5 Ways I Save on Essential Expenses to Have More Remarkable Experiences

Tatiana Hart/ July 22, 2018/ MONEY/ 0 comments

How to Make Budgeting Fun

Budgeting does not resemble dieting:  when you diet you eat certain foods and starve yourself.

When you budget well,  you still buy what you want, unlike dieting, but only when you set aside enough money for it.

Borrowing money  is very expensive in the long run and does not make us wealthy.

We invented good and bad debt to justify that we can buy what we cannot afford mostly to make us feel good about ourselves.

Once we resolve the self-esteem issue, we will find the strengths and the means to make and to save the money we deserve so we can cash flow anything we want for the rest of our lives.

Pretend you have enough money to lend to others. Would it be terrific? That means that you can cash flow just off your savings for the rest for your life.

Therefore, it is wise to know what your priority purchases, besides food, and plan for them ahead.

If you like me value time and experiences over stuff, you will find room for travel in your budget.

One way or the other, the tools below will help you take advantage of traveling more and experiencing the world and your money more effectively.

You Do Need a Budget (YNAB)

The idea behind YNAB resonates with Paula Pant’s financial freedom philosophy: You can afford anything, but not everything (and not at once).

You do have to prioritize your major expenses and allocate funds for them ahead of time.

The main principle of YNAB budgeting allows to give every dollar a job. Let’s say you want to plan a trip in May and allocate funds for it.

Presume your trip to Greece costs $2,500.

You have nine months to cash flow it, therefore, you need to set aside approximately $278 a . month for the next nine months.

If you do not have an Excel spreadsheet for your monthly budget I actually have separate Excel spreadsheets for certain categories base don their complexity), I will share with you an example in the next post.

For now, the premise of budgeting lies in knowing how much you need to cover your aggregate monthly essential payments such as mortgage/rent, utilities, food, and loans.

After you have the above number, you will subtract it from your income. The difference will be the amount from which the Greece trip will come out.

If you impulse buy, let’s say, a new pair of shoes tomorrow that you did not budget for, the amount will have to come out of another category partially or fully.

If that category happens to be the trip, you will have to find the money to compensate the shortage.

The YNAB strategy keeps protects you from borrowing money on credit and keeping your stress levels low.

My Wallet: Best Travel Debit and Credit Cards

I typically choose banks and credit card companies which offer travel benefits such as points on purchases, travel miles,  zero currency conversion fee, so forth.

I have had a high yield checking account with Charles Schwab for the past 4 years and never looked back.

They do not have ATMs but they do refund fees should you need to obtain cash anywhere in the world.

I used them across Europe and always had the best currency conversion rates and the best customer service when I needed help with my ATM pin in Sardinia

My favorite credit card with 0% APR on purchases and 0% APR on balance is American Express.

American Express provides a $150 cash bonus for spending $1000 in the first three months.

My favorite travel credit card is Capital One Venture .  Besides the impressively slick design, it offers 50,000 miles in the first four months with a qualified spent amount.

They also wave the annual fee for the first year. The earned points in the first four months paid for the round trip ticket to Europe. Chase Sapphire does not charge currency conversion rate.

The card has travel protection insurance built in in the service in the event of trip cancellation if you book flight, hotel, or a car with it.

Student Loan and Private Loan Financing

I refinanced my student loans with Social Financing – SoFi to get a better interest rate and better repayment terms. Since my goal is to get rid of the loan as soon as possible with the least interest

I am describing low fees, low interest and great service when I say better repayment terms.

The first of all remarkable things about SoFi that they do not charge a finance charge. It is free to refinance your loans.

However, it is really hard to qualify for a loan with them, They do due diligence during the qualification  process but it is truly worth it.

I chose to sign up for Direct Debit which gives a discount of 0.25% off the interest rate.

To reduce the total payoff amount overtime, I set up an agreement with the new lender where I make lump sum payments toward the principal only.

It is allowed when a direct debit agreement is enforced.

Direct debit automatically withdraws minimum payments monthly  and distributes them between the principal amount and the interest where interest is prioritized.

That is why when you do not distinguish between principal only payments and interest payments, it  feels you are throwing money into a pit without making a dent in the principal especially when the loan amount is large.

If you designate principal only payments, you dramatically reduce the amount of principal from which the interest is calculated and consequently the amount of interest you pay overtime.

Budget-Friendly Cellular Plan

FreedomPop has been my cell service provider for the past three years.

They offer custom plans that can be tailored to your needs.

Since I do not make too many phone calls and mostly use text messaging, my monthly bill is only $4 for unlimited talk, text and 1GB of data.

You can also use free Wi-Fi instead of data if you need to go over 1GB. When I travel, depending on the duration, i may purchase a local sim card or use Skype or other apps for calls via Wi-FI.

Earn Cash Back on Travel and Purchases

I use BeFrugal   to receive discounts and rebates. Be Frugal offers discount codes and cash rebates on a wide range of purchases. It is superior to other websites I have used because it offers higher rebates, a $10 cash bonus for opening an account and more pay out options.

Ebates gives you cash back on travel bookings and a multitude of  online purchases from Amazon, Target, Expedia and many many more.

Anytime you connect to a desired online retailer, Ebates calculates a pre-defined percentage and deposits cash into you Ebates account to mail you a check when a $5 threshold is met.

I feel more content when I travel and have unique experiences and when i spend time with my loved ones.

Therefore, I use the tools described above to allocate money for memorable experiences.

Hope you can take advantage of them.

Until next time.

-Tatiana Hart

 

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