3 more ways to save on groceries

A while back I offered 7 ways to save at the grocery store. Here are 3 more ways to save:

1. Compare prices for your favorite items. Prices for your most frequently-purchased items will be different depending on the store you’re shopping at. Next time you go grocery shopping take a pen and notepad and write down the prices for the items you buy most frequently. Repeat at a few other stores in your area, and before long you’ll have a good idea of which store has the lowest overall prices.

2. Product substitution. Say you like peanut butter. The price of peanuts has risen this year because of a shortage caused by bad weather. So instead of buying peanut butter you might try jelly or jam or any number of other alternatives. I use this tactic frequently when grocery shopping. I have a few different brands of bread that I prefer, and I don’t hesitate to buy them — when they’re on sale. When they’re not I find something else to try.

3. Don’t be tempted by items at checkout. Items are placed in checkout lines for one reason only: to get you to buy more. Gum, candy, batteries, lint rollers, anything the store thinks you may have forgotten while shopping. Magazines also appear here. While it can be tempting to pick up one or more of these items while standing in line, your wallet will thank you if you avoid them.

Now that we have 10 ways to save at the grocery store, are there any that I missed?

Photo by qmnonic

Ways to save on your cell phone bill

Just about everyone has a cell phone these days. And over a third now have smartphones. Cell phone plans from the Big 4 (AT&T, Sprint, Verizon and T-Mobile) can cost as much as $80-$100 a month for just one line! So what are your options if you’re looking to save on cell phone service?

Consumer Reports lists Five ways you can save on your cell-phone bill as follows:

  1. Don’t automatically buy from the company store
  2. Consider a lower-priced carrier
  3. Use alternative services
  4. Max out on Wi-Fi
  5. Investigate employee discounts

Here are my thoughts:

  1. The only way I’m buying from the company store is if they have the phone I want and it’s free (with contract.) If you’re with one of the Big 4, the company’s website is a great place to start. They often run online-only specials for popular phones that you won’t get ordering by phone or in-store.
  2. The article mentions Consumer Cellular, which I’ve never heard of, as a low-cost alternative. But some of the other no-contract players out there include Straight Talk, Virgin Mobile, Boost, Metro PCS and Cricket. Some of these run on a Big 4-network, and some have their own networks. The advantage of these players is that you don’t have to sign a contract, and you can get a plan for as low as $30 a month. If you need robust national coverage, some of these options may not be for you. Be sure to check out the carrier’s coverage map before making a decision.
  3. Carriers like to charge a massive fee for texting packages, and if you don’t sign up for one you’ll pay a per-text price of 10 to 20 cents. And unlimited data is becoming practically extinct. This means you will have to be more creative in finding ways to avoid added costs and imposed limits. Both Apple and Android have apps that allow you to send unlimited texts for free. And for data, there’s a mobile web browser I like called Opera Mini that can limit the amount of data your phone uses to surf the internet. It uses compression technology behind the scenes but still gives you the same browsing experience.
  4. Using Wi-Fi whenever possible is one of the most important things you can do to keep your monthly bill down. Most smart phones can switch seamlessly from data networks to Wi-Fi when you’re in range of a hotspot previously accessed by your phone. Whenever I’m around the house, my phone is always using Wi-Fi for data, which allows me to keep my usage below the 200MB level every month.
  5. Check your provider’s website to see whether they offer a discount for employees at your company. Some providers offer discounts for college students too, so it doesn’t hurt to ask.

Change for a dollar

I came across this video yesterday, and it really helped me focus on the spirit of generosity we each should have this Christmas season. Please take a few minutes to watch this video.

It’s amazing to me that one man who has nothing is able to take care of so many others.

When I was in college, I got my wisdom teeth taken out. After the procedure, I went home and basically laid on the couch for an entire day. I didn’t even feel like eating. But my sister, who has a caring instinct, made me some mashed potatoes and spent time with me while I recovered. It was a small gesture, but it stood out to me because it shows how the little things can make all the difference.

Try to take a break from the lights, decorations, shopping and presents for a moment and reflect on how you can better serve others. You’ll strengthen your character. You’ll improve the lives of others. And you’ll surely make a difference, whether you know it or not.

It really is the little things in life that make the biggest difference.

Renters Need Insurance, Too

For all you renters out there, do you own a renter’s insurance policy? Renter’s insurance protects you if your belongings are destroyed by fire, natural disaster, or theft. A common misconception is that your landlord’s insurance will cover your belongings if they’re destroyed. Their policy only covers the structure and anything inside that they own, so having your own insurance is a must for renters.

Renter’s insurance is very inexpensive. The average policy is about $15 a month and getting a few quotes online is easy, so there’s no excuse not to have one. For about $180 a year, you can ensure that your possessions are replaced if they’re stolen or destroyed. Some policies also pay for relocation assistance which covers the cost of rent or hotel stays if you’re unable to live at the premises.

One important aspect of renter’s insurance policies to pay attention to is replacement value versus actual value coverage. Replacement value coverage is far superior because it pays you the cost to replace your items, up to your policy limit. But it’s also more expensive than actual value coverage, which factors in depreciation of your items. So with actual value, you’re only getting market value (which may be far less than you originally paid) for your items at the time they were stolen or destroyed. To me, it’s worth the extra cost of 15% or so for replacement coverage.

To buy renter’s insurance, you’ll have to come up with your best estimate of the total dollar value of your possessions. When doing this, you have to distinguish between items with monetary value and those with sentimental value. Items with sentimental value (old love letters, family photos, etc.) can be difficult or impossible to replace, and might not have any cash value. Thus, when calculating the value of your items you should strictly consider monetary value. Based on your estimate, you’ll choose your coverage amount.

One thing I recommend is to walk around your home once a year with a camcorder, smartphone, or digital camera and record all of your possessions. As you go through each room, say aloud what you paid for each item. Store the recording on a CD or USB device at another location. Then, if your insurance company gives you a hard time when you submit a claim you’ll have proof of what you owned.

Some landlords require their tenants to have renter’s insurance. But most do not, so it’s up to you to protect yourself. Don’t let a disaster in your home destroy your finances.

Should you close a credit card you never use?

Say you got a credit card five years ago and you used it a lot during the first couple of years. But you haven’t used it since then and are thinking of closing the account. Should you do it?

You might think that by closing an account, you’re simplifying your life and improving your credit score. You may be right about the first part, but closing a credit card account, especially if it’s an older one, will actually harm your credit score in two ways:

It reduces your available credit, which pushes up your credit utilization ratio. This is a fancy way of saying that you are using too much of your available credit. Your credit utilization ratio accounts for 30% of your credit score. Because this is so important to your score, many experts recommend keeping your balances below 30% of your available credit. For example, if all of your credit limits add up to $10,000, you wouldn’t want a total balance of more than $3,000. But I recommend keeping your ratio at 20% or below to give yourself some breathing room.

It also reduces the average age of your accounts. This makes up a smaller, but still significant portion of your credit score. If you close a recently-opened card it won’t harm your score much. The bad news comes when you close an older account — this can reduce your average age of accounts considerably. Creditors like to see accounts that have been open a long time with a solid payment history. So if you close your oldest account you eliminate a portion of your oldest account activity.

The exception to this rule is a card that carries an annual fee. Especially if you don’t use the card regularly or get rewards from it, it may make sense to close it to avoid paying the fee. Before you do this though, apply and be approved for a second major credit card. You always want to have at least two major credit card accounts open.

A final tip: Use each of your credit cards at least twice a year. Even a $1 pack of gum every 6 months will do the trick.  This keeps them active in your credit mix and helps your overall credit score.

Star Athletes Go Broke, Too

Daily Finance has an eye-opening article, 10 Star Athletes Who Excelled at Losing Millions. Among them: Sheryl Swoops, a WNBA star with $750,000 in debts; Michael Vick, an NFL quarterback who still owes $19 million from his bankruptcy; and Mike Tyson, a former heavyweight boxer who blew through $400 million. How did these people end up broke after making so much money?

The answer is quite simple. Star athletes fall prey to the same vices as regular folk, just on a much larger scale. Instead of blowing $400 at a casino, they may gamble away $400,000. Instead of financing a $30,000 car, they buy a $100,000 one. Instead of their houses being too big by 1,000 square feet and 1 bathroom, they’re too big by 6,000 square feet and 7 bathrooms. And they get divorced just like we do, losing the same proportion of their assets.

No matter your income, it’s easy to live beyond your means. Just because you bring in $6 million a year doesn’t mean you’re necessarily better off than someone making $60,000 a year. If you make $6 million and spend $6.1 million, you’re worse off than if you make $60,000 but only spend $45,000 and invest the rest. The biggest determinant of whether you will end up in debt is how you manage your finances. 

Do you make a budget and keep it up to date? If so, do you stick to it month after month? Do you set aside money each month for emergencies? Do you save at least 10% of your income for retirement? Do you minimize impulse purchases? Do you look for ways to reduce your monthly bills and expenses? If you can answer “yes” to most or all of these questions, you’re likely on the right path financially.

When we think of star athletes, we don’t often think of their debt or other financial troubles. The reality is, it happens more often than not:

78% of NFL players go bankrupt or nearly broke just two years into retirement, according to Sports Illustrated. Among NBA veterans, 60% fall into the same predicament after five years.

Part of the problem is who these star athletes spend their time with. According to former NFL player Eugene Profit:

The whole idea of being invincible and ‘it’s never going to end’ kind of makes you have a much higher propensity to take risk. No one’s going to tell you no because they want to stay in your entourage or circle.

So this feeling of invincibility leads to greater risk taking. My opinion: Testosterone likely plays a role here, which is why 9 out of the 10 athletes listed in the article are male. Instead of surrounding themselves with others who encourage these athletes to spend themselves silly, they can seek out friends who are more of a positive influence.

Star athletes are people too. Like us, they make mistakes. Like us, they can be tempted to overspend. But they can learn to control that spending, just like us.

How important is free shipping?

Moneyland discusses the growing popularity of free shipping at online retailers:

In November of last year, a New York Times study noted that 41% of online purchases came with free shipping—an impressive figure at the time, considering that free shipping was once a novelty, a rare unexpected bonus.

And this year, according to a National Retail Federation survey, more than 9 out of 10 online retailers will offer free shipping at some point during the holidays. Free shipping has become almost an expectation among online shoppers. So important, in fact, that many require it:

Increasingly, online shoppers won’t complete their orders unless free shipping is part of the deal.

According to the article, 47% of shoppers would abandon their purchase if they found out shipping wasn’t free at checkout. I can’t tell you how many times I’ve added one or two things to my online cart, only to close out the window when the shipping charge appeared.

In my opinion, sites like Amazon.com have figured out a great way to exploit our expectation of free shipping. At Amazon, you almost always receive free shipping, as long as your purchase is at least $25. That’s where this tool comes in handy. Amazon’s free shipping policy is really paying off for them because we often buy more than we intended. Most of us will keep adding to our cart until we reach $25. In short, we’re rewarded for buying more.

Free shipping causes us to not only buy, but to buy more. We rationalize: “Since it’s all ‘free,’ why not throw in the kitchen sink too?” But it’s important to be mindful of your purchases. Don’t fall for the clever ploys of online retailers offering free shipping, trying to get you to spend more. Free shipping can be a great deal, but only if you stick to your list and avoid the temptation to overspend.

If you’re planning to do any online shopping, Free Shipping Day is December 16th this year. Over 2,000 online retailers will offer free shipping with delivery by Christmas Eve. To see who’s participating check out FreeShippingDay.com.