Costco New Membership Deal w/ $40 Costco Gift Card + $40 off $250 Online Coupon

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costco0The Groupon deal for a new Costco Gold Star Membership is back, where for the regular price of $60 you can get the following:

  • 1-year Gold Star membership ($60 normally by itself), with auto-renewal of the Costco membership using a Visa® credit or debit card.
  • Membership card for the Primary Cardholder and one additional Household Card for anyone living at the same address, over the age of 18.
  • $40 Digital Costco gift card (valid towards any purchase, including gas)
  • $40 off $250 order (before tax and shipping) on Costco.com. Expires August 14, 2022.

Valid for new members in the first year of their membership or members that expired prior to January 1, 2022. If you wish, auto-renewal can be turned off at any time by logging into your account online.

Save even more on your Groupon with a cashback shopping portal. Many offer new customers bonuses if you make a qualifying purchase, including Rakuten (formerly eBates) ($10 bonus), TopCashBack (varies), and BeFrugal ($10 bonus). I have cashed out of all of these in the last 12 months.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Mint Mobile: My Canada International Roaming Experience and Tips

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

After a delay of two years, my family finally used up our flight credits and stash of hotel points to travel internationally to Vancouver and Whistler, British Columbia for some snow-filled fun. I was a bit worried about how well my “budget” cellular service Mint Mobile would work in Canada. (I’ve used them for years now to keep my monthly bill under $20 a month – see my Mint Mobile review.) Hopefully this information along with my personal experiences will be helpful to other cost-conscious travelers.

Mint Mobile has an international roaming page with some basic “official” information:

  • You can add prepaid funds to your international roaming balance in $5, $10 or $20 increments. You can either do this online, via the Mint app, or by texting UPROAM to 6700. You should probably do this in advance, as you need internet access or cell service in the first place.
  • For Canada, the rates are: 6 cents per minute voice, 2 cents per SMS text, and 6 cents per MB of data. This means 1 GB of data costs $60!
  • You can check your balance by texting ROAM to 6700.
  • Note: While in the US, you can make free voice calls from the US to Canada and Mexico. Handy for trip planning!

Additional tips to activate voice and data roaming on your phone. Mint says the above is all you need, but I dug up following additional steps to try after reading about user difficulties on the Reddit forum which seemed to make sense (i.e. make sure you enable cellular voice network roaming and cellular data roaming). I did all this upfront and both voice calls and texts worked fine for me, but I’m not sure if it was critical. Try the following on your phone:

– Before leaving the US, enable airplane mode.
– Once you arrive at your destination’s, disable airplane mode.
– Dial (#766#) from your phone’s keypad to activate roaming.
– Activate roaming and data roaming on your device.

No data? Check your APN settings. Again, my cellular data roaming worked fine without changing my APN settings, but if it doesn’t for you, changing them to one of the settings either at Mint Mobile (try the Android settings even if you have an iPhone) or Ultra Mobile (same owner) has worked for other users. I might even print these out beforehand, or copy them onto an offline doc on your phone. After changing your APN settings, you may be allowed to pick a specific local network provider in Canada like TELUS.

Tips to minimize costs. Due to the high cost of cellular data, we pretended we were back in 2010.

  • Cellular coverage was quite adequate in Vancouver and Whistler, BC. My wife and I communicated primarily by SMS text message. At 2 cents each, it was very efficient and economical. We did have a few voice calls when text was too cumbersome.
  • We turned off cellular data for 95% of the time, only really using it when we needed Uber/Lyft or additional Google Maps guidance.
  • When cellular data was turned on, it was on “Low Data” mode to prevent too much automatic background usage.
  • We did all our iMessage, emails, and other activities when we were back on hotel WiFi, free restaurant/coffee shop WiFi, or other free public/airport WiFi.
  • While on WiFi, we also downloaded offline maps onto the Google Maps app for all the areas we knew we’d be going. GPS worked fine using offline maps. We also *gasp* used physical maps too! Felt strange.

Before we left, we loaded $20 each ($40 total) to our Mint international roaming balance. After about 10 days of running around Canada, we ended up using about $10 each ($20 total). The balance supposedly never expires, so we can use the rest later. Overall, I felt it was a very reasonable price for the flexibility provided. Again, some other users do report having trouble with initially connecting to cellular data in Canada, but we had no such issues. Hopefully, with all the troubleshooting tips above, you can also use Mint Mobile while on a short trip to Canada.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Health Care Flexible Spending Accounts: Don’t Lose Your FSA Money

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Updated for 2021. Here’s a year-end reminder (which also I set on my calendar for myself) to get back all the money sent into Healthcare Flexible Spending Accounts (HC FSA) due to their “use it or lose it” structure (see possible extensions below). The maximum salary deduction limit is $2,750 for 2021. You choose your deduction amount during Open Enrollment season, but it can also be adjusted during “qualifying life events” like the birth of a child, marriage, or divorce.

Quick ideas. If you didn’t exhaust your funds with insurance copays or deductibles, here are eligible items that you can still buy over-the-counter without a prescription. Just order things online and then submit the receipt. Amazon even has a special FSA-eligible page that accept FSA/HSA debit cards, complete with an “under $25” and “little-known eligible items” section. (Tip: Use this time to stock your hurricane/earthquake/snowstorm emergency kits.)

The 2020 CARES Act added the following categories for 2021 and beyond:

When getting a receipt, make sure it clearly includes the following:

  • Date of service or purchase
  • Name or description of the item
  • Amount of purchase

Deadline extensions. Employers have the option of adding one of the following:

  • Some plans allow a grace period until March 15th of the following year as opposed to a December 31st deadline to use your funds, but it may only apply to claims and not late purchases. Check with your employer on if they opted-in to these extensions.
  • Some plans allow participants to carry over up to $500 in unused FSA funds into next year. Check with your employer.

Big, exhaustive lists. Some of these are searchable by keyword as well.

But remember, your FSA administrator has the final say as to the exact guidelines for reimbursement according to your plan. I learned this the hard way when our FSA administrator switched one year from in-house to Conexis (now since acquired by WageWorks). Wow, Conexis was a pain. I had to submit some claims three times before finally getting approved. If you count the time wasted, I probably lost money by participating in the FSA at all. The skeptic in me suspects that this bureaucratic nightmare is part of their business model. (Remember mail-in rebates?) Guess who gets to keep unreimbursed FSA funds? The employer, which can then use the money to pay for… the FSA administrator.

Got a Health Savings Account (HSA) and think you are ineligible for an FSA? Look for a “limited-purpose FSA” option that is restricted to dental and vision care services. These have the same max annual salary deduction.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

My Favorite Things: High-Quality 2021 Edition

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Here are a few of my favorite things, sorted roughly with the most recent purchases on top. I enjoy reading about other folks’ favorite things much more than those generic gift guides. These are my answer to the question “If all your possessions disappeared, which high-quality things would you buy again?” If something comes to mind, that means the price was worth and you probably use it all the time. (Note: If you are reading this in an email/RSS reader, I am not allowed to include any Amazon affiliate links in e-mails, so they have been removed. Please click on the post title above to view the links in a browser. Thanks!)

High-quality, AA/14500 LED Pocket flashlight – $20

I am not a flashlight geek, but I have been slowly accumulating these little, powerful flashlights. I used to love those hefty Maglite flashlights, but the 4 D-cell version only put out 151 lumens, with even the baton-like 6 D-cell version putting out 178 lumens. This Lumintop pocket flashlight puts out 270 lumens with a single AA battery and up to a 650 lumens with a 14500 Li-ion battery (you can swap them out as they are the same size). It costs a little under $20 and there are other high-quality brands out there, but I think $20 is a good price point. (For under $30 you get a rechargeable 14500 w/ built-in charging port included.) I don’t want to depend on a low-quality $2 LED flashlight in an emergency situation. I use this multiple times a day – when taking out the dog, looking for lost toys underneath furniture, and so on.

Lodge Enameled Cast Iron Skillet – $80

Confession time… after writing many compliments to my Lodge cast-iron skillet, but it’s now a rusty mess. We used it 3x as much during 2020/2021, but despite a couple of re-seasoning stints in the oven, eventually our sub-par maintenance willpower got the better of us. We started using our Le Creuset and Staub enameled cast-iron pots as a substitute, and eventually decided we wanted something the shape of our old black skillet, but with the enamel finish. This lodge “casserole dish” works perfectly in that regard, as it can go on the stove and straight to the oven. (We love one-dish dinners.) For about $80, we can finally use dish soap on this daily driver.

Dyson V8/V10/V11 Cordless Stick Vacuum – $300+

We have owned one of the earlier heavy-duty, corded Dyson vacuums for over 10 years now and it has worked wonderfully. I had been eyeing these cordless versions for a while, but finally bought one when I saw refurbished ones at a discount at the Dyson Official eBay Store. Although refurbished, it came well-packaged directly from Dyson and I could not tell that it wasn’t brand new. This thing lives in our kitchen/dining area and the convenience and power is amazing, much to our dog’s dismay. I don’t know all off the differences between all the flavors; I bought the V10 because it was powerful while only a bit more expensive than the V8 at that time, but the pricing and inventory varies.

Thermapen food thermometer by Thermoworks – $80 to $100

There are many imitators, but as someone who has wasted money buying cheaper stuff, the frequent home cook should just go straight to Thermworks.com. They don’t sell anywhere on Amazon, so don’t look there. Thermoworks has clearly thought obsessively about how to make a precise, reliable, easy-to-use food thermometer. I expect it to last 10 years easy. It turns on when you need it, it turns off when you don’t, and simply feels high quality. It just makes home cooking easier and more foolproof. I have the classic Thermapen, which apparently was so good that they still sell it (at nearly zero discount) despite creating this newer improved version. However, I also suspect that most people (including myself) could get away with the $35 Thermopop.

Osprey Packs Farpoint 40 Travel Backpack – $160

After doing a lot of research on travel/hiking backpacks, I went with an Osprey Pack. They have an All Mighty Guarantee that will repair any damage for any reason free of charge, no matter when you bought it. So far, I have not been disappointed. Quality materials and construction. Just wish I could have used it more… it still looks far too new!

zeroll

Zeroll Original Ice Cream Scoop – $20

If you walk into an ice cream parlor, this is probably the brand that they use. Once you try it, you will wonder why all the other ice cream scoops in the world are so bad in comparison. Made of aluminum plus a conductive fluid inside that makes it easier to get through rock-hard ice cream. It creates the perfect ball shape for placing on cones. The 2-ounce size makes a small/medium scoop (good for kids) but other sizes are available. We go though a lot of ice cream in my house. Aluminum won’t rust and there are no moving parts, so it should last forever. Why not own the best ice cream scoop in the world for $20?

Patagonia Houdini Jacket – Men’s and Women’s – $100

This ultra-lightweight jacket (3.4-3.7 oz) packs into it’s own chest pocket (so there’s no extra bag to lose). This means you can throw it anywhere, from your cargo shorts pocket to your purse to your travel carry-on. It’s good for wind and light rain (not fully waterproof though) and just those times when you’re a bit chilly. It’s relatively expensive but the quality is high and it has traveled with me everywhere for several years.

Darn Tough Full Cushion Wool Socks – Men’s and Women’s – $25+

You wouldn’t think socks would come with an unconditional lifetime warranty, but they do from Darn Tough. If you wear a a hole in them a decade later, they will still replace them for free. Made in Vermont and comes in different thicknesses for use in both the heat and cold. High-quality wool keeps your feet dry and comfortable (and doesn’t stink). I also have decent wool socks from Costco, but I always pick these first. These are pricey, but I am slowly collecting them as part of my minimalist wardrobe.

KitchenAid Artisan 5-Quart Stand Mixer – $400

This was bought shortly after we got married, and we’ve been using it regularly without any issues for now 15 years. We use it to beat eggs and knead dough for pizza, pasta, cookies, and bread. It’s got some “character” now (dings and scratches), but is definitely something where the cost is amortized over decades.

Wusthof Classic/Gourmet Knives – 16-pc set for $450

These were on our wedding registry. I was amazed someone actually bought them at the time, but we proceeded to use them nearly every day for over 15 years! (Yup, I’m old.) They have been professionally sharpened a couple of times (less often than recommended), but they still work perfectly with no chips or rust spots. I bought a $40 Asian cleaver from a shop in Chinatown a couple years ago, and it only lasted a few months before large rust spots appeared. My mom told me I didn’t treat it right. Probably. I told her I’d rather spend $100 on a knife and have it last decades even after not treating it right. So I bought this Henckels version and never regretted it. Good knives are worth it.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Consumer Reports: Top 10 Most Reliable Car Brands 2021

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Consumer Reports has released updated results from their 2021 Car Owner Survey in the articles Who Makes the Most Reliable Cars?, 10 Most Reliable Cars, and 10 Least Reliable Cars. Most of it is now behind a paywall, but more info can be found in outside media coverage like USA Today. Here are highlights, including the Top 10 and Bottom 5:

  • Most reliable: Lexus is back at #1, but the top 3 are the same (Lexus, Mazda, Toyota)
  • Most improved ranking (into Top 10): Infiniti and Acura.
  • Biggest ranking drops (out of Top 10): Hyundai and Ram.

Consumer Reports Top 10 Most Reliable Car Brands, 2021 (2020 ranking)

  1. Lexus (3)
  2. Mazda (1)
  3. Toyota (2)
  4. Infiniti
  5. Buick (4)
  6. Honda (5)
  7. Subaru (8)
  8. Acura
  9. Nissan
  10. Mini

Consumer Reports Bottom 5 LEAST Reliable Car Brands, 2021

  • Volkswagen
  • Genesis
  • Jeep
  • Tesla
  • Lincoln

The following brands did not have enough survey responses to be ranked: Alfa Romeo, Dodge, Fiat, Jaguar, Land Rover, Maserati, Mitsubishi, and Polestar.

Here are the 2020 rankings for the curious. I don’t think these rankings are perfect, but I do believe they are unbiased and based on actual reader surveys.

Despite providing these brand rankings, Consumer Reports recommends that you shop by specific vehicle model and not just by brand make. Reliability problems often occur when a new model is released with a new engine and/or drivetrain system. In my opinion, this makes the best bet to buy a Toyota/Lexus/Mazda model that is a few years into the current generation, after any remaining kinks have been worked out. Not exciting, but neither is the hassle and expense of dealing with car repairs. Consumer Reports print subscribers can add digital access for $25 per year.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Time Best Inventions of 2021: Easy 401k Rollovers, Optimize Home Remodels, AI Tutor, Kid Plane Bed

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Time magazine has announced their Best Inventions of 2021. In addition to offering a hopeful look at the future each year (which we can all use these days), I always find a few useful products and services that can save you money and/or effort as compared to the traditional option. Warning: The annoying thing is that every individual item with short description counts as an “article” against their paywall limit. Here are a few potentially-useful inventions that caught my eye:

Capitalize – Easy 401(k) Rollovers (Are they really that hard?)

Millennials change jobs often, and when they do, many neglect to bring along their 401(k)s, put off by the hassle of long phone queues and locating obscure documents. […] Simply enter the names of former employers or retirement-account providers, and Capitalize does the rest—unearthing accounts, handling paperwork and suggesting IRAs where old money can make new gains.

Realm – Optimize Home Remodels (for property value, not personal enjoyment)

Homeowners often struggle to decide which upgrades will offer the biggest property-value boost. Realm helps out by analyzing real estate, tax, zoning and other data to offer recommendations—assessing the impact of different designs, materials and financing options to calculate the return on, say, a kitchen renovation.

Amira and the StoryCraft – AI Reading Tutor App (1-on-1 tutoring is not affordable for everyone)

Research shows that the best remedy for reading disorders is early intervention. Unfortunately, there are not nearly enough teachers and tutors for one-on-one instruction. Amira and the StoryCraft was developed to help. Using speech-recognition software, the app ($7.99) listens to students read aloud, pausing when a child stalls or makes a mistake on a word. Then, the app teaches them how the word is pronounced. A Carnegie Mellon University study found that students using the software for 20 minutes posted twice the gains as those using traditional methods.

JetKids BedBox – Convert airplane seat to bed for small kids 3-7

It costs $199 but if my kids would have reliably fallen asleep on it, I’d have bought it for sure… Approved my many major airlines including American, Delta, Southwest and actually sold by others like Cathay and Singapore. (I did notice that United is not on their approved list.)

OXO Spoon Rest with Lid Holder

I like the overall quality of OXO products (their tongs have lasted forever compared to cheaper alternatives) and while this invention won’t change the world, it does solve a problem with my drippy lids resting on random things in my kitchen. *clicks “Add to Wish List”*

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Healthcare and Dependent Care FSA Check-up Reminder (Average Loss $157)

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As we head into the last few months of 2021, this is a reminder to check on your Healthcare and Dependent Care Flexible Spending Accounts (FSA). This NYT article outlines some temporary changes this year, while also revealing that nearly half of all FSA participants have lost some amount of their contributions, with a median lost balance of $157.

Healthcare FSA carryover allowance for 2021 into 2022.

Employers may allow a “full” carry-over of remaining balances for next year — up to the total balance in the worker’s F.S.A. So if you had $1,000 in your account at the end of this year, you could carry it all over into 2022. (The usual carry-over limit is $550.)

Masks, hand sanitizer, sanitizing wipes, and at-home COVID tests are FSA eligible expenses. See official IRS notice. The Amazon FSA and HSA Store accepts your FSA/HSA debit card for hassle-free reimbursements and is also an easy way to find eligible items that may be useful to you.

The accounts can be used for medical care and co-payments, nonprescription drugs, and a variety of health-related services, products and supplies, including menstrual pads and tampons, breast pumps, contact lenses and lens solution.

And the I.R.S. recently clarified that masks, hand sanitizer and other items that protect against the spread of Covid-19 are eligible for reimbursement. At-home Covid tests also qualify, the I.R.S. said, because “the cost to diagnose Covid-19 is an eligible medical expense for tax purposes.”

Dependent Care FSA carryover allowance for 2021 into 2022..

Under a temporary pandemic relief change, however, all funds in dependent care accounts may be rolled over into 2022 — if the employer chooses to allow it.

Balance carryover extensions are thus possible but still require your employer’s approval, so check with your HR department first.

I hate wasting potential tax savings, but this is another year of struggling with my Dependent Care FSA benefits provider over reimbursement approvals. FSA “stores” made some things easier, but many childcare providers simply aren’t used to providing detailed, itemized receipts like Amazon or Walgreens.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

FIRE Starters: Profiles of 12 Individuals and Families Pursuing Early Financial Freedom

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I enjoyed watching all 14 YouTube videos in the FIRE Starters interview series by Marketwatch. The videos were well-edited, in that they averaged only about 5-7 minutes each but still explained the individual and/or family’s unique path to financial independence. You can watch a single video during any small break, or you could watch them all in about an hour and a half. The profiles usually covered the initial spark, overall occupation and salary range, age timeframe, and a monthly budget breakdown. Some of the videos follow the same person(s) a couple of years apart (before and after the pandemic began).

Here a few embedded video examples (might not show up in e-mail):

A few observations:

  • Work. I saw a nurse, flight attendant, hourly IT consultant, lawyer, and energy trader. People who pursue Financial Independence are more likely to have an above-average income, sure, but are they also more likely to be paid on an hourly or shift basis? Maybe when there is a direct link between trading your time (life) for money, you quickly realize the power of dialing up and down your hours. Use the difference between income and spending to buy productive assets and create an supplemental income stream, and those are the primary variables of financial independence.
  • Possibilities. Seeing how other people have customized their lifestyles helps you visualize your own path. The more examples the better. Don’t blindly follow the perceived default of 40-50 hours a week times 40 years. You don’t have to spend like your friends. You don’t have to work the same hours as your friends. You might live in a tiny 500 sf urban condo. You might live on an off-grid 10-acre farm. You might not have kids. You might have 5 kids. You might invest in stocks. You might invest in real estate. You could work full-time, 50% time, or 8.562% time. There are so many ways to play the game.
  • FIRE is just a catchy but imperfect acronym. As someone who started on this journey before “FIRE” was a popular acronym, I’m not sure why “FIRE” is so catchy. I’d say 80% of successful FIRE folks end up saying “I really just focus on the Financial Independence part” and not the “Retire Early”. So why bother with the RE part? The word “retire” evokes a very specific idea, while “financial independence” doesn’t force itself to be black or white. “Grey” semi-retirement may offer a better path, allowing you to work less and live more while you are young and healthy.
  • The first $10,000 is the hardest. As I’ve said before… Only a small percentage of the population can save up $10,000. Even having that amount of money can change your life. If you can save up $10,000, you can save up $100,000. If you can save up $100,000 and add some time and productive investments, you can reach $1,000,000. The most important thing is to start. Let these videos inspire you.
My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Savings Rate vs. Income Bracket: How Impressive Is Your Savings Rate?

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One of the criticisms of the pursuit of financial independence is that it is “only for the rich”. Certainly, having a lot more money coming in every month should make it easier to set some of it aside. However, you might also observe that most people with higher incomes have higher expenses – bigger homes, faster cars, fashionable clothing, and so on. What if everyone is basically running on a hamster wheel, regardless of income?

In other words, a 0% savings rate:

Well, according to this Economic Policy Institute analysis based on the Federal Reserve Board’s Survey of Consumer Finances and other data from 1989-2013, this is not far from the truth for everyone up to the 90th percentile of households:

This Mother Jones chart converts the percentile numbers into annual household income:

This chart shows the problem with any statistics about “average savings rate across all households”. While the average savings rate might be 10%, it’s basically zero for 90% of households while over 50% for those making over $750,000 a year (some of whom are making far, far more than $750k a year).

If you are making over $200,000 a year, then you shouldn’t be too proud that you are maxing out your 401k at $19,500 a year in 2021. If that’s all you are saving, that’s less than a 10% savings rate and you are barely average. If you’re making over $300,000 a year and only maxing out your 401k and your IRA every year, then you’re saving much less than your income bracket peers.

However, the most intriguing discovery to me is that the savings rate for those making $150k to $200k annually is essentially the same (zero) as everyone making $40k, $75k, and $125k a year! Within that wide range from $0 to $200k a year, it turns out to be pretty close to a hamster wheel! If you have any sort of significant savings in this income bracket, you should feel a little better today. Why does every household earning up to $200,000 a year, feel a need to spend nearly all of it on average? Perhaps in this range, you still believe that you are receiving “value” for that additional spending in terms of comfort, security, convenience, and/or happiness. If you can afford it, you really want it.

Let’s roughly estimate an ongoing 40% savings rate of your annual income as being on pace for truly “early” financial independence. (This assumes relatively constant income, not a big windfall.) Someone making $100,000 would have to spend as if they made $60,000 a year. I don’t see why this is impossible, as someone making $60k also spends $60k.

If people spend what they earn, why can’t they just pretend they earn less? If only it were so easy. So many of our choices are rooted in deep psychological desires, a combination of evolution (nature) and our childhood experiences (nurture). We are social, comparative creatures and have so many cognitive biases they barely fit on a huge infographic with tiny font. As Morgan Housel explains in The Psychology of Money:

Doing well with money has a little to do with how smart you are and a lot to do with how you behave.

As the data shows, for 99% of the population, anyone saving 40% of their income is a rare bird. While it is a more impressive and rare feat to see someone making $50k and spending $30k while putting $20k a year into productive assets, than for someone making $250k and spending $150k, you don’t get extra points for difficulty level! You should still work on increasing that income.

Bottom line. The average household earning between $0 to $150,000 per year spends nearly every dollar they year, but so does the average household earning $150,000 to $200,000 a year. Why is this, and what can we learn from it?

[Hamster wheel image credit]

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Evidence-Based Doomsday Prepping and Personal Finance

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards and may receive a commission. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

I dug into the longread Doomsday prepping for less crazy folk today. The title pretty much says it all – I prefer to call it “evidence-based doomsday prepping”.

Effective preparedness can be simple, but it has to be rooted in an honest and systematic review of the risks you are likely to face. Plenty of excited newcomers begin by shopping for ballistic vests and night vision goggles; they would be better served by grabbing a fire extinguisher, some bottled water, and then putting the rest of their money in a rainy-day fund.

[…] I also found that to come up with a rational threat model, we need to think of “risk” as a product of both the probability and the consequences of a given event. By that metric, stubbed toes and zombie outbreaks are equally uninteresting; one of them has nearly zero significance, the other, nearly zero odds.

Strangely enough, my favorite part might have been the section on getting in shape and losing weight, as it very closely matched my own experiences and opinions on the topic. But since this is my money blog, I’ll talk about the personal finance aspects. If you’re going to build a resilient lifestyle, you’ll need some assets and figure out how to protect them.

Good ole’ emergency fund. The most likely “disaster” you’ll face is probably unemployment. Forget retiring at age 30, you’re just trying to survive having no income (or a severe cut) for 6 months. If you can figure out how to build a stash of 6 months of living expenses, you’ll already be way ahead of most people and have a rough blueprint for eventual financial freedom anyway.

Cash. You should be prepared to not have access to banks or ATMs for a short period of time. It could be a huge systemic crisis, or you might simply have a bad case of identity theft. Cash is still mighty handy for anything other than an extremely severe event – although it might be good to smaller bills.

For short-term survival, simple solutions work best: just keep about 2-4 weeks’ worth of cash somewhere at hand; have enough money on you to get you back home when traveling, too. Of course, be mindful of the risk of burglary, so if you’re keeping the funds at home, pick an unobvious location for the stash; more about that soon.

Break-ins are difficult to prevent, especially in suburban single-family homes with secluded backyards and street-level windows and doors; tall fences and window bars can work, but they are expensive and tend to draw the ire of your neighbors. The most cost-effective solution may be to keep your windows and doors closed when away, but beyond that, just optimize for hassle-free outcomes. You can leave some less important goodies in plain sight – say, some cheap jewelry, a modest amount of cash, and a beat-up phone – and put all the real valuables in a much less obvious or less accessible spot. A heavy safe will usually do; diversion safes fashioned into books, cans or clocks are pretty cool, too – if you trust yourself not to accidentally throw them away.

Banking. The author suggests splitting your money between two unrelated banks. This practice could easily extend to your brokerage accounts.

As for the remainder of your money, I suggest splitting it across two largely unrelated financial institutions with different risk profiles – say, a big national bank and a local credit union.

Gold. Before you follow the safety box suggestion, know that banks aren’t responsible if they lose the contents of safe deposit boxes. Serious preppers recommend paying for a reputable, international vault to store your gold – I imagine it to be dug deep into the mountains of Switzerland – but as noted that is expensive and reserved for those with a high net worth.

Because of its very high value-to-volume ratio, physical gold is stored and moved around very easily, but keeping substantial amounts at home can be ill-advised; theft is a very real risk, and most insurance policies will not adequately cover the loss. Safe deposit boxes at a local bank, available for around $20 a year, are usually a better alternative – although they come with some trade-offs; for example, the access to deposit boxes was restricted by the government during the Greek debt crisis in 2015. Non-bank storage services do not have that problem, but cost quite a bit more.

Bitcoin. Cryptocurrencies aren’t discussed at all, but they are meant to be independent of governments. If you put your keys into a hardware wallet, this is another store of value that could have an infinite “value-to-volume ratio” and possibly easier to move than gold or cash. Will Bitcoin be more or less valuable in a crisis? I don’t know. The answer also might change over time.

Stuff. Yes, yes, guns and ammo. But for the most likely scenarios the best thing you could have done was to take a bit of your money buy some everyday stuff: keeping your gas tank half full, keeping a full propane tank, packing a simple Go Bag with clothes/first aid kit/energy bars/extra prescription medicine, a few crates of water, and so forth. Fire extinguishers, fire ladders, smoke and CO detectors in every room could be the best money you ever spent. You might also throw in a will and an advanced health directive.

Insurance. I was surprised that there wasn’t a more detailed discussion of insurance. If we’re talking real-world life-altering disasters, either getting hit by a car or hitting someone else with your car has got to be one of the more likely ones. Do you have adequate health insurance? disability insurance? auto (liability) insurance? homeowners? flood? earthquake/hurricane add-on? Don’t forget these 11 reasons to buy an umbrella liability insurance policy.

Bottom line. There are many simple things that you can do to make your life more resilient that doesn’t involve building your own underground bunker, and many of it meshes with basic personal finance advice. Here’s a nice ending line to keep things in perspective:

In the end, ladders, cars, and space heaters are a much greater threat to your well-being than a gun-toting robber or an army of zombie marauders could ever be.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Four Pillars of Retirement: Money, Purpose, People, and Health

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While it is understandable that most talk about “retirement planning” concerns money, a truly successful retirement requires more than that. Coincidentally, the same week I was pondering the Components of Happiness, I also stumbled upon a 6-year leanFIRE update from LivingaFI. It was a very honest and thoughtful story of someone who carefully planned and quit their job at age 37. I usually focus on my reason for financial indepedence as “spending my time as I wish”, but now I realize that it may help to specifically address certain areas regularly.

For your consideration, here are The Four Pillars of Retirement*:

  • Money: You need enough money to pay for housing, transportation, food, healthcare, and everything sold at Walmart/Target/Amazon/Costco.
  • Purpose: You need to feel that you are useful, moving forward, pursuing a goal, and/or making the world a tiny bit better.
  • People: You need love. Love and social interaction from your life partner, children, family, friends, and/or animal companions.
  • Health: You need to feel physically healthy, or be at peace with your level of health.

Imagine each pillar as one of the legs of a square table. We have to maintain and shore up any cracks before it gets serious. If you are lacking in any one of these pillars, your retirement gets wobbly. If any two are crumbling, that’s enough to make the entire thing tip over.

Most people say that they hate work, but working takes care of more than just the money pillar. In addition to income, work can provide a sense of purpose and self-worth, as well as a wide social circle. Some people just like having something fixed to build their routine around; they flounder with “nothing to do”. People often imagine retirement as a perpetual weekend – playing golf, eating out, travel, shopping, etc. – but it can get weird when all your friends are still working. Here is a WSJ article on how leaving work can put a lot of strain on couples.

It can be difficult to get out of the “I must be busy and productive” mindset. When you retire, use the opportunity to sit in the quiet and ponder what is most important to you. Choose your hard thing.

Finally, even if you have done all you can to be prepared, life still happens. The author of LivingaFi had nearly $1 million in assets, reasonable expenses, a committed life partner with a similar level of assets, lots of outside interests, and good health. This is not judgment, but a scary reminder for all of us: jobs, bull markets, relationships and good health can all end faster than you think. Your actions matter, but luck matters too. For example, the Social Security Administration says that a 20-year-old worker has a 1-in-4 chance of being disabled before retirement age. (Where available, we should buy adequate life, health, and disability insurance.)

My biggest blind spot was that if you have children, any one of them may also develop a health condition or other special needs that may require additional financial support indefinitely. I really didn’t appreciate the hidden struggles that so many families go through that is no fault of their own. I also didn’t fully appreciate how lucky I was to not have to deal with any of these things while growing up as a kid.

If you accept that luck matters in your investments, then the optimal choice might be to retire earlier with a more modest amount so that if things go well, you get more retirement years, but if things go badly, then you fall back on some part-time back-up work. Being willing to be flexible can pay off. You have to balance your odds of running out of money with the odds of running out of time.

On the other hand, if you are a high-earner, it might be better to work “One More Year” while you work on planning for the other pillars. Finding a new purpose, finding new friends, finding a new routine, it can be quite difficult. Looking back, I am thankful that we did not attempt to retire early and instead adjusted our hours (and income) downward while still keeping our foothold in the workforce. I’m still working on these pillars myself, but our middle path has worked well for us.

(* A nod to the classic The Four Pillars of Investing, one of the first investing books I ever read and reviewed here way back in 2004.)

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

Lesser-Known Cheap Basic Prepaid Cell Phone Plans on Every Network – Starting Under $10 a Month

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(Updated 2021. T-Mobile absorbed Sprint, so no more Sprint MVNOs. Tello is now a T-Mobile MVNO, but is still quite affordable. Ting Mobile has new flexible plans that work well for occasional data users, and you can now choose from either the T-Mobile or Verizon network.)

You can get unlimited talk and unlimited texts for $10 a month or less on every major network. That’s less than my bare landline used to cost. The major networks sell wholesale minutes to lesser-known MVNOs (Mobile Network Virtual Operators), which they in turn sell at a significant discount to individuals. Below are the best options by network below (Verizon, AT&T, T-Mobile) along with an alternative. I sort by network because that usually makes it easier to Bring Your Own Device (BYOD), though every MVNO will have a form where you can check compatibility via identification number (IMEI or MEID). Here are the cheapest plans with unlimited talk & text and 5G/LTE high-speed data.

Disclosure: This post includes affiliate links where available. If you make a purchase through the links below, I may be compensated.

T-Mobile NetworkT-Mobile Network Color: Hot Pink

  • Unlimited Talk & Text. Tello Mobile also has an unlimited talk, text, and no data for $8 a month. You need to choose a custom plan to find this option. Upgrade to 1 GB of data at only $10 per month. New user promo: Get 50% off their first 3 months.
  • Unlimited Talk & Text + Flexible Data. Ting Mobile has an unlimited talk and text for $10 a month plus pay-for-what-you-use data for $5 per GB of high-speed data. This may work best for those that want to always have access to data at a reasonable price, but no data during most months. Ting data can also be shared across multiple lines ($10 per line base). Ting now runs on both the T-Mobile and Verizon networks. For T-Mobile, you should be directed their “X1 SIM card”. New user promo: Bring over your own phone and get a free $25 service credit.
  • Higher price, but not MVNO. Alternatively, you can go directly with T-Mobile Connect and get unlimited talk and text with 2 GB data for $15 a month.

Note: I personally use Mint Mobile, which offers unlimited talk, text, and 4 GB data for $15 a month – see my Mint Mobile review for tips and details based on my experiences.

AT&T NetworkAT&T Network Color: Blue

  • Unlimited Talk & Text. Good2Go Mobile offers unlimited talk and text for $10 a month. Upgrade to 1 GB of data and pay $15 month. Buy the SIM card from Amazon for $5 and get $5 credit included.
  • 3 GB LTE data, more expensive. Alternatively, Red Pocket Mobile offers unlimited talk, text, and 3 GB data for $19 a month. After your LTE data runs out, you still get data included at slower 2G data speeds until your month resets. Be sure to choose the AT&T network (GSMA) when you sign up.

Verizon NetworkVerizon Network Color: Red

  • Unlimited Talk & Text + Flexible Data. Ting Mobile has an unlimited talk and text for $10 a month plus pay-for-what-you-use data for $5 per GB of high-speed data. This may work best for those that want to always have access to data at a reasonable price, but no data during most months. Ting data can also be shared across multiple lines ($10 per line base). Ting now runs on both the T-Mobile and Verizon networks. For Verizon, you should be directed their “V1 SIM card”. New user promo: Bring over your own phone and get a free $25 service credit.
  • I previously listed US Mobile, which also advertises unlimited talk and text for $10 a month, but they actually tack on a mandatory $2 month “access fee” on top of the usual taxes and fees. I don’t know of any other provider that does this, as it is basically a secret way to make the price really $12 a month.
  • 3 GB LTE data, more expensive. Alternatively, Red Pocket Mobile offers unlimited talk, text, and 3 GB data for $19 a month. After your LTE data runs out, you still get data included at slower 2G data speeds until your month resets. Be sure to choose the Verizon network (CDMA) when you sign up.

(Note: Now that Sprint has finally completed its merger with T-Mobile, some T-Mobile MVNOs can now access Sprint towers and some previous Sprint MVNOs are switching to T-Mobile MVNOs.)

Here are the cheapest plans with unlimited talk & text and 5G/LTE high-speed data.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.