Saving Money for Non-Budgeters

SavedPlus

Everyone wants to save money, but some people don’t have the discipline to “pay themselves first”. If you don’t balance your checkbook or put away a set amount of money with each paycheck, then SavedPlus might be a simple solution to help you save money without having to change your habits.

The way it works is simple. You choose a savings percentage between 5-20% that you want to save with every purchase you make. Then as you spend, that extra percentage gets moved from your checking to savings account. So, if you set your percentage to 10% and go to the grocery store and spend $75, an extra $7.50 will be moved to your savings account. You can change the percentage from the mobile app or web site whenever you’d like as well as check your account balances and set up goals.

To keep you from pulling too much from your checking, you can also set up a maximum transaction amount so that it doesn’t save an extra 5% of that new flat screen purchase as an example. In addition, you can choose to exclude single transactions if you want. To keep you from overdrawing your account, you can also set up a minimum balance for your checking account so that it stops transferring money if your balance gets too low.

In order to use this service, you give your checking and savings account information along with your debit and credit card info so it can catch all of your transactions and move the money from your checking to savings. How much does it cost to use this service? Nothing. It’s free. You don’t have to open any accounts with them since they use the accounts you already have.

For those of you who balance your checking account and keep close tabs on what you spend, this may not be for you. It would drive me crazy to try to keep track of the extra transactions. But for those who keep track of what is in their checking account by just looking at the balance occasionally, then this may be a perfect way to starting putting away some extra money for a rainy day or retirement.

For more information, you can check out their site, the FAQs, and the How It Works page.

Potential Savings: I haven’t personally used this service, but it seems to be getting some attention. According to their website, average users save $350 a month or $4200 a year. That’s quite a bit of coin for not having to change your habits.

Life without credit cards

Credit Card

Can it be done? Can someone really live without credit cards? I mean, you need one to build credit right? What about when you’re in an emergency?

Let me start by telling you that credit cards are not your friend. Even though we ALWAYS paid them off on time and never paid interest, we decided not to keep them around. When I was in high school I got a credit card with a small limit to pay for gas and other stuff. It was to “build credit”. Then before my wife and I got married, we got another credit card to earn cash back on all of our big purchases we were going to have for the wedding. I remember that we used it to buy our rings.

So in 2007, our eyes were opened and we learned that we could live life without credit cards. We decided that we were going to pay off all of our debt and there really was no reason to have the plastic there as a temptation. So we ended up calling up the credit card companies and cancelled both of the cards that we had. They really turned on the charm with the cash back card. “Why do you want to cancel when you’re making money off of us since you always pay it off on time?” The truth is, you tend to spend a bit more when you use a credit card, and we had occasionally fell into the we can pay it off with our next paycheck routine. Yeah, well what if an emergency pops up that we need to use that next paycheck for.

I guess it’s probably a good idea to dispel some of the rumors that fly around about why you NEED a credit card.

  1. It will help you build credit. Credit is only necessary if you plan on going into debt for things. You can get a mortgage without every having a credit score.
  2. What about refinancing my home to get a better rate? We refinanced our house twice since canceling both cards. I think the bank liked the fact that we had money in the bank, jobs, and no late payments on our credit report more than anything.
  3. The discounts are just too good to pass up. Seriously? I already told you that you’ll spend more on a credit card because you don’t feel it the same way when it doesn’t affect you at that moment. When the cashier checks you out next time and asks you if you’d like to save more money by signing up with a credit card, try telling them that you don’t believe in credit cards but you’d like to know if you could still get the discount anyhow. It may not always work, but their reaction is sometimes priceless.
  4. Some bills like car insurance give me a better deal because of my good credit. Hmmm, we pay about $650 a year for our car insurance for two cars. Yep, I said for the whole year. If a place you do business with does check credit to get you a better deal, chances are they are looking for late payments more than anything.
  5. Yeah, but your credit score was already high from having a credit card. True, because we did the responsible thing and always paid our bills on time. However, our credit score has dropped from being in the 700’s to being somewhere in the 600’s since we’ve closed the cards, and honestly, we don’t care.
  6. How will I pay for stuff? If you decide not to use a credit card, then you’ll know that anything you buy, you can afford. If you don’t have the money for it, you can’t buy it. It’s pretty simple. I know there are some people who are in a cycle of using credit cards and then paying them off and they may not have the money at the beginning of the month to make the transition. If that’s you, you may have to make the transition over the course of a few months. As you can, try to purchase less so you’ve got some extra cash at the end of the month and can put even less on the card the next month.
  7. What if I have an emergency? Using a credit card in an emergency is like chopping your finger off to take care of a paper cut. You solve the immediate problem and exchange it for another one later on down the road. If you didn’t have the money for the emergency in the first place, when you’re bill comes you probably won’t have the money then either. Then you’re paying interest on it for who knows how long. Getting rid of your credit cards causes two things to happen. First, you save money for emergencies. Second, if you don’t have the money, you come up with creative solutions you wouldn’t have thought of if you had the credit card as a crutch.

Let’s say that you do want to try life without credit cards, but you’re not ready to chop them up yet. I’ve got just the plan for you. Take a plastic cup, fill it with water, drop the cards in, and then put it in the freezer overnight. Your credit cards will not longer be available for easy access. When you see that “gotta have” item at the store, you’ll have to run home, and thaw the cards. Hopefully, in the time it takes for them to thaw, even under hot water, you can really think the purchase over before you buy something you don’t need or can’t afford.

Have we regretted getting rid of our credit cards? Not in the least.

Finally, I want to leave you with this classic Saturday Night Live video. It’s always been a favorite of mine.

I have to wonder how many people watched this on a TV they were making monthly payments on, while sitting on their 90 days same as cash couch.

Featured Image courtesy of sixninepixels / FreeDigitalPhotos.net

Recovering From Unemployment – Part 1: Getting Into Debt

IOU Piggybank

Unemployment: One of the most counter-productive methods of saving money out there.  And yet, it’s not uncommon to have periods of unemployment in our adult lives.  Unless you’re leaving one job for another, chances are good you’ll have at least a week or two of unemployment, right?  It can be a scary experience, especially if you have few safety nets in place!

In 2010, our sole breadwinner lost his job.  We knew it was coming, fortunately.  He was a pharmaceutical rep for a small company that was bought out by a foreign company.  It had been undergoing some major changes for years, and there was always the threat of impending job cuts.  About 6 months before the actual cut, there was a rumor that the end was near, and soon the company confirmed this.  Fortunately, we were not in debt aside from our mortgage and my student loan.  We had already been dabbling with moving out to the country, and this news sealed the deal for us.  Our house was a major drain on our finances, and while it was my starry-eyed-newly-married-House o’ Dreams, we both knew that faced with any season of unemployment we would quickly run out of money with our giant mortgage.  It was time to say goodbye to the home we’d loved for the last six years!

Despite a treacherous selling market, despite trying to sell a very unique home for far more than the neighborhood’s worth, and despite selling by owner, our home sold in 4 months.  We fell in love with a beautiful home in the country with a much smaller square footage, and happily, a much smaller mortgage.

By then, Ty had been unemployed for two months.  At the time, we viewed this as a “vacation”.  With all the flurry of selling and buying homes, it was just nice to focus simply on moving.  Our daughter had just turned two, and Ty was enjoying getting a taste of experiencing MY job – the life of a stay-at-home mom!  Once we settled in though, Ty started getting serious about his job hunt.

Little did we know how brutal this would be!  At first, we thought this was the perfect opportunity for Ty to switch careers, but while he applied to plenty of non-sales opportunities he was more than qualified for, he never even got an interview.  So eventually he decided even a job he didn’t love was better than no job, and in the meantime our severance package was dwindling.  He started applying for pharmaceutical jobs again, and began to feel the true sting of rejection.

Let’s fast-forward one year.  Ty had a few unsuccessful interviews, but mostly he felt frustrated over the interviews he didn’t even get.  This was new territory for him, in the past he would apply for a job, quickly receive an interview, and usually walk out of the interview with a job.  He had never not even gotten an interview before!  It was a humbling year, to say the least.

By January, he scored a 6-month contract with a pharmaceutical company and we were able to breathe a little easier for awhile.  We also welcomed our second daughter into the family at the end of March!  We tried to replenish our savings account, and he kept searching for permanent work.  Unfortunately, once the contract ended, Ty would go on over 20 interviews over the next year and a half – all fruitless, frustrating ventures.  We both took whatever odd cash-paying jobs came our way, but it certainly wasn’t enough to sustain us.  By the end of 2012 this no longer felt like a vacation, but rather a very scary nightmare.  Unemployment benefits were up, our savings account was dry, and there was little hope in sight.

Finally, finally…a miracle!  My parents expanded their catering business and needed a manager… score!  Not only did Ty get the career change he longed for, but also an environment that built up his crumbling self-esteem, and perhaps best of all:  A Paycheck.  It’s really amazing what a paycheck can do to your psyche, isn’t it?

Now that we have a regular paycheck, we have some work to do.  Although we had tried to budget, cut corners and be wise during our period of unemployment, we still ended up falling back on a credit card.  Most of the debt came from legitimate budget-breakers like a major dentist bill, replacing a few leaking windows, and several auto repair bills, but honestly, some of that debt came from unwise purchases as well.   So now it is time to completely revise the budget:  we certainly don’t have enough money to live extravagantly by any means, but we DO have enough to LIVE and get out of debt, albeit slowly.

The first step is to make an oath to retire the credit cards.  Those things are the DEVIL.  They are too easy to use, and they make a new pair of shoes seem so much more affordable in the moment!  We decided to take this very, very seriously.  This is a time for delayed gratification.  This is a time for continuing to cut corners.   This is a time for hope!

Stay tuned for Part 2: Delayed Gratification!

Featured Image courtesy of Stuart Miles / FreeDigitalPhotos.net