Category Archives: Smart Spending

Frugality is Just the First Step

credit: Neonbrand on Unsplash

credit: Neonbrand on Unsplash

One of the heated controversies in the personal finance world is whether you should focus on cutting your expenses or increasing your income. Team Cut Your Expenses argues that increasing your income won’t do much if you also inflate your lifestyle and spend more than you earn. Plenty of people have high incomes, yet, they are still living paycheck to paycheck. Team Increase Your Income argues that you shouldn’t “live within your means,” you should “expand your means.”
There is only so much expenses you can cut in your life and who wants to live a life of sacrifice and depravation. Why not increase your income as the potential of that is unlimited compared to saving a few bucks using a coupon. Team increase your income tells you that leaving below your means is depravation and cutting out lattes is unnecessarily, when you can just “expand your means.”

Increasing income by investing it is great but it takes money to make money. You need to be able to save money first to invest it. Building a business always sounds sexy and exciting, but it will most likely take a lot of work and time. There is no shortage of products out there trying to sell you on how you can increase your income. Some are scammy and shady, while others are probably truly trying to help the client. However, increasing your income will always require hard work and often times some luck. This doesn’t mean you should try. You absolutely should try to increase your income.

As frustrating it is to sometimes hear proponents of Team Increase Income bash frugality, sometimes Team Cut Your Expenses can be equally frustrating. Cutting coupons to save 25 cents and reusing dryer sheets is going to help you build wealth. And spending your valuable time doing these tasks will keep you from finding path to finding wealth. Another issue with those who tout frugality is when I read blogs where the writer shuns consumerism and embraces frugality and makes it appear as some unknown magic elixir. They write about how they cut out some costs in their lives a few years ago and will soon retire early. Wow, that easy right? Just don’t buy stuff you can’t afford! Yes, this is great advice but there’s something missing. A good INCOME! There are many who already shun consumerism and are frugal, but are doing it because that’s the only way they can get by. It cannot be disputed that it is much easier to save a large percentage of your income when you have a larger income. While it is impressive to have a high savings rate when other similarly high income people spend it all, it is obvious that Income Matters.

So which side is right? Most people love taking one side and forcefully arguing it. Maybe it’s someone who touts frugality but doesn’t know ways to increase his or her income. Maybe it’s a guru trying to sell you their product which will increase your income. Everyone chooses a side. Most people have an agenda. The real answer, however, is that both sides make valid points. But, why can’t you do both? Why can’t you cut down your expenses while trying to increase your income! With that said, frugality is the first step.

Frugality is the first step because it is much easier. Just follow the rule: Don’t buy stuff you can’t afford and don’t need! Voila! You’ve saved money. Call up internet provider and ask for a discount. Switch to generic brands. Find a more affordable cellphone plan. Cut cable television. Cook meals and bring your lunch to work. All actionable steps which can easily be taken which will save you money not just once but over the long term. No need to learn SEO or WordPress to build a blog telling other people how to make money by starting a blog. No need to create and sell an online course about how to build online courses to sell to people. No need to publish and market a book about how to make money publishing and marketing books. No need to learn the ins and outs of real estate investing. While these skills can be great and something you might want to learn to increase your income, let’s start with the low hanging fruit.

Frugality is also an essential first step if you have debt and/or low cash reserves. It is much harder to increase your income either through a business or investment if you have debt. One of my friends struggling with debt often talks about wanting to invest in stocks or start a side business, but is struggling with a large credit card burden. How are you going to invest money in stocks or invest money in starting a business when you’re in a ton of debt? It would be akin to going for a brisk walk in the mornings as exercise, while eating hamburgers, fries and soda at lunch every day.

Once you’ve gotten your expenses under control, you should focus on income. Obviously, there are things that you can do concurrently, like learning new skills to find a better paying job, looking for a better job, asking your current employer for a raise, or working on a side hustle with low start up costs. However, if you plan on increasing your income by starting a business or investing in stocks or real estate, you’ll need some money. Having your expenses under control will form the foundation for you to increase your income. You will have money to invest in either your business or in stocks/real estate. You will also have an emergency fund as a buffer so that you are not at financial risk if you suffer a setback. That emergency fund will give you the courage to find a better paying job or start your own business.

Are you on Team Cut Your Expenses or Team Increase Your Income or both?

Buying a Used Rental Car

Buying a car is a stressful event. Buying a used car is even more stressful. You don’t want to buy a lemon and you don’t want to overpay. I purchased my previous car years ago through Enterprise Car Sales and had a good experience with it. You can read about my experience here. In a prior post, I mentioned that I was looking at purchasing a bigger vehicle and eventually bought a minivan. After doing some research, it seemed like the Honda Odyssey was a good choice. One big reason was the fuel economy for such a big car. Unfortunately, Enterprise Car Sales did not carry that car so I considered going to a regular used car lot.

I did not have a good experience with the used car lot. I found a car with a very good price…maybe too good to be true. I had a mechanic check it out and he basically told me to RUN FAR FAR AWAY. He said that even if the price was dropped $2000, he wouldn’t recommend buying it. I didn’t want to deal with shady used car dealers so I considered other types of minivans and looked back at Enterprise Car Sales, but their prices didn’t seem as good as when I purchased from them years ago. I also looked into Hertz Car Sales, which like Enterprise sells their rental car inventory, CarMax, a no-haggle used car retailer as well as a new tech start-up called Carvana, which sells used cars online (they deliver the car to you).

After looking at those option, I found that Hertz had the best prices for the vehicle I was interested in. Hertz advertises that their prices are $1000 or more below the Kelley Blue Book (KBB) value. It is a no haggle price so the price is the price, however, I found the price to be very fair based on my research and over $1500 below KBB value. Also, if you are a Hertz Gold Member, you get an extra $300 off. If you’re not a member, you can just sign up online. They didn’t seem that strict about it. I just showed them my member ID card which I printed from my e-mail.

Hertz offers two options when purchasing their cars. One is Rent2buy and the other is Herz Certified. For the Rent-to-buy program, the cars are still in their rental inventory so you have to reserve the vehicle. You have three days to test drive the car and decide whether to buy it or not. If you end up buying it, you will not be charged for the rental. I went with the Certified program. According to their website, certified cars are “carefully selected from their rental fleet” and then undergo “extensive” inspections because it is put out for sale.

My car buying process went smoothly and without a salesperson trying to pressure me to buy or upsell me. There also wasn’t any hidden fees like “destination fee” or “documentation fee.” The person I worked with showed me the car and took me on a test drive. There was no pressure and the transaction was stress-free. I recommended Hertz Car Sales to a friend of mine and he also bought a car, but he went through the Rent2buy program. The cars in that program might have less mileage as they haven’t been retired from the rental fleet yet. My friend told me that during the three-day test drive, the car ran smoothly and when he took it to his mechanic, he was told the car was “like new.” Hertz also provides a 12,000 mile or 12 month power train warranty. You also get 12-months roadside assistance.

When I’ve mentioned that I purchased my car from Hertz, some have asked me whether I’m worried that it’s was previously a rental car and might have been abused. I guess this is a possibility, but I think the majority of people renting from Hertz are probably people on business. And for others renting the cars for leisure, do you really abuse it or do you just drive like you normally do? Another thing is that I bought a Minivan! Most likely the person renting it is a parent and I doubt they’re flooring it or doing donuts in the parking lot. Also, I think rental car companies have an incentive to keep their cars in good condition so maintenance is not really an issue.

One other criticism was that I didn’t get a good deal because I could not negotiate the price. However, I can’t say that was the case. As I mentioned in my previous experience with Enterprise Car Sales, I did my research and in that instance also went and negotiated at other dealerships. In the end, no-haggle is not a big deal because the price is fair. It’s possible that if you’re an expert negotiator and the dealership you go at a time is desperate to move its inventory you might get a better deal, but I’m happy with my deal. The only downsides for some maybe is that they may not carry the make and model of the vehicle you want, and their cars also probably won’t have higher end features. But I don’t need heated leather seats or an entertainment package so that’s okay.

Would you purchase a vehicle from a rental company or do you prefer to negotiate at the car dealerships?

How Will Your Children Pay For College?

Little LRC walking to preschool last winter

Little LRC walking to preschool last winter

Paying for a child to go to college or at least helping to pay a substantial portion of the tuition is the goal of many parents. While I’ve mentioned that some of my co-workers seem to go to far in financially supporting their adult children rather than teaching them to be independent and financially literate, I understand wanting to help pay for college. They want to give their kids the best chance for a financially successful future and don’t want them to start out life with the burden of substantial student loan debt.

A recent survey has revealed that millennials are saving more for their children’s college education than parents from previous generations. The results of the survey makes sense because millennials are the generation that has had to bear the brunt of the student loan debt crisis. They have first hand knowledge of the burden of having student loans weighing them down and don’t want their kids to have to carry that burden.

Should you pay for college?

If you’ve got nothing saved for retirement or you’re living paycheck to paycheck, it’s probably best to focus on fixing that before saving for college. While your child can always borrow to pay for college costs, you won’t be able to borrow money to fund your retirement. There are also parents who don’t think it’s a good idea to pay for college because the child will have a sense of entitlement or take their schooling for granted. I think that paying for college is a shared responsibility. I have two little boys, a 3 year old and a 3 month old. I will do my best to help them pay for college but I’ll expect them to chip in as well.

How much should you save?

With private universities charging over $50,000 and even over $60,000 in tuition, it seems impossible to save enough to pay for college. And at the rate that tuition is increasing, it seems even more impossible. However, personally, I think the rate at which tuition is increasing is unsustainable. When college grads with heavy student debt burdens have difficulty finding high paying jobs and have a difficult time making their student loan payments, the college tuition bubble is bound to burst. In any event, both my wife and I went to state universities, and while tuition is increasing at public schools as well, they are still much more affordable. Many parents and students love the big name colleges because they think that is the only way to be successful, but often times, where you go to school will not determine what you will achieve. If my child turns out to be high-achieving and we can afford the price tag, I won’t deny him that opportunity, but going to a big name university no matter the cost just doesn’t make financial sense.

529 NYS saves

How do you save for college?

The 529 plan is probably the best vehicle to save for you child’s college education. Surprisingly, many people haven’t heard of the 529 plan. Only about two-thirds of Americans have heard of the 529 plan and only about 27% of families use it to save for college. Many people also have misconceptions as to how the 529 plan works. When you contribute money to a 529 plan, the money grows tax-deferred and when you withdraw the money to pay for qualified college expenses, you are exempt from federal taxes. Many states offer a tax deduction for contributions into your state’s plan. I live in New York and participate in its 529 plan because of the tax deduction and because it contains low-cost Vanguard funds.

Some have said they don’t want to save in a 529 plan because their child may not go to college. The 529 plan can be transferred to another child or to a grandchild or even to yourself. So there is some flexibility. However, if you really don’t like being tied down, you can always save in a taxable stock account.

Saving tips

Start early – I start saving for my first son’s college when I found out that my wife was pregnant. What can I say? I’m a planner. Since I didn’t have his social security number, I listed the beneficiary of the plan as me and then changed it to my son after he was born. Getting a head start opening a 529 plan will give allow your contributions to compound. Determining how aggressive you want to invest college savings will depend on your risk tolerance. If you are having trouble saving for your child’s college because you’re still paying off your own student loans, check out this valuable resource about student loan refinancing.

Have family friends contribute – When my friend’s daughter turned one, he threw a birthday party and asked for contributions to his daughter’s college savings plan instead of toys. His daughter has been showered with plenty of toys from family and friends already and they have a small apartment. A gift towards her future college education would be much more valuable. The 529 plan in New York makes it pretty easy for people to contribute online.

Have kids contribute – As I mentioned early, I think it’s important that children share in the responsibility in saving for their college education. When I was growing up, I would receive cash gifts during my birthday and holidays and would also receive an allowance. My parents would ask me occasionally if I’d like to save and invest that money for college. (The 529 plan did not exist at the time). As a good little saver even as a child, I would allot some of my savings for this purpose.

Do you plan on helping your child pay for college? How are you saving for it?

“It’s Supposed to be That Expensive!”

Photo Credit, David Niblack,

Photo Credit, David Niblack,

A higher priced product does not necessarily mean a better quality product. While it is true sometimes, often times, we pay a higher price only because we perceive something to be a higher quality. Other times we pay for higher priced items because we like that brand and are conscious of image. Here are a few things that people assume you have to pay a lot for because marketers have brainwashed us into thinking that the price point is the norm. The companies in these industries also have monopoly/oligopoly over the industry.


Glasses are expensive. Recently, I received a coupon for “$200 off” glasses at an optical store and I thought I would get a great deal, but in the end, the salesperson still told me the glasses would cost over $500. I always assumed glasses are just expensive and there was just no way around it. Then I read about a company, Warby Parker, that was turning the eye-wear industry on its head. The founders explained that the reason why eyeglasses are so expensive is because most frames are manufactured by a single company, Luxottica, which controls 80% of the major brands. Not only do they own most of the major brands, they also own a majority of the eyewear stores, including, Lenscrafters, Pearle Vision, Sears Optical, and Target Optical, among others. But wait there’s more! If that wasn’t enough, Luxoticca also owns EyeMed, the second-largest vision care insurance plan in the U.S, which, if you have coverage from Aetna or Anthem Blue Cross Blue Shield, is your carrier. Now it makes sense, the glasses are expensive not because it costs a lot to make, it’s expensive because one company has a monopoly and can control the price. According to an article on the DailyMail, Oakley had a dispute with Luxoticca about pricing so it dropped Oakley from Sunglass Hut, which is surprise surprise, owned by Luxoticca. Luxoticca would later buy out Oakley. So because Luxoticca controls the market, they can price glasses at over $200 when they cost only about $30 to make.

So if you want to find an affordable pair of eyeglasses, you can check out Warby Parker which sells glasses online but they have physical stores in some cities. I haven’t bought glasses in awhile and haven’t gone there so I don’t have personal experience but you can read about Kristin’s experience, who blogs at the Wild Wong. There are also other online eyeglass stores like Zenni Optical, 39 Dollar Glasses, and Kristin wrote about some of those online stores as well. I know many people may not feel comfortable going to an online store but Warby Parker allows you to try 5 frames for 5 days and has a 30-day no questions asked return policy. Also, I read that Costco has good prices. Bob Niedt, who writes for Kiplinger, wrote about his experience buying glasses at Costco . I’m not sure whether Luxoticca controls them, but the DailyMail article mentioned Costco as its competitor.


When I bought my first mattress, I remember my mom telling me not to scrimp when buying a mattress. She told me that mattresses are worth it since we use it so often and that mattresses are supposed to be expensive. This was somewhat odd to me because I grew up with frugality ingrained in my head by my parents so expecting to pay a lot was rarely something that was said to me. My mom is not the only one though and I’ve heard many people, including those who blog about frugality, say that their mattress costs thousands of dollars, but is worth it. I’m not saying that a comfortable mattress is not worth it, it certainly is. But does it really have to cost that much?

If you’ve been paying attention, there seems to be a lot of internet ads for online mattress companies. Much like Warby Parker, these online mattress companies are trying to turn an old industry on their heads. One such company, named Tuft & Needle, says that “mattresses are typically marked up 6-12 times and consumers are mostly paying for “gimmicks, unfair retail markups, sales commissions, and wholesaler’s profits.” Another online mattress company, named Helix which makes customized beds, argues the same thing. According to their website, their team conducted substantial research and “found that there is typically a fairly direct increase in quality as price increases, but only up to roughly the $1,000 price point for a queen. Beyond that point, typically brands are just charging you more for the same materials. Adding on extra features sounds nice, but in practice these extras aren’t adding much to your sleep quality.” The CEO of another online mattress company, named Casper, said that “statistically, lying on a bed for four minutes has no correlation to whether it’s the right bed for you.” He explains that hotels don’t ask people what beds they want, and yet, we often find those beds very comfortable. He said that the salesmen at mattress stores like to play games with customers to get them to buy the what they say is the “most comfortable” mattresses which are always the most expensive ones.

The mattress industry has striking similarities to the eyeglass industry. An article on Priceonomics said that the “whole mattress industry seems to be a giant, make money hand-over fist, anticompetitive racket.” They are controlled by a small amount of companies. Sealy, Serta, Simmons, and Tempur-Pedic make up 59% of the industry revenue. Mattress wholesalers have gross margins of 41 to 64% and retailers mark that up another 96% on average.

If you have the time, listen to this Freakenomics podcast entitled Are we in a Mattress Store Bubble?, which explains why a lot of these start ups are selling mattresses and why there are so many mattress stores to begin with. Mattresses have high markups. Retail profits are steep because manufacturing costs are low. A mattress with a retail price of $1000 costs about $250 to make. While new mattresses have special gels and foams, most people buy a mattress that is similar to the basic innerspring mattresses that have been around for ages.

I still have a mattress that I bought about seven years ago so I haven’t had the chance to try out these new startups. However, a few personal finance bloggers whom I trust gave Tuft and Needle excellent reviews. Amazon reviews also seem excellent. Their return policy is pretty generous. If you are someone who just can’t fathom buying a mattress on the internet, you should at least make sure to try to haggle when you buy at the mattress store. There is a high markup and they are definitely open for negotiation. I wasn’t even thinking to negotiate when my wife and I bought a mattress from Sleepy’s years ago. We were just looking around and not ready to buy so we left the store, but the salesman immediately told us he would knock off $100 and we took the deal. I’m sure we could have gotten an even bigger discount!


They say two months salary for engagement rings right? Is that net salary or gross?? And who made up this rule? Demand for diamonds is a marketing invention, argues Rohin Dhar in a Priceonomics article. Before the 1940’s, the diamond industry was dying so De Beers went to Madison Avenue for help. They marketed diamonds as a symbol of status and love by enlisting the help of Hollywood stars and the fashion industry. The marketing campaign was so successful that in 20 years, a diamond engagement ring was practically a requirement to marriage. Today, 80% of women in the U.S receive diamond engagement rings. This custom has also spread to other countries. And as to the rule about two months salary, the De Beers marketing machine made that one up. Actually, it was only ONE MONTH’S SALARY, but since that rule worked so well, they figure they should increase it to TWO MONTHS!

Like the first two industry, De Beers is pretty infamous for having a monopoly over diamonds, in addition to creating the market for it, in the 1980s, De Beers controlled almost 90 percent of rough diamonds and they would manipulate the markets by buying up mines and intimidating competitors.

Diamonds are marked up 100% to 200%, and if you want to sell your diamond back, good luck getting the wholesale price. According to an Atlantic article, Jack Brod, president of Empire Diamonds, which is a company that buys diamonds estimates that a half-carat diamond ring, which might cost $2,000 at a retail jewelry store, could be sold for only $600 at Empire. Jewelry retail stores don’t buy back diamonds because their offer of lower than wholesale price for something that they just claimed was so valuable would be a bad optic. The whole house of cards may just fall down. Diamonds are not an investment, they are merely a status symbol. Unfortunately, there is no internet company to disrupt this industry, because unlike eyeglasses and mattresses, diamonds have no intrinsic value. Instead, maybe people can buy a different type of gemstone, however I know there is societal pressure to get a diamond. I did read a very interesting alternative on a post from Millennial Boss blog where the blogger sets out her grievances against the diamond industry and said that she went with an alternative: moissanite, which looks strikingly similar to a diamond. And one final reason to consider an alternative to diamonds, Blood Diamonds!

What other products are highly marked up and not worth the cost? Do you think these internet companies can disrupt the monopolies in those industries? Have you tried any of the above-mentioned companies?

This post does not include affiliate links.

Mind-blowing Ideas Found Reading Blogs



Even before I started my own blog, I was a blog reading addict (mostly personal finance blogs). I’ve learned so many great things and gotten so many ideas from reading blogs, which include ideas that the main stream media often don’t talk about. I was tired of reading the recycled articles about making a budget and contributing to your 401K up to the employer match. I didn’t want to read any more stories about how early retirement was almost impossible (and by early they meant 50’s) and that even retiring at 65 might be a pipe dream. Here are some of the amazing things that I’ve learned thus far:

Retire in your 30’s

I always thought that, like most people, you get a job, work for 40 some odd years and retire in your 60s. I thought I was doing an awesome job saving for retirement when I opened an IRA account and increased my 401K contribution over the amount that my employer matched. Since I was working in government where I had a pension, I started thinking that retirement at 55 would be possible and thought that was incredibly awesome. Now when I stumbled upon the Early Retirement Extreme blog where the blogger, Jacob, said that he retired after working 5 years and was not yet 30, my mind was blown. He was a little extreme with his frugality, but then through Jacob’s blog, I found Mr. Money Mustache and his story really made me think that early retirement was possible. He went into detail about how he and his wife retired early, and argued that early retirement didn’t mean a life of deprivation, explaining often that he lives a very fulfilling life. I’m not going to be able to retire in my 30’s, but it’s possible I get there in my 40’s.

Simple, Stress-free Investing with Superior Results

I have talked about index investing many times on my blog. I believe in it and I am glad that I found this strategy. It wasn’t always this way though. Like many others, I used to chase returns by trying to a hit run by investing in the next hot stock and by investing in mutual funds which had the best returns. Now I realize that it is difficult if not impossible to consistently beat the market, so I just stick with low-cost index funds. Warren Buffet has encouraged most investors to just invest in low-cost index funds and I’m going to take his advice. This investment approach has also reduced my stress. The market drops a few hundred points! There’s a recession coming! Britain is exiting the EU! I’m investing for the long haul and I don’t really care about the stock market fluctuations. I continue to invest and stay the course. I’m not exactly sure when I first learned about index investing but it was likely on the Bogleheads’ forum.

Don’t Pay Taxes

You know how the saying goes that “there are only two guarantees in life: Death and Taxes.” Well, what if you could pay very little or no taxes? Wait wait wait, I’m not saying you should be like Wesley Snipes and get convicted of tax evasion. There are legitimate ways for regular working Joes to shelter our money from taxes. When I read the blog post title $150,000 Income, $150 Income Tax and Never Pay Taxes Again, I was very interested. We often hear about maximizing our returns when investing, but most times we ignored tax savings. Taxes are boring and complicated. Nobody really wants to deal with them. Heck, most people I know have no idea about their own taxes! They send their tax documents to the accountant who files the taxes for them. The tax policy in the US targets people with earned income so if you reduce your taxable income by “making your take home pay as small as possible,” you can avoid paying a good amount of taxes. Justin who blogs at Root of Good and wrote the post about paying only $150 in income tax with a $150,000 income, suggests that “you do everything you can to make your take home pay as small as possible” by maxing out tax advantaged plans like Retirement plan contributions (401k, 457 or 403b plans), flexible spending accounts, health savings accounts, and others. I’m pretty sure that after I read this post, I immediately logged onto my 457 plan online and maxed out my contributions.

The post about never paying taxes again was found on the Go Curry Cracker blog and it gave four simple rules to eliminate taxes:

◾Choose leisure over labor
◾Live well for less
◾Leverage ROTH IRA Conversions
◾Harvest Capital Losses AND Capital Gains

I’m especially a fan of choosing leisure over labor to eliminate taxes. That’s a win win! This advice is geared more towards those seeking or near early retirement, which is what I often dream about.

Out-of-State Real Estate Investing

I always wanted to invest in real estate but it didn’t seem possible because real estate was so expensive in the area where I lived. When I read that the blogger FI Fighter, who also lived in a high-cost-of-living-area, invested in real estate in states where the prices made more sense and where the properties would cash flow, I was very intrigued. I was somewhat skeptical at first but after some due diligence and research, I jumped in and also purchased a rental property out-of-state.

Travel for Free

I used to focus on earning cash back on my credit cards. When I read bloggers write about earning travel points on credit cards and going to exotic locations for nearly free with points, I didn’t really pay much attention because I always figured it was just too good to be true. There was a catch, right? However, after I read more and more stories of people were doing it, I was of course, interested to see if I could get in on it too. After learning some of the “tricks of the trade” with travel hacking, I’ve been able to score some free flights and have stayed at hotels (some pretty luxurious ones) for pretty much free. If you are someone who overspends with a credit card, travel hacking is not a good idea. If you are disciplined with your spending and are an organized person, you can definitely take advantage of travel hacking. I think I first started reading about travel hacking on the Flyertalk forums, but the information can get pretty technical and it might be intimidating to newbies. I think from that forum, I found the Million Mile Secrets blog which is a great resource for those interested in pursuing this. If you want to learn more about this area, there is even a free online course about the topic on Travel Miles 101. If you want even more hand holding, you can contact Holly from Club Thrifty with your ideal itinerary and she will help you create a “credit card rewards-fueled plan that can make your travel dreams come true”

You Can Really Make Money Online!

I always thought that there was an opportunity to make money online but I didn’t know how, plus I am not the least bit technically inclined. Reading articles where bloggers reveal how much money they earn online really opened my eyes to the opportunities out there. Check out the income reports on Club Thrifty and Making Sense of Cents and tell me you don’t want to learn more about this possibility. I definitely am and will need to learn more about how to earn some money online! The best thing about making money online is that you can be often work from anywhere and your schedule is a lot more flexible. Also, if you do it right, a lot of the income can be passive.

Drastically Reduce the Cost of Your Cellphone Service

I was in a family plan with AT&T and had an employer discount. I thought that was the best that I could do. There was no other way to reduce this expense unless I went with some unknown network which was probably unreliable. Then I read Is Your Cellphone Plan Ripping You Off? on the Saving the Crumbs blog and I knew that I could saved a lot of money by switching. Being that Cricket Wireless uses AT&T’s network, I figured there was no downside to the switch. With Cricket Wireless’ family plan, you can have 5 smartphones with unlimited talk and text and 2.5 gigs of data (after which your data speeds are reduced) for $100. That is less than half of what you would pay if you had a similar plan on AT&T. So why wouldn’t I switch? I’ve also heard great things about other plans like Republic Wireless and Ting which are a lot more affordable that the traditional plans, but I haven’t tried them. If you’re interested, you can check out the review on Republic Wireless here, and the review on Ting here.

Consider an Adjustable Rate Mortgage
When I was purchasing a co-op, I went to the bank and the loan consultant just assumed that I was looking for a 30 year fixed mortgage. I didn’t know any better and after the housing crash in 2007, there was such a stigma with adjustable rate mortgages that I just assumed that a fixed mortgage was superior. I truly regret not doing more research about this because I would have saved a lot of money if I didn’t go with conventional advice. When I read Financial Samurai’s post, 30-Year Fixed Mortgage Loan or an Adjustable Rate Mortgage (ARM)?, I knew I made a costly mistake. Here is an excerpt of what he had to say:

“First of all, the average duration one lives in and owns a home is 7 years. If that’s the case, what on earth are you doing borrowing a 30-year fixed rate mortgage for? A 23 year + overestimation of ownership is a serious miscalculation based on the statistics at hand. With a 5/1 ARM, your underestimation is only 2 years, but you already have baked that in”

We bought a co-op which is a junior 4 (small dining alcove converted into a small bedroom). Being that our family was growing, it was very likely that we’d outgrow the apartment in 5 to 7 years. I did run the “rent vs buy” calculator and given other factors, I think it made sense to buy a co-op even given this timeline. But it made no sense to get a 30-year fixed mortgage. If I had gotten a 5/1 ARM, I’d reduce my interest rate by 1% saving over a thousand dollars a year. *Face Palm*

Do you see anything here you might implement in your life? Have you read anything tips or ideas on other blogs that was really mind-blowing? If so, please share in the comments!