All posts by KPals

Found Money In Your Pocket? Here’s What to Do With It!

Photo taken by Marcos André. Courtesy of Wikimedia Commons.

Photo taken by Marcos André. Courtesy of Wikimedia Commons.

Dontcha love finding forgotten cash in an old pair of pants? It doesn’t happen all the time, of course, but it’s one of those sweet and unexpected pleasures in a modern life full of credit cards, online banking and electronic reminders. Surprise! You’re $5 or $10 less poor (err richer) than you were a minute ago. ‘Here’s $20,’ Life says, ‘and have a nice day!”

Thanks, Life!

But what now? Do you just shove it into your purse or wallet and forget about it until its time to splurge on a candy bar or a magazine or some dinner you won’t remember later? Naaaah.

Let’s look at some money-smart things you could do with that bill to help get yourself started with better money habits.


It might be easy to think of that unexpected bill in your pocket as just throw-away cash to use on some little impulse purchase, but that bill is worth more than the $5, $10 or $20 printed on its front. If you instead deposited it into a high-yield savings account and kept it there, you’d realize that it could be worth a little more. In fact, in 20 years, at a high-yield savings account of 0.75% APY like those offered by ING’s Orange Bank and depending on inflation rates, that $5 could be almost $5.80, that $10 could be almost $11.50 and that $20 could be almost $23.25.

You may or may not be impressed by that, but that additional money might be better than if you had spent the bill and then been left with just $0 and a memory you’ll soon forget. Plus, you may find that you build a habit of saving small amounts until you’ve started saving really significant sums!


You’ve probably heard people talk about the stock market before—but outside of a retirement account that you probably don’t actively manage, you might not have ever bought or sold a stock before. Why not use that extra bill to start to learn a new skill—equity investing—and test the waters a bit by buying a few shares.

One easy way to start is to sign up for some online service like Sharebuilder that doesn’t require minimums to trade. Then just do a little bit of internet research until you find a company you like that has a shares that you can buy for less than $5, $10 or $20 each. Whether the stock’s price goes up or down does not have to matter at these small sums as long as you can use the experience to learn how stock markets work. And learning how stock markets work is very important because over the long-term, equities offer one of the best possible returns for your money. In fact, the average annual return on the market is about 9.3% over many years—or about 6.2% annually when adjusted for inflation.

(Keep in mind that we warned you earlier that the typical $7 trading fees charged by companies like Sharebuilder can really add up! But for what it’s worth, Sharebuilder also gives you $50 in free money when you make your first trade. Thus, it’s easy to start, but don’t get carried away with those fees. We’ll discuss a fee-free alternative next.)


There’s an old saying that in the long run, nobody can beat the market. That means that you shouldn’t put a lot of effort into picking one stock over another, because in the long run on average, you will have been better off just buying a tiny slice of the entire market instead of placing your bets on a few specific stocks that will make you money some years and lose you money in other years. Buying a tiny slice of the market can be achieved through buying ETFs, or exchange traded funds, that represent most or all of the stocks in the marketplace. They are a good bet, because on average, more stocks overall increase in value instead of decrease in value. By buying a slice of the whole market, you get to enjoy the benefit of the long-term average increase—without the hassle and worry of trying to parse the winners from the losers.

ETFs can also be very cheap to buy compared to full shares in specific companies, and you’ll find that many brokers like TD Ameritrade, Charles Schwab and Fidelity don’t charge any fees at all for trades on certain ETFs—making them extra affordable and easy to access if you just have a few dollars that you want to start with.

Start smart-money habits today

Well, that was an unexpected list, huh? Take it to heart though, and remember that you can start to practice smart-money habits with any amount of money and a little enthusiasm. In fact, take a look at our Seven Days to Financial Fitness Plan and start your journey to a more comfortable life today.

Earn Gift Cards for Being a Regular Reader

punchtab-gift-ribbonYou may have noticed that a Rewards tab has appeared in the bottom left-hand corner of our screen. Allow us to introduce Punchtab, the Silicon Valley-based loyalty program that helps readers of blogs to earn loyalty points by reading and sharing our posts. These loyalty points can be redeemed for gift cards from popular retailers like Starbucks, Amazon and Target.

To get started, simply click on the Rewards tab in the corner and then log-in using your Facebook account. By using your Facebook account as a unique identifier for you with Punchtab, you can start to accumulate points whenever you view or share our posts. As you accumulate more points, you can choose from the various rewards in the PunchTab Rewards Merchandise Catalog based on the number of points you have and the number of points needed for a particular reward.

We’re happy to be working with Punchtab here, and we hope the gift cards help you save money $5, $10 and $20 at a time!

Thanks for joining the FiveTenTwenty Club

~Janet and Karl

Don’t know what the FiveTenTwenty Club is? Learn more here, read about our Money Method, join in the conversation in our Community Forum and start living the Seven Days to Financial Fitness Plan!

How to Save Money: The Definitive Guide – Part 2

freeimage-10752841-webHi everybody. We’re back with the second part of our multi-week series “How to Save Money: The Definitive Guide.” As you may remember, we aim to encourage people to be creative in how they think about managing their biggest monthly expenses. Last week in Part 1, we addressed housing costs and transportation costs and suggested downsizing, sharing and/or renting as moderate ways to reduce costs without necessarily doing without the things you want. Over the coming weeks we will continue to explore those ideas over the next few weeks as they relate to other common large monthly expenses: groceries, utilities, telephone or smart phone service, internet service and entertainment options like cable, movies, books, etc.

What You Eat and Drink

Americans spend a lot of money on food. The US Bureau of Labor Statistics estimates that the average consumer (a 49-year old that makes about $63,000 a year) spent about $2,620 a year eating outside the home and about $3,838 eating at home in 2011. That comes to about $538 a month or about $124 a week. More recently, a 2012 Gallup survey found that its sample spent an average of $151 a week on food, though the median  of the sample was $125.

As you can imagine, eating out is usually way more expensive than eating at home–unless you’re risking your health on too many fast food “value” menus. As a consequence, I try to avoid eating out more than a few times a week, but that does not always work for my home or social lives. (Janet prefers restaurants over home-cooking.) I also get a lot of personal satisfaction from preparing food myself at home and I’m on a healthy diet right now that is best maintained through home-cooked meals, so I am doubly eager to do it. However, we’ve learned a few strategies to help reduce the overall cost of eating out. You can find them in Janet’s recent post called 6 Easy Hacks for Saving on Fine Dining.

There are other cost considerations when eating out or at home. Animal proteins–meats–are expensive, and seafoods (including shellfish) tend to be the most expensive of them. GE Miller over at 20SomethingFinance began saving thousands of dollars each year when he and his wife gave up meat entirely. However, if you want to reduce your spending on meats without giving them up completely, skip expensive meats like seafood, beef and lamb–especially in restaurants where these particular meats usually carry large mark-ups over wholesale prices. If you still want your lobster or fish or steak though, you’ll find that you can prepare them much more cheaply and healthily at home.

As for alcohol: While home-brew tends to be a very expensive hobby, the idea of drinking at home instead of at restaurants is sound enough. Restaurants and bars charge so much money for booze. It reminds me why everyone in college was so sensible about “pre-gaming” before going out! If you want to save money then, buy good stuff at the store to drink at home and only drink swill at bars and restaurants if you must (and ideally on special).

Joking aside though, when it comes to reducing food and drink costs, a little planning, a little sharing and a little avoidance can go a long way toward saving you money. If you plan your grocery shopping so that you can make multiple meals (including leftovers) with the ingredients you buy, and you share the costs of the food with friends and loved-ones who join you, you can save thousands of dollars each year and even have a lot of fun making meals to enjoy together. (It helps too if you avoid the most expensive meats and ingredients.) And, if you’re the type who plans far ahead or who buys the same groceries each week or month, you also might want to consider a bulk subscription option through your local Community-Supported Agriculture (CSA) or Amazon Subscribe & Save.

Stay Tuned for Part 3 Next Week

As you can see, there’s a lot to consider when trying to save money on this major regular expense. There’s more to come though, as we address other common large monthly expenses including home utilities, telecommunications and entertainment in future posts. Until then, keep fighting the frugal fight.

How do you save money on food? Share your tips, strategies and experiences in our Community Forum!

How to Save Money: The Definitive Guide – Part 1

budget2013-612x300We here at the Five Ten Twenty Club read way too many blog posts online about the “Top 5 Ways To Save You Money.” (The internet is full of them, and most are eye-catching but not particularly helpful.) While the posts contain a few good ideas from time to time, after a while, most of the ideas in the blogs just strike you as too weird and difficult.

We don’t think most people want to be extreme discounters, hand-making everything in their homes for example. We figure most folks just want some reasonable tips about how to spend less doing everyday things, so that they’ve got a little money to put toward their goals like paying off credit cards, putting aside money for a nice vacation or saving for their children’s schooling.

So, we’ve tried to put together a list that’s actually useful:

Where you live

Whether it involves rent or a mortgage and property taxes, your home is almost always your biggest expense. According to a 2013 study published by the National Housing Conference’s Center for Housing Policy, the median housing costs for a working renter or homeowner in the USA was $847 and $1,024 per month, respectively–or about 33% and 29% of their respective pre-tax incomes. Since this is likely your biggest monthly expense, any significant reductions you make in your housing costs can save you a lot of money.

Choosing where to live is always a complicated decision based on any variety of things like the number of rooms and amenities available in the home, the desirability of the neighborhood (for entertainment, safety, or access to public transportation or quality schools, for example) and the associated commute time to work. If you want to save significant amounts of money each month, you should prioritize affordability when you’re considering a home. Perhaps you don’t actually need so many rooms, such a nice building or such a nice kitchen. Maybe you’re open to having roommates that can help share in housing costs. Be open to downsizing and sharing to save money.

What You Drive

Your choice of transportation is likely to be your next biggest expense. According to the AAA, the average sedan costs about $760 to own and operate each month if you drive about 15,000 miles a year. Even if you keep your current car though, you can reduce that cost dramatically by driving less, because the less you drive, the less you’ll have to spend on gasoline and maintenance. Committing to drive less may even help you save money on your insurance, and it can be as easy as reducing your overall travel; carpooling or ride-sharing; riding a bicycle or walking; using public transportation; or renting a car for long distance trips (so that you reduce your maintenance costs and risk-of-accident for your own vehicle). These are all changes that are easy to make from time to time.

However, those other Top 5 lists are right that you may also want to consider not owning a car at all. This can actually be pretty easy to do in certain US cities. If my own job was near public transportation, I could take advantage of the subway and bus station near my apartment, sell off my car and then just borrow or rent a car whenever I need to drive outside the area. That need occurs seldom enough, so it could be a great financial decision with little additional hassle at the end of the day.

If that sounds daunting to you, consider that there are now more ways to rent vehicles than ever before. Traditional car rental companies like Enterprise have been diligent about expanding beyond the expected airport locations to neighborhoods through many major cities. Also, ride sharing companies like Lyft and Sidecar allow you to hitch a ride with people who are using these services’ smart phone apps to turn their private cars into temporary taxis, and car sharing companies like RelayRides are helping regular people to rent out their cars to their neighbors whenever they are not using them. (RelayRides even just expanded to offer service at airports.)

Stay Tuned for Part 2 next week

Well, that’s enough for today. While we might have seemed light on specific tips, we more want to encourage you to consider a broader range of options for your home and transportation than you might normally consider. And of course, you’ll need to find the most affordable solution that still works for you and any partner or children that may also be directly affected by any decision you make. But the simple point is that it’s easier to save big bucks by cutting down on your largest expenses. Sure, every dollar adds up – but when you’re talking major costs like housing or transportation, they add up faster. We’ll talk more about this in Part 2. Until then, keep fighting the frugal fight.