Control Your Food Spending with These Tips

This following is a post by MPFJ staff writer, Jeff. Jeff writes about sustainable living and finances at his website, Sustainable Life Blog. Jeff really enjoys traveling with his wife as much as he can, to wherever he can.

For the longest time, my wife and I couldn’t get our food spending under control. While our food spending seemed to go up and down at times, it was always higher than we’d like. We were never as bad as one blogger who used to spend $600 per month on fast food but we still seemed to spend quite a bit.

The worst part about our food spending is that when our fast food spending would go up, our grocery budget would stay the same – we expected it to go down as we were eating less at home, but it wouldn’t budge. We’d end up spending more money on fast food when we were over-scheduled or too busy, but that’s not a great excuse to spend $200-300 per month – I’d much rather have the money. We had to find a strategy to lower our spending and eventually settled in on a few good ideas that have helped us.

First, we figured out when we were hitting up the local fast food joints – it was mainly non-breakfast meals on the weekend (both days), and weeknights when we didn’t have a meal planned or some protein needed to be defrosted and was not or something like that. Once we identified when we were doing all this extra spending, we were working towards figuring out why were doing all that extra spending – it was simple. We didn’t plan and we didn’t make time to cook.

Get a Crock Pot

Our first step was to start taking the time to prep a few meals ahead. We noticed we were always busy (though self imposed, and we’ve been working on that too). We’ve gotten into a great routine on Sundays where we get both of our crock pots going. One crock pot has a meal for dinner that day (something like a soup) and let that cook all day. Usually if we get it in early enough we can eat it for lunch, but that doesn’t always happen. Since we have 2 crock pots, the other one gets filled with another recipe that I let cook all day and portion it out at the end of the night for lunches for the week.

Whatever is leftover from crock pot 1 also gets portioned out individually for lunches for the week. So with relatively little effort, We have 10+ servings of food for lunches for the week, as well as dinner (and sometimes lunch). This is a great and easy way to save some money and avoid eating out.

Here’s a few simple recipes for the crock pot – Barbacoa & Pulled Pork.

Set a Budget

The most important thing that we did to reduce our spending on fast food and dining out was to go all cash. My wife and I have been using credit cards for all spending (and paying them off every month, of course) but we switched to cash for this category. We set a monthly limit of $50, and at the beginning of the month I go to the ATM and get that amount of cash from our checking account and we set it on the counter. We both decide on when we will use it, and it has worked really well for us so far. We even seem to have more money left over at the end of the month from our $50! We were spending well over $150 before, and now we’ve got leftovers off of $50! So crazy!

If you aren’t sure what amount to budget, look at where you’ve been spending and set something lower than that. It needs to be low enough to make a difference and hurt a bit. Keep cash and stick to your budget and reap the savings.

Plan Your Meals

Our third breakdown was when we didn’t have a plan for what we were going to do for dinner, so we would just default to running out and picking something up quick. That’s not the cheapest option or the healthiest, so we were really working to cut that out. We’ve started planning our meals bi-weekly and have been going to the grocery store once per week to keep up on food. The planning really makes it easy as we go home and don’t have the “what’s for dinner” conversation.

How about you all? Do you plan your meals or budget your dining out expenses? Or what other tricks do you have to keep dining out spending low?

Share your experiences by commenting below!

***Photo courtesy: https://www.flickr.com/photos/59937401@N07/5930043516/

Traveling By Train: An Alternative to Expensive Air Travel

This following is a post by MPFJ staff writer, Jeff. Jeff writes about sustainable living and finances at his website, Sustainable Life Blog. Jeff really enjoys traveling with his wife as much as he can, to wherever he can.

While I was traveling to visit family over Christmas, my family and I were able to experience something that we’ve never been able to do before: take a train to get to our destination. My wife’s sister lives in western New York State, and we were headed out to stay with the family in the Finger Lakes region. Unfortunately, all of the flights to nearby airports were about $450 per PERSON, round trip and much more than I was willing to pay.

After talking with my wife, we decided to take a flight for $200 (going into NYC and out of Buffalo), save ourselves a ton of money and then take Amtrak from NYC to the Finger Lakes. I’d never been on a train before and was quite excited. We ended up being rather late due to track sharing & a disabled train headed the other direction that we had to pick up, but I was still impressed and left wanting more.

Travel By Train

I’ve always wanted to take the train, and when I look at the prices it makes me want to even more. At first though, I was wondering how people were able to take so much time off to take the train from point A to point B (a few days) and then spend time enjoying point B before returning home (on an airplane). The train seemed like so much fun and would be a great trip, and I mentioned that to a friend of mine who’s a huge travel guy. He said they were fun and worthwhile, but that I was thinking about them all wrong. Make the train THE trip, instead of making it a mode of transportation to where you want to go.

So for example, instead of taking the train to Chicago to see Chicago, I should take the train to see what is between here and Chicago.

Even though the train is slower, I found the travel to be much more comfortable than most of my recent plane flights. The seats are comfortable and wide, and something that I didn’t mind sitting in for 8 hours. There are enough electrical outlets on the train, as well as WiFi, so you can be productive while you ride as well. You’re able to move, and you can go get food from the cafe car on the train after it opens. It’s a much more comfortable experience than air travel, and I look forward to getting to take the train over a longer trip (2-3 days).

Cost

One nice thing about traveling by train is that it’s often fairly cheap. The ticket may seem a bit more expensive than it is to fly, but keep in mind that you’re also using this as sleeping quarters for 2-3 days as well, meaning you wont have to pay for a hotel or other place to stay while there.

The sleeper rooms, while not huge, look good enough, and they have huge windows that you’ll be able to look out of. I hear that the Amtrak Empire Builder serves up a pretty nice ride as it goes from Chicago through Minnesota, Wisconsin, North Dakota, Montana (including Glacier National Park), Idaho, and then to a final destination of Portland (OR) or Seattle (WA).

Final Thoughts

While it’s probably not the first idea you had in mind for a family vacation, I’d strongly encourage you to look at the train routes as a vacation idea next time you’re planning. You’ll have the opportunity to see some amazing parts of the country that are typically considered “flyover” and most people don’t get the chance to see. While it wont be the fastest way from point A to point B, its a good value and will provide you and your family with lasting memories for years to come.

How about you all? Do you have any plans to travel by train anywhere? Have you done it before? If so, what do you enjoy about it?

Share your experiences by commenting below!

***Photo courtesy http://www.flickr.com/photos/springfieldhomer/12580852/

An Investors’ Guide To Investing In Peer-To-Peer Loans

The following is a post by MPFJ staff writer, Toi Williams, who is a professional personal finance blogger of Fine Tuned Finances. She has backgrounds in personal finance, sales, and real estate.

Many investors are being drawn to investing in peer-to-peer loans as a passive investing method that provides higher than average returns. For conservative investors, the least risky notes on the lending platforms offer substantially better returns than bank certificates for slightly higher risk. For investors that are comfortable taking on more risk, the platforms also include notes with correspondingly higher risk profiles.

Peer to peer loan platforms categorize their loans into different investment grades based on the amount of risk inherent in the loan. Each peer-to-peer loan platform has a minimum credit score requirement for borrowers to reduce the risks of investing in loans on the platform. Loans requested by people with high credit scores receive higher investment grades than loans requested by people with average credit scores.

For many investors, the best thing about investing in peer-to-peer loans is how easy it is. In many cases, the minimum investment amount for a single peer-to-peer loan is around $25. Some investors use services that use proprietary algorithms to pick their notes for them. Others choose to use the reinvestment programs of the lending platform to reinvest their returns from the platform.

It is important for potential investors to remember that they will be holding on to their investments for a period of three to five years. Once money has been invested in a loan, the investor must keep the investment until the end of the term. The notes that the investors are investing in are unsecured, so if a borrower defaults on the loan, the investor could be out of a considerable amount of money. Many investors mitigate this risk by diversifying their holdings by investing small amounts into a large number of loans.

These peer-to-peer lending platforms are considered to be the best ones for investors due to their vigorous underwriting processes and returns for investors.

Lending Club

Lending Club is currently the largest of the P2P platforms, arranging about 56,600 loans totaling $791 million in the first quarter of 2014. Lending Club loans range from $1,000-$35,000 with the average loan amount reaching $13,913. The platform has some of the most stringent underwriting standards in the industry, with over 80 percent of applicants rejected for not meeting the criteria. To be approved, the applicant must have a FICO score higher than 660 and a debt-to-income ratio of not more than 30 percent.

Applicants that are approved are grouped into seven loan grades assigned a letter from A through G and further categorized into five sub-grades numbered 1 through 5 based on an assessment of their credit history. Applicants graded A1 get the lowest interest rates, currently 6.78 percent APR for 36-month notes and 7.3 percent for 60-month notes. G5 rated borrowers pay the highest interest rates, currently 29.99 percent APR for 36-month notes and 28.69 percent APR for 60-month notes.

Investors can also invest in Lending Club through private investment funds. There are two funds that are proving to be very popular for investing in Lending Club – the Conservative Consumer Credit Fund and the Broad Based Consumer Credit Fund. The Conservative Consumer Credit Fund has a minimum investment of $500,000 and invests in only the two least risky grade notes on the platform. Returns for the fund have averaged a 5.69 percent trailing 12-month net fund return. The Broad Based Consumer Credit Fund also has a minimum investment of $500,000, but it invests in all loan grades. The fund has invested in more than 16,000 36-month and 60-month consumers loans and returns for the fund have averaged a 9.36 percent trailing 12-month net fund return.

Prosper Marketplace

Launched in February 2006, Prosper was the first peer-to-peer lending company operating in the United States. Prosper is allowed to offer loans in 47 of the 50 states and in Washington, D.C. Investors must invest in a minimum of $25 per note, but any investment amount of at least $25 is allowed. Prosper has a Quick Invest feature that allows investors to choose the loan grade or other filtering criteria and invest with just four clicks.

Prosper offers loan terms ranging from 12 months to 60 months and allows borrowers with credit scores as low as 600 to use their platform. Prosper charges even higher rates than Lending Club for borrowers with lower credit scores, with interest rates ranging from a low of 5.65 percent up to a maximum of 31.99 percent. The average interest rate for loans on the site is 19.2 percent.

Peerform

Founded in 2010, Peerform is a newer peer-to-peer lending platform. Investors can invest in whole loans or fractional loans on the platform. Peerform offers personal loans with 3-year terms ranging from $1,000 to $25,000. Borrowers must have a minimum credit score of 600 and a debt-to-income ratio below 40 percent. They also cannot have any current delinquencies or judgments on their credit history.

Borrowers are sorted into 16 risk grades ranging from AAA to DDD. AAA graded borrowers have credit scores of 720 or above when they apply for their loan through Peerform. AAA graded borrowers are offered interest rates of about 6.4 percent while DDD graded borrowers pay an interest rate of about 24.2 percent.

Additional Resources For Investors

• Interest Radar – www.interestradar.com – Analytical tools for peer-to-peer loan investors
• Lend Academy Investments – www.lendacademy.com – Introduction to investing in peer-to-peer loans by Peter Renton
• LendingRobot – www.lendingrobot.com – Automated investment tool for peer-to-peer loan investors
• Nickel Steamroller – www.nickelsteamroller.com – Risk management tools for peer-to-peer loan investors

How about you all? Do you have any experiences with peer-to-peer loans? Do you have any resources not listed above that have worked well for you in the past?

Share your experiences by commenting below!

**Photo courtesy http://pixabay.com/en/executive-businesswoman-world-510513/

Stop, Think, and Be Thankful

The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

Do you ever stop to think about how much you really have? I sure hope so, because if you’re reading this post on your personal laptop or tablet right now, you have tons more than the average person in this world. On this day, I suggest that you stop, think, and be thankful.

We Are Wired to Want

Have you ever wanted something simply because someone else had it? I think we all have! It’s in our nature. Let’s take kids for instance. There might be a group of kids playing, each with their own toy, and then one kid decides to pull a different toy out of the closet, one that everyone knew about and didn’t grab. But, now that this kid has it, the other kids want it. We have all seen this before haven’t we? For whatever reason when someone else has something we are wired to want it.

Unfortunately, many of us do not grow out of this habit of wanting. When our friends and neighbors buy new cars, we suddenly get the itch to buy a new car as well. We know that it’s not a wise purchase (due to our lack of cash and the quick depreciation on the vehicle), but we begin to justify it. We suddenly start noticing that our current car “breaks down all the time” and “gets terrible gas mileage”, when in actuality the car is a perfectly fine automobile and might last another ten years if you just take care of it. The reason for buying the car is simple – we want it so we talk ourselves into buying it.

We Forget What We Have

As human beings, all we really need is a roof over our head, food in our bellies, and clothes on our back. If we shared a house with ten of our closest friends, what would all of that really cost us? Maybe $200 a month? But how much do we actually spend per month? For many of us, the monthly cost of keeping all of our stuff is well over $3,000 a month. Isn’t that just insane?!

And, with all of this spending, we are still left wanting more. Instead of a 2,000 square foot house, we think we need a 3,000 square foot house! Instead of a six-year-old domestic car, we would really like a brand new luxury car. And for what reason? Just because it looks cooler? Or maybe because we want others to envy us?

I don’t think I have ever quoted Oprah Winfrey before, but this saying is absolutely spot on:

“Be thankful for what you have; you’ll end up having more. If you concentrate on what you don’t have, you’ll never, ever have enough.” – Oprah Winfrey

Thankfulness and happiness really go hand in hand. If you are thankful for what you have and are happy with what you own, then you will likely be blessed with even more. But, if you constantly want what other people have, then you will just be wanting for your whole life, because there is no way that you can afford to buy everything. It is best to be thankful.

We Don’t Know What Others Don’t Have

While we are out wanting all day, many of us forget to consider the needs of others. Do you ever stop to think about how good you actually have it? There are millions of people out there that do not have access to clean water, and you can access it from your home by taking about 5 steps to your left and turning the faucet.

There are millions without the luxury of owning a car, but still walk 10 miles or more each day purely for their survival. You have a car that can drive you hundreds of miles, but you just want a shinier model.

The next time you want something, consider the life of the needy. How would they view your desires? Again, be thankful for what you have and you will only grow in your happiness in this life.

How about you all? What have you desired lately that is totally unnecessary? Will you be thankful instead?

Share your experiences by commenting below!

**Photo courtesy http://www.flickr.com/photos/hgaronfolo84/116858703

Increase Your Net Worth with Education

The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

Did you know that the more education you have, the higher you pay will likely be? I know it probably doesn’t shock you, but it’s absolutely true!

When I was in college for engineering, I was concerned that I would need to continue my education again and again in order to keep up with the changing dynamic of the engineering world. In fact, it was one of the reasons that I left engineering school.

Looking back, I was an idiot kid that didn’t realize that all occupations require continued learning. It’s expected that you continue to learn, grow, and improve in the working world. In fact, if done properly, it can actually be a great way to advance at your place of employment.

Feed Your Brain

So what is the best way to improve your knowledge and advance your career? As much as I hate to admit it, getting your Bachelor’s degree will probably provide you with the greatest degree of advancement. Just be sure not to spend too much on your degree. It might be easier to find a job coming out of an Ivy League college, but it will definitely cost you more money to receive that luxury (often two or three times more). Instead, look at going to an in-state university or a smaller college. The cost will be much lower, but your employer will likely still be impressed by the name of the school on your resume.

If you have your bachelor’s degree and work in an office setting, the next suitable degree would be a Masters. Again, focus on getting the education from the degree and don’t worry so much about the name of the school you are getting it from. Just having the degree will mean quite a lot to your employer.

Finally, if you are not interested in obtaining degrees then I would suggest being your own teacher. Take a hold of your own education and get yourself over to your local library. What are you interested in learning more about? Company financials? Leadership? Management? The library holds your answer to each of these topics and many more. Find out what you would like to learn, teach yourself through books and online courses, and then be sure to use your new-found knowledge in the workplace.

Prove Your Worth

Getting a degree is admirable, but if you apply none of your learning then you really don’t deserve to advance in the company. No matter where your education came from, if you expect to move up the career ladder to that next job, then you’ll certainly need to apply your learnings in your job.

A few years ago I sought out a mentor. This is the exact message he conveyed to me as well. Sure, a piece of paper from the University is nice, but it doesn’t do anything for the company if the education goes unused. Instead of just displaying my diploma in my cubical, he encouraged me to teach some of my knowledge to the rest of my department.

Within a couple of weeks, I discovered that many of my coworkers did not know how to use Microsoft Excel efficiently. Instead of using a function to transfer information from one file to another, they were copying and pasting information. To help them out (and to prove my worth to the company) I held a class for 14 people. I taught them how to use functions and I was immediately deemed “The Excel Guy”. It increased the company’s awareness of my skills (not just in Excel, but in teaching others) and it showed my increased value to the entire company. This simple action led to a promotion just four months later. If I hadn’t displayed my knowledge, I would likely be working that same menial job today.

Increased Knowledge Equals Increased Income

As you may have gathered, and improvement of knowledge will soon lead to an improvement in your income. As you learn and grow and display your skills to your employer, you will no-doubt be rewarded for the increased value you have brought to the company. Your knowledge will lead you to higher ranking jobs and will also increase your salary with each jump up the ladder. Education is almost certain to increase your salary, and therefore your net worth.

How about you all? Are you working to increase your knowledge? Are you displaying your new skills at work?

Share your experiences by commenting below!

**Photo courtesy http://www.flickr.com/photos/nottinghamtrentuni/14714286904

Can Public Transportation Replace A Car?

The following post is by MPFJ staff writer Travis.  Travis is a customer blogger for Care One Debt Relief Services, and also appears weekly at Enemy of Debt.  Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family.

I stop at the corner at the end of my block to talk to my neighbor almost every day at the conclusion of my morning run. It’s always at roughly the same time because I have to be home in time to make sure my kids get up for school, and my neighbor is waiting for the city bus to pick him up and take him to work.

For as long as I’ve known him, his family has owned a single car and his wife drove it to her job, requiring him to use alternate methods to get to work. I figured that they just prioritized other things financially over owning a second car. When the weather is nice, sometimes he rides his bike, most of the time he takes the city bus.

Recently they purchased a second car, but I still find him standing on the street corner at 6:00am waiting for the bus. I asked him why he still rides the bus, even though they now had two cars. He gave the following answers:

• Finding parking downtown is difficult and time consuming
• The cost of parking adds up quickly

Our conversation piqued my interested, and prompted me to do some investigation into using alternate means of transportation as well. My son is turning sixteen soon, and there may be times when he may want or need to drive to school. Neither he or I are in the position to buy another car right now, so we may be left with my wife, my son, and I all needing to drive, and only two cars.

Since my office is less than five miles away from my home I wondered how much it would cost for me to use an alternate method of transportation to get to and from work, and if it would work within my schedule to do so.

Bicycle:

Cost:

I used to have a bike, but it was stolen a decade ago. I’d incur a one time cost of a bike and a bike lock. I could spend $80 on a bike, or I could spend $1000 or more. I’d likely try to find something in the $300 price range.

Convenience:

With a bike, I would be free to come and go as I pleased. However, weather conditions could play a major detracting role in this as well. I would also have to get some kind of rack to transport my lunch and laptop. It would take me about 20 minutes to get to work, which isn’t that much longer than driving myself.

Analysis:

Using a bike to get to work would be much cheaper in the long run than buying another car, but there are times when the weather could be a factor in being able to get to and from work.

Public Transportation:

Cost:

I took a look at my city’s public transportation website and found the following pricing:

• $2 per ride
• $26 for a 20 ride ticket
• $48 for a monthly pass
• $480 for a yearly pass ($40 a month)

Convenience:

A bus line runs along the street at the end of my cul-de-sac, and as mentioned the bus actually stops at that intersection.   The bus comes every 30 minutes starting at 6am until 8:30am. It goes almost directly to my place of employment, the ride lasting 15 minutes. I can again use it to get home, with the bus picking up at my place of employment every 30 minutes starting at 3:45pm until 6:15pm.

Analysis:

As far as public transportation goes, having a bus stop 100 feet from your front door is about as convenient as it can get. The 15 minute ride is only slightly longer than it would take me to drive there myself.

Riding the bus isn’t as convenient as hopping in my car and leaving at any time I feel like it. But, it does give me some flexibility as to when I want to get to the office and definitely fits my usual workday schedule.

Advantages & Disadvantages:

The pros and cons of using a bicycle and/or public transportation to get to work breaks down like this:

Advantages:

• Cheaper than owning a third car (Cost of vehicle, gas, maintenance, insurance)
• Don’t have to worry about my car starting in winter
• Don’t have to worry about parking

Disadvantages:

• Inconvenience of waiting in or driving my bike in hot, cold, or rainy weather
• Takes longer to get to and from work
• Inconvenience of planning your work day around the bus schedule
• Lack of privacy when riding the bus

The best solution for me is to purchase a bicycle along with a 20 ride bus ticket. This gives me a bike that I can use not only to go to and from work on days I need an alternate method of transportation, but also for recreational purposes. The 20 ride bus ticket allows me to use the bus on those rare occasional that I need to ride the bus. It doesn’t expire, so I can use it as frequently or infrequently as needed. When it’s used up, I can just buy a new one.

We expect my son to get a part time job, save up his money, and eventually buy his own car. Until then we’ll have to make some sacrifices when it would be more convenient to allow him to drive to school due to after school activities, or if he has to work. The bicycle / city bus combination is the perfect low-cost solution to achieve this.

How about you all? Do you use public transportation? Have you ever investigated the cost and convenience of using public transportation in your area?

 Share your experiences by commenting below!

 **Image courtesy of nitnut at FreeDigitalPhotos.net

Important Financial Moves You Can Make in 2015

This following is a post by MPFJ staff writer, Jeff. Jeff writes about sustainable living and finances at his website, Sustainable Life Blog. Jeff really enjoys traveling with his wife as much as he can, to wherever he can.

It’s a new year again, and it’s time to prepare yourself financially and get the rest of your life in order. While many have their goals figured out and are midway through the point where they’ll eventually fail, you can make your financial goals different this year.  When you look back on 2015 in December, you can be happy with your progress.

Here are a few things you should do to make the most (financially) out of your 2015:

Increase your retirement contribution by at 10% or more

Last year, I wasn’t sure if I would be able to max out my Roth IRA account, but I knew I wanted to contribute more than I had in 2013. After talking it over with my dad, he suggested increasing my contribution by 10%. The amount doesn’t seem like much, but it made a big difference.  That small monthly increase led to another 10% increase midway through the year, and things just kept rolling.

I was given some money for Christmas, and I used that to max out my Roth for 2014 – the first time in a few years I had been able to do that, since I had been paying off some debt previously.

So, for those of you looking to increase contributions to your retirement accounts (401k, IRAs or 457’s/403b’s) but are not bumping up against the government maximum for the year, consider increasing your contribution by at least 10-15% per paycheck.

Typically, it does not amount to much more than skipping one meal out per week, but the benefits at the end of the year are substantial.

Lower Your Monthly Nut

Lowering your monthly expenses is critical to increasing your cash flow and your savings. I spent most of 2013 working on lowering my monthly nut, and it allowed me to do some things that I probably wouldn’t have been able to do otherwise (like absorb a 1500+/mo cash hit).

In late 2013, I spent a day gathering all of the monthly bills for the family, and then spent the next 3 weeks researching how to lower each and every bill. I started with the big ones like home and car insurance, then moved on to smaller ones, such as cable TV, internet, and cell phones.

Even though you may only be saving $10-$25 per month on some of this stuff, it can really add up over the course of a year. We were able to reduce our monthly expenses from above $2200 to below $1500, just by making a few phone calls.

So in 2015, take a look at your bills and figure out how to lower them – even if it’s just by $10 per month. You’ll save yourself $120/year, and be happy you did.

Pro tip: If you want to lower your phone bill, look into Ting or Republic Wireless. If you want to tackle cable TV or internet, here’s a script to use when you call.

Establish a New Money Routine

This is what I’ll be focusing on primarily in 2015 – changing my money habits.

After looking at the data, it seems as though I can go Monday to Friday without spending a dime, then I’ll spend $100-$200 on the weekends. Of course, some of this is groceries so it’s not all bad, but it seems as though I’ve gone into a pattern where I save all my “pent up” spending for the weekend.

So, in an effort to lower that number, I’m going to do two things:

1. Set a budget of $500 per month for all non monthly nut related things (for me, that includes gas and groceries), and;
2. Extend my “no spend weekdays” by 1 day, and make Saturday a day where I don’t spend any money.

I’m hoping this will lower my total spending for the month, and help kick start me to a better habit.

What about you all? What money moves are you planning on making in 2015? Do you have other money-saving tips you found successful and would like to share with us?

Feel free to leave your comments below!

**Photo courtesy http://www.flickr.com/photos/cooperweb/8363160192/

How Will Insurance Impact Your Early Retirement?

The following is a post by MPFJ staff writer, Derek Sall. Derek is the owner of the blog, LifeAndMyFinances.com, where he teaches people how to get out of debt, save money, and become wealthy.

Have you ever thought about retiring early? With the proper savings and build-up of passive income, it is entirely possible! But, what about benefits like health insurance? What about the company 401k contributions? Is it realistic to walk away from these benefits and still retire early?

These are questions that I have been asking myself lately, and if you have ever thought about early retirement I bet that these questions have you curious as well. Let’s dive in and see what the impact might be of an early leave from your job.

My Extreme Early Retirement

My plan for financial independence started a couple of years ago. I first decided that I would get rid of all of my debts including my home mortgage, and then start to build up some passive income in real estate. At this point, I am 100% debt free and am ready to try out my luck with land lording.

I originally had a plan to purchase one or two rental houses per year with cash. By following this plan I could accumulate about 8 rental houses by the time I reach the age of 34. After factoring vacancies and general expenses, I figure my before tax earnings would be about $70,000 per year. If I could achieve this income per year, I would actually be making more money than my current salary! Surely I would be able to retire from my day job with an increase in salary, right? Unfortunately, the math isn’t quite that simple.

There are a few issues with my plan though. I did not factor in how much it would cost to insure myself, and I also didn’t figure how much I would lose in company 401k contributions. How much would it cost to buy my own health insurance? And how much money am I leaving on the table by forgoing those 401k payments?

The Cost of Medical Insurance

In my current company, medical insurance is pretty cheap. For just myself, I pay $54 a month for some pretty decent high-deductible coverage ($1,500 deductible). Based on the research I have done, my cheapest insurance option would be $148 a month for a $5,950 deductible. In other words, I am paying three times the cost for some pretty crappy coverage.

Realistically, in five years I probably won’t be single. I plan on being married and will probably have a child. In this case, my total cost of insurance through work would be $156 per month vs. $450 on the exchange (again, for a crappy deductible of $5,950). Plus, by leaving work I am forgoing $1,000 of HSA money from the company.

With the HSA contribution, my total yearly insurance cost within the company is $872/year. If I decided to retire early, my insurance costs would be $5,100 each year, and would certainly increase with age. This is a massive difference! So what about the 401k contribution?

The Cost of the 401k Contribution

My company currently matches 401k contributions up to 3% and also contribute an additional 7% for our benefit. For me, this totals about $6,000 per year. If I retired 30 years early, I would be throwing away all of those contributions. With interest, these $6,000 deposits would total $734,000! Yikes! That’s quite a lot of money to give away!

The New Total for Early Retirement

Instead of earning my current salary with my passive income, I figure that if I still want to retire early I will need to earn much more.

If we consider only the increased cost of medical insurance, one should earn about $10,000 more than their current salary in order to fund a respective medical insurance plan, and that’s if you’re young and healthy! If you are older and have health issues, then early retirement might not be in your best interest.

It is a sad realization, but one must factor in all of the increased costs that come with early retirement.

How about you all? Do you think you’ll retire early? Have you considered the increased costs of insurance?

Share your experiences by commenting below!

 **Photo courtesy http://www.flickr.com/photos/120360673@N04/13856188134

The Best Ways to Ask Your Boss For a Raise

The following is a post by MPFJ staff writer, Kevin Mercadante, who is a freelance professional personal finance blogger for hire, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry.

For a lot of people, one of the most difficult work related tasks is having to ask your boss for a raise. Though it should be something easy to do if you feel that you absolutely deserve one, it’s usually a tense situation. In no small part, this is due to the fact that there is a built-in reluctance on the part of employers to give raises. After all, the more an employer pays a staff member, the less profit that will be available in the budget.

One of the best ways to ask your boss for a raise is be prepared in advance. Doing so can stack the deck in your favor, and make it less difficult to pull off. Before you ask for a raise, try some of the following steps.

Research Your Market Value

Unless your job classification is very unique, the job market largely determines how much your employer is paying you, and how much they may be willing to increase your pay. This is all about defining your market value as an employee, and that’s all about determining how much you make in relation to other people in similar positions.

There are various web based information sources on salary levels, but the most comprehensive is the Bureau of Labor Statistics (BLS) Occupational Employment Statistics website. The BLS is an agency of the US Government, and not only does the site provide salary ranges for nearly every job classification in existence, but it also provides specific regional salary statistics. This is important because for example, an accountant is likely to earn more in New York City than in Nashville.

If you are on the lower end of the salary range for your job classification in your geographic location, you’ll have more room to ask for a raise. But if you are at the higher end of the range, you need to tread lightly. Your employer has access to the same information, and could use your request for a raise as an opportunity to remind you that you’re at the top of the salary scale.

The BLS site also provides ten-year growth projections for each career classification. This information is not to be underestimated. The greater the future demand for your job, the more flexibility you will have in asking for a raise.

Figure Your Employer’s Financial Position Into the Mix

You also need to consider what your employer’s financial position is at time you’re asking for a raise. If the company is losing money and cutting staff, asking for a raise may be a difficult proposition at best.
If you are on the lower end of the pay range for your job classification, you may still be able to get a raise even if your employer is not prospering. But here’s where you will need to do some careful analysis. As yourself the following questions:

• How important is your position to your employer’s overall operation?
• How well are you performing on your job? Can you objectively rate yourself as a high performer, a medium level performer – or something less?
• How difficult or desirable would it be for your employer to replace you?
• Would your getting a raise put your employer in a difficult position with other employees?
• How much do you like working for your current employer, and would you be willing to make a move if you don’t get a raise?

If you are a key employee at your company, you are a top performer, and you are well below the top range for your career in your location, you can still ask for a raise. But if your answers to a few of the questions above are generally negative, you’ll want to use caution.

Document Your Accomplishments

It’s unfortunate that many employers do a much better job in documenting your mistakes and blunders than your accomplishments. And that’s why you need to be prepared to step in and fill the void.

Seriously, this is a step you cannot leave to chance. Asking for a raise is very much a negotiation process. While you’re asking for the raise, your employer is pushing back and trying to justify why you shouldn’t be given one, or given one that’s less than what you’re asking for. You’ll need to be fully “armed” for that outcome.

You should literally have a file that includes positive past job reviews, commendation letters, and any other examples of outstanding work. If you are in either a production position or have budget authority, you should be fully prepared with hard numbers that document your statistical improvements.

You don’t need to pull these out early in the negotiations, but rather to have them available just in case things don’t go your way. If your employer resists giving you’re a raise, citing your performance as an issue, you’ll be ready with evidence that tells a better story.

Remember That It’s Business, not Personal

It’s very difficult not to get emotional when asking for a raise. After all, you’re asking your employer for an improvement in your compensation, and that’s a true “gut issue”. Be that as it may, you have to do your best to keep your emotions out of the picture. No matter how personal it truly is, it really is a business negotiation.

It’s best to be as cordial and respectful as possible in approaching your boss about a raise. You should always want to stick to the facts – as provided based on the research you have done in the steps above – and to avoid emotional generalities.

You should also fully expect some form of resistance. If you don’t get any, great! But if you do, you’ll be prepared. As noted above, your employer will have their own reasons for wanting to limit your income. Your job will be to prove – based on the facts – that their conclusion is incorrect. But in the process, keep in mind that you are merely asking for an increase in pay, and not attempting to justify your existence on the payroll. That means do your best to reasonably promote yourself, but avoid getting defensive at all costs.

You want to make sure that your request proceeds as a friendly negotiation, and doesn’t spill over into the realm of conflict. Make it clear that you are both on the same side, that the raise will help you to do your job better and to increase your performance.

Also be fully prepared to be flexible. If you’re asking for a 10% raise, and your employer counters with 5%, be ready to meet in the middle. This isn’t about winning, but about getting yourself a better compensation package.

Have a Strategy Just in Case the Outcome is Negative

Despite your best efforts, your request may still be denied. At that point you’ll need to determine whether you will be able to continue on with the employer knowing that your pay will not be increased. And that will depend on whether or not there are better alternatives with other employers.

The strength of your negotiations will rest largely on you knowing that information beforehand. If your career field is in strong demand, in you’re at the lower end of the pay scale, you’ll have the confidence of knowing that you have other alternatives going into the meeting with your boss. That confidence will likely come through, and could win the day for you. But if it doesn’t, you will have to be prepared to go elsewhere.

Should you decide instead to stay on with your employer and make a request at a later date, you will have to be certain that the denied raise doesn’t negatively affect your attitude. No matter what, continue to do your best work! This will be important on two fronts:

1. Continuing strong performance will put you in a better position to ask for a raise again at a later date, and
2. It will make it easier for you to find a position with another employer, since your performance will likely get you a favorable reference from your current employer.

There are risks to asking for a raise. If you should carefully consider those risks, and prepare for them in advance, not only will you have a better chance of getting the raise that you want, but you’ll be able to do it with more confidence.

How about you all? Do you struggle at the thought of asking for a raise? Have you tried asking for a raise in the past?

Share your experiences by commenting below!

**Photo courtesy of https://www.flickr.com/photos/usdagov/14605147054/sizes/n/

The Novice’s Guide to Improving Your Finances in 2015

The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

Once again, a new year is upon us, and with it, the promise of a fresh start. Each year, we find ourselves on a precipice, leaping from one year to the next. If we choose, we can also leap from one lifestyle to another.

A new year seems more powerful than any other time. Why not harness that power and momentum and make this year the year you get your financial house in order?

If you decide to take on the challenge, don’t try to improve every aspect of your finances immediately. Instead, take it day by day, month by month. In fact, I recommend that you make one change every month or two. By the end of the 2015, you’ll be in much better financial shape than you are right now.

Take Advantage of Your Employer’s Match

Does your employer offer a match on your retirement savings? If so, your job for this month is to set aside as much money as you can to take advantage of your employer’s match. If your employer matches up to 6% of your salary, try to put away 6% every month. Make this easy on yourself by having your retirement savings automatically deposited. Now, instead of saving just 6%, you’re saving 12% in retirement thanks to your employer’s match.

If you can’t put aside as much money as the employer will match, put aside as much as you can.

Pay Yourself First

Too often, people pay all their bills and are left with the remaining money. They think, I’ll save some money if I have any left over this month. Guess what? They usually don’t have money left over. The trick is to pay yourself first.

If your budget is extremely tight, maybe you’ll only be able to set aside $20 or $50 a month. That’s okay. Don’t make the mistake of thinking saving isn’t worthwhile for such a small amount. If you save $50 every month, you’ll have $600 set aside at the end of the year. That is much better than having nothing saved. Of course, if you can save more, do.

The best way to make sure savings happens is to have the money automatically withdrawn from your paycheck and deposited in your bank account. After a while, you won’t even miss the money from your paycheck, and it will continue to accrue in your bank account.

Learn to Budget

If you’ve read several finance books, you know that there are many different ways to budget. The important thing is to find a way to budget that works for you.

If you typically overspend each month, you might benefit from being on a cash-based budget and only paying in cash for a few months until you learn to not overspend.

Search budgets online, and you will find many different tools and strategies. I’ve found America’s Cheapest Family’s budgeting strategy works best for me, but there are many more to choose from.

Don’t forget to consider using software to help you. There are plenty of great software tools out there like Mint.com, You Need a Budget, and Pear Budget. Many offer a free trial period. Don’t be afraid to try a few until you find the right match.

Finally, remember that it may take 3 to 6 months to get to the point where your budget actually matches what you do with your money. Don’t be discouraged if your budget doesn’t work out the first month or two. There is a learning curve to budgeting, especially since most of us are used to spending fairly freely.

Pay Off Debt

If you’re in debt, make this the year you really focus on not adding any new debt and paying off what you have. If you’re married, sit down with your spouse and decide how much debt you want to pay off this year and how you’ll do it. Maybe one of you will take an extra job, or maybe you’ll put your tax refund on your debt.

Once you calculate exactly how much you owe and make a plan for paying it off, you’re much more likely to see your debt load decrease.

Learn about Investing

Even people who have a fairly good handle on their money can find investing intimidating and confusing, but it doesn’t have to be this way. There are plenty of good resources that can help you learn more about investing.

If you search online, you’ll find courses you have to pay for to learn about investing, but there are also plenty of free resources. Fidelity offers a free learning center covering topics like mutual funds, ETFs, and options. Morningstar offers 172 different courses on stocks, funds, bonds, and portfolio building and monitoring. You can even take a free online class from Stanford University about making smart investment choices.

There are so many resources, there is no reason why 2015 can’t be the year you learn more about investing.

Give Your Extra Money a Job

Each of us receives extra money every year. Most of us just absorb that money into our regular budget, but if you instead give it a purpose, you’ll make it work much harder for you.

For instance, my husband and I wanted to make some cosmetic repairs to our home like getting a new kitchen faucet and putting in a garden. The problem? We didn’t have extra money to buy the supplies. So, one day I decided that whenever I got a one-time writing job, I’d put that money in a home improvement fund. After all, these one-time jobs gave me money I wasn’t expecting any way. Within 6 weeks, we had enough money for both the new faucet and the supplies to build a raised garden bed.

Don’t believe you have enough money coming in every year to make a difference? Please reconsider. Julie from The Family CEO has earned $43,082 in “found” or extra money over the last two years and has used it for everything from helping her daughter pay cash for college to bulking up her emergency fund.

Give your extra money a job. You’ll be surprised how much more money you have coming in than you thought.

Save for Your Children’s College

I’m putting this last because saving for your own retirement and getting out of debt are far more important. If, after doing those two things, you have extra money, consider saving for your child’s education.

Of course, the earlier you start investing the better, thanks to compound interest. You could even start with a small amount like $10 or $20 a month because every bit will help.

However, if you’re like we are and have a 10 year old child but very little college savings, you can take a different approach. For every dollar that our son saves for college, we match his contribution. So far, in the last four months, he’s saved $50, so he has $100 in his college fund. Seeing us essentially double his money has made him more excited to save, and it also helps make him take an interest in finances and saving for the future. For us, we are still saving for his college education, but we don’t have the financial pressure of saving more than we can comfortably afford to.

How about you all? What financial moves do you want to make this year? What financial goals are most important to you?

Share your experiences by commenting below!

**Photo courtesy of http://commons.wikimedia.org/wiki/File:Analyzing_Financial_Data_%285099605109%29.jpg