MONEY Travel

How Not to Overspend on Vacation

overstuffed SUV trunk with vacation luggage sitting on pavement
Getty Images

You can still have fun without blowing your budget.

While many consumers say they design their vacation plans in such a way to save money, 60% of consumers said they exceed their summer travel budgets every year, according to a nationally representative survey conducted on behalf of Citi ThankYou Premier card. Nearly a third (30%) said they avoid holiday weekends when scheduling their vacations because of the high costs associated with them — only 11% said Memorial Day is the best time to arrange summer travel.

For those who plan to take a vacation this summer, most (74%) say they’re going to do so by car. On average, gas prices are about $1 per gallon cheaper this year than last year, according to AAA’s data on national fuel costs, though the average gasoline price has increased in the days leading up to Memorial Day. Still, gas prices this weekend will be at the lowest they’ve been in five years, and AAA projected Memorial Day weekend will see the highest travel volume for the holiday since 2005 — 88% of travelers (about 33 million people) will travel by car, the organization estimates.

If you’re out and about for the long weekend, you’ll have plenty of opportunities to save money, in addition to the low fuel costs. Many studies support the idea that vacation is good for workers’ well-being and mental health, but running into financial problems from a getaway might outweigh its positive impact. Here are some tips for having a rewarding trip, whether you’re out of town now or planning an escape later in the summer.

Make a Budget & Stick to It

With 60% of consumers saying they blow their vacation budgets, it’s clearly difficult to control spending when you’re out having fun. First of all, make a realistic budget for your excursion by planning ahead, researching costs at your destination and reminding yourself of the importance of spending within your means. If you let things get out of control, you may jeopardize other aspects of your finances, or you may end up going into debt, especially if you put your vacation expenses on a credit card — and if you’re carrying a high balance on your cards, it could have a negative impact on your credit score. Whatever your budgeting method is — keeping receipts, writing out transactions on a piece of paper, using a spreadsheet or tracking purchases in an app — stick with it when you’re out of town.

Look for Opportunities to Save

If you have a credit card that rewards certain spending categories or travel purchases, consider using it for your planned vacation expenses — just make sure you’re not spending for the sake of earning points, because that’s an easy way to let things get out of control.

There are many services that help you find discounts and coupons for travel, and if you have a smartphone, you can use an app to help you find deals using geolocation. Researching offers in advance certainly helps, but technology can also make it easy to find money-saving solutions in the moment.

Keep an Eye on Your Accounts

Here’s another area where technology is your friend. Chances are your bank has a mobile app you can use to keep track of your transactions, so if you didn’t bring a computer on your trip or don’t have a secure Internet connection, you can stay on top of your spending on the go. If you haven’t done so already, be sure to secure your phone and financial apps with passcodes, so in the event you lose your phone, no one else can access your sensitive information.

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MONEY

Here’s How to Save $100,000 by Age 30

150530_FF_Save100KBy30
Jamie Grill—Getty Images

Start by saying no more often.

You might have heard an absurd-sounding parable that often makes the rounds on personal finance blogs. This story is about two siblings who want to have a comfortable retirement — let’s make them sisters for this article’s purposes.

The first sister starts saving in her 20s and manages to save $100,000 by the time she turns 30, but then never puts another dollar towards her retirement. The second sister waits until she’s 30 in order to start saving for retirement and then puts away $10,000 every year until she turns 65.

The story is meant to showcase the power of compound interest and saving early for retirement.

It sounds pretty incredulous but the math works out. If you assume the sisters invest at a 7% rate of return, the younger sister is going to have $1,150,615.18 when she retires while the older sister will have $1,065,601.21.

It’s a nice story.

But nowadays with so many 20-somethings drowning in student loan debt and having a hard time finding a job, it might sound impossible to them to save $100,000 by the time they’re 30. That doesn’t mean the story doesn’t apply to them!

You don’t have to reach that magic number in retirement savings by your 30th birthday. After all, this parable is meant to inspire people to start saving as much as possible as early as possible.

So, let’s say you do want to try to save $20,000, or $50,000 or even $100,000 by your 30th birthday? Here are some tips to do it.

1. Go to a Cheap School

Choosing a cheap college or the one that gives you the most money in scholarships is key. Unless you plan on going into a career that will pay you enough to quickly pay off your student loans and guarantee you a job as soon as you graduate, it doesn’t make a lot of sense to go deep into debt for college. There are a lot of ways to reduce the cost of college and ensure that you graduate with a low amount of student debt.

For example, there are financial planning techniques that you and your parents can use to ensure you qualify for more financial aid. You can also choose to start at a community college and transfer to a four-year university during your degree. Living at home while going to school could be an option for some and would save you a significant amount of money.

2. Avoid Credit Card Debt

While it might be impossible to completely avoid student loan debt, it is often possible to avoid credit card debt. Many people choose to live above their means and use credit cards in order to supplement that. This leads to a vicious cycle of high interest-finance charges that can lead you further into debt (this calculator can help you figure out how long it’ll take you to pay off that credit card debt). Those drinks that you bought two years ago and charged to your credit card will end up costing you a significant amount of interest by the time you actually pay them off. The ideal way to use your credit card is by putting purchases on your card that you’ve already budgeted for and then pay them off at the end of the month — this helps you build your credit while keeping you out of debt.

3. Live Like a Student

I’ve seen a lot of my friends leave college and get a job only to significantly increase the amount that they spend. While they were adept at being thrifty to keep their costs down while they were in college, once they left they found themselves living paycheck to paycheck. Just because you leave college doesn’t mean you should stop living like you’re in college. Get a roommate, take public transit if possible and live frugally. Commit yourself to saving as much of your income as possible every month and put any pay increases towards your savings.

4. Take Advantage of Retirement Matches

A retirement match is like getting free money. Sure, you have to invest some of your own money into your retirement account in order to get it but many employers will match your contributions up to a certain percentage of your annual income. This is an absolute no-brainer. Make signing up for your company’s 401(k) or IRA matching program a priority on your first day at any new job.

5. Get a Second Job or Side Hustle

If it’s okay with your employer, find a way to make a little extra money on the side to supplement your savings. I’ve done things like take on freelance writing jobs, tutor, or help companies develop engagement strategies. You can also do things like start a blog or sell things online.

6. Take Jobs With More Responsibility

The best career choice that I made was to take a job that paid me less but that provided me with significantly more responsibility right out of college. By gaining leadership experience in my first couple of jobs, I was able to very quickly double my salary. Meanwhile, I know people who took better paying jobs with less responsibility and have had to toil for years working their way up the ladder. While it might sound counterintuitive that you’ll be able to save more by the time you’re 30 by working in jobs that pay less right out of college, you may find that employers will pay you more within a couple of years due to the experience you gain.

 

7. Don’t Be Afraid to Change Jobs

Millennials have a bad reputation for being frequent job switchers. Changing jobs, however, has been the best thing that I have done in my career. By looking for my next opportunity and making a switch, I was once able to make over $15,000 more per year. Just be sure not to switch jobs too often as some employers will be afraid of hiring you.

8. Say No

One of the hardest things about trying to save in your 20s is that you’re going to have to say no to a lot of fun things that your friends will invite you to do. If you do say no, you’ll be much better off financially the long run, but you might feel like you’re missing out in the short-term.

By keeping your eyes on the prize and knowing that because you’re saying no you’ll be more likely to be safe and secure throughout your life, this might make you feel better. If it doesn’t, just suggest an alternative. Instead of going out, host a potluck or party. You could have just as much fun and save money.

9. Set Short-Term Goals

Instead of thinking about saving $100,000 by the time you’re 30, think about saving $10,000 by the time you’re 23 and $20,000 by the time you’re 25. By creating annual and biannual savings goals, you’re less likely to be overwhelmed by the big number and give up. Remember that you’re more likely to make more money in your late 20s than you are in your early 20s, so expect to save more then.

While it might seem impossible to save $100,000 by the time you’re 30, if you follow these steps and end up debt-free with $10,000 in the bank — you’re going to be in a much better place. Saving $100,000 by 30 is a stretch goal that not everyone is going to be able to meet. After all, you might currently be 25 and have $100,000 in student loan debt.

The moral of the story about the two sisters is not necessarily that you need to have $100,000 by 30, so much as it is to point out that the financial choices you make in your 20s will affect you for the rest of your life. By setting yourself up to make good financial choices while you’re in your 20s, you’re setting yourself up for a much easier financial road ahead.

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MONEY Shopping

The Best (and Worst) Dollar Store Deals

Dollar Tree Inc. dollar store in Shelbyville, Kentucky, U.S.
Luke Sharrett—Bloomberg via Getty Images Dollar Tree Inc. dollar store in Shelbyville, Kentucky, U.S.

Skip the bottled water.

Believe it or not, dollar stores have been around since at least 1955 when Dollar General opened its first one in Springfield, Kentucky.

Granted, a dollar went a lot further back then — equivalent to almost $9 today. Even so, that inflation has done very little to reduce the size of my local dollar store’s qualifying inventory; it carries so many products — including a limited selection of fresh produce — that I’m certain I’d get along just fine if it were the only store in town.

So, just how big are those dollar store bargains? Well, to find out, I recently took a little shopping trip and compared the prices of items found at my local dollar store to similar items at the local Walmart, Rite Aid pharmacy, and Albertsons supermarket.

The Best Dollar Store Deals

Razor blades. Any man who uses a traditional razor will tell you that replacement blades are not cheap — and just as my last dollar store survey discovered in 2010 — the comparison didn’t result in a close shave this time either. Here’s the catch: The dollar store only sold an off-brand. The name-brand blades at Walmart, Rite Aid and Albertsons are about seven times more expensive.

Toilet Paper. On an equivalent per-roll basis, the dollar store rolled over the competition — especially when you consider that runner-up Rite Aid was more than twice as expensive.

Batteries. Don’t be fooled by claims that dollar stores sell inferior poor-performing carbon zinc batteries. Mine had plenty of higher-quality alkalines on the shelf. And they were half the cost of those sold by my local grocer, which also happened to be its closest competitor.

Bananas. My local dollar store doesn’t sell a lot of produce, but what they had seemed reasonably prices. In fact, their bananas were cheaper than the ones being sold at both Walmart and, most surprisingly, my local grocery store.

Baby Shampoo. The dollar store baby shampoo was almost half the price of similar generic shampoo being sold at Walmart. The disparity was even greater compared to Rite Aid and my local supermarket.

The Worst Dollar Store Deals

Chili powder. The conventional wisdom is that when it comes to price, dollar store spices can’t be beat. This survey turns that train of thought upside down — just as it did in 2010 — as Walmart once again had chili powder on sale for less than half the dollar store price. Talk about a spicy deal!

Bottled Water. If you’re a bottled water drinker, you’re better off buying at Walmart, which was offering it for 12% less than the dollar store.

As you can see, in most cases the dollar store did indeed offer the best deals. Here are the results of all 12 items I surveyed:

Dollar Store 2015

Summing it all up, I’d say the most surprising thing to be learned from my little shopping experiment is that not everything at your local dollar store is a bargain — so you have to be a little bit careful. On the other hand, if you aren’t afraid to purchase off-brands, there are lots of really great deals there — especially when it come to razor blades.

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Len Penzo blogs at lenpenzo.com, “the off-beat personal finance blog for responsible people”.

MONEY consumer psychology

19 Secrets Your Millionaire Neighbor Won’t Tell You

The secret to financial freedom.

From time to time we bring you posts from our partners that may not be new but contain advice that bears repeating. Look for these classics on the weekends.

That’s right. Although having a million bucks isn’t as impressive as it once was, it’s still nothing to sneeze at.

In fact, CNBC reports that in 2013 there were 13.2 million millionairesin the United States alone.

That’s a lot of people, people. And the odds are one or two of them are living near you.

Heck, one of them might even be your neighbor. In fact, the odds are very good that it is your neighbor.

But, Len, you don’t know my neighbor. That guy doesn’t look anything like a millionaire.

Well, guess what? Your suburban millionaire neighbor called (oh yeah, we go way back) and the two of us had a nice little chat.

Here’s a few things he shared with me but apparently doesn’t want to tell you. (No offense, I’m sure.)

1. He always spends less than he earns. In fact his mantra is, over the long run, you’re better off if you strive to be anonymously rich rather than deceptively poor.

2. He knows that patience is a virtue. The odds are you won’t become a millionaire overnight. If you’re like him, your wealth will be accumulated gradually by diligently saving your money over multiple decades.

3. When you go to his modest three-bed two-bath house, you’re going to be drinking Folgers instead of Starbucks. And if you need a lift, well, you’re going to get a ride in his ten-year-old economy sedan. And if you think that makes him cheap, ask him if he cares. (He doesn’t.)

4. He pays off his credit cards in full every month. He’s smart enough to understand that if he can’t afford to pay cash for something, then he can’t afford it.

5. He realized early on that money does not buy happiness. If you’re looking for nirvana, you need to focus on attaining financial freedom.

6. He never forgets that financial freedom is a state of mind that comes from being debt free. Best of all, it can be attained regardless of your income level.

7. He knows that getting a second job not only increases the size of your bank account quicker but it also keeps you busy — and being busy makes it difficult to spend what you already have.

8. He understands that money is like a toddler; it is incapable of managing itself. After all, you can’t expect your money to grow and mature as it should without some form of credible money management.

9. He’s a big believer in paying yourself first. Paying yourself first is an essential tenet of personal finance and a great way to build your savings and instill financial discipline.

10. Although it’s possible to get rich if you spend your life making a living doing something you don’t enjoy, he wonders why you do. Life is too short.

11. He knows that failing to plan is the same as planning to fail. He also knows that the few millionaires that reached that milestone without a plan got there only because of dumb luck. It’s not enough to simply declare that you want to be financially free.

12. When it came time to set his savings goals, he wasn’t afraid to think big. Financial success demands that you have a vision that is significantly larger than you can currently deliver upon.

13. Over time, he found out that hard work can often help make up for a lot of financial mistakes — and you will make financial mistakes.

14. He realizes that stuff happens, that’s why you’re a fool if you don’t insure yourself against risk. Remember that the potential for bankruptcy is always just around the corner and can be triggered from multiple sources: the death of the family’s key bread winner, divorce, or disability that leads to a loss of work.

15. He understands that time is an ally of the young. He was fortunate enough to begin saving in his twenties so he could take maximum advantage of the power of compounding growth on his nest egg.

16. He knows that you can’t spend what you don’t see. You should use automatic paycheck deductions to build up your retirement and other savings accounts. As your salary increases you can painlessly increase the size of those deductions.

17. Even though he has a job that he loves, he doesn’t have to work anymore because everything he owns is paid for — and has been for years.

18. He’s not impressed that you drive an over-priced luxury car and live in a McMansion that’s two sizes too big for your family of four.

19. After six months of asking, he finally quit waiting for you to return his pruning shears. He broke down and bought himself a new pair last month. There’s no hard feelings though; he can afford it.

So that’s it. Now you know what your millionaire neighbor won’t tell you.

Oh, and, um, would you be so kind to keep this just between you and me? I’d hate to ruffle anyone’s feathers or cause of any kind of neighborly spat.

Please?

Thanks. You’re a peach.

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Len Penzo blogs at lenpenzo.com, “the off-beat personal finance blog for responsible people”.

MONEY Budgeting

Here’s Why More Americans Are Saying ‘I Do’ at City Hall

Couples head toward the Historic Dade City Courthouse to say their marrige vows.
Zuma Press—Alamy Couples head toward the Historic Dade City Courthouse to say their marrige vows.

It may be the best wedding gift of all.

When Scott Oeth was thinking about proposing to his girlfriend, Linda Hardin, he knew the stats. The average wedding costs in 2014, according to popular website The Knot, were a whopping $31,213.

That’s when the Minneapolis financial planner thought, No way.

Lucky for him, his bride-to-be was thinking exactly the same thing. So last year the couple arranged for a courthouse wedding, a celebratory dinner at their favorite steak house, covered as a gift by his new in-laws, and a backyard BBQ reception later in the summer for 100 guests.

Total cost: A paltry $1,250.

Oeth, 43, says he wouldn’t change a thing. “It was all wonderful, and we had such a great time,” he says. “I don’t think that most people who spend tens of thousands on traditional weddings could say the same.”

More newlyweds seem to be thinking like Scott Oeth and Linda Hardin. Courthouse and city hall ceremonies now account for between 3 and 4 percent of marriages, up from 2-3 percent a couple of years ago, according to industry resource The Wedding Report.

Financially speaking, toned-down weddings make a ton of sense. After all, think of all the other places newlyweds could spend that money to get their marriage started on the right financial foot, Oeth says.

Fully funding IRAs for both spouses. Paying off high-interest credit cards. Getting rid of student debt. Starting a 529 college-savings plan for young children. Saving up for a down payment on a first home.

“Expensive weddings are like a subprime mortgage crisis of the heart,” says Laurie Essig, associate professor at Vermont’s Middlebury College and “Love, Inc.” columnist for the magazine Psychology Today.

Noting that most young people have student loans, Essig says, “It just doesn’t make financial sense to be taking out even more debt to have a lavish wedding.”

Those typical expenses, according to The Knot, include $14,006 for venue rental, $2,556 for the photographer, $3,587 for the band, and $555 for the cake.

In many urban centers, costs can be much higher than those national averages. In Manhattan, for instance, the typical wedding bill comes to a wallet-punishing $76,328.

Of course, it is no mystery why people are so willing to pay through the nose for their Big Day. Marriage is seen as a once-in-a-lifetime moment that couples want to memorialize with one spectacular day.

Forgoing Extravagance

When you think of financial alternatives to a fancy wedding, it is hard not to see the logic of forgoing the extravagance.

“Of course, it doesn’t make sense to spend all that money,” says Essig. “But marriage is a magic ritual, and magic will always outweigh more pragmatic stuff, like going down to city hall and filling out forms.”

Many spouses-to-be are afraid to bring up the idea of shaving wedding costs, for fear of appearing like a cheapskate, hurting their partner’s feelings, or angering in-laws at a highly emotional moment.

Get over that reticence and have a money conversation, experts say.

The so-called wedding-industrial complex may not like it, but there is no law against buying a used dress from a thrift store, or getting a vintage ring, or having the ceremony in a park instead of a grand ballroom, Essig suggests.

Even if your wedding is a quick and simple affair, always check local regulations beforehand, advises Christen Moynihan, editorial manager of the website Broke-Ass Bride. There might be waiting periods after acquiring a marriage license, or specific ID requirements for getting all the necessary approvals, and you do not want to be caught off-guard.

A ceremony in front of a justice of the peace might only run a couple of hundred bucks. “There was a time when low-cost weddings and courthouse ‘I Dos’ were scandalized, but in recent years there has been much higher acceptance for weddings to take place in whatever way the couple envisions,” Moynihan says.

Scott Oeth and Linda Hardin redirected some of their wedding savings toward a fabulous honeymoon on Kauai. Since they are cost-conscious, they bought a travel package through Costco and got free first-class flight upgrades because of Scott’s Delta Medallion status.

Total cost for the fairytale honeymoon? Around $3,000.

MONEY consumer psychology

4 Personality Quirks That Sabotage Your Savings

insecure girl
Grove Pashley—Getty Images

When you are your own worst enemy

They say it takes all types — but some types have a harder time saving than others. Are you allowing some of your less flattering character traits to derail your finances? Here are four personality types that sabotage saving.

1. The Insecure

In a consumer economy, advertisers work tirelessly to link products to personality. Do you drive a domestic car, or an import? Are the countertops in your home Formica or granite? Are you a Mac person or a PC person? Often, the answers don’t simply explain what we prefer — they suggest who we are, or at least who we’d like to be.

Playing upon consumers’ insecurities works like a charm. Ego sells lots of products and keeps huge swaths of the population on a treadmill of debt. Fight back by getting comfortable in your own skin and learning little ways to feel more confident every day.

2. The Impulsive

Let’s admit it: we live in a consumer-centered universe. Every screen we gaze into promises to deliver more delights to our doorstep (with free shipping and cashback rewards, of course). There are entire armies of designers, marketers, and retailers whose sole purpose is to anticipate what will tickle us next and magically make our wallets fall open.

In a consumer Candyland like ours, those who haven’t learned how to overcome impulse spending don’t have a chance. Without a dependable restraint system, they’re sure to wander toward the Gumdrop Mountains, fall into the Molasses Swamp, and never be heard from again.

3. The Impatient

Just one word separates a saver from a spender. A saver says, “I need it.” A spender says, “I need it now.” Purging that one pesky word from our consumer vocabulary can save us thousands of dollars over a lifetime. “Now” eliminates the option of shopping around for the best deal, it means we don’t have to plan and save, and it means we’ll think about the consequences to our budget later. If you’re trying to spend wisely, stop being impatient and start thinking of “now” as a hair-curling, four-letter word.

4. The Fearful

Spending wisely and saving for the future takes a bit of fortitude. To make real progress, we have to know who we are deep down, learn how to conquer fear, and take a few chances. Those who are afraid of money likely don’t understand it, or grew up in households where money was a constant source of anxiety. They might be able to pinch a few pennies, but profound success will always be elusive. The fearful wouldn’t dream of negotiating on price, they don’t feel comfortable making independent investment decisions, and they’re afraid to spend when presented with real wealth-building opportunities.

Saving money over the long term is no different than achieving any other goal. We have to duck and weave around our own insecurities and impulses and surround ourselves with like-minded people who can cheer us on and serve as role models for success. If you find yourself struggling, it might be time to take a hard look at the company you keep.

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MONEY Budgeting

Americans Spend More on Taxes Than Food, Clothing and Shelter Combined

hand pulling cash out of wallet
Getty Images

The surprising math on how we spend

Every year, the Tax Foundation compares the total amount of taxes paid in America and the amount of spending on the necessities of food, clothing, and shelter. In most recent years, the Tax Foundation has concluded that Americans spend more on taxes than on necessities — and 2015 is no different.

The Tax Foundation projections show a total of $4.85 trillion in taxes paid in 2015, divided between $3.28 trillion in federal taxes and $1.57 trillion collected at the state and local level. According to the Tax Foundation, total taxes are approximately 31% of the national income. Using data available from the Bureau of Economic Analysis (BEA), the Tax Foundation calculated approximately $4.3 trillion in spending for the basics with food at around $1.8 trillion, clothing at $0.3 trillion, and housing at $2.2 trillion.

Here’s the real question: Is this spending comparison indicative of a problem or of a correct and equitable tax structure? Should any of us be outraged? Probably not, although there are reasons for concern.

Certainly, the trend is not promising. The gap between taxes and spending on the essentials in 2012 was approximately $150 billion, rising to almost $300 billion in 2014 and around $550 billion in 2015. It’s hard to spin that as a positive development.

The Tax Foundation’s report also says nothing about equity of taxes and spending. Certainly, the Tax Foundation can leave the impression that taxes are too high for all Americans by using aggregate values. More progressive sites such as the Center on Budget and Priority Policies (CBPP) call these values misleading, pointing out that with our progressive tax system, poorer Americans clearly pay a greater share of their income for the essentials and less in taxes.

Meanwhile, the wealthy pay more in taxes and while they may make more discretionary purchases in food, clothing and shelter, it isn’t enough to make up the difference. Therefore the “average” (middle-class) American probably does not pay more in taxes than for the basics, and the lower income levels certainly do not.

This conclusion implies a higher amount of wealth transfer to help lower-income Americans with spending on their basics. Indeed, a graph created by the Tax Foundation shows a steady rise in transfer payments as a percentage of the cost of living, from 0.5% to nearly 35% in 2011. The Tax Foundation acknowledges some double-counting inflating the value, but the trend is still valid.

This illuminating graph and other explanations may be found in a 2012 article on the Tax Foundation website. For example, the amount spent on taxes was roughly equal to that spent on food, clothing and shelter from 1929 until the 1990’s, when the divergence began. Since then, taxes have increased disproportionately in a sawtooth pattern, with dips corresponding to economic crashes (2001 and 2007-2009).

If you have a budget — and you should have if you don’t — you can certainly figure out whether or not you paid more in taxes than you did in 2014, and can probably make a good estimate for 2015. What you do with that information is up to you.

You may well conclude that you pay too much in taxes, but use the exercise as an opportunity to analyze your spending on the basics. Are you getting the best value out of your dollar for your food, clothing, and housing payments? We’ll just ignore the subject of whether you’re getting your money’s worth out of your taxes. Save your outrage for that topic.

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MONEY Budgeting

Living Paycheck to Paycheck on $75,000 a Year

couple paying bills in kitchen
Neil Beckerman—Getty Images

One-third of high earners get by this way.

If you are struggling to save money and think that a larger paycheck is the key to solving your problems, a new report suggests that may not be completely true. According to a recent survey by SunTrust SUNTRUST BANKS STI -0.77% , almost one-third of survey respondents making $75,000 per year or more live paycheck to paycheck on occasion, as do one-fourth of the respondents making over $100,000 annually. The secrets to saving are as much of a mindset issue as they are an income issue.

The survey, conducted by Harris on SunTrust’s behalf, polled 518 adult respondents (ages 18 and over) in households that brought home a combined income of $75,000 or more. One-third of those households cited insufficient financial discipline as a reason that they do not reach their goals. The survey does not say how much overlap that has with the percentage of people that sometimes live paycheck to paycheck, but it’s a solid bet that most high earners in a paycheck-to-paycheck situation have at least some lack of financial discipline.

The response to another question highlights the financial discipline aspect. Within the group that aren’t saving as much as they want to save because of their lifestyle choices, 68% said that expenses from dining out was the main reason for their lack of saving. The number was slightly higher among millennials (70%), but in general, this was true across the generations. Entertainment and clothing were also listed as reasons that saving was limited. These are all discretionary purchases related to fiscal discipline, regardless of income.

Do these results translate into long-term savings concerns? One-third of respondents living paycheck to paycheck say it probably does, and even some of those who are living more frugally have some concerns. Of the respondents from ages 35 to 44, 53% expect their savings will be adequate to help them live comfortably in retirement. Only 37% of those between ages 45 to 54 feel that way, suggesting that as one gets closer to retirement, either the optimism begins to fade or a realistic assessment of retirement costs sets in. Perhaps it’s a bit of both.

The survey is part of SunTrust’s efforts to get people to set positive goals, assuming that setting targets will help motivate people to save to meet those targets. The campaign plays on words by suggesting saving for “sunny days” instead of only for rainy days.

We think the folks at SunTrust are on to something. Fiscal discipline may be partly related to a lack of knowledge, but lack of willpower appears to be the largest culprit. Unsuccessful savings efforts fundamentally boil down to budgets. Either people aren’t making realistic budgets or they are choosing not to stick with them, and the SunTrust campaign is easing people into the concept.

Granted, it’s easy to accumulate debt through discretionary purchasing — but debt management is an important part of learning how to set a budget. If you have too much debt for the income you make, cut down on your spending and start paying down your debt. As you get used to the lower spending levels, transfer your debt reduction payments to some sort of savings.

Please consider following this philosophy if you are a high earner living paycheck to paycheck. It can be a difficult philosophy to follow, but it’s certainly not complicated. While we appreciate your single-handed efforts to save the economy with your discretionary spending, let the rest of us carry the ball for a bit.

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MONEY Budgeting

Shopping for Low Gas Prices Is a Waste

gas pump in the desert
Will Sanders—Getty Images

Don't bother.

I know a couple people who will drive five miles out of their way, ten miles round trip, just to save a nickel per gallon. I’m sure you know several folks that might even drive further to save a nickel or dime per gallon.

I never worry about saving a few cents at the pump. When I need gasoline, I usually just pull in to the first gas station I see. That is because driving out of your way to save a few cents doesn’t make much sense. Usually, the savings at the pump are eaten up driving around to get the bargain.

Once again, I will use my trusty spreadsheet to illustrate my point. The results are shown in the two tables below:

For example, lets assume you drive 10 miles out of your way (round trip) to save four cents per gallon at a cheaper gas station. Let’s also assume you buy 12 gallons worth of gas. Looking at the top chart, we can see that you saved 48 cents.

Now let’s assume you paid $3.00 per gallon of gas. Looking at the bottom chart, which assumes the car averages 20 miles per gallon, we can see that you spent $1.50 driving to the station with the lower gas price. So in reality you lost $1.02 ($1.50 – 48 cents) in your quest to save four cents per gallon!

Your loss would be even greater if the price of gas was higher, or you drove even further to save the money, or your car got less than 20 mpg.

For this example, even if you only drove five miles round trip and the price of gas was only $2.50 per gallon, you’d still lose 15 cents (63 cents – 48 cents).

When shopping around for gasoline, you should naturally expect any savings at all to become less as:

1. The price of gasoline rises.

2. The amount of gas you put in your tank decreases.

3. The miles you drive to realize the “savings” increase.

4. The average vehicle MPG decreases.

So next time you’re driving around and your tank is running on empty, don’t fret about finding the cheapest price. Unless the competing gas stations are within a couple blocks of each other, the odds are you won’t be saving much money anyway.

More From Len Penzo dot COM:

Len Penzo blogs at lenpenzo.com, “the off-beat personal finance blog for responsible people”.

MONEY Health Care

Even an Appendectomy Can Hurt Your Credit Rating

150520_EM_AppendectomyCarLoan
Steve Wisbauer—Getty Images

The medical billing error from hell

When Saideh Browne had an emergency appendectomy in the summer of 2012, she had no idea it would raise the cost of a car loan three years later.

The 44-year-old personal trainer from New York recently visited a dealership to buy a new Honda Accord and discovered her credit score had been dinged by two lingering medical bills for $770 that had gone to collection.

Browne says she did not purposefully ignore the bills, nor did she shirk them because she could not pay. Like many other people, she got caught in an endless loop of indecipherable paperwork between the many providers involved in her care and the insurance company. The amounts due and the reasons listed for the charges kept shifting. Browne did not want to pay a wrong bill and never see the money again.

“I’m an astute consumer, but it gets confusing,” Browne laments. “You don’t know what bill is what.”

Almost 50 percent of medical bills have errors, according to government data studied by NerdWallet, which has a medical bill review service.

“It’s quite staggering,” says Christina LaMontagne, a general manager for NerdWallet. “Probably all of us have been mis-billed on a medical service.”

That includes LaMontagne, who recently received a medical bill she did not understand that was due in 30 days. Her first recommendation to consumers: ask for an itemized statement.

Therein lies the dilemma for most consumers.

“There are cobwebs in the system,” LaMontagne says.

So what is a consumer to do? Here are the three steps to keep your credit healthy:

1. Communicate immediately, in writing

You can pick up the phone to call your provider and the insurance company, but you need documentation, says LaMontagne. The doctor and insurance company need to respond back to you in writing, or you have grounds for appeal because you were not properly notified.

Disputing a charge should stop the clock, but there is no guarantee your unpaid bill will not be sent to collection.

The average time a provider will carry a bill is usually 120 days, which is how long Medicare providers are required to wait, says Chad Mulvany, director of healthcare finance policy for the Healthcare Financial Management Association, a trade group for hospitals.

LaMontagne says significant anecdotal evidence exists that more bills are being sent to a collections agency after 90 days, so the transition to collection could be quick.

1. Get outside help

If you are getting nowhere with your provider, turn to your state insurance commission.

You can also hire a bill resolution company, such as NerdWallet Health or Medical Billing Advocates of America, which charge either a flat fee or take a percentage of the savings you achieve.

Some workplace human resources departments also offer assistance, or at least can run interference with insurance companies.

Expert help is important because many collection agencies prey on consumer fear and tend to go away quickly if confronted by somebody who knows the law, says Pat Palmer, president of Medical Billing Advocates.

For instance, collection agencies are not supposed to be familiar with your medical details. So the first thing Palmer does for clients is call and ask about the charges. If the agents know what the bills are for, she tells them they have violated medical privacy laws. “You never hear from them again,” Palmer says.

3. Negotiate a payment plan

Most medical providers want to close out your account. Setting up a payment plan could get the monkey off your back, says Healthcare Financial Management’s Mulvany.

Most of all, paying something allows you to move forward, says credit expert Beverly Harzog, author of “The Debt Escape Plan.”

“If you don’t take care of it, it’s going to drag you down,” Harzog says.

That is exactly what Browne has done, setting up a payment plan for the unexplained bills.

“At this point, I just want it to go away,” she says.

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