MONEY Saving & Budgeting

3 Ways to Cut the Fat From Your Budget—and Save More

male athlete drinking 100% Mega Wealth fitness shake
Gregory Reid

Nowadays technology makes it easier to whip your spending into shape.

Welcome to Day 6 of MONEY’s 10-day Financial Fitness program. You’ve already seen what shape you’re in and started to track your spending. Today, look for ways to free up cash.

Even if you hit the gym regularly, you can probably still pinch an inch here and there.

Your spending, too, is bound to have a little flab. But here’s the good news: If you haven’t combed through your budget in a while, you may be surprised to discover how new technologies, shifting business models, and other recent developments can help you find more money to save.

1. Join the Sharing Economy

Are there any big-ticket items you could get away with renting rather than buying? For instance, maybe now that the kids are in college or you’ve retired you could do without that second car, which, according to AAA, costs almost $9,000 a year to own and operate. Consultancy Alix-Partners found that by 2020 more than 1 million families will use carsharing services to avoid buying a second ride. In some areas, Zipcar and Enterprise Car Share charge less than $50 a day for fully insured cars with gas, while a one-way car-pooled ride with Uber or Lyft can cost as little as $2.25.

For vacations, how about trying a home-swapping service such as Intervac or HomeExchange.com to chop that hefty hotel bill? Then there’s the pricey item you need only once or twice. Rent that fancy camera from BorrowLenses.com or see if your area has a tool-lending library where you can borrow a rototiller or other item for free.

2. Take a “Financial Health” Day

To cut regular expenses such as cable, phone, or insurance bills, set aside a few hours to compare rates from different firms or to ask your current provider for a discount, says Joe Ridout of advocacy group Consumer Action: “A lot of companies rely on your inertia to keep business they no longer deserve.”

To really dig in, take a day off to devote to haggling with insurers, banks, and more. Robert Brokamp, a financial planner and writer for Motley Fool, persuaded his firm to set aside a day for employees to deal with finances. “A lot of these things have to be done during work hours,” he says.

3. Tap Technology

Sites and apps that monitor your spending are great for catching expenses that could fall through the cracks. BillGuard, for one, flags mistaken or duplicate charges and allows you to challenge them right from the app.

Technology can also help rein in impulse purchases and find deals on the things you do buy. These top shopping apps and browser add-ons help you pay the lowest price every time you shop online. To avoid the daily deluge of online shopping temptations, use Unroll.me to pull all retailer emails into a single message. Out in the real world, try the GroceryIQ app before you hit the market. Create a shopping list using the app and it will search for coupons for those specific items. Finally, gas may be cheap, but don’t just fuel up willy-nilly; use an app like GasBuddy to get the best price possible.

Previous:

Next:

  • Day 7: Find Ways to Save More
  • Day 8: Boost Your Earning Power
  • Day 9: Learn How Better Health Can Help Your Finances
  • Day 10: Shore Up Your Safety Net

 

MONEY Budgeting

How to Start Tracking Your Spending in 7 Minutes Flat

stopwatch with money/dollar on it
George Diebold—Getty Images

If you want to save more or get out of debt, knowing where your money goes now is an essential first step.

As part of our 10-day series on Total Financial Fitness, we’ve developed six quick workouts, inspired by the popular exercise plan that takes just seven minutes a day. Each will help kick your finances into shape in no time at all. Today: The 7-Minute Spending Tracker

Seven minutes is a little tight to create a budget, but it’s enough to tackle the first step: pulling together all your spending info using a budgeting tool such as Mint. You’ll need your credit and debit cards to get started.

0:00 Surf to Mint.com and register for a free account.

0:42 Mint asks for your credit card providers and bank. As you type in each one, a list of possible matches will pop up. Select the right one and enter the online login and password you use for that account. (Mint is a secure site and cannot get to your money.)

3:02 Mint will need a minute to pull in all of your transactions, which it automatically slots into categories like “Cellphone” and “Groceries.” Problem is, the app doesn’t always get it right. To fix that, click the “Transactions” tab.

3:34 See those “uncategorized” charges? You can select them to choose a correct label. This is pretty tedious, so tick the box that says “always re-categorize X as Y.” That way, Mint will put all future transactions from that retailer in the right place.

5:02 When you did that, you probably also noticed some charges Mint tried to identify but placed into the wrong bucket. Scroll through those and correct them the same way.

6:30 Grab your phone and download the Mint app. Having the program handy will help you keep on top of charges.

7:00 Now you’re ready to click the “Budgets” tab and create a spending plan. For more help with that, check out our Money 101 stories on creating a budget you can stick to and setting financial priorities.

Previous:

Next:

  • Day 6: Cut the Fat From Your Budget
  • Day 7: Find Ways to Save More
  • Day 8: Boost Your Earning Power
  • Day 9: Learn How Better Health Can Help Your Finances
  • Day 10: Shore Up Your Safety Net
MONEY Financial Planning

10 Days to Total Financial Fitness

Bench press with gold painted weights
Gregory Reid

Presenting MONEY's 10-day program designed to pump up your finances for 2015. 

When you think about what kind of shape your finances are in nowadays, you may be feeling downright buff. Retirement plan balances are at record highs, home prices are back to pre-recession levels in most parts of the U.S., and the job market is the strongest it’s been since 2006.

No wonder Americans are more optimistic about their finances.

Given that, it’s understandable that some bad habits may be creeping back into your routine. Americans, overall, are slipping into a few: Household debt is at a record high, fueled by an uptick in borrowing for cars and college and more credit card spending. Vanguard reports that investors are taking risks last seen in the pre-crash years of 1999 and 2007.

What’s more, the financial regimen that’s been working well for you of late may not cut it anymore. In this slow-growth, low-interest-rate environment, both stock and bond returns are expected to be below average for several years to come.

To pump up your finances in 2015, you need to shake up your routine. The plan that follows can help you do just that. Every day for the next two weeks, we’ll target-train you for a different financial strength. This program includes seven quick workouts, inspired by the popular exercise plan that takes just seven minutes a day, that will push you to raise your game in no time at all. What are you waiting for?

See What Shape You’re In

Even if you’re a dedicated exerciser, you could be ignoring whole muscle groups, leaving yourself susceptible to injury. For example, 39% of people earning more than $75,000 a year wouldn’t be able to cover a $1,000 unexpected expense from savings, according to a 2014 Bankrate survey. So the first step is to establish your baseline by asking yourself these questions.

How are my vital signs? Tick off the basics: Check your credit, tally up your emergency fund (aim for six months of living expenses), look at how much you are contributing to your retirement plans, and get a handle on how you’re splitting up your savings between stocks and bonds.

Less than half of workers have tried to calculate how much money they’ll need for retirement, EBRI’s 2014 Retirement Confidence Survey found. Take five minutes to use an online tool that will show you if you’re on track, such as the T. Rowe Price Retirement Income Calculator.

What’s my day-to-day routine? The very first thing Rochester, N.Y., CPA David Young does with his clients is go over their spending. Budgeting apps, he notes, “make the invisible credit card charges visible.” As important as the “how much” is the “on what,” says Fred Taylor, president of Northstar Investment Advisors in Denver. Divide your expenses into the essential costs of living, investments in your future (savings, education, a home), and the discretionary spending you have the flexibility to cut.

Am I juicing my finances too much? In other words, how toxic is your borrowing? Your total debt matters. But the kinds of debts you have and the implications for your future are crucial too, says Charles Farrell, author of Your Money Ratios and CEO of Northstar. As a young saver, you shouldn’t be worried about high debts due to a house and education, Farrell says, as long as you can handle the payment, will be debt-free by your sixties, and are using debt only to fund investments in a low-cost or high-earning future, such as a low-maintenance home or new job skills. Farrell suggests in your twenties and thirties you should limit total mortgage debt to less than twice your family income. In your fifties, you should have a mortgage no higher than what you make. At any age, total education debt should not exceed 75% of your pay.

What’s my biggest weak spot? You need to guard against familiar risks, like insufficient insurance. But David Blanchett, head of retirement research for Morning-star, says you should also think about less obvious threats. Will new technology put your livelihood at risk? Are you counting on a pension from a financially shaky firm? Do you live in an area, such as Northern California, where home values hinge on the success of one industry?

Once you know how much progress you’ve made so far and what areas need the most work, you’re ready to get going on your financial fitness plan.

Next:

MONEY Love and Money

10 Over-the-Top Ways to Propose—and What they Cost

Creative ways to propose
Andrew Burton—Getty Images Tom Schwab, 37, proposes to his girlfriend of 18 months, Mary Nubla, 35, in Times Square on February 14, 2014 in New York City. (She said yes.)

Want to pop the question via Jumbotron? Hire a flash mob? Put on a real fireworks display? Get ready to open your wallet

In a building with sweeping views of New York’s Hudson River, pictures of a couple hang from “cherry blossom trees” that were handmade for the occasion from branches and petals. A harpist strums softly in the background as a woman makes her way down an aisle of rose petals towards a table with an elaborate ice sculpture. Petals spell her name on the floor.

Her family and friends are there too, waiting on another floor to celebrate with a catered dinner followed by a night of dancing.

This isn’t a wedding; it is a real-life marriage proposal event. And it cost $43,000.

These days, the traditional “will you marry me?” move—that is, a groom-to-be down on one knee in a restaurant or other romantic location—simply doesn’t cut it for many couples. “Everyone is trying to make their proposal unique,” says Michele Velazquez, co-founder of The Heart Bandits, a proposal and romantic event planning service that arranged the event in New York. “You don’t want to have your girlfriend Google a proposal and see that it’s been done a bunch of times.”

While $43,000 is an extreme example (the average wedding costs $30,000), Velazquez says the typical proposal planned by her firm ranges from $3,000 and $5,000. That’s still a hefty sum, especially when you consider that the proposer also has to buy a ring—$5,600 on average, according to a 2013 survey of grooms by The Knot.

Despite those costs, The Heart Bandits have never suffered from a lack of demand. Velazquez says her business has grown 100% every year since it launched in 2010.

Looking for a really phenomenal way to pop the question? Below you’ll find costs for other over-the-top-proposals.

But keep in mind the top tip that Velazquez offers her clients: “It’s not about the money you spend, it’s about the personalization.” In other words, look for a way that reflects something about your relationship or your future spouse’s interests.

What it Costs to Propose With…

A hot-air balloon: About $200 to $400 per person for a 60-minute private ride

The jumbotron at an MLB game: $50 to $2,500, based on data compiled by Swimmingly.com

A skywriter: $1,500 to $2,000, according to nationwide aerial advertising firm FlySigns

An airplane banner: Starting around $500, according to nationwide aerial advertising firm FlySigns

Musicians:$150 to $300 per hour for a soloist hired via a website like gigmasters.com

A glass slipper at Walt Disney World: $375 on top of the cost of admission. Other Disney proposal events and locations range from $15 (“Will You Marry Me?” chocolate slipper dessert) to $500+ (Fireworks boat cruise on private yacht)

Fireworks: $2,500 to $6,000, according to pyrotech.com

A flash mob: upwards of $2,000, as reported by The New York Times

A mock movie trailer: can be around $5,000, according to Drywater Productions in Janesville, Wisc., but the price varies based on video specifics

A professional photographer or videographer: $25 to more than $1,000

 

More from Money.com:

The Rising Toll of Inequality on Social Security

The Career Mistake You Don’t Realize You’re Making

25 Ways to Get Smarter About Money Right Now

MONEY Out of the Red

This Millennial Paid Off $23,375 in Student Loans in Just 10 Months

Jordan Arnold

"If you have a game plan, you can accomplish your goals," says 22-year-old Jordan Arnold.

Like many millennials, Jordan Arnold graduated from college five figures deep in student debt. Unlike most of his peers, he paid off all of his loans less than a year after graduation.

This is his story, as told to MONEY reporter Kara Brandeisky.

Jordan Arnold, 22
Bluffton, Ind.
Occupation: credit analyst
Initial debt: $23,150
Amount left: $0
When he started paying it down: May 2013
When he became debt-free: March 2014

How I started building debt

I always knew I was going to go to college, though I figured I’d go to community college for a year or two because it’s cheap. But my parents started talking to me about this private Christian school, Indiana Wesleyan in Marion, Ind. I took a visit, and I really liked it. It’s only like 3,000 students on campus, so it’s a tight-knit community.

Tuition and room and board was about $31,000 a year. And the first year I hadn’t applied for federal student aid, since I didn’t commit to the college until about 10 days before classes started. I got some scholarships and a grant from my church, though. So, ultimately, I owed approximately $9,000 that first year.

Getting to $23,000

I could only borrow up to $5,500 in subsidized loans from the government each year, so I worked to cover the rest so that I didn’t have to take out private loans. I also graduated in three years, which helped.

Still, altogether, I had to take out $15,150 in subsidized federal loans and $2,000 in unsubsidized federal loans. I borrowed another $6,000 from my parents.

My uh-oh moment

In the fall semester of my senior year, I remember being kind of nervous. I knew I had to start paying my debt within six months. It’s stressful, when you don’t have any money. And I heard all these stories about college students who get out of school, they have all this debt, and they can’t find jobs.

Getting my debts paid off was important to me. I didn’t want to get the point where I’d have to be paying student loans for another 10 years. Right now, I’m single. I don’t have any dependents that rely on my income. But I didn’t want to have these loans over my head when I’m trying to feed a family and put a roof over their heads. It’s not just about me, it’s about my future family.

My first step out of the hole

Luckily, I got a job right out of college at an insurance agency (I had majored in finance). I was on salary, and it was pretty good: $36,000 plus bonuses.

I didn’t have to pay my student loans for another four months, but over the summer I decided to go ahead and start making payments before interest began accruing.

I actually moved back in with my parents—which is hard when you have been out on your own. But I didn’t really have a reason to move out. And I was blessed that they actually preferred me to live there because I could help out around the farm they own, baling hay or feeding the horses. Living at my parents’ place for free was a lot better than having to pay $400 or $500 a month for rent.

Kicking it into gear

About four months into my new job, I picked up a second job, delivering for Pizza Hut, to help pay off my debt. I would start work at the insurance agency at 8:30 a.m., change in the bathroom at 4:50 p.m., get to Pizza Hut by 5, deliver pizzas until about 9:30, get home around 10, then shower, eat, and go to bed.

My monthly take-home pay from the insurance company was about $2,200, and I made about $1,000 at Pizza Hut. After gas, car insurance, tithing to my church, entertainment and food, I could put about $2,000 towards my debt every month.

At that rate, I was projected to pay off my debt in May 2014. But I got a $3,000 refund on my taxes, and paid off the rest of my debt with that.

How I celebrated being debt-free

I made my last payment the first of March, then I went to Florida with some friends two weeks later. It was pretty rewarding after a 10-month battle. I had probably worked 65 to 70 hours a week for seven or eight months. It was exhausting, but it was worth it.

What I’d tell someone else in my place

If you have a game plan, you can accomplish your goals. I have an account on Mint.com, that’s where I kept my budget. That’s a big part of it—just seeing your progress and knowing you’re getting closer.

Also, have an emergency fund. While I was paying off that debt, I had a small car accident. I was delivering a pizza, and I hit something in someone’s driveway. It cost me about $760 to fix the car. But I had a $1,000 emergency fund, which was kind of a buffer that I kept because life happens.

Finally, don’t be afraid to move home if you have to. That was a big part of how I got out of debt.

My plan for the future

I quit my Pizza Hut job in April after paying off my debt, and now work at a bank analyzing commercial and agricultural loans, which is more in line with what I wanted to do.

I actually haven’t moved out of my parents’ house yet. Instead I’m saving up for a down payment on a house. I’m putting away 50% of my take-home income for that, and I should have a down payment by mid-summer. I also started investing. I started a Roth IRA, and I plan to max it out this year.

Staying true to myself

Some people have made the argument, ‘Maybe you shouldn’t have paid off the debt so fast because the interest rate is cheaper than what it will be for you to borrow for a home.’

That makes sense in my head, but in my heart, I didn’t want this hanging over me. I want to be responsible with my money and build a strong foundation.

Are you climbing out of debt? Share your story of getting “Out of the Red.”

Check out Money 101 for more resources:

MONEY Love and Money

This Is the Sexiest Financial Habit

businessman laying on field of money
iStock

A new survey asked people what money management traits they'd find attractive in a mate. Prepare to be surprised by the answer.

Money matters when searching for a mate—and it’s not just how much you have, but how you handle your cash, according to a survey released Wednesday by Ally Bank.

Three quarters of people think it’s important to find a partner with a similar financial philosophy. Okay, that figures. But the survey also revealed which financial habits people found most appealing in a potential mate.

And it turns out that… wait for it… a strong budgeting and saving strategy is the hottest, with 55% of respondents putting it at the top of the list. The older people were, the more fiscal discipline mattered.

Surprised? Budgeting is indeed sexy.

To make yourself more of a catch, check out “How Do I set a Budget I Can Stick To?” in our Money 101 section, or start using Mint.com, which does a lot of the work for you.

Paying off credit card bills in full every month (21%) and bargain hunting (18%) were other attractive attributes. So maybe you’ll fall in love over a Presidents’ Day sale.

And since only 3% were titillated by higher credit limits and liking finer things, consider tacos instead of T-bones on that first date.

Read more Love & Money:
The Most Important Talk You Need to Have Before Marriage
5 Super Easy Online Tools That Can Help Couples Feel More Financially Secure
5 Smart Financial Moves for Unmarried Couples Who Live Together

MONEY financial advice

When Money Isn’t the Top Priority

Sometimes the right decision from the financial perspective is the wrong one from the human perspective.

As a financial planner, I sometimes have a tendency to look at personal finance as a matter of checking off boxes.

Emergency fund? Check. Budget? Check. Saving for retirement? No? Well there’s the hole. Let’s start right there.

There’s some value in that kind of thinking. After all, certain things are just good practice and running through that checklist is a good way to get a quick read on someone’s financial situation.

But I also remind myself to not take that mentality too far. I try to remember that good financial planning is really about helping my clients build a life they enjoy, and that money is just a tool that can help make that life possible.

Which means that sometimes the “correct” decision from a financial standpoint is not actually the correct decision. Sometimes happiness needs to take precedence.

I worked with a young couple recently who were about to have their second child. Like I do with all clients, I asked them right at the start why they were coming to me. What was it they wanted to achieve?

They told me that they wanted to make sure they were saving enough for retirement. They wanted to save for a new house with a bigger yard. They wanted to make sure they had the right insurance in place.

But what they really wanted was to see if they could make their budget work so that the wife could stay home with the kids. She felt like she was missing out on this once-in-a-lifetime opportunity, and they thought they might be in a position to make it work. So they came to me.

As I reviewed their situation, one thing was immediately clear: From a purely financial standpoint, switching to a single income was going to be a step backwards. The wife had a stable job, made good money with good company benefits, and it was going to be more difficult for them to reach some of their long-term goals without her income.

We talked about all of those things at our next meeting. I wanted them to make an informed decision (as did they), so it was important for them to know what they would be giving up.

But I also showed them how they could make it work with just the one income. We talked about some changes to their budget that would make it easier, and we planted the seeds of a plan to get some of their other savings back on track over the next few years.

I also shared my personal story with them. My wife quit her job when we had our first child, and it was a financial hit. But it was the lifestyle we wanted, and over the years we’ve found ways to compensate.

In the end, they decided to give it a shot. They knew exactly what kind of financial sacrifices they were making, but they also knew what kind of lifestyle they wanted. And if they could make the finances work around that lifestyle, that was the route they wanted to take.

We all make decisions every day to put happiness ahead of money. We eat dinner with our family instead of in front of our laptop catching up on work. We take our spouses on dates, go out with friends, and go on vacations. These are the moments that make our lives meaningful. They are the reason we care about money in the first place.

As I work with clients now, I try to remember that my job isn’t to help them check off all the right financial boxes. My job is to help them use their money to build a happy life.

Life, not money, is the real priority.

———-

Matt Becker is a fee-only financial planner and the founder of Mom and Dad Money, where he helps new parents build a better financial future for their families. His free book, The New Family Financial Road Map, guides parents through the most important financial decisions that come with starting a family. Becker is a member of the XY Planning Network.

MONEY Sports

Why a Trip to the Super Bowl May Not Be Worth the Staggering Cost

Travelers walk past Super Bowl XLIX logos at Phoenix Sky Harbor International Airport on January 19, 2015 in Phoenix, Arizona. The NFL Super Bowl XLIX will be held at the University of Phoenix Stadium on Febrauary 1, 2015.
Christian Petersen—Getty Images Travelers are already being greeted by Super Bowl XLIX logos at Phoenix Sky Harbor International Airport.

Of course if you're a die-hard Patriots or Seahawks fan, none of this math might matter.

How much is it worth to watch the Super Bowl in person?

That is the question thousands of American football fans have been wrestling with the last few weeks. Do you take a once-in-a-lifetime plunge and spend perhaps tens of thousands of dollars to get yourself to Glendale, Arizona, to watch the Seattle Seahawks take on the New England Patriots?

Or do you kibosh such a massive expense, and earmark that sum for more sober purposes, like saving for retirement, paying down debt, or getting ready for April’s tax bill?

Ron Yeh, who was keen to see his beloved Seahawks win a second straight title, decided go this year after weighing the pros and cons.

The 40-year-old gastroenterologist from the Seattle area and a friend found a package from warehouse club Costco Wholesale Corp that included tickets, lodging, shuttles and tailgate parties—$8,000 for two.

“I’ve been following the Seahawks ever since the fourth grade, when my family moved here from Taiwan,” Yeh says. “But this is my first time going to the Super Bowl. It’s going to be exciting.”

Obviously, a Super Bowl memory does not come cheap. The average resold ticket has been going for $3,046, according to data provided last week by StubHub.com. That is up from $2,527 last year, when the game took place in New Jersey’s MetLife stadium.

Ticket sales on StubHub.com have ranged from $937 to $11,500. Those prices do not include ancillary costs—flights, hotels, food and drink, and memorabilia.

Besides his $4,000 package, for instance, Ron Yeh spent another $950 on a round-trip flight from Seattle.

Arizona’s tourism authority is betting that Super Bowl attendees will spend roughly double that of a normal conventioneer, upwards of $600 a day during their stay. Last year attendees spent an average of $141.75 each on food, drink and merchandise just at the game itself, according to SportsBusiness Journal.

At the top end, the cost can be staggering. Take a look at this package recently offered by private jet charter company Magellan Jets: prime tickets, round-trip flight, access to celebrity parties on Super Bowl weekend, and more. The eye-popping tab: $35,000 for two.

“It’s clearly not an event for a regular middle-class family,” says Victor Matheson, a professor and sports economist at College of the Holy Cross in Worcester, Massachusetts.

But the Super Bowl is a rare and special event, and missing out can haunt people. Take financial planner H. Jude Boudreaux, who was ready to see his New Orleans Saints take on the Indianapolis Colts back in 2010, but sold his tickets to a friend at the last minute.

“I do regret it every year when this time of year rolls around,” he says.

Of course, the cost does not have to be exorbitant. Scout for tickets in the nosebleed section, rather than on the 50-yard line. Bunk with friends in the area instead of paying insane hotel markups. Take redeye flights with connections.

Also, do not expect too much. You can forget about seeing every replay from 10 different angles, to be debated by panel of ex-pros in a luxury booth.

Instead you’re going to be outside, probably a long way from the action, without your trusty flatscreen and no fridge full of snacks.

That is what financial adviser Keith Singer of Boca Raton, Florida, found when he saw the Philadelphia Eagles at the Super Bowl 10 years ago.

“It was really hard to see the game from where I was, and I missed all the pregame shows because I was at the stadium,” he says. “I probably wouldn’t go to another Super Bowl again. There’s no better view than in front of your giant TV, with all the refreshments and food you could want right at your fingertips.”

But even folks watching at home are preparing to fork out for the big day. The National Retail Federation’s Super Bowl Spending survey estimates that 184 million viewers will be spending a combined $14.3 billion—an average of $77.88—on food, gameday gear, decorations and TVs.

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