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Find the best prepaid debit cards of 2017, including low fee cards and those you can use for free. We compare features, fees, and bonuses.

best prepaid debit cards

Prepaid debit cards have always been a controversial topic. Some cards carry insanely high fees just for making everyday purchases. Suze Orman’s entry into the prepaid card business, the Approved Card, prompted heated debate about whether it represented a conflict of interest, given Orman’s following.

In 2010, the Kardashians announced their branded prepaid card. They received bad press due to the card’s predatory fees and lack of customer benefits. They canceled the card soon after it was announced.

Not all prepaid cards are as bad, but fees are common. You need to evaluate each offer to determine whether a prepaid card is right for you. Prepaid debit cards are the preferred tool for many parents. They can monitor their children’s spending while teaching their children how to responsibly handle money management.

The best prepaid debit cards are cards without fees, offering rewards for everyday purchases. While credit is almost everywhere in this country, many Americans do not have a credit card or bank account. They use cash for their needs. While this might be a cheaper method of paying for products and services, it isn’t always safe to carry around cash for purchases. Rather than resort to prepaid cards with high fees consider looking at some of these best prepaid debit cards available for consumers today.

The Best Prepaid Debit Cards of 2017

American Express Serve

If you’re looking to avoid fees with your prepaid debit card, this choice from American Express might be the best option. You can load the card from a bank account online or by phone, or you can place your deposit in the form of cash at over 50,000 retail locations including Walmart, CVS, 7-Eleven, and Family Dollar. There is a service fee of up to $3.95 that will be added to your purchase for depositing cash.

American Express does not charge reload fees made through bank accounts and direct deposit linked to the card (in network). Cash reloads and other reload methods may carry a third party purchase or service fee. This is not a credit card, however, the card comes with many of the major benefits that all American Express cardholders receive, like roadside assistance, purchase protection, and entertainment access.

There is a $1 monthly fee but that can be waived when you have a direct deposit each month of $500 or more. No ATM withdrawal fees when you use a MoneyPass location and no online billpay fees either.

Netspend Visa Prepaid MasterCard

Netspend is one of the leaders in the prepaid card industry. Their strongest offering comes in the form of the Netspend Visa Prepaid MasterCard. If you’re savvy enough to know how to transfer money to and from your card without the help of a Customer Service agent, the transfers are always free, If you need help, it’s $0.50 per transfer. There is no direct deposit fee and no initial fee for getting the card.

Netspend offers three different plans to manage your prepaid card. They are as follows:

  • Pay as you go – No monthly fee but a $1 charge per signature transaction and a $2 charge per pin transaction. This plan is ideal for people who plan to use their card very very little.
  • FeeAdvantage Plan – $9.95 per month, all transactions included at no additional cost.
  • Premier FeeAdvantage Plan – $5.00 per month if you have at least one qualifying direct deposit of $500 or more every month. The best value in terms of monthly cost if you have the direct deposit available.

Also, be careful at the ATM with this card. There is a withdrawal fee of $2.50 and a decline fee of $1 if you don’t have funds readily available.

Walmart MoneyCard® Visa® with Cash-Back Rewards

The Walmart MoneyCard® Visa® offers the best rewards program of any card on our list. For all Walmart shoppers, you stand to earn 3% cash back on every Walmart.com online purchase. 2% cash back is earned at Murphy USA and on Walmart fuel purchases and 1% cash back is earned at Walmart stores. The maximum amount of cashback you can earn is $75 each year. If you find yourself getting cut off from cash back rewards because you’ve already capped out $75 in a year … perhaps you should review your finances!

The fee structure for the Walmart MoneyCard® Visa® is fairly straightforward. There’s a $5 monthly charge and it can be waived when you load more than $1,000 on your card in the previous month. A $2.50 ATM withdrawal applies on every transaction and to get cash from your card at a Walmart location is free of charge. There is no charge to receive the initial card, no charge to make daily purchases and a $3 fee if you require a replacement card.

American Express Serve® Cash Back

If cash back is your game, the American Express Serve Cash Back provides a great opportunity. Every time you shop at a store or online, you’ll earn 1% cash back. Cash back is added immediately after you make your payment and available for redemption on your next purchase, at anytime. There is no annual cap on the amount of cash back you can earn and it never expires, so long as your account remains open and in good standing.

Now let’s talk fees. The initial card price is up to $3.95 if buying at a retail location. There is a $5.95 monthly fee unless you live in TX, VT or NY (no fee in those states). No direct deposit fee, no fee to add money from a bank account but up to a $3.95 fee to add cash at a retailer. Depending on the ATM you use, there could be up to a $2.50 ATM fee. No ATM fees when using a MoneyPass location. Last but not least, if you’re looking to take cash out of your American Express Serve Cash Back, up to a $9.49 fee applies.

Green Dot® Prepaid MasterCard®

This is a card with a simple fee plan. Cardholders will not have to pay a monthly fee as long as they deposit at least $1,000 onto the card monthly or make 30 qualifying purchases posted to your account monthly. If these conditions are not met, the monthly fee is $7.95. There are fees for initial purchase, which varies by retailer, of up to $4.95. Reload fees also vary by retailer and is currently up to $4.95.

Green Dot is an extremely convenient but expensive prepaid option. In addition to using the card for everyday purchases, you have the ability to write checks using your account. The limit per check is $3,000 and it’s only good for 90 days. In addition, The Green Dot® Prepaid MasterCard® offers free online mobile bill pay and NO fee for an ACH transfer. As always, direct deposit is FREE.

Try a Checking / Savings Account Instead

Chime Visa® Debit Card

Prepaid cards can certainly make life easier, but they can also make life more expensive. If you’re in the market for a prepaid card, you may want to consider opening a savings account with Chime. The Chime Visa Debit Card can be used anywhere Visa is accepted. There’s no monthly fee to worry about, no card fee, and no fees for making day to day purchases. ATM’s in the Money Pass network are also free to use (there are over 24,000 of them nationwide)

On the savings account side, every time you use your Chime card to make a purchase, they round up the dollar amount and deposit the change into your Chime Savings Account. Setting up direct deposit is easy and there are no fees to transfer money in and out of your account. Coolest of all, Chime is willing to start you off with a free $5 after you first direct deposit.

You can also have a look at our best savings and checking account promos. All of the checking accounts listed can also provide you a debit card to make purchases, but be aware of each bank’s monthly fees and/or requirements for waiving the fee.

Final Thoughts

As you can see, the prepaid debit card industry is mired in fees. If you believe a prepaid debit card is right for you, tread carefully. Read the terms and conditions and know the fees. Even the best prepaid debit card can end up costing more money than you are prepared to spend. There are many other debit cards I’m not including in this list at all because they are best avoided. Using a prepaid debit card can help a responsible person who does not qualify for a credit card handle their expenses, but it can also be a recipe for disaster.

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50 Ways to build an emergency fund. Tips, tricks and strategies on saving more for emergencies and where to keep your rainy day money.

emergency fund

There’s a reason Dave Ramsey’s famous Baby Step #1 is to build an emergency fund. It helps people get on track for becoming financially independent.

I don’t agree with everything Ramsey says. But having at least a small emergency fund to begin with can be helpful. A basic emergency fund is a place where you keep cash for true emergencies, such as job loss or a broken-down car that would prevent you from going to work.

Ultimately, you’ll want enough cash in your emergency fund to cover all of your necessary expenses for a 3 to 6 month period. But any amount of money saved is a start.

Beyond the basics, I suggest at least five separate components to a complete emergency plan. Getting to that point presents challenges for many people. When you’re starting out, it can be difficult to assemble even the basics for eventual financial freedom.

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But even if you’re hard-pressed for cash, you can still start an emergency fund. Here are fifty different ways to start saving today:

  1. Open a high-yield online savings account with as little as one dollar. This gives you somewhere to put your emergency funds, which is essential. And you might as well protect against inflation while you’re at it.
  2. Sign up for direct deposit. When you do, have part of your paycheck–as little as a few bucks–deposited right into your new online savings account. You won’t spend it if it doesn’t hit your checking account in the first place!
  3. Empty your pocket change into a jar every night. Then, put the change into your savings account every couple of months. Don’t spend much in cash? Try an app like Acorns that automatically rounds up your transactions to save your virtual change for you.
  4. Add to your jar every time you swear. Trying to break a bad habit? Tax yourself every time you do it. You’ll break your habit more quickly and save money while you’re at it.
  5. Have a garage sale. Selling off things you no longer want or need can get you started on the road to saving. Plus, it’s nice to de-clutter the house once in a while!
  6. Sell on Craigslist or Facebook groups. Bigger-ticket items may net a better price sold individually on Craigslist or your local Facebook garage sale group.
  7. Whenever you purchase groceries with a coupon, deposit your savings into the bank. This works especially well if you aren’t already in the habit of using coupons. Whenever you cut a few bucks off of your typical grocery bill, save the extra. You’ll never even miss it.
  8. Downgrade your cell phone or cable serviceThe best ways to save are options that let you keep saving money, month after month. Just be sure you put the money saved into your emergency fund every month!
  9. Bring your own lunch to the office. Say you typically spend $10 for lunch at work, but you can make a salad at home for $2.50. Every day you bring your lunch to work, put $7.50 into your emergency fund.
  10. Ask for a raise. Pull together your work performance stats for the past year or two. Then, get together with your supervisor, and lobby for a raise.
  11. Save your raise. If you do get a raise, don’t let lifestyle inflation eat it all up. Instead, have it automatically deposited to your savings account rather than your checking account.
  12. Drink soda rather than alcohol when you’re dining out. Buying even one drink at dinner can set you back $5 or more. Every time you downgrade your drink, throw the money you’ve saved into your emergency fund.
  13. Switch to store-brand food items. Get a feel for how much this cuts from your weekly grocery budget. Then save the extra cash.
  14. Switch to generic medication. Many times, doctors don’t mention generics, but you can switch to them if you ask. Again, keep track of how much you’ve saved, and add it to your bank account.
  15. Cut back or eliminate your addiction to smoking. Smoking has up-front costs, of course. But you’ll also save money on healthcare over time if you quit.
  16. Be aware of your ECRD FactorWhat are you spending money on that you could eliminate or cut back on? Find those areas, and then leverage them to save more money.
  17. Start a side gigWhatever your side gig, put any profit from it directly into your savings account.
  18. Use a cash back rewards credit card. Instead of putting the rewards towards extra spending, put them into your savings account.
  19. Save gas by not driving faster than 65 miles per hour. You can also save gas and be easier on your car by not braking too hard and by following other safe driving practices.
  20. Stop using credit cards if you pay interest. If you have trouble not carrying a balance, just stop using your credit cards.
  21. Cancel your Netflix subscription. Actually, look at all of the subscriptions you’re charged for monthly or annually–Netflix, Hulu, Amazon Prime, Spotify, etc. If you don’t use them enough to justify the costs, just cancel them.
  22. Do your own yard work. If you’re currently paying someone to do your yard work, start doing it yourself. You’ll get a workout and save some money.
  23. Visit the library rather than your local bookstore. Bookstores are great. But you can save so much money on reading material by renting it from the local library!
  24. Stock up on non-perishable groceries when they are on sale. Having a well-stocked pantry is essential to keeping your grocery spending lean. Get familiar with your local stores’ sales cycles, and stock up when you can.
  25. Cancel magazine subscriptions. If you have some must-read magazines, subscribing is better than paying more at the newsstand. But if you’re not reading those magazines cover to cover every month, cancel them.
  26. Reuse or repair things instead of replacing them. Then, take the money that you saved by not purchasing new, and put it into your savings account.
  27. Delay vacations until your emergency fund is complete. This is a tough one. But you should have at least some part of your emergency fund saved before leaving on vacation.
  28. Sign up for online bill payment if your bank offers the service for free. This will keep you from missing bills and paying late fees.
  29. Shop around to ensure all your your financial accounts do not charge you extraneous fees. In this day and age, you shouldn’t pay for the privilege of using a checking or savings account!
  30. Always know how much you have in the bank so your accounts will never be overdrawn. Money management and budgeting apps are a great option for helping your manage this.
  31. Use public transportation rather than driving when possible. Alternatively, consider biking to work.
  32. Work a few extra hours at your day job. If you’re paid hourly, you can earn extra to put into savings. If you’re salaried, impressing the bosses could net you a raise sooner rather than later.
  33. Call your insurance provider and ask for an updated quote. In face, you should shop around for insurance once a year. You never know when you’ll get a better offer!
  34. Crawl the web for abandoned and unclaimed property owed to youYou never know what you’ll find. Put any unclaimed cash straight into savings.
  35. If you travel, join AAA; the discounts will often pay for the membership fee.
  36. Cancel your gym membership. You can get a great workout at home with some free weights. And you can always get your cardio in by walking or running outdoors.
  37. Consider refinancing your mortgageIf you haven’t taken advantage of low interest rates, now is the time. You could save hundreds per month, depending on your circumstances.
  38. Cook and brew coffee at home. Cutting out a latte a day may not make you a millionaire. But cooking and brewing your coffee at home can save you a few bucks a day.
  39. Find opportunities for one-time income. Don’t have time for an ongoing side gig? Consider doing one-time income-earning opportunities like babysitting or house sitting.
  40. Check out your memberships. Are you a member of a professional club you don’t get much use out of? A local country club? Consider cutting out memberships that don’t really benefit you.
  41. Save your tax refund. In fact, you can have your tax refund direct deposited to your savings account.
  42. Adjust your withholding. Don’t want to wait until tax time to beef up your emergency fund? If you always get a refund, you could be having too much withheld from your paycheck. Talk to your HR department about adjusting your withholding. Then, put that extra cash from your paycheck right to your emergency fund.
  43. Stop eating out. Commit to only eating out for truly special occasions, such as birthdays. You’ll be surprised how much this could save over the course of a year.
  44. Consider a no-spend month. This Pinteresty trend is actually a great way to save money. You basically eliminate all but your essential spending for a full month. It can be an eye opening way to cut unnecessary spending long-term, too.
  45. Keep track of all of your spending. Sometimes you spend money without actually realizing it. Keeping track of all your spending, either with an app or by writing it all down, can help you pinpoint where you’re over-spending.
  46. Negotiate on everything. Whether it’s a retail store or your cable company, pretty much everything is negotiable.
  47. Share your home. Getting a roommate can really boost your savings. Or you can use Airbnb or VRBO to rent part or all of your house part-time.
  48. Save on energy. Take steps to make your home more energy efficient, and it’ll save you money month after month.
  49. Shop secondhand. Sometimes, you just have to buy stuff, whether it’s new cups to replace the ones your kids broke or a new pair of jeans. But these things don’t have to be brand new. Try shopping at online secondhand stores or your local Goodwill to save some serious cash.
  50. Celebrate milestones. Saving three to six months’ worth of expenses can take a while. So set some milestones–like your first $500 or $1,000–worth celebrating. (Just don’t blow a bunch of money on a fancy dinner out while you’re at it!)

With a goal to be financially independent, the first step is securing a cash cushion, accessible in emergencies. During this funding phase, it may be beneficial to make sacrifices that in other situations you would not make. A slight decrease in quality of life in the short term will likely outweigh long-term financial devastation when a future emergency arises.

Original published on April 14, 2008, this article was updated by the Consumerism Commentary editorial team (five of us to be precise) on November 15, 2017.

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Interest only mortgage payments appeal to many because of the low monthly payment. But are they a good way to go? We list the pros and cons.

interest only mortgage payments

A while back, a Consumerism Commentary reader named Ryan suggested I write about interest-only mortgages. I thought this was an interesting request. So I definitely wanted to address the topic.

First and foremost: there is no such thing as an “interest-only mortgage.”

Wouldn’t that be nice? To have a mortgage that did not require you to pay any principal back to the lender? Unfortunately, though, that’s not going to happen. When you become a borrower, your lender will insist that you pay both interest and, at some point, principal.

What does exist, however, is an interest-only payment option for mortgages.

What Is An Interest-Only Payment Option?

The interest-only option can apply to adjustable-rate mortgages and fixed-rate mortgages alike. The purpose is to allow borrowers to reduce monthly payments for a period of time, usually somewhere between three and seven years at the beginning of the mortgage term.

For example, let’s say that you buy a home with a monthly payment of $1,200. At first, $600 goes to interest, and $600 goes to the principal. If you use the interest-only payment option for a while, your monthly payment would start out at just $600. You would pay this interest-only amount for a predetermined number of years. During that time, the actual loan principal balance remained unchanged (unless you chose to pay extra). Then, at the end of the term, your payment would jump up to the original amount ($1,200). At this point, you would begin repaying the principal, as well.

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Who Uses It?

There are many types of people who would likely consider interest-only loan terms. These include:

  • Those who want to buy a home, but want to buy more than they can actually afford right now.
  • Buyers who know they’ll sell the home quickly, and so don’t want to tie up extra funds in a higher monthly mortgage payment.
  • Buyers in a financial situation where they need lower payments now, but know that they’ll be able to afford higher payments later on.
  • Those who want to take invest the money saved each month, confident they can get a better rate of return this way than with paying down their mortgage principal. This could also apply to buyers who want to pay off high-interest debt with the money saved.

The lower monthly payments during the interest-only period are good for households with irregular income. This comes into play with those who receive commission payments less frequently than on a monthly basis. It’s also beneficial for households with unpredictable income, such as a business owner who is expecting low income while the business is in a period of growth.

Interest-only payment options also allow borrowers to “afford” a more expensive home than their bank account says they can. This can be important for an executive who needs to entertain clients at home. A home’s appearance can be crucial to success in these cases. Buyers may also want to buy a home that’s simply beyond their means for the time being. Perhaps parents want to get their children into a certain school district. They just can’t budget for a full mortgage payment but can afford interest-only payments.

Things to Consider

This repayment option is a dangerous prospect, especially in an environment where you can’t be sure whether the value of the house will rise in the short term.

While making interest-only payments, the borrower is not building equity in the house. If the borrower is not building equity, they are essentially renting their own home. This is especially true if home values are stagnant or falling. The borrower is never paying down what they ultimately owe on the home.

When house values are declining, this problem is compounded. Here, the borrower owes the full purchased value of the house while making the interest-only payments. And the house’s declining values means the borrower will quickly owe more than the home is worth.. Then, if the borrower has to sell, they could wind up owing the lender more than they get from the sale of the home.

In another negative situation, some interest-only payments don’t cover the full amount of interest due each month. This is especially true if the mortgage is at an adjustable rate (ARM), which may increase over time. The excess, non-paid interest is then tacked onto the principal. This means the buyer owes even more in principal than they did originally.

This is called negative amortization. Not only is the borrower not adding equity at that point, but they’re digging a hole even deeper. And they haven’t even reached the increased monthly payment period yet!

Another downside to utilizing this interest-only option is that many people are not disciplined enough to invest or save the difference each month. Instead, they spend it. This means that they put themselves in a tight position with their home for no reason. And they may have nothing to show for it in the end.

When the Interest-Only Period Ends

Interest-only payment options don’t last forever.

After the determined period of time ends, the lender will expect the borrower to start paying back the principal, as well. This usually means a significant increase in the monthly mortgage payment.

What if the borrower’s income hasn’t increased as expected or if their business has not moved past the “growth” stage? In this case, the new payment might simply be unaffordable. Plus, the payment will typically be even larger than it would have been had the buyer chosen a standard 30-year mortgage to begin with.

So, what’s a borrower to do? They have a few options.

The buyer can find a way to increase monthly payments. So they can pay down the mortgage principal and any negative amortization quickly. Then they can sell the home. Or if they want to keep the home, they can refinance the mortgage. They could check out a lower interest rate or do yet another interest-only payment period. Or they can stretch the balance back out over 30 years to make the payment more affordable.

The problem with selling or refinancing is that it’s largely contingent on the home’s value and equity at the time. If the mortgage is now upside down, it will be difficult to make either move. You’ll end up owing money to the lender if you sell. And in order to refinance, you may need to have extra cash on hand.

Is Interest-Only Right for You?

Determining whether an interest-only option is right for you can be tricky. After all, you’re playing a very risky numbers game that requires discipline.

Let’s take a look at just how different your situation will be if you go the interest-only route versus simply paying off your mortgage traditionally. To demonstrate this, the Federal Reserve Board has a helpful comparison chart outlining the differences in payments you might expect if you choose an interest-only payment option, reproduced below. Notice how low the equity is in the last column, identifying borrowers who opt for the interest-only method.

Interest-only mortgage payment comparison
You need to ask yourself a few important questions before deciding on this method.
  • If saving/investing the money–Am I disciplined enough to invest the difference each month? Am I also as certain as can be that I will earn a higher return on this money by putting it elsewhere than I would save by paying off my mortgage on a typical schedule?
  • If expecting income to increase–What is the likelihood that my income will increase as expected over time, so that I can meet my increased payments after the interest-only period ends? What are my options if this doesn’t happen?
  • If planning to sell soon–What is my reason for selling after a short period of time, and what are the odds that this could change? Can I still afford this home if I don’t sell or am unable to sell?
  • Do I have additional savings at the ready, so I am safe if I wind up underwater on my mortgage? In that case, I may need to put down an additional payment for a refinance or to close out with the lender if I sell.

Best Lenders for Interest-Only

Since interest-only mortgages played a role in the foreclosure crisis of a decade ago, banks don’t tend to offer them nearly as often. When they do, there are often high qualification requirements, usually in the form of excellent credit and high asset wealth. With the former, this ensures that the borrower can still afford the payments when they suddenly increase, avoiding the “payment shock” that has plagued many.

Some lenders do still offer these types of mortgages, but you’ll have to look a little harder. You can start by looking up basic mortgage rates through an online aggregator. Then request additional information from the lender regarding interest-only payment options. Be prepared for them to confirm your excellent credit and higher net worth before approval. And be ready for the loan to (likely) be an adjustable-rate mortgage (ARM).

Banks like Navy Federal Credit Union, Wells Fargo, and Bank of Internet USA still offer this option. You can also look into interest-only mortgage options through SoFi.

Do you have or have you had an interest-only payment option on a mortgage? Please share your experiences or opinions.

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How to Save $500 a Month: Saving money doesn’t have to hurt. We’ve developed a plan to help you save an extra $500 a month without sacrificing your lifestyle.

Even when you’re good at managing your money, it’s surprisingly easy to let things get out of control.

When you’re young and broke, you can be incredibly creative in finding ways to save. Or maybe when you first catch the “get out of debt and save money bug” this happens to you. You take on roommates to reduce your living expenses. You live without a car, cable, and dining out. And when you start getting out of debt and finally investing, it’s all worthwhile.

But then your income starts to increase. And you may let your expenses inflate along with it.

Maybe it starts with some reasonable moves, such as moving into a more expensive, but more comfortable, home or apartment. Maybe you then buy a cheap car because it’s so much more convenient than public transit. Or maybe you start taking on more expensive hobbies and interests on the side.

None of these things is bad, in and of themselves. But over time, you might find that your new lifestyle is more expensive than you want it to be. Luckily, when you find yourself in this place, getting back to the basics may be easier than you think.

Even if you think you already live quite frugally, chances are likely that you can reduce your monthly expenses. Maybe you can even reduce them by $500 or more per month. Think that’s crazy? Start with these steps, and see how much you could save.

Step One: Shop Around for Insurance

All too often, consumers don’t take this step seriously enough. But you really should shop around for insurance–homeowner’s/renter’s and auto, at minimum–on an annual basis. You just never know what you could save by switching your policies. This is especially true if your financial or property situation has changed recently. For instance, as your car ages, you should pay less for insurance. And if you paid off your car and have money in savings, you might consider dropping the requisite comprehensive coverage. This can save you a bundle!

But even without major changes, you could save on insurance by switching companies. So be sure you’re shopping around at least once per year. And be sure to shop all of your property insurance policies at once, since most companies offer hefty discounts for carrying more than one policy with the same insurer.

Step Two: Optimize Your Life Insurance

Most people, even single people, ought to have a life insurance policy. But if you do have a policy, you may want to be sure you have the right amount of coverage. If your children are older or you have significantly less debt than the last time you purchase life insurance, you may be able to downgrade to a smaller policy. This could save you significantly each month or year, depending on how often you pay your life insurance premiums.

Step Three: Refine Your Food Spending

Too many people spend too much money on food. It’s easy to do, especially if you eat out often. But you can often tweak your food spending slightly to save big bucks.

According to the most recent USDA figures, there’s a huge variance between frugal and liberal food spending plans. As of August 2017, a family of four with two school-aged children could spend $642 per month on a frugal food plan. A liberal plan, on the other hand, could cost over $1,200 per month. There’s your $500 in savings, right there!

Maybe you’re somewhere in the middle, though, and maybe you don’t want to spend time clipping coupons and taking other steps to get your grocery budget down to the “frugal” level. But there are some simple ways to save on food spending, which could save you $500 or more per month with barely a thought. My top tips include:

  • Plan your meals. If you’re not great at meal planning, check out online meal planning services. They cost just a few bucks a month and can help you save hundreds by being more frugal with your food.
  • Shop your pantry and fridge. It’s easy to over-buy food. This isn’t as much of an issue with nonperishables. But check for fruits and vegetables or other perishable items you need to eat before your next grocery store trip. You might be surprised what you can make out of what you already have!
  • Look for sale items. You don’t have to clip, organize, and use coupons to save. You can do it automatically by shopping for items that are on sale. You’ll get the biggest bang for your buck by planning meals around on-sale meats and fresh products.
  • Switch to a cheaper store. My family loves the Aldi chain of grocery stores. They offer generally high-quality off brands, and we automatically spend way less when we shop there as compared with other local stores. Find the cheaper grocery store in your area, and buy everything you can there first.

Step Four: Optimize Your Services

If you’re like most modern consumers, you have a huge variety of services that you use every month. This could include basics like your trash and recycling services or optional items like internet and cable service. You can easily save $100 or more per month by optimizing these services. Here are some service-specific tips to try:

  • Shop around for trash and recycling. If your area offers more than one service, they’re competing for customers. You can use this to your advantage by shopping around. Before you switch services, though, be sure to let your existing provider know what the new offer is. They might just beat it and save you even more money!
  • Consider a different cell phone planWhen you’re in an area with good cell phone coverage, switching to a cheaper provider can make a huge difference. If you’re in a less-covered area, Verizon probably still has the best coverage. But you can often save on your plan by cutting out data you don’t use, downgrading to a cheaper phone, or just calling to ask for discounts.
  • Try a lower internet speed. Unless your family is consistently streaming with multiple devices, you may be able to get by with a slower, thus cheaper, internet service.
  • Get away from cable. With all the online options available today to get your favorite television programs, there’s not much excuse to have cable. If you have to have it, go with the lowest-paid subscription you can.
  • Review your subscriptions frequently. From magazines to apps to other services, we all have a lot of subscriptions these days. Some may be well worth your while. If you read a lot, Amazon’s Kindle Unlimited subscription could actually save you money, for instance. But subscriptions that you don’t actually use will just waste your money.

Step Five: Pay Off Your High-Interest Debts

The first four steps could very easily get you to the $500 per month savings level. But what if they don’t get you quite there? Then use the money that you have saved and pay off your credit card debt.

Right now, the average American family owes just over $8,000 in credit card debt. If you’re paying 15% interest on that debt, that’s about $100 in interest every month! So you could save 1/5 of that $500 per month just by paying off your credit cards. And, of course, on $8,000 in debt, your monthly minimum payments could very well cost $500 per month of itself! Sure, it might take you a while to pay off your credit cards, but each month you save on other expenses could be a month closer to this goal.

Another option, of course, is to transfer your high-interest credit card debts to 0% introductory APR credit cards. This can help you pay down your balances more quickly since your payments won’t be eaten up by interest each month.

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