Saturday, December 28, 2013

Life Planning

This is something I encourage everyone to do.

If everyone did this, maybe our country wouldn't be 17 trillion dollars in debt.

Take a couple minutes from your day and plan out how much money you will need for the rest of your life.

First off, make an estimate of your lifespan. In America, the average lifespan for a man is about 78 years and 79 for a woman. These figures include everyone, so if you determine yourself to be healthier than average, maybe you want to estimate your lifespan to 85 to 90 years.

Anyone can do this.

Take your estimated lifespan and subtract your current age.

For example:

85 (estimated lifespan) - 30 (current age) = 55 (years left to live)

The next step is to determine the amount of your expenses. Estimate your monthly expenses and multiply that by 12 to get your yearly expenses.

For example:

$1,000 (monthly expenses) * 12 (months) = $12,000 (yearly expenses)

Now, just multiply your years left to live by your yearly expenses.

55 (years left to live) * $12,000 (yearly expenses) = $660,000 (lifetime expenses)

Very easy calculation.

To get a better number, subtract your current savings from your lifetime expenses.

For example, lets say your current savings at the age of 30 is $50,000.

$660,000 (lifetime expenses) - $50,000 (current savings) = $610,000 (money you need left)


This is a very simple calculation to do.

Now, it might not be the most accurate figure because it is not that easy to estimate your lifespan, future expenses, living conditions, the future, inflation.

That is okay though. The point of doing this exercise is to be thinking about your future and your finances.

After all, trying to estimate the total money you need at the age of 24 is like trying to hit a target from 1000 yards away.

But trying to estimate the total money you need at the age of 45 is like trying to hit a target from a much shorter distance.

Every person should be aware of his/her current financial position at any time.

My next post, I'll demonstrate how to use spreadsheets to get a better picture of your finances.

Saturday, December 21, 2013

Stuff you should never pay for : TV service

This is probably going to help out older generations more than generation y. After all, generation y grew up with cell phones, mp3, google, and advanced technology.

If you have an internet connection and tv service, there is very little reason to pay for tv service.

Different tv packages can cost anywhere from $20 to $100 per month. On the other hand, Netflix costs only $7 to $12 a month.

Different services are available to stream tv shows over the internet and today, several different shows have some sort of internet presence.

One thing that bothers me about tv service is that you end up paying for lots of garbage that you don't even want.

Just go to walmart. Instead of paying for a montly service, you can probably find your favorite tv serives in a dvd box set. No commercials either.

Depending on what you pay for tv now, switching to netflix can save $10 to $90 a month.

Monday, December 2, 2013

Take Defensive Driving

Today's strategy will save money on car insurance premiums although it might be kind of a pain to do so.

You can reduce the amount you pay for insurance by about 10% by taking defensive driving. This benefit will usually only apply if you have a good driving history.

Defensive driving classes can be used to overturn a ticket, fine, or points. If used for that reason, you cannot get the insurance discount for 3 years.

The class I took was 6 hours straight on a Saturday with a half hour for lunch. If that sounds too tedious, most locations will offer different options like 3 hours per day split over two days.

The class is really basic and you take a very simple exam at the end.

After completing the course, you get a certificate. Send that to your insurance company, and the discount is good for three years.

It was very cost effective too. The class I took was only $30, so it paid for itself really fast.

I would recommend this to everyone. For example, lets say that you have full coverage on your car and your insurance premium is $100 per month. With a 10% discount, you save $360 over the course of three years.

Six hours of time to save $360 over 3 years.

It might not be worth it to everyone, but if you have a office job like me, 6 hours isn't so bad.

Saturday, November 30, 2013

Choose your rewards carefully

Today's strategy is very simple.

Just about everyone uses a credit card. Most cards offer rewards, just make sure to pick the card that offers rewards that suit you the best.

It makes no sense if you have a credit card that gives you free airline miles but you never travel.

So, I searched up Google "best credit card rewards" and found the following link. It compares 10 different cards.

So, my favorite card is the Bank of America Bank of Americard.

I've had this card since 2012. The best features have to be the fact that you get a discount of EVERYTHING that you buy with the card.

You get a 3% discount on gas, 2% on groceries, and 1% on everything else. I know, you hear it in the commercials all the time.

Keep in mind, don't use the card irresponsibly. Don't be tempted to buy anything that you would not buy otherwise. Also, make sure to pay off that balance every month. The best way to use a credit card is to pretend like you don't have one.

Now, if you use the Bank of Americard for every purchase, and you spend $10,000 in a year. You have saved at least $100 that year.

Say that out of that $10,000, $2,000 was spent on gas. That is an extra $40 on top of that first $100.

Another added feature to the card is a deposit bonus. If you deposit the bonus money into your checking or savings, you get a 10% bonus.

$150 times 1.10 equals $154.

$154 savings over the course of one year. That might not sound like a lot, but keep in mind that you had to do nothing to save that money. The money that you spent was money you would have spent anyway. You might as well get rewarded for something you will do anyway.

Monday, November 25, 2013

Throw away your Iphone

This is the first post of my blog. This blog is going to be about different ways to save money.

With this first post, we will start out with saving money of your phone bill each month.

Go ahead and think about how much money you pay for your cell phone. A friend of mine said he paid about $100 a month for unlimited data, and 450 minutes. I guess this is typical for most people that own a smartphone.

A couple months back, I saw some plan advertised for unlimited talk and text for $50 a month. That's very cheap compared to my friend's plan but that still comes out to be $600 a year.

To me, cell phone plans always seemed overpriced. Eighty dollars of that contract is probably dedicated to playing angry birds or candy crush.

Contracts suck.

Before you get a new phone, decided what you really need or want. If you strip away the heavy features like internet and apps, its possible to get phone service for $10 to $20 a month.

I know, this may be difficult for most people to do, but there is a lot of money that can be saved here.

Switch over to prepaid phones.

I've used TracFone for the last three years and I've spent no more than $160 per year for phone service.

If you decide to make the switch, make sure to buy one of the phones that offers the triple minutes for life card. You get the most bang for your dollar that way.

These phones are also very easy to find. You can get them online, walmart, walgreens, and other places.

Eighty dollars will get you 400 minutes without any multipliers. However. If you have the triple minutes feature added, you get 1200 minutes.

One hundred dollars will get you 400 minutes and one year or service. So with the triple minutes, you get 1200 minutes and one year of service. You could get through one whole year just paying a phone bill once, well depending on how much you call people. You get 100 minutes a month.

I'm pretty sure that not everyone can deal with stripping out advanced features, but if you can, you can save a good amount of money each month.