Help Me Now, Clark
Improve Your Personal Finances in One Week
Some consumer problems can be daunting and discouraging. Digging out from under a pile of credit card debt can take years. Saving for retirement is a slow process. But there are a lot of things you can do right away to make an immediate difference in your finances. Then you will have more money to pay off debt, save for the future, or take that vacation you’ve always wanted but couldn’t afford. I’ve chosen twenty-five of my very best tips for this section, with a special emphasis on ones you can put to use today. Try a few, and you’ll get instant satisfaction that will motivate you to try more of the money-saving tips in this book.
1. Search for unclaimed money in your name.
Do you have money in a bank or brokerage house account that hasn’t been touched in a while? Or let’s say you’re the unknowing beneficiary of an insurance policy that’s floating around out there, or maybe a late relative you never met left you some stock in a will. After a period of time, the state eventually rules those accounts or policies dormant, and the money is sent to an unclaimed-property office. Which state office it is sent to depends on where the company holding the money is based or where the deceased person lived.
USA Today reports that certain states suffering from budget problems have decided it’s okay to steal these leftover funds from you. Washington, Delaware, Alabama, Oregon, South Carolina, Louisiana, and Kentucky all changed their laws to make it legal to seize unclaimed money and not give it back. But there’s good news. There’s a way to find out whether you have dormant money so you can claim it before the state does! A website called MissingMoney .com allows you to type in your name and see if you are due a refund. You can also check for relatives, but only they can claim money in their name. Do a multistate search to include the state you live in and the states that include the headquarters of all your previous employers. In addition, always search in Delaware and Connecticut, as most stock brokerage and insurance companies are based in those two states.
Another website to check is Unclaimed.org. And if you’ve ever had an FHA loan, be sure to see if there are leftover assets waiting for you at HUD.gov. (Read “See If You’re Owed a HUD Refund on an FHA Mortgage” on page 132 for more details on the latter.)
You could be a hero to a loved one, or be the beneficiary of money you didn’t even know you had!
2. Start enjoying free TV and movies.
If you’re like most Americans, you’re probably paying $60 per month or more for cable or satellite TV service. It’s not uncommon to pay more than $100. That’s upward of $1,200 annually. Who couldn’t use that money back in their pocket?
The high price of pay TV has forced more than 1 million Americans to disconnect their satellite or cable service, according to The Wall Street Journal. Are they going TV-less? No, they’re getting TV content on the Web or with “rabbit ears” antennae instead.
That’s right, you can fire your pay TV provider and use a simple pair of rabbit ears and a modestly priced digital converter box ($40–$60) to get over-the-air TV absolutely free. The picture you get over the air is actually superior to what you get when your satellite or cable provider gets done compressing its signal for distribution.
But getting your TV signal over the air means you’re going to receive only the local broadcast channels. If you still want to get your cable fix, try going to websites such as Fancast.com or YouTube.com for free programming. Websites like Boxee.tv and Clicker.com act as virtual program guides to let you know what’s playing where in cyberspace. Most of the major networks also have free programming available at their own websites.
Hulu.com was the real breakthrough service in this arena. It was like a poor man’s DVR, where you could watch what you wanted when you wanted on demand with commercials. Of course, they’ve now changed their strategy to a “freemium” model: There’s only a limited amount of programming available for free, and the rest can’t be accessed until you pay $7.99 each month for their Hulu Plus pay service.
Certain cable channels have not yet made their content available on the Internet. But they’ll ultimately have to do so or risk losing the advertising base of tech-savvy, high-income viewers. If there are specific programs you can’t live without, you can always rent them from Netflix.com or a similar service.
I’ve been talking for three years about people disconnecting from the cable and satellite companies. Now that I’ve been with Netflix on demand for a year, I can tell you it’s a real deal. My family almost never watches regular TV anymore. We simply use a Wi-Fi–enabled Blu-ray player to get the programming from Netflix to our TV. Netflix is $7.99 each month.
Ratcheting up the competition, Amazon has introduced unlimited streaming video as a feature of its Amazon Prime loyalty program. The main attraction of Amazon Prime was originally the offer of free two-day shipping on most online purchases, with no minimum order size for hardcore Amazon customers who wanted to pay $79 for annual membership. But the free streaming has been thrown in as a carrot to entice more casual customers to join. Right now there are only 5,000 programming choices on Prime, but that’s expected to grow quickly. The monthly charges work out to be a little less than $6.60. Visit Amazon .com/Prime for more details.
I love the idea of competition creating innovation and more choice for you. When you think about how many more competitors will be coming to market soon, you realize it’s going to become routine to watch video in a whole new way for very little dough.
3. Get unlimited texting and e-mailing for $10 per month.
Have you ever tried to use a smartphone and wound up feeling really dumb? Today’s mobile devices are packed with so many features that it’s easy to get confused when using one. That’s where a handheld device called Peek comes in. The Peek is a supersimple-to-use mobile device for e-mail and texting at rock-bottom prices.
The Peek was originally marketed to tweens and teens because it’s an e-mail-only device that does not feature any calling capability—we all know how young people actually think using a phone to talk is something only old folks do! But that approach missed a more valuable market segment. Now they’ve modified their business plan to cater to small businesses. Corporate types may not know how much their CrackBerry or iPhone costs each month if their company is paying for it. But entrepreneurs who are struggling to make a profit need to watch every penny.
The Peek Pronto sells for $70 in charcoal gray for businesspeople. (There’s also a black cherry–colored model that would appeal to tweens.) Monthly service starts at $10. And there’s never a contract! Think of it as a poor man’s BlackBerry. If you have a teen whose texting is eating up your wallet, the Peek could present a solution. One thing Peek doesn’t offer, however, is the ability to use your existing phone number. Visit GetPeek.com for more details.
Kajeet.com is another service that’s geared to parents who want to monitor what their teens are doing with their mobile devices. This service has a full suite of parental controls that let you restrict certain numbers for incoming and outgoing calls and texts, select when the phone can be used, and more. Refurbished Kajeet phones are available for as little as $24.99. Monthly service with unlimited text messaging and sixty minutes of talk time starts at $14.99.
In addition, Kajeet allows parents to track the movement of their teens with a built-in locator for an additional $8 per month. Unlike Peek, Kajeet does allow you to move a phone number you already have over to their service.
4. Get a 2 percent cash-back card with no strings attached.
When the new credit card rules went into effect February 2010, the banks that issue the majority of cards in the United States were prohibited from practicing many of their common rip-offs. But that hasn’t meant that the rip-offs have stopped completely; to the contrary, the banks have instead switched to cooking up new legitimate gouge fees, especially annual fees on cards that previously had no annual fees.
That’s put a lot of people into the market for a new credit card. Fortunately, one respected low-cost brokerage house has stepped up to offer what I call the best credit card deal in America: Fidelity Investments.
Their Fidelity Retirement Rewards American Express Card takes your 2 percent cash back and deposits it directly into your IRA, 529 college savings plan, or Fidelity brokerage account. This is not 2 percent cash back only when you charge $500 on the third Tuesday of every other month; this is every single charge—no games, no gimmicks, no annual fees, and no limits on what you can earn back. Visit Fidelity.com or call 800-343-3548 for more details.
Notice that I didn’t say a word about the interest rate of this card. I don’t even know what the interest rate is! That’s because this card should really be used only by people who do not run a monthly balance.
If you do run a balance, try hunting around for a credit card at your local credit union. If you want another option, I also like the Pentagon Federal Credit Union Platinum Rewards card. I was alerted to this card by a website called CreditCardTuneUp.com, which I discuss later in the book. (See “Find the Best Reward Card for You” on page 183.)
Membership to Pen Fed Credit Union is usually limited to the Army, Air Force, Coast Guard, Homeland Security, other U.S. military and government organizations, and related groups and institutions. But anyone can join if they first join the National Military Family Association, a nonprofit advocacy organization for military families that requires only a onetime tax-deductible fee of $20 for entry. You don’t even have to keep your membership active to remain in Pen Fed Credit Union. Visit PenFed.org or call 800-247-5626 for more details.
5. Check all your monthly statements line by line.
There’s something brewing right now that I consider a national scandal. The cell phone companies are in cahoots with rip-off artists and they’re stealing your money, doing courtesy billing for third-party crooks who push a variety of text messaging services.
I know that cell phone bills are impossible to understand. My last cell phone bill was fifty-six pages long! But I go through it page by page each month. I’ll find something that’s not legit about once every four months. Look for deceptive terms such as “Premium Content” or “Direct Bill Charge” (sometimes referred to as “DBC” on your bill).
Recently, I found a $2.95 charge for a ring tone that the provider’s website claimed was free. I called my carrier and got my money back.
Too often, people today just get bills of all kinds charged to their credit card and never see a statement. Don’t be one of them! Get a paper statement each month and scrutinize it line by line. But if you want to go green, you can also review your full bill online each month. Just don’t fall into the trap of thinking you’ll get around to viewing it online and then never do it.
Businesses are a major target because their phone bills can be pages and pages long. But this is war. Carriers think they can get away with stealing your money, but they can do so only if you allow it.
Sadly, the danger isn’t limited to the world of telecommunications.
Christa DiBiase, the executive producer of my radio show, is completely obsessive-compulsive when it comes to checking her brokerage account online every day. Several years ago, she logged in and noticed that every single holding she owned had been liquidated, the address on her account was changed, and there were instructions to wire the money out of the country. She reported it immediately and was able to reverse all the damage. Her vigilance foiled a crime in progress.
Be sure to check your online brokerage or mutual fund account at least three times a week. After the fact, there is no protection under the law if your account is fraudulently accessed. You’ve got to be proactive.
When it comes to your credit card statement, you should go through it carefully on a monthly basis. You’re allowed a full sixty days to dispute any fraudulent charges.
6. Start a Roth IRA.
If you’re a regular listener or viewer of my radio or TV show, you hear me talk about the Roth IRA account all the time. In fact, Christa often refers to this wonderful investment option as my “girlfriend” because of my bias for it. Yet despite my enthusiasm, only about one in five Americans has a Roth account.
I think people are unnecessarily confused by the Roth. I want to demystify it for you.
With a Roth, you make regular contributions each pay period, just like you would with a 401(k) at work. You can even set up automatic payroll deductions like with a 401(k). But unlike a 401(k), a Roth gives no tax break up front; the benefit is that every single penny you put in can be spent tax-free after age fifty-nine and a half! And you can contribute up to $5,000 annually, unless you’re over fifty, in which case you can contribute $6,000. Where do you put Roth money? Just about anywhere you want: in a bank, credit union, or no-load (“no load” means no commission) mutual fund; with a full-commission or discount stockbroker or a financial planner. When you are young and starting out, you should put the money with a discount broker or in a no-load mutual fund because then you’re reducing management fees. I want all your money working for you.
It’s important to know that a Roth is just an empty shell or a vacant house and you’ve got to put some “furniture” in it. One of my favorite pieces of furniture is a total stock market index—where you own tiny little slices and dices of thousands of companies across the spectrum of capitalism.
Roths can be flexible, depending on which company you choose to invest with. You can start with $50 and put in as little as $50 each month. (See “Start a Roth with $100 or Less” on page 193 in the Personal Finance chapter.) If you already have a regular IRA or a 401(k) at work, don’t think it’s an either/or proposition with a Roth. You can have all three types of retirement savings accounts without any conflict.
7. Fire your bank and join a credit union.
It’s often been said that there are no free lunches. But I think that credit unions come pretty darn close.
I have been a member of four different credit unions over the years. I first learned about them in the early 1970s while working as a civilian employee in the Air Force. At the time, I overheard an officer speaking about the great loan rates the credit union offered, and I had to check it out for myself.
What exactly is a credit union? It’s like a bank in which you are a shareholder. In other words, you own the place! Membership is basically available to anyone, based on where you live or what profession you have. There’s a nominal fee to become a member and once you join, it’s like you’ve taken a step up to the “mezzanine” of the financial world with a ton of great products at your disposal. For example, my credit union currently offers car loans at 2.99 percent interest to those with good credit. Home equity loans are available at 4 percent for five years.
You have access to all the usual services you would with a giant bank, including ATM cards, savings instruments like CDs, and more. And while credit unions might still have rip-off charges for overdrafts on your savings or checking accounts, they’re usually lower than elsewhere.
In addition, credit unions offered interest rates on credit cards that were 8 percent cheaper on average than the giant monster mega-banks’ rates, according to recent figures from Datatrac. That alone can add up to big bucks each month if you carry a monthly balance.
Customer service is outstanding at most credit unions—with some limited exceptions. The one thing you don’t get with a credit union is convenience. Credit unions typically don’t have as many branches as the giant monster mega-banks and they may be fewer and farther between.
Visit CUNA.org or FindaCreditUnion.com to find a credit union to join.
8. Raise the deductible on your insurance.
Insurance is one of those things in life that nobody wants to buy, but we do it because it’s necessary. I have a way you can save on it, and it doesn’t even involve switching your insurer or making any other scary changes.
Pick up the phone and raise the deductible on your insurance policy. Do this for both your automobile and homeowners insurance policies.
The typical auto insurance customer can save fifteen to thirty percent on their premium for collision coverage by bumping their deductible up from $250 to $500, according to the lastest numbers I’ve seen from Consumer Reports. Those savings jump—on average to forty percent—if you make the leap to a $1,000 deductible.
When it comes to homeowners insurance, we’ve come a long way from the $500 deductible of yesteryear. You should raise the deductible to either $1,000 or $2,500, regardless of whether you’re in a house, a townhouse, a co-op, or a condo. Some mortgage lenders may have a cap on how high you can set your deductible. Check with yours about any limitations.
By doing this, you’ll pay less in premiums, but more important, you’ll reduce the risk that your insurer will cancel your coverage because you made too many claims. Today homeowners insurance can be used only in the case of a catastrophic loss. It’s a “use it and lose it” proposition.
And I recommend that you update your coverage for the value of your home and its contents every five years, if needed. Don’t wait until after a catastrophic loss to find out there’s no way you could rebuild and replace with what the insurer is offering.
One final word about car insurance. If you have an old “beater” car that’s of little value, you may be unsure if you should get collision and/or comprehensive insurance. The general rule of thumb is that if the cost of full coverage annually is greater than 10 percent of the car’s value, you’d be better-off dropping both collision and comprehensive coverage and having only liability on your policy.
9. Avoid extended warranties.
For years, I’ve been trying to convince people that extended warranties are garbage. I felt like the lone wolf in the wilderness until Consumer Reports started backing me up.
Electronics seldom fail, according to the magazine. In fact, TVs fail at a rate of only 3 percent in the first four years of ownership. Why would anyone buy a warranty when you have a 97 percent chance that your TV will work for numerous years?
In the world of flat screens, VIZIO was once the king of off-brands and their failure rate was only 3 percent. Ditto for Sharp. Samsung, a premium brand, has only a 4 percent failure rate. So whether you’re talking name brand or off-brand, the failure rate all around is minuscule.
In addition, extended warranties are extremely expensive relative to the cost of the item you’re buying, and that makes them a poor investment. The New York Times, for example, found a popular Nikon camera with a warranty that was 27 percent of the purchase price at Best Buy! A netbook they looked at had a warranty that was nearly a third of the purchase price!
But that still hasn’t convinced everyone they should avoid extended warranties. The Hartford Courant reports that sales of extended warranties were up 10 percent toward the end of the last decade, and almost 50 percent of consumers bought extended warranties on computer purchases.
You never want to insure a rapidly depreciating asset. And no products depreciate faster than electronics or computers. You get back only 8 to 15 cents out of every warranty dollar, after you account for depreciation and how quickly technology becomes outdated.
Luckily, there is a free way to extend a manufacturer’s warranty. Many credit card issuers will double the manufacturer’s original warranty up to one additional year if you use their card to make your purchase. (See page 34 of the Cars chapter for my take on extended auto warranties.)
10. Switch to a cheap no-contract cell phone provider.
It seems like every week there’s a new price point being set in the telecommunications world. As I write this, there’s an all-out war going on between the traditional Big Four wireless carriers—AT&T, Sprint, Verizon, and T-Mobile—and smaller operators such as MetroPCS, Cricket, Boost Mobile, Virgin Mobile, Straight Talk, and others. When one drops the price on its rate plans, the others are sure to follow. (T-Mobile has agreed to be purchased by AT&T, but the deal has yet to be approved by federal regulators.)
The Big Four have historically pushed expensive “bucket of minutes” business models with twenty-four-month contracts. That’s allowed the smaller operators to carve out a market niche by offering cheaper unlimited calling plans with no contracts.
Which would you rather have?
I recently switched from a Big Four carrier to Straight Talk. I’m paying $45 each month for an unlimited calling/texting/Web plan and I love it. There’s also a monthly plan for $30 that comes with 1,000 minutes, 1,000 text messages, and 30 MB of data for Web surfing and free 411 calls. Visit StraightTalk.com for more details or a participating Walmart store near you.
Straight Talk actually uses Verizon’s and AT&T’s networks to place calls. So you can go with Verizon or AT&T and pay around $100 each month for unlimited calling and texting, or you can go with Straight Talk and use AT&T’s and Verizon’s infrastructure for $45 monthly. You decide.
More recently, I’ve been testing an Android-based phone manufactured by Huawei on the MetroPCS network. It sells for $100 with no contract for now. Monthly service with almost unlimited everything is $50. (And I want you to know that when I test something, I buy it. I don’t accept any freebies from manufacturers or carriers at all, because I want you to know I’m unbought and unbossed.)
Do I like the MetroPCS Huawei as much as my current main phone, the EVO 4G from Sprint? No way. That EVO is so amazing it practically makes my breakfast in the morning!
But if I wasn’t spoiled by the EVO, I would love this particular MetroPCS phone. MetroPCS has a reliable network that works in about ninety percent of the United States. And unlike the EVO, the Huawei actually has good battery life. Visit MetroPCS.com for more details.
If you don’t do a lot of calling, Virgin Mobile has what I think is the best plan in America at this time. You get basic unlimited everything for $25 month with one qualifier: A scant 300 minutes of calling each month. This could be a great option for Web-, e-mail-, and text-happy people who don’t do a lot of talking, like my daughter Stephanie. Visit VirginMobile-USA. com for more details.
11. Change your landline service to POTS.
Are you still paying for a landline? If so, you’ve got to know about the tariff rate.
The tariff rate—aka Plain Old Telephone Service (POTS)—is an ultra-cheap regulated rate set by your state’s local telephone monopoly. You get a basic dial tone with no frills or extra features. Monthly service typically costs between $7 and $18. But you’ll still have to pay additional junk fees of $10 to $13 each month.
To get it, just call your monopoly phone company and ask for the “state-regulated tariff rate” or the “POTS line.” If the representative you speak to feigns ignorance, ask to be transferred to a supervisor and make your request.
I have a landline at home that my wife will not allow me to drop. In my home state of Georgia, the POTS costs us a little more than $29 each month. So we still throw away $360 each year—even though we use that phone only about two minutes each month. I’d call that getting ripped off at a discount. So I skip eating a couple of days each month to make up for it! ( Just kidding.)
12. Get free phone service for life for $200.
For many years, people have been looking for a better way to make landline calls than through their monopoly phone company. Vonage was a real game-changer on this front and then other Voice over Internet Protocol (VoIP) services like Skype came along. But you still had to put up with pesky monthly charges.
Well, what if you could have free home phone service for life with no monthly fees? You can with Ooma.
The Ooma device looks like a house intercom. You plug a cable for your Internet into it; you plug your traditional landline phone into it; and suddenly you have phone service! The makers of Ooma claim they have a built-in processor that makes their sound quality comparable to monopoly phone service. The calls do sound great.
When I first discussed Ooma on my radio show in 2007, many of my staffers were speculating about how long it would take for Ooma to end up in Clark’s Graveyard—that repository of all those wacky, entrepreneurial ideas I love so much that never find their footing in the marketplace and go broke. (See the Clark’s Graveyard chapter at the end of this book.)
But fast-forward to today and Ooma is still around—with a new cheaper price! When Ooma first launched, it was priced around $400. Now that has dropped to $200 to $249, depending on where you get it. I’ve even seen it at Costco Wholesale for $179. And that’s it. No more monthly fees ever, though you will pay about $11 annually for an FCC charge.
Of course, “lifetime service” means the lifetime of the company, not your lifetime! But at $200 or less, that’s a price point at which I am willing to take a leap of faith. Visit Ooma.com for more info.
13. Exit a cell phone contract without early termination fees.
Cell phone contracts are rapidly becoming a thing of the past as more and more people switch to noncontract carriers. But maybe you recently re-upped your service or switched to a more expensive phone with one of the Big Four carriers. That likely means you have a fresh pair of twenty-four-month handcuffs known as a contract. Happily, there is a way to pull a Houdini and get out of that stinking contract!
CellSwapper.com and CellTradeUSA.com are two websites that offer you the chance. For about $20, both services will allow you to trade your phone and contract to someone who wants it. You can also take over someone else’s contract, which will allow you to avoid the $35 activation fee on a new phone.
Of course, the type of phone you have is very important when you’re looking to swap out—that is, the “hotter” your phone, the more likely someone else will want it. Sprint contracts are typically the hardest to exit. The reason is twofold: First, they have abysmal customer no-service. Second, many of their phones lack the coolness factor and that makes them harder to unload. On the flip side, if you’re looking to take an existing contract over from someone else, you might have luck with Sprint users.
Finally, there’s always the poor man’s way to get out of your existing contract. When you get some mice-type in the mail saying the service fees are changing, that is your opportunity to exit from your contract without paying a cancellation fee.
14. Supplement your income with a legitimate work-at-home job.
The conventional wisdom about education and employment—that as your level of education rises, the less likely you are to be affected by layoffs—was completely flipped on its head during the Great Recession. The recession knew no boundaries in terms of education, skill level, training, or years on the job.
If you have skills of a certain nature, you can try picking up some consulting work or freelancing on a per-job basis. The Internet offers a variety of sites that hook freelancers up with employers. Some of the more popular ones I read about in the San Francisco Chronicle include crowdSPRING.com, eLance.com, Guru.com, and oDesk.com.
Then there’s a service called Fiverr.com, through which people share things they’re willing to do for $5. You might be able to hire someone to review your résumé, design a website, improve a PowerPoint presentation, or even write your maid-of-honor speech—for just $5! The low price is really just a loss leader that allows work-at-home types to attract a client base for their particular area of expertise.
I read about one of the wackier gigs out there on Fiverr.com on the MSN Money website. Apparently there’s a resident of Newport Beach, California, who will write whatever personal messages you want in the sand, take a picture, and then e-mail it to you for $5. It’s a business that brings in about $300 dollars a month, according to MSN Money ... just for playing in the sand!
Think about it in your life: What can you do to earn extra income? At ClarkHoward.com, I have a list of companies offering work-at-home opportunities that I believe are legitimate, Many of them involve being a virtual call center operator. You typically need a phone, a computer, and an Internet connection to do this kind of work. Visit my site and search keyword “work at home” to see the complete list.
15. Reduce your withholding.
People will often come up to me around tax time and happily ask for advice on what to do with their giant refund. They treat it like it’s found money or some kind of windfall. But it’s not.
I’d prefer that you get no refund at all. If you are getting one, it means that you’ve made an interest-free loan to the government and your money has been working for them—not you—all year long.
Doesn’t Uncle Sam already get enough of your money? Why give him more? Many people try to justify their tax refunds by saying it forces them to save money. Nice try. While I agree that saving money is a valid concern, I believe there’s a better way to accomplish that goal. Let’s say you typically get a refund of $1,200 every year. Try reducing your withholding at work by $100 each month and have your bank or credit union automatically transfer that $100 into a savings account. You never see it, so you never miss it. But the end result is that you’ll build your savings and earn interest all year long.
You can talk to your human resources department or a payroll specialist at work to reduce your withholding. I want you to be even-steven when it comes time to do your taxes—neither a borrower nor a lender (to the government) be.
16. Lower your student loan payment.
At the end of the last decade, a radical new change on the student loan front took place that could potentially benefit a lot of borrowers. Income-Based Repayment (IBR) plans became available to those with federally guaranteed student loans such as Stafford Loans and Direct PLUS Loans for graduate students.
Under this new repayment program, your monthly payment is based on your current income and family size. In fact, it could be an unprecedented zero dollars! For example, a single person earning $16,245 annually would have a zero-dollar payment under the program’s terms, according to the Project on Student Debt (PSD) website.
The IBR plan is something you have to apply for; a deal like this won’t simply come to you! Start by contacting the lender or lenders who hold your student loan(s) for more details on the application process.
Unfortunately, I’ve been hearing from callers who say their lenders are ignoring them when they ask about the IBR plan. Many lenders simply don’t have any info up on their websites. It’s difficult to say whether the lenders are incompetent or purposely playing dumb to avoid losing revenue. Let’s hope it’s just an oversight.
Fortunately, the PSD has a nonprofit info site called IBRInfo.org to help you navigate through any difficulty you might have getting into an IBR plan. The site even offers a beta calculator with a detailed Q&A that will help you figure what you need to pay to stay current on your student loans.
I can’t overstate the importance of staying current on student loans. In particular, if you have private student loans in default, the lender is allowed to seize your wages and empty your account without proving that you owe the money. Don’t let that happen to you if you fall on hard times. Get going with an IBR instead.
17. Comparison shop for health care.
One of my big beefs with medicine is how hard it is to figure out the cost of medical care before you actually receive it.
If you don’t have health insurance, or you have big out-of-pocket expenses with health insurance—say you’re in a high-deductible plan and it really matters what you’re going to be charged—there’s a website called PriceDoc.com. It allows you to put doctors and providers into competition with one another to provide the best cash prices for your medical care.
If you have insurance and like to comparison shop, ZocDoc.com is a new website that allows you to locate doctors by specialty and the kind of insurance they accept. You can also read user-generated reviews of doctors and make an appointment online instantly with their office. As I write this, ZocDoc is available only in Chicago, Dallas, New York, San Francisco, and Washington, D.C.
Over the next five years, medicine is going to be brought kicking and screaming into the era of actually having to post prices—much as the doc-in-a-box retail clinics that I love so much do. This should have happened a long time ago. But if you need to know what a procedure is going to cost now, these are a couple of ways for you to do it and shop around for the best price.
18. Let online pharmacies bid for your business.
There are so many ways to attack the high price of prescriptions, but I want to share one listener-suggested tip: BidRx.com offers a new way to shop for medication by letting pharmacies bid for your business.
There are actually two benefits to the BidRx model. First, you enter the name of your desired name-brand medication and BidRx will give you a list of generic alternatives. That in itself can represent a savings to you. Be sure to contact the doctor who wrote your original prescription to see if any of the suggested generics would work for you.
The second benefit is what really makes BidRx unique. It puts your prescription—whether generic or brand name—up for electronic bid among independent pharmacies. You get instantaneous price quotes right there on your computer.
This is a completely free service that requires you only to register at the site. Use “clark” as the referral code. (Don’t be thrown off by the wording you’ll see online, saying that a referral code comes from an “approved marketing agent.” In no way, shape, or form do I receive any money from BidRx. They simply set up “clark” as the referral code because their traffic spiked after I talked about them on my radio show and website.)
We are in an era when there are so many breakthroughs in medication. But I still think you should be wary of seeking out the latest and greatest drugs. You don’t want to be a guinea pig for a pharmaceutical sales rep who convinces doctors to write scripts for a hot new drug that later turns out to harm your health.
The safe choice is to stick with a time-tested and well-proven generic of a long-issued brand name. The only exception to this rule might be if you have an unusual condition that does not respond to existing medications.
19. Consider medical tourism.
For several years now, people have been going overseas to places like Thailand, India, Costa Rica, Brazil, and other far-flung locations to save money on surgeries. This practice is known as medical tourism.
While there are some inconveniences in going far away for care, the cost differences can be enormous. For example, a hip replacement that might run you $60,000 in the United States could be $12,000 to $15,000 overseas.
I’ll be the first to admit that I’m a complete idiot when it comes to most medical issues, but I think if you’re grappling with the cost issue alone, this is a no-brainer.
The number of Americans who are medical tourists is rising 20 percent per year, according to a recent report in the Financial Times of London. While the savings may be extraordinary, the big question remains, “What kind of care will I get overseas?”
While the quality does vary, many places overseas have first-rate hospitals that cater to foreigners. The Financial Times reports that Singapore is the best place to go overseas for Western-quality medical care. You’ll save substantial amounts there—up to 50 percent off—and have a private nurse twenty-four hours a day.
Far from being a possible insurance risk, medical tourism is actually encouraged by some insurers. Several Southern California insurers have provisions for treatment in Mexico that can save 40 percent on insurance premiums. Meanwhile, a couple of insurers in the state of South Carolina offer care at Bumrungrad International Hospital in Bangkok.
Just beware that if you go abroad for medical treatment, you’ll typically have no liability protection or recourse in the event of malpractice, plus there’s limited availability of aftercare.
You’ll want to vet facilities carefully before you go. Check the credentials of the doctors and surgeons who will treat you. Are they trained or board certified in the United States or another Western country? And be sure the hospital or facility you’re thinking about using is certified by Joint Commission International, a division of the major U.S. accreditation organization of the same name.
If you plan to work with a medical tourism company, such as Medical Tours International or Planet Hospital, to handle the arrangements of your trip, be sure that the hospital recognizes the company and that the company has carefully vetted the hospital.
20. Buy prescription eyeglasses for as little as $7.
Eyeglasses don’t have to cost hundreds of dollars. ZenniOptical.com is just one of several websites that offer prescription eyeglasses starting at $7 per pair with shipping costs of $5.
How can they be so cheap? Zenni grinds its lenses in China and offers absolutely no service after the sale. That’s led some of my listeners to become disenchanted with Zenni. But I’ve used them multiple times and never had a problem. You can even order only the frames at half off Zenni’s already low prices!
If you plan on ordering, get your vision checked by an eye doctor first to determine your prescription. You’ll also want to find out your pupillary distance (PD)—the space between the center of your pupils, expressed in millimeters. Certain frames will not work with certain PDs because the center of the lenses will either be too wide or too narrow. You need a fit that’s just right.
When my ten-year-old daughter recently needed glasses, my wife wanted to go to Costco Wholesale. But I nearly had a coronary when I looked at the price of the frames and lenses my daughter liked—they were $80! I quickly suggested Zenni, prompting my wife to blow her top and tell me not to be so cheap. We soon reached an agreement: My daughter got the pair of glasses at Costco, but she got a spare pair from Zenni for $19. It turns out that she likes the pair from Zenni better than the one from Costco!
Some people wonder how Zenni glasses can be any good if they’re so cheap. I have a friend who is an investigative reporter for an Atlanta TV station. A couple of years ago, he did a story about eyeglasses in which he compared Zenni and a number of other more expensive brands. The Zennis had perfect prescriptions compared with the glasses that were filled at well-known U.S. optometry chain stores. Buying cheap glasses does not automatically mean you’ll get bad quality.
A host of Zenni competitors including EyeBuyDirect.com, GlassesUnlimited.com, and GlassesShop.com also offer prescription eyeglasses at a similarly low price point.
21. Enroll at a hospital gym.
If you’re like most people, you overindulge in calories during the holidays and then make a New Year’s resolution to eat better and exercise more. Here’s a word of warning to avoid getting eaten alive by gym salespeople.
The health club industry basically has two business models. In the good one, you pay monthly or quarterly with no contract. The sleazy business model, however, involves long-term contracts designed to give your checking account a workout.
With the sleazoids, the downfall begins when they offer you a free tour of the facilities. The tour is done by a commissioned salesperson with the intention of getting you to sign a multiyear contract. Once you sign that contract, the gym does what’s called “moving paper.” They sell off the contract to a finance company that will take the note on for pennies on the dollar. That creates additional incentive for the club to sign up more members—and hope that none of them ever show up to work out all at once!
In a recent filing with the Securities and Exchange Commission, Bally Total Fitness disclosed that the average member visits the club one half of one time per week. You’d be hard-pressed to find any fitness expert who recommends a full workout only once every two weeks!
There is, however, a better way for health clubs to do business: by allowing customers to pay month to month or quarterly with no real contract. That creates incentive for the club to help you stay on a healthy regimen so you’ll keep coming back. They win and you win!
I recommend checking out hospital-affiliated fitness centers. They’re usually rehab-based or geared toward the hospital staff. They’re clean, well run, and don’t force contracts on you. Best of all, most will sell memberships to the public. Visit the hospital nearest you to see if this kind of gym facility exists in your neighborhood.
Another option I’ve noticed popping up in vacant storefronts around the country is the ultra-low-cost no-frills gym that is open twenty-four hours and tends to price out at around $15 each month with no contract. But beware: These gyms might not have showers for you to use; they simply offer the use of exercise equipment at rock-bottom prices.
22. Use coupon code sites to save when shopping online.
The use of online coupon codes always sees a boost during the holiday season. Both Black Friday and Cyber Monday—those days that follow Thanksgiving and mark the start of the holiday shopping season—have helped popularize the use of online coupon code sites. But these sites also offer a really great way to save money all year long.
Some popular coupon code sites include RetailMeNot.com, CouponCabin.com, and BradsDeals.com. When you visit them, they’ll reveal secret codes you can enter for extra savings when checking out at a retailer’s website.
In fact, it’s a good idea before checking out at any website to enter that retailer’s name plus the words “coupon code” into a search engine and see what’s out there.
When it comes to buying online, it’s very important to read the website’s return policy. Some online retailers have awful policies, while Amazon and Zappos.com generally have favorable ones.
Here’s another tip: Christa DiBiase, the executive producer of my radio show, always checks to see if she can get credit for her child’s college savings account by clicking through to an online retailer via UPromise.com or BabyMint.com. In six years of doing that, she estimates her online purchases have contributed about $1,100 to her daughter’s future educational expenses!
23. Buy three copies of the Sunday newspaper.
It’s amazing to think that the use of coupons was very uncool before the recession. But I’ve never been about cool; I just like to save money. Many Americans jumped aboard the coupon train when the Great Recession hit.
Coupons are the kinds of low-hanging fruit that I really encourage you to grab because they’re so easy. Here’s how to do it: First, I want you to buy three copies of the Sunday newspaper just for those glossy RedPlum and SmartSource coupon circulars. As an alternative, you can also visit RedPlum.com and SmartSource.com to print coupons for free, though you may find some variation between what’s available online and what’s in your Sunday paper.
Once you’ve gathered all your coupons, visit a site like CouponMom.com that breaks down weekly sales by state and explains which coupons to use where and when for maximum savings.
The second key here is to know your prices. You don’t need a complicated price book. Just track the prices of your top ten items. Keep an eye on them for a month and a half or so. If you know the regular prices of your ten most common purchases at local stores, then you’ll know when to stock up on something when it goes on sale. If you have a coupon at that point, so much the better! MyGroceryDeals.com will notify you when items of your choice go on sale.
Third, be flexible. Brand loyalty will cost you money. If you have a coupon for a brand you’re not familiar with, why not give it a try and see if you like it? You may be surprised.
Finally, there’s one last step to saving money with coupons: Know your store’s policy. Some grocers will double manufacturers’ coupons up to 50 cents every day and others will actually accept competitors’ coupons. So a coupon worth 50 cents could actually be more valuable to you than a coupon worth 75 cents if your grocery store will double the first coupon.
When it comes to food shopping, a little coupon strategy will go a long way!
One side note here: There’s been a big push to get consumers to use electronic coupons. I loaded an e-coupon app on my smartphone but soon deleted it because I found I never used it. E-coupons have been something of a bust so far. That will likely change in the future, but right now Americans still prefer clipping traditional newspaper coupons.
24. Buy private label groceries at the supermarket.
There’s no better way to instantly save up to 30 or 40 percent off your grocery bill than buying a store brand. You won’t even have to change where you shop.
Before you balk at this particular tip, know that store brands are much better than they once were. Remember those plain packages marked “cola,” “potato chips,” or “potted meat product” branded with big, black NO FRILLS logos that were the kiss of death? They’re gone.
But Americans have been slow to buy private label groceries as readily as shoppers in most other developed countries. Canadians, for example, have always had a strong focus on no-frills goods. They’ve even perfected premium-style store brands that look like they’re name brands. President’s Choice—one outstanding Canadian private label—has managed to create a sense of high-quality products at a low price. That name, of course, is a bit ironic considering that Canada has a parliamentary government headed by a prime minister!
We’re now seeing widespread market segmentation of store brands here at home, with up to three different versions of a particular generic product—each with a different price point and different packaging. One product might be superior to the brand name; another could be equivalent in quality but 30 percent cheaper; and a third will be low quality for a dirt-cheap price, much like the original no-frills goods of the late 1970s and early 1980s.
If you’re not yet buying store brands, here’s my advice: Grab a store brand and your favorite national brand and compare the ingredients. They’re very similar in most cases. So why not give the no-name a try? If it turns out you don’t like it, you’ve bought a piece of garbage just once. But if it’s good, you can buy it moving forward and save each time.
25. Make your razor blades last longer.
In February 2006, a gentleman called my radio show and told me he’d been using the same razor for a year. The caller, a metallurgist, revealed that blades don’t degrade from shaving but instead corrode over time from the moisture that collects on them.
The man said he uses a blow dryer to dry his razor after each use. His call prompted others to share their tricks for maximizing a razor’s life.
At first I was incredulous. Using a disposable razor for even a month sounded crazy—let alone a year. But then I got inspired by the discussion (and the expense of shaving blades) and decided to take a single 17-cent razor and make it last for twelve months.
I didn’t dry my razor with a blow dryer but instead took the lazy man’s approach of just blotting it dry on a towel.
The razor actually lasted for a whole year, and I was very pleased not to have to throw away money on blades anymore. And no, I didn’t cut myself even once. The moment I bleed, that razor is out of my life!
After my experiment was well under way, I opened a drawer under my sink and found two fifty-five-count bags of double-edged razors that I’d gotten on clearance at a warehouse club. One bag was open and had fifty-one shavers left, while the other was completely sealed. Using one blade a year, I’d have to live past one hundred to use up the package that was already open. I’d have to live to 158 years to use both bags. I don’t expect to live that long, so I’ll be donating that unopened package to a shelter where my wife and I volunteer.