Month: June 2019

Books with Impact: You Need a Budget

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The “Books with Impact” series takes a deeper look at specific books that have had a profound impact on my financial, professional, and personal growth by extracting specific points of advice from those books and looking at how I’ve applied them in my life with successful results. The previous entry in this series covered Triggers by Marshall Goldsmith.

You Need a Budget was the first personal finance software package I really fell in love with. I dabbled with Microsoft Money (RIP) and Quicken when I was first turning my finances around, but it was You Need a Budget that really clicked with me when I started using a spreadsheet-based version of the software many years ago, and I still use You Need a Budget 4 (the last standalone version of the software) on occasion when trying to get a clear picture of my finances because I simply love how it handles and displays my financial information.

What drew me to the software more than anything, however, was the philosophy behind it. YNAB wasn’t just a piece of software for tracking your finances; it was designed to help you follow a rather in depth philosophy and program for improving your financial state, something that other major personal finance software packages never really had (and still don’t, for the most part). That philosophy, encapsulated in four simple rules, was the really valuable part of the whole system.

That brings me around to this book. You Need a Budget by Jesse Mecham (the founder of YNAB) is basically the philosophy behind YNAB expanded with details into a short but quite powerful book, a book that I want to dig deep into because of the all-around solid personal finance philosophy and system it contains.

Let’s dive right in.

A New Way to Look at Your Money

The book starts off with an insightful criticism of the traditional form of budgeting, budgeting in which you merely list a lot of categories, come up with spending targets for each category, and then aim for those targets in those categories.

What’s wrong with it? It’s inflexible. You can’t prioritize one budget category over another. It’s inherently predictive, meaning you’re trying to guess what the future holds every time you make a spending target.

The big shift that the YNAB philosophy makes is that it focuses on spending what you have right now, rather than what you project you’ll have going forward, with a particular emphasis on how that money can get you to your goals. In other words, it chops the concept of projecting future income out of budgeting entirely.

The interesting part of this method as opposed to traditional budgeting is that it highlights the scarcity of money, as is nicely described on page 20:

[T]his feeling of scarcity is a good thing. It means you’re seeing your money for what it truly is: a finite resource – and this is a huge part of that mindset shift I talked about. It doesn’t actually matter how much money we have or don’t have. Scarcity is simply that feeling of wishing their were more. This is an important moment. The feeling of scarcity might tempt us to quit, but when we step back and embrace scarcity, we make good decisions.

I found this really interesting because it seems to fly in the face of the idea of an abundance mindset. In many aspects of life, it’s much better to have an “abundance” mindset, meaning that you perceive that the pie is infinite in size so it’s not a big deal to share with others because you’ll still have more than enough for yourself. YNAB centers around the opposite idea, at least for your finances: all you have is this little pool of money.

The argument is that, in terms of your money, the future is abundant and thus very difficult to reasonably budget. The present of your financial situation, however, is scarce – there’s only a limited amount of money and you have to make the most of it that you can.

The advantage of applying a scarcity mindset to your financial state is that it shows you that each dollar is important and everything in your life is vying for each and every dollar because there’s only so much to go around. Much of the justification for splurging comes from an abundance mindset about money – there will always be more money, so why not just spend it now on something unimportant? When you walk away from that mindset and adopt a scarcity mindset for your money, splurging becomes just another competitor alongside things that are likely more important to you.

Because you’re treating every expense and financial goal as a hungry mouth wanting to devour part of that relatively small pool of money you have right now, you have to prioritize. Which of these expenses is the most important right now? If I give $200 to this, what other possible expense has to go without money for now? You begin to feel those little frivolous nickel and dime expenses actually ripping money away from things you know are more important, and that forces you to start thinking about every dollar with seriousness.

Another interesting aspect to this perspective is that it forces you to start taking responsibility for your future now. If you want to have things in the future, you have to put money aside for them now. Taking money away from future savings goals and giving it to something else is effectively saying no to your future goals. If you want that future goal, you have to put your money where your mouth is now. There is no “someday” that will take care of it.

This leads directly into the first “rule” of the YNAB philosophy.

Rule One – Give Every Dollar a Job

It’s simple. From page 33:

Just check your bank account balance and assign a job to every dollar you own. You’re officially budgeting the moment you start doing this, and with every “job” you assign, you’re answering the question: What do I want my money to do for me?

Of course, this starts with figuring out what needs to get done with your money along with what your big goals are. What are the urgent things that have to be covered soon, like your current bills, the rent, your food needs in the next week or so, and so on? What long term things do you want to happen in your life? What fun things do you want to do in the near future – or even a little way down the road? What big bills are coming up?

You want to start with survival. What do you need to make it through the next few weeks with your basic well being intact? You need food, water, shelter, hygiene, and clothes on your back, basically. After that, move onto obligations – electricity, debt payments, garbage removal, and so on. Those are the basics. Those are the needs. Those are the things that, if you don’t handle them, your short term life gets bad quickly. It is vital to separate these things from non-essential habits that you’re treating as necessities. Coffee isn’t a necessity – it’s a non-essential habit. Non-basic foods aren’t a necessity – they’re just something you want because it’s tasty or healthy or whatever. Alcohol? Not a necessity. Filter those things out for now.

You’ll also need to consider longer-term obligations, like upcoming expenses that you know are coming. It’s time to cover a fraction of those things – and cover another fraction each time you get an influx of cash.

After that, it really comes down to your personal priorities, and that’s where you need to start thinking. What is actually a real priority in my life? The nice part about this philosophy is that it’s literally about putting your money where your mouth is. Once you’ve covered survival and obligations, the things you do with your money are up to your personal priorities, and there’s no hiding them here. What you do with your money is your true priority, regardless of what you tell yourself.

The use of each and every dollar you have is an expression of either the basic needs of your life or what your life’s priorities are. Each and every dollar has a “job,” in other words. It’s doing something for you.

My experience has been that the more in line your personal priorities are with the “job” you assign to every dollar in your life, the more peaceful you feel. It’s when you’re not taking care of something that you’re theoretically prioritizing so that you can spend money on something that has a lower priority for you that you run into financial trouble, every time. It’s all about carefully considering what your priorities are.

This does not mean having no fun. However, what it does mean is that things that you spend money that have a comparatively low return in terms of the pleasure they give you should be pretty low on the priority list, below a lot of your long term goals. It’s okay to prioritize a few pleasures that bring you a lot of joy in the short term, but you have to be discerning about it. Some things simply aren’t as big of a deal as others, and those lesser things need to fall rapidly down the priority list.

This becomes very real when you’re looking at the money sitting in your checking account right now and assigning each and every dollar in there a job. Where does each of those dollars go? Doing it well requires some real thought and introspection, and that’s the real value of this system.

Rule Two – Embrace Your True Expenses

The “true expenses” that this chapter is talking about is alluded to a little bit in the previous chapter, but this chapter brings it into focus. It’s not just about making sure the bills are covered each month, but making sure that you’re also taking care of the irregular expenses in your life.

For example, let’s say you know you have an insurance bill for $700 coming due in 7 months, and you get paid twice a month. That means you should probably put $50 out of your current pile of cash aside toward that insurance bill and then do it again every time you have a cash influx so that the insurance bill is easily paid when it comes due.

Those are your true expenses – not just the daily ones or the monthly ones, but the irregular ones that come around once every six months or once a year or whatever. In the YNAB system, those required but infrequent expenses should always be directly gobbling up a little piece of the pool of money you have right now, as well as a piece of every influx of money that comes in (like a paycheck).

There are also things that are unexpected and inevitable, like needing to replace parts on your car or having to repair appliances in your home. It can be very hard to estimate these kinds of things, but following routine maintenance on a 15,000 mile per year car is about $50 per month, and a good annual budget for unexpected home costs is about 1% of your home’s value, so you can break that down, too. Those are pieces that need to come out of the pool of cash you have.

Beyond that, this is how you plan ahead for your big life goals. What slice of the current cash you have available is going to retirement? What about college savings for your kids? Your house down payment?

This obviously requires some planning, and that’s where software can help. The YNAB software is designed to do this very naturally, and it’s why I fell in love with it years ago. You can actually do all of this on a spreadsheet, too, if you’re familiar with Excel or Google Sheets.

Rule Three – Roll with the Punches

Just as it’s impossible to micromanage every second of your time because unexpected events always happen, it’s impossible to micromanage your money because of the unexpected events life deals us. We can have the best money plan in the world, but when something like a job loss or an unexpected family illness or a hailstorm occurs, the best laid plans are torn to shreds.

Unexpected expenses can often mean changing your budget, and changing your budget can feel like failure. It can feel like you didn’t plan for everything and now all of your planning is worthless.

It’s not.

Part of the value of this type of financial planning is that, once it gets going, it becomes very possible to roll with the punches. If a sudden high priority event comes along, you simply take cash designated for lower priority events to handle it. In other words, once you’ve been doing this for a while, your budget becomes something of a living thing, capable of changing and morphing around the unexpected moments of your life.

How does this work? Let’s say you decided you wanted to buy a new television for your family for Christmas and budgeted $1,000 for it. Using the YNAB system, you decide to put aside $50 per paycheck for it starting in February. September rolls around and suddenly the unexpected happens – you have a sudden $500 expense. Guess what? You can handle it. You have the cash set aside to do so.

But what happens to that television plan? Once the urgent thing is paid for, you reprioritize. Do you want to put aside $100 per paycheck until Christmas to cover it, or are there other priorities that you should deal with first? You get to make that choice because of the freedom that YNAB offers you.

The system really centers around prioritizing your expenses, and when an urgent expense comes in with a higher priority, then you can take away money put aside for lower priority expenses (like a $1,000 television for the holidays) to handle it. The key is understanding that you’re really only worried about the pool of money that you actually have in hand and how to use every dollar most effectively. You don’t worry about the next influx of cash until it arrives.

Rule Four – Age Your Money

The real power of this system is that, over time, it moves you to a situation where you don’t need your next paycheck, and given a long enough timeframe, it moves you to a situation where you don’t need any paycheck.

It’s actually quite simple. All you really have to do is over prepare a little for each of those expenses you know are coming so that eventually you’re covering next month’s rent out of this month’s pool of cash because the next rent payment is already covered. Then you’re covering two months in advance, then three.

Let’s say that you’re paid twice a month and your rent is $1,000 a month. If you say that out of every incoming pool of cash, you set aside $600 for rent, you will have next month’s rent covered at the end of the month with $200 left over. Do that again next month and there’s $400 left over. Three months later and you actually have a full month of rent already in the can in advance and you can start preparing for subsequent months.

Mecham refers to this as “aging your money.” You’re effectively using money you brought in two or three months ago to pay your rent now.

If you do that for every bill, a lot of good things start to happen.

For one, you can survive for a while without any influxes of cash. You roll right through a job change without skipping a beat. You get fired? No problem, as long as you can find a job in the next month or two. You have a sudden life emergency? No problem – you can just nibble a bit from the money you have put aside for rent two months from now.

For another, you can start feeling confident investing for really long term stuff. If you have two months of rent checks already covered, you can tone down your $600 twice a month put aside for rent down to $550 or $525, then apply that $50 or $75 twice a month to, say, retirement savings or an extra payment toward paying off a student loan. Think of it this way: you have the money set aside to cover all of your survival needs and obligations for the next two months, so you can start working on covering a month’s worth of survival needs and obligations for yourself when you’re old by contributing to retirement savings. It’s the same thing, just very long term.

For yet another, your money starts to earn money for itself as it is aging. When you only age it for a month or two in savings, it only earns a little bit of interest, but when you age money for 30 years in a retirement account, it earns a ton of return on your money.

For yet another, the more you age your money, the larger your pool of money that you have available to make decisions with. Remember, the YNAB philosophy orients itself around making decisions regarding only the money you have in hand. Thus, the more money you have on hand, the richer your decision making palette and the easier it seems to make room for big long term goals.

So, how do you get there? The book suggests setting a simple goal (page 110):

Set a goal to save what you spend in a typical month. When you hit your goal, budget out the new month with that money. Now your next paycheck can go to the following month. Your money is officially thirty days old.

And how do you get there?

Embrace the sprint. Go on a no-spending spree for as long as you can. Also hustle to bring in extra cash in creative (and legal) ways. Anything you save or earn goes straight to your savings for the next month.

The more you age your money, the better. It not only gives you breathing room, but it also grows your money.

The rest of the book consists of a series of short chapters talking about specific applications of these four rules to specific life situations.

Budgeting as a Couple

Here, Mecham essentially reiterates the core advice that almost everyone gives for couples dealing with money issues, because it’s hands-down the best advice and the one thing that works: communicate. You’ve got to talk about your money situation together, openly, with minimal emotion, and with a genuine intent to put you both in the best life possible.

The main focus of the chapter is on the idea of a monthly “money date,” where you sit down with your partner and fully go through your finances and budget, setting priorities together for the next month. Together is important here; there’s almost no better way for this to fall apart than for one partner to just dictate the financial rules to the other one.

One important part of “couples budgeting” is to recognize that you both need a bit of personal fun money. There has to be some breathing room in the budget for each of you to pursue your own interests or else there will be backlash against the whole idea, especially from the person less committed to the concept, so this should be a fairly high priority item. Now, if that person decides to use that personal fun money of theirs buying soft drinks at the convenience store, that’s their call.

Slaying Debt, Whatever Your Situation

How does debt repayment work into all of this?

First of all, accruing more debt should be pretty much entirely off the table if you’re using this philosophy. That includes credit card debt. The only time you might consider debt once you get this whole strategy rolling is something like a home loan or possibly a student loan, but consumer debt should be almost entirely avoided because you’re planning ahead for expenses now and sticking with just the pool of money you actually have in hand for your spending.

As for repayment of the debt you already have, the best strategy is to treat your basic payment as an obligation and treat an extra payment as a fairly high priority but non-essential item that you want to throw some money to each time money comes into your accounts. So, you make sure your minimum is covered, and then you put some significant priority to allotting some cash for an extra payment on that debt.

Teaching Your Kids to Budget

Mecham advocates giving children an allowance and using that as a basis for teaching basic money management skills when they reach middle and upper elementary and middle school. He advocates giving them one or two required commitments for portions of their allowance and then complete freedom in terms of the rest of it.

The one or two required commitments for a portion of their allowance – things like saving for college or giving to charity – are basically a microcosm of YNAB. If you talk about the philosophy behind this a little and then talk about how they can use the idea to take a portion of their weekly allowance and put it aside for bigger goals (like, say, a new game for their Nintendo Switch or a bunch of new canvases for painting), they’ll often come around to it on their own.

Even better, if you establish this kind of pattern early on in their life, they’re more likely to draw on that type of thinking later in life to build their own path to financial independence from you and financial success on their own.

When You Feel Like Quitting

This last section discusses a lot of reasons why people quit budgeting: they don’t leave themselves any breathing room, they set unrealistically low spending targets for things like household supplies or food, they assume that they can rapidly and permanently change a lot of their routines and habits, they demand too much too soon, and so on.

The key to sticking with a financial change, no matter what it is, is to accept that things won’t always go perfectly and it’s okay to be imperfect. What you’re looking for more than anything is to be a little better today than you were yesterday and to gradually move towards where you want to be while recognizing that steps backward are normal and aren’t a terrible sign of failure.

If you feel like quitting or feel like a failure, look at the progress you’ve made so far and feel good about it, then refactor your plans. What parts work well? Keep those. Which parts don’t work well? Ditch them or try new versions of them. No one has a perfect plan the first time they try.

A Brief Note About the Software

Although my focus here was writing about the book You Need a Budget, I felt it appropriate to make some references to the software package You Need a Budget a few times, and rather than reiterating my thoughts on the software package, I thought I’d summarize my thoughts in one place near the end.

Several years ago, YNAB version 4 was hands down my favorite piece of personal finance software. In fact, I still use that exact version at home because of how well it embodies the philosophy spelled out in this book, a philosophy I strongly agree with in most ways.

However, several years ago, YNAB chose to discontinue their standalone version 4 software and instead moved to a subscription-based software package. While I have no objection to the concept of software as service, I didn’t migrate to the subscription based version because, well, I still use my old version 4 software. I did do a trial of the subscription-based version, but I was pretty happy with my old software for a number of reasons (it does what I want, for one, and it also keeps all of my data local rather than in the cloud) and I’ll stick with it as long as it still runs.

So, if it seemed like I often stopped short of a full-throated endorsement of the software in its current form, that’s why. I don’t actually use the current form. Having said that, the current form of the software is a really well executed embodiment of the principles described in that book and cloud software is mature enough that I would feel safe putting information into the software that didn’t directly reveal my identity. It is the best budgeting software around today.

Final Thoughts

This book is a great readable explanation of the You Need a Budget philosophy and how to apply it to one’s own finances. This philosophy – and the accompanying software – was a vital part of my own financial turnaround, particularly during the period when we were finishing up paying off our consumer debt and considering buying a home and then figuring out how to handle expenses with multiple children. I still use the principles of the system, and I still occasionally use the software, though much of our financial organization is automated at this point. (In fact, the automation itself is a lot like You Need a Budget, as the automation just moves a lot of our income off to various pools and accounts for specific purposes.)

If you know of someone just trying to get a grip on managing their own money and getting a little ahead of the paycheck to paycheck life while building a foundation of money principles that can really grow with them as they get more and more ahead financially, this is a great book for them. The material might seem overly straightforward for someone who is already in a great financial place, but roughly 80% of Americans live paycheck to paycheck and quite a few of them want a path out of that life, and this book’s a great starting point for them.

The post Books with Impact: You Need a Budget appeared first on The Simple Dollar.

Depression and me

sourced from: https://www.getrichslowly.org/depression-and-me/

For much of the past two weeks, I’ve been wrestling with my mental health. I could sense a crisis coming, so I scheduled some time away. I didn’t want to have to be worrying about blog posts while I was worrying about everything else. Thus, my “summer vacation”.

Long-time readers are aware that I’ve struggled with depression for most of my life.

In sixth grade, I missed five weeks of school with what my father called “parrot fever”. (We had parrots, and he attributed my issues to a parrot allergy.) After our family physician could find nothing wrong with me, Dad took me to his therapist. Hushed conversations followed the appointment. The verdict: I was dealing with depression.

In junior high, I was briefly suicidal but made a deliberate decision to turn things around. In high school and college, the depression was always there, looming in the shadows. As a young adult, it mostly went away…but then it came back as I got older.

In 1999, when I was thirty, I experienced something new: anxiety. At one point, I thought I was having a heart attack. Nope. It was a panic attack. When the second panic attack came a few weeks later, I knew it wasn’t my heart. It was me stressing about life.

Interesting note: It was after the second panic attack that my doctor strongly encouraged me to start drinking red wine. For real. Before that, I was a teetotaler.

During my divorce in 2011-12, Kris asked me a favor. “Please see a counselor,” she said. I did, and it helped. My therapist gave me advice for coping with depression and anxiety, plus she diagnosed me with ADD. For a few years, I was able to manage my symptoms.

Last year, though, things got bad. March and April and May were a struggle. In June, I published an article here about my ongoing battle with depression. During the summer, my mental health improved, however, and I forgot about how hard the spring had been.

Tweet about Anthony Bourdain's suicide

A Sneaky Little, Sticky Bitch

In February of this year, my anxiety returned. The depression followed soon after. When my heart-attack scare in mid-March turned up no physical issues (other than high blood pressure), my doctor suggested that the problem was anxiety. She asked me to start seeing a therapist again. So, I did.

Since early May, I’ve been attending talk therapy once a week. We’re exploring why I feel so anxious, and how using alcohol to cope with anxiety is a “maladaptive behavior”. We’re exploring other ways to make things work.

The trouble? When I don’t drink in the afternoon, I get more anxious.

The frustrating thing is that the depression and anxiety lead me to act like a completely different person.

For instance, I love people. I love spending time with people. Social interaction energizes me. Right now, though? I hate it. I don’t want to deal with anyone in any capacity. I don’t want to spend time with friends. I don’t want to be in crowds. (I make an exception for Portland Timbers games.) I don’t even want to go to the grocery store.

Here are some ways this manifests itself:

  • Today, I had a lunch appointment with a colleague and friend. Karl is a great guy and I enjoy spending time with him. Normally. Today, though, all I could think about were the reasons I might be able to cancel.
  • Yesterday, I taped a TV interview with a local station. I wanted to cancel that too. Afterward, I ought to have driven out to the family box factory. But I didn’t. I didn’t want to spend time with my brother and cousin.
  • This Sunday evening, there’s another Portland Timbers game. Kim can’t go with me, so I need to find somebody else to join me. I have zero desire to do so. I may end up selling the tickets and skipping the game because of my anxiety.

My medical doctor has prescribed propranolol to simultaneously deal with my high blood pressure and my anxiety. While it seems to be helping the former, it’s not helping the latter. (According to wikipedia, it’s really only useful for performance anxiety.)

Meanwhile, the depression is even worse. If you look at the symptoms of depression, I’m exhibiting every single one. Some of my symptoms are severe.

  • Fatigue? Have it.
  • Insomnia? You bet.
  • Feelings of guilt and worthlessness? Oh boy.
  • Irritability? Yes, and it’s so not me. I’m not an irritable guy — but I am lately.
  • Loss of interest in things once pleasurable? Absolutely, and it’s SO FRUSTRATING. Nothing appeals to me. I’m numb.
  • Trouble concentrating, remembering details, and making decisions? You have no idea. Everything is a chore.

The latter is especially difficult to deal with. When Karl asked where to meet for lunch today, I couldn’t decide. Why not? That’s so simple! Last night, Kim wanted me to make dinner. But I didn’t because I couldn’t decide what to fix. That’s ridiculous!

A Horrible, Terrible, No Good, Very Bad Day

In fact, yesterday was miserable. It might have been the worst day of my entire life.

My head was a mess of negative thoughts and emotions, all of them swirling and swirling and swirling in a never-ending dark cloud of despair. I couldn’t focus on anything. I did tape the TV interview (the first segment went very well, but the second bordered on incoherent) but that’s the only productive thing I did all day.

On the drive home, I bought — and then consumed — a big bowl of clam chowder, a big bag of potato chips, and an entire package of chocolate chip cookies. Then I sat in the hot tub and played a videogame for five hours. (At least I didn’t drink alcohol!)

When Kim came home, she asked, “What’s for dinner?” I admitted that I hadn’t made dinner — but I didn’t tell her how messed up my head had been all day. (She knows I’m struggling but she doesn’t know how badly.) While she changed out of her scrubs, I fried some frozen potstickers.

Naturally, all of this makes me feel even more guilty and worthless and depressed. It’s a vicious cycle.

I’m sure you can see how this would translate in an inability to get work done, both here at Get Rich Slowly and in my real life.

It’s a problem.

What’s the solution to the problem? I’m not sure. There must be one. But I don’t know what it is. Drink every afternoon? That’s what I’ve been doing, and it works. But, as my therapist says, it’s a maladaptive behavior. I think we all know where that road leads.

My therapist is patient. She keeps giving me homework assignments…and I keep avoiding them. Exercise! Meditate! Set goals! These all sound awesome. They’re all things I know I like to do. But they also sound like tremendous effort, so I don’t do them.

Bringing Gratitude

Instead of canceling my lunch appointment with Karl today, I went. I’m glad I did.

I’ve known Karl for almost a decade. He’s one of the most uplifting, supportive people I’ve ever met. I love that his work is centered on positivity. He runs a site called Bring Gratitude and he published a book by the same name. (Six months ago, he shared a guest article here at Get Rich Slowly about practicing gratitude with a daily journal.)

As we sat down for lunch, I told Karl point blank about the issues I’m going through.

“I can totally relate,” he said, and he shared some of his own past struggles.

“You know,” I said, “my therapist has been urging me to try meditation. But I don’t know how to start.”

Karl nodded. “I meditate. I meditated just this morning. But it can be tough to get going. You have so many thoughts racing through your head. Here’s one thing that might work, though. Give yourself one minute. Only a minute. For that minute, meditate on all of the things that you’re thankful for.”

“I like that idea,” I said. “I like it a lot. Normally, I’m a grateful guy. I’m a lucky man, and I know it. Usually. Lately, though, I’ve forgotten how awesome life is. Meditating on the things I’m grateful for would be a great way to remind me of what I’ve got.”

Thank You

On my drive home, I put Karl’s idea into practice. I took back roads. As I drove slowly through the countryside, I thought about all of the things that I’m thankful for.

  • I’m thankful for Kim. She’s a not just a wonderful partner in life, but she’s a wonderful person. She’s a good soul.
  • I’m thankful for my dog. Tahlequah is a handful (a pawful?), and I do get frustrated with her. But I’m also grateful to have such an enthusiastic hound dog in my life.
  • I’m thankful for my health. I haven’t taken care of myself much lately, but that’s on me. Generally speaking, my body is in fine shape. And with a little work, it could be in great shape once again.
  • I’m grateful for music. I don’t mention it much, but music brings great joy to my life. I love music of all sorts. Taylor Swift, yes, but also U2 and Mozart and Styx and ABBA and Public Enemy.
  • I’m thankful for Portland. I love the green of it. I love its quirky die-hard (sometimes absurd) liberalism. I love the food scene and the Timbers and the passion for books. Speaking of which…
  • I’m grateful for words. Books bring me joy. So does writing. I’ve managed to make a living from my words, and I hope to continue doing so in the future.
  • I’m grateful for life.

Here at home, I had a call with my business partner, Tom. We spent two hours talking about behind-the-scenes details here at Get Rich Slowly. We made plans for the future. But we also took a lot of time to talk about nothing.

It was awesome. It was just what I needed.

When I got off the call, the dog wanted to play. She looked up with puppy-dog eyes and made her little whine that means, “Dad, throw the ball for me.” We went outside into the sunshine and I threw the ball for her. Then, I got down on my knees and wrestled with her. She loves when I wrestle with her.

“I really do have a good life,” I thought after the dog and I were done chomping on each other. I went into the kitchen to put away the clean dishes. “I’m thankful for all of it.”

You know what? I’m thankful for Get Rich Slowly too. And for you, the readers. This site has been a huge blessing in my life — and I’m not one to talk much about blessings. I’ve put a lot into GRS, it’s true, but I’ve gotten so much more out of it. I’ve gotten so much from you folks.

So, thank you. I mean it. Thank you for reading. Thank you for contributing. Thank you for everything.

Few and Far Between

As Karl and I chatted at lunch today, I caught a Natalie Merchant song playing on the restaurant’s radio. At first I thought it was “Wonder”, but then I recognized it as “Few and Far Between”.

“How fitting,” I thought. Some of the lyrics:

“‘Til you make your peace with yesterday, you’ll never build a future. I swear by what I say: Whatever penance you do, decide what it’s worth to you, and then respect it. However long it will take to weather your mistakes? Why not accept it?”

So, that’s what has been going on in my life lately. It’s been a struggle. But I can see a light at the end of the tunnel. And I can see some money articles at the end of the keyboard. (Thank goodness, right?)

What’s been going on with you?

The post Depression and me appeared first on Get Rich Slowly.

The best checking accounts of 2019

sourced from: https://www.iwillteachyoutoberich.com/blog/best-checking-account/

My checking account pays me $83 per year for using it.

How?

First, I have an APY that gives me $5 per year. That’s pretty small, but it’s a start.

Then I have an ATM fee reimbursement. All my ATM fees get refunded at the end of the month. If I use the ATM once per month with an average fee of $4, that’s $48 per year.

And finally, my checking account has no foreign transaction fees. I travel internationally twice per year and usually withdraw $500 each time from international ATMs. Some banks have foreign transaction fees as high as 3%. That would cost me $30 for the year. Instead, I pay $0.

Not to mention that I have no minimums and no maintenance fees.

That’s a pretty sweet deal for a checking account.

Our financial lives revolve around our checking account. The majority of our cash and earnings pass through it and we access it all the time. Instead of having a checking account that dings you with fees and limits, get one with the perks that help you live your rich life.

The best checking account for you is largely going to depend on just a few things:

  1. Start with the best default: Charles Schwab checking. This is what I use.
  2. Do you want extra help with saving and budgeting? If so, get Simple.
  3. Do you deal with large amounts of cash or foreign currency regularly? If so, get a bank with a local branch.
  4. Is convenience a priority for you? If so, get a checking account at a bank that you already use.
  5. Do you want a cash back program on your debit card because you’re against using credit cards? If so, get Axos or Discover checking.

The best banks with the best checking accounts

Based on our criteria for what makes a great checking account, we’ve narrowed the options down to this list:

When building this list, we looked at these factors:

User experience

The user experience on a checking account matters a lot.

Unlike a savings account that we might check a few times per year, we’re in our checking accounts all the time. The online and mobile apps need to be decent. Thankfully, most banks have invested in their apps over the past few years, so the overall quality is much higher than it used to be.

We’ve only included checking accounts that have great online and mobile apps.

Fees

I see no reason to ever get a checking account with a minimum balance or maintenance fee. Every bank used to have them. And the big banks were the worst offenders. Then some upstart banks released no-fee checking accounts, which forced most banks to remove their fees.

Nearly all the banks in our list have no minimum balance or maintenance fees. And if they do, we’ve made sure to call them out.

In our opinion, there are too many amazing checking accounts without regular fees to settle for an account that does have them.

Convenience

As you consider the different checking account options, keep convenience in mind. Over time, simplifying your accounts and prioritizing a single bank will become a higher priority.

In the beginning, perks tend to matter more than convenience. Then it tends to flip at a certain point in your financial journey.

Take ATM reimbursements for example. Saving $3-5 every month makes a big difference early on. Then when you reach a certain level, skipping the ATM reimbursement to simplify your life starts to sound pretty appealing.

There’s no right answer here, it comes down to your preference. If you’re not sure, use these guidelines:

  • If you don’t care about having another bank login or you’re setting up your accounts for the first time, maximize your perks. Find the account with the best set of perks.
  • If the thought of managing another account feels like a headache, feel free to sacrifice a few perks in order to get a checking account at a bank that you’re already using.

We looked for checking accounts that either had great perks or other popular offerings that could be bundled together.

Reputation

Right off the bat, we excluded several checking accounts from our list. Mostly from major banks like Bank of America and Wells Fargo.

While not every major bank is horrible, a few of them definitely are. Wells Fargo committed one of the largest banking scandals of all time. And the list of horror stories from Bank of America is seemingly endless.

Some big banks are decent (like Chase), but we didn’t even consider offers from Wells Fargo or Bank of America. These are terrible banks. No matter how good their accounts, we recommend staying away.

Why APY doesn’t matter for your checking account

Lots of checking accounts promote their annual percentage yield (APY). Get another 0.40% return on your cash, sounds pretty amazing right?

Having an APY is completely worthless on a checking account. It’s effectively zero.

I’ve personally used the Charles Schwab checking account for years, which has a 0.40% APY, one of the highest out there.

And yet it earns me only $5 per year.

Why so little? There’s no reason to sit on a bunch of cash in a checking account. Even if you have a relatively high cash reserve (for whatever reason), you’re much better off putting that cash into a savings account, which gets you an even higher APY.

Sacrificing the $5 that you might make from a checking account APY in order to get another perk that’s more valuable is well worth the cost. When you’re looking through checking accounts, don’t even consider the APY. It sounds good in theory but has no real impact on your finances.

Best checking account reviews

Here’s how our top checking accounts all break down.

Axos

Axos has three primary checking accounts, and each has a different set of perks:

Essential

Rewards

CashBack

APY

None

Up to 1.25%

None

Monthly fee

None

None

None

Minimum balance

None

None

$1,500 average daily balance to get 1% cash back up to $2,000 per month

Mobile deposit

Yes

Yes

Yes

ATM reimbursement

Unlimited for U.S. ATMs

Unlimited for U.S. ATMs

Unlimited for U.S. ATMs

Foreign transaction fees

1%

1%

1%

Physical branches

None

None

None

The Rewards and CashBack accounts need a bit more explanation.

First, you can’t get an APY and cash back on the same account. You have to pick one or the other by choosing from one of the accounts.

For the APY on the Rewards account, it’s up to 1.25%. You’ll get 0.4166% each time you meet one of these conditions (do all three for a total APY of 1.25%):

  • Get monthly direct deposits of $1,000 or more.
  • Use your debit card for a total of 10 transactions per month (min $3 per transaction).
  • Use your debit 5 more times for a total of 15 transactions per month (min $3 per transaction).

On the CashBack account, you have to maintain an average daily balance of $1,500 over the month. The 1% cash back will also only apply to “signature-based transactions.” This means that the debit card has to be run as credit. Confusing right? Here’s another way to think of it: if your debit card is run as a debit card and you enter your pin, you don’t get cash back. You have to pick the credit option each time you use the card. And the cash back is limited to a maximum of $2,000 per month.

At first, the cash back sounds amazing. Cash back on a checking account seems like an incredible perk.

The problem is that the cash back will only apply when you’re using your debit card. With the minimum balance and the “signature-based” restriction, it’s not nearly as attractive as it could be. That’s an awful lot of restrictions when you could simply use a cash back credit card instead. By using a credit card, the cash back rewards will be much higher and with fewer restrictions.

I’d only consider Axos if you’re completely against using credit cards and want a checking card that has a debit card with some rewards. In that case, this is one way to get a cash back program without a credit card.

Even the APY Rewards account isn’t that interesting. In order to get the full 1.25% APY, you have to be using your debit card regularly. And if you’re using your debit card, you’re not using your credit card. The extra APY isn’t worth forgoing a credit card rewards program.

Charles Schwab

Perks

  • APY: 0.40%
  • Monthly fee: None
  • Minimum balance: None
  • Mobile deposit: Yes
  • ATM reimbursements: Unlimited
  • Foreign transaction fees: None
  • Physical branches: They do exist but there’s usually only 1-2 per city

For perks, Charles Schwab is the undisputed champion.

There are no monthly maintenance or minimum balance fees, no foreign transaction fees, unlimited ATM reimbursement without any restrictions, and an APY.

If you travel internationally or are looking for the checking account with the best perks, get the Charles Schwab checking account. We can’t recommend it enough.

There is a small catch when opening a Charles Schwab checking account: They require that you also open a brokerage account with them. There are no fees or minimum balance on the brokerage account — it’s completely free. The only requirement is to open the account. You never have to do anything with it. Schwab is hoping that you’ll use them as a brokerage when you’re ready to have one later.

The only real downside to the Charles Schwab checking account is the limited physical branches. If you handle cash or deal with foreign currency frequently, their branches might be extremely inconvenient for you.

As long as you do all of your banking online or get lucky by having a branch near you, get a Charles Schwab checking account.

HSBC

HSBC has quite a few checking accounts to choose from:

Basic Banking

Choice Checking

Advance

Premier

APY

None

None

0.01% on balances above $5

0.01% on balances above $5

Monthly fee

$3/month regardless of balance

$15/month if minimum balance isn’t met

$25/month if minimum balance isn’t met

$50/month if minimum balance isn’t met

Minimum balance

None

None with direct deposit or $1,500

$5,000 minimum balance w/ direct deposit or $10,000

$100,000 across accounts

Mobile deposit

Yes

Yes

Yes

Yes

ATM reimbursement

None, fee of $2.50 when using out-of-network ATMs

None, fee of $2.50 when using out-of-network ATMs

4 times per statement (U.S. only and doesn’t include NY)

Unlimited (U.S. only)

Foreign transaction fees

3%

3%

3%

None

Physical branches

Worldwide

Worldwide

Worldwide

Worldwide

Compared to the other accounts in this list, HSBC’s offerings aren’t great. There are monthly fees that are somewhat difficult to get waived, the ATM reimbursement is limited, and the foreign transaction fees are super high. None of the perks get competitive until you’re at the Premier level, which requires a $100,000 balance.

Why include HSBC at all?

One reason: some folks need a truly global bank. If you’re doing business internationally, have homes in multiple countries, or have an international lifestyle, the support of a global bank could be well worth the extra fees and lack of perks.

For most folks, skip HSBC entirely and choose one of the other options in this list.

Ally

Perks

  • APY: 0.60%
  • Monthly fee: None
  • Minimum balance: None
  • Mobile deposit: Yes
  • ATM reimbursement: Up to $10 per statement
  • Foreign transaction fees: Up to 1% of transaction
  • Physical branches: None

Ally has a pretty solid checking account.

However, it’s not as good as Charles Schwab. First, it has a 1% fee on foreign transactions. That’s a deal-breaker for me when traveling. Second, the ATM reimbursement is limited to $10 per statement. Third, while the APY is higher than the Charles Schwab checking account, the APY doesn’t matter on checking accounts anyway. Lastly, Ally doesn’t have any physical branches at all.

Ally has a good checking account, but you’ll be better off with Charles Schwab.

Capital One 360

Perks

  • APY: $0 – $50,000 is 0.20%, $50,000 – $100,000 is 0.75%, and over $100,000 is 1%
  • Monthly fee: None
  • Minimum balance: None
  • Mobile deposit: Yes
  • ATM reimbursement: Up to $15 per statement
  • Foreign transaction fees: None
  • Physical branches: A couple of branches or “cafes” in a few cities

Getting a 1% APY sounds nice but the Capital One 360 Checking tiers make it completely irrelevant.

Why would you have $100,000 in your checking account anyway? Even if you’re sitting on cash deliberately, it should be in a savings account, which will always have a much higher APY. And with the lower APY of 0.20% on lower balances, the value ends up being minor.

Don’t factor the APY into your decision to get the Capital One checking account.

That said, all the other perks for this account are pretty good. No maintenance or minimum balance fees, no foreign transaction fees, an ATM reimbursement up to $15 per statement, and a couple of physical branches if you’re in a major city.

While it’s not quite as good as the Charles Schwab account, it’s really close.

I’d strongly consider getting a Capital One 360 checking account if I already had a Capital One credit card. Being able to keep my accounts consolidated would be a huge bonus.

Discover

Perks

  • APY: None
  • Monthly fee: None
  • Minimum balance: None
  • Mobile deposit: Yes
  • ATM reimbursement: None
  • Foreign transaction fees: None but good luck trying to get a Discover card accepted internationally
  • Physical branches: None
  • Cash back: 1% on up to $3,000 of debit card purchases

The Discover checking account is a bland account. There’s nothing bad about it, but there’s nothing good about it either.

It does have two main perks: no foreign transaction fees and cash back. The foreign transaction fees are irrelevant. I wouldn’t even attempt to use Discover when traveling internationally, I stick to a Visa card. The cash back at 1% is nice, but you’d have to skip a credit card rewards program in order to use the debit card. This is only valuable if you’ve decided to avoid credit cards entirely. It’s also limited to $30 worth of cash back per month. That’s extremely low.

I’d avoid the Discover checking account unless I was already using Discover credit cards and desperately wanted the extra simplicity from having all my accounts in one place. Or if I was avoiding credit cards entirely and wanted a debit card with a cash back program.

Chase

Chase actually has three checking accounts:

Chase Total Checking

Chase Premier Plus Checking

Chase Sapphire Checking

APY

None

0.01%

0.01%

Monthly fee

$12, waived if you have $500 of direct deposits, a balance of $1,500 at the beginning of every day, or an average balance of $5,000 across your checking and savings accounts

$25, waived if you have an average balance of $15,000 across your checking and savings accounts or a Chase mortgage with linked payments

$25, waived if you have an average balance of $75,000 across your checking and savings accounts

Minimum balance

None

None

None

Mobile deposit

Yes

Yes

Yes

ATM reimbursement

None

4 times per statement

Unlimited

Foreign transaction fees

None

None

None

Physical branches

Lots

Lots

Lots

The hurdles that Chase requires in order to get the monthly fee waived is annoying. This is the main downside of the Chase checking accounts.

However, they could still be the best accounts for you. I’d seriously consider a Chase checking account if I was also planning on getting a Chase savings account and knew that I’d easily hit their balance requirements in order to get the monthly fee waived. We have a deep-dive on all the best savings accounts here.

Once we factor out the monthly fee, the Premier Plus and Sapphire Checking are both decent offers. APY doesn’t really matter anyway, both have mobile banking and deposits, no foreign transaction fees, and ATM reimbursements. Plus, we get the added bonus of being able to walk into a physical branch since Chase branches are in most cities.

Basically, the Chase checking accounts are a competitive checking account with all the benefits of a major bank. And if you have the Chase credit cards, you could get all your accounts with one bank, making everything really convenient.

USAA

Perks

  • APY: 0.01% with $1,000 or more
  • Monthly fee: None
  • Minimum balance: $25 to open the account, then no minimum balance after that
  • Mobile deposit: Yes
  • ATM reimbursement: Up to $15 per statement but there is a $2 fee from USAA on every ATM withdrawal after the first 10 per statement
  • Foreign transaction fees: 1%
  • Physical branches: Branches in Colorado Springs, West Point, Annapolis, and San Antonio
  • Military perks: If you’re part of the military, there’s no initial deposit required, you get a pre-filled 1199A, and you get paid a day early

If you’re in the military, there are a few unique perks that other checking accounts don’t have. But I wouldn’t call them game-changing perks. The 1199A is a direct deposit form. You only have to fill this out once when setting up your new account (unless you switch jobs). This only saves you 15 minutes of time.

Getting paid a day early is kind of nice but only impacts you during the first payment cycle. Then your paychecks will have to last the same number of days as they usually would.

Otherwise, none of the perks are that great. The ATM reimbursement only lasts until $15 and then USAA hits you with a fee after the first 10 per statement. There’s also that 1% foreign transaction fee to watch out for, so you’d want to avoid using this account when traveling internationally.

On the whole, there are better checking accounts to choose from. I’d only consider the USSA checking account if you’re already doing a lot of business with USAA and want to keep your accounts in one place. For example, their car insurance is pretty good.

Simple

Perks

  • APY: 2.02% on “Protected Goals” with a balance of at least $2,000
  • Monthly fee: None
  • Minimum balance: None
  • Mobile deposit: Yes
  • ATM reimbursement: None
  • Foreign transaction fees: Up to 1%
  • Physical branches: None

Simple does things a bit differently than the other banks. Instead of splitting your balances between checkings and savings, Simple has “Goals” and “Save to Spend” sections.

In other words, Simple is more of a combined checking and savings account with an amazing UI that helps you control your spending.

You’ll set up as many Goals as you want and when you want to hit your savings goals. Like saving $2,000 for a trip to Italy in 6 months. Then Simple automatically figures out how much you need to save and regularly reduces that amount from your Safe to Spend amount.

Your Safe to Spend amount is your total balance, minus your Goals and scheduled bills over the next 30 days. Whenever you’re wondering if you can afford something, simply check the Safe to Spend amount and if there’s enough, go for it. This helps immensely with guilt-free spending.

Simple also has a set of reports to track spending across categories over time.

I highly recommend Simple if you’d like an account that makes it easier to save and budget.

Chime

Perks

  • APY: None
  • Monthly fee: None
  • Minimum balance: None
  • Mobile deposit: Yes
  • ATM reimbursement: None and Chime has a $2.50 fee for any out-of-network ATM
  • Foreign transaction fees: No fees on foreign transactions but you do get the $2.50 ATM fee since Chime’s in-network ATMs are only in the U.S.
  • Physical branches: None
  • Early direct deposit: Yes
  • Send checks by mail: Yes, Chime will send the check for you
  • Round-up savings: Automatically round up every transaction to the nearest dollar, placing that extra amount into a savings account

Chime is another bank that combines your checking and savings accounts. It’s similar to Simple.

It has a great UI and a nifty way to help you save. It’ll automatically round up your charges to the nearest dollar, putting the difference in a savings account. Saving a few pennies will add up fast. If you’ve had trouble saving in the past, this will help a lot with hitting your savings goals.

You can also transfer up to 10% of your pay into a savings account. While this is a nice touch, it’s possible to set up an automatic transfer between any checking and savings accounts.

On the whole, we recommend Simple over Chime, since Simple has more features to help you with saving and budgeting.

The 5-step process to finding the best checking account for you

  1. Start with the best default: Charles Schwab checking.
  2. Do you want extra help with saving and budgeting? If so, get Simple.
  3. Do you deal with large amounts of cash or foreign currency regularly? If so, get a bank with a local branch.
  4. Is convenience a priority for you? If so, get a checking account at a bank that you already use.
  5. Do you want a cash back program on your debit card because you’re against using credit cards? If so, get Axos or Discover checking.

Step 1: Start with the best default checking account

If we look at the value of perks across different checking accounts, Charles Schwab beats all the other accounts easily. There are no maintenance fees, no foreign exchange fees, unlimited reimbursement on ATMs worldwide, and an APY.

If you’re looking for the most valuable checking account and the following steps don’t apply to you, we recommend getting Charles Schwab.

For the other options that we’re about to walk through, evaluate those accounts against the Charles Schwab checking account.

Step 2: Do you want extra help with saving and budgeting?

Let’s say that you’re earlier in your financial journey and still developing habits around saving and budgeting.

In that case, I strongly recommend giving Simple a try. It’s a combined savings and checking account with an interface built around helping you save. It’ll also figure out all your bills for you, telling you exactly what you can spend at any given moment, completely guilt-free.

Yes, Simple’s APY on its savings account isn’t as high as other savings accounts. And the perks on its checking account aren’t as valuable as Charles Schwab. But the extra support you get with saving and spending is well worth it in my opinion.

Step 3: Do you deal with large amounts of cash or foreign currency regularly?

As much as I love doing everything online, there are two good reasons to choose a checking account that has fewer perks in order to have a bank with a physical branch nearby.

1. Large cash withdrawals or deposits

If, for whatever reason, you deal with large amounts of cash regularly, you really need a physical branch.

Take my friend for example. One of his main hobbies is gambling. He treats it as an expense and always stays within his budget. He’s in the fortunate position of being able to do this.

He heads out to Las Vegas once or twice a year and withdraws a bundle of cash for the trip. Neither of us has personally tried to see how many consecutive withdrawals we can make from a single ATM, but we don’t really want to find out. In situations like this, a local bank completely solves the problem.

If you need to withdraw more cash than a typical ATM can handle even once or twice a year, it’s worth getting a checking account at a local bank.

2. Foreign currency

If you deal with foreign currency regularly, I’ve found it immensely helpful to have a physical branch nearby.

Years ago, I did a workshop for a Canadian startup accelerator and got paid $4,000 in Canadian dollars. They mailed me a check. While it’s possible to do a mobile deposit with normal checks through my Charles Schwab account, that doesn’t work for checks in other currencies. Luckily, Charles Schwab tends to have a branch in most cities. I still had to drive all the way across the city multiple times to get the deposit sorted out. Thankfully, I haven’t had to deal with this again. But if I did, I’d get a checking account at a large, local bank just for depositing checks in foreign currencies.

Another perk of having a local branch: exchanging foreign currency back into U.S. dollars. After any international trip, I always end up with $50-100 worth of leftover foreign currency. I consider the airport currency exchange kiosks a complete rip-off. Not only are the exchange rates terrible, a lot of them don’t accept smaller bills. Having a local branch completely solves my leftover foreign currency problem. I can simply walk in, give them whatever I have left, and they deposit it into my account at a decent exchange rate. Problem solved.

So if you’re dealing with foreign currency or large amounts of cash even a few times a year, it’s worth getting a checking account with a local branch, even if the perks aren’t as good. Hopefully, one of the banks in our list has a local branch near you. If you’re not sure, start with Chase, since they have branches all over the U.S.

Step 4: Is convenience a priority for you?

Before jumping into a new account, ask yourself how much you value convenience.

Do you really want to manage a dozen different financial accounts? I know that seems like a lot, but when you factor in checking, multiple credit cards, a mortgage, student loans, 401Ks, brokerage accounts, savings, joint accounts, and all the accounts for your spouse, it adds up really fast.

The more time goes on, the more you’ll value simplicity across your accounts. I know multiple people who have gladly paid ATM fees again just to get a few of their accounts under the same bank.

Capital One is a great option for simplicity, since they have great credit card offers and they have a really strong checking account. While Chase’s checking accounts aren’t as good, their credit cards tend to be among the best. And if you use Discover cards, definitely consider Discover’s checking account.

Step 5: Do you want a cash back program on your debit card because you’re against using credit cards?

Generally, you want to use credit cards for the majority of your spending. With all the travel rewards and cash back credit card options out there, it’s free money back in your pocket. As long as you pay off your credit cards every month, there’s no downside.

But what if you’re still against credit cards? Some folks have trouble controlling their spending on credit cards and others are philosophically opposed. Or maybe their credit score is too low to get a credit card.

If that’s you, there are a few cash back programs on debit cards for checking accounts. Axos and Discover both have great options.

Again, a cash back program on a debit card will always be inferior to credit card cash back offers. You will get less money back by going this route. That said, it may still be worth it for you if you’re trying to avoid credit cards entirely.

The best checking accounts of 2019 is a post from: I Will Teach You To Be Rich.

How We Go Camping – And Some Suggestions for New (and Experienced) Campers

sourced from: http://feedproxy.google.com/~r/thesimpledollar/~3/zBp6WfcdxUU/

Joel writes in:

First, what is your car camping set-up. I’m thinking of getting a canopy tent for hanging out — something like a 10×10 foot bug protection for placing over the picnic table. Wondered if you had recommendations or even use one then thought I’d just ask about the set-up in general.

Before I dig into our own camping history and how we camp today, I want to talk a bit about why camping is a great idea.

The big reason why camping fits well on The Simple Dollar is that camping is an extremely inexpensive way to get out of the house for a few days. Once you’ve covered the initial startup costs of a tent and a few other items, the cost of camping is basically the fuel to drive to a spot, any fees associated with the campsite… and that’s about it. You have to bring your own food, but the food costs for us are typically comparable to eating at home. It is a very inexpensive form of leisure and getting away from it all. Plus, camping can also be a very inexpensive summer vacation, as you can simply drive a long distance and camp in some new part of the country.

There are many different flavors of camping, and I’ve found that not everyone likes every flavor of camping. The two main varieties of camping are “car camping,” where you drive to a premade campsite, pitch a tent or a small camper, and live on the supplies you brought in your car or small camper, and “backpack camping,” where you literally carry the gear you need for camping on your back and explore wilderness. Within each, there’s a lot of variation.

Having said that, camping isn’t necessarily for everyone. Some people enjoy almost every kind of camping out there. Some people enjoy backpacking but find car camping dull; others feel the exact opposite. Some people don’t like any kind of camping.

Sarah and I have been avid campers for many, many years. Both of us used to do car camping growing up, and for the full time we were dating and for perhaps the first ten years of our marriage, Sarah and I were frequent car campers. At first, we had a smaller four person tent and kept our camping equipment in a tub in our apartment.

During those early years, Sarah and I got into a habit of camping several times a summer. It was a pretty regular weekend activity for us – we’d often come home on a Friday, grab our tent and sleeping bags and box of camping gear and a small cooler, toss them in the trunk, and we were ready to go. We’d stop at a grocery store on the way and fill up the cooler and get a few groceries, head to our campsite, and get our tent up before dark, and then spend Saturday and much of Sunday at the campground before heading home.

Over time, we gradually accumulated more camping gear – stuff that wasn’t really necessary but was kind of neat to have along. People knew we loved to camp and would often give us camping gear as a gift. We picked up things like tools to make starting a campfire easier or some really sturdy dishes for the campsite or a Dutch oven to use for campfire cooking. Gradually, our one tub expanded to two tubs, but it still wasn’t a problem.

The challenge came when we had a child, then another, then another. Camping quickly morphed into a much greater logistical challenge requiring us to remember stuff for five people rather than two, plus a lot of baby-related gear. The number of times we camped each summer declined, and we both missed it.

When Sarah was a kid, she had two younger sisters and their family used a popup camper, so she spent a good year shopping around for a used popup camper in good shape and, a few years ago, she found one she liked for a really good price (I think it was a liquidation type of situation where a family needed to get rid of unwanted items rather quickly) and we bought it. It’s a mid-2000s Jayco popup that looks quite a bit like this, but with some key differences and some minor wear and tear on it. We paid substantially less than $1,000 for it.

This served several purposes. One, it provided a single place to store all of our camping items. We simply keep them all stored in the Jayco when it’s folded up and there’s more than enough space for all of the camping gear for five people. Going camping is now quite simple again – we just hook the camper to our van and take off. Two, it made Sarah incredibly happy, as she loved the popup camper that her family camped in when they were kids. Three, a popup is pretty inexpensive as such things go. Four, it’s lightweight, meaning it’s easily towed by our van with a towing package. The cost per year of it has not been much more than a well-equipped tent, either, since we bought it used and have kept care of it.

Personally, I didn’t mind our tent at all. For the first few years we camped with our kids, we used a six person tent that worked really well for our needs and I was really happy with it. Part of the reason for the popup was my wife wanting one, so she conserved her personal spending budget for a while to afford one (it seemed like an “extra” that she wanted but not me). Now that we have it, I appreciate what it offers, but I wouldn’t object a bit to using a tent in the future.

So, as I mentioned, we store our camping gear in this used popup camper. It folds down into a pretty small footprint with roughly 80 square feet of storage space, which we fill up with sleeping bags, extra pillows, firestarting tools, dishes, a Dutch oven, and many other items.

What about a canopy tent, as described in the question? For bugs, we use citronella candles, which we light in the late afternoon before bugs emerge and do a pretty good job of keeping them at bay. We position a few large citronella candles around the front of our camper and this seems to keep almost all bugs away from us within a pretty nice radius. I haven’t found any need for a canopy tent, as we just go in the popup when it rains and the candles keep bugs at bay when it’s not raining. I prefer to get the large bucket-sized citronella candles, as they last for a long time and you don’t have to worry about buying new ones very often.

What items do we take? As I said, we keep most of our stuff in the camper, and we have a checklist of items to grab from around the house or at the store before we go camping – things that we use during non-camping months (like clothing) and things that are perishable or consumable that need to be replenished, like sunscreen and bug spray for hiking. Our overall camping checklist isn’t too far off of this family camping checklist from REI, though our list is pared down a little from that.

My recommendation is that if you’re camping for the first time, borrow a tent or a popup camper and some gear from someone and take a short 2-3 day trip using mostly borrowed gear.Ask your family members or very close friends if they have camping gear and ask to borrow it. Choose a campground that’s near features that seem interesting to you and go there for a long weekend. You’ll figure out on that trip whether camping is really for you and what kind of style you want. Do you want to backpack? Do you want to camp out of a car? Do you want to use a small popup? Is camping just not for you? You’ll probably be able to figure this out within a couple days of car camping with a borrowed tent and borrowed equipment.

Often, what you’ll find with your first camping experience is that it was mostly positive with a few serious nitpicks or issues. In general, someone who thinks camping sounds like fun will usually find the fun it it, whereas people who aren’t excited by the idea will dislike it. The thing is, almost always, the “serious nitpicks or issues” can be solved quite easily for future trips. Camping is a very flexible activity with tons of advice available online for tips and strategies for specific situations.

For us, we usually camp three or four times during each summer. We usually camp once within an hour or two of home for our first camping stop of the summer, mostly to give us an opportunity to really check over the camper and make sure everything is in order. Some summers, our full summer vacation is camping, as we’ll tow our camper to a national park and camp there. We did this most recently in 2017, when we camped at Yellowstone National Park for more than a week and spent time in Grand Tetons, too. During other summers, we’ll usually still go on a four or five day camping trip at some point in the summer, usually not too far from home (usually in our state or a neighboring one). We also usually camp once late in the summer with another couple, and we sometimes also camp with several old friends of ours on a group camping trip. In addition, our kids often have “camping birthday parties” where we take them and several of their friends camping. In 2017, I believe we camped six times, which was our record.

My main future goal for camping is that I would like to try an overnight backpacking trip with my family (where you carry a tent and all needed gear and food in your backpack with you) but this requires somewhat different gear than we already have. I have a cousin who is into backpacking from whom we may be able to borrow most of the gear to try it out.

If you haven’t tried camping and it sounds appealing as both an enjoyable activity and a frugal way of getting out of the house, I recommend simply borrowing gear and giving it a try. If it sounds appealing, you’ll probably love your first trip (with maybe a challenge or two), and then it’s time to start looking for bargain camping gear (which may be an article in the near future).

Good luck!

The post How We Go Camping – And Some Suggestions for New (and Experienced) Campers appeared first on The Simple Dollar.

The best rewards credit cards of 2019

sourced from: https://www.iwillteachyoutoberich.com/blog/best-rewards-credit-cards/

If your goal is to maximize rewards, get the best bonuses, and play the points game no matter the cost…

You’re on the wrong page.

We have a different philosophy on rewards credit cards.

It’s the same philosophy that we have for all of personal finance: ignore the small stuff and focus on the Big Wins.

Points hacking is small stuff.

Finding a great rewards card you can depend on and then never thinking about it again is a big win.

Finding the best card for you is pretty simple when your goal is to maximize your rewards with the least amount of effort possible. The main decision you’ll need to make is to get a travel points or a cash back card. We’ve sorted through hundreds of credit card offers to find the best card for both categories.

There are a few other situation-specific cards to consider too. All-in, there are only six cards that are worth looking at.

We’ve done a deep dive on all these cards below.

What makes a great rewards card

The usual advice focuses on how to squeeze out every last percentage point from restaurants, gas, groceries, and 50 other categories.

I disagree.

You see, we need to factor in the effort required to get the rewards.

Some cards have rotating spending categories and all sorts of hoops for you to jump through in order to hit some hypothetical maximum reward.

At I Will Teach You To Be Rich, we’re adamantly against these types of games.

A few extra rewards points are not going to fundamentally change your lifestyle. Automating your finances, getting a great rewards card that doesn’t require ongoing effort, and then focusing on bigger wins WILL change your life.

The best rewards credit cards have rewards programs that are easy to understand, require little to no maintenance, and yield at least 1.5% back in cash or rewards. Add in a few perks and you’ve got a great card.

Should you get a travel or cash back rewards card?

Whether to get a travel or cash back card comes down to one simple question.

What’s more important to you, the value of the rewards or simplicity?

If you want to get every dollar in rewards possible, travel rewards programs always beat cash back cards. For credit card companies, there’s always a percentage of people who forget to spend their points, so they’re able to increase the value of their points over a more straightforward cash back program.

Of course, don’t get a travel points card if you hate to travel. That would be … unhelpful. It’s still worth it as long as you travel once per year.

Maximizing the value of your rewards does come with an extra cost though. You’ll have to manage your points. They’ll accrue in your credit card account and you’ll have to make choices on when and where to spend them. For example, different redemption methods have different values. The American Express Membership Rewards points are worth $0.07 on Amazon and $0.10 on Uber. Every card has its own redemption methods with its own values.

You could use the rule of thumb of always redeeming your points for miles on an airline program. This is a good rule, and it’ll usually maximize the value of your points. But you still have to transfer your points to miles. Each credit card points program will transfer to some airline programs and not others. And once you get your points into the right miles program, you’ll have to deal with whatever points restrictions your airline has (blackout dates, only certain flights being available, etc.). To add even more complexity, some credit card programs allow you to book flights and hotels directly through them, but then there’s a separate set of restrictions and point values that you have to deal with.

Sounds like a pain? It is.

For me, the extra hassle is worth the free international flights that I’ve been able to get.

If the extra hassle of a travel rewards programs sounds exhausting, get a cash back rewards card instead.

Cash back cards still have plenty of benefit without any work:

  • You get a straight percentage back on all charges to your card.
  • The cash back shows up on your statements either automatically or with very little effort. Worst case, you’ll have to log in and hit a button to initiate the cash back.
  • While some cash back cards have maximum payouts, rotating categories, and other nonsense, there’s plenty of cards that keep things ultra simple.

That’s as simple as it’s going to get.

Here’s how to make your decision:

  • To maximize the value of your points, get a travel rewards card.
  • To maximize simplicity, get a cash back card.

How we evaluate credit cards

These are the criteria that we used to whittle hundreds of credit cards down to the few cards that we recommend.

Rewards or cash back program

How many points or how much cash back does a card earn? And under what conditions?

This is where the bulk of rewards value comes from, so when in doubt, choose the card with the better rewards program.

And watch for restrictions on rewards. It’s common to have a points boost of 5X on a spending category combined with a cap or restriction on how that charge is made. Some of the travel cards force you to book through their website in order to get the full points bonus on that charge. To me, that significantly reduces the value of the card. I place a lot of value on flexibility and choice.

Get a deep understanding of your card’s rewards program so you know exactly how it’ll work.

Bonus value

Most credit cards have a bonus offer for new customers. It usually works like this:

Get X if you spend $Y within Z days.

Hit that milestone and you’ll get the bonus added to your account within a few months.

Be careful with these though. If the spending amount is a huge stretch for you, it’s a sign that the card isn’t a good fit for your current spending habits. Whenever I’m looking at a bonus program, I only consider it if I can easily hit the spending amounts that trigger the bonus.

One hack is to get a new card around the same time that you’re making a larger purchase that you already planned and saved for. Furniture is a great fit for this. If you’re already planning on getting a new couch or mattress, that could get you the bonus on its own. Get your new card, make the purchase, immediately pay down the balance with the money you already saved, get your bonus.

While it’s good to look around for the best bonus promo on the card you want, we never choose cards based on the bonus program alone:

  • You’ll be using the card for years, the perks matter a lot more than the bonus.
  • Points are not created equal. One card might offer 100,000 bonus points while another offers 60,000 points. There’s no way to tell which one has the better deal without really digging into the value of their points programs.
  • Just about every great card has a decent bonus.
  • Point hackers will chase bonus programs but we don’t recommend that approach. There are more important things for you to focus on.

We recommend choosing the card you want based on the rewards program and perks. Then accept whatever bonus the card happens to offer.

Perks

There are a number of perks that you might get from your credit card. For some, perks are more important than rewards.

Most credit cards have a host of perks that we all forget about, like car rental insurance and lost luggage protection. Standard perks that come with most cards:

  • Rental car insurance
  • Purchase protection
  • Return protection
  • Extended warranties
  • Trip cancellation insurance
  • Lost luggage replacement

These perks are so ubiquitous that you don’t have to factor them in when choosing the card you want. If one of them is super important to you, double check and make sure the card you’re considering does have it.

There ARE perks that only come with certain cards. These are the perks we get excited about. They include:

  • Uber reimbursement
  • Global Entry and TSA Precheck reimbursement
  • Lounge access
  • Travel reimbursement
  • Hotel upgrades and credits

If a perk is super valuable to you, it could be worth getting a less valuable rewards program just for the perk. Frankly, this is why most people get the American Express Platinum. Access to the Centurion lounges makes flying much more enjoyable.

Fees

Some credit card fees matter more than others.

While we absolutely hate maintenance fees on checking and savings accounts, all the best rewards cards have annual fees. The rewards and perks easily cover the annual fees as long as you’re regularly using the card. Cards tend to fall into three tiers with their annual fees:

  • No annual fee: There are no-fee cash back and rewards cards out there. The perks and rewards will be limited but it is possible to get a no-annual-fee rewards card.
  • $100 annual fee: Most of the good rewards programs start with annual fees in $90-100 range. This is a good level for your first rewards card.
  • $500 annual fee: The best cards are at this level, like the American Express Platinum and Chase Sapphire Reserve. They have perks none of the other cards have.

If cash is tight and you’re watching every dollar, get a no-annual-fee card. Once you’re more financially comfortable, the $100 annual fee cards open up the real rewards programs. And after you’re making $100,000 or more per year, get one of the $500 annual fee cards to maximize your rewards.

There are other fees to look out for too, like the foreign transaction fee.

I hate foreign transaction fees. I travel internationally a few times a year and I only choose cards without them. Traveling is expensive enough — the last thing I want is a 1-3% charge on top of everything.

Even if you don’t travel and you don’t think this is a big deal, you can still get hit with a foreign transaction fee within the U.S. The fee triggers any time a charge goes through a foreign bank. So if you buy something online, even if the price is in U.S. dollars, you could get an extra fee without realizing it.

Plenty of cards still have foreign transaction fees, so watch for this if you travel.

Simplicity

Some folks love playing points games.

I am not one of those people.

I want 1-2 cards that I can always default to. I’d much rather get 80% of the value without having to spend any time thinking about points.

No matter how good the rewards program is, it’s just not worth the effort if I have to actively think about it. I have plenty of more important things that need my attention.

When looking at rewards programs, look out for these common traps:

  • Rotating rewards categories. Cards that change the rules are never worth the extra effort in our opinion.
  • Increased rewards for minor spending categories. I don’t really care if I get 10X points when buying 7-Eleven slushies. Give me a break. I need categories where I spend regularly.
  • Points that get locked up in obscure programs. Yes, a random hotel credit card might give more points per dollar than other cards. But are the points worth anything if you can only use them at a hotel you never wanted to go to?

If a rewards program has too many restrictions, we don’t include it in our recommended cards.

What about the card APR?

I never pay attention to it. I can’t even tell you what the APRs are on my cards because I always pay the balance off every month.

Look, if you don’t pay off your balance every month, it’s not worth doing a rewards program at all. You’ll pay more in interest than you’ll ever get back in rewards. Get out of debt, get ahead of your spending, and build a habit of paying off your balances.

First build the financial habits and stability to pay off your balance every month. Then, and only then, should you get a rewards credit card.

The two best rewards credit cards

So what are the best rewards and cash back cards? Here are our recommendations.

Chase Sapphire Reserve

The best overall rewards credit card

  • “Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 toward travel when you redeem through Chase Ultimate Rewards®
  • Named “”Best Premium Travel Credit Card”” for 2018 by MONEY® Magazine
  • $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year
  • 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.
  • Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $750 toward travel
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Access to 1,000+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select
  • Up to $100 application fee credit for Global Entry or TSA Pre✓®”

If you travel at all, get this card. The perks are phenomenal.

First, you get $300 reimbursed every year on travel charges. I just booked a domestic flight yesterday and I got the whole flight reimbursed.

No foreign transaction fees either. The card’s also a Visa, which is the most widely accepted card internationally. That’s as good as it gets for having a reliable credit card to use internationally.

Global Entry and TSA Precheck were game changers for me when traveling. Half my stress and anxiety when traveling was eliminated. I never imagined how much better I’d feel without having to take my shoes off or my laptop out when going through security. Getting the application reimbursed is an amazing perk. Pro-tip: Get Global Entry, which includes TSA Precheck and is only slightly more expensive.

I spend a lot on travel and food. For racking up points, the Chase Sapphire Reserve is perfect for me. I get 3X on the majority of my spending. If only they had 3X points on cashmere sweaters, I would be in heaven.

There is one big downside: the $450 annual fee. That’s high for a lot of people.

The travel and Global Entry reimbursements do cover most of the fee. With the $300 annual travel reimbursement, the annual fee comes down to $150. We also have the $100 credit for Global Entry or TSA Precheck. These programs last 5 years, so that equals $20 per year. Basically, the real annual fee is $130.

When most travel rewards cards have annual fees of $95, paying $130 for the Chase Sapphire Reserve in order to get 3X points on travel and restaurants is a fantastic deal.

Citi Double Cash

The best cash back credit card

  • “Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay
  • Balance Transfers do not earn cash back
  • 0% Intro APR on Balance Transfers for 18 months. After that, the variable APR will be 15.74% – 25.74% based on your creditworthiness*
  • Click ‘Apply Now’ to see the applicable balance transfer fee and how making a balance transfer impacts interest on purchases
  • No categories to track, no caps on cash back, no annual fee*”

I love the simplicity of this card. 2% cash back, no nonsense. Get your first 1% cash back when you spend, get another 1% when you pay down the charge. There’s no cash back limits and no annual fee either.

You won’t get cash back on any balance transfers but that’s pretty reasonable in our view.

There isn’t much in the way of perks, but that’s not why you should be considering this card in the first place.

It’s a no-frills, ultra-simple, maximize your cash back card.

For those of you who want to get a card and never think about your rewards every again, the Citi Double Cash is the card for you.

There is one major downside to the Citi Double Cash card. It has a 3% foreign transaction fee, which is super high. If you travel regularly, the 3% fee will stack up fast and negate any of the cash back rewards that you’ve earned. So only get the Citi Double Cash card if you rarely travel internationally. If you do travel regularly, I have another cash back option for you later on in this post.

Other cards to consider

Depending on your circumstances, there are a few other cards that could be the best option for you. Let’s go through them.

Chase Sapphire Preferred

  • “Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 toward travel when you redeem through Chase Ultimate Rewards®
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel”

The Chase Sapphire Preferred has a slightly less valuable points program and fewer perks than the Chase Sapphire Reserve. And the Sapphire Preferred comes with a smaller annual fee at $95.

You’ll still get 2X points on travel at restaurants, a great bonus offer, and no foreign transaction fees.

But you’ll be missing the travel credit, Priority Pass™ Select for lounge access, and the Global Entry or TSA Precheck credit. And you’ll only be getting 2X points instead of 3X points on travel and restaurants.

We recommend getting the Sapphire Preferred if the $450 annual fee on the Sapphire Reserve is too much of a stretch. The Sapphire Preferred is a great first step into the world of rewards credit cards that have annual fees. Plus, you can always upgrade to the Sapphire Reserve later.

If you make more than $100,000 per year, you should probably go straight to the Sapphire Reserve card.

Capital One Quicksilver Cash Rewards

  • “One-time $150 cash bonus after you spend $500 on purchases within 3 months from account opening
  • Earn unlimited 1.5% cash back on every purchase, every day
  • No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won’t expire for the life of the account and there’s no limit to how much you can earn
  • 0% intro APR on purchases for 15 months; 16.24%-26.24% variable APR after that
  • 0% intro APR on balance transfers for 15 months; 16.24%-26.24% variable APR after that; 3% fee on the amounts transferred within the first 15 months
  • Pay no annual fee or foreign transaction fees
  • See if you qualify for a better offer with Capital One:”

Yes, the 1.5% cash back isn’t as high as the 2% cash back from the Citi Double Cash.

But the Capital One Quicksilver has no foreign transaction fees, which means it’s perfect for folks who travel internationally and want the simplicity of a cash back card.

The annual fee does depend on your credit score. If it’s good enough, it’ll be waived. Otherwise the annual fee is $39.

If you travel internationally once per year and want a cash back card, we recommend getting the Capital One Quicksilver card.

American Express Platinum

  • “Earn 60,000 Membership Rewards® points after you use your new Card to make $5,000 in purchases in your first 3 months.
  • Enjoy Uber VIP status and free rides in the U.S. up to $15 each month, plus a bonus $20 in December. That can be up to $200 in annual Uber savings.
  • 5X Membership Rewards® points on flights booked directly with airlines or with American Express Travel.
  • 5X Membership Rewards points on prepaid hotels booked on amextravel.com.
  • Enjoy access to the Global Lounge Collection, the only credit card airport lounge access program that includes proprietary lounge locations around the world.
  • Receive complimentary benefits with an average total value of $550 with Fine Hotels & Resorts. Learn More.
  • $200 Airline Fee Credit, up to $200 per calendar year in baggage fees and more at one qualifying airline.
  • Get up to $100 in statement credits annually for purchases at Saks Fifth Avenue on your Platinum Card®. Enrollment required.
  • $550 annual fee.
  • Terms Apply.”

The Amex Platinum is all about the perks. If you’re looking to get perks that none of the other cards have, this is the card for you.

The Uber reimbursement is awesome. I easily spend $15/month on Uber rides, so that’s money right back in my pocket.

What’s the Uber VIP status that comes with the card? It’s an exclusive option that will match you with drivers who have a rating of 4.8 and above. It’s certainly nice, but it’s only available in a handful of cities. It also means you could wait a lot longer in order to get a driver with a high enough rating. It’s cool, but I wouldn’t get too excited by it.

The 5X points on flights and hotels booked directly with airlines is a pretty amazing perk. But I wouldn’t use it myself on flights. Honestly, I only book flights directly through airlines. I’ve heard too many horror stories from sites like Expedia or Orbitz. A good friend of mine booked a flight through Expedia and the airline never received the notice, so they didn’t reserve a ticket for him. He didn’t find out until he showed up for his connecting flight and had to buy another ticket on the spot for a crazy price. The worst part is it took him 9 months to get a refund from Expedia. I avoid that nonsense completely by finding the flight I want through Hipmunk or Google Flights, then booking directly through the airline.

One of the best perks of the Amex Platinum is getting access to the Centurion Lounges. These lounges are swanky — some of the nicest lounges out there. Unfortunately, they’re not in that many airports yet. Check to see if your main airport has one there. If you fly out of or through one of these airports regularly, this perk is a game-changer and is worth the annual fee on its own.

What about the 1000+ other lounges?

Credit card companies always inflate lounge access numbers. They’ll include a bunch of third-rate lounges that you’ll never want to go to anyway. Or they’ll add airport restaurants that offer a $20 discount off your meal in order to call that a “lounge.” When looking at lounge perks, I always check the exact lounges that are included in the airports that I fly through regularly.

So don’t assume you’ll be able to walk into any lounge. The majority of lounges will be out of your reach.

American Express Blue Cash Preferred

  • “Earn a $200 statement credit after you spend $1,000 in purchases on your new Card within the first 3 months.
  • 6% Cash Back at U.S. supermarkets (on up to $6,000 per year in purchases, then 1%) – that means spending $60 a week at U.S. supermarkets could earn over $180 back per year.
  • 3% Cash Back at U.S. gas stations. 1% Cash Back on other purchases.
  • You spoke, we listened. Over 1.6 million more places in the U.S. started accepting American Express® Cards in 2018.
  • Cash Back is received in the form of Reward Dollars that can be easily redeemed for statement credits, gift cards, and merchandise.
  • $95 annual fee.
  • Terms Apply.”

Do you have a long commute and spend over $100 per week in groceries?

For families, getting 6% cash back on groceries is amazing. Most families easily spend over $100 per week on groceries, so it won’t be hard to hit the annual cash back limit. You’ll hit it if you spend $115 per week — that works out to $360 in cash back per year on groceries that you have to buy anyway. That’s like getting 3 weeks of groceries for free. It’s too bad there’s a cap. This card would be incredible if there wasn’t one.

The other key perk on the American Express Blue Cash is the 3% cash back on gas. Right now, this wouldn’t do anything for me since I live in a city and rarely drive. But when I was growing up, gas was one of my biggest expense categories. I lived in a small town in Colorado that was 45 minutes from anything. My family and I were filling up our gas tanks every 2-3 days. Getting 3% cash back would have been amazing.

You’ll also get 3% cash back on streaming subscriptions and transit (taxis/rideshare, buses, parking, tolls, trains, etc.). The streaming cash back is nice, but there’s only so much any of us can spend on streaming in a given month. And while I know folks that spend a ton of money on rideshares, they tend to get the Chase Reserve card since they spend even more money on travel and restaurants. The cash back on these categories will help but I wouldn’t expect it to make a major difference in your rewards.

Watch out for the 2.7% foreign transaction fee on this card. I’d avoid using it when traveling internationally.

In other words, if you have a family and a long commute, consider getting the Amex Blue Cash to maximize your rewards on groceries and gas.

Should you get multiple rewards cards?

Don’t even consider having multiple cards until you’re comfortably spending over $3,000 per month.

I do recommend getting two rewards cards sooner rather than later if you want an American Express card. As great as the American Express cards are, plenty of businesses don’t accept them. So you’ll want a backup Visa or Mastercard when you can’t use your American Express. For a backup rewards card, I’d get one with a lower annual fee since you won’t be using it as often.

I might consider getting two rewards cards if my lifestyle covered multiple rewards programs. Let’s say I was spending a lot of money on gas, restaurants, and travel every month. In that case, the Chase Sapphire Reserve and American Express Blue Cash Preferred would be a great combo. I’d put all my groceries and gas on my American Express Blue Cash Preferred and put my travel and restaurant expenses on my Chase Sapphire Reserve. I’d rack up a ton of points and cash back with a system that I could easily remember.

I set a limit for myself of only having 2-3 cards. After that, things get too complicated.

The best rewards credit cards of 2019 is a post from: I Will Teach You To Be Rich.

How much I spent during two weeks of travel

sourced from: https://www.getrichslowly.org/travel-spending/

I like to travel. Over the past decade, I’ve probably made an average of two international trips per year. But you know what? Never once in that time have I tried to track how much I spend while exploring the world. Sure, I log my numbers in Quicken (as I do for everything), but I’ve never analyzed the cost of an individual trip.

This month, I flew to Europe to hang out with my cousin Duane again. He and I enjoy traveling together. Because I was curious, I decided to be diligent about tracking my expenses for this trip.

Note, however, that I didn’t try to do anything different. I didn’t adjust my normal behavior simply because I knew I’d be reporting to GRS readers. I did what I always do. I spent in ways that felt normal to me.

I don’t need a fancy hotel, for instance. Neither does Duane. We’re happy with cheap, simple lodging. And because most of the time we don’t book rooms in advance, we don’t hunt for the best deal. When we decide to stop for the night, we look for a place to stay. When we find something reasonable ($50 per person per night is our target) and available, we book it. We don’t continue to search. We’d rather use our time to explore our surroundings.

On the other hand, we’re both willing to splurge on food from time to time. Our rooms aren’t important to us, but what we eat is.

Similarly, we’ll pay to see special sites, but mostly we’re happy visiting free museums and/or walking around a city. We don’t pay much for tours, etc.

So, how much did I spend for two weeks in Europe? Let’s find out!

Chateau Chenonceau

Chateau Chenonceau in France’s Loire Valley

Booking Flights

This trip was sort of spontaneous. Remember, Duane has throat cancer. We expected our trip in December to be the last adventure we had together. But his health has held steady — and his doctor is making hopeful statements that he might be around for Christmas! — so we decided to make another trip.

Generally, I try to book flights several months in advance. I feel like I find cheaper options that way. This time, though, I didn’t book my flight until April 19th, less than a month before our trip.

Also, I’m fussy about flights. It’s not that I need to sit in business class — I’m perfectly happy in coach — but I don’t like layovers. I’m willing to pay extra for a direct flight.

Unfortunately, when I searched for flights from Portland to Paris, I couldn’t find any direct flights. I could, however, find a non-stop to London. I like London. It’s a pleasant city. “What if,” I thought, “I flew to London a few days early and used that time to get some work done? Then I could take the Chunnel train across to Paris to meet Duane when he arrives.”

So, I booked a flight to London. It cost me $996.63 and each leg took roughly 10.5 hours.

(I don’t know how much Duane paid for his plane ticket. I think it was around $600, but he had to fly from Portland to Las Vegas to Los Angeles to Paris and it took him almost 24 hours. Yuck. I’m happy to pay a premium to avoid crap like that.)

I made a small mistake when booking my ticket. In the past, I’ve always traveled economy. That’s what I thought I was doing this time. Nope. Apparently, there’s a new(-ish) airfare class called “basic economy”. This is a massive “screw you” from the airlines to their customers. It’s a little bit cheaper, but you’re not allowed to make any changes to your ticket once you’ve booked. No option to upgrade. Plus, you board dead last. And you can’t choose your seat. And if you check a bag — as I did for my return flight — it costs a ton.

Edinburgh

I flew into London with no real plan for the first few days. Brandon (the Mad Fientist) had invited me to visit him and his wife in Edinburgh, Scotland, but I felt like I oughtn’t do it. I felt like I should stay in London and work.

When I landed, though, I changed my mind. “Is it still okay if I come up to see you?” I asked. “Sure!” Brandon said. So, I hopped on Trainline (an awesome app that Duane and I used to buy train tickets during our December trip) and booked a ticket from London to Edinburgh. Cost: $101.92.

While waiting for my train at Kings Cross station (and watching the tourist throngs at Platform 9-1/2), I withdrew £200 for spending money, which is about $252.31. I used this cash to buy things like coffee and snacks and souvenirs. I brought home £141.15, which means I spent £58.85 (or about $74.24) cash while in the U.K.

I had a great time hanging out with Brandon and Jill. They showed me everyday life in Edinburgh, one of my favorite cities. They put me up in their spare room, took me to pubs, and we wandered together through the streets and the parks.

While there, I spent:

  • $45.76 at Brewdog for beer and snacks. (Did you know that low-alcohol beer — like 0.5% to 2.0% — is a thing in the U.K.? I wish it was a thing here in the U.S. I’d buy it.)
  • $17.74 at Whiski Bar for an hour of music and Scotch.
  • $9.91 at Cairngorm Coffee, where Brandon and I spent a morning working.
  • $33.78 at Mother India restaurant, where the three of us had a fine meal of “Indian tapas”.

In all, I spent a total of $283.35 during my three nights in Scotland.

Picnic in the Meadows

Picnic in the Meadows with the Mad Fientist and friends

Paris

When it came time to meet Duane in Paris, I was faced with a choice. Originally, I had intended to take the train from London to Paris. But when I looked at times and prices to get from Edinburgh to Gare du Nord, I didn’t like what I saw. The trip would take about 12.5 hours and the total cost would be over $350. Yikes!

“You should book a flight on EasyJet,” Brandon suggested. I’ve never used EasyJet, but I looked into it. For $199.45, I could fly from Edinburgh to Charles de Gaulle airport (CDG) in Paris — in less than two hours. I booked a ticket. Then, using Chase Ultimate Rewards points, I booked one night at the Hotel ibis, which is attached to CDG terminal 3. My cost: 7718 Chase points.

In Paris, I paid €17.99 for a one-day train pass, which gave me unlimited access to all Metro and RER routes. (The metro lines are the subway and local trains. The RER routes are the commuter trains that run deeper into the suburbs, going places like Versailles and the airport.) I also withdrew €200 in cash (about $222.50) to use for incidental expenses, such as snacks and souvenirs.

While I waited for Duane’s flight to arrive, I visited Notre Dame to see what it looked like after the fire. (I was startled to note that when the wind was right, you could smell the ashes!) I bought an extra travel shirt. And I met my friend Amy for champagne and charcuterie. (Amy lives in Houston but happened to be in Paris for work.)

Amy and J.D.

Amy, J.D., and random amused French woman

At around 18:00, I returned to the airport to pick up our rental car. I was worried this might not go smoothly, but I was wrong. Estelle, the young woman at the Avis counter, was amazing. It didn’t take long for her to get met set up with a Peugot 208. Plus, she was kind enough to phone ahead to our hotel to let them know we’d be a little late. I booked the car with British Airways points. My cost: 16,600 Avios — a bargain!

As I was finishing at the rental car, Duane cleared immigration. Perfect timing! We hopped in our little car, braved Paris traffic and made our way to the garden spot of Giverny.

In Giverny, we checked into our B&B (booked with 8154 Chase points), then hurried to the only restaurant in town that was still open. Duane spent €51.00 on our dinner of duck breast and red wine.

During two nights in and around Paris, I spent $199.45, €17.99, 8154 Chase points, and 16,600 Avios (BA points). Duane spent €51.00.

Normandy

The next morning, Duane and I started our driving tour of northwest France. I’d been worried that all French drivers would be like the ones in Paris. They weren’t. On the country roads, people were much more mellow. Thank goodness. (I drive like an old man. I hate speeding and tailgating.)

First, we toured Rouen, the town where Joan of Arc was burned at the stake. We saw our first cathedral of the trip, visited the (free) Museum of Fine Arts, and browsed the weekly market.

Duane and I both enjoy markets. We’re happy to pass time looking at fruits and vegetables and meat and fish. For real. Plus, this gave us a chance to buy cheap food for the road. I picked up a paper sack filled with twenty baby chorizo sausages, for instance, and it cost only €5. (I think there were more than 20 sausages in the bag too. That thing lasted me almost the entire trip, and I was eating several sausages per day.)

In the afternoon, we drove to Honfleur with no plans about where to stay. The first hotel we visited was perfect: cheap and efficient. I paid €100.00 to book a room. Duane spent €54.00 on our dinner at a local pub.

On our second day, we meandered along the coast. We stopped to taste calvados (an apple brandy made in Normandy), nibbled goat cheese in Deauville, and stopped to visit the Grand Hotel in Cabourg, the site of Proust’s famous memory-inducing madeleine.

Meat and Cheese

Buying goat cheese and “bacon” in Deauville

In the late afternoon, we reached Bayeux. Our first hotel choice was booked, but the second had two cheap rooms available. We paid €49.00 each. For dinner, we chose an expensive restaurant (I can’t remember why) that cost Duane €94.00.

After dinner, we wandered around town. It was a magical evening in mid-spring. We happened to hit the city during its “festival of lights”, and when we stopped by the cathedral, an American choir was performing a concert. We stopped in to listen.

In the morning, we visited the Bayeux Tapestry, a 70-meter long work of art that’s nearly 1000 years old. In dozens of scenes, it depicts the Norman conquest of England. People think I’m joking when I say this, but I’m not: This tapestry is like a very early comic book. (And, in fact, the drawings used to plan tapestries like this are referred to as cartoons. No joke.) This visit cost me €19.00.

Bayeux Tapestry

Seriously, the Bayeux Tapestry is like a primitive comic book

While in Bayeux, we visited Omaha Beach and the nearby American Military Cemetery. After that, we drove backroads to reach Mont-Saint-Michel, one of the most famous tourist sites in all of France (and formerly one of the top three destinations for Christian pilgrims). This island used to be isolated from the mainland by ocean tides. Now there’s a causeway that leads to it, but even that sometimes floods over (as it did during our stay).

I used 14,538 Chase points to book a room on the island, and I’m glad we did. During the day, the place is packed. After 18:00, the crowd disperses and things become peaceful. It’s fun to wander the ramparts with nobody to disturb you.

Here, Duane paid €89.00 for dinner.

During our time in Normandy, I spent a total of €168.00 and 14,538 Chase points. Duane spent €286.00.

Mont Saint Michel

Mont-Saint-Michel at high tide

Brittany

The next morning, after a quick tour of the Mont-Saint-Michel abbey, Duane and I packed up to drive to Brittany. (The island actually sits on the border between the two regions.)

As we entered Brittany, we got our first taste of fuel prices in France. To put 38 liters (about 10 gallons) in the Peugot 208, I paid €60.00. Holy cats! That’s nearly $7 per gallon, or about twice what we pay here in the States.

In the early afternoon, we stopped for a couple of hours in the walled city of Dinan, which is built on a hillside overlooking the river Rance.

Dinan

Looking from the ramparts of Dinan to the valley below

By early evening, we’d reached Carnac on the Atlantic coast. Carnac is famous for its “standing stones”, a collection of 3000+ domens and menhirs in the region. I love sites like this (and Avebury and Stonehenge in England), so was pleased to visit. (If you’ve ever read any Asterix comics, you’re familiar with the stones of Carnac.)

The first hotel we visited had a cheap room available (€66.00), so we booked it. Our dinner next door was…an adventure.

Brittany, as you may know, is the source of the crepe. It’s also the source of the galette (a savory crepe). Crepes and galettes everywhere in this region. Because we like to try local food when we travel, Duane and I decided to eat galettes for our evening meal. “You should get the andouille,” the restaurant owner told us, smiling. So we did.

Well. It turns out that American andouille is not the same as French andouille. French andouille is simply sliced pig intestine that has (ostensibly) been cleaned very, very well.

“This tastes like ass,” Duane said as he ate his galette. He couldn’t finish. I did finish, but was a little mortified when I looked up the ingredients later. Our host seemed to take pity on us for being such good sports. When I ordered a glass of calvados after the meal, he gave me a huge pour.

I paid €46.00 for our dinner of pig-gut pancakes.

During our 24 hours in Brittany, I spent a total of €172.00. Duane spent nothing.

The Loire Valley

After a quick breakfast of coffee and crepes (€12.00 paid by Duane), we made our way to Angers, former capital of the Anjou region. (Angers is the source of both anjou pears and Cointreau liqueur.) Here, we visited our first chateau. Did you know that a chateau is a castle? I didn’t — not until this trip.

Anyhow, the Chateau d’Angers is home to the amazing Apocalypse Tapestry, a 600-year-old visual retelling of the apocalypse story from the Bible’s Book of Revelation. Like the Bayeux Tapestry, it reminds me of a massive comic book made from cloth. It cost us €12.00 each to see the chateau and its art. (Duane paid this.)

Apocalypse Tapestry in Angers

The Apocalypse Tapestry at Chateau d’Angers

In the evening, we experienced our big splurge of the trip. Based on a GRS reader recommendation, I had booked a night for us at the Royal Abbey of Our Lady of Fontevraud, a former monastery founded in 1101. Although many old buildings remain (and guests are free to explore them), the site is no longer an abbey. It’s a fancy upscale hotel and a Michelin-star restaurant.

Going in, I’d told Duane to ignore the costs for our night at Fontevraud. “I’m paying for the hotel and dinner, and it’s not part of our trip accounting. Don’t try to balance it out,” I said. “I’m making a deliberate decision to splurge.”

Our room at the abbey cost us €172.00. Our meal cost €239.00. As I mentioned earlier this week, the food was fine and I’m glad I experienced it. But I wouldn’t do it again.

In the morning, we traveled country roads to visit another chateau: Chenonceau. We each paid €19.00 to tour the grounds of this beautiful old estate.

In the afternoon, we moved to nearby Amboise, where Duane paid €73.00 to book a hotel. We hiked up the hillside, then tasted wine in a cave. We ate dinner at the tiny Restaurant L’Ilot, where the woman waiting tables chided us for not making a reservation — then was playfully grouchy the rest of the evening. This meal cost Duane €94.00 because he insisted we order a bottle of wine.

The next day, we stopped briefly in Blois to visit the church of St Nicolas. This place is barely mentioned in the guidebooks, but we loved it. During World War II, most of its stained-glass windows were destroyed. They’ve been replaced by modern windows with modern glass. The results are amazing. When light shines through them, color spreads throughout the church.

St Nicolas Church in Blois

The light show from the stained glass at St Nicolas Church

We next stopped in Chartres to visit its famous cathedral, which is especially known for its stained-glass windows. And while yes, there are many of them (176!) and they’re impressive, I liked the ones in Blois better.

During our time in the Loire Valley, I spent a total of €430.00, most of it for my splurge at the abbey. Duane spent €281.00. (He filled the car with gas at one point.)

Wrapping Things Up

After touring the Chartres cathedral, we didn’t know what to do. We found ourselves on the southwest side of Paris, but wanting to reach the northeast corner by the following evening. We couldn’t make up our minds, so I simply drove east.

Eventually, we reached Fontainebleau, which we decided might be fun to visit. But the town was packed and we were tired. Instead, we drove on until we found a budget hotel (aptly named Budget Hotel), where Duane paid €86.00 for a room. For dinner, we each paid cash at a French fast-food chain.

The next morning, we returned our rental car. I was sad to say good-bye to the Peugot 208, which had served us well. Before we turned it in, Duane paid €32.00 to top off the fuel tank.

For logistics purposes, I’d used 11,182 Chase points to book us separate rooms at the ibis Hotel once again. (It’s handy having this place next to the airport train station.) We each paid €17.99 for one-day train tickets, then we rode into Paris.

With several hours to kill, we decided to walk the city. But we didn’t walk the downtown tourist core. We’ve both done that before. Instead, we chose the Coulée verte René-Dumont, an elevated greenway akin to New York’s Highline. From there, we made our way along the canal. This 5k stroll made for great people-watching.

Here, we said our good-byes. Duane wandered off to spend time on his own. I met up with my pal Matt Kepnes (a.k.a. Nomadic Matt) for a couple of beers.

In the morning, I took an early flight back to London (booked with 4500 Avios and $27.50), then boarded my Delta flight back to Portland.

On this final day, I spent a total of $47.48, 4500 Avios, and 11,182 Chase points. (At some point, I withdrew another €200.00 in spending money. I returned home with €102.66, which means I spent €97.34 of that — or about $108.41.) Duane spent €86.00 and $19.98.

The Bottom Line

After all of that, how much did I spend on this trip? Let’s crunch the numbers. For two weeks (three nights in Scotland and ten in France), I spent:

  • $996.63 for my flights from and to the U.S.
  • $573.65
  • €637.98 (about $710.63)
  • 19,336 Chase points
  • 21,100 Avios (British Airways points)

Converting all of my expenses to dollars, my total cost was $2277.91 plus rewards points. That’s an average of $175.22 per night. (I spent $1284.28 plus points if you ignore the flight, for an average of $98.79 per night.)

If I hadn’t splurged €411.00 for the abbey experience (and instead paid €100 for dinner and lodging that night), my costs would have been €311.00 less.

During our nine nights together in France, Duane spent a total of €670.99 (about $747.40) plus whatever his flights cost him (about $600, I think). That’s $83.04 per night ($149.71 with his flights). Together, not counting flights, we spent the equivalent of $2031.68 and points for this vacation.

Because I’ve never tracked my trip spending before, I have no frame of reference for our costs. I feel like we did a good job of using money wisely — spending only on things that brought us value — but who knows? I’m sure plenty of people would spend much less on a trip like this. That would probably require advance planning, though, and half the fun for us is making this up as we go.

Here’s the thing, though. How much have I been spending simply to live here at home? About $5000 per month, right? (And I’m aiming to get that down to $4000 per month.) When you compare the cost of travel to the cost of simply maintaining my lifestyle here in the U.S., it’s shockingly affordable. Cheaper than living in Portland, even.

That’s food for thought.

One final note: In Edinburgh, Brandon showed me how to use Apple Pay. Believe it or not, I’d never done this before. Now, though, I’m hooked. Even back here in Portland, I’m using my phone to pay for things, not my actual credit card. I think this is awesome. Duane is less convinced. But that’s a subject for a future blog post…

The post How much I spent during two weeks of travel appeared first on Get Rich Slowly.

How to make better (and quicker) decisions

sourced from: https://www.getrichslowly.org/how-to-make-better-decisions/

Last week, I wrote about how I’ve embraced mindful shopping. I’m teaching myself to be more deliberate about the things I own and buy. My goal is to buy less and, more importantly, to own less.

As part of this, I don’t want to waste time shopping. I’m trying to train myself to make better decisions more quickly. This is tough for me to do.

By nature, I want to evaluate every alternative, to find the best option in every circumstance. Left to my own devices, I can spend two hours trying to decide which chainsaw is the best chainsaw at the best price.

There’s nothing wrong with this, of course. Comparison shopping is a good thing. But there’s a fine line. Some comparison can help you avoid purchasing poor products. Too much, on the other hand, becomes a tax on your time and your brainwidth.

I want to find a balance. I no longer feel the need to make a perfect decision. (Is there such a thing?) I’m becoming comfortable with the idea of accepting decisions that are “good enough”.

In short, I’m trying to incorporate lessons I’ve learned from The Paradox of Choice by Barry Schwartz so that I can take some of the suck out of shopping.

The Paradox of Choice

For those unfamiliar, Barry Schwartz is a psychology professor from Swarthmore College. His 2004 book The Paradox of Choice argues that while life without choice is almost unbearable, having too many choices carries burdens of its own.

“I believe that many modern Americans are feeling less and less satisfied even as their freedom of choice expands,” Schwartz writes. “Having too many choices produces psychological distress.”

This certainly rings true from my own experience. And not just with money decisions.

One of the joys of financial independence is the ability to choose how to spend your time. Indeed, this is a unique luxury. However, it’s also a burden. When you have an infinite number of options available, how do you make decisions about what to do with your time? (My answer, as you can probably guess, is to be clear about your purpose, and to make decisions aligned with that purpose.)

Schwartz argues that faced with so many options and decisions, we would be better off if we:

  • Embraced certain voluntary constraints on our choices (instead of rebelling against limits).
  • Opting for “good enough” instead of always seeking the best.
  • Lowering our expectations.
  • Made our decisions non-reversible.
  • Paid less attention to other people.

“A majority of people want more control over the details of their lives,” he writes, “but a majority of people also want to simplify their lives.” Schwartz calls this the paradox of choice. Greater choices creates greater complexity. That’s what we think we want. In reality, most folks crave simplicity — and simplicity requires fewer choices.

So, how can we confront this paradox? Is it possible to have the best of both worlds? How do we go about wrestling with the ever-increasing array of choices while simultaneously seeking simplicity.

That’s precisely what I’ve been trying to answer for myself lately.

At the end of The Paradox of Choice, Schwartz shares eleven steps that he believes can help mitigate (or eliminate) the distress caused by so much choice. Let’s look at four that I’ve found effective in my own life.

Learn to Love Constraints

“To manage the problem of excessive choice,” Schwartz writes, “we must decide which choices in our life matter and focus our time and energy there.” Establish personal rules of thumb and follow them. Artificially limit your number of choices. You might, for instance, have a rule that you’ll only visit two stores when shopping for clothing.

Here’s a real-life example of limiting your number of choices.

For the past six months, I’ve been in the market for a new vehicle. There are hundreds to choose form, and if I were to let myself look at the entire universe of new cars, I’d never make a decision. Instead, I’ve created my own “pocket universe” of cars to choose from: compact and sub-compact vehicles that are available in electric or hybrid versions.

Another great way to exercise contraint is to ignore all of the options that are available, especially for products you purchase regularly. Do you need to examine every cheese at the grocery store? Every can of soup? Every loaf of bread? Of course not. You have favorites. You have defaults.

Whenever possible, stick with what you know — especially if what you know already makes you happy.

Satisfice More and Maximize Less

According to Schwartz, maximizers are those who only accept the best. Every time they make a choice, they want to make the best choice possible. And even after they do make a choice, they worry there might have been a better option.

Satisficers, on the other hand, have learned that contrary to conventional wisdom, good enough often is. They’re willing to settle for something other than the best. A satisficer still has expectations and standards, but once he’s found something that meets those standards, the search is over.

My cousin Duane is a maximizer. He agonizes over buying decisions — even ordering food in a restaurant.

Duane knows it doesn’t make much sense to deliberate over a menu decision, but he can’t help it. He can’t stop himself. “What if I choose something wrong?” he says, mocking himself. “That’s why I like buffets.” With a buffet, he has an “out” if he doesn’t like what he chooses. He can go choose something else.

I used to be like this too. Now, though, I take a different approach when dining out. I skim the menu until I find something I like, then I look no further. That first item I find is what I order. What’s the point of trying to pick the perfect meal? Will it make me any happier? Probably not. I’m satisfied choosing the first thing that looks good.

I took this approach when buying my chainsaw last week. It worked great! I’ve invested in the EGO Power+ series of battery-powered tools. I checked to see if they produce an electric chainsaw. They do, and it’s highly rated. I ordered it without looking at any other options.

Regret Less

After you’ve made a choice, move on. Don’t linger over other possibilities. Don’t second-guess yourself. If you buy stock in Dell instead of Apple, don’t continue to track Apple’s price. Stick with what you have.

More to the point, don’t compare your choices with other possibilities. “Our evaluation of our choices is profoundly affected by what we compare them with,” Schwartz writes, “including comparisons with alternatives that exist only in our imaginations.”

He argues that we can vastly improve our subjective experience by striving to be grateful for what’s good about our choices rather than being disappointed by what’s bad about them.

It’s also important to remember that most choices are complex. There’s rarely an option that’s clearly superior to all others in every single way. Each choice has its advantages and its disadvantages.

When faced with especially tough decisions, consider using the Jeff Bezos “regret minimization framework“.

Manage Expectations

How we feel about our decisions is strongly influenced by our expectations of the results. You might, for example, build up in your mind that a long-awaited Hawaiian vacation is going to be amazing — then it’s not. It’s fine, but it’s not nearly what you’d hoped.

The problem here isn’t Hawaii or the ocean or the hotel. The problem is the expectations you created for the experience. High expectations are the enemy of happiness.

Similarly, it’s important to remember hedonic adaptation will occur. Even if your new Tesla is thrilling during the first week of ownership, that thrill won’t last. You’ll gradually become accustomed to your new normal. Before long, that Tesla will seem mundane.

Schwartz argues that one of the best ways to control expectations and to anticipate hedonic adaptation is to be a satisficer rather than a maximizer. Don’t look for (or expect to find) the “perfect thing”. It doesn’t exist. If your aim is only satisfaction, your decisions are less likely to fall short of expectations.

Another way to manage expectations is to stop comparing yourself to others. Doing so is nearly always destructive to your sense of well-being. Don’t do it. Stop trying to keep up with the Joneses. “Focus on what makes you happy,” Schwartz writes, “and what gives meaning to your life.”

Thinking in Bets

Last year, I read and reviewed Thinking in Bets, Annie Duke’s book about making smarter decisions when you don’t have all the facts. (Here’s my review.) Duke says that we should stop thinking in terms of right and wrong. Few things are ever 0% or 100% likely to occur. Few people are ever 0% or 100% right about what they know or believe. Instead, we should think in bets.

According to Duke, all decisions are bets on the future. An unwanted result doesn’t mean we made a poor choice. It just means the bet didn’t pay off this one time. If you get a head injury in a motorcycle crash, that doesn’t mean wearing a helmet was a bad decision. It was a good decision, but this one result was poor.

“Job and relocation decisions are bets,” she writes. “Sales negotiations and contracts are bets. Buying a house is a bet. Ordering the chicken instead of the steak is a bet. Everything is a bet.”

In the year since I read her book, I’ve thought of this concept often. Another way for me to make better (and quicker) decisions is to embrace the idea that I’m betting on outcomes. When I buy something, I’m betting whether or not I’ll like it because it meets my needs.

Taken together, all of these ideas — those from Duke and those from Schwartz — are helping me spend less time deliberating over decisions and more time enjoying life.

The post How to make better (and quicker) decisions appeared first on Get Rich Slowly.

Mindful shopping: Learning to be deliberate about the things we buy and own

sourced from: https://www.getrichslowly.org/mindful-shopping/

The older I get, the less I want or need. The older I get, the less I like to spend money. And when I have to buy something, I try to practice mindful shopping.

When I was younger, I wanted (and/or needed) all sorts of things. I wanted new clothes. I wanted tech gadgets. I wanted books. I was convinced that I needed a fast computer to be happy, not to mention a big house and lots of furniture. None of my shopping was mindful. It was mindless.

Now, at age fifty, buying things seems more like a hassle than a reward.

For one, buying something means I have to spend money — money that I’d rather keep for more important things, such as retirement. Or travel. Or beer. (Best of all: Travel and beer!)

J.D. enjoying a beer in Idaho

Plus, there’s the entire shopping process. It’s a chore. If I need to buy a chainsaw, for instance (which I actually did this week), I have to research the best option. Then I have to find the best price. Then I have to order it or, worse, take time out of my day to go pick it up in person.

Then, after I buy a new thing, I have to store it. I have to dispose of the packaging, then add whatever I bought to my collection of Stuff. It becomes clutter in my life. (This is true whether the thing is actually clutter or not.)

I use my laptop computer all day every day, for instance, yet it still acts as mental (and physical) clutter. It’s always here in the living room, sitting next to my recliner. I see it whenever I walk by. It’s always on my mind.

I know I sound like an aging curmudgeon, but all of this is true. The older I get, the less Stuff I want — and the more I want to get rid of the Stuff I already own.

Now, I don’t want to pretend that I don’t buy things. I do. There’s no question that I do. I even spend frivolously if I’m not diligent. But I’m far less likely to buy things than I used to. And when I do buy things, I tend to be purposeful about my purchases. I try to be a mindful shopper.

Let’s use the chainsaw as an example.

Mindful Shopping in Practice

In the olden days — like, 2009 — I would have driven to Home Depot and bought a chainsaw the moment I thought I needed one. It wouldn’t have even been a question. (In fact, I did this very thing in 2004.) Today, I deliberate over purchases like this for weeks, even when I know I need a tool.

Kim and I currently own an acre of mostly-wooded land just outside of Portland, Oregon. We have lots of trees, and those trees have lots of limbs. I don’t think we’re supposed to go hacking away at the trees on the forested part of our property, but there are still plenty of woody problems inside the yard.

For example, in March I took out a cedar tree so that I could replace it with a small orchard. This might have taken a few minutes with a chainsaw, but I spent an hour chopping away with a hatchet and a pruning saw. When I was finished, I was left with an ugly stump. (This stump joined several other stumps left over from the previous owners.)

“That stump looks terrible,” Kim told me. “You need to get rid of it. And you should get rid of the other stumps too.”

“I know,” I said. “But I don’t have the tools to do it.”

“Why don’t you just buy a chainsaw?” she asked. “We’d use it all of the time.”

I knew she was right. I’m constantly climbing ladders to chop down limbs. Every year, we take out two or three small trees that have taken root in inconvenient locations. A chainsaw would be handy.

We could certainly rent a chainsaw when we need it. We often rent equipment. Generally, though, we only rent tools if they’re things we don’t anticipate needing again for many years. We rented a lawn aerator last year, for example. And after we accumulated a couple of projects that needed it, we rented a chop saw. We may rent a pressure washer in the near future.

It doesn’t really make sense to rent a chainsaw, though. It’s something I’ll use several times each year. Usually when I find myself wanting one, I’m in the middle of a larger project. I don’t want to make an hour-long round-trip to the hardware store to rent another tool. It’d break my flow. Plus, over the long term, the cost will add up.

So, owning a chainsaw makes sense. I ordered one from Amazon and it arrived yesterday. But that doesn’t mean I’m happy about it. It was a hassle. And now it’s yet another thing I have to store. But at least I was mindful about the purchase.

The Onus of Ownership

It’s not just that I don’t want to buy stuff. More and more, I don’t want to own things.

I know I have to own some things. I have to own clothes, for instance. I have to own tools. I have to own furniture. I have to own my computer. It’s nice to own some art and some books.

But so many of the things I own sit unused for weeks or months or years on end. It seems silly.

Two years ago, in a moment of weakness, I bought a Nintendo Switch. “This’ll be fun!” I thought to myself when I bought it. And it was fun for a few hours. Now, though, it rests ignored in the TV room. The last time I used it was in November. I should sell it (or give it to somebody’s children).

Meanwhile, books have become a burden in my life. I never thought I’d say that. You see, I love books — and I always have.

Ten years ago, in my first active campaign against clutter, I purged most of my 3000+ books. Still, I have too many. They’re everywhere, and I don’t like it. It’s no longer fun. Gone are the days when I’d simply order whatever book I wanted off Amazon. Nowadays, I usually dread getting new books.

It used to be that I found owning things comforting. I’m not joking. It made me feel good to know that I had all sorts of books and tools and furniture and clothes. I don’t feel that way anymore.

Storage is not the answer

Whenever I feel overwhelmed by the things I own, I remember our tour of the U.S. by RV. We carried very little with us on that trip. It was liberating. When we stopped to overwinter in Savannah, Georgia, Kim and I rented a condo for six months. All we had in that condo was what we’d had in the RV. Having so little felt amazing.

Time to Tidy

What do I spend money on? The older I get, the more my spending is aligned with my values. I deliberately practice mindful shopping and mindful spending.

For me, that means I spend a lot on travel, both for work and for pleasure. Between October 2018 to October 2019, I will have made four trips to Europe (three for fun and one for work) and four domestic trips (all for work). That doesn’t count local excursions by car.

At home, my biggest expense — by far — remains our food budget. Even though we’re dining out much less frequently in 2019, I still spend more on food (and drink) than any other category.

I don’t mind spending money on travel and food for a couple of reasons.

  • First, these are things I value. They enrich my life.
  • Second, they don’t create clutter. They’re not possessions.

Nobody would ever mistake me for a minimalist, but I definitely crave a simpler lifestyle than the one I have now. For me, that means having fewer things around me.

And if I want to own fewer things, I have to get rid of some of the Stuff I already own.

When I returned from France two weeks ago, I was a cleaning machine. This often happens when I get back from a long trip. After spending days or weeks living with little, I’m eager to make my living space as minimal as possible.

This time, I started with the bathroom. I emptied all of my drawers and cupboards, then methodically trashed anything I don’t use regularly. I threw out old shaving cream and bottles of stale cologne. I tossed dozens of old sticky notes on which I’d scrawled my weight and bodyfat. When I put the room back together, I felt a sense of relief.

I want to do the same in the bedroom — but I’m scared. Purging old toothpaste isn’t a costly decision. Thinning a wardrobe, however, means getting rid of clothing that cost real money at one point in the past. Sometimes, the recent past. (Yes, I realize I’m succumbing to the sunk-cost fallacy. But just because I understand this intellectually doesn’t mean I can overcome the problem in practice.)

It may be time for me to remind myself of the KonMari method, to re-read The Life-Changing Magic of Tidying Up. I need outside encouragement that yes, I can do this — and that it’ll all be for the best in the long term.

Get rid of whatever doesn't spark joy

A Man with a Plan

Yesterday as I was driving to work at the box factory, I thought about what I’d own in an ideal world. Where would I live? What would I do? What would my life look like?

“I’m happy with the house,” I thought, “and I’m happy with Kim and the animals.” The basic infrastructure of my life is fine. I have a good partner, and we’ve deliberately selected a small house with a large outdoor living area. This is all great.

“But if I could buy everything from scratch, I’d own much less,” I thought. “I wouldn’t have nearly as many clothes. I wouldn’t own so many books. We wouldn’t have crap in the storage shed at the bottom of the hill. We’d use that space as a tool shed instead.”

Driving home yesterday afternoon, I thought some more about this idea. What are some actual steps I can take to move from my current state of clutter and chaos to something more closely resembling this (hypothetical) ideal existence? I came up with a few ideas:

  • Implement a moratorium on buying. This shouldn’t be difficult. It’s merely formalizing a behavior I’ve already adopted. I’m ready to press “pause” on purchases for a few weeks or months until I’ve taken the next steps. This goes beyond mindful shopping to no shopping — at least for a little while.
  • Make a list (or several) of the things I want (or need) to own. Most of the time when I tackle projects like this, I do the reverse. I start with what I have and subtract. This is challenging. It quickly leads to decision fatigue. This time, I think it’d be interesting (and fun) to take an additive approach, to make lists of the items I’d own in my ideal life and work from there. What would my wardrobe look life? What books would be on my shelves? What tools would I have for the yard?
  • Go from space to space, ruthlessly purging the things I no longer need or want. I want to go full Marie Kondo on my life, being rational and realistic. If my aim is to create a capsule wardrobe filled with quality clothes, I need to get rid of a lot of crap. If books bother me so much, I need to thin my collection. I need to ask myself questions like: Am I really ever going to listen to my 100+ record albums again? (I don’t even own a record player! Mine was destroyed by a “melting” pumpkin five years ago. For real.)
  • Be methodical and patient. Don’t try to do this all at once. It’s not possible to accomplish all of this in one day. Or one weekend. It is possible, however, to take fifteen minutes to sort the clutter in one kitchen drawer. Or, if I have an hour in the afternoon, I can pick through my photography gear to figure out which lenses I still use. (Do I use any of them? Or has my phone completely replaced my SLR?) If I’m diligent, I can probably process most of the house in a month.

This project excites me. It feels like doing this will clear both physical and mental baggage. I don’t want to pretend like I think this will instantly make me a happier person — it won’t — but I’m certain it’ll bring a certain level of peace and calm to my life.

Kim gets a similar sense of serenity when the house itself is clean. For the first time together, we hired a housekeeper this week. For the past few days, Kim has been smiling and happy and she says it’s because she loves walking from clean room to clean room.

The post Mindful shopping: Learning to be deliberate about the things we buy and own appeared first on Get Rich Slowly.

The best online savings accounts of 2019

sourced from: https://www.iwillteachyoutoberich.com/blog/best-savings-account/

Finding the right savings account can get you an extra $200 for free this year.

Depending on your balance, it could make you a lot more money.

Let’s say you have $10,000 to put into an online savings account.

How much would that turn into at a big bank savings account? Most big banks have an APY (annual percentage yield) of 0.15% or less. After a year, your account would be worth $10,015. Not much of a gain there.

I love getting money for nothing, but even I have a hard time getting excited over an extra $15.

Now let’s say you take that same $10,000 and put it into an online high-yield savings account with an APY of 2.25%.

After a year, you’ll have $10,225.

That’s $225 for doing absolutely nothing. Everyone needs some extra cash on hand for an emergency fund anyway. Why not get as much as you can while it sits there? All it takes is opening the right savings account.

The best online savings accounts

We’re going to do a deep dive into what to look for, which accounts are best, how to get the highest APY, and tricks for optimizing your savings accounts.

If you want to skip all that and open an account right now, all of these savings accounts are among the best:

You’ll be happy with any of them. My personal favorite is Ally.

What matters when picking an online savings account

Here’s how we evaluate the best savings accounts.

User experience

Good online and mobile apps make a huge difference these days.

While I do appreciate a great user experience, I do have to say that it doesn’t matter as much with a savings account.

It needs to be good enough but not great.

Why?

Because we rarely log into savings accounts. Savings accounts usually have limits of being able to withdraw from them up to 6 times per month. By definition, they’re not meant to be used regularly.

With one of my accounts — my emergency fund that I never touch — I log into it maybe once a year during tax season to grab the annual tax form. Otherwise, I never log in at all.

So the user experience should be good enough that it’s not infuriating, but it doesn’t need to be cutting edge. That adds a lot more value for checking accounts, which we do access all the time.

Fees

For online savings accounts, it’s absolutely essential that you get an account without any maintenance fees. Monthly maintenance fees used to be common. Thankfully, just about all the online savings accounts have done away with them.

On any good savings account, you’ll rarely run into fees during normal usage. But even on the best accounts, it is possible to trigger fees for certain events:

  • Returned deposit items
  • Overdraft items paid or returns
  • Excessive transaction fee (like going over 6 withdrawals per month)
  • Expedited delivery
  • Outgoing domestic wires
  • Account research fees

We’ve made sure not to include any banks in our list that have maintenance fees. But you should be aware of some of these other fee items that do exist on every account.

Convenience

What we consider to be “convenient” with savings accounts falls into two buckets depending on where you are in your own personal finance journey.

When you’re building savings for the first time, it’s essential to get a savings account with no minimum balance. A $5 required balance or something like that is fine, you just don’t want to have to worry about a higher one.

Don’t put up with any account that requires a sizable minimum balance. There are so many options that don’t have any balance requirements at all. This is the last thing you should be worried about in the early days, especially if an emergency comes up and you need to withdraw cash.

Later on, what you consider to be convenient typically changes.

Once you’ve built enough of a cash buffer for yourself, you’ll care a lot less about minimum balances. Instead, your accounts, cards, and banks have all gotten complicated enough that simplicity matters a lot more than it used to. At this stage, some folks will opt for a lower APY in order to consolidate their accounts and make everything more manageable.

Is this the optimum strategy to get every ounce of growth from your cash? No, it isn’t. But the extra piece of mind can be well worth the cost. If this sounds appealing to you, check to see if the savings account at your main bank has a good enough APY without any maintenance fees. If it does, it could be your best option.

FDIC insured

Don’t ever consider an online savings account that’s not FDIC insured. This means that the account is guaranteed by the federal government up to $250,000 per depositor. If something horrible should happen to the bank, the federal government guarantees you’ll still get access to your balance, up to $250,000. This is per depositor, so the $250,000 includes the combined balance of all your savings accounts at the same bank.

Just about every savings account is FDIC insured. It’s been a standard practice for a long time. But keep a close eye on this any time you’re considering an innovative or unique approach to storing your cash.

For example, some folks will store their cash in a money market account, which operates a lot like a savings account. Money market accounts are usually FDIC insured. But money market funds, which you place cash into from a brokerage account, are not FDIC insured. A subtle yet critical difference during tenuous times.

Another example: Robinhood attempted to roll out a checking account that promised a 3% APY. That’s a checking account paying higher interest than any savings account that was available at the time, by almost 1%. Sounds amazing right?

It came with a number of catches, one of which was that it wasn’t FDIC insured. Without the FDIC insurance, we don’t consider the higher APY worth the risk.

Our stance is that every dollar of our savings should be covered by the FDIC, even if the balance is high enough that we have to split it up between multiple savings accounts.

All of the savings accounts that we review below are FDIC insured. Just keep an eye out for this if you’re exploring an atypical approach to storing your cash.

APY rates

APY rates — the annual percentage yield — are the main difference between savings accounts. The higher your APY rate, the more money that you get automatically every month.

APY rates across saving accounts generally fall into 3 tiers.

Big bank savings account APYs

For the vast majority of big bank savings accounts, the APY is terrible. Big banks assume that you want a savings account along with your checking account, so they don’t do anything to entice you for the savings account itself. Even when plenty of online high-yield savings accounts are offering an APY of 2%, big banks might only offer a 0.15% APY. On a savings balance of $10,000, that’s a difference between making $200 a year versus $20 a year.

This doesn’t apply to ALL big banks, but most of them do fall into this category. So keep an eye out for these. Unless you really want to maximize convenience by consolidating accounts and taking a lower APY, it’s worth finding a savings account with a higher APY.

High yield savings account APYs

Over the last few years, high yield savings accounts have become extremely popular. These are usually banks that don’t have branches and specialize in online banking. Since their overhead is a lot lower, they pass the savings onto you with a higher APY.

There are a few banks that have become strong contenders in this category, like Ally and American Express.

You can also expect the APY to stay updated over time. Back during the financial crisis, the Federal Reserve dropped interest rates to 0%, and most high yield savings accounts had APYs of about 0.5-0.7%. As the Federal Reserve increased interest rates, these same accounts also increased their APY regularly. Many of them are now above 2%. Whenever interest rates increase, you’ll get those increases automatically from these accounts. No need to constantly switch between accounts and chase the best rate.

Cutting edge APYs

At any given moment, there are a few banks that are pushing the APYs higher than anyone else. They’re doing this as a promotional strategy to attract more customers. Some of these banks keep pace with changing interest rates, some of them don’t.

While we don’t consider it worth the effort to chase an extra 0.1% on our APY, these banks are an option if you’re looking to maximize the APY on your savings.

Online savings account reviews

Here’s the lowdown on the most popular online savings accounts.

Axos savings account

  • FDIC insured: Yes
  • Minimum balance: None
  • Maintenance fees: None
  • APY: 1.30%

The APY is much lower than other high-yield savings accounts — it’s average at best. There’s no reason to open an Axos account unless you’ve already maxed the FDIC limits on every other high-yield savings account and have to get a lower APY to horde all your cash.

I recommend picking one of the other accounts from this list.

Discover online savings account

  • FDIC insured: Yes
  • Minimum balance: None
  • Maintenance fees: None
  • APY: 2.10%

Discover’s APY is pretty strong. Not quite the top, but it’s really close.

And if you happen to have a Discover card or checking account, keeping your accounts in one place makes everything a lot simpler.

If you have another Discover account, definitely get a Discover savings account.

HSBC

HSBC has a few different savings accounts.

HSBC Premier Savings

  • FDIC insured: Yes
  • Minimum balance: $100,000 across your deposit accounts and investment balances. If you go below this balance, there’s a $50 monthly fee.
  • Maintenance fees: None
  • APY: 0.15%

The HSBC Premier accounts are for clients who have large deposits at HSBC. Unfortunately, the APY is awful. An APY that low with a minimum balance of $100,000 is kind of insulting.

This is a good example of a classic big bank savings account. A bunch of constraints with a terrible APY. Skip these accounts entirely.

HSBC Direct Savings

  • FDIC insured: Yes
  • Minimum balance: $1
  • Maintenance fees: None
  • APY: 2.30%

HSBC does have a high-yield savings account with a competitive APY. Normally, I’d recommend this account as a main contender.

But HSBC is just a terrible bank. Every interaction with them is more difficult than it has to be. The only reason I’d ever consider opening an HSBC account if I needed a giant, international bank for some reason.

Even though this account looks great on paper, you’ll regret it if your experience is anything like ours.

Ally savings account

  • FDIC insured: Yes
  • Minimum balance: None
  • Maintenance fees: None
  • APY: 2.20%

We’re huge fans of Ally. They’ve become one of the leading high-yield savings accounts.

Yes, Ally doesn’t technically have the highest APY, but it’s darn close. And they update their APY often. So if interest rates continue to rise, you’ll get a higher APY without having to do anything.

Their account UI is pretty slick too, and it’s always improving.

I have an Ally account myself.

Feel free to stop reading here and open an Ally account right now. You won’t regret it.

Capital One 360 Savings

  • FDIC insured: Yes
  • Minimum balance: None
  • Maintenance fees: None
  • APY: 1%

I do love Capital One 360’s sub-savings account, which let you save for specific items like a down payment on a house or annual vacation in a separate account.

However, that 1% APY is pretty weak. It makes the Capital One 360 Savings a poor choice compared to the other high-yield savings accounts in this list.

Skip the 360 Savings account entirely. The APY is too low.

You can boost the APY to 2% by opening a Capital One 360 Money Market account. It’s basically a savings account, but it does have a $10,000 minimum balance. And if your balance drops to less than $10,000, the APY is only 0.85%, which isn’t worth it.

The 360 Money Market account could be worth it. First, the $10,000 minimum balance should be a trivial concern for you. Second, you could get a lot of convenience if you already happen to have other Capital One cards or accounts. If that’s the case, a slightly lower APY at 2% compared to some of these other accounts could be well worth the simplicity of having all your accounts in one place.

If you don’t have any Capital One accounts already, choose one of the other accounts from this list.

Marcus by Goldman Sachs

  • FDIC insured: Yes
  • Minimum balance: None, but there is a deposit limit of $1,000,000 for all your savings account and CDs
  • Maintenance fees: None
  • APY: 2.25%

Goldman Sachs jumped into the high-yield savings account space with one of the highest APYs.

They do limit deposits to a total of $1,000,000, but that’s not a major concern. You’ll want to split up your cash balances across multiple banks to get it all FDIC insured anyway.

If you’re looking for your first high-yield savings account, this is a fantastic option.

American Express savings account

  • FDIC insured: Yes
  • Minimum balance: None
  • Maintenance fees: None
  • APY: 2.10%

American Express was one of the first to introduce a high-yield savings account, and it’s been around for awhile now.

These days, the APY is slightly lower than some of the competitors. While American Express does update their yields frequently, they’re always 0.10-0.20% off the highest rates. While it’s still a great option, I’d choose one of the other accounts for this reason alone.

One other caveat: the American Express savings account isn’t integrated into the same login account as the American Express credit cards. Even if you have both, it feels like having two different banks. There’s no extra simplicity from trying to consolidate.

Barclays savings account

  • FDIC insured: Yes
  • Minimum balance: None
  • Maintenance fees: None
  • APY: 2.20%

Another great option. Great APY, no maintenance fees or minimum balances — you can’t go wrong with a Barclays online savings account.

Synchrony savings account

  • FDIC insured: Yes
  • Minimum balance: None
  • Maintenance fees: None
  • APY: 2.25%

Synchrony is also a great option. The APY is one of the highest and has no minimums or maintenance fees.

The 4-step process to picking the best online savings account

  1. Check the banks that you currently have accounts with and see if they have a competitive savings account. If the APY is comparable to the accounts we listed above, stick with your current bank.
  2. Otherwise, pick an account from this list:
    1. Discover Online Savings Account
    2. Ally savings account
    3. Marcus by Goldman Sachs
    4. American Express savings account
    5. Barclays savings account
    6. Synchrony savings account
  3. Try to pick an account from a bank that you foresee doing other business with. For example, Ally has car loans and Discover has their credit cards.
  4. If you’re still not sure, go with Ally.

What about sub-savings accounts?

One of our favorite savings account tricks is to open “sub-accounts.” This allows us to easily budget for bigger purchases by saving a little bit each month. We can also track everything by separating all the accounts.

For example, I have these categories in my own savings account:

  • Emergency fund
  • House downpayment
  • Mini-retirement
  • Christmas gifts
  • Annual vacation

Each month, money goes into each of these separate accounts with the automatic transfers that I set up. And I can easily see how much I’ve saved towards my goals.

Ramit’s savings accounts used to look like this back before ING Direct was bought by Capital One:

ING direct

Here’s a more current example in Ally:

Ally

Some savings accounts will call these “sub-accounts,” and everything will be part of the same savings account. This is a rare feature to find though.

For everyone else, simply open up multiple savings account under the same bank login. You can easily have 5-10 savings accounts at the same bank. Then treat each account for whatever saving category that you like.

This means you can get “sub-accounts” at any bank, even if they don’t have a “sub-account” feature.

Don’t chase yields

Look, there’s always a bank that has a slightly higher APY. Banks use it as a promotion strategy to get more accounts, so it’s always changing.

Regularly researching new APY rates, looking for that extra 0.05% APY, opening accounts, and transferring money all over the place wastes more time than it’s worth.

Don’t be a rate chaser.

Remember IWT’s philosophy of big wins. Focus on the major wins that really move the needle and forget about the small stuff. Chasing higher APYs on savings accounts definitely falls into the “small stuff” category.

Pick a savings account that has a competitive APY from a bank that you trust for the long term. Then stick to that decision and work on improving other areas of your life.

Money market accounts vs savings accounts

The difference between money market accounts and savings accounts can be pretty confusing.

That’s because there’s no practical difference.

Here are the similarities:

  • The APY tends to be the same between both types of accounts.
  • You can withdraw up to 6 times per month.
  • Some have ATM cards, some don’t.
  • Some have minimums, some don’t.
  • Both are FDIC insured.

Basically they’re the same account. If your bank happens to offer a money market account with no maintenance fees, no minimum, and a competitive APY, feel free to use it.

Now for the confusing part: money market funds are completely different. They’re part of brokerage accounts and allow you to place cash while you wait to invest it. Since money market funds are not FDIC insured, so it’s not a good habit to store lots of cash in them.

When to get savings accounts from multiple banks

If you ask high net worth folks which savings accounts they have, sometimes they’ll list off half a dozen different banks.

At first, this makes no sense. Why all the extra complexity and different accounts?

There’s one reason: FDIC insurance limits.

Most people are limited to $250,000 worth of insurance at any given bank. Joint accounts and accounts across different categories (like retirement accounts) can increase this limit, but that only goes so far. If you have a substantial amount of cash, the only way to keep it insured is to open up savings accounts across several banks.

That’s why folks will start opening up savings accounts across multiple banks.

If you have multiple savings accounts to manage, Max will automatically move balances around your accounts to optimize for the highest APY while keeping all your cash insured. They do charge a 0.08% annual fee for the service.

As for which accounts to open, we recommend starting with these:

Any combination of accounts that have strong APYs will work.

The best online savings accounts of 2019 is a post from: I Will Teach You To Be Rich.