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Dave Ramsey says families can save $3,500 a year by eliminating these for luxuries from their lives:

• Daily lunches out: Save $1,040 per year
• Premium cable packages: $792 per year
• Unused gym memberships: $468 per year
• Regular coffee trips: $1,200 per year

Here’s my take on this:

• There’s no doubt that small spending can add up, so there’s good reason to talk about options like these.
• Almost any spending can be ok as long as it’s done in moderation and savings comes from somewhere else. I believe moderate and selective frugality is the way to go — save on things you don’t like and spend on things you do. Given this philosophy, any of the above could be money savers or ok to spend on.
• I took my lunches to work for YEARS. Yes, we saved a lot of money and I got to eat something I liked every day. It was a win-win.
• We have bought cable TV for several years now, but it’s our main form of entertainment. It often replaces trips to the movies which can be far more expensive for a family of four.
• Unused ANYTHING is a waste of money, and gym memberships are no different. We do belong to a gym and pay $149 per month. But I go 25 times a month, my wife goes at least 20, and each kid goes 10 or so. That equates to $2.29 per visit which is a GREAT deal given that our gym is a high-end exercise facility (not just your normal run of the mill gym). In addition, this investment more than pays for itself as exercising helps to both grow your income and save money.
• David Bach came up with the Latte Factor many years ago. I’m a big coffee fan but there are ways to enjoy it without spending $4 a cup. I spend about 30 cents a cup and I have lattes that taste just as good as what I get at a cafe — even better sometimes. I buy my beans whole, grind them, and make single-serve cups of coffee in my Keurig. Way cheaper than Starbucks!

So, those are my thoughts on Dave’s suggestions. What do you think about them?

Welcome to this week’s edition of Star Money Articles.

Budgets are Sexy lists ten surprises in early retirement.

ESI Money interviews another millionaire.

Centsibly Rich tells how to save for a vacation.

Financial Samurai says one email almost ruined his severance.

Physician on Fire lists some successes and failures with disability insurance.

Finally, my book of the week is Stop Acting Rich: …And Start Living Like A Real Millionaire. I think the title says it all!!!

Have a GREAT weekend!!!

Yes, I realize this post is a couple months late for many. You can use it next year!

As tax season is close to an end, I wanted to share this tool from Dave Ramsey about whether you should do your taxes yourself or hire a tax pro.

It takes you through a series of questions and then recommends a solution.

My guess is that the simpler your taxes are, the more likely you’ll get “do them yourself” and the more complicated they are the more likely you’ll get “hire a pro.”

I took the test and it came back with “hire a pro.” Which is good since I’ve used a CPA to do my taxes for years. Why? There are tons of reasons why you should hire a tax pro, but here’s one great reason from the end of Dave’s survey. It’s a quote from someone who hire a tax pro:

“I tried online software with no luck. The difference between the return I would have received and what your ELP was able to get for me was almost $3,000!”

Now it’s worth mentioning that this tool is being used by Dave to identify those who may want/need to use a tax pro and then refer them to someone in Dave’s network. Not saying there’s anything wrong with that, but just want to be sure everything is fully disclosed.

That said, there’s no doubt to me that my CPA saves me more in time (many, many hours) and money (by catching things I don’t even know about) to pay for her fee. So it’s well worth it to me.

How about you? Do you do your own taxes or does someone do them for you?

This post is from FMF contributor Antonio Williams.

Getting a degree is more expensive than ever. Many college and graduate students are required to take out student loans in order to finance their education. The average debt per borrower for undergraduate students rose to new heights in 2016, and the record gets broken every year. For graduate students, the number was even higher, at $57,600. Many borrowers have multiple loans, leaving them struggling to pay several bills each month on top of their other financial obligations.

For many graduates, there are plenty of things they can do to help themselves. Loan consolidation or refinancing may be an option to combine many loans into a single loan. For private student loans, it may also be a way to obtain a lower interest rate or convert a variable interest rate loan to a fixed interest rate student loan. For federal student loans, consolidation can be a tool to help you stay on top of your student loan payments.

There are two different types of consolidation: federal and private. Federal student loan consolidation involves a specific process through the United States Department of Education where multiple federal student loans are combined into a single federal student loan. It can only be used for federal student loans — not private loans — and typically will not result in a new, lower interest rate. Instead, the interest rate for a federal loan consolidation is based on a weighted average of the old loans’ interest rates.

The primary benefit of federal student loan consolidation is that it results in a single monthly payment. In addition, borrowers may be able to extend the repayment of their loans, lowering their monthly payment. They may also be able to switch to an alternative repayment schedule or move from a variable interest rate loan to a fixed rate loan. However, changing the length of a loan repayment schedule will result in paying more over the life of the loan. For example, by extending the payment term from 20 to 30 years, a borrower could pay thousands of dollars more in interest even with the lower monthly payment. Consolidating federal loans may result in losing certain borrower protections that only apply to specific federal loans, such as interest rate discounts or loan cancellation benefits. Carefully consider the advantages and disadvantages of federal loan consolidation before deciding to consolidate. You may be eligible for deferment or forbearance if you are struggling to make your payments. This may be a better option for some borrowers than consolidating your federal student loans.

If you do decide to consolidate your federal student loans, go directly to the Department of Education’s website. Never respond to pop-up ads, letters, or email solicitations about consolidations; it is free through the government, and you should never be charged a fee. Once you are on the site, simply log in with the identification that you created to apply for your student loans. Then complete the application form, choose a repayment plan, using the repayment estimator to see how much you will pay each month. You can then choose your new loan servicer from the list of available options. You will then receive a statement from this new servicer, and will make your payments directly to this company.

Private loan consolidation is also known as student loan refinancing. This process involves applying for a new student loan, which is then used to pay off your existing student loans. Private loan consolidation can be used for both private and federal student loans, or just private student loans. The main benefit of private student loan consolidation is to obtain a lower interest rate, usually based on a better credit score, a higher income, a history of on-time payments, or other factors. Private loan consolidation may also be used to switch a variable rate loan to a fixed interest rate loan.

Refinancing or consolidating private loans often saves borrowers money through lower interest rates, or by going from a variable interest rate to a fixed interest rate. A refinanced private loan involves an entirely new interest loan based on the borrower’s application and creditworthiness. This generally means a lower monthly payment. Typically, repayment terms for a private loan consolidation are shorter, from five to twenty years, which means that private loan consolidations allow borrowers to pay off their debt more quickly. However, if borrowers consolidate both private and federal student loans together, they will lose the benefits of federal student loans, such as income-based repayment options, deferral, loan forgiveness and more. If you are considering refinancing your private student loans, think twice before consolidating your federal student loans with your private student loans.

If you decide to refinance your private student loans, you should begin by examining your student loan servicing documents to determine if it makes financial sense to consolidate your loans. You can obtain this information directly from your lenders by requesting a free copy of your credit report from one of the three major credit reporting agencies. These documents will list your outstanding student loans, including the companies that hold them. Once you have these documents, you can then use online calculators to determine if you will save money by refinancing your student loans. Online sites such as LendEDU will then allow you to compare a number of lenders based on their interest rates, terms, rank and other factors so that you can make the best possible decision about which lender to choose for your student loan refinance.

Apply for a private student loan consolidation directly with a lender; as with federal student loan consolidation, it typically will not cost you any money. Your eligibility for refinancing will be based on your creditworthiness and oftentimes your projected income. Generally, your credit score must be at least in the mid-600’s to qualify for refinancing. The higher your credit score and other indicia of creditworthiness, the lower your interest rate will be. According to Investopedia, there are five major factors that determine our credit score.

Whether you are consolidating private or federal student loans, consolidating your debt can help you organize your finances and may save you a significant amount of money on your student loans. Carefully consider all aspects of consolidation before you make the decision to make sure that you are making the best choice for your finances!

Here’s a video on how the wealthy get up early. 

It says they rise three hours before they go to work and use that extra time to advance their lives and their fortunes.

They spend a good portion of the morning reading to gain knowledge. They also exercise aerobically 20-30 minutes a day — which also makes them smarter (the video goes into the biology of how this happens). Combine these two and you have smarter people who do more in life and their careers, and thus make more money.

A few thoughts:

• Spending extra time to grow your career is well worth the investment. That extra time could net you several million dollars extra over the course of your working lifetime.
• Exercising not only saves/extends your life but it can both save and make you more money. Good stuff!
• Put the above two points together and this is how getting up early can help you become wealthy.

I used to be a night owl and HATED the mornings. Then we had kids. 🙂

Slowly, over time, I began getting up earlier and earlier. I was reading (mostly) during this extra time, but some time was also allocated to thinking and planning.

More recently I read The Miracle Morning: The Not-So-Obvious Secret Guaranteed to Transform Your Life (Before 8AM) and have been more intentional with my early mornings.

Here’s what I do now in the morning:

• Weigh myself (daily weigh-ins keep me accountable)
• Drink 24 oz of water and a protein shake
• Check my sites to make sure they are up, record daily stats, etc.
• Read for 15-30 minutes on personal finance and business
• Do a couple chess puzzles
• Head to work out

I get home about 10 am or so, having taken the long walk home (on nice days) and having 7,000 to 10,000 steps already under my belt.

Of course I can do this because I’m retired, but many of the principles can work for those employed as well. The idea is to get up earlier and use that time to accomplish the things in life you want to accomplish.

Any other early risers out there?

Welcome to this week’s edition of Star Money Articles.

Retirement Manifesto says you need something to retire to.

Picky Pinchers lists savings tips for the top five housing-related costs.

ESI Money gives more evidence that financial advisors and TV personalities are not experts.

Our Next Life says not to listen to them.

Route to Retire claims you’re the average of the five people you spend most of your time with.

Finally, my book of the week is The Simple Path to Wealth: Your road map to financial independence and a rich, free life. It’s a contender for best investing book of all time IMO.

Have a GREAT weekend!!!