Complete list of Saving articles

The problem with Hotels.com price matching guarantee
About a month ago I made a booking on Hotels.com based on friends' recommendations. I was happy with the process, and I was assured in my decision because the site had a price matching guarantee: if I found a lower price elsewhere, then I could get a refund for the ...

Applied math: which egg size is cheapest?
I recently started eating egg whites regularly, and that meant I needed to start shopping for eggs every week. My local grocer sells a variety of egg sizes. Can you figure out which one is cheapest? Here are the prices: Here is how I approached the problem.

The gimmick of dollar cost averaging (DCA)
You just received a $100,000 in cash. Do you invest the money all at once, or do you spread it out into equal investments using dollar cost averaging? Most advisers will say to dollar cost average, but I do not think this is the right answer. Dollar cost averaging has nearly ...

Should you tip for water in bars?
In most American bars, it's customary to tip a dollar or two per drink. People usually don't tip for tap water because it's given for free. But does that make sense? I thought about a few reasons why one should tip for tap water.

Quick tip: how I saved money on servicing at the car dealership
I recently went to my car dealership for scheduled maintenance. Now I will already admit this was probably not the best decision. If you are trying to save money, it is often better to avoid overpriced dealerships and go to other mechanics (a former mechanic makes this case of how overpriced ...

Bars and restaurants: often giving you 12 percent less beer since 2008
I was ordering a beer at a restaurant, and I was asked if I wanted the "tall" or a "pint." I suspected the "tall" was a better value, but I always ask to make sure. Occasionally bars will charge a premium on larger quantities, as illustrated in this post on Freakonomics: ...

Beware of smiling faces in financial advertising
Finding the best savings account is mathematically simple. You should shop around for the best rates at reliable banks, and then pick an account that offers a competitive rate. But our predictably irrational ways can get in the way. I was reading an interesting example of how something as simple as ...

The Flexible Spending Account: an “investment” with a great “ROI”
Flexible Spending Accounts (FSAs) are an incredible way to pay for health expenses. While FSAs can be complicated and require some effort, I now think their rewards are worth the hassle. I want to explain a bit about how FSAs work, and then I'll get into the math. Most people know ...

Do you want batteries with your cereal? An example of behavioral economics in retailing
The last time I was at a local Target store, I noticed something strange. At the end of the cereal aisle, there was a display rack for batteries. Not something complementary like snack bars, or nuts, or hot chocolate mix. The rack had batteries, hundreds of packs of disposable batteries ...

Study: jealousy can drive purchases
Do you buy things because you can really afford them, or because you see people poorer than you have bought those things? We are influenced by how others spend, and a recent paper documented how social status can affect our spending. From the press release at the Journal of Consumer Research:

Salami tactics: how to get anything you want, one piece at a time
If you go around asking for free things, you will occasionally get lucky. But if you habitually bother people, you will be labeled as a pest and your luck will run out. That's why it pays to be more subtle in your requests. This post is about a negotiating technique that ...

Beer arbitrage for Dark Lord Day tickets
Dark Lord Imperial Stout is one of the most highly rated and desired craft beers. The market for Dark Lord is especially interesting because its supply is very restricted. Dark Lord is only distributed on one day of the year in a festival known as Dark Lord Day. While festival tickets cost ...

Capital One Venture card rewards math: how does it stack up?
I saw an ad for Capital One’s Venture card that got me curious. The ad stated the Venture card offers much better rewards than other cards offering miles, and it was named as one of Money Magazine's best credit cards. That claim naturally got me skeptical, so I dug into the ...

Budget and expense tracking – quarterly review
Three months have already gone by this year. How are you keeping up with your financial goals and New Year's Resolutions? Now is a good time to evaluate if you have been keeping up with your budget and spending plans. If you are spending too much, you have enough time left ...

Allais Paradox: how low probability events deceive us
This is a fun example in decision theory that demonstrates how are preferences can be inconsistent. As a point of trivia, Maurice Allais won the Nobel Prize for other research, but he is most remembered today for this paradox. (h/t: Falkenblog). The paradox is best illustrated with a brief experiment that I'll ...

Why would CD rates be lower than savings account?
On the surface, it would seem certificate of deposits (CDs) should always offer higher rates than savings accounts. With CDs, you have to lock your money in for months at a time, invest a certain minimum, and suffer penalties or lost interest if you want your money early. With many ...

Why you should ignore car insurance savings claims
When one company advertises it can save you money, it sounds like a deal. But when two companies claim they can BOTH save you money, you have to think something is fishy. Such is the case with auto insurance. Currently both the companies State Farm and Allstate have advertising claims that ...

4 ways tracking expenses helps when filing taxes
Years ago I started tracking expenses simply to see how much I spent and earned. I was thrilled to see how writing down all my purchases made me more aware of my spending habits. I ultimately became more conscious of my spending and ended up saving a lot more money ...

5 common credit card mistakes, and how to avoid them
Even though I consider myself an educated consumer, I know that smarts alone will not prevent money mistakes. I occasionally take time to read basic personal finance advice to remind myself of good habits. I came across a document at the Federal Reserve website about basic credit cards tips. These are basic ...

Why goal-setting can backfire, study
I am a huge fan of setting goals and figuring out concrete steps to solve them. Goals have helped me in weight loss, saving for retirement, and post more frequently on this blog. But there are flaws to goal-setting, which are explored in the amusingly titled study Goals Gone Wild: The ...

Video: do not invest your emergency fund
This is really basic, conventional financial advice that too many people ignore. With saving accounts offering very low interest rates, it can be tempting to invest emergency funds into the market for gains. This is not a good idea due to stock market volatility, as explained in the following video from USAA.

Video: how to buy a car using game theory
This video is about a car buying technique from Professor Bruce Bueno de Mesquita. I previously enjoyed one of his TED talks about predicting political events. The video is short and offers great practical advice for buying a car in America. Give it a watch:

4 stupid things people do when researching tax information online
Are credit card opening bonuses taxable? When is the deadline for contributing to an IRA? These are just a few of the questions people will be searching for with tax time just around the corner. These days, it will not be hard to find the answers online. There are so many good ...

Video: don’t use penny auction sites
I have been meaning to write about penny auction sites like Quibids and Skoreit. These sites got big a couple years ago, and there are some great articles at codinghorror.com about how they are a scam and basically a lottery. This would be fine if the sites were regulated like a lottery. ...

What’s the most you ever spent on a gift? [Poll results]
I put up this survey about gifts around holiday time. Here are the results:

3 things Calvin and Hobbes taught me about money
I grew up reading Calvin and Hobbes comics. And I still appreciate re-reading and reliving antics of the imaginative Calvin and his partner in crime Hobbes. There's something wonderful about Calvin's energetic and child-like approach to life. And while my teachers never let me read these comics in school--it was strongly ...

Do you protect yourself against identity theft? A cool risk assessment survey
Identity theft is serious business. According to the Bureau of Justice, U.S. households suffered $13.3 billion in DIRECT financial losses from identity theft in 2010. A few households were lucky to have identity theft with no financial loss. Those that did suffer had an average loss of $2,200. That doesn't ...

Pizza cost comparison using mental math
I was recently at Jupiters Pizza in Champaign, IL, and we were trying to figure out what to order. We were deciding between getting individual 9 inch pizzas at $7 a piece, or splitting a couple of medium 14 inch at $14 a piece. For fun, I wanted to know which pizza ...

Small changes add up: Turning off coffee maker saves someone $65
You have no doubt heard that appliances use energy even when not in use. This standby power slowly drains energy at night, and these energy vampires can comprise up to 5% of energy usage. Accordingly, some people I know save energy by unplugging big energy devices like gaming systems or TVs, ...

Start saving early: catching up is hard
This is one of the most important financial lessons. I still remember learning it in high school, particularly because the numbers were so compelling. Here is a problem that demonstrates the value of investing at a young age.

Carrying large bills can help you save, sometimes
It's an old idea that if you carry large bills, you will be less likely to spend than if you carry singles and smaller bills. In fact, some people intentionally carry large bills as a means for spending self-control. But how much more likely is it you will spend the small ...

Why a saving for a single goal is best
I am a big fan of writing financial goals. In college, I remember having goals about learning how to invest, finding a good job, and saving for retirement. I was following common wisdom that it's best to write out financial goals and make a plan for each. But was having all ...

How to add categories to the Simple Expense Tracker
When I started tracking expenses four years ago, I was disappointed with the free templates I could find online. Too many required registrations, and ultimately the spreadsheets were bloated with formats and sometimes macros. I initially created the free expense tracker (downloadable here) for readers of this site. That is, young, ...

2012 Free Budgeting Spreadsheet and Expense Tracker
I just wanted to let everyone know I have uploaded the newest spreadsheet (can be downloaded here) The only substantive change I made from the 2011 spreadsheet was to add a column for per diem budgeting (though technically that was a mid-year change I introduced in August written up here) The only ...

Expense tracking: end of year review
For 4 years on this blog, I have been praising the benefits of tracking expenses (get the free spreadsheet here). I have gone into detail on how best to account for purchases properly, including topics such as: Tracking expenses while traveling How many categories should you have? Why the richest American suggested tracking expenses But I ...

Poll results: debit card use
A couple months ago I asked readers of this site how frequently they used debit cards, if at all. Here are the poll results:

Holiday expense tracking
The holiday season is a special time. But however you enjoy the holidays, it is important not to forget about your finances. All those gifts and donations do add up, and you will want to keep a consistent record of your spending. Here are a few examples of holiday purchases and some ...

A math tip for calculating change
I normally use calculators for my computations. But occasionally it helps to be able to do some mental math, say if you are going cash-only and want to verify you got the correct change quickly. This post is about a small tip that can help with calculating change. I first want ...

4 amusing money fails
People often do stupid things when they are trying to save money. Here are a few amusing tales that gave me a chuckle and made me remember some basic money lessons. 1. Texas man rescued from chimney said he was trying to save money

To save money, just think “I can wait”
This article is inspired by something my friend once told me. He said, "It's going to be awesome. I can't wait for the new Batman movie to come out." I realize this is a totally ordinary statement, particularly because my friend is a huge Batman fan. And no doubt I have ...

The rule of 6: a way to estimate interest earned when making monthly deposits
Last week I explained how to calculate interest using the APY from a bank or savings account. The short summary was this: the APY tells you the percent interest you can earn if you make a lump sum deposit for one year. The basic method for calculating interest is: Interest earned ...

Interest calculation from an APY on a bank account
Bank accounts are full of jargon and sometimes it can be confusing to understand all of the terms. I got an email the other day from someone who had some questions about opening a bank account. Specifically, the person was curious about how the APY was calculated and how that related ...

What’s the best place to sit in a movie theater?
In one sense, this question is simply answered. The best seat in a movie theater is the one that you enjoy the most. If you like to sit all the way in the front, or all the way in the back, then that's the best seat for you. I am ...

How much should you put your checking account?
My friend was reviewing his finances, and he realized he had a lot of money sitting in his checking account. All my friend wanted was the minimum to keep in checking. If he had enough to pay bills, rent, and get cash from ATMs, he would be covered. The rest of ...

How to spot fake reviews
Review websites are like a wife to me: I always check with them first before making a major decision. I say this jokingly, but it is pretty much true. There is Amazon for consumer products, Yelp for restaurants and site-seeing, TripAdvisor for hotels, and Angie's List for repair services. Even at ...

Consumer Ed: which Southwest credit card is better?
My friend flies Southwest Airlines a lot, and he recently decided it would be worth it to get one of its frequent flyer credit cards. My friend was careful to consider the options, as each Southwest Rapid Rewards credit card carries an annual fee. There were two different cards that he was ...

5 tips for tracking expenses while traveling
When I was sipping a drink on a private beach resort recently, I felt completely relaxed and I forgot about my worldly troubles. In this paradise, it was tempting to let go and splurge on things like cocktails, jet ski rentals, and massages. But I brought myself down to earth and ...

How much rent can I afford? The 30 percent rule explained
When I got my first full-time job, I remember being overwhelmed by a lot of financial questions. One of the pressing issues was finding an apartment. Specifically, I wanted to know how much rent I could afford to know which neighborhoods and areas were within my budget. I did a bunch of ...

Reading this before you shop can help you save: a psychological trick to stand up to salespeople
A lot of people I know have trouble saying no to salespeople. Lacking confidence, they end up buying extended warranties and magazine subscriptions that they never use. I came across an interesting trick that can help turn the tides. But before I explain it, I want your help in settling a bet ...

Why don’t people track expenses? [Poll results]
In March of this year, the National Foundation for Credit Counselling surveyed over 1,000 American adults to get a sense of financial literacy. The results showed an alarming trend in personal finance. Compared to 2010, people had more reckless habits: "Americans are spending more, saving less, and still carrying credit card ...

6 credit card tips when traveling internationally
I have been traveling a decent amount this year, and my credit cards have definitely been a huge convenience. I do not have to carry as much cash, and I am comforted that I can get access to money when needed. But since travel means I am using my credit card in ...

If a friend is wasting money, should you speak up or keep it to yourself?
via images_of_money I sometimes cringe when I hear how some people throw away their hard-earned money. A few stories that come to mind are: --Someone in credit card debt got a $100 tuition overpayment refund. He chose to use the money to buy a video game rather than pay off debt --A friend ...

Which has better rewards: BankAmericard vs Amex Blue Preferred rewards card?
This is an interesting question that could be asked in a consumer ed class. Suppose Alice is shopping for a cash-back rewards credit card. She is considering between the BankAmericard and the American Express Blue Preferred credit cards. Here are the details of those cards, at the time of this writing. SUMMARY OF REWARDS Category BankAmericard Amex ...

A trick to getting more booze in bars
image by Kyle May This tip comes just in time for the weekend. I read about the trick on Bundle, a great personal finance site. This article points out how you can possibly get more alcoholic drinks in bars, if you say the right words. Here are the details:

5 tips to remember your ATM PIN or any numerical password
I normally remember my ATM PIN without issue. But there have been two times where I completely blanked on my PIN. Had I needed money urgently, it would have been a big problem. It got me thinking that I needed a better system for remembering my ATM PIN. I did a ...

Traveling without a smartphone – 3 tips for getting information on the go
Don't get me wrong, I am all for smartphones. I am amazed at how much computing power is available on the go, and I am aware that smartphones are the way of the future. But I am not excited about their cost. Data plans run from $30 to $50 a month, ...

Last minute coupons: 5 websites to check before buying anything
I'm shocked at how many people pay full price. There are tons of free coupons you can find online, meaning savings are just a click and a promo code away. I now make it a point to diligently check coupon sites before I buy anything online. Below are 5 of the big sites ...

How to enter a rebate when tracking expenses
Occasionally, I will get office supplies or food items with significant mail-in rebate discounts. What's the proper way to input the savings when you are tracking expenses? I will share my tactic below. (On a related note: I should mention I have never once had a rebate declined, in contrast to the horror ...

5 ways Bing can help you save money
Until about two months ago, I exclusively used Google as my search engine. But I was curious about Bing because I heard it offered rewards for trying it out, and I'm a sucker for free money. I have to say I'm glad that I gave Bing a try. While Bing was ...

Stop fooling yourself: a better blind taste test that can help you save money
image by tiarescott Do you have strong preferences for food and drink? One of my friends insists on drinking high end vodka. Another prefers the taste of brand name cereal. And someone else drinks organic milk primarily for its taste rather than for health reasons. These specialty products can run up to ...

Making a per diem budget using the simple expense tracker
One of the most popular things on this site is a free budget and expense tracking spreadsheet. The spreadsheet has been downloaded over 21,000 times in the past two years and I get a lot of feedback for it. Occasionally I get a request for a new feature. Here is an ...

Brendon, Brendon, you gotta read this. 8 financial lessons from Coach McGuirk
He's not the most famous character, but he is one of my favorites. Coach McGuirk is an oddball character from an old animated show called Home Movies that originally aired on Cartoon Network from 1999 to 2004. To get a sense of the character, you need only know that Coach McGuirk ...

How to save 15 percent on Groupon, and other sites ShopDiscover can save you big bucks
Groupon is already cool enough about deals on restaurants and fun activities. But did you know you can essentially save even more just by using the right credit card website? There's a way to earn 15 percent cash back through Discover's shopping website plainly named ShopDiscover. The ShopDiscover rewards program offers a way ...

16 ways WolframAlpha can help you manage money
I think it's always important to try out new tools and see how they can help me. One of the coolest tools I've come across in the past few years is WolframAlpha. The site debuted in 2009 to much praise and was voted that year as the greatest computer innovation by ...

One answer to the Netflix price hike: diversify your media portfolio
Netflix's strategy has yet to gain acceptance There's been a lot of uproar about Netflix's recent price hike of up to 60 percent. Customers who were paying $10 a month for streaming and DVD rentals will now have to shell out $16 for the same service. The uproar has been so strong ...

8 interesting donation boxes
I have recently visited many museums and I've seen many of them have donation boxes. While most of them were plain and bland, a few of them were more interesting and caught my attention, making me more likely to donate. The lesson is a little bit of style can help a ...

Consumer ed quiz: is this a good deal on natural gas?
One of the difficulties in properly managing your money is the vast amounts of decisions you have to make. Someone who is great at investing, finding travel deals, and buying a home can still lose a lot of money by making poor career decisions or racking up credit card debt. These ...

Honest Abe: don’t take on unnecessary debt
Abraham Lincoln is such a revered individual, a self-made man who is now considered one of America's greatest presidents. Lincoln's honesty and integrity are well-celebrated. He made sure to repay his debts, and he also avoided taking on debts he could not pay off. I came across an interesting story that demonstrates ...

Mental Math: combining discounts and bonus quantities
The other day I found a great deal. A snack I like was now being packaged with 10 percent more food, AND it was being sold at a 20 percent discount. I had no hesitation in buying since it was clear I was getting a good price. But later I was curious how ...

Is this sleep aid a rip-off?
While perusing the drug store, I noticed a rather strange pricing scheme. On the one hand, there was sleep aid that sold for $5. On the other, was allergy medicine that sold for $2.50. So what's the catch? The interesting thing is both products were essentially the same medicines.

Year End Financial Checklist, 2010
The end of the year is an interesting time financially. It's a natural time to review the last 12 months and plan for the upcoming year. It's also a time to take action. Because many financial activities like taxes and insurance are based on the calendar year, it's important to take ...

Sorry, you cannot buy happiness with a $75,000 salary
There's an economics study about money and happiness that's getting a lot of attention. Here's a sampling of the headlines: The Perfect Salary for Happiness: $75,000 - The Wall Street Journal After $75000, Money Can't Buy Day-to-Day Happiness - BusinessWeek What does it take to be happy? About $75000 - Los Angeles Times These headlines ...

Tip to remember rotating credit card rewards
If you're like me, you have a couple of rewards credit cards. And you try to pick the best card for a given purchase. This used to be easy. Rewards cards used to have fixed rewards categories--like 5 percent cash back on gas and groceries--and you could get in the habit ...

Discover Bank savings account: why I don’t trust it
Recently I considered opening an online savings account at Discover Bank. I was intrigued for a couple of reasons. The appeal started with the rate. The savings yield was very competitive and even slightly higher than ING Direct. As of this writing, Discover Bank offers a 1.35% APY versus ING Direct's ...

The psychology of spending
Why do we buy things we don't need? What factors cause us to buy irrationally? These are a couple of the main questions of behavioral economics. Lately I've been writing about this topic over at the money site Bundle.com, where I am a community editor. A few of my friends have liked ...

Save on electricity costs by avoiding peak hours
Did you know electricity rates can change during the day, by as much as 40 percent? You might be able to save money by planning when you do laundry or run the dishwasher. As explained on the conEdison website: Energy-conscious customers can save money if you use electricity during off-peak periods when ...

An intriguing gas discount
Mike emails me about a curious promotion and asks me to analyze it: I noticed this interesting discount where a grocery store teamed up with Sunoco to give rewards to frequent shoppers. Here is the link with the details Basically, for each $50 spent at the grocery store, you can redeem for ...

How much does your city spend on food? Plus a contest from Bundle
There's a wonderful infographic at Bundle that shows how big cities in America spend money on food: A couple of Bay Area cities like San Jose and San Francisco are near the top of the list, but it is Austin, TX that wins by spending a whopping $12,447 per year on ...

Getting adult dental sealants to prevent cavities and save money
I'm in my 20s and keep good dental hygiene. But a couple of years ago, for the first time in my life, my dentist found cavities. He said it was probably because food was getting stuck in my molars. He said my teeth had rough grooves and sticky food like raisins ...

What is the actual discount? Doing the math for coupons and sales that sound better than they actually are
image credit: CosmicKitty I remember when discounts were easy to understand. Most stores would have sales like "25 percent off" and that would be that. Even the foolish K-mart ad shown above of "0 percent off" can at least be praised for its transparency. Nowadays discounts come in a variety of coupons ...

Bundle roundup (4/16)
Today I wanted to share a little bit about something else I do on the web. As you may know, I am a community editor for Bundle, a site about how America spends its money. What makes Bundle unique is its tool Everybody's Money which visually illustrates how people spend money. ...

The strategy of eating leftover food
image credit: muffet I often end up with leftover food in the fridge. It may be because I buy groceries generously, or because I cook in bulk, or because I often bring food home from restaurants. A while back I had a refrigerator full of leftovers including things like Parmesan cheese, a ...

Rate per person-hour
Sometimes an old trick can come in handy. I was pleased at a recent incident where we used rate per person hour. Is my cleaning service too expensive? A few of us were discussing how much we paid for cleaning services. The numbers were something like the following. One person was paying ...

How many categories should you have for your budget or expense spreadsheet?
My friend is getting serious about his finances, and at my suggestion he has agreed to work through a couple months of my free budget and expense tracker spreadsheet. The first thing that struck him was the list of budget categories. Many mainstream budget worksheets have about 20-30 categories. Even Bundle, ...

Money lessons from art class
I didn't learn how to draw, or paint, or mold clay. I slightly improved artistically, if at all. But I still feel I learned a lot from my eighth grade art class. It all started with the first assignment. We were to create an art portfolio case from construction paper. The ...

Amazon Subscribe and Save is great
One day I was planning to buy some personal care items. On a whim, I checked if they were available at Amazon.com. To my surprise, many of the items were listed. And to my delight, they were cheaper at Amazon. The good news turned out to be even better. Some of ...

Free budget spreadsheet and expense tracker
(To download, go to the "free budget spreadsheet and expense tracker" file in Financial Tools page) Last year a lot of people took a fresh look at their finances. And that meant starting with the basics of comparing income to expenses. I have long been recommending such expense tracking. For four years ...

How much does your girlfriend cost?
If women didn't exist, all the money in the world would have no meaning--Aristotle Onassis Friday night was ending, and we asked our friend what we owed. He replied, "Don't worry about it guys--it's so little that it's on me. This is nothing compared to a normal Friday night when I ...

5 extra uses for shot glasses
I appreciate shot glasses. They are classy and inexpensive souvenirs. And they are ultimately practical for weekend parties when making drinks. I have amassed a decent collection of shot glasses. One day it bugged me that the shot glasses primarily got used on weekends. They simply occupied cabinet space on weekdays. In ...

Gifts for economists, 2009
What gift would you give an economist? It's the time of year when I discuss a few ideas. This is not easy to answer because economists are highly individualist. But there are a few guidelines I go by. All else equal, I feel economists prefer three things. First, they prefer practical ...

Kraft offers “free” food in many SuperValu stores-Why?
I came across an interesting promotion from Kraft foods-it's almost like free food. If you purchase $25 in qualifying items, you will get a $5 your next purchase and $20 via mail in rebate. The offer is valid from 8/7/09 through 8/23/09 in selected SuperValu stores such as Albertsons, Jewel-Osco, ...

Can a budget help your marriage?
There are three rings involved with marriage. The engagement ring, the wedding ring, and the suffering --Unknown The sum which two married people owe to one another defies calculation. It is an infinite debt, which can only be discharged through eternity --Johann Wolfgang von Goethe The bonds of matrimony are like any other ...

Why cooking at home is smart
During this time off from the blog, I have had much time to reflect on some of my favorite articles. Here is one from the July 2008 email newsletter that I found relevant--hope it finds you well! (sign up for the free Mind Your Decisions email newsletter at phplist) image by ...

The simple expense tracker–over 1,000 downloads
Not long ago I introduced a free spreadsheet called "The Simple Expense Tracker" to help people record their expenses. The spreadsheet tabulates expenses and income, and it automatically calculates monthly and yearly savings and spending by category. It's not as fancy as the software on websites like mint.com or wesabe.com. ...

3 ways to cut costs at happy hour
photo by pink sherbet Do you enjoy happy hour? I sure do. It's a fun way to get to know your co-workers and end a long day of work. That's why I wanted to make happy hour more affordable and I came up with these ideas. Before I get started, a word ...

The Automatic Millionaire: book review and criticism
Can you become a millionaire...without making a lot of money or having willpower? You can, promises money writer David Bach in The Automatic Millionaire. Bach is one of the most popular money advisers and his explanations can be very catchy (he's the one who coined the term "the latte factor"). Does ...

How much money do you need to be happy?
source: Joe Shlabotnik via flickr At Stanford, I heard someone say they needed to make at least $150,000 annually to be happy. I was surprised for many reasons, but most of all, I was surprised at how serious the person took the question. I was raised with values like "health is ...

The strategy of writing a complaint letter or email
source: aturkus via flickr I remember the first time I complained to a company. I hastily made an angry call and was flatly rejected. I composed myself and five minutes later I made another call. This time I used a calm tone and I read from a complaint script I found ...

A big reason why you should track your expenses–money flows are complex
Most of the people I discuss money with track their expenses or agree it is a good idea. But not everyone is convinced. Here is a comment I received earlier this week: Presh, I sort of see your point about tracking expenses, but isn't it overkill? I seem to do just ...

A free spreadsheet to track your expenses
(To download the file, see the "expense tracker" file in Financial Tools page) Tracking your money is perhaps the most powerful step for saving money. But what is the best way to do it? Programs like Microsoft Money and Intuit's Quicken are great but I think they are too sophisticated for beginners. ...

Die Broke: A Radical Four-Part Financial Plan
Conventional money wisdom focuses on saving. If you earn more, limit expenses, and plan properly, you'll be able to save enough for retirement and still have something to pass along to the kids. This is the philosophy on which most advisers operate. But there is just one problem-the conventional wisdom ...

4 tips for making the most of the recession
The recession has been painful. Some of my friends have lost their jobs. Others are finding it harder to stay afloat. But this is no time to look down--rather, one must make the most of a bad situation. There are opportunities during bad times. But to see them, one has to ...

3 important lessons from the financial crisis
It's hard to know what to think these days. I find myself overwhelmed sorting through all the data and predictions. It's time for reflection, so here are three of my lessons during this downturn: 1. Saving for emergencies: time to revive age old wisdom Ancient societies understood the need to save for ...

Figuring out how much your time is worth–does it make sense?
Question: What's the best way to value your time? I am trying to make a decision about whether to hire help for my house. My answer: There are many ways to figure out how much your time is worth. You can get a quick estimate of your hourly rate by taking your salary ...

Why do people make stupid money decisions?
Reader question: Presh, random question for you: why do people make stupid money decisions? Any thoughts would be appreciated. My answer: This is an interesting question. The other day I saw someone pay more for food because he ordered ala carte instead of getting the combo. I certainly scratched my head after that ...

Is your car loan more expensive than you think? The difference between APR and the total interest you have to pay
Question from a reader (slightly edited): I have 60-month loan for an $18500 car with a 5.69 percent APR. When I do the calculation using simple interest it comes to $1052.65. On my contract from the dealer it says $2726.20. Why is their number closer to 15 percent? Am I missing ...

Are You Eating Your Retirement Savings?
Some of my acquaintances think it's impossible to save nowadays. They say there is nothing left after taxes, housing, and basic social expenses. One person even said it's getting to the point that $50,000 is not enough to live in Chicago. This seemed curious to me, so I started a discussion ...

Try New Foods to Deal with Rising Costs
All the things I love to eat are getting more expensive. Simple pleasures like bread, rice, and corn have almost doubled in price. What's one to do? Try new food, naturally. There are two reasons to do this. The first is an economic reason. Food prices are the result of supply ...

How do you deal with overdraft fees?
"Bob" emails me his frustrations with managing his checking account: I just got hit with an overdraft fee and I'm really annoyed. I regularly check my account online but this time a check cleared unexpectedly. It was a check I wrote a couple months ago and forgotten about. How do you deal ...

Improve Savings by Planning for Failure?
My friend was thrilled to find a multimedia section at her library. It had movies, even new ones, for a one-week loan. And the best part was DVD rentals were free. She quickly cancelled Netflix and rejoiced in saving hundreds of dollars a year. All was going well until she got ...

How My Friend Outsmarted a Car Salesman
photo credit: daveynin My friend always gets great deals on cars. Like most of us, he shops around and collects price information. What sets him apart is his ability to close the deal. He gets the best deal because he uses the three following techniques: He avoids price traps (he thinks in dollars, ...

10 Things about the Working World I Wish I Knew in College
Let's face it--each new stage in life brings dramatic changes that are difficult to anticipate. No matter how smart you can be in college, you will still get surprised by the working world. I faced these surprises myself. I thought the working world would be hard since it lacked the freedom ...

Should I Get a Dental Sealant to Prevent Cavities (and Save Money)?
Image source: yomi955 via flickr I'm an adult now, but for the first time in my life, my dentist found cavities. I didn't understand it, as I religiously follow all of the American Dental Association's guidelines for oral hygiene (brush twice, floss, eat balanced meals, visit dentist regularly). Why did I get ...

Make Saving Enjoyable, or How You Can Have Your Cake and Eat It Too
Image via evan at flickr When I talk to college graduates, they tell me they save to pay off loans, to buy a house, and to invest for retirement. These responses are good, but perhaps they confuse the goals of saving with the reasons for saving. For example, saving for a birthday ...

Guest Writer: The Basics of Islamic Finance
Religion and money are joined in many ways. Discussing these issues can educate and improve understanding among followers and non-followers alike. Today is a discussion of Islamic finance from guest writer Asad. Guest writers discussing other religions to follow in upcoming weeks. Religion is a sensitive issue--please be sensible when writing ...

Why We’re Not Designed to Follow Budgets–There’s More to Life
image source: Rubyran via flickr In many ways, following a budget is like adhering to a portion controlled diet. In both cases, you create elaborate plans to limit unhealthy consumption. If you mess up, as you are likely to do, you can compensate the next day or week by working ...

Fast and Frugal Late Night Snacks
The consulting grind encouraged my night owl tendencies. When I retired to my quarters, I found myself snacking on delicious and fattening restaurant leftovers. I was new to the job, but I quickly understood the saying "fat consultant." While I still work late at night, I've drastically improved my ...

The Basics of Managing Inflation Risk
What is inflation? Inflation refers to an increase in the average price level in the economy. One way economists measure inflation is by tracking the price of an "average basket" of goods in the economy. The most common inflation index is the Consumer Price Index. It's important to remember that ...

Thinking about the 401(k) Account: Should I Have One? How Much Should I Contribute? What are the Risks? Trying to Interpret the Experts
Planning for retirement raises a number of difficult questions. I'll admit that I often get confused coming up with answers. And I'm an economics graduate who started investing in high school and enjoys reading financial articles. I have sympathy for anyone that feels overwhelmed or confused by the ...

Line Etiquette Pays: How I Accidentally Saved Money at the Grocery Store
image source: Jimmy_Joe's via flickr Recently, the supermarket gods have rewarded me twice with free food. I would like to say I planned this, but it really came about by accident. It happened because I was practicing good etiquette, and I like to think that no good deed goes unrewarded. What are ...

I Don’t Budget–Here’s Why
If you like budgets, you don't need to read more. If you have never tried a budget, then give one a try because experience is the best teacher. This article is meant for people who have tried budgets, realize they have faults, and are confused why financial people keep yelling at ...

How would being filthy rich change your weekend?
For me, it would not change much. I have a key observation to back this up. I have friends from many income levels. This ranges from indebted students with limited budgets to millionaire entrepreneurs who can do whatever they want. What's different when I hang out with the students and the millionaires? ...

Save More or Earn More?
Should you save more or earn more? This is a frequent money question. It's also a misguided one. When I hear this question, I say I want both. I need to earn more so that I can enjoy higher quality products. But for a given income level, I need to save more ...

The Calculating Guru Questions Pricing Tricks
Those late night TV infomercials make me laugh. "It's all yours for under $20! Just pick up the phone and order our product (for $19.99)." Yes, the product is "under $20." But not by a meaningful amount. Does $19.99 really sound better than $20? Is anyone fooled by the pricing trick? Apparently ...

Food Fridays: Savings are Overrated
I'm tired of savings. I try not to think about them any more. And it's made me a better customer when considering food, clothes, cars, and even housing. I'll explain why through a hypothetical example. Here's a question for you: would you rather save $4 or $2 on the same ...

One Reason to Buy Less Stuff
I'll use the decision to buy an iPhone as an example. Most people would ask, does the iPhone do enough to be worthy of its cost? Is it worth, say $400, to buy this device? One way to think is that the iPhone has more features than a $199 iPod and ...

A Small Update to Expense Tracking Spreadsheet
Based on a reader suggestion, I made a small change the 2008 Simple Expense Tracker so it is easier to understand. My apologies for the prior confusion. For those of you that downloaded it, please replace your file with this new one: (The File: See Financial Tools). Here's what I changed: for ...

Track Your Money: Saving Advice From Rockefeller
The Advice "Now let me leave this little word of counsel for you. Keep a little ledger, as I did. Write down in it what you receive, and do not be ashamed to write down what you pay away. See that you pay it away in such a manner that your ...

Separating Equilibrium: Why Expensive Gifts Aren’t Always Proportionally Better
If you want to give a great gift, you do not need to spend tons of money. In fact, I'd say that many times the more you spend on a gift, the less value you will get. This is not just frugality advice. It is based on a game theory result. ...

Money Makes You Numb
If you want to be rich, should you save more or earn more? So far, I've written primarily about saving more by recommending you drink from the tap, curb your subscription costs, and cut back on other regular expenses. Earning a high salary gives you the potential to save more. It is ...

Financial Tools
In response to a reader request, I have created a separate page dedicated to the financial tools and spreadsheets that I develop. So far, I have put up the popular "The Simple Expense Tracker" and the "APR and APY Converter." Stay tuned as more tools are upcoming, like how to track investment ...

How I Saved my Friend 25 Percent in 5 minutes
My friend has a home surveillance service that costs him several hundred dollars a year. He has it even though his neighborhood has virtually no crime and someone is almost always inside his house. And the worst part: he rarely turns the alarm on when the house is actually empty. ...

On Making Comparisons with Your Money
Recently, I learned that there are men who wax their backs and other delicate areas. I guess they do it to be clean-cut, but it seems extreme to me. I commented to my female friend that it sounds painful. She replied, "Yeah, but men can't complain since women wax their legs ...

The game theory of buying clothes, and why money tips are often short-lived
I discovered a money tip before I moved to college. I was living in Illinois and it was a chilly September. But I actually needed more summer clothes because I was moving to warmer California weather at Stanford. Since I was shopping out of season, most what I wanted was ...

The 3 biggest obstacles to getting rich
Why am I not happy with my finances? I hear this question from many people. Some people blame not enough education, and schools are responding by increasing financial education classes. But will more information help? I used to think so, but here is a story that really got me thinking. My friend ...

4 reasons to drink water from the tap
Not all chemicals are bad. Without chemicals such as hydrogen and oxygen, for example, there would be no way to make water, a vital ingredient in beer"“Dave Barry I hate when people complain about high gas prices while they joyously drink bottled water. Here's a quick fact: bottled water can be more ...

Why saving is smart: understanding the law of diminishing marginal utility
Chicago-style pizza is one of my guilty pleasures. I know it's not healthy food, but every once in a while, I cannot resist indulging. I am further tempted because a place near me offers an all-you-can-eat lunch buffet. Going there is one of my favorite dining experiences. Though a recent meal ...

When comparison shopping, trust the math, not your eyes
Recently, my grocery store began stocking a new, "family-size" package for a cereal that I enjoy. It caught my attention because the family-size box is a lot larger than the regular one. In fact, the family-size box looked almost double the size: In a rush, I chose the family-size box and ...

Is there a right way to track expenses?
I introduced a free spreadsheet to track your expenses (for the file, see the financial tools page) about a week ago, and I'm thrilled that people are finding it easy to use and helpful to their finances. Thank you for the support, and please feel free to contact me with ...

Free spreadsheet to track your expenses
The File: See Financial Tools In last Fridays' article, I discussed some of the various ways you can track your expenses. I've tried to keep things simple so you can get started. Here are a few notes about the file: The spreadsheet is designed for one full year of data. The spreadsheet calculates ...

Why you should track your spending, and 3 slick ways to do it
A fool and his money are soon parted. When people ask me how they can improve their spending habits, I start by asking them some questions. How much did you spend on gifts last year? What percentage of your income do you spend on gas? Most people give some answers, but ...

5 ways your library could help you spend less
People tell me they don't like the library because it doesn't have the latest books. And I completely agree. If you strongly prefer new books, then buying them is the only solution. Plus, you get to read the book when it's in the news and people are talking about it. ...

Credit cards, debit cards, and cash–which way of paying is best?
At a bar, I once saw three people at a table receive separate checks, and amazingly, each of them paid in a different method. The first person threw down cash, the second a debit card, and the third a credit card. It got me thinking about why people pay in ...

Understanding sunk costs
A sunk cost is an expense that you cannot recover. Accordingly, economic theory says a sunk cost should not affect your decision making. Psychologically, it is hard to ignore sunk costs. Here are a few examples where sunk costs come into play. Example 1: Attending an NFL game with already purchased ...

What is the difference between APY and APR? How is interest actually computed in my savings account or on my loan?
Whether you are financing a loan or getting a savings account, you need to know about interest rates. Banks talk about interest rates using the acronyms APR and APY, but what exactly do they mean? I'll explain why banks conveniently quote one figure or the other. But first, I will ...