My SHINY Nickels

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The Top 10 Reasons Why I Pay Less to Travel Than You – Part TWO

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Welcome.  This is PART TWO in a 2-part series on “The Top 10 Reasons Why I Pay Less to Travel Than You”.

In PART ONE, we talked about flights.  We were introduced to the “Travel Fool”, who is planning a week-long vacation to Kauai for 2 people in mid-June. He put in his search parameters and booked the cheapest flight he saw…paying $2,256 for 2 round-trip flights.

Which is still WAY TOO MUCH stinkin’ money.  Then came the “Travel Savvy Cool Guy” who does a little tap-tap-tapping on the keyboard, and in 10 minutes, saves himself $1,270, a savings of 56%.

And it’s time to confess…for me, it’s not just about the discount, it’s the thrill of the chase…now that we’ve saved a ton of money on our flights, let’s tackle lodging, food and activities, shall we?

 

Let’s jump right into where you’re going to stay.  If I was the “Travel Fool”, I would book a hotel stay in Kauai, paying the average nightly rate for a 3-star property…$220.  Which for a week-long stay would put us at $1,320.  But we’re not the “Travel Fool”, we’re the “Travel Savvy Cool Guy”, remember?   So we keep looking.

 

5)  Where You Stay Is None of My Bid-Ness

If you’re absolutely set on staying at a more traditional hotel/resort/condo, your best bet is likely going to be on sites such as Hotwire.com or Priceline.com.   Both of these travel sites contain a function where you can either bid on travel or purchase travel without knowing the hotel name in advance.

But this shouldn’t deter you.  This is where significant savings can be had.  The reason I mention those websites specifically is because of a place called BetterBidding.com.  Never heard of it?  It’s a forum where Hotwire and Priceline bidders post their successful wins so you can see what others paid for a given hotel. The site also contains a “Hotel List”, which shows the participating hotels in any given city/neighborhood and star category.  That way you can get an idea of what hotel you’ll receive in advance, taking most of the mystery out of the decision.  I’ve used both Hotwire and Priceline numerous times, and received stays in high-end hotels (Hyatt, Hilton, etc) for as low as $50 per night in some cases.

 

6)  There’s No Place Like HomeAway

If you’re open to staying somewhere besides a hotel/resort, which I personally prefer, try sites like HomeAway.com, VRBO.com and AirBnB.com.  On these sites you can find thousands of people renting out their vacation homes/cottages/condos, usually for much less than you’d pay at a hotel or resort…and it’s much more private.

I found an ocean-view guest house in desirable East Kauai just a short walk from the beach on VRBO.com for $80 / night.  A bonus with vacation homes is that they usually have at least a kitchenette, which allows you to cook some meals on your own…but I’ll get more into that later.

We’ve now dropped our lodging from $1,320 to $480…that is $840 in savings to stay in a private vacation home instead of a hotel/resort.

A difference of $840…that’s a 64% savings!

 (Last-Minute Update:  Just as I was about to publish this post, I scored a great deal on lodging for our Seattle trip next month.  For 3 nights, the cheapest ‘decent’ hotel I could find in the area we wanted to stay was $99/night plus taxes/fees, for a total of $359.  I went to AirBnB.com, and found a private cabin with a backyard waterfall for $80/night, total $259.  That’s nearly a $100 difference, for a weekend trip.  It pays to look around!)

7)  Get a Deal on Wheels

Some destinations require a set of 4 wheels to get around.  If that’s the case, try Orbitz.com and use their car rental comparison tool.  It gives you a handy-dandy comparison grid of all vehicle types across nearly all rental agencies.  It even highlights the cheapest option in each category. At the minimum, this grid will give you a ballpark figure to work from.

The other place I always check is Budget.com.  Promo codes for their website are easy to find and just as easy to use.  Just google “Budget coupon code” and hundreds of them will pop up.   I’ve received up to 40% off at times using various coupon codes.  I also recommend waiting until a few days before travel (unless you’re traveling during a busy holiday), as the rental rates are usually much lower.

So…let’s get into how this works…I found a few coupon codes for Budget, ran the numbers for a weekly rental, and pulled together the total “out-the-door” price quotes for 3 different scenarios.  The first price quote is the standard rate someone like the “Travel Fool” would pay without any discounts ($225.55).  The second price quote is after I applied the coupon code W852873 that I found from a google search ($199.96).  The last price quote is after applying the coupon code W852873 and changing my rental period to next week ($158.14).

The difference between the first and last scenarios is a savings of $67.41.  That’s a 30% savings!

 

8)  Find Deals on Meals

We’ve had some mighty fine grub on our travels.  Even in notoriously expensive places like Hawaii, we’ve been able to eat on less than $50 a day for both of us, and that INCLUDED splurging on shave ice.  We’ve packed picnic lunches from a local deli or ordered a pizza and had dinner on the beach.   If the place you’re staying has at least a kitchenette, get a few groceries and make some meals right in your room. You can always dine al fresco on your patio or pack it up and have a picnic in a local park/beach.   It’s awesome!  Whether you eat in or eat out, just get out of the tourist areas (aka “traps”) and you’ll find a world of delicious, cheap food.

Case in point…have you dined at a shrimp truck in Hawaii?  It’s fast, it’s cheap and it’s slap-yo-momma good.

 

9)  Exchange Rates Matter

If your destination is international, and you’re deciding between a few different areas, consider the exchange rate and cost of living.  That is, determine where you can get more for your dollar, and you’ll squeeze in more travel fun for less moolah.  An example would be Thailand and Argentina.  Your dollar will stretch MUCH farther in Thailand than Argentina.  For the same price as an average vacation in Buenos Aires, you could enjoy a rather luxurious vacation in Thailand.

 

10)  Get Your Groove On with Groupon

Once you know where you’re headed, check out the local Groupon or LivingSocial offers for restaurants and activities.  There’s plenty of discounts, and you may even discover places you’d never have found otherwise.  I would advise going on Yelp.com to check them out first though.  Getting 50% off of something that sucks, well, still sucks.

 

 

Now let’s recap, shall we?

The “Travel Fool” would have paid $2,268 for flights, $1,320 for an average 3-star hotel and $225 for a weekly car rental for a TOTAL of……..$3,813

The “Travel Savvy Cool Guy” would have paid $1,008 for flights, $480 for a private beach house and $158 for a weekly car rental, for a TOTAL of……..$1,646

 

I’ll do the math for you.

That’s a difference of $2,167.   A 57% savings.

In fact, you could extend your vacation in Kauai to almost AN ENTIRE MONTH and STILL PAY LESS than the “Travel Fool” paid for ONE WEEK! It’s madness.  Complete madness, I tell you!

 

So if you love to travel like we do…quit throwing your money away on things that don’t bring you joy, and instead let that cash take you somewhere cool.  Once you stop being the “Travel Fool” and start becoming the “Travel Savvy Cool Guy”, you’ll be traveling more often, for much longer, for less cash than you ever thought possible.

The Top 10 Reasons Why I Pay Less to Travel Than You – Part ONE

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You know my obsessions by now.  Personal finance.  Food.  Travel.

That last one?  Yeah, it can really wreak havoc on a budget.  We enjoy our share of cheap little weekend getaways, but sometimes you really want to get away.  You know?  Over the years I’ve found some tricks that allow us to travel for less without becoming flight attendants or drug mules.  Both would really cramp our style.  These are strategies that can be used time and time again, with very little effort, by the average traveler.  No mileage hacking or travel reward credit cards involved.

And because this topic is so broad and enormous, I’ve divided it into multiple posts; today’s post is PART ONE, and we’re talking about one of the most expensive factors of your trip…FLIGHTS.

 

Let’s get started.

I’m going to plan a virtual vacation right now, as I type this, so you can see that the discounts I’m talking about are not just random numbers I’m pulling out of the air.  These are real trips I could book today for the prices I show you.   I’m going to use my favorite destination, the island of Kauai, staying for 7 days, 6 nights in mid-June for 2 people.  A fairly standard summer vacation plan.

Let’s pretend I’m a typical traveler living in my hometown of Sacramento, California.  Many people tend to head over to Expedia.com, so I’ll start there and put in my search parameters…

Sacramento (SMF) to Lihue, Kauai (LIH), from Sunday, June 15th through Saturday, June 21st.

 

I get the following results…

CHEAPEST FLIGHT = $1,134 Roundtrip per person on United Airlines (x 2 = $2,268)

 

At this point, if you’re a “Travel Fool”, you go ahead and book it…deciding that must be the going rate for Kauai these days.  

But I know better.

 

1)  Be Like a Gymnast…and Get Flexible

First things first…flexibility is one of your biggest allies.  This is how you’ll be able to find the deepest discounts.  So do some mental stretches and get comfortable with the idea that you may not end up traveling on the day you want or the time of year you prefer.  Or maybe you envisioned staying at a resort, but you’re okay staying at an alternative property.

In fact, you may find that thinking outside the box is not only cheaper but gives you an experience that typical vacations will never provide.

 

2)  Get To Know Your Neighbors

Check neighboring cities when searching for airfare.  Often you’ll find that if you drive just an hour or two, you can reach a hub airport where fares are cheaper.  So let’s go back to our Kauai example.

If I change my departure airport to QSF (this is the code for “All San Francisco Bay Area” airports, see “Hint” below), and press “Search”…I get a new cheaper flight for the exact same dates…

San Jose, CA (SJC) to Lihue, Kauai (LIH)  $970 Roundtrip per person on American Airlines

We’ve now dropped our flights from $1,139 to $970 per person…that is $338 in total savings to leave out of San Jose instead of Sacramento (less than a 2 hour drive away).

 

Hint:  Did you know that you can often search and compare all regional airports at one time, by using what is called a “Metropolitan Airport Code”? For example, the New York City area (JFK / Newark / LaGuardia) is “NYC”.  The Los Angeles area (LAX, Ontario, Orange County, Burbank) is “QLA”.  The San Francisco Bay Area (San Francisco Intl / Oakland / San Jose) is “QSF”.  Go here for a complete list.  These codes are super convenient; when I entered “QSF”, the search engine looked for the cheapest fare out of ALL regional airports, and not just one.  

 

3)  Don’t Travel With the Pack

Travel on low-demand days of the week.  I have the best luck with Tuesdays and Wednesdays.  So let me do a little tap-tap-tap on my keyboard and change my dates.  I’m going to shift my trip by just two days.   I plug in a departure of Tuesday, June 17th through Monday, June 23rd and sure enough…I get an even cheaper fare!

San Jose, CA (SJC) to Lihue, Kauai (LIH)  $693 Roundtrip per person on Delta Airlines

We’ve now dropped our flights from $1,139 to $693 per person…that is $892 in total savings to leave out of San Jose instead of Sacramento and by shifting our trip to Tuesday through Monday.

 

4)  It’s Time to Get Off the Peak

If you’re not set on traveling a particular time of the year, find out the off-peak season for your destination and travel then.  Once again, we’ll go back to our Kauai example.   Instead of traveling in June, which is during a peak season in Hawaii, we’ll go in November.  I plug in a new departure of Tuesday, November 4th through Monday, November 10th.  And…you guessed it…the price dropped…AGAIN!

San Jose, CA (SJC) to Lihue, Kauai (LIH)  $504 Roundtrip per person on Delta Airlines

We’ve now dropped our flights from $1,139 to $504 per person…that is $1,270 in total savings to leave out of San Jose instead of Sacramento, shifting our trip to Tuesday through Monday and going in November instead of June.

 

Did you catch that? Just from applying a handful of strategies, that took me 10 minutes…that’s a difference of…

$1,270…a 56% savings!

The “Travel Fool” would have paid $2,268 for 2 round-trip tickets, but since you’re the “Travel Savvy Cool Guy” you knew better and found them for $1,008!

 

You’re already on your way to vacationing at half-price…stay tuned for PART TWO…I can hardly wait…we’re just getting started!

 

UPDATE:  I’ve been using a site called SkyScanner.com recently and I love it.  It essentially does all of the steps above for you.  You can even enter parameters that will search for the cheapest place to fly in the world anytime in the next year!  So if you know you have $200  bucks to spend, just enter your departure airport, and it will tell you where you can fly and when in ascending order by price.  Any destination under your max budget is a possible vacation spot!

 

How to Feed 5 People for $5…and It’s Delicious!

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Dear chain-sandwich-shop-named-after-a-mass-transit-system,

I sit here laughing pitifully at your poser of a deal.  $5 foot long? Ha! I fed our family of 5 for just 5 bucks…and that’s WITH leftovers that everyone fights over later.  Top that.

Sincerely,

Mrs. Nickels

 

Last night I fed my entire family for $5.  Less than that technically, if you consider we had leftovers.  And it didn’t taste like cr@p.  In fact, it was deliciousness on a plate. What is this wonderfood?

PIZZA.

Oh that glorious concoction of crispy yet soft dough, slathered in slightly spicy sauce, with an ungodly amount of cheese and fresh toppings.  Aye aye aye.

It’s definitely a staple here at the Nickels house. It’s cheap, it’s fast and it’s finger lickin’ delicious.  And yes, the recipe is at the bottom of this post.  I wouldn’t leave you hanging, would I?

 

CHEAP

I buy my bread flour,  yeast, olive oil, mozzarella and sauce in bulk at Costco.  This saves us a ton of dough money. (Wow, that was a bad pun. Sorry.)  The toppings I usually purchase at my local grocery store.  I’ve approximated my cost per pizza in parentheses.

Bread flour $9.00 for a 25-lb bag  ($0.36)

Yeast $4.64 for a 2-lb bag  ($0.02)

Olive Oil $15.00 for a 2-liter bottle  ($0.50)

Shredded Mozzarella Cheese $15.00 for a 5-lb bag  ($2.00)

Prego Sauce $8.48 for 134 ounces ($0.25)

Sliced olives  $0.99 for 4 ounce can ($0.50)

Mini Pepperoni  $2.99 for 5 ounce package ($1.50)

My GRAND TOTAL per pizza?     $5.13

Do you understand how cool that is?  If you can get even half of your weekly dinners made for $5 or less, your grocery bill will start looking more like your phone bill and less like your mortgage payment.

 

FAST

First, if you haven’t invested in a bread machine, you should.  There’s no reason you need to pay full price either.  There are plenty on Craigslist, eBay or even on Amazon (used) for a fraction of the price of a new one.  I love mine.  Can you tell?

This is my magically-makes-pizza-dough-in-45-minutes machine

It takes me about 10 minutes to pull the ingredients together, toss them in the bread machine, and press “Start”.  Seriously.  The machine takes it from there…mixing, kneading and rising for another 45 minutes.  This is easy stuff, folks.

Once the dough is done, it’s another 5 minutes of pressing out the dough in the pan, spreading sauce, sprinkling cheese and toppings.  Stick it in the oven for about 14 minutes and that sucker is DONE.

The pepperoni and olive creation is ready to enter the oven…I’m already salivating.

 

FINGER-LICKIN’ DELICIOUS

It’s so stinkin’ good.  Seriously.  The dough is soft on the inside, crispy on the outside.  In fact, after it came out of the oven, it was sliced up and gobbled so quickly I forgot to take a final ‘finished’ photo.  So this post-dinner snapshot will have to do.

This doesn’t do it justice. But here’s a glimpse of what we enjoy here at the Nickels house on a regular basis.

 

If you’ve already started cooking more at home, then here’s a virtual high-five *SMACK*.  But if you want to get hard-core, buy in bulk and make your own pizza dough, and for $5 you can feed a small army.

 

 

 

~~~   The Nickels’ Basic Pizza Recipe   ~~~

Ingredients:

4 Cups Flour (preferably bread flour, it has a better gluten ratio)

1 tsp salt

1/3 cup extra-virgin olive oil, plus a little extra to brush on the crust

1 tsp active dry yeast

1-1/2 cups warm water

1 cup of your favorite pasta/pizza sauce (we use Prego)

3 – 4 cups shredded mozzarella

Toppings of your Choice

Directions:

In a small bowl, pour the 1-1/2 cups of warm water (warm, NOT hot or it will kill the yeast instead of activating it) and add the yeast.  Don’t stir, just let the yeast sit on the surface of the water; it will slowly dissolve.  Set it aside.  In a medium mixing bowl, stir the flour and salt together.  Drizzle the olive oil into the flour mixture, stirring as you pour.   Now we put the ingredients into the bread machine.  (If you don’t have a bread machine, you can google ‘pizza dough recipe’ and follow the directions for mixing/kneading/rising by hand.)

IMPORTANT!  Pour the yeast/water mixture into the bread machine FIRST, THEN add the flour mixture on top.  No need to stir, the machine will take care of everything.  Set the bread machine to the dough setting, and press “START”.  It should take about 45 minutes.  At this point, if you need to prep any of your toppings, this would be the time to do that.  If not,  then go enjoy your 45 minutes!

Once the dough is complete, set your oven to 475 degrees.

Remove the dough from the bread machine and plop (yes, that’s a verb if you ask me) it out on to a heavily floured surface, stretching it a bit to fit into the pan you’re using.  Turn the dough over to get both sides floured, and then place the stretched dough into your pan.  I use a large cookie sheet with raised sides.

Once the dough is stretched out to the edges of the pan, I take a fork and poke the pizza dough just on the inside area where I don’t want the dough to rise.  So in other words, avoid the outer edges, because you want a nice soft doughy crust.  Don’t you?  Then brush olive oil on the outer crust.

Take the cup of sauce (or more if you like things “saucy”) and spread it evenly over the inner area of the crust.  Sprinkle salt lightly over the entire thing, and then add the mozzarella cheese.  Lastly, add whatever toppings you like.  (If it were just me, I’d have something along the lines of goat cheese-caramelized onions-bacon-mozzarella, but this was a family-friendly pizza, so I went with mini pepperonis and olives.  We also like switching out the pasta sauce for BBQ sauce, and topping it with barbecued chopped chicken and thinly sliced red onions. Mmmmm. Maybe next time.)

The time will vary from one oven to the next, but our pizza cooks in about 14 minutes at 475 degrees.  Don’t be afraid to let the crust get golden brown and the cheese to get that nice caramel color, it makes it so flavorful!

 ~~~

 

‘Expectations’ is a Dirty 12-Letter Word

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Yup.  That’s a dirty word in our house.  (And you counted the letters, didn’t you? Busted.)  Anyway, for as long as I can remember, I’ve always had expectations.  I guess you could say it borders on OCD, or could at least be classified as some minor form of it.  If things don’t line up the way I think they should or would, my insides cramp.  I get flustered, my pulse increases and I get a little…um…”snippy”.

On a chilly Saturday afternoon, about a week before this last Christmas, my husband and I had plans to go shopping and knock those final gifts off of our kids’ list.  I was already looking forward to our day together, even the Friday night before.  There was a little spring in my step, and I believe I may even have whistled while I did the dishes that night.  I really enjoy our time together, and had mentally laid out the next day in my mind.  Sleep in…pull on our “casual-Saturday-chic” clothing…stop and have a quiet Starbucks date…head out to the stores…have lunch at our favorite cafe…drop by the bookstore to browse…head home.

Saturday started out promising…we slept in.  But it went haywire from there.  Soon after waking up, our daughter prances out to the family room and announces she needs a prom dress.  My husband and I both say in unison…”Today?”  She looks around coyly.  “Yes, it has to be today because I’ve got cheer on Monday and Tuesday and then Wednesday is Youth Group and then…”  She continued her well-laid-out argument, and I admit, I stopped processing the words I was hearing.  In my head, she began to sound like an adult from the Peanuts cartoons.  “Wah-wah, wah-wah-wah.  Wah-wah-wah-wah.”

Don’t get me wrong.  I love her.  But her nickname around here is “Last-Minute Louie” for a reason.  Everything is needed today, or due tomorrow. She never could have known my plans for that afternoon, but in one sentence, an entire day’s worth of expectations were obliterated.  I wasn’t happy.  The three of us head out to the car.  My whole demeanor changed, and my husband called me out on it as we pulled away.  I didn’t want to make our daughter feel bad, certainly not.  But I couldn’t help but be…DISAPPOINTED.  I had an idea in my mind of how our day was going to go, and it didn’t happen.  Well, I take that back.  We ended up with 3 out of 6.   I slept in (there’s 1), pulled on my Saturday-chic clothes (there’s 2) and went to some stores to look at prom dresses (that kind of counts as 3).   I guess a 50% success ratio isn’t too bad. (That’s my pitiful effort to be positive.)

Last-Minute Louie in “the” prom dress. Her smile made it all worth it.

One day not too long after this occurred, when faced with yet another disappointment, my husband looked me straight in the eye, and said, “You know what the problem is? You’re not any less lucky in life than anyone else.  You just have far more expectations than the rest of us, so the odds are that some of yours won’t be met.”   Damn, I hate when he’s right.

Since that day, I’ve had several opportunities to let my unmet expectations get the best of me.  Many (but not all) of those times I’ve managed to change my outlook.  I’ve tried to be more like the GPS in my car.  Friend cancelled at the last minute?  Recalculating.  Driver doesn’t merge in the every-other-car pattern like everyone else?  Recalculating.  Dinner didn’t turn out as expected?  Recalculating.   I’m learning to work within the parameters I’m given, and make the best of the situation.

In fact, with a goal to retire in 7 years, that flexibility is crucial.   Because investing plans don’t always go as expected.  The stock market may not meet our projected returns.  We may not reach our savings goals every year.  Instead of focusing so hard on that magic number “7”, I’m learning to set aside my rigid, unforgiving expectations.  Maybe we’ll reach our goal on time.  Maybe we won’t.   But either way, you can call me Garmin…that reliable ‘ol GPS just finds the next best route given the situation, and so will I.

I Hate “SUBMIT Button” Remorse

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My fingertip hovered over the “SUBMIT” button for much longer than what would be considered normal. I fretted. I worried. I walked away and came back. I knew that once I hit the button, there was no going back. No changing our minds.

We’ve decided to give up our unlimited data plans on AT&T.

I know you just shuddered too, right? (Not.)   It may sound crazy and overly dramatic, but my husband and I have been back and forth over and over, trying to decide what to do.  I guess the finality of it just bothers me. You can’t even get unlimited data plans on AT&T anymore. Only those that had them originally were ‘grandfathered in’ and allowed to keep them. We are heavy data users, but the undeniable truth is that we were paying WAY TOO MUCH STINKIN’ MONEY each month on our cell phone bill. For four iPhones, we were paying $226 per month. Aye, aye, aye. (I know.  That’s outrageous. We may be budget-minded, but we’re Apple people, okay? So shoot us.)

I kept getting these annoying little messages from AT&T to join their new “Mobile Share Value Plan”.   There must be something in it for them.  So every time I read one, my stubborn alter-ego emerged……

“I WON’T BUY INTO YOUR EVIL PLAN AT&T!!! I WILL DIE BEFORE I LET GO OF MY UNLIMITED DATA PLAN!  I AM NOT YOUR PUPPET, AND I WILL NOT BE MANIPULATED!!!”

antipuppet

I beamed with pride (at myself).  I will NOT be a drone.   I will NOT give in to slick advertising.   I will stand valiantly atop the unlimited data plan hillside, with my “I WILL NOT SURRENDER!” flag staked firmly in the soil.

Before I go any further, let me declare that I’ve officially revealed a part of my personality I’m not proud of.  That is, if I detect that I’m being manipulated somehow, I will do everything I can to NOT do whatever “they” want me to do.  And by this point, AT&T was causing my manipulation-radar to go bananas.  But after a few weeks of these annoying messages,  I decided to step back and analyze it rationally; the way you should always approach financial decisions.   I needed to think about this expense with my head, and not my manipulation-radar.

AT&T estimated that with the new “slick” plan, our bill would be about $130 + taxes/fees, including my 23% corporate discount.   And if you remember from a few paragraphs back, we’re currently paying $226 a month.  The key to the new mobile share plan, is that instead of unlimited data, our 4 devices would share 10GB per month.  The next obvious question is…is 10GB enough?  Would we go over?  Would we be in a constant state of possible-data-overage-induced stress?  I had no sense of current usage, so I went on the AT&T website and reviewed our data usage for the last 12 months.  On average, we used a little less than 5GB monthly.  So even if we doubled our data usage, we still wouldn’t reach our maximum.  (And I do realize that there is something in it for AT&T; data usage will only increase over the years, so the fewer number of customers on unlimited data plans, the better it is for them.)

At this point, I knew what we needed to do.  It only makes sense for us to give up our unlimited data plans.  So we did.  We put up our imaginary white flag of surrender, and clicked “SUBMIT”.

Am I still a little uncomfortable with the idea that I can no longer be a wasteful glutton at the AT&T data buffet?  Yes.  Am I a little worried that my bill will not be as AT&T “estimated”?  Yes.  Am I afraid I’ll have a case of “SUBMIT button” remorse?  Absolutely.

Only time will tell…I’ll be sure to give you an update when I get my first ‘normal’ bill…

(Funny) Moment of the Week: An Awkward Conversation

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awkwardconvoI’ve figured something out the last week or so.   While this was created as a “personal finance” blog, and that angle is very satisfying, on occasion I think I’d like to look back on my week and see what things I accomplished, things I didn’t accomplish, humorous things that happened, etc.  So this is the first of many “moments of the week”, a sort of brain-dump if you will, of things I think are worth sharing.

One such humorous little gem occurred the other day, and it still makes me laugh, so I’m sharing it here.

It all started when I got an email.  The company that hosts my website, BlueHost, contacted me requesting to confirm some things about my new account.

So I called them up, and a nice gentleman answered the phone.

 

Nice Guy: “Thanks for calling BlueHost, this is Scott*. What can I do for you today?”

Me: “Hi, I received an email requesting I call you to confirm my new website.”

Nice Guy: “Ok, great. What is the web address of your site?”

Me: “Sure. It’s www.myshinynickels.com.”

Nice Guy: “Hmmm. It’s not coming up. Is this an adult site?”

Me: “Um, no……it’s just a personal blog.”

Nice Guy: “Hmmm. Ok. Let me repeat it back to you. w-w-w-dot-m-y-s-h-i-n-y-n-i-p-p-l-e-s-dot-com.”

[long pause………….]

Me: “Um, did you just spell myshinyNIPPLES.com? It’s supposed to be NICKELS, like the coin.”

[Another awkward, painfully long pause]

Nice Guy: “Ohhhhhhhhh ok, that makes more sense. Yup, here you are.  Sorry ’bout that.”

 

Then I pressed MUTE, and laughed. Hysterically.  Like in a crying-so-hard-I-can’t-see-because-my-tears-are-clouding-my-vision kind of way.   I managed to un-mute just long enough to squeak out ‘yes’ and ‘no’ answers for the rest of the phone call, in between fits of laughter.  Then, finally, it was over.

Poor Scott, I’m sure that was far more awkward for him than it was for me.  And I’m 99% sure that he went home that night and told his [girlfriend/wife/mom] about it.

People often wonder what their purpose in life is.  Why they were put on this planet.  I’m starting to believe that my sole purpose in existing is to provide humor by way of awkward moments.  You’re welcome, Scott.  You’re welcome.

 

* Name has been changed

Guest Post by Mr. Nickels: Don’t Forget to Be Happy on the Way to Happiness

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unhappy-smiley

I’m not the talented writer of the family, but what the heck. I’ll give this a shot. Just know, if this flows and makes sense, Mrs. Nickels did some editing.

 

The Information “Sponge”

Gaining control of your finances as a couple is hard. Having to do it on your own without support is even more difficult. It has already been an adventure, and over time, our plan has continued to evolve. At first, it felt like a daily struggle. Obviously getting rid of the debt was the number one priority, then we started putting big chunks of our salary into retirement accounts.

Mrs. Nickels’ first wake up call was the catalyst that initially sent us on this wild ride, and being that she, by profession, analyzes statistics/finances, it was obvious to me that she should be in control of our retirement plan. And, it turns out, Mrs. Nickels is an information sponge. When she gets an idea in her head, she will read, read, and read more, in a never ending cycle. Then the Googling begins and she reads even more. I do have to say, when she wants something, she’s all in. (I’m lucky she wanted me).

Going Overboard

Then it happened. What I like to call the “Suze Orman” effect. We had a basic plan of what we wanted to do and we were diligently putting away money for our future. Then Mrs. Nickels read one of Suze Orman’s books. (Not a good idea.) It scared the crap out of her.  All of a sudden, so much money was going into our savings, that we were basically broke.

I probed to find out her thought process behind this move. She was scared. She was under the impression that if we didn’t feel the pain of saving, we weren’t saving enough. With no goal, we didn’t have a clue as to how much we should be saving, or how long it would take us to be financially independent. After some discussion and research, we arrived at a goal. Mrs. Nickels did some Excel magic and we had a timeframe to meet a goal that we were both happy with. And, we didn’t have to cut back to eating only three days a week to reach it.

Your goals and priorities need to be clearly defined. They may change, but not having a goal can lead to those “What the heck are we doing?” moments. Sure, we could live an extremely frugal lifestyle and reach our goal that much faster, but at what cost? What would our lives be like? Is it worth it to reach our goal but have no happiness along the way? It’s not worth it to us. We decided that we need to have a life while saving for a financially free life down the road.

Going Overboard (the other direction)

There are bad ideas that come out of thinking this way also. Soon after starting my new job, I got it in my head that we could afford to get me a new car. I always liked the BMW Z4. I started looking and saw the new body style for the first time. What a SWEET ride! I wanted that. We talked about it and came to the conclusion that we would make a large down payment and could afford the monthly payments while reaching our goals.

It would mean that our goals would be reached a year or so later, but we were already planning to retire early, what’s another year? Then I took a hard look at the numbers. Mrs. Nickels had put together a detailed spreadsheet of our retirement plan. After the realization of what this car would really cost, I quickly moved past my selfishness and made the right decision for us.

A Balancing Act

For our situation, it’s all about balance. There are things we could cut out to save even more money, but we aren’t willing to give up those things to shave just one more year off of our working lives. At the same time, most material possessions aren’t worth extending that working life either. We are constantly having discussions about our plans and where we want to be. Right now, the majority of our investments are in stocks, but we are considering moving into peer to peer lending and/or real estate. Are we willing to be landlords? Is the risk too high for peer to peer lending? These are questions we ask ourselves and discuss almost daily.

Communication is key to our success. It would suck to reach our goals and hate each other when we arrive. Our plan is to start our new financially free life the same way we started our married life. Happy and wanting nothing more than to be together. Being best friends and enjoying life.

5 of the Biggest Budget “Leaks”…Do You Have One?

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As you probably know, we try to get our own plumbing done around here.  Just the other day, our shower drain was stopping up.  We pulled out our drain snake attachment (it attaches to a standard drill, very handy) and roto-rootered the heck out of that thing.   About three and a half hairballs later, it was once more draining like it should.  Ahhhh…that’s better.  Showering while standing in 3 inches of grey water ain’t nobody’s idea of a picnic.

And while this post isn’t actually about plumbing, it IS about fixing leaks…in your finances.  It’s easy to identify the big items that put a major drain on our bank account…homes, cars, dining out…but it’s the small and quiet leaks in our spending that, when combined, add up.  Whether it’s fees we could be avoiding, unused subscriptions or little pockets of extra money we’re not tapping into, they are all small-scale wastes.  What are these slow leaks, you ask?  Here’s just a few…

 

1.  Unused Memberships / Subscriptions

Look through your last few months of bank statements.  Are you subscribing to anything that you no longer use?  Be honest with yourself, and cancel them, people!  If you get sincere joy from them, then by all means, carry on.  But just be honest.  (Do you actually read those issues of Popular Science, or have they stacked up over time to the point that they have become an extension of your coffee table?)

  • Gym memberships
  • Netflix, Xbox Live or other streaming media membership
  • Magazine / Newspaper Subscriptions
  • Weight-loss memberships (Weight Watchers, Jenny Craig, etc)
  • Food-delivery subscriptions (Nutrisystem, food co-ops, etc)
  • Birchbox, Glossybox, other monthly subscription services…

2.  Floating Debt

Are you continuing to pay the minimum payment on a credit card every month, while letting a chunk of money sit in your savings account?  You figure that you need an emergency fund, right?  Sure.  But if you have anything more than $5,000 sitting in a low-interest savings account, while you sit on credit card debt, you need to wake up.  The money you have sitting in a low-interest savings account is likely earning less than 1%, while your debt is probably costing you anywhere from 10-30% in interest on your balance every month.  Quit floating your high-interest credit card debt; take your extra savings that’s making you next to nothing, and put it towards your debt. Ta-freakin-da.

3. Not Taking Advantage of the Company Match for your Retirement Plan

If you have an employer-sponsored retirement plan at work, but are not putting in enough to get the full match, you are THROWING MONEY AWAY.   Many companies, if not most, offer a partial match for contributions you make to your retirement plan at work.  At my company, for example, they match 50 cents for every dollar, up to 6%.   So over the course of a year, if I made $100,000, and contributed at least 6%, which is $6,000, the company will contribute an additional $3,000 into my account. If I’m contributing anything less than 6% of my salary to my retirement plan, then I’m giving up free money. Plain and simple.

4.  Overpaying on Insurance

If you have an excellent driving record, and you own your vehicle free and clear, consider increasing your insurance deductible to $1,000 and dropping collision and comprehensive coverage.  Your monthly premiums should drop substantially.  Also, check with your insurance company if they offer discounts for bundling; often if you combine your auto and homeowners insurance with one company, you can save.

5.  Wasted Utilities

Leaving the A/C or heat running while no one is home is a complete waste…of energy and money.  We have a “smart” thermostat, The Nest, which detects if we’re home, and has decreased our monthly utilities by 40%.  Even if you don’t have a “smart” thermostat, chances are you have at least a programmable thermostat, so take a few minutes to program it!  Aye, aye, aye.

 

At our house, we try to do an annual “leak check” every year about this time.   I thought for sure I wouldn’t find anything, but low and behold, I checked our transactions from the past month, and ACK!…I found a couple of things.

  • Last year we subscribed to an online tutoring service, IXL.com, for $10/month.  This was at a time when my daughter was having trouble focusing on math, so I found a tutoring site that was fun and interactive for her, and it truly did help.  (Yes, even a mother like me who has taken 4th-year calculus on differential equations and number theory is no help to a child who is determined to listen to anyone but me. Sigh.)  But once she improved her math grade, I forgot about it, and continued to pay the $10 monthly fee for several months after. Ugh.
  • Two years ago we bought an Apple iPad, and subscribed to the data plan through AT&T for $15/month.  I had cancelled the data plan a long time ago, but then reinstated it a few months ago while we were traveling. But we’ve been back for 2 months, and yup…still paying $15/month.
  • We were subscribing to a video game rental service, GameFly.com, for my son.  It was $17/month.  Eventually we reached a point where there were no games that he wanted to play (or could play due to mature ratings), so he slowly worked through the games in his queue, until there were NO games in his queue.  We continued paying $17/month for months until I did this check.  Yikes.

Just canceling those three above saves us $42 a month…over $500 a year.

So…I’m as guilty as the next guy (or girl).  Even when I think I’ve tightened things up everywhere I can, there are still places where I find a slow leak here and there.  So take a hard look at your own expenses…do YOU have a leak?

Plug it.

So You Want to Retire Early? It’s All About the Numbers

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numbersA comment from a reader on my last post, Would You Rather Have Money…or Look Like You Do?, asked for some ‘nuts and bolts’ information on our ‘retire early’ strategy.  I was planning on writing this in the near future anyway, but moved it to the front of the pack. So “Paul V”, this one’s for you. My motto “Live Smart. Save Money. Retire Early.” pretty much sums up our strategy. We’ll go through them one-by-one.

1.   Live Smart.

This means cutting back on at least the ‘big ones’…housing, car expenses, food…and, when possible (it often is), increase income.  We made most of these changes as soon as we decided to turn our financial life around.

Efforts we made to LIVE SMART:

  • Downsized our home.  (This may mean renting out your current home and renting something smaller and less expensive, or selling your freakishly-large McMansion with the equally-large property taxes.  Don’t be afraid to make a big change, especially if it means big monthly savings.)  Even a $500 monthly savings = $6,000 a year.  We saved thousands per month when we downsized.
  • No car payments.  If your current vehicle is worth more than $10,000…sell it and buy something less expensive and practical.  There are plenty of used cars that are economical and would pass the coolness test.  Once you sell, invest the cash difference, if any.
  • Cook more, eat out less (when you do eat out, go somewhere that gives you high pleasure-per-dollar.  If you’re going to pay someone else to cook and bring you food, it should be WORTH IT.)
  • Buy groceries in bulk – we shop almost exclusively at Costco.
  • Make sure you’re getting paid what you’re worth.  If not, seek out a higher-paying job.  (My husband found a new job making 30% more, even in a depressed job market. It’s worth the effort.)
  • Increased our auto insurance deductibles to $1,000, and because our vehicles are paid off, dropped comprehensive coverage completely.  These two changes cut our monthly premiums by 50%.  We comparison shop every year, and the best value the last 3 years in a row has been esurance.com.
  • Lowered our heating/cooling bill by 30-40% after installing The “Nest” Smart Thermostat. Paid for itself in 3-4 months.
  • Learned some DIY tricks.  Treat every repair/maintenance issue as an opportunity to do it yourself.  This won’t always be possible, but it’s always worth looking into.  Start with small projects, and work your way up to bigger things.
  • Once we made the changes above, the monthly cash we freed up skyrocketed.  We eliminated our debt, and then started Step 2…Save Money.

2.    Save Money.

  • Before you can know your own savings strategy, you need to play around with the numbers and see what different savings models do to your timeline. Go to Networthify.com and use their early-retirement calculator.  I suggest using 9% as your rate of return, and 4% as a safe annual withdrawal rate.   We plugged in our numbers, with a 60% savings rate, and it gives us an estimate of about 7.5 years until retirement.
  • For those with a net annual income of $100k or more, you should be aiming for a 50% savings rate…if you want to get hard-core, and really shorten your timeline, aim even higher.
  • Our first savings efforts went towards our employer-sponsored retirement plans (401k).  Next we each opened a Roth IRA at Charles Schwab.  Then the rest of our savings is invested in a regular taxable brokerage account, also at Schwab.  I like Schwab; their website is intuitive and simple to use, and opening a new account is as easy as it comes.  They process deposits and purchases quickly as well.
  • Invest in low-cost index funds
    • The mutual funds you invest in should never have expense ratios of more than 1.0%.  (Take a look at the ‘fact sheet’ for each mutual fund, and search for ‘expense ratio’ or ‘net expense ratio’.  This is how much the fund manager will charge you to manage your investments.)  That’s why index funds are so great.  Their expense ratios are usually 0.25% or less, which means they take a much smaller cut of your money to manage it.
      • Example:  If you have $250,000 invested in “Mutual Fund A” with a 2.0% expense ratio, they will take $5,000 out of your fund in fees each year.  If you have that same $250,000 invested in an index fund, “Mutual Fund B” with a 0.25% expense ratio, they will only take $650 each year.  Invest in index funds and keep more of your money.
    • The majority of our money is invested in four (4) index funds.  50% is in an index of the S&P 500, 20% in a medium-cap index, 20% in a small-cap index, and the last 10% is invested in an international index.  We’ll eventually move some of our balance to a bond fund (less risk) as we get closer to our retirement date.

3.    Retire Early.

  • If you used the handy calculator I suggested in Step 2, you should have a good idea of what your savings strategy will be and the timeline until retirement.
  • When your investments reach the point that a 4% annual withdrawal rate will cover your desired expenses, you are financially independent.
  • When you retire, you’ll continue to live smart, spending money on things that mean the most…for us this will be travel and eating good food.  In every other category, we’re going to live as economically as possible.
  • Check out one of the best posts I’ve seen on the math behind early retirement, by a blogger known as Mr. Money Mustache.  Both he and his wife retired at 30 years old.  He does a much better job explaining the early retirement strategy than I ever could.

 

Once you understand the power behind extreme savings rates and compound interest, the goals you can reach will blow your mind. Someone starting with a $0 balance, who begins saving 50% of their 100k net income can retire in 13.7 years with nearly $1.4 million dollars.

After my husband and I started living smarter, we were able to quickly pay off our debts.  Then the extreme saving/investing started.  We couldn’t believe how much we were able to put away.  Many times we’ve said to eachother, “Why did we wait so long to wake up?” 

Would You Rather Have Money in the Bank…or Look Like You Do?

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A few weeks ago, while sifting through an old memory box, I came across one of my childhood diaries.  It looked so aged; the bright pink and blue pattern on the cover had faded over time to dull pastels.  But the sight of it brought me right back to that time. 1987.  I was 9 years old.

I couldn’t help myself.  I cracked it open.  I began to read the excited, innocent and often dramatic musings that I wrote as a young girl.  One entry struck me.  It read:

“Dear Diary,

Yesterday was the best day ever.  We’re so rich.  My parents bought a new Camry, and my brother and I got a bunch of new toys. I also got a new pink sweater from Mervyn’s.  It’s SO CUTE! [entry continues…]”

Logic as a 9-year-old was that if we’re buying these new things, then we must have a lot of money.  But, we really didn’t.  My parents were financially responsible, so the fact that a new car coincided with a couple of new toys and a sweater was purely coincidental. It provides an interesting peek, however, into how I perceived wealth and money at that age.  A new car, toys and clothes were indicators that we were financially set.   But the reality was that while we were not living in poverty, we were not wealthy either.  We were a typical middle-class family with my dad as the wage-earner and my mom who was the stay-at-home parent.  We always managed to have enough, but we were far from rich.

The day I wrote that diary entry, I remember well.  I recall the excitement I felt.  But my feelings were connected to something greater than the thrill of newly-acquired material possessions.  I couldn’t have really known, or even described the greater sense of relief I felt, but looking back now, buried under the excitement was a calm peace that comes with financial security.  It may have been an illusion, but I felt it nonetheless.

Has Anything Changed?

This retrospective look back at my view of prosperity at 9-years-old got me thinking.  26 years later…what are my perceptions of wealth now?  What does it mean to be successful/prosperous/wealthy?  I can already say for certain that I’ve passed through several “stages” during these last 26 years.

In my late teens, being well-off meant your parents bought you a brand new car for your 16th birthday, and at anytime you could request a small lump sum of cash for a trip to the mall. You would not be questioned as to whether your household chores had been completed, as you had none.  Then came the “house-poor” 20’s.  I had a well-paying job; it was a race to see how much I could acquire, and I figured that the bigger the house, the more successful I must be.   Cars, a larger home, TVs,  nice furniture…check. Going into my 30’s, I began outsourcing various tasks I found unpleasant.  A weekly cleaning service was hired, a gardener began to take care of the yards, a trip to the nail salon every week or so, an expensive hair stylist, and a monthly restaurant expenditure of $1,500 a month.

What those years represent is the chasing of a feeling.  The constant, relentless pursuit of that moment when you feel that you’ve arrived and you’re finally living in abundance.  But despite the fact that I was surrounded in nice things, in a spacious suburban home, with hired help taking care of less-desirable tasks, that moment didn’t come.  I was still viewing prosperity through the glasses of a 9-year-old girl; if I just acquire enough, it will mean I must have lots of money.  It will mean I’m financially secure.  But, I wasn’t.  I had cars, but no money.  I had nice furniture, but no money.  My kids were in private preschool, but I…had…no…money.  While my gardener mowed my lawn, he probably had more in his checking account than I did.

Do You Feel Successful Now?……How About Now?……Or, Now?

But what I find interesting, is that during all of the mad, crazy spending I never felt “prosperous”.   It was just my life.  Even though our bank statements showed some nice deposits, it showed withdrawals at the same rate or faster.   Every month was just another run on the hamster wheel.  Money comes in, money goes out, without anything meaningful to show for it.  Annual pay increases would come, and…nope, still didn’t feel financially secure; and they were often spent before they were earned.

When my spending finally caught up with me a few years ago, I had my first financial wake-up call.  I had reached the bottom of a giant chasm, and there was nowhere left to go but up.  We turned our finances around with a fierce intensity. Soon the $40,000 in debt was paid off, and then we had our second financial wake-up call.  It wasn’t long before money was being saved…at a very fast rate.  The chronic stress I didn’t realize I had, was falling away.  With every deposit into our investment account, I had a feeling of exhilaration.  And the “high” wasn’t temporary.  At any time, I could check our account, and see the progress we were making.   I was no longer chasing the high that comes with the consumption of “stuff”.   I moved from the “law of diminishing returns” to a place of increasing returns.  Returns on investments that were growing on a daily basis.

For me, feeling financially at peace didn’t lie in what we spent, but in what we kept.  For so long, we spent all of our money and energy chasing the ILLUSION of prosperity, instead of prosperity itself.

And while we spend less and save more than we ever have before, we’ve managed to simultaneously increase our satisfaction with life.   I find happiness in things where money isn’t necessary; playing board games with my children, making s’mores in the backyard, a bike ride and picnic with my husband.

The Milestone

I’ll never forget the excitement when we reached that first $100,000 milestone.  In 2 years, we had gone from $40,000 in debt to $100,000 saved and invested.  I stared at the number, took a screen shot on my laptop to capture the moment, and smiled.

100kMilestone

Sitting there on the sofa in my living room, the smile soon turned to a release of tears.  Not a flood, but just a few.  I could barely grasp what we’d accomplished, yet I could see our future in my mind; imagining where we’d be in a month, a year, 5 years.

The excitement was familiar to me; but this time it wasn’t connected to the thrill of newly-acquired material possessions.  This time it wasn’t an illusion of financial security as seen by a 9-year-old girl.  I was excited and at peace, and this time…it was real.