Nickeled and Dimed

One of the first steps to turning around your finances is slashing your expenses.  In the beginning, this can be very easy.  By simply getting rid of, or cutting down on your unnecessary expenses (such as dining out), you can take a large chunk out of your monthly spending.  But what happens when you have chopped these expenses down as  far as you possibly can (or want to)?  Then it’s time to go to work on your necessary or fixed expenses.  And this part may not be as simple.

Luckily there are websites and technology that can help us with this.  One website is Mint, which we talked about last week.  Today we will talk about another website that can help you cut expenses, BillShrink.

BillShrink is a site devoted entirely to helping you save money on your cell phone and credit card bills.  By entering your current cell phone or credit card information, it will scan the entire market to try to find a deal that both fits your needs better and saves you money.  Here’s a quote from BillShrink on how they do this:

Do you know there are over 10 million cell phone plan and add-on combinations? Or that every credit card has over 100 meaningful variables? We’re obsessed with monitoring all those details - so you don’t have to!

When I first read about BillShrink, I was skeptical.  Then I tried it.  It is fantastic.  By simply uploading my current cell phone bill, it found me three plans that would both fit my needs and save me money (one would save me as much as $35 a month!).  After entering what I use a credit card for and my credit score, it found me 16 credit card offers that offer better rewards and lower interest rates than the card I am currently using.

Let’s look at how BillShrink works for both cell phone bills and credit cards.

Using BillShrink to Save on Cell Phone Bills

When using BillShrink to look for better cell phone plans, you have two choices. 

- One way to look for better plans is by estimating your usage, which requires you to tell them how much you currently spend a month, how many minutes you use a month, how many lines you need, how many texts you send/receive a month, and your home and work zip code. 

- The other (easier) way to find better plans is to simply upload your current cell phone bill.  To do this all you need to enter is the phone number of the primary phone on the plan and your wireless account password.  By entering those two things it will automatically pull your monthly cell phone bill and see what you use every month.

After entering this information, regardless of which option you choose, it will show you a list of cell phone plans that fit your needs while saving you money on your monthly bill.  It also automatically takes into account the fee it would cost your for canceling your current plan early.

Using BillShrink to Optimize Your Credit Card

Whether you still carry a balance on your credit card, or use it to earn rewards and then pay off the balance each month, BillShrink can help you find a better deal.

You start off by answering a simple question, “do you pay off your credit card each month”.  The next series of questions will depend on what your answer to this one is.

Answer yes, and your next step is to tell it how much you spend each month, what your credit score is, the three categories you use your card for most often, what your current card is and how long you have had it for.  After answering these questions, it will produce a list of cards that offer better rewards and fits your spending habits and credit score.  Using a credit card responsibly to earn rewards and build credit can be a fantastic financial move.  Using BillShrink can help you maximize this strategy by finding the best deals out there.

Answer no, that you don’t pay off your balance each month, and you will then be asked how much you spend each month, what your credit rating is, what your existing balance is, how much you pay off each month, and what your current card is.  By answering these it will search for credit card offers for people in your credit range that offer lower interest rates and annual fees than your current card.  Finding a credit card that lowers your interest rate from 19 percent to 12 percent could offer a savings of hundreds of dollars a year or more, depending on how much of a balance you carry.

Whether you are looking to save money on your cell phone bill or pay a lower interest rate on your credit card, BillShrink can be an excellent tool to help lower your monthly expenses.  Head over to www.billshrink.com, give it a try and let us know how much you saved.

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Grocery shopping is one of my largest monthly expenses.  In a typical month, my Fiance and I will spend right around $300 on groceries and food.  On top of the money, I absolutely despise the shopping itself.  I hate searching for a parking spot.  I hate fighting the other shoppers for positioning.  And I hate waiting in the check out line.

Suffice it to say, I’m open to anything that will make grocery shopping less expensive, and equally important (to me), less time consuming.  Since in the past shopping had always been a last minute decision for us (when we were absolutely forced to go due to being completely out of food), we rarely went prepared with a list of what we actually needed.  As a result, we came home with more “impulse” items that we didn’t actually need.

I decided to run a little experiment comparing how much time and money it cost us to go shopping first without a list, then with a list.  Both shopping trips were done with our cabinets and refrigerators virtually empty, meaning we needed the same amount of food both times.  Here are the results of both trips:

Grocery Shopping Without a List

Total amount of money spent- $114.47

Total time spent from moment entering store to moment arriving in checkout line- 49 minutes

Number of days until next shopping trip- 12 days

Grocery Shopping With a List

Total amount of money spent- $108.08

Total time spent from moment entering store to moment arriving in checkout line-  27 minutes

Number of days until next shopping trip- 16 days

Verdict

Making a list wins this competition in a landslide victory.  Overall, making a list saved us $6.39, 22 minutes and the food lasted four days longer.

On top of that, the food we purchased with a list led to more actual meals (as opposed to living off Ramen Noodles and mac and cheese for the last few days between trips) and less junk food purchased.

I know making a list before going grocery shopping isn’t a novel idea.  I’d guess it is one most people already use to some extent.  But this little experiment was proof to me they do save you money and especially time.  If you don’t already make a list before shopping, try it out.  The results will amaze you.

Our next step in decreasing our grocery costs is to start clipping coupons, something else I have never done.  I suspect that will save us significant money, but also increase the time spent shopping slightly.  I will let you know how it ends up.

Do you use a list when grocery shopping or have any other tips for reducing costs and time while doing it?

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Ramit Sethi’s I Will Teach You To Be Rich is one of the top personal finance blogs on the internet.  He is notorious for telling people to forget about the little frugality tips and focus on the big things that save money.  For example, instead of worrying about the cost of your coffee addiction, which could save you ten or so dollars a week, focus on how to get the best interest rates on a mortgage, which could save you tens of thousands of dollars (these aren’t Ramit’s words, just an example of his style). 

Ramit is a very polarizing guy.  You either love him or hate him.  While few doubt his financial acunem, many seem to be put off by his confident–borderline cocky–attitude.  He knows his advice is legit, and he is not afraid to speak his mind.  Make a less than intelligent comment on one of his articles and he will let you have it.  Personally, I like Sethi very much.  His blog has been a big part of my financial turn around and an inspiration for starting this site.  But I do see how his style would turn some people off.

Recently, Ramit caused an even bigger stir than normal by introducing “Scrooge Strategy: Premium Savings Tips“.  Scrooge Strategy is a subscription program that, upon signing up, will send you weekly in-depth tips on ways to save money and/or earn more money.  These aren’t just small tips like “pack your lunch for work”.  Sethi promises super-tactical, highly in-depth tips that will help you save hundreds, in not thousands, of dollars per year.  And on top of his own tips, he also promises to include tips from other top personal finance bloggers, millionaires and Ivy League educated financial minds.

So what’s the catch?  This is a paid subscription.  Eight dollars a month to be exact.  And this has a lot of people up in arms over the whole thing.

On top of Ramit catching heat for daring to charge money for his services, another top personal finance blogger is being scolded for even mentioning the subscription.  Get Rich Slowly’s normally laid back commentors were quite vocal about their displeasure for not only the idea of charging money for personal finance tips, but the simple fact that JD mentioned it.

A lot of people seem to be under the impression that both Ramit Sethi and JD Roth are being hypocritical in charging a fee (or mentioning the program) while at the same time telling people to be frugal.  Here are my thoughts on the situation.

• The idea that charging for financial tips is wrong is laughable at best.  If that is the case personal finance books, magazines and newspapers would be out of business.  There are many times in life where it makes sense to spend some money in order to make (or save) money.
• Ramit is not being “hypocritical”.  He preaches the idea of making money off your hobbies.  Coming up with ways to save money is a hobby of Ramits.  He’s found a way to make money off it.  That sounds to me like he is practicing what he preaches, the opposite of being a hypocrite.
• JD is doing what a personal finance blog should do, which is bring all major personal finance news to his readers attention.  The Scrooge Strategy is major personal finance news.

As for the subscription service itself, I’m leaning towards signing up.  Here’s why:

1. It offers a 60 day money back guarantee if you do not save more than it costs to join.  There is virtually no risk.
2. It had a six week trial period and offers testimonials from several of the original users.  They seem to be quite satisfied.
3. It gives me something to write about here.  I can let you guys know if it is working.

 

Do I recommend you sign up for “The Scrooge Strategy”?  No.  But I do recommned you check out www.iwillteachyoutoberich.com, see how you like Ramit’s style and decide for yourself whether or not you want to sign up.

I do not think the subscription is right for everyone, or even most people.  I do think it has an audience that it can be very useful to.  It is up to you to decide whether or not it is worth (or you can afford) the eight dollar a month charge.

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Suze Orman is one of the most respected–and probably my favorite–personal finance experts.  I have read several of her books and watch her show nearly every week.  She offers exactly what we talk about here, common sense advice and tips on personal finance.

Right now, you can download a copy of her latest book, “Suze Orman’s 2009 Action Plan”, on www.oprah.com for free by clicking here.  No catch.  No gimmicks.  Simply go to the site and download the book. 

This free download is available for anyone until Thursday January 15th at 11:59 p.m.  All you need to download the book is the latest edition of Adobe Acrobat Reader, which you can also download for free here if you don’t already have it.

I have not yet read this book, but I certainly will be taking advantage of the opportunity and will download it soon.  This is great opportunity to further your financial education at absolutely no cost, a rare opportunity.  After reading the book please comment below and let us know what you thought of it.

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