Home equity burning a hole in your pocket? You may want to think twice about that boat.
Home equity is a valued resource, and if you have it, you might be tempted to tap that wealth for other purposes. A home equity loan, which allows you to use your home’s equity as collateral, is a great way to do this. But depending on your personal situation, it may not be the right thing to do.
Here’s when a home equity loan makes sense — and when it doesn’t.
DON’T: Fund a lifestyle
Remember when homeowners yanked cash out of their homes to fund affluent lifestyles they couldn’t really afford? These reckless borrowers, with their boats, fancy cars, lavish vacations and other luxury items, paid the price when the housing bubble burst. Property values plunged, and they lost their homes.
Lesson learned: Don’t squander your equity! Look at a home equity loan as an investment — not as extra cash when making spending decisions.
DO: Make home improvements
The safest use of home equity funds is for home improvements that will add to the home’s value. If you have a one-time project (e.g., a new roof), then a home equity loan might make sense.
If you need money over time to fund ongoing home improvement projects, then a home equity line of credit (HELOC) would make more sense. HELOCs let you pay as you go and usually have a variable rate that’s tied to the prime rate, plus or minus some percentage.
DON’T: Pay for basic expenses or bills
This is a no-brainer, but it’s always worth reiterating: Basic expenses like groceries, clothing, utilities and phone bills should be a part of your household budget.
If your budget doesn’t cover these and you’re thinking of borrowing money to afford them, it’s time to rework your budget and cut some of the excess.
DO: Consolidate debt
Consolidating multiple balances, including your high-interest credit card debts, will make perfect sense when you run the numbers. Who doesn’t want to save potentially thousands of dollars in interest?
Debt consolidation will simplify your life, too, but beware: It only works if you have discipline. If you don’t, you’ll likely run all your balances back up again and end up in even worse shape.
DON’T: Finance college
If you have college-age children, this may seem like a great use of home equity. However, the potential consequences down the road could be significant. And risky.
Remember, tapping into your home equity may mean it takes longer to pay off the loan. It also may delay your retirement or put you even deeper in debt. And as you get older, it will likely be more difficult to earn the money to pay back the loan, so don’t jeopardize your financial security.
Related:
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.
Budgeting is great, as long as you know where your money is really going.
Budgeting doesn’t have to be hard. It’s a great way to see just how much you have coming in, going out and left over each month. However, there are certain mistakes that many people make, especially in the beginning. These mistakes can mean the difference between a great budget that works perfectly and one that is blown after the first few days.
Are you making these four budget mistakes? If so, you can avoid them in the future!
Trying to Keep Up with Others
It’s really common to get competitive with your finances. You see that your best friend can afford that new car or the new house and you want it to. Comparing your finances isn’t healthy. You will both be in different positions. She may have a better job or you may have more debt to clear.
Create a budget that is just for your family. It may be hard, but you need to stop comparing yourself with others. You’ll just end up overspending and getting into more debt.
Forgetting About the Unexpected
Things happen in life, and they throw your budget off. Your boiler may break or you need to make a repair on the car. Part of your budget needs to be for these emergency situations. If not, you’re either going to blow the budget or use those credit cards to get out of a jam, putting you in further debt.
Think about the unexpected things and have a contingency plan. It could be a savings account for emergencies, or you may just make sure your checking account keeps a certain amount as a buffer should something happen. Budget and expect emergencies to happen, and you’ll be able to deal with them calmly.
Stop comparing your accounts with everyone else.
Using Outdated Software
You know that software is great for your budgeting. You can quickly track your expenses and make sure you never go over. However, you need to make sure that software is up to date. Outdated software will struggle to link to your different accounts and will not be suitable on the go.
Mint.com is great for budgeting software. You can see all your accounts at a glance, see how close you are to goals and track on the go with the mobile app. It’s all free to use too, giving you one less thing to worry about.
Forgetting About the Small Items
You’ve been tracking those ongoing, large expenses, but you’re forgetting about those small ones. It could be the $5 coffee now and then or that $20 on getting your nails done each month. These small purchases soon add up. Just think: $5 per day on your coffee to work is $25 in a five-day working weekend. Say you had two weeks vacation; that’s $1,250 each year spent that you’re not accounting for.
Track every little expenditure that you make. It doesn’t matter how small or infrequent it is, it all adds up and will give you the true idea of the amount you’re spending.
Budgeting is great, but you need to watch out for the mistakes. The above are just the four most common people make, and there are plenty more. With planning, good tracking and expecting those emergencies, you will soon find you have more money in the bank and have a budget that is better in shape.
A study conducted by Charles Schwab just last year found that three in five Americans live paycheck to paycheck, yet only one in four has a written financial plan. In fact, the majority of Americans are hesitant to receive any outside help when it comes to managing their money, even though those who do reach out tend to exhibit more positive investing and saving behavior. 45 percent of U.S. adults aged 40 to 59 said they’d rather visit the dentist than make an appointment with a financial advisor, due in large part to the fact that they feel uncomfortable sharing financial missteps with a stranger.
To gain a better understanding of who people trust when it comes to financial advice, we polled 1,000 Americans to find out who, if anyone, they turn to for money-related questions. We found that while those in older age brackets (65+) still enlist the help of a financial planner, many younger demographics actually go to their parents before resorting to the internet. Some key findings included:
23% of respondents would rather go to their parents for financial advice compared to just 19% who would turn to the internet.
33% of men would go to a financial advisor versus 26% of women.
4 out of 10 of those aged 55+ would go to a financial advisor.
Millennials Most Likely to Reach Out to Their Parents for Advice
Each year, the internet continues to grow in staggering amounts, with users utilizing the web for everything from social media consumption to eCommerce. Today, roughly nine out of ten American adults use the internet. Because there are millions of active internet users searching Google daily, we were surprised to find that still, most respondents would go to their mothers for financial advice over the web.
Our survey polled Americans ages 18 to 65+ and found that of those under 24, 44% would go to their parents for financial advice versus just 33% who would trust Google to answer money-related questions.
Men More Likely to Go To a Financial Advisor Than Women
Around 31% of respondents said they felt most confident reaching out to a financial advisor. Of this number, 33% were men versus just 26% women. Conversely, 14% of women are most likely to turn to their mothers versus just 9% of men.
Those Aged 55+ Most Confident in Financial Advisors
It appears the older generation is less hesitant to reach out to certified financial advisors. Of the 29% who listed financial advisors as their go-to, 40% of respondents were 55 and older. This could lean heavily into the fact that those of this age are nearly retired and feel more inclined to consult an expert in things relating to their retirement income strategy.
Studies have shown that a handful of Americans over the age of 30 don’t understand basic financial terminology such as determining their 401k, knowing what interest is, or understanding how inflation works. Many of these people also feel lost when it comes to a long-term, stable financial plan. Financial planning, however, enables you to create an ongoing process that will not only help with current cash flow but also help build a nest for retirement. Regardless of who you visit for financial advice, be it mom, the internet, or a financial adviser, it’s important to become educated on the terminology, processes, and ways to ensure a secured future.
It’s spring cleaning season – so why not give your finances a once-over?
That might sound like an intimidating concept, especially if you haven’t taken a careful look at your financial situation in years, but organizing your money doesn’t have to be painful. We’re here to walk you through each step, so you can rest easy about your financial future.
Why You Should Organize Your Finances
Auditing your finances is the first step to getting your financial life in order. Never stopping to inventory what you have and what you owe is like going on a road trip with an incomplete map. You may eventually get to your destination, but it will take a lot longer to get there. Organizing your finances will make it easier to become debt-free, save for retirement, or pay for your child’s college education.
This process can also help you identify any blind spots or problem areas, like a brokerage account you’d forgotten about or an old bank account that became overdrawn. The sooner you discover and address these problems, the closer you’ll be to achieving your goals.
Examine Your Bank and Credit Card Statements
Tracking your expenses is one of the most important parts of organizing your financial world, especially if you’re not in the habit of examining your bank statements.
Log on to your bank and credit card accounts and examine all the expenses from the past few months. You may find recurring charges you’ve forgotten about, evidence of fraud, or unused subscriptions you never canceled.
If you discover charges you don’t recognize, contact the card company to dispute them. You generally have just 60 days to dispute a charge, so don’t expect to get your money back if that time frame has passed. You may consider canceling the card in question to prevent more fraudulent charges.
Consolidate Bank Accounts
Having too many bank accounts can be confusing, expensive, and ultimately harmful. Many banks charge monthly maintenance fees if you don’t meet the minimum balance or have direct deposit, so a forgotten account can cost you.
Go over your current checking and savings accounts to determine which you should keep and which you should close. You should have one checking account and at least one savings account for your emergency fund and other goals.
Some consumers like having multiple savings accounts for various savings goals, like one for vacations and a different one for home repairs. But if having multiple accounts sounds too stressful, then stick to one checking account and one savings account.
This is also a good time to consider switching banks if you’re being charged excessive fees. Online banks and credit unions often have fewer fees and higher interest rates.
Rollover Old 401(ks)
When you leave a job, it’s easy to pack up the items on your desk. What many people forget is to take their 401(k) with them.
Rolling over old 401(k)s is key to consolidating your finances. When you leave a 401(k) at your old employer, you’re likely to forget about it. That’s why it’s crucial to roll it over as soon as possible. Also, if you wait too long, the account may become difficult to access because you’ll have forgotten your password or other crucial information.
You can rollover your old 401(k) if you have an IRA or a 401(k) at your current employer. Contact your old 401(k) provider and ask how to roll over an account.
Once that process is completed, make sure your money is invested. People often forget to invest the money after it’s been rolled over, so it sits in the cash portion of their retirement account barely accruing interest.
Organize Your Debts
If you have any loans or credit card debt, start organizing them with a spreadsheet or pen and paper. Here’s what to jot down:
The total remaining balance
The minimum monthly payment
The interest rate
The remaining term (not applicable to credit cards or lines of credit)
Any other relevant details, like if it’s a 0% APR credit card that will soon transition to a higher APR
Not sure if you’ve found all your loans? You can locate them on your official credit report, which you can find at AnnualCreditReport.com. There are three credit bureaus that produce credit reports, and because not all lenders report activity to all three credit bureaus, it’s helpful to view each one.
If you see an account you don’t recognize, it may be a sign of identity theft. You can file a dispute with the credit bureaus to get it removed from your record.
After you’ve organized your loans, you can start to create a debt payoff plan. You can also sync these accounts to your Mint profile, which will send you due date reminders to help you avoid late payments.
Assess Your Insurance Needs
Insurance is one of those financial topics that most people barely think about.
But while it might be a tedious experience, reevaluating your insurance needs is a crucial part of personal finance.
For example, you may need to buy life insurance now that you’re married with kids. You may also want to buy disability coverage or increase the limits on your car insurance. This is also a good time to compare quotes from other companies to ensure you’re getting the best rate.
Find a System You Can Stick to
Once you finish auditing your finances, it’s time to create a system that allows you to keep everything organized. Set up a regular time to go through your bank, credit card, and investment accounts. Pick a day that works every week and make it a habit.
Ask for Help
Auditing your finances can be overwhelming, especially if you’ve put it off for months or years. If you run into a problem, like an old investment you don’t understand, or a credit card that went into default because the bills were delivered to an old address, it’s time to ask for help.
If you have an issue with a loan or credit card, call the lender or credit card provider and ask what your options are. If you have a tax problem, you may need to find a CPA or Enrolled Agent who can assist you. For investing or general finance questions, contact a financial planner.
Through unprecedented times like this, the support from our respective communities remains most important to help us come out of this physically, mentally and financially stronger. As we make plans and take the necessary precautions for our physical health, it is also key that we have a plan in place for our financial health.
If the state of your finances is one of your stressors, we’re here to help. Last week, we asked our Minters to share their top personal finance concerns during this time. From smart investing to revising your budgets to building an emergency fund, Brittney Castro, Mint and Turbo’s Certified Financial Planner, shared her top tips and advice to get us through this time. Watch here.
At the end of the day, our health and wellbeing matter the most. While things may seem unpredictable at this time, we are always here as a resource for all things personal finance. For additional COVID-19 related resources, check out our growing list of cost-free resources. If you have any additional questions, tweet us at @Mint and we’ll be sure to support you as best as we can. Stay positive and healthy, Minters!
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From budgets and bills to free credit score and more, you’ll discover the effortless way to stay on top of it all.
Roughly 26% of car buyers feel that they overpaid for their vehicle, according to a 2014 survey from TrueCar, Inc. That same survey admittedly also found consumers believe car dealers make about five times more profit on the sale of a new car than they actually do — but whether you truly paid too much for your now-old ride or you simply think you did, there are ways to save the next time you hit up a car dealership. For starters, the rates on auto loans are largely driven by your credit, so simply bolstering your credit score can potentially save you thousands of dollars over the life of your loan. Plus, it never hurts to comparison shop and negotiate when it comes to auto loans and the actual vehicle itself — you may be missing out on savings by doing one and not the other.
But First… How Much Car Can You Afford?
According to Credit.com contributor and car insurance comparison company TheZebra, automotive experts generally suggest auto loans not exceed 10% (if it’s just the loan) to 20% (if it’s the loan and related expenses like car insurance) of your gross monthly income. Of course, that’s a broad rule and every potential car owner is going to have to take a long, hard long at their finances and current debt levels to decide what they can, in fact, afford. Following these three simple cost-cutting steps can help you save big on your auto loan and next car purchase.
Not checking your credit before you start shopping for a car is a huge mistake. Because your auto loan rates are directly tied to your credit scores, even a small inaccuracy on your credit report could cost you. Before you start shopping for your dream car, take an hour to check all three of your credit reports and credit scores online. You need to check with all three major credit reporting agencies — Equifax, Experian and TransUnion — because you don’t know which one a lender will use for your application. If you have a credit score above 750, you can probably qualify for the best rates available and negotiate an excellent deal on your car. If your credit score is lower, see if you can give it a boost before you apply for a loan.
You can view two of your credit scores, along with your free credit report snapshoton Credit.com. The snapshot will pinpoint what your specific area of opportunities are and what steps you can take to improve. However, as a general rule of thumb, you can raise your credit score by disputing errors on your credit report, paying down high credit card debts and limiting new credit applications.
2. Shop Online
Unless you have a credit score in the 800s and can qualify for a 0% auto loan offer, you are probably not going to get the best deal on a loan from the dealership. Auto loan rates and fees offered by online auto lenders are usually a lot lower than the rates offered by dealership financing programs. Plus, you can shop and compare rates online without causing damaging inquiries to your credit report (provided you’re not formally applying for every offer you see). Most online lenders have calculators or rate guides that show you what rate you could receive based upon your credit score. (Note: Be sure to vet any lender, whether online or within a dealership, before taking them up on an offer.)
With many online loans, you fill out the application and receive an approval by email within a few hours. Then the lender mails you a check that is ready to be made out to the person or business selling the car. If you end up not buying a car or not using the loan, you toss the check (shredding it first, of course). Plus, the check from the lender usually specifies a certain price range (for example, $9,000-$10,000). This leaves you with some room for negotiating a lower price with the seller even after you have received your loan approval. Speaking of which …
3. Negotiate the Price
Many people may wind up overpaying for a car simply to avoid negotiating the price of a car with a salesperson. Luckily, the Internet makes negotiating with car dealers a whole lot easier. Before you start shopping, look up the listed price, invoice and MSRP of the car you want through an unbiased site like Kelley Blue Book and request free price quotes online. Armed with these facts, you’ll have an advantage over the salesperson when you start the negotiations. You should be able to save a couple hundred dollars, if not a few thousands, by negotiating with the car salesperson before you decide to buy.
Proving It
You may be thinking: This is all fine and dandy, but does it really add up to $3,000 in savings? Let’s crunch the numbers using this auto loan calculator.
According to data from Experian, the average interest rate on a new car loan for prime customers as of the last quarter of 2015 was 3.55%. The average rates on a new car for non-prime customers and subprime customers during that timeframe were 6.24% and 10.36%, respectively.
So, let’s say you wanted to buy a $16,000 car and had $1,000 saved for a down payment. If you chose a loan repayment period of 60 months, had a non-prime credit score (think just below 700), and got a loan through a dealership, you could receive about a 6.3% annual percentage rate (APR).
Dealership option: $292 a month – $17,525 total costs
However, if you checked your credit reports and scores before you applied and found a way to boost your score to prime (think around 750), your interest rate from the dealership could drop to about 3.5%.
Improved score: $273 a month – $16,373 total costs
You would have already saved $1,152 dollars, just by checking your credit reports! That’s a pretty good return on your investment. Next, you might be able to reduce your rate even more by shopping for a loan online with your new credit score of 750. Let’s suppose, for argument sake, you qualify for a 2.7% APR (the average interest rate for super-prime customers during the last quarter of 2015, according to Experian).
Online loan: $268 a month – $16,052 total costs
You would have saved almost $1,473 by working on your loan options using Step 1 and 2. Finally, if you went to negotiate with the salesperson you could probably make a deal with the seller to reduce the price of the car down to $14,000. In this case, you would only have to borrow $13,000 with your 2.7% APR loan from an online lender.
Negotiated deal: $232 a month – $13,912total costs
Your total savings from following these three simple steps would equal $3,613 over the life of your auto loan!
Hardly a day goes by without a story of a major data breach on a business, government agency or individual. And, like seeing reruns of the same old television series over and over again, I think that most of us grow tired of being lectured for not paying enough attention to computer security.
“Lana” felt that way, writing, “I ignored the advice about computer and mobile device security, feeling scolded every time I heard a recommendation. And then I got hacked, became an identity theft victim, and it took me two years to clean up the mess.
“Dennis, with your sense of humor, why not write an article telling people how to be hacked? I’ll bet that will get their attention.”
With that request in mind, I asked Paige Hanson, Chief of Cyber Safety Education at NortonLifeLock, to explore the ways of getting hacked and becoming a victim of identity theft.
We Leave Digital Trails That Tell All About Us
“We are producing more data about ourselves than ever in the past, which leaves a digital trail that is vulnerable to being compromised,” Hanson points out. If you’re not careful to clean up after yourself, those digital breadcrumbs we leave behind could lead thieves right to your door. To help avoid that, Hanson highlighted some common ways we make it easier for fraudsters to take control of our digital world:
1. Take all those surveys of your likes and dislikes.
Consequences: Fun quizzes often ask a series of personal questions to help you find out which Disney Princess you are or ask you to share your yearbook graduation photo (along with what high school you attended and the year). Fraudsters find creative ways to use these quizzes to get you to answer the same types of questions used by banks and other institutions when setting up accounts — your first-grade teacher, your first car, your first pet. You are giving out the answers to your security questions without realizing it. Hackers then can build a profile on you. If the quiz requires you to provide your email to participate or get the results, the fraudster now has your email address. He can send a request to reset your password that looks like it came from your bank or credit card company, and when prompted to “Answer these security questions,” he just may have all the information he needs to take over your account.
2. Keep your social media privacy settings set to public.
Consequences:This will make sure everyone knows what you are doing, every photo you post, who your friends are, all of the personal details you share and possibly where you live. A hacker will have complete access to the personal details, making you an easier target for identity theft.
3. Don’t update your phone’s operating system, home computer or your apps. Absolutely do not keep your virus software current!
Consequences: One of the most common ways cybercriminals gain access to your systems, aside from enticing you into clicking on malicious links, is through out-of-date software. As software companies discover flaws in their systems, updates are issued. By not installing them, you are open to being hacked. Out-of-date software invites malware infections and other cyber issues, such as ransomware.
4. Do not password protect your smartphone or mobile devices.
Consequences:You get coffee at a restaurant, leaving your device on a table. With no password, anyone who steals it will have instant access to all your personal information.
5. Have the same username and password for all the sites you visit.
Consequences:If fraudsters acquire that information, they will use it on popular sites in an effort to gain access to your online accounts. The solution is to use different passwords for each account, and most people don’t do this. A password manager solves the problem.
6. Transact everything over public Wi-Fi to make sure the owner of the Wi-Fi site can see your online activity, what websites and links you’ve been on.
Consequences:They send you a link concerning something that you were interested in and you click. It is called spear phishing, and they’ve now obtained access to your digital life.
7. Store on your mobile device and physical wallet as much personal information about yourself and family as possible, including Social Security numbers for the family, driver’s license, home address and so on.
Consequences: That way, if stolen, it will so much easier for the entire family to be hacked!
8. When working from home, let your children download games and programs on your work device.
Consequences:They might not be compatible with your employer’s approved downloads and could leave your company vulnerable to being hacked. You could lose your job!
Bonus: How to Make Things Worse After You’ve Been Hacked
One you have been hacked or data stolen, here’s how to deepen your trouble:
1. Do nothing. Especially do not contact your lender, credit card company, bank or law enforcement. Remain connected to the internet.
Consequences:While reporting a hacked or stolen debit card, credit card or credit card number and security codes before they have been used by a fraudster results in no liability, if you know your card has been lost or stolen and do nothing at all, you could take a hit. For credit cards, losses are limited to $50 under the Fair Credit Billing Act. But rules for ATM cards aren’t as forgiving. There are different time periods that apply as to when the card has been used that limit personal liability, but you must act quickly: If you wait more than 60 days after your statement is sent to you to report the loss, you could lose all the money taken from your account! Banks and credit card issuers will provide you with new cards and security codes, but do not enter these numbers online as your activities could be followed. Change all your passwords from another computer.
2. Do not back up your files with an external hard-drive, thumb-drive or into the cloud.
Consequences:In the event of a ransomware attack, you could be paying the scammers a great deal of money!
Under a new stimulus bill passed by Congress and signed by President Biden, millions of Americans will receive a third stimulus check in the coming weeks. Third-round payments will be for $1,400 per eligible person, plus an additional $1,400 for each eligible dependent (use our Third Stimulus Check Calculator to see how much you’ll get). Many families who have lost income during the coronavirus pandemic will need to use their checks to put food on the table or keep a roof over their heads. But if you’re still fully employed and not financially distressed, consider putting your stimulus check to work.
With many restaurants still closed and most events shut down, it’s more difficult to “waste” your third stimulus check on vacations, eating out, attending a concert and the like. So, instead of spending your third stimulus check on something you really don’t need, think about investing, saving, or donating the money you receive from Uncle Sam.
Here are 6 ways you can make your third stimulus check work for you or help your community.
(Stay on top of all the new stimulus bill developments – Sign up for the Kiplinger Today E-Newsletter. It’s FREE!)
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Save for Retirement
Socking away money for retirement is always a smart move. You have until April 15, 2021, to invest in a traditional or Roth IRA for 2020. The maximum contribution for a 2020 IRA is $6,000 — $7,000 if you’re 50 or older — so you can stash your entire stimulus check there if you don’t need it for anything else.
If you’ve already invested the maximum for 2020, consider investing in a traditional or Roth IRA for 2021. The contribution limits are the same as for 2020. You have until April 18, 2022 (April 19 for residents of Maine and Massachusetts), to invest in an IRA for 2021, but the sooner you invest, the more time your money will have to grow.
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Pay Off High-Interest Debt
Interest rates are low for student loans, mortgages and bank savings accounts, but if you’re carrying credit card debt, you’re probably paying upwards of 15%. You can free up a lot of cash by paying off those cards — and paying down debt gives you a rate of return you can’t find anywhere else, says Benjamin C. Simiskey, a CFP in Katy, Texas. If you manage to pay off the entire balance, you’re also eliminating a monthly expense, he adds. “That’s the best of both worlds.”
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Give It Away
If your finances are in order and your job is secure, considering using your stimulus check to help those who don’t share your good fortune. You can deduct a portion of your donation on your 2021 tax return even if — like most taxpayers — you claim the standard deduction. That’s because there’s an “above-the-line” deduction for up to $300 of cash donations. This new deduction was originally allowed for 2020 returns only. However, the second COVID-relief and government spending bill extended the charitable deduction for non-itemizers for another year. It also allowed married couples who file jointly to deduct up to $600 in cash donations (in 2020, the maximum a married couple can deduct is $300).
You can’t claim the above-the-line deduction if you itemize — in that case, you’ll have to deduct your contributions on Schedule A of your tax return. But there’s also pandemic-related relief for 2021 itemizers who want to make major contributions. The amount itemizers can deduct for cash contributions is generally limited to 60% of their adjusted gross income (any cash donations over that amount can be carried over for up to five years and deducted later). However, Congress lifted the 60% of AGI limit for cash donations made in 2020 and 2021, although there’s still a 100% of AGI limit on all charitable contributions.
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Shore Up Your Emergency Fund
While the unemployment rate is lower now than it was earlier in 2020, many people still don’t feel very comfortable about their employment situation. Even if you’re working now, the pandemic isn’t over yet. You could still experience a drop in income if your hours are cut, you’re quarantined, or you have to stay home with your children because their school buildings are closed.
Ideally, you should have at least three to six months’ worth of living expenses in a savings account. If you’re not there yet, your third stimulus check is a good start. Online banks usually offer the highest interest rates on savings accounts, and some come with no minimum-balance requirement or monthly fee.
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Invest in a 529 College Savings Plan
Contributions to a 529 college savings plan grow tax-free, and withdrawals aren’t taxed if you use them for qualified expenses, such as college tuition and room and board. You can invest all or a portion of your third stimulus check — 529 plans typically have very low minimums. Plus, your state may give you a tax deduction or credit if you invest in your own state’s plan. If your children are young, you have many years for investments in the plan to compound and grow. To research plans, go to www.savingforcollege.com.
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Support Local Businesses
Buy a gift card for a local restaurant or other small business that has been forced to close or scale back operations during the coronavirus pandemic. That will provide the business with much-needed cash during the shutdown, and you can use the gift card to treat yourself to a nice meal or massage when the pandemic is behind us.
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Stay on Top of Stimulus-Check Developments
Follow Kiplinger for the latest news and insights on federal stimulus payments (and other important personal-finance matters). Stay with us on:
See some of our other coverage of the third stimulus check:
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My husband Travis and I paid off $78,000 of debt in less than two years.
We paid off $53,000 alone in ONE YEAR!
Today I’m sharing 20 ways you can change things up, save money, etc, for how to pay off student loans faster… and what I would change if I had a do-over.
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How to Pay off Student Loan Debt
Let’s start with some baseline facts. Throughout our debt payoff, our combined income was roughly $88K meaning we lived off $35K and put 60% of our income towards loans.
While we put $53K toward debt the first year we only put $25 toward it the second. That’s because we also bought a house around six months before we became debt-free. It’s not the order I’d recommend doing things but we were forced out of our rental and decided we’d rather put off our debt-free scream a few months than wait another year to buy.
Now for the hard truth: It was really easy signing for these loans but it was not easy paying them off.
Over $12,000 of my personal income alone was from side jobs and I (no lie) contracted shingles early on in the process from how stressed I was about the task at hand.
What’s also true, aside from the discipline it took to turn down trips to Disney and dinners out, is that I had a great year. I had fun, went out, and we even took a vacation. Even though sometimes I felt deprived in the moment, looking back I wasn’t deprived at all. Every “no” made me a stronger person.
There are countless stories on the Internet about how people paid off massive amounts of debt in short amounts of time and they mostly say the same thing. So I wanted to give you something a little different and tell you what I think are the 20 most important things we did to tackle this big problem as quickly as possible.
1. Determine Your “Why”
This is the first and most important step we took. We decided we want to travel and buy a home big enough to foster children (one of my side jobs was at a foster group home.) Every time it got hard I reminded myself of why we’re doing this and it influenced every financial decision I made. You’re gonna need this one to succeed.
2. Have Clarity
You can’t finish a race if the route’s not laid out. The next thing we did was take inventory of our debt, savings, income, recurring bills, etc. to have a clear picture of our financial situation. Some couples don’t combine their finances, for us it was necessary to be transparent with each other since his earned income would be paying off my loans and vice versa.
3. Make a Budget
You’re gonna need a specialized budget. It’s 100% necessary to have a written budget before every month begins. We do ours in EveryDollar, it’s the easiest user interface I’ve worked with. We’ve never made a perfect budget, we’re always tweaking throughout the month but we always spend less than we bring in. We’re able to meet and exceed our loan payment every month because of the budget.
4. Change How You Shop
I traded Publix for Aldi, Target for Walmart, and the mall for Goodwill. Some changes were better than others (LOVE Aldi, hate Walmart) but it’s all for the sake of saving money.
While getting out of debt we committed to not paying full price for anything. I sit in my car or stand in line looking for coupons before I make a purchase. Here are some of the ways I save on full-priced items
Groupon and LivingSocial for deals on activities.
Shopping through Rakuten when making any purchases online will get you cash-back from virtually any retailer. (I never get a Groupon without getting Rakuten cash back!)
Use Blink to save on prescriptions.
EyeBuyDirect to save on prescription eyewear.
Energy saving methods like buying low-flow showerheads to reduce our utility bill or using wind power through Arcadia (it doesn’t save me money but it’s better for the environment!
Sites like Restaurant.com for dining deals.
ThredUp for nice secondhand clothing at steep discounts from retail.
I take advantage of free trials at gyms.
Apps like ibotta to save at grocery stores and other big box retailers.
5. Pick Up Extra Jobs
There are only so many things you can cut out of your life but there’s virtually no limit to the amount of money you can bring in. We started with hourly side jobs and since starting this blog I’ve had opportunities to freelance that have given me much more flexibility with my time.
You have to start somewhere and I am convinced bringing in extra income is the key to paying off large amounts of debt fast. If you can’t work any extra then negotiate a raise or find a higher paying job. This is that vital of a step.
I’ve laid out some 21 ways to make extra money and if you’re interested in blogging you can start here or check out my post about how to start and monetize a blog in any niche.
6. Drive Old Cars
We both drive Toyota Corollas and will drive them until we need something bigger. IMO, you don’t deserve a new car if you’re in debt, you don’t even deserve a nice used car. I don’t care how shiny it is.
You need something to get you back and forth from your 2 jobs and when you can pay cash for an upgrade then you deserve whatever you can afford.
7. Buy Used or Find Free
I don’t buy new clothes anymore and half of our furniture we got for free next to dumpsters and repainted. New doesn’t always mean better. We’ve saved a lot of money this year by not falling into that trap.
8. Meal Plan
I’m so passionate about this I wrote a book on it.
Meal planning is essential to saving money on food. I worked in restaurants during college and they did inventory every week and planned specials around it to minimize food waste and save money. So I do the same in my kitchen. I plan meals around what I have and the grocery budget has become the one section I never exceed because of it.
If you need help:
Making a simple DIY meal plan
Buying less and saving money at the grocery store
Preparing food once you plan it
And reducing the food waste in your house
Then check out my book Meal Planning on a Budget (It’s available on Amazon!)
If you’re bad at doing stuff like this or don’t have a lot of time, Cook Smarts is the meal planning I recommend. It’s the best value out there and I always say work smarter, not harder.
9. Celebrate Milestones!
Every time we pay off a loan or hit a milestone we have a little celebration. It’s usually dinner out (using Groupon or Restaurant.com) or a glass of whiskey and a movie on Netflix. If you have big loans that don’t have little milestones, make your own. $3K and $5K increments are a good start.
10. Sell Stuff
We didn’t have any big things to sell but we got a few nice appliances from our wedding so we sold the old stuff and made enough for gas for the month. We regularly sell clothes at Plato’s Closet and random stuff on OfferUp or Facebook Marketplace.
11. Find Cheap Housing
We own our house now but living in something small and cheap was clutch while we were paying off debt. You get smaller utility bills and have less room to buy “stuff” for. We live in a growing city in a pretty nice neighborhood and I’ve kept no secret that we paid $800 for a 1/1 in a duplex.
As the housing market rises so do rent prices so you have to get creative while looking. My husband went for runs in different neighborhoods and found it on one of those. It wasn’t listed. We also negotiated adding water & sewage into the rent.
12. Stop Eating Out Alone
We still eat out, even when we don’t have a gift card, but we stopped grabbing food out of laziness. I used to get tacos every Wednesday after work (not on Tuesday? Gasp.) and grits on Saturday before I went in.
For millennials, eating out is part of our culture, it unites us, but these taco and grits trips weren’t bringing me closer to anything but my fork. So now I only eat out if it’s with friends or my husband.
13. Visualize
We had a 4 ft paper thermometer on our wall (next to our thermostat, lol) that we fill in after we’ve made our loan payment for the month. I used to just watch numbers get smaller in all my accounts but with this corny visualization trick, It’s been fun to see that red bar go up and the white space above it get smaller and smaller.
I made a free printable debt thermometer for you here if you want to try it!
14. Give
Seems a little counter-intuitive doesn’t it? We could be making an extra $500 payment on our loan, shave a month or two off our total repayment. Only 67% of households give to charity & religious organizations.
It’s over half but Americans still get a D in social justice. It’s important to me to give what we can now so in the future giving more will be a natural progression.
15. Chill Out
Where all my Type A brothers and sisters at!? Let me hear you say “Ahhh. Omg. This is too much. I’m freaking out…” I used to live somewhere on that level.
It’s gotten a lot better since my Shingles outbreak (at the ripe age of 26) but I still have to remind myself to just go with the flow. Whatever happens, will happen and it’ll all work out in the end.
16. Unfollow Your Friends on Social Media
Confession: I unfollowed two of my best friends on Instagram and I didn’t tell them. I love them but they’re always traveling to cool places, eating great food, buying new stuff, and I just couldn’t handle it.
In no way has it affected our relationship (it’s probably improved it) and I can scroll a little safer now.
Also Read: Why Unfollowing my Friends Helped my Finances
17. No-Spend Challenges
I’ve done a few no-spend challenges and they’ve all taught me more about my spending habits. I still bought groceries and went out to eat but I didn’t buy any personal non-necessities. The beauty of a no-spend challenge is that it can look different for everyone and you’re guaranteed to save money for as long as you do it.
If you want to learn how to do a no-spend challenge that transforms your habits and causes you to spend more intentionally you can check out my other book on Amazon, The No-Spend Challenge Guide. (#shamelessplugs)
18. Check Your Bills
Whenever it’s time to renew or we see an ad for a good offer (on something we already pay for) we call to negotiate a better deal. It’s unfortunate that companies take advantage of their customers like they do but that’s how it is and it’s on us to keep our necessities affordable.
19. Ditch Cable
We never signed up so this one is a no-brainer. I don’t care how much you love sports or how many kids you need to keep occupied. There are cheaper, if not free, ways to do it than cable. Try Fire TV Stick or Roku to fill your cable sized void.
Our friend knows our budget is tight while paying off debt so she let us use her Netflix account for free. You never know, maybe one of your friends will do the same while you’re getting your finances together. And football isn’t going anywhere.
20. Stop Investing
I wouldn’t stop for more than a year or two but it motivated us to go that much faster. I know we missed out on future compound interest but the fire it lit under us helped pay way less in interest.
And now we max out a 401k, two Roth IRA’s, and an HSA. Which is way more effective than just $50 or $100 a month toward these accounts.
If you want to pay off your loans fast, then pile on the money you would be investing to your loan. And remember it’s not forever.
You Can Pay off Student Loan Debt!
So what would I do differently? I would’ve chilled out a little more but that’s really it. I’m proud of how flexible we were able to be and still stay motivated to get the job done so quickly. But there are still things I missed out on that I wish I would’ve spent the money and done.
Whew! That’s a lot, right? Don’t expect to start all these at the same time. We worked up to doing all these things. Start with the first four and work your way down, you’ll be surprised at how naturally they all come over time.
<img data-attachment-id="3993" data-permalink="https://www.modernfrugality.com/20-things-pay-off-53k-student-loan-debt/20-things-we-did-to-pay-off-78k-2/" data-orig-file="https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?fit=1000%2C1500&ssl=1" data-orig-size="1000,1500" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="The tips and trick a couple used to pay off $53,000 in student loan debt in 1 year." data-image-description="
Are you tired of drowning in your student loan debt? Here are 20 tips and tricks one couple used to pay off $53,000 in student loans in 1 year. #payoffdebtquickly #Payingoffstudentloans #howtogetoutofdebtfast #studentloantips #payingoffstudentloans
” data-medium-file=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?fit=200%2C300&ssl=1″ data-large-file=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?fit=400%2C600&ssl=1″ loading=”lazy” data-pin-description=”Are you tired of drowning in your student loan debt? Here are 20 tips and tricks one couple used to pay off $53,000 in student loans in 1 year. #payoffdebtquickly #Payingoffstudentloans #howtogetoutofdebtfast #studentloantips #payingoffstudentloans” data-pin-title=”The tips and trick a couple used to pay off $53,000 in student loan debt in 1 year.” src=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?fit=400%2C600&ssl=1″ alt class=”wp-image-3993″ width=”265″ height=”398″ srcset=”https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?w=1000&ssl=1 1000w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?resize=200%2C300&ssl=1 200w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?resize=400%2C600&ssl=1 400w, https://i1.wp.com/www.modernfrugality.com/wp-content/uploads/2020/06/20-things-we-did-to-pay-off-78k.jpg?resize=768%2C1152&ssl=1 768w” sizes=”(max-width: 265px) 100vw, 265px”>
<img data-attachment-id="2438" data-permalink="https://www.modernfrugality.com/20-things-pay-off-53k-student-loan-debt/1-22/" data-orig-file="https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?fit=735%2C1102&ssl=1" data-orig-size="735,1102" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"" data-image-title="20 Tips to Help you Kick Your Student Loans to the Curb for Good" data-image-description="
Are you ready to pay off your student loans and be done with them? Here are 20 things a couple did to pay off their massive student loan debt in 2 years. #studentloantips #moneysavingtips #howtogetoutofdebt #gettingoutofdebt #howtogetoutofdebtfast
” data-medium-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?fit=200%2C300&ssl=1″ data-large-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?fit=400%2C600&ssl=1″ loading=”lazy” data-pin-description=”Are you tired of drowning in your student loan debt? Here are 20 tips and tricks one couple used to pay off $53,000 in student loans in 1 year. #payoffdebtquickly #Payingoffstudentloans #howtogetoutofdebtfast #studentloantips #payingoffstudentloans” data-pin-title=”The tips and trick a couple used to pay off $53,000 in student loan debt in 1 year.” src=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?resize=238%2C357&ssl=1″ alt=”We paid off $78K of debt in 23 months by doing these things.” class=”wp-image-2438″ width=”238″ height=”357″ srcset=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?resize=400%2C600&ssl=1 400w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?resize=200%2C300&ssl=1 200w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2017/01/1-1.png?w=735&ssl=1 735w” sizes=”(max-width: 238px) 100vw, 238px” data-recalc-dims=”1″>
<img data-attachment-id="4245" data-permalink="https://www.modernfrugality.com/20-things-pay-off-53k-student-loan-debt/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good/" data-orig-file="https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?fit=1000%2C1500&ssl=1" data-orig-size="1000,1500" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="20 Tips to Help you Kick Your Student Loans to the Curb for Good" data-image-description="
Are you ready to pay off your student loans and be done with them? Here are 20 things a couple did to pay off their massive student loan debt in 2 years. #studentloantips #moneysavingtips #howtogetoutofdebt #gettingoutofdebt #howtogetoutofdebtfast
” data-medium-file=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?fit=200%2C300&ssl=1″ data-large-file=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?fit=400%2C600&ssl=1″ loading=”lazy” data-pin-description=”Are you tired of drowning in your student loan debt? Here are 20 tips and tricks one couple used to pay off $53,000 in student loans in 1 year. #payoffdebtquickly #Payingoffstudentloans #howtogetoutofdebtfast #studentloantips #payingoffstudentloans” data-pin-title=”The tips and trick a couple used to pay off $53,000 in student loan debt in 1 year.” src=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?fit=400%2C600&ssl=1″ alt class=”wp-image-4245″ width=”312″ height=”468″ srcset=”https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?w=1000&ssl=1 1000w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?resize=200%2C300&ssl=1 200w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?resize=400%2C600&ssl=1 400w, https://i0.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/20-tips-to-help-you-kick-your-student-loans-to-the-curb-for-good.jpg?resize=768%2C1152&ssl=1 768w” sizes=”(max-width: 312px) 100vw, 312px”>
<img data-attachment-id="4284" data-permalink="https://www.modernfrugality.com/how-to-find-what-you-value-to-make-smarter-spending-decisions/mf-the-secret-to-paying-off-debt-fast-78k-in-2-years/" data-orig-file="https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?fit=700%2C1350&ssl=1" data-orig-size="700,1350" data-comments-opened="1" data-image-meta=""aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"1"" data-image-title="The Secret to Paying off Debt Fast!- $78k in 2 Years!" data-image-description="
Do you want to figure out how to FINALLY pay off your debt? Here is the secret to paying off debt fast. #payingoffdebtfast #payingoffdebtquickly #howtopayoffdebtfast #howtopayoffdebtquickly #studentloantips #moneytipsformillennials #moneyhacks #debthacks #gettingoutofdebt #howtogetoutofdebt #payingoffstudentloans, howtogetoutofdebtfast
” data-medium-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?fit=156%2C300&ssl=1″ data-large-file=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?fit=311%2C600&ssl=1″ loading=”lazy” data-pin-title=”The Secret to Paying off Debt Fast!- $78k in 2 Years!” data-pin-description=”Do you want to figure out how to FINALLY pay off your debt? Here is the secret to paying off debt fast. #payingoffdebtfast #payingoffdebtquickly #howtopayoffdebtfast #howtopayoffdebtquickly #studentloantips #moneytipsformillennials #moneyhacks #debthacks #gettingoutofdebt #howtogetoutofdebt #payingoffstudentloans, howtogetoutofdebtfast” src=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?resize=251%2C484&ssl=1″ alt class=”wp-image-4284″ width=”251″ height=”484″ srcset=”https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?resize=311%2C600&ssl=1 311w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?resize=156%2C300&ssl=1 156w, https://i2.wp.com/www.modernfrugality.com/wp-content/uploads/2020/08/MF-The-Secret-to-Paying-off-Debt-Fast-78k-in-2-Years.jpg?w=700&ssl=1 700w” sizes=”(max-width: 251px) 100vw, 251px” data-recalc-dims=”1″>
Jen Smith is a personal finance expert, founder of Modern Frugality and co-host of the Frugal Friends Podcast. Her work has been featured in the Wall Street Journal, Lifehacker, Money Magazine, U.S. News and World Report, Business Insider, and more. She’s passionate about helping people gain control of their spending.
Learn how to navigate the deals and come out on top.
Why pay full price for something if you can get what you want, plus another item, at a discount? This is called bundling, and researchers have been studying the pros and cons of it for decades.
Although many consumers think of bundling as a modern concept — it’s often used to combine TV, internet, and phone services, for example — the practice has been around for years in a variety of forms.
As a homeowner or renter, navigating the benefits and pitfalls of bundling household services means using a little common sense and a bit of economic reasoning. It also requires being aware of when and how products are bundled.
What is bundling?
Everything from fast-food combo meals to items in a two-for-one deal could be considered bundled, especially if sold at a lower price than the separate parts.
For households, bundling might mean purchasing home and car insurance together at a slightly lower rate — the average American, for example, saves 16 percent when bundling the two policies, according to the latest data from InsuranceQuotes.com.
The possibilities for bundling household services abound, according to Andrew Schrage, co-owner of Money Crashers Personal Finance: “You might find someone on Craigslist who can help with electrical, plumbing, and air-conditioning/heating needs. You’ll likely get a discount, because you’ll be bringing that person more work.”
Mixed versus pure bundling
There are several types of bundling, each with varying levels of consumer benefit, according to George John, a professor at the University of Minnesota’s Carlson School of Management. As a homeowner, you’ll most likely encounter these two types:
Mixed bundling. The consumer chooses between separate items or a bundle. The pieces will likely be more expensive individually, but the consumer has the option to buy just one piece.
Pure bundling. Occurs when the seller offers only a bundle and no individual pieces. This would happen, for example, if a town has only one moving service, which requires clients to buy its cardboard boxes.
In such a scenario, consumers are worse off, because the seller increases its profit by requiring such a deal. The company can get away with it “because they have a very strong market position,” John says.
Understanding your needs is key
Why are so many services offered in bundles? “This is somewhat controversial, but it turns out that companies make more money when they offer you discounts on those bundles, because consumers get tempted into buying it,” John says.
To win at the bundling game, keep your needs in mind, and stay strong in the face of alluring deals. Bundles are a true victory for consumers only if they genuinely need all parts included in it.
When consumers fail to shop around for the other items in the bundle and go for the packaged deal instead, they often walk away with products they don’t want or need — and sometimes pick up lesser-quality goods along the way.
Finally, the touted time-saving advantage of combining bills, which service providers sometimes use as a selling point, may not economize that much time, especially if a consumer would be signing up for automatic bill payments anyway.
Service providers “want to take your attention away from the fact that it’s actually a price move. They want to tell you that you’re getting a better experience if you bundle,” John says.
Client-controlled bundling
Consumers triumph when they control what’s in the bundle. Have a nanny who you pay a little extra to make dinner each night? That’s a bundle. “It’s totally a good deal, because you know the benefit that comes from having the same person watch your child and cook for you. You’ve made the judgment,” John says.
At the end of the day, discipline is key. Saying no to unnecessary items, looking for other options instead of pure bundling, and refusing to be duped by false benefits will ensure you win the bundling game.
