How to make a penny saved a penny earned.

We all know the phrase “a penny saved is a penny earned”.  That phrase probably meant something 30 years ago when a penny could actually buy something, and back when we actually physically had pennies as opposed to credit cards.  That said, there is a way to bring the idea back to relevance.  Open up a bank account that you can make deposits into for free (the account must be free too), whether it is at your current bank or maybe at your brokerage, and set it up to where you can transfer money from your primary bank account to this new bank account.  Any time you consciously save money, whether it is by not drinking a glass of wine at dinner, not purchasing that $100 shirt you have wanted but don’t really need, or cancelling cable, take that saved money and then move it to your new “pennies earned” bank account.  You can likely even do this using your phone, and you may end up moving a little bit of money to the penny saved account every day as a result of your choices.  If you stick with it, you will be amazed at how much money you have saved over time.  Then, every few months, take that money and put most of it in your emergency fund or investments, and use the rest to splurge on a nice meal or that $100 shirt I mentioned above, which will now be a guilt-free purchase!

How to make credit cards work for you. 

One of my first goals with my clients is to help them get out of credit card debt.  High annual fees, high interest rates and reduced credit scores are all significant detriments of having credit card debt.  Once you are able to get out of credit card debt, however, it becomes time to make your credit cards work for you.  There are many credit cards that will pay you cash back of 1% and some up to 5% on your purchases, all without an annual fee.  So long as you pay off the card each month, then you can use those cards to get hundreds, if not thousands, of dollars back each year.

There are many websites that will help you sort through the best rebate or cash back credit cards, and I am happy to help you with the process as well, but here are a couple of general ideas.  First, find a credit card that will pay you cash back on all of your purchases.  Currently, our Amazon credit card through Visa pays us 3% cash back on Amazon.com purchases, 2% on gas, dining and drugstores, and 1% on everything else.  I believe we can get the “cash back” in the form of a statement credit, but we just apply it towards purchases at Amazon.  What you do not want, ideally, is a “cash back” card that only lets you get the cash once a year or only lets you use it on purchases at certain stores, which I think is the case with our Banana Republic credit card.

Second, if you shop frequently at a certain store, or fly frequently with a certain airline, then consider getting a credit card with that company, as often you can get discounts on your purchases, cash back on your purchases, and then discounts on your use of your rewards, such that you may be able to get the equivalent of 5% or better in terms of savings.  Just make sure that you do not accumulate too many points or credits on those cards such that you won’t be able to use them.  For us, we obtained an American Airlines card for our flights to Chattanooga and the beach (so we are guaranteed to use the points at least twice a year), and we promptly made enough purchases on that card to qualify for a free flight or two.  Now that we have mostly maxed-out the benefits of that card until we can use the bonus points, we are going to switch back to the Amazon card.

How to Save Time Online.

If you are anything like me, you have over 100 online accounts, with their various usernames and passwords.  The problem is that you likely only have about three passwords that you use across accounts, which is a tremendous security risk, and those passwords are unlikely to be very strong.  To solve this problem, I use a password manager called Dashlane.  For an annual fee of $40.00, Dashlane stores all of my usernames and passwords (as well as credit card information and notes if you want) and remembers them across all of my devices (desktop, laptop, tablet and cell phone).  The information is stored in a secure, encrypted format, and Dashlane automatically enters my usernames and passwords as I go to the various websites requiring the usernames/passwords, which saves a tremendous amount of time.  It tells me which of my online accounts may have been hacked or breached, encourages me to change reused passwords across accounts, can take me to the web page for each site in order to change my passwords, and even recommends (and memorizes) stronger passwords.  As a result, I can use 100 different usernames and passwords on those 100 accounts for much better security, and all I have to remember is the one password to log into Dashlane.  There is a free version of Dashlane that does not work across devices so you can try it out, and there are many competitors that are likely very comparable.

-Richard

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