2 New Apple Products That Could Save You Money
Apple held its annual spring event at its headquarters in Cupertino, California, on Monday, March 25th. Two of their new products are particularly interesting from a personal finance perspective and could save you some money.
Apple held its annual spring event at its headquarters in Cupertino, California, on Monday, March 25th. Two of their new products are particularly interesting from a personal finance perspective and could save you some money.
Apple News+
I am an apple snob and stockholder.
We have too many apple devices in our household.
Apple News+ is a new service that allows you access to a large number of magazines and newspapers, as well as their standard news content. This comes at a set monthly subscription rate of $10/month. At first blush this seemed like an interesting deal for $120/year. I’m skeptical of monthly subscriptions but I love magazines, and I get my news mostly from The Wall Street Journal and The New York Times. So I figured I would run a quick audit in our house to see how much we spend on annual new/magazine subscriptions. I used magazines.com to determine pricing.
GQ - $20/year
Bon Appetite - $20/year
Fortune - $20/year
The Economist - $95/year
ESPN the Mag - $30/year
WSJ - $467/year
A total of $652 in reading material!
Holy crap … I was slightly horrified to realize that total. The vast majority of my reading is on a screen, so News+ seems like a bit of a no brainer for our family. Do you know how much you are spending on this category? Add it up!
Apple Card
I am generally opposed to credit cards as a means to pay for your typical monthly expenses. I prefer to spend out of my checking account, so that I know exactly what I have available. And it forces me not to over spend. When I really want to nail down my monthly discretionary spending, I like to load my weekly cash on the Cash app card. I also think that cash back rewards and sky miles bonus points are gimmicks meant to entice your lizard brain to spend more.
If you decide that you need a credit card, if you travel at all, you will, or that you can control your spending urges, and want to get the cash back rewards. Apples Card is a pretty cool product.
It is tightly tied to your apple wallet
it gives daily 2% cash back rewards
it allows you to control your payment options
it provides some visibility into you budgeting/category spending
it gives you a physical version, made of titanium
there are no annual charges
So all in all the new card (which is not yet available), looks like an interesting product. I am curious to see how things play out when it is available. I like the easy integration with the wallet. And I like visibility it provides for your spending.
*Note that there are currently cards available that offer a nice cash back option. So you don’t have to wait for this card to get cash back.
Budgeting Part 2 of 3: How To Start Budgeting
The sooner you can get started, and make progress, the more likely you are to stick to it and succeed. So, let’s do this!
BUDGETING 101: for people who hate budgeting PART 2/3:
How to get started
Congratulations! You’ve realized you need a budget. That is the first step towards being in control of your finances, and half of the battle! The next step is getting started with a budget. The sooner you can get started, and make progress, the more likely you are to stick to it and succeed. So, let’s do this!
The majority of the advice out there approaches budgeting with expenses and tools. I have a different approach: First, take a breath. Innnnnn and ouuuut. Then, we begin with your income.
The easiest way to stay in control of your budget is to never have money show up in your “spending” account. Having a big chunk of money in your account is too tempting. Right after you get paid, it’s natural to think, “I work I hard, I deserve _________.”
fund your goals
with automatic payroll deductions
401k - start with 5% of income or max out a company match. For every $100k, that is $208/paycheck. You wont miss it, but over a career, your future self will be pleased.
Health Savings Account - look at last year’s out of pocket spending, set it there.
Dependent care savings plan - what is your kids’ day/after care expenses? You are already spending it!!
set it and forget it
Don’t be average:
The average American has 3.1 credit cards with an overall outstanding balance of $6,354.
Credit Card Usage and Statistics 2019
set yourself up for success with online bill pay
Ok, so you funded some of your goals, but now your paycheck is in your account, and you are feeling flush! Set yourself up for budgeting success by going to your online bill pay and setting up automatic payments immediately after every paycheck .
Schedule automatic monthly payments for:
If you are self employed
Set up a SEP IRA and have money automatically contributed to your SEP IRA account.
Your non-discretionary bills immediately and make it a set amount each month.
We pay GA Power $200 every month. During the winter we build up a nice cash reserve, during the summer we spend it down. The opposite happens with the gas bill. I also like to round up to the nearest hundred on my mortgage, with the extra going to principal.Pay off your damned credit cards! Start with the one with the smallest payoff and allocate all but the minimum amounts for the others.
Transfer money into a savings account for a rainy day fund.
Fund your short term goals: Transfer money into a vacation savings — or other short-term goal like a new car or house renovation project.
IRA or a brokerage account and the kids 529’s - if you are doing nothing, make it $100. Increment in. As you get comfortable, increase it.
“The goal here is to fund your goals, and never even think about the money “leaving” your account, because it never really “enters” your account.”
Don’t EVER give your bank account info to a company to take out auto payments.
You need to control the movement of your money.
Discretionary Spending
Take a moment to recognize the work you’ve done: You set up automatic payments for your non-discretionary bills AND your goals are being taken care of. That is a huge step. Nice work! What will remain in your account, is THE ONLY CASH you have left to spend on discretionary items. That means, you make a promise to yourself: NO CREDIT CARDS when you run out of money at the end of the month.
Advice on credit cards
Credit cards are bad. This is worth repeating: NO CREDIT CARDS. That means, you make a promise to yourself:
DEAR SELF:
NO, I MEAN NONE , NOTHING, NADA GOES ONTO A CREDIT CARD, not even to earn miles for the trip I’m not going to take in the indeterminent future. And if I do take the trip, it will likely be during a blackout dates and I won’t be able to use those elusive “rewards” anyway.
Yours Truly, (really I’m yours… am I getting too meta?)
Me.
Budgeting FAQs
q. I get paid twice a month, I can’t afford to pay all of my bills at once! How will i be able to afford to eat or live reasonably until my second pay check?
or
q. My bills are spread throughout the entire month how do I manage not getting late fees?
A. Both of these questions have the same answer: Spread your non-discretionary bills across your two paychecks. What that may mean is, the majority of your bill paying in your first pay check, goes to the mortgage (and maybe a few utility bills). Leave yourself enough left over, so that you can buy gas and groceries until the next paycheck. On your next paycheck, finish off the utilities and your savings for goals. Leave just enough for your discretionary spending, to make it to your next paycheck.
q. what if one of my big utility bills (e.g. my car loan), needs to wait until the second paycheck, but is due on the 8th of the month, and will thus be late?
A. Most of the time, if you are up to date on your bills, a company can work with you to change the due date, give them a call. If they won’t, make a minimum payment on your first paycheck, and then finish the payment on the second paycheck.
q. Why autopay the same amount each month?
You want to set up your payments on autopay, and don’t want to wait on the bill.
You don’t want to worry about any accidental underpayments.
Over the course of the year, the payments will average out.
Q. Josh, by the end of the month, I either don’t have any money left over, or worse, I am spending on my credit card to make ends meet!! This method sucks, what gives?!
A. Good question… the answer to this is in Budgeting Part 3