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Growella Games Matches Savings Goals, Dollar for Dollar
Events, Personal Finance,

Growella Games Matches Savings Goals, Dollar for Dollar

The following post is sponsored by Growella.

According to Investopedia, Millennials (aka “Gen Y”) face the most uncertain future when it comes to money matters. These twentysomethings feel like the generation least able to achieve the material goals lauded so highly by the older generations they look up to. It seems daunting just thinking about the steps and money that go into buying a house, undergoing higher education to land a dream job, or retiring at a reasonable age.

There are a few notable reasons why millennials have difficulty saving:

  • >75% of millennials want to have the same clothes, cars and gadgets as their friends (thanks a lot, social media!)
  • Half of these people use credit cards to pay for basic necessities
  • >50% receive monetary support from their parents
  • 75% would rather spend their money on experiences

Money Saving Tips

Sometimes saving money is a matter of understanding how to be the most effective with the money you have. This tips can get you on the right track to start:

  • Set a budget: Connect all financial accounts (credit card, checking, savings, loans, etc.) to a tool like Mint. Categorize each transaction. Set a monthly limit for each category, and measure your efforts to stay within the budget you set – then adjust next month as necessary!
  • Pay yourself: A tool like Acorns or Digit can help you automate savings/money-growing efforts.
  • Contribute to your 401k: Or IRA, if that’s what you’re into. If you work at a company that sponsors a retirement savings plan, set up a specific monetary amount or percentage that gets taken off before your paycheck is deposited into your bank account. Out of sight, out of mind!
  • Stave off wants: Getting tech toys cheap often comes down to having godlike patience. Work diligently to pay off your credit cards and student loans, prioritizing these payments over shiny new things. Thanks to interest, these two kinds of debt accumulate over time and cost you more in the long run if ignored!
  • Ask for help. With so much personal finance advice on the internet, it can be hard to know what strategy is right for you. But companies like Growella exist to lend a helping hand.

Also, take a moment to consider if you’re spending too much money shopping online, or on vacation travel.

Growella Games: A Money Challenge

Growella is a resource for money, career, and life advice for twentysomethings who want to achieve more.

In the spirit of their reason for existence, Growella recently launched a money challenge game. Just about anyone can benefit from the results, whether they have a certain money goal to hit, want to pay off their student loans, or start saving.

Participants undergo an 8 week challenge to save money. If they succeed, Growella will match their savings – dollar for dollar. Bailey Cummins (of becomingbailey.com) started with the goal to save money for her emergency fund, and you can read about her progress here.

How to Play Growella Games

First off, get yourself registered for Growella Games here. What are you waiting for? It’s free! Next, you’ll receive a confirmation email with a link to your player profile.

From there, you’ll share your money goals, and how you think Growella Games can help you. Based on your profile, Growella will assign a specific money challenge to you. To give an example, a player with student loans might be challenged to reduce their student loan balances by $500.

Every player’s goal is personalized. As you make progress, you’ll record weekly video updates to be shared with the Growella community, and on your personal Growella Games player page.

one person is selected to play from all completed registrations, and that player selection will happen at the end of April (for the current round). The challenge runs for 8 weeks. If you successfully complete it, your money is matched dollar for dollar.
Challenge yourself with Growella Games. Who’s in?

How to Shop Online for a New Bank
Life, Personal Finance,

How to Shop Online for a New Bank

If you’re looking to save more of your hard-earned money this year you may want to reconsider where you bank. The thought of switching banks can seem like a stressful endeavor, but it could end up saving you big bucks in the long run. In 2015, the nation’s 3 largest banks collected over 6 billion dollars in fees from consumers.

How to shop online for a new bank

The easiest way to change your luck (and fee structure) is to learn how to shop online for a new bank. Most, if not all, banks have a website that you can use to gather information like account benefits and branch locations. If you’re serious about finding a bank with lower fees, and live in the Chicago area, you’ve got over 100 different banks to choose from. But don’t be overwhelmed – PrimoBanks has done the research required to show you what to expect as far as various fees are concerned.

Here’s an easy 3-step process to get you started on PrimoBanks’ website!

Step 1: Select your State of Residence (*currently only Illinois)
Step 2: Enter your Zip Code(s)
Step 3: Choose a Bank Fee

Chicago banks don’t like to share All fees publicly

Banks will promote their free services such as online banking or bill pay front and center on their website, but not all banks disclose their fees online.

When it comes to account fees banks are not required to display them online, but only during the account opening process.

Only 50% of brick and mortar banks in the U.S. choose to post their fees online for consumers to view, and if they are online they are usually buried in the fine print.  That’s why it’s important to consider account fees when shopping around for a new bank. If a bank won’t provide you with their fees upfront it may be a good indication of worse things to come.

Good News for Chicago banking

More banks in Chicago are starting to offer consumers the convenience of applying for a new account online through a secure application.  Right now, about 40% of brick and mortar banks offer online account opening capabilities for consumer accounts and look for that number to increase in the future.

Like anything else shopping online for a new bank will require a little bit of research, but will be well worth it to your savings!

What bank do you use for most of your needs? Are you wondering how to shop online for a new bank? Ask your banking questions and leave opinions in the comments!

chicago cheap ass (3)
Life, Personal Finance,

Are You Missing Out on Money?

Did you know the government might have some of your hard-earned money, is dying to return it to you, but just doesn’t know where to find you? It’s true! When people move, or addresses are entered incorrectly, companies often end up with money they owe folks but they can’t track them down to give it to them. So they turn the money over to the state government, who puts it in a big vault where the governor swims in it Scrooge McDuck style—just kidding, that last part doesn’t happen (that I’m aware of). The government then puts the information about the unclaimed property online in a searchable database. This is where you come in!

Simply go to the website containing your state’s database and search for yourself and family. I found a fair bit of money owed me and $7,000+ (!!!) of stock owed to my step-sister. The procedure for claiming the money varies from state to state. Sometimes you just fill out a form online, sometimes you print something out and mail it in, sometimes you even have to have it notarized if it’s a big enough amount of money.

Use this map to find the database of each state you want to search. You should search each state you’ve ever lived in. To make things easier, many of the states have also put their listings on a centralized database at Missing Money. You can visually see which states participate in this centralized database here. Local Chicago Cheapasses will note that Illinois is not part of the Missing Money site. They will instead need to go here to search for their lost booty.

Happy hunting!

chicago cheap ass
Life, Personal Finance,

Financial Planning for Dummies

I’m a financial planner.  I help people figure out what it’s going to take for them to retire the way they want or send their kids to Harvard.  Then I execute the plan—managing their investments and figuring out the best place to put new savings.  But I recognize that not everybody wants to pay for this kind of help.  Some people are do-it-yourselfers and some people just don’t have enough assets yet.  But do-it-yourself is not ignore-it-yourself.  You still need a plan! This applies to people of all ages—starting young makes achieving your long-term goals much easier.

This article is not going to tell you how to create a full financial plan for yourself.  It would take too long, and a lot of other people have done it extremely well already.  But I will give you a few tips that will get you pointed in the right direction and alert you to some major pitfalls to avoid.

Tip 1: Educate yourself, but from the right materials

There is a lot that’s been written about how to manage your finances.  Most of it is complete and utter crap.  CNBC and Money magazine need eyeballs to get advertisers, so a lot of financial pornography gets written and peddled there.  Or some author comes up with a catchy strategy which doesn’t really make sense but sounds good, so it gets published as a book and sells a bunch of copies to people who deserve better advice.  In the end, changing your financial habits is just like changing your eating habits.  You can try the latest fad diet, or you can do what you know deep down really works—eating right and exercising.

So what’s eating right and exercising in the world of your finances?  It means:

  • Living well below your means so you can save a big chunk of each paycheck
  • Investing your savings in a mixture of diversified, low-cost stock and bond mutual funds so you can achieve the returns you need without taking on too much risk.

OK so that’s not everything.  But that’s most of it.  There’s nothing sexy about it.  All it takes is self-discipline.  Just like eating right and exercising.

So where can you learn a little bit more about these concepts and how you can implement them?  The best resource available is a group of people called the Bogleheads.  They are named after John Bogle, the founder of the Vanguard group and creator of the first index mutual fund.  Bogleheads are a broad group of people who believe in the principles I laid out above.  They can help you in a couple of different ways:

If you get your advice from the Bogleheads web site and from Boglehead approved books, you will learn the right way to build and execute a financial plan.  If you get your advice from other materials, chances are you will be steered in the wrong direction.

Tip 2: Watch out for financial professionals

It pains me to say it, but most people in the world of personal financial planning and investment management do more harm than good to their clients.  Many of these folks are really salespeople who don’t know much about financial planning and are just trying to earn commissions.  This is the primary reason I got into the industry myself and started my own firm—I wanted to be able to provide honest financial advice for a fair price, even if that meant making less money than the typical business model.

So how are you, a layperson, to know the good financial professionals from the bad?  Here are a couple of things to watch out for:

  • Don’t invest money in life insurance.  At some point in your life, you will almost certainly be approached by a financial planner/insurance agent, who might even be a family member or friend.  They will put this great pitch in front of you about why whole life insurance or some other form of permanent life insurance (universal life, variable universal life, etc.) is a great way to invest your money for the future.  They’ll probably allude to some sweet tax benefits and show this awesome-looking analysis for how rich you’ll be in 25 years.  Don’t do it!  These policies are meant to be sold, not bought.  They’re so unprofitable for the investor, and so profitable for the insurance company offering them, that insurance agents are paid fat commission checks to sell these policies.  That’s why they push them so hard.  You can read more about why whole life insurance is such a bad investment here.  The really sad part is that in many cases, the folks who buy permanent life insurance don’t need life insurance at all as they have nobody who is depending on their income.  If you do need life insurance, the only kind you should ever buy is term life insurance.
  • If you hire a financial planner/investment advisor, make sure he/she is fee only.  Broadly speaking, there are 3 types of models financial planners use to make money.
    • Commissioned financial planners appear to be working for free, but really they are getting commissions when you trade.  The commissions can come from the broker by way of getting a portion of the fees associated with each trade.  But even more pernicious are the commissions that come from mutual fund companies whenever a financial planner gets a client to buy one of their mutual funds with high front-end/back-end loads and/or outrageous expense ratios.  This is a huge conflict of interest—the financial planner is recommending extremely dubious investments to the client in order to get paid.  “Free” advice will end up costing you a lot of money.
    • Fee based financial planners will charge you to manage your money (often a percentage of assets under management) and take commissions for recommending dubious investments to you.  You might be thinking that it sure takes a lot of chutzpah to have this kind of model for making money, and you’d be right.
    • Fee only financial planners only make money from transparent fees they charge you.  There are no commissions, which eliminates the worst conflicts of interest.  They typically make money either by charging their clients a percentage of assets under management, a flat fee, or an hourly fee.  These are the only kinds of financial planners I would ever consider.  If you hire a financial planner who charges a percentage of assets under management, make sure the percentage is reasonable for the services performed.  1% or higher is common, and I believe that is too expensive for basic financial planning/investment management services.

Before you hire a financial planner, ask him how he makes money.  More to the point, ask him if he receives any commissions when his clients buy certain products.  You want to hear the words fee only.  If you don’t, specifically ask whether the financial planner is fee only.  Once you’re able to ascertain that a financial planner is fee only, have him explain his compensation model thoroughly so you can understand it and decide if it’s worthwhile.  If you really want to be a bad-ass, ask to see a copy of his form ADV Part 2A.  All registered investment advisors are required to give this to their clients.  Reading this is a good way to understand what the financial planner is offering and what they charge.  In particular, you should read the sections entitled Fees and Compensation, Performance Based Fees and Side-by-Side Compensation and Client Referrals and Other Compensation.  These are mandatory sections of the form that will tell you how the financial planner is compensated, and you can look them up in the Table of Contents.

Tip 3: Learn how to use spreadsheets

When I got my MBA, I distinctly remember the first group project I was a part of where we were asked to use Microsoft Excel to solve a problem.  I had never used a spreadsheet before and was so embarrassed!  Since then, I’ve become proficient and use it all the time, and not just to be a good financial planner.  One of my favorite things to say is “There are few problems in life that Excel can’t help you solve.”  Spreadsheets allow you to store and manipulate data easily.  As you become proficient with them, you’ll find more and more uses for how they can help you.  I use spreadsheets for things like:

  • Deciding which medical plan to sign up for
  • Determining whether it’s better to buy or rent housing
  • Creating itineraries
  • Keeping track of tax-deductible expenses
  • Figuring out who owes who money after a group trip
  • Splitting up the costs on my cell phone family plan among the different family members on it

Critically, using spreadsheets will help you do your own financial planning.  Spreadsheets will help you:

  • Build a budget
  • Calculate your asset allocation and help you rebalance when it differs from your desired asset allocation
  • Build a year by year saving and investing plan and track your progress against it

If you have Microsoft Office, Excel is a fantastic spreadsheet.  If you don’t, Google Sheets is a free alternative.  Their functionality is basically the same.  There are lots of YouTube videos on learning to use Excel, or you can buy a book, take a short, free class at a local library, or a longer, paid class from a company.

Wrap-up

Taking control of your own financial destiny in one of the most important things you can do.  Too many people in this country end up mired in debt and spend their golden years subsisting on a meager Social Security check and the kindness of relatives.  By following the tips in this post, you can put yourself on the track toward financial independence.  Trust me—your future self will thank you for the work you put in today.

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Life, Personal Finance, Shopping, Travel,

The Best Credit Card Rewards = Free World Travel

It’s a cliché on every dating profile ever written: “I love to travel.” But for most of us, it really is true. The big catch is that traveling is expensive. But it doesn’t have to be! The key is to take advantage of introductory offers that credit card companies use to get your business.

First, a caveat. This is only for people that can use credit cards responsibly. If you don’t pay off your bill every month, this isn’t for you. The interest rates on these credit cards will eat you alive. The credit card companies are counting on some applicants paying them a lot of interest—that’s why they offer these great introductory offers. But if you can trust yourself to use credit responsibly, there’s no reason you can’t travel for almost free. And travel in style.

The Best Credit Card Rewards for Free Travel

The 2 biggest expenses when traveling are usually airfare and lodging. Here’s how you can use introductory credit card offers to practically eliminate both expenses.

Airfare

Like Sinatra said, Chicago is my kind of town. Besides street festivals, North Avenue Beach, and the Hangge Uppe, Chicago is also a hub for United Airlines (UA) and American Airlines (AA). This works out perfectly because those two have perhaps the best frequent flyer programs in the world if you want to fly internationally. The critical reason UA and AA have great frequent flyer programs is they don’t pass on fuel surcharges when you book an award ticket through them, even if the ticket is on one of their partner airlines (Star Alliance for UA, OneWorld for AA). On many other frequent flyer programs across the world, you can book a supposedly free roundtrip flight but still end up paying $500 to $1,000 in fuel surcharges. What’s free about that?

Collecting UA and AA miles is pretty straightforward with introductory credit card offers. These credit card offers require you to spend a certain amount of money within a certain amount of time in order to get the bonus. I would recommend getting the cards one at a time and focusing all your spending against the card until you’ve hit the bonus requirement. Then move on to the next card.

Card

Minimum Spend

Length of Time

Bonus

Annual Fee

Chase Ink Plus business card

$5,000

3 months

50K Chase Ultimate Rewards. Has been as high as 70K in past.

$95, waived first year

Chase Sapphire Preferred Personal Card

$4,000

3 months

40K Chase Ultimate Rewards plus an additional 5K for adding an authorized user

$95, waived first year

Chase United MileagePlus Explorer business card

$2,000

3 months

50K United miles

$95, waived first year

Chase United MileagePlus Explorer personal card

$1,000

3 months

30K United miles plus an additional 5K for adding an authorized user. Has been as high as 50K in past and targeted offers of 50K are frequent

$95, waived first year

Citi AAdvantage Platinum Select personal card

$3,000

3 months

50K American miles.

$95, waived first year

CitiBusiness AAdvantage Platinum Select business card

$3,000

3 months

50K American miles.

$95, waived first year

A few things worth pointing out in this chart:

  • Chase Ultimate Rewards are transferrable 1:1 to UA miles. They’re also transferrable to a lot of other programs (like Southwest) so they’re better than UA miles.
  • A few of these are business cards. The credit card companies are really lax about giving out business credit cards to people with not much of a business to show. Maybe you’d like to start walking dogs on occasion for a few extra bucks. That’s a business! Maybe you’ve started a blog that you intend to put advertising on someday. That’s a business! You don’t even need revenue yet. You can read more about getting business cards without much of a business here.
  • These cards all have annual fees, but they’re waived for the first year. Just be sure and cancel the cards before the annual fee is due.

If you were to get all 6 of these cards, the introductory bonuses alone would net you 95K Chase
Ultimate Rewards (which can be transferred 1:1 to UA miles), 85K UA miles, and 100K AA miles. Not to mention that all these cards also earn at least 1 mile/point for every dollar spent—that’s another 18K miles/points you’ll get from completing the introductory offers. Suffice to say, this is a ton of miles and can get you anywhere in the world!

Hotels

Airfare is half the battle, but lodging can really add up, too. Especially if you don’t want to sleep in a 20 bunk bed dormitory where the smell can best be described as “sweaty dude mixed with cheap tequila mixed with broken condoms.” Fortunately, there are some great hotel credit cards that let you get your Z’s for free. Here’s a few of my favorites:

Card

Minimum Spend

Length of Time

Bonus

Annual Fee

Chase Hyatt personal card

$1,000

3 months

2 free nights at any Hyatt in the world

$75, waived first year

American Express Starwood Preferred Guest personal card

$3,000

3 months

25K Starpoints

$65, waived first year

American Express Starwood Preferred Guest business card

$5,000

6 months

10K Starpoints with first purchase and add’l 15K Starpoints after meeting minimum spend

$65, waived first year

Citi Hilton HHonors Reserve personal card

$2,500

4 months

2 free weekend nights at any Hilton in the world

$95

The Hyatt one is my favorite…it’s a low minimum spend and you get 2 free nights at any Hyatt in the world. There are several hotels where the rate you would pay is over $500 a night and sometimes over $1,000 a night! The Starwood cards are great, too. Starpoints are really valuable—you can often stay in nice hotels for 10K Starpoints a night (Starwood has such hotel brands as W, Le Meridien, Westin, Aloft, St Regis, and Sheraton). While the Citi Hilton card is limited to weekend nights (Friday, Saturday, or Sunday), you’ve got the same opportunity as with the Hyatt—stay in a really expensive, luxurious hotel you could never afford normally. The Hilton card does have a $95 annual fee that is not waived for the first year. I should point out that there are a few exclusions from both the Hyatt and Hilton free night list that you can find online—it’s unlikely this will cramp your style.

Putting it All Together

So this all sounds good on paper, but how about a real life example of how you could travel in style for close to free with just a few cards? Let’s say you and a companion want to go to Tokyo and Kyoto at the beginning of April next year to see the famous cherry blossoms. Each of you signs up and completes the introductory bonuses for the following 4 cards, all of which have their annual fee waived for the first year:

  • Citi AAdvantage Platinum Select personal card
  • CitiBusiness AAdvantage Platinum Select business card
  • American Express Starwood Preferred personal card
  • Chase Hyatt personal card

Just from the introductory bonuses, you each have 100K AA miles, 25K Starpoints, and 2 free nights at any Hyatt. You can fly from Chicago to Tokyo in business class for 100K AA miles during off-peak times (off-peak for Japan is defined as 10/1 – 4/30). I found lots of flight options when searching for 100K mile roundtrip award tickets—here’s one example.

Best Credit Card Rewards

You get to fly first class on the domestic flights between Chicago and Dallas and business class on the trans-Pacific flights between Dallas and Tokyo. If you’ve never flown business class, it makes all the difference in the world! You get good food, free booze, and a much bigger seat that reclines enough for you to actually get some sleep. In short, you can arrive at your destination without feeling like the piece of gum stuck to the bottom of some unlucky bastard’s shoe. The total cost of your ticket: $49.70 in taxes.

When you get to Tokyo on April 5th, you can go straight to your hotel—the Park Hyatt Tokyo. This $500/night hotel was featured prominently in the movie Lost in Translation. You too can go live it up in the famous “New York Bar” on the 52nd floor, where Bill Murray and Scarlett Johansson’s characters meet for the first time. Because you and your companion each have 2 free nights, you can stay at this hotel for 4 nights. On April 9th, having seen all there is to see in Tokyo (yeah right), you take the train to Kyoto, the spiritual center of Japan. Here you spend 3 nights at the Kyoto Westin, enjoying the chain’s signature Heavenly Bed, for 10,000 Starpoints a night—30,000 Starpoints in total. You and your companion have 50,000 points between you, so you’ve got more than enough to cover this.

The total cost for these hotels: nothing, nil, nada, zilch. All taxes are covered when using your Hyatt free night certificates or Starpoints to get a room.

On the 12th you take the train back to Tokyo and fly back to the US, again in business class. You’ve traveled and stayed in style in one of the most expensive countries in the world during one of its most iconic times of year, and the total cost for your flights and hotels was $49.70 per person. All for you and your companion each signing up for 4 credit cards and directing $10,000 of the spending you would have done anyway onto them over the course of up to 12 months.

A Final Note

A lot of people shy away from signing up for a bunch of credit cards because they are afraid of what it will do to their credit score. This is really an unfounded concern. Your score may go down by a few points for a short time after opening a card, but the effect is small and temporary. In the long run, most people who open up a lot of credit cards for the introductory offers actually have their credit score go up. I’ve opened 10 new cards in the last year, and my score with Transunion, where most of the hard inquiries on my credit were done, is between 790 and 800. Anything above 750 is excellent—you don’t get bonus points for having an 820 score instead of a 790. Opening up a few credit cards won’t jeopardize your ability to buy that dream house someday, just so long as you always pay your credit card bills on time!

So there you have it. The best credit card rewards for free travel. Domo arigato for reading such a long post. Sayonara!