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Archives for June 2016

Save 20% at Starbucks Every Day!

By Frugaling 7 Comments

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Starbucks Coffee Savings

Search for how to save money at Starbucks, and you’ll find millions of results. People love finding ways to cut their costs at a place they love. Some go to Starbucks to meet friends or to grab a quick pick-me-up at lunch. And for many, it’s a daily habit: wake up, grab a coffee, and drive to work. The company has carefully crafted a strategy of home, work, and Starbucks. Their goal is to have you spending significant amount of time at their retail stores.

Personally, I have a couple cups of coffee each day. Sometimes they’re from Starbucks, and sometimes they’re not. As a frugal person, it’s hard to see any purchased coffee as a thrifty choice. It’s not. To brew a pot of coffee might cost $.40-.50. If you get a tall coffee at Starbucks, that’ll set you back about $1.89 (and that’s just for a plain coffee). Of course, the frugal choice is staying home, but sometimes I like going out and grabbing one on the go. Sometimes there’s just something wonderful about working in a coffee house.

Regardless, my ultimate goal is to save every dollar and dime I can no matter the place. People tend to criticize Starbucks for being “too expensive,” but a cup of coffee is pretty reasonably priced. If I go anywhere else in town, I’ll be looking at about $2 or more for the same size.

It’s been two years since I last wrote about saving money at Starbucks. Much has changed with the company and my wallet since then. Nowadays, I can save 20% or more at Starbucks — every day. Here’s how you can, too.

1. Start with a cash back card (6% savings)

To achieve this level of savings, you must start with a cash back credit card. Personally, I use the Blue Cash Preferred card from American Express. This card is designed to give you 6% at grocery stores, 3% for gas, and 1% for everything else. I only use the card for grocery and gas purchases (bonus tip: the Amex card even works at Aldi to save me an additional 6% on groceries).

Now, you might be wondering how Starbucks could ever be considered a grocery store. How could someone actually net 6%? The answer takes a couple more steps to understand. Stick with me.

2. Buy an eBay gift card to purchase a Starbucks gift card (10% savings)

At a local grocery store, look at their gift cards aisle. If they’re like mine, you’ll find tons of options from Amazon, Chilis, and even Starbucks. But you don’t want to buy a Starbucks gift card yet; albeit, that’d net you a cool 6% rapidly. Instead, we need to buy an eBay gift card.

After buying an eBay card, search on their website for a Starbucks gift card. You’ll find tons of offerings. A good rule of thumb is 10% — that’s the expected discount off the face value of the card. This process takes time. To purchase an eBay gift card, then a Starbucks gift card, and wait for it to arrive at your home might take a couple weeks. For me, it’s worth it because I know I’ll eventually go to Starbucks again; when I do, I want to save.

3. Register for Star Rewards (5% savings)

In the last couple years since I wrote about saving at Starbucks, they changed Star Rewards. The process involved some chicanery, but the bottomline is they devalued their entire program. For every dollar spent, people earn two points. Once earned, you can buy almost anything with a reward (how about a venti fancy-frap or calorie-packed pastry?).

Based on my coffee calculations, it now takes 35 cups to get a reward. Ouch! This miniscule savings does help, though. By registering the card with an established reward account, you’ll save about 5%, conservatively.

4. Bring your own tumbler (5.3% savings)

I bring a reusable tumbler before I ever scan my rewards card. Thankfully, Starbucks provides a hearty 10-cent discount each time.

Want to look like you just got a Starbucks and be frugal, too? Starbucks sells a reusable tumbler for $2 (and I believe it’ll count for Star Rewards as a purchase).

Order a tall coffee for $1.89, and then it becomes $1.79. Ten cents might be laughable, but over time these costs add up. By using a tumbler each time for coffee, you’ll be saving about 5.3% more. If you forget your tumbler, order a short coffee (8 oz) to save about $0.10 off a tall.

5. Take advantage of free refills (50% savings)

Most coffee places don’t offer free refills. For registered Star Rewards members, cups of coffee can be refilled for free. Now, a $1.79 cup of coffee can become $0.90. Or, $0.60 if you really are looking to get your coffee buzz on!

Even without the refills, Starbucks becomes a solid option for those looking to have a cup of coffee while out on the town, crossing the country, or just looking to get a little work done. By combining these strategies, I save over 20% every day at Starbucks.

Do you go to Starbucks? What tricks do you have to save at coffee shops?

Filed Under: Save Money Tagged With: Cheap Coffee, Coffee, Coffee Shops, Cup, Save Money, savings, Star Rewards, Starbucks

Apple Pay Will Make You Pay

By Frugaling 8 Comments

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iPhone and Macbook for Apple Pay
Photo: William Iven/Unsplash

Apple’s agenda should scare you

Last week, Apple held their 2016 Worldwide Developer Conference (WWDC). Like always, it was a smorgasbord of updates to operating systems and apps, developer fandom, and hooplah over Siri’s special powers (now she’ll work across devices!).

Cue the applause.

However, I had this weird problem when I went to stream the keynote. You see, Google Chrome was blocked from being able to watch the event. The website told me I needed to be in the Safari browser on a Mac or iOS device (i.e., iPhone or iPad).

I thought nothing of it at the time; except, “Well, this is inconvenient.” But really, why should I care? I simply switched to Safari and then streamed every remaining second of it. My mind spit out whatever I was doing beforehand in favor of all things Apple. I was jacked in.

But in that moment — that blip of inconvenience due to Apple’s desire to withhold information from any Android or PC user, something distasteful festered. My head kept picking at it like a stubborn cuticle. It felt uncomfortable to be forced to switch. Why should I need to? There’s something arrogant about it. Apple was a pioneer in technology; surely, they knew how to present the keynote address across multiple browsers, right? The intentionality felt hostile — a confrontation to openness in the Internet Age.

The cost of being a user

Many people have talked about Apple as a “walled garden.” What they’re implying is that the company is protective of their devices, operating system functions, and who can play in the iOS world. For developers and consumers, the effects have pros and cons. Apple’s devices are more secure, but they’re also more expensive.

You’ve got to pay up to belong, but membership has its… privileges. The devices are beautiful and the operating system is solid. But paying up – in more ways than one — is quickly becoming Apple’s specialty. For starters, their devices have some of the largest margins in the industry. As most of the hardware industry has dwindled, Apple’s pushed on to become one of the largest companies in the world.

Now, their financial acumen goes beyond the machines they manufacture. About two years ago, the company made moves into the financial industry with Apple Pay. It used to be limited to restaurants, groceries, gas stations, and other retailers that accept plastic credit cards. Those retailers employed Near-Field Communication (NFC) devices that could then accept iPhones and Watches via Apple Pay. Users could rid their wallet of the extra plastic in the process. How easy!

You’ll pay for updates to Apple Pay

This year’s WWDC contained a little nod to Apple Pay in the form of a button that could be placed on websites that accept credit transactions. They dubbed it, “Apple Pay on the Web.” This new button would take the place of filling out forms and spending countless hours of your life punching in 16-digit numbers, expiration dates, CVV codes, full names, addresses, phone numbers, your blood type, your cousin’s maiden name, and your favorite fruit.

Apple’s making a value proposition. Essentially, they’re saying, “We know you value your time. That’s why we’ve created an ingenious solution that’ll solve the hassle and time it takes to shop online.”

Behind this “solution” is a masterclass in consumption. First, Apple Pay will only work with Macs; at least, to start. You’ll need a Mac running Safari. As always, Apple’s computers have a large profit margin built in. That means you’re paying a hefty amount over comparable systems just to pay for things online (are we noticing a consumption loop here?).

Second, Apple is pairing Apple Pay on the Web with iPhones. That phone is going to cost you, as well. Heck, a new iPhone costs about $700 off contract. The phone will be used to “confirm” transactions — press your thumb (or any other digit of your choosing) to your TouchID sensor. Et voila! You’ve purchased… something.

Third, all this “innovation” is to help you consume, to pay more, to think less, to spend more time mashing your thumb against a sensor. It’s made for businesses more than consumers. And while it’s awesome to have autofill forms, instant transactions, and secure payments, shouldn’t we weigh the potential costs of this so-called progress?

Reduced friction = increased spend

The convenience of online retailers contains a risk for some spenders: reduced friction. Friction occurs when you rub your hands together — feel that heat? Friction is the reason I’m burning so much gas in my car, too. Just read the company’s description about Apple Pay:

Customers love the simplicity of Apple Pay, and you’ll love the increased conversion rates and new user adoption that come with it.

Apple Pay for the Web will reduce time spent critically making important decisions that directly affect your wallet. Will you spend or save today? Even more, the method continues to encourage the Apple-everything mindset in the face of lofty price points. They’ve created a system to reduce friction for a small subset of the population — those that can pay up to have at least two Apple-branded products at all times.

Today, I see a modality that shouldn’t be encouraged. For Apple, by Apple. They’re creating a world where nobody else can play; unless, you’re an Apple owner, then you’ll pay.

Filed Under: Save Money Tagged With: Apple, apple pay, internet, iPhone, Macbook, NFC, Online, reduced friction, Shopping, TouchID, Walled Garden, web

I’m Desperate For A Financial Makeover

By Frugaling 11 Comments

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Looking at a map

A year ago I read Burton Malkiel’s seminal text on investing, A Random Walk Down Wall Street, and concluded that it made sense to invest in exchange-traded funds (ETFs). He imparted a challenging message: people are inherently poor stock pickers, but we can be better through diversification and buy-and-hold strategies. ETFs would be a quick, affordable, engaging way to diversify, too.

Despite the logic, my brain wouldn’t relent — I wanted to invest in an individual stock. Like a horse being kicked and yanked to the right but continuing left, I decided, against my better judgment, to place an investment in a risky, small cap stock. I’d been following it for quite some time, and made a small prior investment. I wanted to put more in, though.

Only two weeks after doing so, I lost $400. How could this happen? Why did I fall for this logical fallacy and bias? I was berating my brain for the errors. The company looked poised for a rapid expansion. I had drunk the Kool-Aid.

I knew better than to make this recent individual investment, and did it anyways. Humbled, I was the definition of many of the investing problems and fallacies individuals have a habit of engaging in.

Like my flawed investment, I realized much of my financial strategies had become stale. Having money to invest was a new feeling, and the do-it-yourself route wasn’t working. I needed to refresh my checking, savings, and investment streams. And I wanted to feel secure in my financial future. Here’s how I analyzed and reviewed it all.

1. Analyze current accounts

Almost all banking goes through Ally Bank. With 1% and 0.10% on savings and checking accounts, respectively, Ally is an industry leader. I’ve been with them for years, and appreciate the domestic ATM-fee reimbursements and free checks.

After paychecks are deposited into the account, about 40-50% of the money goes to regular, immediate bills. Then, another large portion gets spent on food and regular expenses throughout the month. This variable amount is something I continue to work on and struggle with. Reducing food budgets is something I’ve written about before, and will likely talk about again. It’s vital for a frugal life. But after all is said and done, there’s only about $300-400 in leftover funds.

Right now, I’ve been putting the surplus into a savings account. Additionally, I’ve been investing in individual stocks, but with mixed results. At this point, and with such little money at the end of every month, I need to be smart about what I do with any extra funds. These funds will be used to travel for job interviews, licensure, work clothes, moving expenses, and other emergencies. It’s important to have a fair amount on hand for all these moments.

After looking at the accounts, I can see that I have two piles: a checking and savings. There aren’t specific accounts for individual goals. Money is one big slush fund of fun.

Another major unaddressed part is regular investing. As mentioned it’s a weakness within my current financial management.

International travel has been also concern financially; not necessarily the cost, as I use bonus miles for most travel, but the currency exchanges. When I traveled to Colombia about a year ago, I needed local currency and had no method to get cash without fees. It cost me quite a bit to talk to a money exchange business and have them take my USD for Colombian Pesos.

2. Consider other accounts, options

Based on this analysis, I will stick with Ally Bank as my primary checking and savings method. Direct deposits will continue to flow to this checking account first. The goal will be to use this to manage all regular bills and upcoming expenses. Ally has really earned my respect over the years, and I’m happy to stay with them.

Staying with Ally doesn’t mean I’ll be staying with the same strategy, though. I’ll be opening up a new savings account and calling it, “Vocational Expenses.” This will be specific for interview, moving, and other work-related expenses incurred over the next three years. Now, how much should go in here and how fast? I will likely need $4000-5000 over the next few years, but this is a rough estimate. To meet this target, I’ll deposit $250 per month automatically out of every paycheck (Ally checking account) for the next 16 months on the first of the month.

International travel currency fees have been abysmal. To remedy this problem, I’ll be opening up a Charles Schwab Investor Checking account and solely using my Capital One Quicksilver credit card. The interest-earning checking account provides most of the features that an Ally Bank affords, but includes ATM-fee reimbursements for international ATMs and no foreign transaction fees for purchases out of country. The account is widely regarded as the best travel debit card in existence. And unlike Ally’s checking debit card, Schwab’s debit card has a chip and pin. In preparation for any travel, I will place a budgeted travel amount into the Investor Checking account, but leave it at low levels, as there’s no minimum balance necessary. Moreover, I’ll use the Capital One Visa for all international transactions, as it has no foreign transaction fees.

The last revised strategy will be a regular, monthly deposit into a taxable Wealthfront account of $100 on the first of the month. Wealthfront provides low-cost (and free for those under $15,000 invested) asset management, and automates the entire process. They choose real estate, emerging markets, and domestic stocks. They reinvest dividends and provide timely updates.

Now, I don’t need to worry about rebalancing my portfolio or looking for low-load or low-fee funds. I’m exceptionally happy with their service and professionalism. Because I might need the funds sooner than retirement, I’ll be placing them in a taxable, brokerage account for now. Eventually, when I have more cash flow and income, I will place more in my Roth IRA to invest without incurring additional taxes.

3. Review decisions and new strategy

With any financial management plan, there are going to be hiccups. When you make as little as me, automating savings and investing helps, but can also hinder my plans. Sometimes, I don’t have enough money one month and can’t make the savings necessary. At the same point, the plan motivates me to earn and save more. Maybe it’ll even encourage me to save on food!

As I analyzed and reviewed my current actions and future plans, I reflected on interest rates and banking business. Today, banks are not in the business of encouraging you to save. They nickel and dime customers — especially brick and mortar banks — for every little thing. Checks? That’ll cost you. Overdraft fees? You bet. Minimum balance not met? Say hello to my lil’ fee.

Banks earn more when you spend. They profit when you’re in peril; a tragic irony that places their interests (pun intended) above yours. From car loans to mortgages to credit debt, banks increase their margins by marketing these products to their customers.

To save requires great care, forethought, and hours of hard work. To spend takes the swipe of your card.

Reviewing and updating your financial plan is one of the most important actions you can do. If anything, it helps you understand your financial fitness and maximize interest earnings. And maybe still, it challenges you to look for new ways to save and scrimp.

Filed Under: Save Money Tagged With: Accounts, automated, automation, Banking, Banks, Budget, Checking, Financial, investing, savings, Wealthfront

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