Your emergency fund can help protect you against financial setbacks, since it provides you with a little extra cushion to draw on.  Rather than turning to debt, you can use money in your emergency fund to cover unexpected costs.

Experts recommend that you save at least six months’ worth of expenses in an emergency fund.  So, if you spend $3,000 a month, you need to have $18,000 in an emergency fund.

That’s a daunting task.

How can you get started when you have that huge amount of money hanging over your head?

Here’s How to Start an Emergency Fund

Break It Down

Realize that you don’t have to have that $18,000 in your account next week — or even next year.  Look at your final emergency fund number as a goal you are working toward.

Big numbers and big decisions tend to paralyze us, making it difficult to start a course of action.  Instead of always looking at your end result, focus on the small things you can do right now to start your emergency fund.

Look at your current spending plan/budget.

Figure out how much room you have to set aside money for a rainy day.  This might mean you cut back and plug some money leaks.  You might also look for ways to earn a little extra money.  In any case, look for a manageable amount to put toward your emergency fund.

In some cases, breaking it down to something that sounds manageable is a good place to start.  Don’t fret that you don’t have the money to set aside $500 a month.  Instead, focus on the fact that you can find $20 a week to put toward your emergency fund goal.  It may not seem like much, but the most important thing right now is to just get started.

Make it Automatic

Once you know how much you can put into an emergency fund each week or each month, make it automatic.  If you don’t have to think about it, it’s much more likely to be something that you do on a regular basis.

If you have a budget or spending plan, add your regular emergency fund contribution to the list.  Codify it in your budget so that it is one of those non-negotiable expenses.  You need to change your attitude so that your emergency fund efforts are considered a vital part of your personal economy.

You can even take it one step further.

My emergency fund contribution comes out of my bank account on the same day each month.  It’s automatically set up as an expense, and it’s clockwork.  I don’t have to remember to make the contribution; it just happens.

Another good arrangement, if it’s available to you, is to have a portion of your paycheck automatically deposited into your emergency fund.  Talk with your company’s human resources department to find out what you need to do in order to make it happen.  If you don’t have the money in your paycheck, you’ll be less likely to spend it.

If you automate, make sure that the other adjustments to your finances are made; you don’t want to overdraw your account.

Where to Put Your Emergency Savings

We talked about how you should break down your goals into easy amounts and how you should automate those contributions   But where should you put these new emergency savings?

My preference is an online savings account.  I’ve had money saving up in an online savings account for years.  What I like is the account tends to be out of sight for me so I’m not tempted to use the money.  Sure I can access it if I wanted to but since it’s not my main account I don’t see the money all the time so it’s somewhat ‘forgotten’ and left to grow.

The main things to consider though is to put the money somewhere that is safe (you’ll have it when you want it) and where you won’t spend it.  Having the money in your checking may sound logical but I find it’s too easy to spend the money if it’s mixed with your other funds.  Remember you need to have this money there for you when you need it — in an emergency.

A note about credit cards: You might wonder if your credit cards could be used as emergency savings.  I say no and yes.  No because too many people are already in credit card debt.  If you carry a credit card balance then adding an emergency charge will not help your situation in the long run.  You can do some big damage to your finances and your credit score.  You’ll probably end up paying interest on the charges and you’re credit score will be hurt since you’re using more of your available credit.

On the other hand, if you have an emergency fund put away and you pay your credit card balances in full every month then using your credit card in an emergency is just a short-term bridge loan with no interest.  You can use the card then pay it off in full with your emergency savings.

Boost Your Contributions

Starting your emergency fund is about doing something — anything — to get the ball rolling.  Once you have started, though, you can check the situation to see if there’s something more you can do down the road.

As you get used to your smaller emergency fund contributions, you can look for ways to find even more money to contribute.  If you currently put $80 a month in your emergency fund, look in your budget, consider a side hustle, and see if you can find another $20 a month to add to your monthly emergency fund contribution, bringing your total to $100.

As soon as you are used to that new level, change it up again.

It becomes a challenge to boost your contributions until your emergency fund is fully funded.  If you turn it into a challenge or a game, you’ll increase your contributions faster, and reach your ultimate emergency fund goal that much sooner.

Re-evaluate Your Needs

Make sure to take some time to every once in a while to look over what your emergency needs are.  If your expenses or your income change then your emergency savings needs will change too.

For example, if you go from renting to buying a house then you want to make sure you have your new mortgage covered as well as the rest of your new expenses.

Consider also what your actual needs are.  Should something happen, like losing your job, you will probably cut back on some of your expenses until you find employment again.  You may not need as much as your current expenses are to get by.

Also consider the current economy and job market.  The longer it would take for you to find a new job then the more you will need in emergency savings.  This may be difficult to judge.  If you hear the economy or your job sector are doing poorly then you know you need to increase your savings.  Be honest with yourself here.  It’s too easy to assume you will be able to find a job easily.

Finally

Once you start your emergency fund you’ll see it’s not that hard to keep it growing.  The biggest part is to get moving and put that money away.  You’ll thank yourself when that next emergency comes and you have the money socked away to cover it.

What are your best tips for starting an emergency fund?

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How to Start an Emergency Fund

However, according to the Wall Street Journal, many experts cite the divorce rate of second marriages to be 40%.

Second marriages come with more baggage — ex-spouses, stepchildren who may or may not like the new step parent, and, of course, financial complications including spousal support and first family obligations, just to name a few.

It’s no secret that money disagreements can be one of the top causes of divorce.

According to a study conducted by Jeff Dew of Utah State University, “Couples who reported disagreeing about finance once a week were over 30 percent more likely to get divorced than couples who reported disagreeing about finances a few times a month” (The New York Times).

So how do those in second marriages, who perhaps bring more money issues and baggage into their marriage with them than they did their first marriage, avoid financial conflict?

One strategy is to have a financial meeting before they marry (and some may argue before they even get engaged).

Make sure to consider these financial topics before that next marriage:

1.  Discuss money beliefs.

According to USA Today, “Nearly two-thirds of married couples who responded to USA TODAY’s poll said they talked little or not at all before the wedding about how to combine their finances.”  As a couple marrying for a second time, this conversation is essential.

Those entering second marriages are often older and bring more assets into the marriage.  They must decide if they want to completely combine finances, keep finances separate, or combine some aspects and keep some aspects separate.  How they choose to merge finances doesn’t matter as much as having the conversation and choosing a method they are both comfortable with.

2.  Consider a pre-nup.

Second marriages can have special financial considerations you wouldn’t have in a first marriage.

A prenuptial agreement isn’t romanatic.  It isn’t sexy.  Bringing up the topic of a prenup can be difficult.  Still, if both partners bring substantial assets into the marriage, or if only one person does, having a prenup can be essential.

Partners who have already been through one divorce know what a messy and long process dividing assets can be.  A prenup will take away that battle should the second marriage not work.

Carole Cox, a college professor, says that having a prenup when she got married for the second time was the smartest thing she did.  ” Her second marriage ended in divorce. The prenuptial agreement is the primary reason she was able to keep her house and pension in the bitter split. It also helped save her from having to pay spousal support to her long-unemployed ex” (LA Times).

3.  Update wills.

Life gets a little more complicated when people marry for the second time.  If one or both partners have children, discussing who gets what in the event of death is essential.

Violet Woodhouse, an attorney and author of Divorce and Money, explains, “State laws kick in when the couple has no legal agreement to the contrary, and those laws can subrogate children’s interest to the interest of a stepparent in the event of death. In divorce, they can enrich a jettisoned spouse, even if the union was short and rocky” (LA Times).

We have a family friend, Susan, who just passed away.  Susan was married for the second time, and her daughter, Wendy, inherited the house when Susan died.  However,  Wendy’s stepfather, who she is not close to and whose name is not on the mortgage, still lives in the house.  Now Wendy is in the uncomfortable position of deciding if she should let him continue to live there or if she would like to take the house or sell it.  Had all three sat down together first and clearly defined the situation, Wendy wouldn’t be in such an awkward position now.

4.  Update beneficiaries.

Ask any financial planner or lawyer, and they will pass on sad stories where a beloved second wife or husband doesn’t inherit anything because the spouse forgot to change beneficiaries from the first wife or husband to the second.

Before people marry for a second time, they should sit down together, discuss beneficiaries, and make any changes that may be necessary.  Consider all documents like life insurance taken out independently as well as life insurance received through the bank or place of employment.  Also consider stocks, retirement accounts, and bank accounts.

Finally

Second marriages bring with them additional financial complications.  While discussing finances so openly and business-like may not feel romantic or sexy, the simple fact is that such conversations may help strengthen a second marriage.  And if the second marriage doesn’t survive, at least each partner has taken steps to protect his or her assets and children from the first marriage.

Are you in a second, or third, marriage?  Did you have any special money discussions before you tied the knot?

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Second Marriage? Have a Financial Date Before You Tie the Knot

How about a card that, besides rewards, comes with additional travel benefits, purchase protections, and more?

Then look no further than the Starwood Preferred Guest® Credit Card from American Express.

Here are some of the benefits of the Starwood Preferred Guest card at a glance:

• Starpoints® bonus: earn up to 25,000 bonus points: 10,000 after your first purchase and another 15,000 after you spend $5,000 within the first 6 months of Cardmembership
• That’s enough for a weekend getaway to a Category 4 Hotel like the Westin Savannah Harbor Golf Resort & Spa, or six free nights at a Category 2 Hotel
• Free Hotel Nights: redeem Starpoints at over 1,100 hotels in nearly 100 countries worldwide – with no blackout dates
• Free Flights: redeem Starpoints on over 350 airlines with SPG Flights – with no blackout dates
• Get 5,000 bonus Starpoints after you transfer 20,000 Starpoints to a frequent flyer program with more than 30 airlines
• No limits on the number of Starpoints you can earn
• $0 introductory annual fee for the first year, then $65
• Terms and restrictions apply.

Starpoint® Rewards Program

When you make purchases with your card you earn Starpoints rewards towards stays at Starwoods Resorts (makes sense, right?).

You get 1 Starpoint for every eligible dollar you spend.  Currently, you get a 10,000 point bonus when you make your first purchase with your new account.  That’s already good for a free night at a category 4 Hotel.  If you’re looking for more time then you can get 6 nights at a category 2 hotel.  That’s a nice start for a bonus.

If you spend $5,000 in your first 6 months you get a 15,000 point bonus that may seem like a lot to spend, but some people do it  (- Just sayin’).

When you use your card to purchase stays at Starwood hotels and resorts you can earn up to 5 Starpoints.  That’s 2 Starpoints for putting the stay on your card and 2 Starpoints for being a Starwood Preferred Guest member.  If you are a Gold or Platinum level member then you get an additional point.

Oh yeah, with your card you are automatically a Starwood Preferred Guest member. (See our review of the Starwood Preferred Guest program for more details like the levels of membership).

Your Starpoints can be redeemed for over 1,100 hotels and resorts in over 100 countries in the Starwood Preferred Guest program.

The Starwood Preferred Guest program contains nine distinctive brands to meet your travel needs:

• Sheraton® Hotels and Resorts
• Four Points® by Sheraton
• W® Hotels
• Aloft (SM)
• The Luxury Collection®
• Le Méridien®
• Westin Hotels & Resorts®
• Element (SM)
• St. Regis®

Your Starpoints can be used any day of the year, with no blackout dates.

Every year you receive credit for five nights toward elite status in SPG.  Twenty more nights yields you Gold status while 45 more nights gets you Platinum status.  With elite status you can earn upgrades to enhances rooms, when available, and you get 4pm checkout (where available).  And you also earn Starpoints faster with elite status!

Your Starpoints can be used for flights too!

Redeem your Starpoints in over 350 airlines with no blackout dates.  You can transfer your Starpoints to more than 30 airline frequent flyer programs on a one-to-one, Starpoint for airline mile basis for most.

In fact, if you transfer 20,000 Starpoints to any one frequent flyer program you can earn a bonus 5,000 points!

Sheraton Hotels and Resorts Bonus

There’s a new promotion going on where if you stay 2 consecutive nights at participating Sheraton Hotels and Resorts you get the third night free!

American Express Benefits

One great aspect of having an American Express card is their slew of benefits they give such as Travel benefits (things like Car Rental Loss and Damage Insurance coverage at no extra cost and 24/7 access to the Global Assist® Hotline for emergencies when you are traveling more than 100 miles from home), Purchase protection (such as fraud protection, extended manufacturer’s warranties, and return protection) and Entertainment benefits.

And of course you get American Express’ excellent customer service.

Annual Fee

The Starwood Preferred Guest Credit Card has an introductory $0 annual fee for the first year then $65 every year after.

Is that a lot?  Not really.  These days more cards are coming with annual fees.  So long as you use your benefits, like free nights, then the annual fee is well worth it.

Is the Starwood Preferred Guest Credit Card a good credit card?

If you stay at Starwoods Preferred hotels or resorts, even every so often, then this card can pay off big for you.

You can earn free stays at some incredible hotels and resorts that can be redeemed any day without blackout dates.  If you’d rather, you have the option to redeem your points for flights (you aren’t tied to any particular airline carrier).  To top it off you get American Express’ customer support and benefits.

The Starwood Preferred Guest Credit Card makes for a great, flexible travel rewards credit card, giving you nice rewards options and benefits.

But understand this — if you tend to carry a balance every month then the benefits you get from the card start to get wiped out by the interest you pay on your balance.  In order to really get the most out of a credit card you have to match the card to how you use it as well as pay off your balance in full every month.

Apply now for the Starwood Preferred Guest® Credit Card from American Express or check their website for more details.

“Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.”

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Starwood Preferred Guest(R) Credit Card from American Express Review

You’ve heard that a credit score is important, haven’t you?  You may have even heard how you should protect your credit score.  But a lot of people are still unsure of what a credit score actually is.

Let’s take a look at credit scores and what they mean.  This way you know once and for all what they are and how they are used.

A credit score is a calculation based on information from a credit report which gives a representation of how credit-worthy a person is or how likely a person is to default on their loan.

Let’s take a quick step back, shall we?  We’re talking about credit scores but it’s important to understand what a credit report is all well.  Your credit report is basically a listing of all the credit accounts you have and your history paying your credit, or debt, off.  Sometimes the report is referred to as your credit history.  The information comes from the lenders who report your activity to the three major credit bureaus.

To quickly sum up — your credit report gives information and a history of your credit accounts.  Now back to credit scores…

Your credit score gives a number range to quickly sum up the information from your credit report.

Think of it like this — your credit score is like your GPA (Grade Point Average) for your credit use.  A high GPA means you’re a pretty good student and a low one means you could be doing better.  When you hear that someone has a 3.9 GPA you think “wow that’s a smart guy who studies hard.”  A high credit score is similar.  An excellent score shows lenders that you’re good with your credit and you pay on time — you’re basically not much of a risk.

On the other end of the spectrum a low credit score tells a lender you could be doing better with your credit and they see you as a bigger risk when lending you money or giving you credit (like on a credit card account).

The most common credit score is the FICO score which calculates based on reports from the agencies Experian, Equifax, and TransUnion.  Be aware there are a good number of different variations of credit scores used by lenders, some depending on the field they cover like auto loans or mortgages.  But the basic one is the standard FICO that you or I can check.

Why Your Credit Score Is Important

When you apply for a loan, be it for a car, house, or credit card, the lender will look at your credit score to measure what kind of interest rate to charge you.

The higher your score the lower your rate.  The lower your score the higher your rate.

It’s in your best interest to have a better score as the interest rate charged is basically how much you will be paying to borrow money.  A high score means you are more likely to pay back the loan without problems.  A low score means there’s considerable risk in giving you a loan so a lender will charge you more for a loan in case you don’t pay it back.

(See my article Buying A Car – Know Your Credit Score And Get Financing Before Hand for an example of how knowing your credit score can help you save money).

Credit scores are becoming more and more important.

They are being used in job interviews (to see if the applicant is responsible with his credit), for insurance rates, and even to get cell phone contracts.

How Is Your Credit Score Determined?

The score is calculated approximately by:

• 35% Payment History – How well you have paid and if they have been on time
• 30% Credit Owed – The amount you owe relative to the amount of credit you have available
• 15% Length of Credit History – How old your oldest account is and the average age of your credit
• 10% New Credit – Amount of credit opened recently as well as recent credit inquiries
• 10% Type of Credit in Use – The mix of credit cards, retail accounts, finance loans, and mortgage loans.

For more details check out: Factors of a Credit Score

Understand though that your credit score is only measuring your credit accounts.  If you pay cash for everything that activity won’t show up as part of your credit score.  Your income is also not part of your score.  So if you make a lot and pay for cash all the time you can actually have a low credit score.

What Do The Credit Score Ranges Represent?

The FICO score ranges from 300 to 850. It’s graded as such:

Be aware these ranges can change but they give you a good approximation of what to expect.

How To Make Your Credit Score Better

Here are a few tips to improve your credit score:

• Pay your bills on time and make it an ongoing habit.
• Pay off your debt.  Don’t just move it around.
• Don’t max out your credit.
• Request credit reports from the three main agencies and check for any errors that may show.  They are not all identical and one could have an error or even fraud.
• Avoid opening a number of new accounts in a short period of time.

When Do You Need Your Credit Score?

If you are planning on getting financing for a car or a home you should request the three credit reports and your credit score.  Car insurance companies also use your credit score to help determine how much to charge you.

Remember, credit reports only list information about your accounts while the credit score is the interpretation of your accounts.  You should have both.

Click here to see how you could possibly get your credit score free.

Your credit score is an important financial number that, if kept high, can potentially save you thousands of dollars over time.

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Credit Score – What Does It Mean?

They wanted to travel from Michigan to Florida for a wedding, and she wanted to fly for free using frequent flier miles they had accrued.  The transportation cost for the trip would be limited to the car they would rent for three days when in Florida.

He, on the other hand, thought it was silly to rent a car when theirs worked perfectly fine.  He wanted to make the 24 hour drive down to Florida for their three day trip.  He was sure this was the cheaper way to travel, even though they would have to pay for gas and put wear and tear on the car.

Ah, the rental battle.

Is it worthwhile to pay for a rental?  The answer, in all honesty, is often that it depends.  However, in this case, simple math would have shown him that her plan would have been the cost saver.

Marital battle aside, we Americans don’t often think of renting outside of cars and apartments.  Instead, our first thought tends to go to ownership.

There are just a few things we automatically think of renting–of course, cars when we are traveling, tuxedos when our children are going to prom or when men get married, apartments, sure.  But for most other temporary needs, we tend to buy instead of rent.

However, if we could let go of this mindset, we may save a substantial amount of money.

How to Determine If It Is Better to Rent or Buy

There are some calculations you can do to determine if it is best to rent or buy.

1.  How often will you use this item?

There are times you are better off renting than buying.

If you will use the item frequently, it will often be a better financial move to buy rather than rent.

When I was breastfeeding my son, I chose to buy a breast pump rather than renting.  (Did you even know you can rent breast pumps?  You can, often from a hospital.)  Renting one cost $20 per month, and buying one cost $250.  Considering that I breastfed my son for 12 months and had to pump at work, this purchase looks on the surface to be a wash.  However, I used the pump, though not as much, for my two other children.  In addition, when I was finished, I sold the pump for $60.

I definitely saved money buying instead of renting.

2.  Have you used this item before?

If you haven’t used the item before, you may want to rent just to try it out rather than making a purchase only to discover that you won’t likely use it again.

My husband made our wooden bed frame, and we thought he would use a circular saw for many other homemade projects.  Rather than renting the tool for $50, we elected to purchase it for $100.  He only used it once and now it is in my pile of items to sell on Craigslist.  If we are lucky, we will earn $50 for it and the purchase will be a wash compared to the price of renting.  However, we should have rented.

3.  Is this a once in a lifetime item?

Many items that we only use once are pricy.  Think of wedding dresses, for instance.  You wear them once, pay an expensive fee for the dry cleaner to clean and preserve it, and then it sits in the closet.  Why not buck the trend and rent a wedding dress instead?

Did you know that girls can rent their prom dresses?  Why not?  Boys rent their tuxedos.  According to MainStreet, “Wear Today Gone Tomorrow rents out dresses and accessories by top designers, many for 90% off the retail price, such as Kay Unger strapless silk ruched dress for $57 for a seven-day rental (retails for $570).”

You may be surprised by other things you can rent:

• Caskets (Yes, caskets–pay $800 to rent vs. $2,500+ to buy.  This is typically an option for those who have a funeral, but then plan to cremate the deceased.)
• Purses
• Textbooks [See our article about saving on textbooks.]
• Camping gear
• Trucks
• Musical instruments

Another Way to Save

While renting can save you a great deal of money, don’t forget the other option–buying used.

Sometimes you can buy things used for less than you may pay to rent them.   A case in point may be a musical instrument, especially if your child will be playing the instrument for several years.

We live in an expensive world, but you can save yourself a bundle by strategically renting what you need or buying used.

Do you typically rent items you don’t use very often, or do you just buy instead?

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Is it Better to Rent Or Buy Stuff? – Renting Items To Save Money

As Jim Gaffigan says in one of his hilarious standup routines: “Women are amazing. A woman can grow a baby inside their body. Then somehow a woman can deliver the baby through their body. And then by some miracle a woman can feed a baby with their body.”

Your mother did that for you.  And then she kissed your boo boos, got you to school on time, and supported you in every wacky endeavor you took on.

Even better if Mom showed you how to budget for a family, get the best value at the grocery store, and the value of time spent with family.

So thanks, Mom, and all Moms who are involved with their children’s lives.

Here are some great reads this week:

Wise Bread | Getting Your Money Back Without Losing Your Friendship
Personal Dividends | What To Do If You Lose Your Driver’s License
Free Money Finance | What Would You Be Willing To Do To Retire Early?
Prairie Eco-Thrifter | Which is More Dangerous: Cash or Credit Cards?
Narrow Bridge Finance | Four Reasons to Shred Those Credit Card Convenience Checks
Invest It Wisely | Why Freelancing on the Side Will Set You Free
My Journey to Millions | If You Have Been Thinking About Getting Life Insurance, Now is the Time
Moolanomy | 6 Investment Alternatives to the Stock Market
Out of Your Rut | 10 Reasons Why People Cannot Get Out of Debt

Free From Broke was featured in the following carnivals:

Carnival of Wealth, “Native American” Edition | Control Your Cash: Making Money Make Sense
Festival of Frugality #387 — Money Life and More
Tax Carnival #116: May Tax Flowers 2013 – Don’t Mess With Taxes
Carnival of Personal Finance – Happy Days Are Here Again Edition!
Carnival of Retirement – Brick Building Edition! | Brick By Brick Investing
Finance Carnival for Young Adults: Cinco De Mayo Edition — Fat Guy Skinny Wallet
Financial Carnival for Young Adults – 20s Finances

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Happy Mother’s Day 2013 and Links

Or how many times has your spouse said it?  What about you?  How many times have you said it?

At the risk of dragging out the old, “I had to walk to school uphill both ways in the snow,” argument, what Americans consider a need today is much different from the past.

In addition, Americans have created a culture in which the concept of “need” is much different from anywhere else in the world.

Enough about historical comparisons and international economics.  Let’s look at a few examples of what Americans today consider needs and just how ridiculous (and expensive) they are.  While we’re at it, let’s consider some common sense alternatives.

How You Can Spend Less on These ‘Needs’

Bottled Water

The water that comes out of your faucet might have a slightly strange taste but the facts are that it’s still much better for you than water in countries around the world.  The difference is that savvy marketing has convinced you that you need bottled water in a (possibly toxic) plastic bottle from a secret mountain spring in Washington.

According to the International Bottled Water Association, the average person drinks 167 bottles of water each year.  That’s $225 per year. At an average cost of $1.35 per bottle, it would take 10 years of refilling a water bottle with tap water before you spent $1.35.  One more fact: If your tap water cost the same as bottled water, your monthly water bill would be about $9,000. (Based on San Francisco water rates.)

If you can’t live without filtered water, the cost of a water-purifying pitcher is about $50 annually.

Starbucks

Spend less now and save lots in the long run!

Something feels trendy about getting your daily dose of Starbucks.  (As if the glorious taste isn’t enough.)  Conservative numbers look like this.  If you purchase one latte daily, that’s about $1,460 per year.  Over 30 years, counting investment income you could have made if you saved that money, you would have an extra $239,891.

You’re probably not going every day but even half that amount is a lot of money.

Are you one of those that “have to have your caffeine to function?”

Maybe your expensive taste for hoity-toity coffee means that old school coffee maker on your kitchen counter needs an upgrade.  Let’s get you a Keurig coffee maker and load you up with those little K-cups.

The machine will cost $58 and each K-cup, somewhere around 60 cents.  If we divide the cost of the machine over three years, that makes the yearly cost of your daily coffee about $239.00.  Even if you add in some other ingredients that make you the ultimate barista, it’s still far less than hitting the Starbucks drive through.

[Editor's Note: My preference is to buy my own beans and make coffee with a French Press which you can buy for about $20.]

Cellphone

Calm down.  We’re on your side.

In a world where the landline is going the way of the VCR, the cellphone is quickly becoming a necessity.  Professionally, employers expect that they can reach us almost instantly and we want to have constant contact with our family.

Here’s where it all breaks down.

Do you globe trot in a private jet?  Do you live on a multimillion-dollar estate?  Do you drive a Ferrari?

Probably not and that’s because you can’t afford those items.  You’re not upset that you don’t have them.  You’re perfectly happy parking your couple-year-old Honda in the driveway of your modest home.

The truth is that you probably can’t afford the Ferrari of cell phones either.  The reason you have one is that cellphone carriers allow you to pay most of the cost of your phone over a two-year period.

If you head to Verizon and pick up the cheapest iPhone 5 and activate it with a bare-bones plan, it’s going to cost you about $1,800 the first year and $1,600 the next.  If you add all of the bells and whistles, it’s going to set you back more than $3,400 for the first year and about $3,000 the second year.

Can’t live without a smartphone?

That’s OK.  You can pick one up at MetroPCS for $99 and sign up for its $40 per month basic plan (contract free) and spend about $648 for the first year.  A smartphone is certainly not a need, though.  You can pick up an even cheaper phone and save more.

Restaurant Food

The drive through is a glorious thing and sitting down at your favorite restaurant after a stressful day at work might be even better.

Oddly, this idea that nobody has time to cook anymore has made eating out a necessity in the minds of too many.  Without factoring in alcohol, an average dinner for two at a chain restaurant is $27 including tip.  That’s a little over $2,800 per year if you eat out twice each week.  Eating at home would cost that same couple about $11 per meal or less than half the cost of eating out on an annual basis.

What about the notion that there is some premium to consider where the amount of time you don’t spend cooking is time you can spend earning?  That could be true in rare occasions but does it really take that long to heat up a steaming bowl of vegetable soup or a plate full of homemade spaghetti?

Finally

Here’s what is worth noting: Americans don’t believe they’re winning the money battle.  They feel like prices are rising, wages are falling, and saving is impossible.

That, to a large degree, is true.  What so many Americans fail to recognize is that their perceptions about what is essential and what isn’t, are flawed.  It’s a lot easier to cut expenses than it is to make more money.  Start by reducing one expense and see what happens.  Then cut or reduce something else.

Small reductions add up to big savings.

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How to Spend Less on Some of Your ‘Needs’

That’s the BankAmericard Travel Rewards® credit card!

This credit card from Bank of America offers up some interesting travel rewards features.  Take a look at a quick rundown of the card:

• Earn 10,000 bonus points when you spend $500 on purchases in the first 90 days of account opening, which can be $100 towards travel purchases
• Earn flexible travel points good for everything from flights to baggage fees
• Earn 1.5 points for every dollar spent on purchases – 50% more than the average rewards programs which only offer 1 point per dollar
• No limit to the total number of points you can earn and points don’t expire
• No annual fee
• Simply pay for your travel with your card. Then, call or go online and you can redeem your points for a statement credit towards all or part of your travel purchases
• No foreign transaction fees
• Chip Technology provides you expanded global acceptance when shopping anywhere you go, outside of the U.S.

Let’s look a little more in-depth at the card now.

Card Features

Reward Points Program

With the BankAmericard Travel Rewards® credit card you earn points from the purchases you make.  They have a flexible program that allows you to use your points for everything from flights to baggage fees.

You earn 1.5 points for every dollar spent on purchases.  That’s 50% more points per dollar than the average rewards program (most offer 1 point per $1 spent).  And there is no limit to the total number of points you can earn and the points don’t expire.

So how do you redeem your points?

Good question.  The BankAmericard Travel Rewards® credit card makes it easy to use your points.

Make your travel purchase with your card then call or go online to redeem your points as a statement credit.  This can be for all or part of your travel purchases.

What I like here is that you don’t have to worry about what programs the card may be a part of.  You’re also not limited to one airline to travel with.  Just make your purchase and then redeem your points.

And to start you off you get a 10,000 point bonus if you make at least $500 in purchases in the first 90 days.  You’re already saving on your travel purchases.

Other Travel Perks

In addition to their points program you also have no foreign transaction fees.  This is great when you are travelling overseas since many other cards hit you with a transaction fee for your credit card purchases.

The card also uses new chip technology.  You don’t see it used much in the U.S. yet but outside of the country it’s more widely used and having the chip allows for expanded global acceptance when you’re travelling.

Ever get in a jam when travelling?  Your BankAmericard Travel Rewards® credit card offers 24-hour travel and emergency assistance.

Want to get dinner reservations or tickets?  Enjoy complimentary access to an exclusive concierge service to help you out.

The BankAmericard Travel Rewards® credit card also carries some nice consumer protections as well.  There’s a $0 liability guarantee where you are not responsible for any fraudulent charges.  They will credit fraudulent charges back to your account as soon as the next day.  And their ShopSafe® feature adds an extra layer of protection when you shop online.

You also have Purchase Replacement which covers purchases that are stolen, lost, or damaged within 90 days after your purchase.

And if you link your BankAmericard Travel Rewards® credit card to a Bank of America® checking account you can use your card as overdraft protection for your checking.

APR Rates

The BankAmericard Travel Rewards® credit card offers a 0% introductory APR on purchases.  This lasts for 12 billing cylces.  After that the rate is 14.99%-22.99% Variable*.

Annual Fee

There is no annual fee for this card.  Keep in mind that you need an excellent credit rating in order to qualify

Finally

The BankAmericard Travel Rewards® credit card carries some great travel perks and all for no annual fee.  You also have an easy points redemption plan where you get statement credits for travel.  And you earn 1.5 points per dollar you spend on purchases.  Add no foreign transaction fees and you’re looking at a good all-around travel rewards card!

Get your BankAmericard Travel Rewards® credit card or click through for more details.

See Terms and Conditions accompanying application for additional offer details.  See rewards program rules for details.

Disclaimer: This content is not provided by Bank of America. Opinions expressed here are author’s alone, however this site is compensated by Bank of America.

Copyright © Free From Broke - A Personal Finance Blog Please visit for more great content!

BankAmericard Travel Rewards® Credit Card – Review

Retirees have seen their investments drop leaving them with less money to pay their living expenses and ever rising medical and prescription costs.

College students struggle to pay their college and living expenses while not going too deeply in student loan debt.

Meanwhile, the so called sandwich generation, those who have elderly parents who need support as well as children that also need support, struggle to make ends meet and take care of both generations while also saving for their own retirement.

Multi-Generational Living:  Coming Back in Style

The idea of generations living together is not new.  One hundred to one hundred and fifty years ago, 3 generations living together was quite common.

Yet, as our society changed and people became more independent, multi-generational living fell out of vogue.  It is no longer necessary, so most people don’t do it.

However, the current economy has changed the most recent housing dynamic. 

Due to the recession, parents worry that their adult children may move back in with them (as many have, sometimes with their own children in tow), and self-sufficient grown children worry that they may have to support their parents, especially if their parents have an insufficient retirement.

While some may be concerned about two or three grown generations living together, there is a group of Americans that are embracing multi-generational living.  They find this situation beneficial for all ages, from the oldest to the youngest, both financially and emotionally.

“According to John Graham, co-author of Together Again, a book about multi-generational living, and Professor of Marketing and International Business at University of California Irvine, ‘We are seeing the nuclear family going back to the interdependence of the extended family. For the last 50 years the American ideal was the nuclear family living independently, but with the economic changes of recent decades that no longer is the solution of choice.’ He added, ‘Multigenerational living is very customary in most countries. It is now becoming much more common in the U.S.’” (MarketWatch).

As reported by ABC World News, “In 2010, 4.4 million homes had 3 or more generations living in them, a 30% increase from 10 years earlier.”  Even more staggering, according to MarketWatch, “The number of multigenerational households has increased by 60% since 1990, according to the U.S. Census Bureau.”

The How of Multi-Generational Living

New home extensions male multi-generational living easier.

Those who are interested in multi-generational living face some tough financial decisions.

Should they renovate their home?  Add on an addition?  Find a new home that is better suited to the new living arrangement?

Unfortunately, each of these options can be costly and take quite a bit of time.  One of the most common reasons for multi-generational living is that people are cash strapped, so paying for a fancy remodel or buying a new home is not typically an option.

People used to try to live together in their current home, a space often designed for just one family.  This can make multi-generational living uncomfortable and annoying.

Another Option for a Home

As a more reasonable option, Lennar, a national home builder, recently introduced Next Gen homes.  These homes are essentially homes within a home.

People can opt to leave their current home as is, and Lennar will seamlessly put a modular onto their home that can serve as a separate suite.  A typical in-law or grown child suite has a bedroom, bathroom, kitchenette, and living area.  It may have two entrances; one is an apartment entrance that is outside the main house, and the other is a door that leads directly into the main house.

This gives the other generation their own living quarters, privacy, and autonomy, in addition to all of the benefits of multi-generational living.

There are other options besides adding a modular addition to the home.  One woman elected to buy a small, prebuilt cottage to put in her backyard for her aging mother.

While remodeling a home can be time consuming, these modular additions can be added on in 8 weeks.  Even better, unlike an expensive addition, these modular additions cost less than half the price of a traditional addition.

Related: Take a Look at Mortgage and Refinancing Rates

The Why of Multi-Generational Living

There are many reasons families choose multi-generational living, but the two most common are to save money and to provide more care and support for aging parents.

Multi-Generational living allows all family members to pool their resources together.

Rather than paying two or three different house and utility payments (if each of the adult generations had their own home), they can pool their money together and pay just one house and utility payment.  This can make living expenses substantially cheaper, which is attractive anywhere people live, but even more so if they live in a high cost of living area.

In addition, this helps relieve the stress for recent college graduates who may have expensive monthly loan payments, retirees who may not have enough retirement savings, and the sandwich generation who can make their own money stretch further when everyone is under one roof.

Finally, elders who may not be able to make their meals and do other routine daily tasks can get help from the younger generations in the home.

Lennar recognized a market need and is now offering popular modular home options.

Would you consider multi-generational living in a home within a home?

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Multi-Generational Living – Is a Next Generation Home for You?

In fact earning cash rewards is a pretty nice perk to get from your credit card.  And when it’s easy to get your cash back then it’s all the better.

Enter the BankAmericard Cash Rewards™ credit card.

Here’s a quick look at what this cash rewards card has to offer:

•  Get $100 cash rewards bonus after you spend $500 on purchases in the first 90 days of account opening
• 1% cash back on purchases everywhere, every time
• 2% on groceries and 3% on gas for the first $1500 in combined gas and grocery purchases each quarter
• Get a 10% customer bonus when you redeem cash back into a Bank of America® checking or savings account
• 0% introductory APR for 12 billing cycles for purchases and for any balance transfers made in the first 60 days, then, the regular APR
• No Annual fee
• No rotating categories and your rewards do not expire

Nice, right?

Now let’s dig a little deeper into the BankAmericard Cash Rewards™ credit card…

Cash Back Rewards

The card offers up 1% cash back on all purchases.  You then get a total of 2% on grocery purchases and 3% on gas purchases.  Grocery and gas bonus rewards apply to the first $1,500 in combined purchases in these categories each quarter.

Here’s the great thing about this program – it’s automatic, meaning you don’t have to register for your cash back, and your  rewards don’t expire.  See, other programs have categories where you have to sign up each quarter in order to qualify.  The BankAmericard Cash Rewards™ credit card makes it easy to understand and earn your rewards.

How do you get your cash rewards?

Your BankAmericard Cash Rewards™ credit card gives you flexible options to redeem your cash back.  Take a look at the options:

• Have it deposited into a Bank of America checking or savings account
• It can be credited to your credit card statement
• Have it sent directly to you.

Those are some powerful options when you think about it.  Every time you use your card you could be putting money into savings, if you choose that option.

There’s also a bonus offer.  Get a $100 cash back bonus after you make $500 in purchases on the first 90 days of opening your account.

And if you’re already a Bank of America^® customer you can enjoy a 10% cash rewards bonus when you redeem your rewards into your Bank of America checking^® or savings account.

APR

The BankAmericard Cash Rewards™ credit card offers 0% introductory rate on purchases for 12 billing cycles.  Also, if you make a balance transfer within the first 60 days then you get 0% APR for the first 12 billing cycles on your transfer.  The APR after the intro period is 12.99%-22.99% Variable* on Purchases and Balance Transfers.

Other Card Perks

You get emergency assistance and automatic car-rental insurance when you are traveling.

Buy something that got damaged, lost, or stolen within 90 days?  You’re covered with Purchase Replacement.

And no need to worry about fraudulent purchases.  Your BankAmericard Cash Rewards™ credit card has a $0 Liability Guarantee.  You won’t be responsible for any fraudulent charges and you can see fraudulent purchases credited back to your account as soon as the next day.

Annual Fee

The BankAmericard Cash Rewards™ credit card has no annual fee.  You do need to have excellent credit to qualify though.

Finally

Should you get the BankAmericard Cash Rewards™ credit card?

This card has easy-to-use cash back rewards with great options to redeem your rewards.  If you’re a Bank of America customer then your rewards could be worth even more, making this card especially attractive for Bank of America customers.  All this and no annual fee.

Overall this is a good cash rewards card that could be even better if you’re with Bank of America.

Get your BankAmericard Cash Rewards™ credit card or click through for more details.

See Terms and Conditions accompanying application for additional offer details.  See rewards program rules for details.

Disclaimer: This content is not provided by Bank of America. Opinions expressed here are author’s alone, however this site may be compensated by Bank of America.

Copyright © Free From Broke - A Personal Finance Blog Please visit for more great content!

BankAmericard Cash Rewards™ Credit Card – Review