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How To Reduce, Reuse, And Save More Cash



Hi, this is Michelle’s editor, Ariel! You may have seen me here before talking about taking my side hustle full-time, living in a small house, and real life frugality. When I’m not working for Michelle, you can find me spending a lot of time over at M$M, working as a staff writer and editor-in-chief. 

The other day I found myself asking this question in a popular FIRE (Financial Independence Retire Early) Facebook group:

Anyone else focusing on a zero/low waste lifestyle and merging that principal with FI?

I asked this question because, while I don’t hang around in those kinds of communities a ton, I find that what I often see is more focused on sexier topics like investing strategies and increasing your income.

Both of those are incredibly valuable tools when you’re working to improve your financial health, even if you aren’t working towards FIRE, but I was searching for advice that felt a little more relatable to my personal goals.

It turns out that I wasn’t alone.

There are a number of people who are actively making choices that are making a positive difference on the environment while helping them save money.

One of the most interesting responses to my questions was, “I just started a process of focusing on my waste… literally.” What they went on to suggest was that we are essentially buying our trash.

There was something about that comment that really hit me. I mean, if you’re working towards FI or FIRE or just trying to keep your head above water, wouldn’t it make sense to stop pay for as little waste as possible?

As I started marinating on this idea, I started thinking about accessible ways to reduce your waste while you work on improving your financial health.

5 thoughts on reducing your waste as a way to save more money


1. Reduce, reuse, recycle, and why the two Rs are the most important 

Most of us learned about the three Rs in school – reduce, reuse, recycle. The way it was taught to me is that each R had an equally positive impact.

The reality is that this isn’t the case at all. If we consider what’s happening with recycling in the U.S., it becomes pretty obvious that we need to focus more now that ever on the first two Rs.

Reduce and reuse are so important because it takes a significant amount of energy to create new products – raw materials have to be extracted from the earth, the product has to be made, and then it needs to be transported to where it will be sold.

For every item you don’t need to buy new, you’re eliminating that entire process, and the benefits can be felt environmentally and financially. 

Here are some examples of how you can reduce and reuse in your daily life:

  • Buying used clothes. A $5 pair of jeans from Goodwill is much better for your finances than a $50 new pair. And, a new pair of jeans costs the environment about 33.4kg in carbon emissions.
  • When you buy things, make sure they can be reused. You can start simple with cloth napkins and refillable water bottles. 
  • Start reusing things that you might typically throw away or recycle. You can wash and reuse Ziploc bags, use yogurt containers as Tupperware, reuse cleaning spray containers by making your own cleaning spray, turn old candle and jam jars into vases or cups, etc.


2. Kick convenience

This one is so hard to fall for when you’ve got a family, a job, a side hustle, etc.

Your time is finite and it’s really easy to say, “heck yeah, let’s hit the drive through because I don’t have time to make dinner.”

Going through the drive through doesn’t make you a bad person, but if you’re like me, you think about all of the trash you’ve just bought (I’m leaning on that comment I mentioned in the intro). There’s the fry containers, individually wrapped ketchup packages, plastic straws, etc.

In moments like this, embrace the power of a quick meal –  PB&J, scrambled eggs and toast, a bowl of cereal and a banana, tuna salad sandwiches, cheese and crackers, whatever. You’re saving cash and trash.

Paying for convenience when it comes to foods is an easy trap to fall into. Like I said, it’s hard when you’re busy and trying to shave precious moments off daily tasks like making dinner. 

The problem is that when you’re trying to save time with convenience, you’re paying a high financial and environmental price.

Here are a few examples:

  • A package of prewashed, pretorn lettuce can cost twice as much as a head of lettuce. It’s also packaged in plastic, whereas you don’t really need to put your produce in the plastic bags in the first place.
  • Paying for grocery delivery services like Instacart cost nearly $5 for every delivery.
  • Ready made meals impact the environment at a rate of 35% more than home made meals.
  • On average, it’s 5x more expensive to order out than cook at home.
  • Meal delivery services like Blue Apron or Hello Fresh produce more plastic waste than grocery shopping, and they’re considerably more expensive.

The one bright side with meal delivery services is that if you actually use everything in your package, they do reduce your carbon footprint because you’re reducing your food waste by only paying for exactly what you need for each meal. 

Now, if you’re able to make a meal plan and shop accordingly, it’s entirely possible that you can reduce your food waste without paying for meal deliveries. And at an average cost of delivered meals being around $10, this is actually fairly expensive when you consider that it’s pretty easy to make dinner for closer to $5 a person.

One of my favorite resources for cheap meals is Budget Bytes – this food blog has inexpensive recipes and shows the dollar cost of each.


3. Source your food locally

My family recently decided to start buying groceries from a local CSA program.

CSA stands for community-supported agriculture.

The idea is that we get a weekly share of groceries that comes from within 150 miles of our house. We pay a little more for some items, like locally made bread and dairy, but it’s actually been a good financial choice for us because it’s gotten us more excited about cooking at home.

Whether it’s a CSA, shopping at a farmer’s market, or finding local foods at your grocery store, buying local has significant financial and environmental impacts:

  • Reduced CO2 emissions as local food travels an average of 100 miles, whereas produce typically travels an average of 1,500 miles.
  • Supporting local food supports your local economy – good for your home value, schools, etc.
  • Local produce is seasonal, and that can cost less than out-of-season foods.

There are some locally sourced foods that do cost more, especially if they’re organic, but it’s okay to only buy what you can when you can. It’s important for us all to remember that small changes go a long way, which brings me to my next thought… 


4. Remember, small acts are just as important

One of the things that I’ve recently seen on social media are people doing something called sustainability shaming. This is when you’re called out for not doing enough for the environment. 

An example is someone who’s reducing the amount of meat they eat, then being shamed for not reducing the amount of plastic they use. Attacks like this do more harm than good.

When you add up lots of small changes, you get something big.

The same goes with your money – and it’s why spare change investing apps are popping up left and right.

What I’m getting at here is that there are little things you can do that will help both your finances and environment:

  • Do you live in a place that you can bike to run your errands? You’re saving on the cost of fuel gas and emissions.
  • Bring your own cup when getting coffee. Your local coffee shop might give you a small discount and you’re reducing your waste.
  • Turn the lights off in your house. Reducing the amount of energy it takes to power your house saves you money. You’ll probably get a little more life out of your lightbulbs too.
  • Stop buying paper napkins and paper towels. By using cloth napkins and towels (scraps work well), you’ll save several dollars a week and reduce your waste, save some trees, reduce the impact of bleaching, etc.

No, none of these things alone will help you save up enough to retire or reverse climate change, but you’re still making a positive impact.


5. Remember why you’re doing this

When my kids were babies we used cloth diapers, and we caught a lot of side eyes and weird questions about what it’s like to clean poop out of diapers. At least one or two close family members just outright said it was ridiculous.

Those remarks are really hard to hear when you’re doing something that’s important to you, and that’s exactly why we did it.

No one wants to shake poop out of diapers because it’s fun.

Most of the stuff on this list is pretty mild in terms of how extreme you can get with your financial and environmental practices, think dumpster diving and using leftover shower water to flush the toilet

But, even the tamest choices can be hard for others to understand. And when someone feels strongly enough about a cause that they’re willing to challenge the status quo, you often wind up with a little pushback.

Remind yourself why you’re no longer buying paper towels, why you’re walking to work, and buying used clothes – your doing something that will have a positive impact on your finances and the environment. 

In the end, how easy is it to make good financial and environmental choices

We are living in a moment when it’s easier than ever to make positives choices.

There is a huge push to rectify what’s happening with our environment, and we’re also living in a time when household debt has hit all time highs.

That means more and more people are actively making the kinds of choices I’m talking about in this article. I remember just a few years ago when you felt out of place for bringing a reusable bag to the grocery store, and now we have states that have banned plastic ones.

There are bloggers like Michelle who focus on frugal living and minimalism, and while they’re not outright environmental statements, many of the tips these articles contain will help both your money and the earth.

We’re in a time when there’s more innovation and competition among companies that can help you manage your money or provide environmentally friendly resources and products.

There is so much information out there, and now it’s your turn to start embracing and implementing these ideas and see the difference.

What are you doing to reduce, reuse, and save more money?

The post How To Reduce, Reuse, And Save More Cash appeared first on Making Sense Of Cents.

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In the Market for a Home? Why a Conventional Loan Could Be Right for You



Conventional sounds so… conventional.

But the traditional path to home ownership doesn’t have to be boring — especially if it could save you thousands of dollars over the life of your home loan.

Government-backed loans — like the Federal Housing Administration (FHA) or Veteran’s Administration (VA) — might get more attention for the low (or no) down payments, but the reality is that the more people get conventional loans when buying a home. 

Of the $1.63 trillion in first mortgages taken out in 2018, conventional loans claimed 45% of the market while FHA’s and VA’s combined share was 22.6%.

And although a government assistance program may seem like an easy way to home ownership, there’s a good chance that may not even be an option.

“At least a third of the people I work with are not eligible for assistance programs,” said Lisa Hamilton, an Accredited Financial Counselor and a counselor at the U.S. Department of Housing and Urban Development (HUD).

Since a home will probably be your biggest purchase, it’s in your best interest to understand how the loan works. Here’s what you need to know about a conventional home loan.

What Is a Conventional Loan?

At its most basic, a conventional loan is a mortgage that is not guaranteed or insured by any government agency.

The loans follow guidelines set by the Federal National Mortgage Association, aka Fannie Mae, and the Federal Home Loan Mortgage Corporation, aka Freddie Mac, two companies chartered by the U.S. government to help standardize mortgage lending.

A monthly mortgage payment has four basic components: principal, interest, taxes and insurance — also known as PITI.

Compare that to FHA loans, which are insured by the Federal Housing Administration, or VA loans, which are covered by the U.S. government. 

If a loan is backed by a government agency, the government will cover your loan if you stop paying it. But that comes at a price, compared to the cost of a conventional loan. Here’s how to decide whether a conventional loan is a better fit for you.

How Do You Qualify for a Conventional Loan?

As with any loan, there are metrics you must meet to qualify for a conventional loan. When you apply for a mortgage, your lender will consider your current income (verified via paycheck stubs, W2s and tax returns) and employment status, in addition to these other criteria.

1. Down Payment

If you’ve heard anything about conventional loans, it’s probably that you need to have a 20% down payment to get one. 

And although putting 20% down will still get you the best terms with the lowest interest and fewest fees, coming up with 20% for a $200,000 home would mean a home buyer would need to have $40,000 — plus additional money for closing costs, inspections and moving. That’s not an easy bar to clear for most first-time buyers.

To attract more customers, lenders have relaxed the 20% rule.

“The lending market has become more competitive, and banks have what they call ‘conventional mortgages’ with 5% down,” Hamilton said. “Or they may run a special and call it a conventional mortgage with 1% down.”

Pro Tip

Although you may be tempted to throw every last dollar toward the down payment, hold onto enough money for an emergency fund — home ownership often comes with unexpected expenses.

If you do decide to put less than 20% down, lenders will require you to add private mortgage insurance (PMI), which is added as a monthly premium to your mortgage payment. 

After you have reached 20% equity in your home, you can call you lender and ask to cancel the PMI (cancellation should happen automatically once you achieve 22% equity).

2. Credit Score

The minimum credit score for a conventional loan is 620 to 640, depending on your lender. However, if you want to take advantage of the lower down payment option, you should plan on raising your credit score as much as you can before you apply.

If you can put down 20% and raise your credit score before you apply for a loan, you’ll be able to snag even better interest rates and terms.

3. Debt-to-Income Ratio

Your debt-to-income ratio gives the lender an idea of how much of your income is going toward paying off your debt each month. 

A “good” DTI for housing is around 25% while the maximum is typically 43%, according to Brent Weiss, CFP and chief evangelist of Facet Wealth

However, lenders have been willing to go even higher, given the right circumstances, according to Hamilton.

“[Lenders] will make exceptions if you have a lot of cash reserves,” she said. “Some lenders are going as high as 55% DTI with those exceptions.”


How Much Can You Borrow? Conforming vs. Nonconforming Loans

Once you know whether you can qualify for a conventional loan, you’ll need to know how much you can borrow. 

For most people, that means applying for a conforming loan. This is a type of conventional loan that meets Freddie and Fannie requirements, so lenders prefer them and thus usually offer better interest rates.

In most of the United States, the maximum conforming loan limit for 2019 is $484,350 — you can find the maximum amount for your area on this conforming loan limits map.

Pro Tip

The majority of conventional loans are for 30 years, but it’s possible to qualify for a 15- or 20-year mortgage loan, which could save you money on interest in the long run.

If you want to borrow more than the limit, you can still get a conventional loan but it will be a non-conforming jumbo loan, which can go as high as $1 million to $2 million. You’ll typically need a combination of really high credit score, large down payment and/or low DTI to qualify.

If you’re considering a non-conforming loan, it’s essential to shop around for the best rates and terms — and always ask for a loan estimate before signing anything.

What Are the Benefits of a Conventional Home Loan?

If you can qualify for a conventional loan, you can save thousands over the life of your mortgage in a couple ways.

For one, although the smaller downpayment on an FHA or VA loan might look attractive initially, both of those loans come with higher fees because the government is assuming the risk if you default on the loan.

Additionally, you can cancel the PMI for a conventional loan when you reach 20% equity in your home. If you have an FHA, you’ll pay the insurance (aka Mortgage Insurance Premium) for the life of the loan, which can really add up over 30 years.

“If your mortgage insurance is $50, $75, $100 per month, that’s quite a bit of money,” Hamilton said. “Buyers need to be aware of that added cost and how it can affect their ability to pay off the loan for that home to become a good investment vehicle.” 

If you still decide to go with a government-backed loan — whether by choice or necessity — consider re-evaluating the conventional loan option in the future.

“If you go FHA, then plan to do that assessment every year, every couple of years,” Hamilton said. “Check in and decide, ‘Should I refinance? What’s the best long-term strategy?’”

Consider it conventional wisdom.

Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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529 College Savings Plans: All 50 States Tax Benefit Comparison (Updated 2019)



Updated for 2019. When choosing a 529 college savings plan, you can open a 529 plan from any state. However, each state can vary widely in what they offer in terms of tax deductions and/or matching grants. 16 states offer no tax break on contributions and 7 states give you the same tax benefit no matter which 529 plan you pick. The remaining 27 states do offer some sort of tax benefit, so you’ll have to weigh your in-state benefits against the superior investment options from an out-of-state plan.

Morningstar has just published their 529 College-Savings Plan Landscape report for 2019, which included a state-by-state summary of the tax benefits:

They also have a new article When It Comes to 529s, How Good Is Your State’s Tax Benefit? that helps to quantify how good the tax benefit is, in terms of how many years of investment expenses it offsets for a theoretical household. More years (darker blue) is better:

These days, for the most part, if your state offers a tax benefit, it’s worth sticking with your in-state 529 plan as long as you are choosing the low-cost index fund “autopilot” options. The formerly “bad” plans have gotten closer the rest of the pack. You might still prefer another state plan for a specific investment option, I suppose.

They also updated this chart that quantifies tax benefits for a hypothetical family with a $60,000 income.

If you really like another state plan, you can look into their “recapture” rules as to what happens if you roll over your assets to another state plan later down the road after your initial contribution. Sometimes you can wait out the recapture period and then roll funds over to a better state 529 plan for free (once every rolling 12 months).

Again, if your state has no special tax break or it does “tax parity” – meaning it offers the same tax benefits for any 529 plan – then I would simply choose from this list of best nationwide 529 plans.

“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone. This email may contain links through which we are compensated when you click on or are approved for offers.”

529 College Savings Plans: All 50 States Tax Benefit Comparison (Updated 2019) from My Money Blog.

Copyright © 2019 All Rights Reserved. Do not re-syndicate without permission.

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Direct v/s Regular Mutual Funds: Know the Difference



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Mutual Funds are available in two plans – Regular and Direct. While regular mutual fund plans are commonly-known to investors, direct mutual fund plans have started becoming popular recently.

What Is a Direct Mutual Fund Plan?

The Securities and Exchange Board of India (SEBI) introduced direct mutual fund plans in January 2013, making it mandatory for all Asset Management Companies (AMCs) to provide an option to invest in mutual fund schemes directly, without the involvement of an agent, broker or distributor, which is the case with regular mutual fund plans.

What Is the Difference Between Direct And Regular Plans?

Particulars Regular Plan Direct Plan
Expense Ratio High Low
Returns Low High
Investment Advice Available Not Available
Market Research Done by distributor/agent Done by self
Convenience More Less

Regular and Direct plans are just the two options to buy the same mutual fund scheme, run by the same fund managers who invest in the same stocks and bonds. The only difference between the two is that in the case of a regular plan your AMC (Asset Management Company) or mutual fund house does pay a commission to your broker as distribution expenses or transaction fee out of your investment, whereas in case of a direct plan, no such commission is paid.

Instead, in the case of direct plans the commission is added to your investment balance, thereby reducing the expense ratio of your mutual fund scheme and increasing your return over the long term.

To understand it better, let’s take an example. For instance, Mr. X and Mr. Y invested in three mutual fund schemes, namely HDFC Equity Fund, Aditya Birla Sun Life Liquid Fund and HDFC Balanced Advantage Fund via a monthly SIP of Rs. 5,000 for each scheme on 01 April 2014. While Mr. X chose the regular plans of these schemes, Mr. Y chose to invest in the direct plans.

Value of Mr. X’s and Mr. Y’s investments after 5 years.

Particulars/Schemes HDFC Equity Fund Aditya Birla Sun Life Liquid Fund HDFC Balanced Advantage Fund
Mr. X (Regular plan) Rs. 4,00,335 Rs. 3,63,967 Rs. 4,05,544
Mr. Y (Direct plan) Rs. 4,10,115 Rs. 3,64,837 Rs. 4,14,396
Difference Rs. 9,780 Rs. 870 Rs. 8,852

Here’s a comparative analysis of the average expense ratio and average returns of the direct and regular plans of mutual funds across different fund categories.

Average Expense Ratio of Regular and Direct Mutual Fund plans

Fund Category Regular Plan Direct Plan Difference
Equity 2.02% 1.22% 0.80%
Debt 0.90% 0.42% 0.48%
Hybrid 1.96% 0.98% 0.98%

Source: Value Research, Data as on March 31, 2019.

As the table above shows, on an average, you will earn 0.50%-1% more per annum by investing in a mutual fund scheme through its direct plan rather than its regular variant.

Why Is the Direct Plan of a Mutual Fund Better Than Its Regular Plan?

  • Lower expense ratio.
  • Higher return due to reinvestment and compounding of amount which gets paid as commission in regular mutual fund plans.

How To Know If You Are Invested In Regular Plans Or Direct Ones?

The account statement/fund holding statement will clearly state whether your mutual fund plan is regular or direct. Typically, if you have invested in a mutual fund scheme through your bank, then it would be a regular plan. If you have invested via the website of the mutual fund, the plan would be direct.

Also, if you are receiving a ‘free of cost’ service from your investment agent or if he/she tells you he/she is paid by the mutual fund company then in all likelihood you have invested in a regular mutual fund plan and are paying a hidden fee.

Also Read: How To Switch From Regular To Direct Mutual Funds?

The post Direct v/s Regular Mutual Funds: Know the Difference appeared first on Compare & Apply Loans & Credit Cards in India-

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