Category: Save

At my own house, I kept thinking I would switch over completely once I had used up all of my old incandescent bulbs, but when I did the math, I was amazed to learn I would save more by ditching those old bulbs —or maybe donating them— than by using them up.
The federal government caught on to the high cost and energy consumption of lighting back in 2007 and passed a law decreeing that lightbulbs must be three times more efficient by the year 2020.
The average American house uses 40 lightbulbs. The average rate for electricity is 13 cents per kilowatt hour.
If all forty lightbulbs were 75 watt incandescent, which is pretty typical, you could convert to 11 watt LEDs to get the same amount of light. Let’s say you leave all forty lights on five hours a day. The annual cost of electricity to power 40 incandescent lightbulbs is an astounding $700. The cost to power 40 LED bulbs is just $100 dollars. Yes, switching to LEDs would save this imaginary household $600 bucks a year. It’s amazing to me that LIGHTING uses so much electricity!
But what about the cost of the bulbs themselves? When LEDs first came on the market, some of them cost as much as $100. Not any more, thank goodness! I was able to find them available for $5 apiece and you can often score LED bulbs for even less, thanks to rebates offered by power companies.
By contrast, old fashioned lightbulbs cost about a dollar a bulb, although, they will probably get more expensive as they become scarce, due to the government mandate. For math’s sake, let’s call the difference in cost between a basic LED and an incandescent bulb $4 bucks. Since a single LED saves you $1.25 a month, you can recoup the cost of the bulb in just over three months.
In addition to saving money, LEDs can save you time —with fewer trips to the store and up the ladder. They last for about 25 thousand hours. That’s more than 13 years, if you keep your lights on five hours a day, which is the number I’ve been using throughout.
Just know that not all LEDs are created equal. To know you are purchasing LEDs with the maximum benefits, look for the Energy Star label. This means they meet standards for brightness, color quality, efficiency, steadiness and lighting up immediately when switched on.
Always nice when you can do something nice for the planet AND you pocketbook all at once.

Rebates offered by power companies:

www.energystar.gov/rebate-finder?scrollTo=0&sort_by=utility&sort_direction=asc&page_number=0&lastpage=0&zip_code_filter=94949&find_rebates=Find+Rebates&search_text=light+bulbs+-+leds&product_clean_isopen=&product_types=Select+a+Product+Category

LED lights for the best price: www.homedepot.com/p/EcoSmart-75-Watt-Equivalent-A19-Dimmable-LED-Light-Bulb-Daylight-2-Pack-5bSA1100STQ1D03/206668064

Energy Star LEDs are the highest standard:
www.energystar.gov/products/lighting_fans/light_fixtures/why_choose_energy_star_qualified_led_lighting

I want to tell you about all the money you can save through pill splitting —which you may have heard of— but also pill growing, which you probably haven’t because I made up that term!

I don’t know why, but many medications cost the same amount regardless of the number of milligrams in each tablet. It’s weird. The pharmaceutical company is giving you more –sometimes twice as much– of its prized compound, but doesn’t charge you much –if any– extra for it.

Take Lipitor, the popular cholesterol drug. A 30-day supply of 20-milligram pills costs $127. But a 30-day supply of 40-milligram pills also costs… $127. Let’s say your prescription is to take one tablet twice a day. Instead of buying twice as many 20-milligram tablets, you can buy the 40-milligram ones and cut them in half. In this example, you would save more than 15-hundred dollars a year!

It’s important to check with your doctor and pharmacist before splitting pills. Some medications, like extended release formulas, should not be split. An easy way to tell if a pill is safe to split is if it is scored along the top for this very purpose.

Now, let’s talk about pill growing! I coined the term “pill growing” to describe another practice taking one big pill instead of a bunch of little pills. Again, since many pills cost the same amount, regardless of the actual milligram strength, this concept works in reverse too.

Here’s how it works. Often, a doctor will start you on a low dose of a medicine and then ramp up the dosage as your needs become clear. At first, it might make sense to just take more of the tablets you already have, to use them up. But if you keep doing it that way, you are probably wasting money.
Say you are on the antidepressant, Celexa. A single ten milligram pills costs $3.30. A single 40-milligram pills costs $3.60. So if you take four of the ten milligram pills, you are paying nearly four times as much as if you take one 40 milligram pill! If you “grow” your Celexa pills, you will save more than 35-hundred dollars a year.

Believe it or not, many doctors don’t think of this idea. So ask if the medication you’re taking comes in a larger dose and then find out how much that larger dose costs and whether it will save you money.

If you send your children to private school, you can now use money saved in a 529 plan to pay their kindergarten through 12th grade tuition.
This new opportunity that came with the tax overhaul of late 2017 only applies to private schools. But yes, starting with the 2018 tax year, you can withdraw $10,000 per student per year to pay for primary or secondary education. Now, you shouldn’t withdraw from a 529 plan if that means you won’t have enough money for college. BUT, if you are financially secure enough to add EXTRA money to a 529, or even set up a new one JUST for K-12 expenses, then there is an opportunity to save a boatload of money in taxes.
To be clear, I’m not talking about the 32 states that offer tax deductions or credits for investing in a 529. That money only adds up to a couple hundred dollars a year at most. No, the real benefit of a 529 has to do with FEDERAL taxes. It’s like a Roth IRA for education in that the money in a 529 grows free of federal income tax.
Now that you can sock away money in a 529 for BOTH K-12 education AND college education, there’s a savings strategy called front-loading that you should know about. This one is for people with big cash reserves. If you have the money, it could be very lucrative to invest a couple hundred thousand dollars in a 529 plan now, so that it has as much time as possible to grow. Then you can withdraw $10,000 per child per year —free of federal income tax— to pay for private school tuition.
An online calculator shows that front loading like this could save a family more than $2,000 a year in federal taxes. Multiply that times the 13 years a child is in school for K-12 and that’s $30-thousand dollars in savings! You know me, I get excited any time there’s a chance for five-figure savings. And you would still have money left over after the 13 years to put toward your son or daughter’s college and maybe even grad school tuition.
Of course, you should consult a trusted financial advisor about your individual situation. You can also run your own numbers through a tuition calculator and I have linked you to a good one below.

529 Tuition Savings Calculator: www.savingforcollege.com/calculators/529-private-school-tuition-savings-calculator

What if you could get all of the beautiful clothes you could ever want for low or NO cost? That is our featured “save more” segment of this podcast. My guest says she has not purchased a new piece of clothing in 20 years and yet she’s a well-dressed woman. Please welcome Kate Bryer to Easy Money. Hi Kate!

Kate, tell us about your real job, first, so people can get a feel for what you’re all about.
I am the Associate Artistic Director at Imagination Stage, a children’s theater in Bethesda, MD.  I have been at Imagination stage for 20 plus years and I run the professional theatre aspect of the organization.  I direct two shows a year with professional actors performing for children.  In addition, I hire all the designers, help to pick the season and work with a casting director to cast all the shows.  

So you’re a creative type and you’ve gotten creative about how you buy clothes.  Explain what you do.
My big thing is actually thrift stores and ebay—i love buying clothes so need to get rid of a lot and do so on ebay.  I dont make a lot of money but enough to play and keep my clothes hobby going.  And i dont think i have bought a new piece of clothing in 20 years.  Every piece of clothing i own is thrift store or ebay bought!

In fact, you say you spend little or no money on clothes at all.  How can that be?
I am a major penny pincher. Always have been always will be. I sell clothes in order to buy more clothes, so that the money coming in and going out are similar.  I love finding treasures at thrift stores and rummage sales.  Well made beautiful things and clothing are an addiction.  I have been told I have a good eye— I know good quality when I see it.  

The other benefit is that your home doesn’t get too cluttered, right?  Since you’re always selling things to buy something new?
Well, not sure my husband would agree…I have a lot of stuff— clothes in particular.  But I try to keep it organized and in places that are not the public areas of my home.  Sometimes it can take a while for something to sell— that is the down side because it means you have to have space to organize and store things until they sell.  I do occasionally take things to a local consignment shop where they will buy clothing and give you 50% of what they can sell it for.  They give you cash right there and it’s good because then you are not having to store these things and wait until they sell.  

Ah, so it sounds like you buy some extra clothes to sell as a little side hustle rather than just buying clothes for yourself? Is that worthwhile?

Let’s provide a visual for people.  What is your style and what brands or designers do you like these days?
Brand and designer  names sell best on eBay.  It is very hard to sell something if it does not have a label.  So, things like designer hand bags (coach, Kate spade, Brighton, , etc) do well.   Basic stores like Ann Taylor, Banana republic, j crew, north face, Patagonia, REI, GAP , Ugg, lulu lemon, do well though there is not a huge profit.  Remember you pay 20% in eBay and PayPal fees every time you sell something.  Plus people have to pay for shipping so the customer may be getting a good deal but shipping adds to their cost.  I like selling clothing best because it is easy and cheap to ship—I buy polyurethane bags on eBay and can mail 1st class (under 13 oz) for about $4

You spend next to nothing on clothes, and yet, would you say you’re a stylish person?
Yes, stylish but comfortable.  I am not really into super high end designer clothing myself because I just don’t feel comfortable dressing clothes that are thousands of dollars—but I love finding something from Anthropologie for $3.  I would NEVER shop in that store— even on sale their clothes are ridiculously expensive.

Can you give me a couple examples of your best buys of all time?!
I bought a beautiful vintage Missoni sweater dress at a rummage sale for $5 that I wore a couple of times and then sold because I didn’t like the way it looked on me.  It sold for $400

And, how about selling.  Any major coups where you made good money?
I recently sold a petit point evening bag for $250 that seemed a complete fluke!  I didn’t know that much about it cause it was vintage and had no label but I put it up for sale and it just kept climbing and climbing in bids.  BTW, the eBay app will often give you a recommendation for a price to start at when you put all the info in the listing.  It doesn’t do that for vintage stuff so you have to do a bit o researching by looking on eBay to see similar things are up for sale

eBay is one of your stores of choice.  What are the best and worst parts of shopping for clothes on eBay?
I think that the worst part is that you have to make  sure you are not being cheated.  There are a lot of sellers there trying to take advantage of others so you have to be vigililant, Read seller reviews and don’t bid on offers that look suspicious.  Remember— if it looks too good to be true, it is. Also I don’t buy anything that lists as originating from China.   First of all, shipping time is ridiculous and second, these are often sellers who might be frauds.  eBay does have a protection policy and if anything does go wrong, you can call them and they will most likely rule in y our favor and give your money back 
The best thing about shopping in eBay is that I will often decide I want something ( I see it in a store or a friend has it) and if I know exactly the size, color, brand name, etc, I can find it on eBay for  a fraction of what it costs in the store.   And I can just go on line,  buy it and have it within a couple of days.  I love that.

You said you also frequent Thrift stores.  Are you methodical about it in order to find the gems?  Or do you just go when you can?
I am not methodical but I do go 2-3days a week.  And I love rummage sales because I can get a lot and I am giving to charity at the same time.  I also organize clothing swaps .   We have instituted one at imagination stage that happens now twice a year, in fall and in spring.  We all bring in clothes and accessories we don’t want and everyone can take what they want.  We each bring snack and drink and have a little happy hour getting a “new” wardrobe.   Whatever is left at the end gets bagged up and brought to the local thrift store.   It takes a bit of organizing and people pitching in to help but it is fun and a good way for people to clean out their closets

What do you say to the people who are uncomfortable with the idea of buying and wearing used clothing.  You know they’re out there!
Sometimes I find clothes that have tags ( more often than you might think) but usually I just wash them before wearing and don’t have any issue.   I inspect clothing closely before buying but sometimes I will buy something that has a tear or a button missing and I will repair.  I just bought a Marc Jacobs trench coat for $6 moved some button around and resold it for $25.  I disclosed in my description that I had moved buttons— very important that if you sell something that is not perfect that you point out all flaws!

Give my listeners some tricks and tips for selling clothes for the most possible money.
Look for clothes that have brand names and are in good shape.  try to sell things in season.  Be honest and up front always with any flaws in what you are selling.  Treat others as you would want to be treated.  You want a really good deal on really high quality well cared for clothing— make sure you do that for others.

And, now let’s flip that over.  Can you give me some tips and tricks for BUYING great clothes for as little money as possible?
Look for sellers who are just people selling things and avoid buying from companies.   Read listing carefully and read reviews of who you are buying from.  Know what you are getting. I avoid buying high end computers, electronics or jewelry because it is too risky that something might be a fraud, Broken or not last.

In episode 26 I interviewed a consignment shop owner and now I’m so glad to have heard from a consignment and thrift shop customer.  Kate Bryer, master of fashion-for-free or nearly free, thanks so much for being my guest on Easy Money!

On Easy Money, we often talk about how to save money in the “how-to-buy-things-for less sense. But I also want to talk about how to save money in the “how-to-make-sure-you-have-enough-to pursue-your-dreams-and-eventually-retire sense! To that end, what if you could spend 10 to 20 minutes inputting a few key financial facts about yourself into a website and when you were done you’d know exactly where you stand and what you need to do? You can! With a new website and app called Fearless Finance. I LOVE that name and love my next guest, Lori Atwood, founder of Fearless FInance. Welcome to Easy Money, Lori! ……Listeners, you should know that I have long-admired Lori’s work in financial literacy and money management AND our daughters are also friends.

How did you get the idea to create Fearless Finance?
After working in the finance industry for over two decades, I discovered a need in the marketplace for a user-friendly financial tool that provides a whole financial wellness approach and that’s when Fearless Finance was born.

You’re not exactly the typical software developer. You don’t live in silicon valley. You’re not in your 20s or 30s. How did you have the courage to take this leap?

There are lots of personal finance apps out there. What makes Fearless Finance different?
Its like a doctor’s checkup for your finances and you only need to do it once a year.
No budgets
No time suck
No linking accounts unless you want to.
No confusion
No conflicts.

Walk us through the app. First, what information do people have to provide in order to use it?
your most recent paystub
2. balances on your savings accounts like retirement (IRAs, Rollover IRAs, Roths, 401ks), savings
and checking accounts, brokerage accounts (CDs, mutual funds, etc.)
3. balances on your debt accounts like car loans, student loans, mortgages, credit card balances
4. your current home value if you own your home (an online real estate estimator is fine)
5. an idea of what you spend each month on things like utilities, food, entertainment. You can
estimate or take a look at your recent spending
If you are self-employed or a freelancer/gig worker, have last year’s tax return handy.

And what information do they come away with, once they’re done?
Cash flow
Rainy day savings
Emergency savings
Retirement savings
Credit card debt

Fearless Finance users get a report that tells them a whole bunch of things. What are they and why are they important?
Total Take Home Income
Recurring Expenses – Yellow and Green
Full Discretionary – Blue Points
Remaining (Income minus expenses and blue points)
Monthly Saving for Annual Expenses
Monthly Amount Left in Checking – “Cushion”
Employable Monthly Cash Flow (before any retirement savings adjustments, if needed)

What I love about the website and app is that after 10 or 20 minutes, users know exactly how much money they have to save each month to pay for their essentials, called yellow and green points. And how much they have left over for what you call “blue points.”
Blue points are for what I like to call “booze and shoes.” Your discretionary expenses. The wants not needs.

“What’s holding people back from getting their financial health in order?”
Too many people are afraid of confronting their actual spending habits and expenses, and think that getting professional advice is not accessible to them. That its only for people with huge portfolios, so they avoid taking action. Shame, fear, expensive, aversion that they will be limited and feeling overwhelmed by it. We’ve created a platform and app that takes into account real life expenses, it offers easy to implement recommendations, and ultimately gives the user control of their own financial wellness.

Here’s a question I ask every business that comes on the show. How do YOU and Fearless Finance make money?
$6.99: Web Platform and Mobile Expense Tracking App (MONTHLY)

$59.99: Web Platform and Mobile Expense Tracking App (ANNUAL)
$32.99: One-time Fearless Finance Summary Report

You can find Lori’s beautifully clear, simple, yet powerful software at FearlessFinance.com and on iTunes and Google Play. Website: FearlessFinance.com
iTunes App: apple.co/2JNDQx4
Google Play App: bit.ly/2H3FQnb

Here’s our save more topic for today: When and why an adjustable rate mortgage could save you thousands of dollars. Adjustable rate mortgages or “ARMs” got a bad rap during the real estate bubble years, because so many people signed up for them not realizing that if their interest rate adjusted upward they would no longer be able to afford their monthly payments.

But here’s the key: the initial interest rate on an ARM is lower than that of a fixed rate mortgage, so you can save big money if you know you are going to sell before your ARM adjusts. Maybe you know your job will be transferring you or that you’ll want to move to a better school district or bigger house. There are lots of reasons people plan, in advance to move and THAT is when an ARM can be a bonanza.

First some background: Most ARMs start at one interest rate and then adjust to another interest rate after a set period of time. When you see an adjustable rate mortgage described as a “7/1 ARM,” the first number means the interest rate is fixed for 7 years and the second number means that it adjusts every year after that. The most common ARMs are the 3/1 ARM, 5/1 ARM, 7/1 ARM and 10/1 ARM. Again, the introductory rate for those 3, 5, 7 or 10 years is lower than that of fixed rate mortgages.

Here’s an example of how well it can work: When I was at GMA, I did a savings makeover on a New Jersey family named the Shoblocks. Money was tight because the wife had quite her job and gone back to school in her 50s and the husband had lost his job in the recession. They needed some wiggle room in their monthly mortgage payment AND were hoping to save some money over the long term too.

When the Shoblocks told me they were planning to downsize into a smaller home when their teenagekids went to college, I saw my opening! They were planning to move in the next three to four years. So I found them a 10/1 adjustable rate mortgage, to give them plenty of cushion if they decided to stay a bit longer. Remember, with a 10/1 ARM, the interest rate is fixed for 10 years and THEN begins to adjust.

Their old fixed rate mortgage rate was 6.85 percent. The 10-year introductory rate on their new adjustable mortgage was just 4.75 percent. That new, lower rate saved them a nice $429 a month, loosening their tight purse strings. AND, even better, if they stayed in the house the full 10 years, it would save them $55,203 over that time! So don’t write off adjustable rate mortgages. Think about whether you know you will be moving out at a certain point. Leave yourself plenty of time cushion, just as I did for the Shoblock’s. And then, see what kind of introductory rate you can get! It’s not often that you can take such a simple step that saves you five figures!