You probably think of a great business leader like Steve Jobs, Bill Gates, or Elon Musk. Right?

Some of you may think of an A-list celebrity like The Rock or Taylor Swift. There is no doubt they are all successful in their careers.

However, people define success in countless ways. From the amount of money in their bank account to the number of followers they have on Instagram, everyone strives to achieve their own version of success.

Whichever way someone chooses to define success, it takes hard work, consistency, and persistence.

My passion for helping my readers reach their financial goals led me to interview celebrities, influencers and business leaders. Sharing their stories brought to life the struggle and triumph that led them to their success.

I want my readers to feel as if they aren’t alone. I want them to hear from real people that they can relate to and learn from.

Through my interviews, I discovered nearly all of the successful individuals I spoke with had similar characteristics. I began to see patterns in their journey toward success.

Over time, it became clear to me that applying these patterns to your own life can help you achieve the life you have always dreamed of. If you have been waiting for that push, here it is!

7 Habits of Wildly Successful People

They Work Harder Than Most People

How many hours do you work a day? For many people, they work 40-hour weeks and then spend the rest of their time enjoying leisure activities or watching their favorite Netflix shows.

This is quite the contrary for the celebrities I’ve interviewed. Even when they work form home, they are putting in a TON of work.

All the entrepreneurs, celebrities, and influencers I interviewed credited working more than 40-hours a week to their success. They live a life of passion and purpose, not one of complacency.

Their drive to achieve their vision of success gives them energy and ignites their creativity in all aspects of their lives. This makes it easy for them to work 12-plus hour days. It amazed me that some of my communication with these celebrities would take place after midnight.

They truly never stop working on their passion and are unapologetic about their persistence.

In my recent interview with Dominic Pace, he mentioned the importance of seeking his own work.

Pace does not rely on anyone to find work for him, rather he pursues his own employment opportunities. He noted that being proactive in pursuing work doesn’t make you aggressive or needy, it makes you ambitious and hungry for success.

Your ambition and drive set you apart from the weak and the lazy. If you want something bad enough, you must put in more work than the average person is willing to. While others rest, you need to be working.

Even if you have a 9 to 5 job, you still have 79 hours a week to do as you please. That number includes 7 hours of sleep a night.

That’s 79 hours of non-sleeping hours when you could be turning your dreams into reality.

If you want to be successful, use your time wisely.

They Know Exactly What They Want

Goal setting is an important trait of those that have achieved success.

Knowing exactly what you want is the driving force behind your work ethic and passion. All the celebrities I speak with are extremely specific about what they are pursuing.

Diane Franklin believes that success is not only defined by the habits we establish but also in figuring out exactly what we want. To succeed you must define your goal and make a list of what steps you must take to achieve your dream.

If you don’t know what you want, you aren’t alone. But you need to start figuring it out. If you are stuck in a rut, then at the very least you already know what you are currently doing isn’t working, and that’s a start. Try something new and see if that’s better.

If not, try again. This is your life we are talking about, so what could be more important!?

According to Diane, you must push aside your fear of failure and to focus on the path to success. If you fail along the way, don’t be ashamed, use the experience as a learning experience and keep working on achieving your goals

For example, if you’re playing darts but don’t hit a bullseye what’s the point of the game? The point is to get better so that you can eventually hit the target!

Having defined goal with a list of actions you must complete is the key to remaining productive.

Knowing what you’re working toward is key to accomplishing your goals and aspirations.

They Respect the Competition

In addition to their passion for work, it is fascinating the healthy respect celebrities have for their competition. Almost every celebrity I interviewed was aware that if they were not willing to put in the effort, someone else would.

The same can be said for successful businessmen and women. Entrepreneurs realize that there’s always someone out there trying to steal their market share.

Successful people respect the fact that to remain successful they must maintain the level of hustle that got them success in the first place. Many believe they must start over each day and work harder than the day before. The first sign of laziness or inconsistency can significantly harm everything they have worked for.

Competition keeps them sharp and on their game. It forces them outside their comfort zone as well as pushes them to grow in their craft and skill.

Many people view competition as a bad thing or something to try to avoid at all costs. However, competition is something celebrities celebrate and accept as a part of life. There’s always someone who will have more experience or a better skill set than you do, but it’s up to you to keep striving for more.

Once we accept the existence of competition, we can accelerate our own growth. To be honest, most people really aren’t paying attention to you anyway. They focus on their own work and what they need to do in order to achieve their ideal version of success.

By using your competition to your advantage, you will always be one step ahead.

Avoid Saying No

Time permitting, successful actors, writers and business leaders rarely say no to high-potential opportunities.

It is impressive how rarely celebrities turn down work. Rather than consider a role too small or large, they consider every opportunity to network. They’re not fixated on the result of one effort, rather they focus on how the effort could lead to more opportunities down the road.

Their opportunistic perspective leads them to realize bringing your “A” game to a low budget short, might lead to the director wanting to work with them again on a future big budget movie.

Every opportunity leads to another opportunity. You never know what’s right around the corner if you don’t put yourself out there as much as you can.

Think back to the times when you said “yes” to a new job or an adventure. How did it turn out? Were you pleasantly surprised or disappointed? Most likely, it opened a new door to something you never thought was possible.

By saying “yes” to big and small opportunities alike you increase the possibilities that happen in your life.

Written Schedules

In nearly every interview I conducted the interviewee kept a handwritten schedule. Either a dry erase board or a simple piece of paper. I was initially shocked that they didn’t use Google calendars.

In my recent interview with Perez Hilton, he discussed his need for scheduling. He doesn’t do spontaneous work. Scheduling his life helps him balance all his avenues of work and stay on top of all his business obligations.

It’s easy for life to get in the way of your to do list. However, when you schedule your day hour-by-hour, minute-by-minute, you leave less room for error. The more structured you are with your daily schedule the easier it will be for you to achieve your wildest dreams.

Time is priceless. The more you efficiently utilize your time to your advantage the more you will see results.

They Invest in Themselves

It is amazing how much time and effort they invest in themselves. Everyone I interviewed could name at least one or two books that they recently read that they found helped their craft.

The vast majority still work with a coach or a mentor, and several had recently attended training or conferences.

Some people view coaches or mentors as something that only non-successful people need. It turns out that the opposite is true.

You are your most important asset. It’s your responsibility to continue to grow and get better every day.

Each day provides the opportunity to learn something new and to enhance your skills. It’s important to take advantage of these opportunities. After all, if you’re not moving forward, you’re moving backward.

Did you know that you only retain 10% of knowledge by simply reading written material? However, you may retain 90% of the material you read and then implement right away.

This means that it is imperative you continue to learn and apply your knowledge. Even if you re-read your favorite books, you will learn something new every time.

They Hit the Gym

It not just for vanity, each person I spoke with also believes hitting the gym and being physically active helps with their mental state. Everyone we spoke with mentioned that consistently hitting the gym helped them remain balanced and improved their mood.

In fact, according to the Mayo Clinic, exercise improves mood and boosts energy levels. If you’re going to work 12 plus hour days, you better have a way to keep your energy up.

In addition, another benefit of exercise is that it helps your cardiovascular system work better, giving you more energy to tackle any tasks at hand. Even the busiest celebrities make time to get their sweat on. They prioritize their health because they knew it could help them maintain their level of success.

Your Road to Success

Whether you want to become an accomplished writer, an entrepreneur, actor or a profitable side hustler, the path to success is similar.

The formula is simple, but few are up to the challenge. They are okay with a mediocre life.

I learned there really isn’t one secret to success. People who reach celebrity status or become business leaders are just like you and I. However, they are persistent, have discipline, and are consistent.

They know exactly what they want.

They take every opportunity and seize the day.

This is a post by guest author Michael who blogs at Your Money Geek, where he shares his experience, unique insights, and profiles inspirational success stories. When he is not writing about personal finance Michael can be found enjoying a sci-fi book.

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

FinancePlanToday.com

The post 7 Habits Of Wealthy People appeared first on Finance Plan Today.

Mint Mobile Review Update: I extended my Mint contract for another year for $15 per month! It’s ridiculous how cheap it is, especially compared to what I used to pay. All in, I pay $180 per year for my phone service while most people pay that in just a few months…

It also doesn’t hurt that they just randomly increase the amount of data you get without increasing the price. A few months ago I randomly logged into my account and realized they increased my plan to 4GB up from 3GB. That now gives me twice as much data as Cricket for literally half the price ($15 vs. $30). Insane.

As I’ve noted in the past, I never use all of the data because I spend 95+% of my time at home and work where the WiFi is super fast. Regardless, it’s nice to have an extra GB without not paying extra.

Mint Mobile Review

Name: Mint Mobile

Description: is a low-cost cell phone company or mobile virtual network operator (MVNO) that uses T-Mobile towers.

Overall

4.4

• Pricing
• Network Coverage
• Customer Service
• Ease of Setup

Summary

I use Mint Mobile because of the low prices and good network coverage in my area. If you are hoping to lower your phone, Mint Mobile is a solid option as long as you get good reception in your area.

Pros

• Low-Cost Plans
• Easy Set-up
• Can Use Existing Phone
• Can Keep Existing Number

Cons

• All Plans Are Pre-Paid
• Need Unlocked Phone

• Sign Up Now!

Today I’m sharing my Mint Mobile Review with you to explain why I decided to switch to Mint from Cricket Wireless. Mint Mobile is a low-cost phone plan provider that is helping people save money with less expensive mobile phone plans.

Mint Mobile At A Glance

Plan Cost	Plans start as low as low as $25/month
Plan Types	Prepaid Carrier
Features	You Can Bring Your Own Phone You Can Keep Your Existing Phone Number
Requirements	Unlocked Phone Necessary Plans are available in 3 month, 6 month, and 12 month increments
Sign Up Now

You might remember that I wrote an article last year about how I had saved thousands of dollars over the years by switching to Cricket Wireless from the main cell phone companies like AT&T, Verizon, & T-Mobile.

I loved Cricket (I still do!), but when I started to hear murmurs about a less expensive option, I knew I had to look into it.

To test it out, I made the switch to Mint Mobile from Cricket Wireless, and I had a wonderful experience! After a year using Mint, I decided to renew my contract for another year. It was that good.

For the record, I have to say that I was truly happy with Cricket Wireless and only switched due to cost. I have a couple hundred thousand dollars of student loans so every penny counts.

I recommend both Cricket and Mint Mobile very highly and ultimately, so you should go with whichever service gives you the best reception. If you live in a place where AT&T and T-Mobile both have solid service, just go with the less costly option.

What Is Mint Mobile?

Mint Mobile is a low-cost cell phone service provider that offers plans with unlimited talk and text, and LTE data.

Mint is a mobile virtual network operator (MVNO) that uses T-Mobile towers. MVNO is a fancy term for a mobile phone network that doesn’t own the actual cell phone towers themselves and essentially rents the bandwidth.

From a user perspective, you would have no idea if your phone is serviced by an MVNO or a standard carrier. So you’re just paying less for what you’re used to getting, including the same 4G LTE and 5G networks.

Because Mint Mobile doesn’t own or build the cell phone towers themselves, they can operate at a much lower cost than the major cell phone networks. They pass these savings to customers like you and me via more fair prices.

Just like the way Cricket Wireless uses AT&T towers and bandwidth, Mint Mobile uses T-Mobile towers. This means that as long as you’re in an area with reliable T-Mobile service, you should get dependable Mint Mobile service. That means you get the same mobile internet for a much better price.

How Does Mint Mobile Offer Cheaper Prices?

Unlike Cricket Wireless (and most other cell phone companies) who charge you a monthly price as you go, Mint Mobile plans are prepaid every 3, 6, or 12 months.

This pricing model allows Mint Mobile to offer super competitive rates since they know precisely how much bandwidth to purchase from T-Mobile. They pass these savings onto customers by rewarding customers who agree to longer contracts.

You still get 4G LTE data with wireless service so you can stream and watch your favorite content.

As you’ll see in the pricing table below, the real savings happen when you purchase a more extended plan.

What Are The Different Mint Mobile Pricing Plans?

You can see the plans on the Mint Mobile website.

Their introductory 3-month pricing levels are the same as their 12-month plans. In essence, they are hoping you’ll love the service and price so much that you’ll opt for the 12-month plan… which is exactly what I did!

Which Phones Can Be Used On The Mint Mobile Network?

Any unlocked GSM phone should work on the Mint Mobile network. You can bring your own unlocked phone just like I did. I just popped out the old sim card from my iPhone and popped in my Mint sim and that was it.

It’s important to note that you can still keep your existing phone number when you switch to Mint. Moving your phone number (porting) to the new network is simple.

This means you’ll save a bunch of time and hassle not needing to notify everyone you know that you got a new phone number or worry about missing calls and messages.

If you want a completely new number and start clean, that’s no problem at all.

Why Switch To Mint If You Are Happy with Cricket?

Look, I had zero problems with Cricket’s service. I loved it and have recommended it to anyone who asked us about it.

But ultimately, when you are trying to pay off over $200,000 in student loans, it all came down to the money saved. If you’ve seen our posts on financial freedom or budgeting, you’ll know how vital living within our means is.

Remember, the lower your expenses are each month, the more aggressive you can invest and save.

I want to be able to retire earlier than when we turn 65 years old, so I am hyper-focused on saving as much as possible and earning as much as possible.

Does this mean I will stop working when I am 50? Probably not, but it will mean I will be able to if that’s what I want to do.

So let’s take a look at how Mint compares to Cricket so you can see whether the savings made sense.

If you are on a major carrier, you’re likely paying much more than either Cricket or Mint Mobile!

Comparison: Cricket Wireless vs Mint Mobile Plan Prices

*Prices accurate as of May 2022

**5GB plan not eligible for Auto Pay Credit

Are the savings worth switching?

In short, YES!

This question comes down to two factors. The savings and the hassle involved.

To start, you are essentially getting the same service you pay for now, but at a fraction of the price. You still get unlimited text and talk, hotspot and tether functionality, high-speed data, strong cell service, and you get to keep your existing number and a compatible device.

Let’s address the hassle of switching before I break down the numbers.

The switch was quite simple, and there was a minimal hassle.

The process of switching took me 15 minutes plus the wait for the sim card to arrive since I already had an unlocked phone (I used the same phone I was using on Cricket Wireless).

Now let’s break down my savings!

Let’s compare the 10GB/month Cricket Wireless plan with the 10GB/month Mint Mobile plans since that was the same change that I made initially.

How Does Cricket Wireless Pricing Compare To Mint Mobile?

When it comes to finding a budget phone plan, these are the two clear leaders in the game. Both companies offer unlimited talk and text on all of their plans.

One company uses AT&T towers while the other uses T-Mobile towers. Also, Mint offers prepaid plans to offer additional savings, while Cricket offers the traditional monthly cell phone plans.

Let’s take a look to see how the costs between the two platforms compare.

Cricket 10GB vs. 10GB Mint Plan (3 Month Pricing)

Cricket 10GB vs. 10GB Mint Plan (6 Month Pricing)

At both the 3-month and 6-month prices, Mint Mobile provides savings over Cricket. At the introductory 3-month pricing, it’s $240 per year. That’s a decent chunk of cash!

One critical thing you have to remember is that these savings are only for a single phone line. If you have a family with multiple lines, the savings become huge. That means more money in your pocket so that you can live your best life without stressing out at the end of the month.

Cricket 10GB vs. 10GB Mint Plan (12 Month Pricing)

At this level, the savings over a full year are HUGE!! Like I mentioned earlier, if you have multiple phones in your family, then the savings can make a massive difference.

Over $200 in yearly savings! The catch is that Mint is a prepaid service, but the savings can be enormous.

One thing to note is that Cricket’s pricing drops as you add more lines, while Mint Mobile doesn’t offer family plans. Since Mint is still less expensive for the 12-month plans you will still likely still come out ahead, but you’ll want to compare to make sure. For example, for 5 lines on Cricket with 10GBs, their price is $26 per line. So still more expensive per line than Mint.

The Downsides To Mint Mobile

If you live paycheck to paycheck and struggle with paying all of your bills on time, then having to come up with the extra cash upfront will be a challenge. However, this is also a benefit because once you pay your phone bill, you won’t have to worry about your service being disconnected every month.

For example, with Cricket, you pay your $35 every month (if you have AutoPay set up), but with Mint’s 3-month pricing, you would pay $105 upfront for three months. On the flip side, the other two months you wouldn’t have to pay anything.

If you decide to maximize your savings and go with the 12-month plan, you would pay $240 once and then not have a payment due the other 11 months.

So over the full year, you would pay a lot less. This translates into more money in your high interest savings account or Roth IRA. More money to spend money on the other things that you need most.

What About The Time Value Of Money?

First, it’s fantastic that you think about the time value or opportunity cost of your money. Compound interest is a real thing!

Second, it’s a great question. After all, isn’t there a chance that you’d be better off keeping Cricket so that your money isn’t locked up for 3, 6, or 12 months! That’s money that you could be investing!

Let’s take a look and see.

For example, let’s assume you opt for the annual plan since that is the plan that would require the most amount of money to be paid upfront. Let’s focus on the 10GB plan that I selected.

This plan is $20 per month and is prepaid. With Cricket, you’d be paying roughly $35 for a similar plan every month. That means that during the first month, you’d have $205 extra dollars to invest. With a standard phone plan, you’d be paying even more.

Assuming you make 6% per year on your investments, that’s 0.5% per month. That means that you’d make $1.03 in investment gains from investing the extra $205. Let’s stop right there. You already saw that over the year, you would save $180, so clearly, this more than makes up for the ~$12 per year of investment gains you miss out on by paying upfront.

If you were to compare this to a standard phone plan you would save even more money.

Any way you slice it, saving money on your phone bill is one of the best things you can do to have more money on a regular basis.

Coverage Issues?

I have now been using Mint Mobile for over 18 months and I have had absolutely no coverage issues. I was on Cricket Wireless for several years and also had no issues. In short, these low-cost plans are the real deal.

Like all phone companies, Mint Mobile has stronger signal in certain areas and weaker reception in others.

Before you sign up, spend 2 minutes to check the wireless coverage in your area with their coverage checker. For the vast majority of you, this shouldn’t be a problem at all.

If you live in an area that’s borderline with regards to coverage, Mint Mobile offers a 7-day money-back guarantee, which is pretty sweet.

No Phone Upgrades

Mint Mobile will sell you a new phone at retail prices, so there are no savings if you are looking to trade in your phone or upgrade.

If you want to use the money saved on the plan to get a new phone, you’re better off thinking twice about it.

“I am going to save money by switching to Mint Mobile, so that means I can upgrade my phone, right?”

WRONG.

Apple and Samsung have some of the best marketing teams in the world. We get it. Every time we see one of their commercials, our brains also start to rationalize why we need the latest Apple or Samsung phone.

But that’s the thing: We don’t NEED a new phone.

One of us had the same phone for nearly five years. Was it annoying to type in the passcode each time when our friends could unlock their phones with their fingerprints? Definitely. Did we survive? No doubt.

Based on our personal savings rate, I’d say we did a lot more than merely survive!

So next time you feel like upgrading something that works perfectly fine, remember one thing: you can’t miss what you’ve never had.

If you really can’t make it more than a year or two with the same phone at least do the two following things:

1. Sell your phone (or give it away to someone in need)
2. Put the money you are saving on your cell phone plan into an account each month specifically for your phone (this is called a sinking fund)

By doing those two things, you will never go deeper into debt and can pay cash.

If you can’t pay with cash, then you can’t afford it (this doesn’t apply to large purchases such as a mortgage).

This doesn’t mean actually paying with cash. I use credit cards to get points/cash back but pay them off in full right away. I do this to avoid ever having to pay interest charges on my credit card.

You Should Know That There’s Now Unlimited Data Plans!

You’ll also notice that while all Mint plans include unlimited talk and text, they now offer an unlimited data plan! For most people, it doesn’t matter since you probably have access to WiFi at home, work, or school.

But if you are the person who has no access to WiFi and uses insane amounts of data monthly, then a Mint Mobile Unlimited plan is the real deal!

Switching To Mint Mobile – My Overall Review

When it comes to our phones and plans, a few things are most important to us.

Price, call & FaceTime quality, data speeds, unlimited text and unlimited calling.

For me, there has been absolutely no difference in call or FaceTime quality. I haven’t noticed dropped calls, audio problems, or any loss in data download speeds. Texts and emails have always been coming through on time and rapidly.

However, there has been one BIG change I’ve seen: more money in the bank from saving on my phone bill.

As mentioned earlier, switching was super simple. I kept the same phone number and the same phone (protip: only upgrade your phone once your current phone dies AKA every 3-5 years to maximize savings).

I haven’t noticed any difference in quality from Cricket (which wasn’t any different from AT&T before that).

Initially, I was on the 8GB plan for six months, but I am now on a 12-month 3 4GB plan. I went from paying $150 for six months to $180 for the full year! Before making the switch to a plan with less data, I checked my account to make sure I didn’t need more than that. I couldn’t be happier.

Well, what are you waiting for? Sign up now!

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

FinancePlanToday.com

The post Mint Mobile Review – How I Save Thousands On My Phone Bill appeared first on Finance Plan Today.

The post blew up and we got a bunch of emails and messages asking if the process was actually simple. We decided to throw this guide together to walk you through making the switch from Verizon, AT&T, T-Mobile, or Sprint to a Cricket Wireless plan!

Cricket Wireless Review

Name: Cricket Wireless

Description: is a low-cost wireless phone company founded in 1999. Cricket was acquired by AT&T and operates on their LTE networks.

Overall

4.2

• Pricing
• Network Coverage
• Customer Service

Summary

There’s no denying that cutting your phone bill is one of the best decisions you can make since it’s a recurring payment that you’ll have for your entire life. That means a small monthly saving will add up to large numbers over time. Cricket Wireless is a solid option and if your experience is like mine, you won’t be disappointed.

Pros

• Low-Cost Plans
• Can Use Existing Phone
• Keep Your Existing Number
• Easy Set-up and Migration
• No Long-Term Contracts

Cons

• Need To Unlock Your Existing Phone

• Sign Up Now!

If you have your eye on a Mint Mobile plan instead, the process is SUPER similar. You can’t really go wrong by paying less for your phone plan!

Cricket Wireless At A Glance

Plan Cost	Plans start as low as low as $25/month
Plan Types	Monthly
Features	You Can Bring Your Own Phone You Can Keep Your Existing Phone Number Discount For Automatic Billing
Requirements	Unlocked Phone Necessary $25 Activation Fee
Sign Up Now

Before you get started there are a couple of things that you should do. First off, check the coverage map below and make sure your area is covered. Once you have verified that, you are ready!

To make the switch online here is a simple checklist for you!

#1 Is your current phone unlocked?

You can contact your current cell provider and ask them if your phone is unlocked.

An “unlocked” phone is simply a phone that can be used on another network. This has to do with the setting with your current carrier. Your carrier will walk you through the unlocking process and let you know if there’s a fee.

Switching networks is typically done by taking out your SIM card and putting in another card from another carrier. It’s that easy.

#2 Are you currently under contract with another carrier?

Early termination fees for smartphones are less common now with most carriers having phone installment plans.

AT&T was the last of the major carriers to end two-year contracts for smartphones. But you’ll face early termination fees if you are still stuck on a two-year contract. Don’t forget that you’ll still have to pay off your device before you switch or turn it back in!

Remember, Cricket Wireless does not buy out contracts, pay off contracts, or buy out your current phone.

Once you’ve confirmed you can switch carriers you’re ready to move on!

#3 Is your current phone compatible with the new carrier?

You probably want to keep your current phone and not spend money on a new one. Good call. That is what we did too. Once you decide which company to switch with, you’ll need to check with them to make sure the phone is GSM compatible.

Cricket has a tool to help you determine if your phone is compatible.

You’ll also need your phone’s IMEI number handy. Cricket does a good job of walking you through the simple process of finding it.

#4 Now you’re ready to pick a plan!

You have made sure your phone is “unlocked”, you are not under contract with your current company, and your phone is compatible. Now you can take a look at the different Cricket plans and see which one will fit your needs and most importantly, your budget!

#5 Wait for the new SIM and begin to save that money!

Once you insert your new SIM card into your phone you’ll be ready to go!

The last step is to sit back and watch all the money you’ll be saving. If you aren’t sure what to do with your money, make sure you read our Personal Finance 101 post, and it’ll become crystal clear.

Summary

As a reminder, here are some of the things you can expect when switching to Cricket Wireless:

• Able to bring your own phone and keep your current number
• Lower cost plans plans
• Nationwide coverage through the AT&T network
• No overages or additional fees like other carriers
• All-in pricing (prices already include tax)
• $5 per month discount for using their automatic billing
• Low-cost devices, if you don’t need the latest releases
• More data, less cost
• Over 3,000 stores nationwide

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

FinancePlanToday.com

The post Switching to Cricket Wireless is Easy! appeared first on Finance Plan Today.

While many people carry the financial burden of an enormous amount of student debt, it’s also important to recognize how fortunate we are to live in a country where the government will loan us money to pursue and achieve our dreams.

In many other countries, only those from wealthy and privileged backgrounds have the opportunity to study beyond high school. But here in the U.S., a poor kid raised by a single parent can become a doctor or go to college in the Ivy League.

That’s incredible! And it may sound strange, but I am thankful for the student debt I have because it was the only way I could make my professional dreams come true.

Don’t get me wrong. Despite being thankful for the government’s help in pursuing my dream of being a doctor, I also don’t want to pay them back any more than I have to. It’s a double-edged sword. Lenders make borrowing so easy that many people borrow more than they should, and get into a lot of financial trouble.

I plan to get rid of my medical school debt as quickly as possible. This post will outline my plan for reaching my financial goals. You can use it as a template to pay off your debt too. Whether you have personal loans, business loans, or other debt, I hope this will help you.

My Wife And I Owe $225K In Student Loans, And It Could Have Been A Lot Worse

At the time of writing this post, I owe $198,745.68 in student loans and my wife owes about $25,000 in student loans. That brings our grand total to just about $225,000.

Our minimum payment looks more like a mortgage payment.

Fortunately, we don’t have any credit card debt, a large car loan, or any medical debt to worry about.

With regard to my federal student loan total, it puts me close to the median amount owed by medical school graduates around the country. This includes tuition, living expenses, residency interview costs, and visiting rotation costs (I did two separate month-long rotations away from Mayo Clinic when I thought I was going to be a urologist, but that’s a story for another day).

Special shout-out to the benefactors who generously donated to the scholarships that helped me offset the $55,500 yearly tuition at Mayo Clinic School of Medicine. If it weren’t for them, my student loans could have easily been $300K+, as the yearly cost of attendance with tuition and living expenses is $86,768. That’s an incredibly high amount of money.

In fact, the average debt of all of my med school friends is similar to mine. Higher education is shockingly expensive, but hopefully the trend will reverse so that young people have more money to build a life for themselves!

Unfortunately, Mayo Clinic Didn’t Offer My Class Need-Based Financial Aid

My medical school class was the last class at Mayo Clinic School of Medicine to not offer need-based financial aid (all of the other top med schools offer need-based financial aid).

Every student in my class received the same scholarship, regardless of their ability to pay. That means that I got the same scholarship as my peers from affluent backgrounds whose parents could pay their tuition and living expenses, and therefore graduated with ZERO debt.

I do not say this to complain, but to give context as to how I have so much debt from a school that advertises the lowest average student debt in the nation.

The reality is that just a handful of the students in my class carried the majority of the debt burden. The students in the classes after mine, from similar backgrounds as me, are fortunate to have much less debt than I have.

This is probably more true now than ever since Mayo Clinic School of Medicine recently received a $200 million donation from Mr. Jay Alix. The medical school was renamed to Mayo Clinic Alix School of Medicine (bonus points if you’re able to find me in one of the photos in one of the site’s pages).

I Began To Repay My Student Loans In My Residency Years

I graduated from Mayo Clinic in May 2018 and began my residency in June 2018. In July 2019, I begin my training in radiology at Northwestern University’s hospital in downtown Chicago after I finish my 1 year medical internship (first year of general medical training after med school). The internship is a prerequisite for my radiology residency.

I will spend a minimum of 4 years in Chicago training to be a radiologist. During residency, all residents at the hospital get paid the same amount regardless of specialty and the salaries are based on your year of training.

Salaries are funded through Medicare and are published online. To see resident salaries for the residents at Northwestern click here. I’ll save you the trouble – since I will be a second-year resident I will make $62,124 (before taxes).

My paycheck every two weeks will come out to roughly $1,740. If I contribute to the 403B (like a 401K except for not-for-profit organizations), my take-home will be even lower.

That salary will need to cover our living expenses (rent, food, utilities), insurance (renters, disability, life), daycare, retirement (401K match), other expenses (clothes, gifts, any travel, etc.) and last but not least, student loans.

As you can see in the image below, I would need to pay $2,156 each month under the standard repayment plan (120 monthly payments).

With the cost of childcare in Chicago ranging from $1,600-$2,200 per month and rent in that same range, you can imagine that it is impossible to cover all of the expenses on resident’s salary when over 40% of your income goes to cover student loan payments.

I Am Eligible For An Income Driven Repayment Plan (and PSLF!)

Enter the Income-Driven Repayment (IDR) plans. These are plans available for those with federal student loans that use one’s income to calculate payments.

The four IDR plans are:

1. Pay As You Earn (PAYE)
2. Revised Pay As You Earn (REPAYE)
3. Income-Based Repayment (IBR)
4. Income-Contingent Repayment (ICR)

Since I will be an employee at a non-profit hospital, it makes financial sense to work towards PSLF. PSLF is a program that the federal government offers to incentivize federal loan borrowers to work in public service jobs. In return for 10 years of service, they will forgive your remaining student loan balance.

Qualifying for student loan forgiveness is pretty straightforward, but you have to make sure to follow all of the steps perfectly. It seems like the Department of Education is finding any excuse possible to not forgive loans!

In order to qualify for Public Service Loan Forgiveness (PSLF), you must make 120 monthly payments (12 payments for 10 years) under one of the four IDR plans.

Thus far, I have chosen to repay my student loans during my residency with REPAYE. With REPAYE, the monthly loan payment is set at 10% of your discretionary income.

Discretionary income depends on your income and household size. The more you make, the more you pay (higher discretionary income) and the larger your family, the less you pay (lower discretionary income).

There are many online calculators including this one from studentloans.gov that will use your actual loan balance to calculate payments under all the different payment plans. As a federal loan borrower, you have more flexibility with repayment plans that private loan borrowers. Just log in with the same info you use to fill out FAFSA and it will calculate your payments on your actual loan balance. I use this calculator at least once or twice a year to ensure that I am on the plan that makes the most sense for me.

My Monthly Payment Under The REPAYE Plan Doesn’t Even Cover The Monthly Interest Charge

Under REPAYE, my monthly payment is not enough to even cover the monthly interest on my loans. That means, that despite making monthly payments, my loan balance will continue to go up.

One of the perks of REPAYE is that, if your payment does not cover all of the interest, they will pay 50% of the unpaid interest each month on unsubsidized student loans. So if your loans accrue $900 dollars a month in interest (like mine do) and your monthly payment is $400 dollars, the government will pay 50% of the difference as follows: $900-$400=$500; $500 x 50% = $250.

That means that each month your student loans will only accrue $250 of unpaid interest instead of $500. That’s a good thing for you but a bad thing for your lender.

Don’t forget to use the repayment calculator after every change in household size or promotion at work. Just because REPAYE is the best plan for me this year, doesn’t mean that it will be the best plan for me next year. You may be surprised by the difference a change could make to your payment.

If you have a high earning spouse, it is probably worth looking into filing taxes as “Married Filing Separately” and using PAYE, since REPAYE will take your spouse’s income into account regardless of whether you file jointly or separately.

Even with the reduced monthly payments for my student loans, it would be nearly impossible to cover all living expenses outlined above in a higher cost of living city. Though Chicago is not wildly expensive like San Francisco or NYC, it’s not exactly like my hometown in Minnesota either.

Without My Wife’s Help, It’d Be A Lot Harder To Make Ends Meet

Fortunately, I have another resource to help: my wife. She will also work to help make ends meet. She also has about $25,000 in student debt we will be paying off.

Our goal for the next four years of residency will be to avoid taking out ANY more debt. This means renting an apartment instead of buying, not financing anything we can’t afford (cars, vacations, phones, etc.), and most importantly living within our means.

The single most important factor that will allow us to be successful in minimizing our debt during my training will be sticking to our budget. We’ve been budgeting regularly for a while now, and it allowed me to borrow less money for medical school.

At the end of each month, we sit down together and make our budget for the following month using our Excel budget template (those new to budgeting may prefer to do it on paper the first couple times so you can take additional notes that are easy to track).

One awesome hack I use to save money is using Mint Mobile to save thousands of dollars on our cell phone bills. Make sure you check out how I did it.

Having a partner that is NOT the same page financially is quite frankly, the quickest way to derail any financial plan.

For those of you that aren’t married, don’t put off discussing money until you are engaged. You don’t want any surprises about your partner’s debt or spending habits and vice versa. Once you get married there is no more ‘my debt’ and ‘your debt’. It’s both of your debt.

If you are married and you have a spouse that doesn’t agree with your perspective, don’t give up after the first try. It could take months and many attempts to get your partner to agree to have a meeting to discuss your monthly budget. They may not understand that a budget can actually greatly enhance your life.

My Post-Residency Years Will Be Focused On Becoming Debt-Free And Building Wealth

Getting through training while trying to keep our overall debt burden as low as possible is just the first step.

By the time I finish my training, I will be closer to 40 than I will be to 30 years old, will owe over $225,000, and will be light-years behind my non-medical peers in terms of homeownership and retirement savings.

What will allow me to catch-up and surpass my peers will be my earning potential combined with a disciplined budget and an equally motivated spouse.

Regardless of whether I pursue PSLF or not, I should be able to pay off my student loans within 5 years.

If I choose to not pursue PSLF (if I don’t accept a full-time job at a non-profit medical practice), I will refinance my student loans to a lower rate.

I will only do this if I am 100% sure I do not want to pursue PSLF, as you are no longer eligible if you refinance through a private lender. Quickly paying off our student loans will only be possible by sticking to a rock-solid budget, avoiding lifestyle creep (the silent money thief), and focusing on mindful spending.

There’s A Lot Of Ways For Student Loan Borrowers To Handle Repayment

My repayment strategy for my 200k student loan debt consists of keeping my living expenses as low as possible so that I can leverage my future high income as a physician to repay my debt aggressively.

From a technical standpoint, I will use the debt avalanche method (paying down my debt based on the highest interest rate first) to handle my debt repayment. However, it’s worth mentioning that the debt snowball may be a better technique for some of you.

The debt snowball consists of prioritizing your debt repayment based on the debts with the lowest balance. That means that you ignore the interest rates and just knock out the lowest balance first. this method has risen in popularity because it’s endorsed by Dave Ramsey and his baby steps.

This may seem counterintuitive, but it has been found to help borrowers with high student loan debt stay focused and it provides a mental boost to keep you motivated. You can say it’s a type of psychological repayment assistance!

Whether you use the avalanche or snowball method, the goal is to pay the loans as quickly as possible over the repayment term.

The money saved in interest could be the difference in having enough money for the down payment on a house or not!

Student Loan Refinancing Can Have Multiple Benefits

It’s also worth mentioning that if you have a huge amount of student loan debt, you likely have many different loans to manage. This can be a combination of a private student loan and a number of federal loans. For that reason, student loan refinancing can also provide a huge organizational benefit.

When you refinance, you essentially replace all of your existing student loans with a new single student loan. That means you only need to worry about one interest rate, one payment date, and one loan servicer. Student loan repayment is so confusing, and all of these potential moving parts don’t help.

The financial benefit of refinancing is the largest for someone with a strong credit score. If you have bad credit you may not save any money at all. But those with excellent credit can stand to save thousands of dollars in interest if they qualify for low-interest rates.

Student loans typically carry much lower interest rates and borrowing fees than a personal loan, which is why you’ll only want to refinance from a student loan refinancing company like ELFI or Earnest. This will ensure that you get lower interest rates and work with a student loan servicer that understands your repayment terms.

Thankfully, We Know That Buying Things Doesn’t Bring Happiness

Growing up poor doesn’t give you many advantages in life, but it certainly gives you one advantage: you don’t miss what you’ve never had. I’ve never had a luxury vehicle or a large home. My wife hasn’t either. This will allow us to live a comfortable and simple life, free from large car payments, 5-star resorts, and eye-gouging mortgage payments.

We know that none of these things will provide us with sustained happiness and will derail our plans. Sticking to our plan is what will allow us to beef up our retirement savings and make up for all of the lost time during medical school, residency, and fellowship.

Remember, when it comes to investing and compound interest the most important factor is time.

Once we are completely debt-free and have made significant ground in our retirement savings, we will continue to be aggressive savers and investors. This means putting away at least 20% of our gross income into tax-deferred accounts, taxable accounts, and other investments. The other 80% will go towards, living expenses, traveling, hobbies, charity, and of course, taxes.

These post-residency years will likely be our peak earning years and we expect to be in a high tax bracket.

As a rehabbed impulse shopper, having a tight budget is what keeps me in line. With a rock-solid plan, I wake up each day with my eye on the prize. I also sleep better at night knowing that if something were to happen to me unexpectedly my family will be taken care of.

Not only would my family get my assets, but I have term life insurance to ensure my family won’t suffer financially if I were to die before we reach financial independence. Losing your dad when you are seven years old will teach you these things.

Financial Independence Is a Marathon Not a Sprint

This is a glimpse into how we are attacking our combined debt as quickly as possible. And my plan for how to pay off student loans.

Whether you have more or less debt, these principles can be applied broadly. It’s important to remember that you only live once and you should enjoy your life. Life doesn’t begin in the future. Life won’t start once your debt is paid off or when you get that one thing you’ve always wanted. It’s all about the journey you take along the way.

Despite living with a tight budget with an eye on our life in the future, I enjoy my life every single day. Other than wishing I was able to travel more, especially to visit family domestically and abroad in Colombia or friends living abroad, I don’t feel like I am missing out on anything.

While I don’t have everything I want, I have everything I need. And in life, that’s the most important thing – especially since I know being wealthy is better than being rich. Your financial situation doesn’t have to define your life. You just have to do your best.

Update: Those of you with student loans (AKA probably every person reading this article) are likely well aware of the Automatic Temporary 0% Interest and Administrative Forbearance due to COVID. My monthly $400+ loan payments are currently on hold, but more importantly the loans are set to 0%. That in and of itself will save nearly $10K this year (and more if it gets extended beyond 9/30/21). I’m still not sure if I will pursue PSLF, but these $0 payments will count towards PSLF qualifying payments!

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

FinancePlanToday.com

The post How I’ll Pay Off Over $200K In Student Loans appeared first on Finance Plan Today.

Make sure you don’t miss my Mint Mobile review! Both Mint and Cricket offer compelling products at a fraction of the prices of the major carriers.

Let’s be honest, living without a cell phone seems nearly impossible for most people, so finding a cheaper alternative is your best bet.

Cricket Wireless Review

Name: Cricket Wireless

Description: is a low-cost wireless phone company founded in 1999. Cricket was acquired by AT&T and operates on their LTE networks.

Overall

4.2

• Pricing
• Network Coverage
• Customer Service

Summary

There’s no denying that cutting your phone bill is one of the best decisions you can make since it’s a recurring payment that you’ll have for your entire life. That means a small monthly saving will add up to large numbers over time. Cricket Wireless is a solid option and if your experience is like mine, you won’t be disappointed. Regardless of which company you ultimately go with, Cricket Wireless deserves to be a part of the conversation.

Pros

• Low-Cost Plans
• Can Use Existing Phone
• Keep Your Existing Number
• Easy Set-up and Migration
• No Long-Term Contracts

Cons

• Need To Unlock Your Existing Phone

• Sign Up Now!

It’s hard to imagine a time without cell phones. For many people, it’s the first thing they see in the morning and the last thing they see at night.

We aren’t here to curb your cell phone addiction, but rather help you pay less for your phone bill.

Today I’ll focus on how to save money on your cell phone bill.

Because cell phones have become an essential device in everyday life, one would think there would be tons of options when it comes to cellular service. But in reality, there are just a handful of large carriers.

As phone screens get larger, so do the monthly prices cell phone companies charge us. In an effort to reduce our monthly bills we searched until we found the cheapest phone plans. This was back in the fall of 2014, and in the years since we made the switch, we’ve each saved over $1,500!

The savings add up quickly and compound over time!

Cricket Wireless At A Glance

Plan Cost	Plans start as low as low as $25/month
Plan Types	Monthly
Features	You Can Bring Your Own Phone You Can Keep Your Existing Phone Number Discount For Automatic Billing
Requirements	Unlocked Phone Necessary $25 Activation Fee
Sign Up Now

Why we jumped to Cricket from AT&T

We chose to switch from one of the large carriers to one that was more affordable. 

Ultimately, for our needs, Cricket Wireless was the best deal. You can easily port over your existing cell number, and all you have to do is just make sure your phone is unlocked and compatible with their network.

They likely won’t buy out your existing contract so you might need to get creative if you are locked in with your carrier.

When we made the jump, there weren’t any physical Cricket Wireless locations near us, so everything was done online. They mailed out a SIM card within a week and we were set. We do think it’s worth noting that Cricket is owned by AT&T, but their pricing and flexibility would lead you to believe they are unrelated.

The low-cost phone carriers like Cricket have a variety of plans available.

Cricket, in particular, has plans ranging from $25 (no data) to $60 (unlimited data) and everything in between. Their monthly prices also include all taxes and fees! No more hidden fees in the fine print that show up on your bill. But you should take into account a $25 activation fee.

We opted for a plan in the middle of their range since we don’t need unlimited high-speed data with WIFI access at home and work.

Cricket Wireless Reception

One thing a lot of our friends have asked us is if we have noticed worse reception or coverage.

The good news is that we have not, and we actually think we have fewer dropped calls now. The one time we felt we had worse service was on a trip to a remote part of Vermont. Some of our friends with AT&T still managed to get 1 bar of service in the middle of nowhere. If you live out in a forest it’s probably worth looking into before making the switch, but the 99% of you that live in a city or suburb will be more than fine.

We never had a problem with service and were pleasantly surprised that we felt we got the same product for less!

What’s The Catch?

The biggest thing to know is that there isn’t an option to buy a new phone at a discounted price. At least for the ‘latest and greatest’ models of iPhones and Samsung phones. You also can’t pay for a new phone on a monthly basis without running that chance of paying interest.

When we get new phones we pay the full price of the phone outright, which is not cheap. But when you run the numbers, paying for the phone outright is the optimal choice anyway.

However, we recommend that you do not upgrade your phone every year and wait until it is absolutely necessary. Believe it or not, an iPhone can last years! We just don’t recommend upgrading the operating system very often since that can slow you down. If it ain’t broken don’t fix it!

Contrary to all of the iPhone and Samsung Galaxy commercials, you do not need to upgrade to the latest phone every year. We promise that the people on the other end of the line (or text thread) cannot tell whether you are texting or calling on an iPhone 4s or iPhone X. If you are the kind of person who needs the latest and greatest phone regularly, please read our article on lifestyle creep. 

With that said, there are many cheaper alternatives to iPhones. We know plenty of people that are happy with many types of phones (Samsung, LG, Motorola, HTC). Remember, a phone is just a tool used to communicate, stay organized, and take photos. It’s not your identity and it is not who you are. If your phone defines who you are, then personal finance is probably the least of your worries!

Once you build your net worth you can splurge on a phone.

Bring Your Own Phone

When we first switched, we simply unlocked our phones and kept our existing iPhones. You can use this tool to see if your current phone will work on their network!

How Much Can You Save Each Year?

Cricket Wireless is not the only low-cost cell phone company on the market. Cricket is simply one of our favorites, has great coverage where we live, and has only gotten better over time. In fact, a few months ago we got a text message from Cricket saying that they were increasing the data on their data plans at no additional cost!

So how much can this actually save you? Look at the example below.

Note: The information in the table below is accurate as of 03/2018; Verizon, Sprint, and T-Mobile do not offer a 5GB plan.

These are not the cheapest plans available, simply the cheapest equivalents plans (equal amounts of data). For our plans, we signed up for Cricket’s auto-pay to save an additional $5 each month, which is a no-brainer. Who wants junk mail, anyway? Not me.

We saved $540 a year. With no noticeable change in service or quality.

By choosing the Cricket Wireless plan with automatic payments from the example above you’d save $540 each year ($420 vs $960)! That’s half a grand you can save each year or use to pay down your high-interest debt like credit cards! Or use it for your family’s Christmas celebration.

If your current plan is even more expensive, or you’d be switching multiple lines for your family, you’d be saving even more. Multiple lines will make the savings add up quickly.

We used this information to convince our friends and family to switch to Cricket Wireless almost 4 years ago. Needless to say, they still thank us when they get their phone bill. We encourage you to do the same!

Ready to Switch? Read our step-by-step guide now!

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

FinancePlanToday.com

The post Cricket Wireless Review: How I Saved Thousands On My Cell Phone Bill appeared first on Finance Plan Today.

While the reasons are complex and beyond this article’s scope, budgeting is a tried and true method of establishing solid financial footing. Instead of reacting to expenses as they arise (or as they are created), budgeting allows one to make a plan for each earned dollar ahead of time. Every single dollar has a purpose.

By creating a game plan for every dollar, you can ensure that you are also allocating money towards debts and savings instead of simply creating more debt to cover growing expenses. 

Simply put, spending money is easy. Far too easy. It’s not hard to imagine how one could effortlessly spend their entire paycheck and then wonder where the money went at the end of the month. Actually, you probably don’t need to imagine it at all, because that’s how most people do it.

Needless to say, an unplanned expense or unexpected decrease in income is enough to shatter any sense of security.

Envelope Budgeting

Amongst the many premium budgeting services available, You Need A Budget (YNAB) has established itself as a favorite within the personal finance community. 

Despite the success that many have had with YNAB, we’ve had readers write in and ask for help because they are still overspending despite having a solid budget in place. Have you ever struggled to stick to a budget? For those who struggle with sticking to their budget, a physical envelope system is a more rigid and literally tangible budgeting method.

When using a physical envelope budgeting system, one goes to the bank in person and withdraws all of the cash needed to cover their budgeted expenses for the month. The cash is then physically divided into each budgeting category (groceries, gas for the car, entertainment, etc.). 

Once the cash runs out for any particular category, one has to wait until the following month to refill the envelope before spending any more money. If you are very disciplined, you won’t borrow money from one envelope if you overspend in another.

While this is undoubtedly a surefire way to prevent overspending, there is typically one complaint that many have shared: managing the cash and having to carry it around can be quite a hassle. It’s also cumbersome to track where you spend money unless you keep very detailed records and save receipts.

Qube Money is the new kid on the block when it comes to budgeting. Their product is the answer to those who want to stick with a strict envelope budgeting system but want to leave the cash behind. Before we get into the details, let’s learn a little more about each company to compare them and finally see which product is better.

So what is Qube Money? 

Qube Money is unique in the budgeting sphere because it combines the power of digital envelope budgeting with the convenience of online/digital banking. Their technology allows you to spend money from each envelope (they refer to them as “qubes”) digitally. No cash necessary. Basically, it’s the cash envelope system for the digital age.

How does Qube Money Work?

Qubes are the digital envelopes that you allocate your money into each month. Instead of using real physical envelopes to distribute the cash, you divide up your checking account into individual “qubes,” which you can think of as sub-accounts of the primary checking account. 

Before making a purchase using the Qube Money check card, you select which envelope you want the transaction to pull from and proceed through the transaction. The data then updates, and you see your new remaining balance. 

Much like a physical envelope, if you don’t have enough money within a qube, you won’t be able to spend the money. There are no overdrafts, so the transaction will be declined if there are not enough funds in the allocated qube to cover the total. 

To illustrate how this works, imagine you are standing in line at the grocery store. You have a cart full of food, and you have $300 allocated for your groceries for the month. While the cashier rings up the person in front of you, you pull out your phone and select your grocery qube. You move the 300 dollars over to the card, and you’re ready to go. Once your groceries are rung up, the total is $150. The transaction clears, and the remaining $150 is returned to your grocery qube for next time. 

No logging is needed, as that transaction has already been attributed to the grocery store qube. It’s similar to logging transactions, except you’re logging them before the transaction rather than after. 

This is an excellent feature because your budget will always be up to date. If you’re like me, you may sometimes forget to track an expense or update them weekly. Qube Money eliminates this aspect of digital budgeting, which isn’t often discussed.

How Much Does Qube Money Cost?

Qube Money has announced four plans. Your needs will dictate which plan is right for you. The “Basic” plan is free ($0) per month. This plan is an individual plan with 10 qubes.

The “Premium” plan includes the same services as the free plan but has additional features such as unlimited qubes and the ability to get more than one card if you share finances with a significant other/partner/spouse/etc. The premium plan is $8 per month. 

A Family plan is $15 per month, and in addition to the features of the Premium plan, it allows you to add up to 10 kids accounts. There is an upcoming ‘chore tracking feature,’ which could be a motivator for task-oriented families. It’s clear that the app was designed with families in mind.

For $25 a month, a Platinum account gives you access to all of the features of the cheaper plans in addition to rewards, benefits through corporate partners, access to additional training, and a sleek metal card.

What is YNAB?

You Need A Budget (YNAB) was initially released in 2004 to help users break the cycle of living paycheck-to-paycheck. YNAB is like a digital envelope budgeting system in the sense that you bucket your money into groups. Not only do you budget for monthly expenses, but for future spending as well (car or home repairs, trips, etc.). 

How Does YNAB Work?

YNAB is a budget and expense tracker that can integrate with banks to sync information and import transactions, but it does not offer banking services. You can also manually enter transactions.

While initially available for purchase as a stand-alone piece of software, YNAB eventually transitioned to a web-based service with a subscription. Seems like that’s how everything is nowadays. 

Since YNAB is not affiliated with a bank, you can spend your money however you would like. Cash, credit, or debit. Doesn’t matter. Just track your transactions (or import them) and go from there.

The software allows you to see reports and track your net worth. 

How Much Does YNAB Cost?

YNAB offers a monthly subscription and a yearly subscription. The monthly plan is $11.99, and the annual plan is $84.

Key Differences between Qube Money and YNAB

While both YNAB and Qube Money are envelope-style budgeting systems, I think the most significant difference is that Qube Money is wholly integrated with a bank, and YNAB is not.

If you struggle with sticking to your budget, Qube Money really behaves much more like a true cash envelope system. While you can work around your envelopes and spend more than you have, the system is designed to keep you on track. No guessing involved. You either have the money or don’t—no spending money and then trying to fudge the numbers or pull money from another category.

The fact that you have to open the app and see your remaining balance also acts as an accountability mechanism so that you are less likely to make an impulse purchase that you weren’t planning. We’ve all been on Amazon’s website and purchased something random that we didn’t need urgently. However, seeing that it’ll have to come from a qube you need for other things may just be enough of a deterrent to keep you from spending frivolously.

Another consideration is that since you’ll need to use your Qube card for purchases, you won’t be able to get the credit card rewards you might be used to. However, for anyone struggling to stick to their budget, that shouldn’t be a huge priority!

Again, Qube’s advantage here can’t be overstated; this can be a powerful tool in the sense that before each transaction, you are forced to open up the app and look at your balances. This constant reminder of your budget could be an underestimated influence on your attitude toward spending and maybe just what you need to curve your spending or alter your habits.

Qube vs YNAB Pricing

So Which is Better? Qube Money or YNAB?

Like most things in life, it depends.

Budgeting is very similar to dieting (sorry for the health-related analogy, but as a physician, I just can’t help myself). The most successful diet is the one you can stick to. Although following a 100% plant-based raw diet can help you lose weight and prevent chronic disease, it won’t work if eating that way is not sustainable for you.

Similarly, it doesn’t matter if cash envelope budgeting is the most effective way to curb unwanted spending if that’s not sustainable for you.

If you have tried budgeting on your own and had trouble sticking to it and not overspending, then Qube Money may be the perfect tool you need to take control of your finances.

Qube also has the ability to allow your children to learn how to spend responsibly since the family plan allows them to receive cards as well. Financial experts agree that the sooner children learn to manage money responsibly, the better their financial outcomes will be later in life.

On the other hand, if you can stick to your budget and want a robust budgeting system that can generate reports and calculate and track your net worth, then YNAB may be right for you.

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

FinancePlanToday.com

The post Qube Money Vs. YNAB (You Need A Budget) | The Envelope Budgeting App Showdown appeared first on Finance Plan Today.

And that includes the inexpensive monthly subscription boxes and shaving clubs. If you have sensitive skin, you especially need to keep reading.

The discount shaving industry has gotten a lot of press over the years. Dollar Shave Club grabbed headlines when Unilever acquired the company for $1 billion. Harry’s, another shaving startup, has gotten attention for also helping to lower the cost of shaving via their Harry’s razor. After all of the press, you’d think these companies provide the cheapest way to shave.

Except they don’t!

What the press has failed to recognize is that these discount shaving companies aren’t the best and cheapest way to shave. In fact, these disposable cartridge razors don’t even provide the best shaving experience. Stop paying for overpriced shaving cartridges! I have a much better alternative for you.

I mean, unless you’re the kind of person that likes to waste money for no reason.

Even these low cost startups that promise razors and cartridges for $1 dollar/month add a couple bucks for shipping and handling. In reality, their average customer will pay between $6-$8 per month for upgraded cartridges.

We are going to show you how over the past 6 years we have paid an average of 30 cents (yes, $0.30) a month to keep our faces cleanly shaven. But first, we introduce you to the double edge safety razor, which is the cheapest way to shave! And no, buying a cheap razor doesn’t mean you are sacrificing on the quality of your shave – quite the opposite.

What Are Safety Razors?

Ever wonder how your grandfathers shaved before razor cartridges and the electric razor? They used a safety razor. These things were built so darn tough and worked so well that Gillette had to invent a disposable razor to combat falling sales.

A safety razor uses double-sided razor blades, which is how this is such a cost-effective way of shaving. In many ways, the shaving industry is similar to the printer and ink cartridge industries. The ink cartridges are where the companies make all of their money. That’s why they are so expensive and are priced artificially high. Similarly, the big shaving companies all make their money on the shaving cartridges.

You can avoid paying crazy prices by forgoing the cartridge razor altogether and shaving with a safety razor. By utilizing extremely affordable razor blades, the safety razor is easily the cheapest way to shave. No artificial markups for no reason other than to profit off your desire for a smooth face.

To get started all you need is a safety razor handle and double-edged razor blades. If you want to impress your grandparents, ask if they still have a safety razor you can have. Some of them might use a straight razor (where the blade folds into the handle), but that’s different.

If getting a free one from home isn’t an option, this is the one we used to get started.

Don’t spend more on another one until you are committed to the safety razor lifestyle. Once you’ve used a cheap one for a while, we recommend getting one that’s easier to load and unload for convenience.

This is the one we both use now:

As we mentioned earlier, the real savings come from the fact that razor blades are dirt cheap. For $10 you can buy 100. You read that right, 100! That’s $0.10 (a dime) apiece.

The box of 100 can last somewhere between 2-5 years depending on how often you shave and how often you change the blade. In our experience, changing the blade every 10 shaves is conservative and you can even get more mileage than that out of each one. Some people change them much more often, but we haven’t had any problems with using them longer.

If you grow a beard like Paul Bunyan, then you might need to replace them more often, but the same thing would apply to conventional shaving cartridges. 

Do You Actually Get A Better Shave?

Undoubtedly. This is one of the rare times when the least expensive method is actually far superior to the alternatives. While I’m a doctor, it doesn’t take an M.D. to realize the benefits of shaving with a safety razor. To begin, you have to understand that a safety razor is much better for your skin for several reasons.

The multi-blade cartridge razors like Gillette are designed to give you the closest shave possible at the expense of your skin. If you use a multi-blade cartridge, you probably like how smooth it leaves your skin. These multi-blade cartridges work by having the first blade grab and pull your hair while the subsequent blades do the cutting. In fact, they often cut the hair shorter than the surface of your skin.

What this means is that the day you shave you’ll have an incredibly smooth shave. However, the following day you may have tons of razor bumps, ingrown hairs, or razor burn.

Think of your hair follicles as blades of grass that are stretchy like rubber bands. What if instead of a normal lawnmower that travels across the surface of a yard, you had a machine that would pull the blades and stretch them out first before cutting. Surely, some of the roots would get stuck below the surface of the soil and have trouble coming to the surface. This is a perfect recipe for an ingrown hair.

This was actually one of the reasons we decided to try something different.

The safety razor helps you avoid those painful and unsightly side effects.

The safety razor is designed to cut the hair on the surface of your skin instead of pulling it and cutting it shorter. What this means is that your skin will have much less irritation and you’ll have fewer bumps and ingrown hairs. There are tons of instructional videos on YouTube to help guide your first couple of shaves until you’re a pro.

These are the blades we love:

Money Savings

Before switching to the safety razor in 2012, we were doing what everyone else does. We overpaid for the fancy razor cartridges with 3 or 4 blades. We spent approximately $10-$15 a month ($180/year) on cartridges. Yikes. 

From 2012-2017 that’s $900 we would’ve spent on shaving products! Since switching over we have spent a grand total of $50 (1 safety razor and 2 packs of razor blades). We have saved a grand total of $850 since switching. $850 dollars is already a big number, but when you take into account the impact of investing that money it makes a big statement. Investing $850 in a stock market index fund from 2012-2017 would have grown to about $2,000!

That’s an extra $2,000 in your portfolio that will keep compounding while you sleep.

If you use Dollar Shave Club you can still stand to save a lot by switching to a safety razor.

Dollar Shave Club costs either $3, $6, or $9 per month depending on the quality of the razor blade cartridges you desire. If we look at the middle of the pack option, we’d still be paying 20x more per month. Now you can see why these shaving companies spend so much money on advertising to convince people that they deliver the “best” shave.

Heres’s a table comparing how much we saved by not using a “discount” shaving option like dollar shave club or Harry’s.

If the best and cheapest way to shave doesn’t sound appealing, then we don’t know what else to tell you!

One final consideration is the fact that using a reusable razor with safety razor blades is better for the environment. These blades and razors don’t contain plastic and can be used many more times. They can eventually be recycled and repurposed which is an added bonus if you love Earth as much as I do.

Shaving Tips

We’ve heard from a number of you who have purchased a shaving handle, blades, a brush, and cream and are ready to go.

The biggest difference between shaving with a safety razor is that you don’t want or need to press the blade against your skin. You simply let it touch your skin and then let is glide across the surface. When using a cartridge system it may seem like you get better results when you press firmly against your skin. The opposite is true here.

Avoid pushing into your skin. Simply let the weight of the handle itself do all of the work. We recommend 2 passes over your face. The first will be moving with the grain, and the 2nd (for those who want a closer shave) will be across the grain. Make sure to reapply shaving cream in between passes! We don’t shave against the grain, but if you plan to shave your legs (many do) just find a video so that you can be a pro!

This is the reason that shaving with a safety razor is far superior to a cartridge system! Remember, this isn’t only the cheapest way to shave, but also the best.

If you’re coming from using a cartridge system, we recommend watching a Youtube video of how to shave with a safety razor so that you can get the best results.

Other Considerations For Safety Razors

It’s pretty clear that we’ve had incredible results shaving with safety razors both in terms of our finances and shave quality. But there’s a few things you should keep in mind.

First, you cannot bring a safety razor blade on an airplane with you. The TSA will see them in the x-ray machine and confiscate them. If you plan to travel with the handle that holds the blades, make sure you remove the blade first. The TSA will likely see it in the x-ray machine and inspect the handle regardless. If you are a road warrior and fly for work constantly while needing to shave daily (hello grizzly IT and management consultants), then you need to think carefully about your optimal shaving strategy.

Secondly, and this applies to ALL types of razors and shaving equipment, make sure that you store things in a safe place where children and pets can’t reach them. If you have children who see you shave, they will undoubtedly want to emulate you, so just be careful. These puppies are sharp.

Lastly, go forth and enjoy the best shave of your life. Oh, and don’t spend all of your new-found cash in one place.

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

FinancePlanToday.com

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Most other kids were playing hide-and-go-seek. I wanted to be Doogie Houser. I am one of the lucky ones who knew at an early age what I wanted to be when I grew up.

Over 20 years of school later, I am finally a doctor and I can barely believe it. Maybe it’s from the lack of sleep, but either way, it’s hard to believe. When I set my sights on becoming a doctor I honestly didn’t realize how long and difficult the process would be. I don’t think most people realize the sacrifices required to become a physician. Especially if you come from a poor family. If you are only in this field for the money, that desire won’t be enough to get you through the years of training. Not even close.

I feel lucky to be where I am, but that doesn’t mean the path was easy.

And yes, there are still days when I start to wonder if I made the right decision. But then I remember exactly why I went into the field the instant I connect with a patient or figure out their diagnosis. I honestly can’t imagine doing anything else.

Preparing for medical school forces you to be 100% focused on only one thing: medicine. If you take your eye off of the prize, you’ll have a misstep along the way and your hopes of becoming a doctor will be out the window. The weeder classes in undergrad, the MCAT, the tests, endless interviews for med school and then residency, and board exams. A series of hurdles – each more difficult than the last.

My Time At Mayo Clinic School of Medicine Was Transformational

From 2013 to 2018, I had the opportunity to attend my dream medical school, Mayo Clinic School of Medicine. As the medical school with the lowest admissions rate in the country, I still need to pinch myself to believe my good fortune. During my time at the world-famous Mayo Clinic, I transformed from the young doctor-wannabe to a budding, hard-working physician-in-training.

I was surprised to learn that the traits required to be successful in this competitive environment are also essential to reaching financial goals. The lessons I learned can help anyone save hundreds of thousands of dollars over the course of their life and I want to share them with you.

1. I Learned Discipline – Both Academic And Financial

During medical school, I spent thousands of hours studying and taking care of patients. After a long day at the hospital, the only thing on my mind was going home and relaxing on the couch. However, my “work” for the day was only half done. I would get home and study until it was time for bed. These grueling years taught me the discipline to do what needed to be done instead of what I wanted to do.

If I took a few days off to relax, the next set of exams would punish me by reminding me that no amount of studying was more painful than doing poorly on a test and being reminded that not everyone graduates. Failure wasn’t an option for me. Our mom sacrificed everything to bring us to this country and I knew I’d have to help care for her in the future.

This discipline allowed me to be successful in medical school and it transferred over to other areas of my life. It was during medical school that I began to use a monthly budget to minimize the number of loans I would need to obtain. We boiled down the budgeting process for you, so that you can also follow the same steps that saved me so much money.

This discipline eventually turned into a habit. The discipline to stick with the budget translated to saving tens of thousands of dollars. Over the course of my life, this habit will easily save me hundreds of thousands of dollars.

2. I Mastered My Ability To Delay Gratification

After our father died from a brain tumor when I was 7 years old, my desire to be a doctor grew stronger. I wanted to help heal other people so their time with loved ones wouldn’t be cut short the way my dad’s was. This goal would take me another 24 years of education to accomplish. I knew it would be a long and difficult goal to attain.

Not a single day goes by when I don’t think about him and how I’d do anything to spend another minute with him. My desire to give other people more time with their loved ones is what drives me to push ahead when I am tired, sleep-deprived, and hungry.

By the time I finish my training, I will have completed 15 years of school and residency AFTER high school. That is 4 years of college, 4 years of medical school, 5 years of residency, 1 year of research during medical school, and 1 year of fellowship training. With the odds stacked against me, I have taken advantage of many opportunities to achieve my goals. There aren’t many Latinx immigrants raised in poverty by a single mom who become doctors. Though I am still in training, a huge milestone was achieved in May when I graduated from medical school and earned the title of Doctor. About time, right?

We all have a common long-term goal to reach financial freedom. It takes even longer than medical training, so you have to stay focused.

But saving for retirement requires an even LONGER path. It requires you to set a goal in your early working years (20s-30s) and work toward it for 30-40 years (or more!). Just like becoming a physician, saving enough for retirement will require sacrifice. It all boils down to making small decisions each day that will get you closer to achieving your goals.

This highlights the importance of setting short and long-term savings and investing goals so you can work toward them. Our retirement calculator is a great place to see how much money you’ll need for retirement. Keeping my sights on the finish line during medical school taught me that you need to know what you are working toward, otherwise you’ll fall off course.

3. I Learned the Virtue of Wealth Through Good Health

As a physician, I have the privilege of caring for very sick patients in the hospital. Seeing the heartbreak of patients and their loved ones when delivering bad news is impossible to describe. On the other hand, seeing the gratitude in a patient’s eyes after they get better is incredible. Each day in the hospital I order blood tests, imaging tests, and consult with other physicians to ensure we provide the best care possible to the patient and an accurate diagnosis is made.

While this work is extremely fulfilling, I can’t help but cringe when I think of the massive hospital bills my patients will have delivered to their home after leaving the hospital. This is something that is not discussed enough in our country.

Medical bills can completely bankrupt a solid financial plan. One of the best way to protect your future wealth is by maintaining good health. By avoiding processed foods and exercising on a regular basis you can literally save yourself hundreds of thousands of dollars in medical expenses over your lifetime.

As a society, we are always looking to save time by eating pre-made, packaged, or fast food. While convenient, this has led to dramatic increase in chronic diseases (diabetes, heart disease, etc.), which cost us billions of dollars. I think this is the most under-discussed topic in personal finance. As a physician and Finance Twin, I am uniquely positioned to bring this topic up. Health, like building wealth, requires tremendous discipline and delayed gratification. Start treating your health like it’s priceless. Your retirement depends on it.

4. I Learned To Keep My Expenses Low

My wife and I decided to share one car to save money. To make this possible with my hectic schedule we found the cheapest apartment to rent near the hospital. Each day I would walk through one of the staff parking garages to get to work. I distinctly remember wondering who drove all the luxury cars in the garage. One day, I finally figured it out.

After a long day at the hospital, the resident I was working with offered to drive me home. Seeing the rain pouring down on the sidewalk, I accepted gratefully. After talking about the crazy amount of loans we both owed, I expected to climb into a rusted-out beater. It turns out that they could barely afford their minimum loan payments because the monthly car payment on their Mercedes-Benz was nearly 50% of their monthly rent payment. What?!

The second you start to compare yourself to others, it’s game over.

When most of your peers (from predominantly affluent backgrounds) don’t have any debt and drive luxury cars, you may start to think that you deserve to drive a luxury car, too. This is a slippery slope and creates a scenario where you are earning six-figures after residency, but still living paycheck-to-paycheck. Sure, you’ll be able to impress all of your Instagram followers with your big house and flashy car, but you’ll be drowning in debt payments and unable to reach financial independence earlier on in life.

Congrats, you’ve just fallen victim of lifestyle creep and you just played yourself.

I get excited driving around town in my used car knowing that it means I can invest more money every month for my future. But don’t worry, I know many of you will still want to lease a new car, and the good news is that we wrote the most comprehensive guide on leasing a car that exists online. We wanted you to get the best deal possible.

5. I Learned That You Are Responsible for Your Own Education

Before my first day of medical school, I had many visions of what it was going to be like. I envisioned sitting in a lecture hall being spoon-fed everything I would need to know to be a great physician. It didn’t take long for me to realize that it’s impossible to teach you everything you need to know. Even during full workdays spent in lecture. On board exams, no questions are off-limits. If you want to excel, you need to know more than what is covered in lecture. It became obvious that in order to be successful I would need to sit down with textbooks, videos, and other resources and learn on my own after lecture was over. I also learned that with enough time and patience, no topic was too tough to learn on my own.

During these five years, I created roughly 8,000 flashcards. I would go through the ink in a new pen in roughly 1,000 cards. There were days when my fingers would cramp up from so much writing. I didn’t realize that was possible.

Medical school teaches you the foundation to build upon for the rest of your training and career. You learn to consume tons of information and synthesize it in a small amount of time. Though I don’t remember every single fact I’ve ever learned, I have developed a framework that allows me to review an article and quickly retrieve factoids in a hidden corner of my brain I forgot existed.

When your back is pressed against the wall, you have no choice but to figure it out.

It was this sense of self-responsibility that originally inspired me to learn as much about personal finance. I realized that much like in medicine, no one was going to sit down and teach me everything. I knew I needed to self-study to learn about personal finance and managing my money. Much like teaching a more junior medical student about a disease, I found myself transitioning from student to teacher of personal finance. However, much like in medicine, you will never learn everything there is to know about personal finance. You will need to be a lifelong student. Our free personal finance boot camp is an awesome place to start. You can sign up in the form right below this!

When I got to the Mayo Clinic I knew I’d be graduating with an incredible amount of new knowledge. Between anatomy, cardiology, and a host of other topics, it often felt like drinking water from a fire hose. What I didn’t expect was to graduate with a skill set in personal finance. The good news for you is that I am here to help you do the same.

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

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If you have a mortgage, it may feel like you will never finish making those monthly payments. For most, mortgage payments often start when you are just beginning your career, then continue for years as you progress through life toward your dream retirement.

Deciding To Pay Off Your Mortgage Early Is A Good Problem To Have. It Means You Can Afford To Do So.

Eventually, you’ll start to make more money at work, kick your adult children out of your house, or possibly even inherit some cash from a relative. When that happens, what should you do with the extra money you have?

You could save it for a new car, invest it in an IRA, give it to charity, or even a combination of these things. Additionally, you could choose to pay off your mortgage early.

Hopefully, you find yourself in such a fortunate situation at some point in your life. When that happens, you’ll have to make the decision on what you are going to do with extra cash.

There seems to be a direct relationship with money and opinions. For whatever reason, as you have more money, you will likely be exposed to an increase in opinions. Often, most of those opinions will come from those that are either unable or unwilling to follow their own advice.

It is always recommended that you seek the advice of professionals and experts prior to making significant decisions with your finances.

Any kind of a decision dealing with your mortgage should also be made after learning from professionals and experts in the personal finance world. As you receive the proper advice, it is also important to understand the pros and cons of paying off your mortgage early.

Pros Of Paying Your Mortgage Off Early

The most obvious reason some experts recommend paying off your mortgage early is the simple fact that by doing so, you eliminate what will likely be the largest debt you will ever carry.

If you pay off every other debt before your mortgage (a practice that many financial planning professionals suggest doing), you suddenly become completely debt free. Imagine, at that point, you wouldn’t owe anything to anybody.

It also forces you to not spend money on other things! If you have a bad credit card spending habit, then socking all of that money away into your mortgage could be the best thing you do!

For Many, There’s Nothing Like The Feeling Of Being DEBT FREE

Not having any form of debt also means having a significantly decreased level of risk.

In the financial world, these two things typically have a reciprocal relationship. For example, when you don’t have a mortgage or any other debts, losing your job is often more of an inconvenience than it is a crisis. If you consider yourself a more risk-averse person, this may be one of the biggest reasons you would pay off your mortgage early.  

A debt free life can also get you much closer to a life with a minimal amount of stress. One of the most common reasons that couples choose to get divorced is because of the stress created by their attempts at money management within their marriage. Without a mortgage payment, such money management can be greatly simplified.

Paying Off Your Mortgage Early Will Eventually Free Up Cash

Another one of the benefits of paying off your mortgage early is the increase in discretionary cash that accompanies doing so. Think of all the things you could do with your paycheck when the only payment you need to make is your utilities and taxes.

For example, you could invest far more for your retirement. You would be better able to invest up to the max in your IRA or 401(k). Another option would be to save it and purchase rental real estate in cash.

You could open a brokerage account that provides more liquidity than other investment option might. There are countless ways to invest for retirement and an increase in your discretionary income can create even more possibilities.

Additionally, you could use the extra money to do the things that you have been putting off because you couldn’t afford them before. You might travel more, buy a new car, help your kids with their financial goals, or remodel your house. More money means more options.

Paying Off A Home Early: Welcome To True Homeownership

One of the greatest benefits of paying off your mortgage early is true homeownership.

I have heard several people explain that their home felt different to them when they cut that last check to pay off their mortgage. There is a sense of accomplishment and a lack of anxiety that accompanies the reality that the bank can no longer take your house away from you. Paying off your mortgage early can make your house feel more like your home.

Lastly, if you choose to pay off your mortgage and later decide that you don’t like being out of debt for whatever reason, you could go get another mortgage on your home. Obviously, doing so would be much less likely than paying off your mortgage early would be, but it is still an option.

Cons Of Paying Your Mortgage Off Early

One of the reasons some experts say you shouldn’t pay off your mortgage early is so you can invest a greater amount of cash for a longer period of time. If you work to pay off your mortgage early, you won’t have as much money to invest.

Obviously, as you invest more over a longer period, your investment is more likely to grow much larger.

In this case, time can be your best friend. Choosing to pay off your mortgage before aggressively investing for your retirement reduces the time your investment has to increase.

After all, compound interest is only one of the wonders of the world when it is backed by a significant amount of time.

Obviously, if your alternative is to invest in a high-yield savings account or a CD, then you are likely going to be losing money compared to paying off the mortgage early.

But if you make long-term investments in stocks, real estate, or other assets, then you could be worse off by paying the mortgage instead of giving yourself a shot to make your investments pay off in the long run.

Paying Off Your Mortgage Early May Cost You A Tax Deduction

Another of the potential downsides that accompanies paying off your mortgage early is that you lose a  tax deduction. In a nutshell, when you file your personal income tax return, you can either choose to itemize your deductions or take the standard deduction.

Since these are deductions that decrease your taxable income, you want whichever one you choose to be as large as possible. Thus, itemizing is only beneficial when the total deduction is larger than the standard deduction.

One of the items that counts toward your total itemized deduction is the amount of mortgage interest that you have paid in the given tax year. Obviously, when you pay your mortgage off early, you lose that potential portion of your itemized deduction.

The Standard Deduction Is Higher, So Fewer People Will Itemize

However, with the Tax Cuts and Jobs Act passed in December 2017, the standard deduction is now significantly larger than it was before. For single individuals, it is $12,000 and that amount is doubled for married couples.

Since the standard deduction is now so much higher than it has been in the past, it may not make sense to itemize. If that is true for your situation, you may not be missing out by not having any mortgage interest to deduct on your personal income tax return.

Further, neither the standard deduction nor your itemized deduction decreases the taxes you pay dollar for dollar. Instead, it decreases your taxable income. This means that for every dollar you spend in interest on your mortgage, you only save around a quarter in taxes, depending on your marginal tax bracket.

Most people would never choose to give up a dollar just to save a quarter on their taxes.

Since paying off your mortgage early can significantly affect your income tax filing, it may be best to consult your tax advisor on this matter.

Paying Off Your Mortgage Early Could May Not Be Wise If You Need The Extra Cash Now

Further, another reason you may choose not to pay off your mortgage early is that it requires you to give up a large amount of your hard-earned cash right now.

It’s not that you are spending that money and won’t ever see it again, but it does limit the way you can choose to spend the money you make. You may be required to give up vacations or new cars, jewelry or home remodels, or any combination of thousands of other things.  

Lastly, equity in your home is one of the most illiquid assets you can own. This means that if you ever need a pile of cash quickly, your home will not be able to provide that as well as savings, brokerage accounts, or even depreciable assets like cars and recreational vehicles can.

One of the only financially responsible ways to get the money back out of your home once you have it paid off is to sell it. If you don’t want to sell your home, you may need to find the cash from another source.

This can create a problem when your roof needs to be replaced, you lose your job and can’t find one for several months, or a medical emergency requires significant funding. Unless you can find a balance between saving and making extra mortgage payments, the illiquid equity in your home may not be as much of a blessing as it seems.

So, Should You Pay Off Your Mortgage Early?

Paying off your mortgage early is a decision that each person or married couple should make for themselves. It is a decision that depends on your specific situation and the type of lifestyle you wish to have. What may make sense for your neighbor or family, may not be such a good idea for you.

Having the ability to pay off a mortgage early is its own accomplishment. However, such a fortunate financial situation requires a level of responsibility. Regardless of the decision you make, it will significantly affect your finances and the lifestyle you live.

Remember, at the end of the day, you need to understand what will make you and your family the happiest and secure.

It’s also good to take a step back and take everything into consideration. For example, if paying off the mortgage early means you won’t have money to pay for life insurance, then you are putting your family in harms way!

About The Author:

Tom Madison is an educator and author and most recently published an ebook on Amazon titled “The Independent Retirement“. His fascination with personal finance began when his father introduced him to certificates of deposit and money market accounts when he was 11 years old.

Since then, Tom has spent thousands of hours learning everything he could dealing with personal finance. His experiences have made him a uniquely qualified expert in providing advice to those looking to properly handle their money. Tom’s Master’s degree in Accounting and Personal Finance has only added to his qualifications in this field. From Roth IRAs to health savings accounts and debt freedom to early retirement, Tom knows the little details that help everyday people create their financial independence.

You can order Tom’s book for free with Kindle Unlimited or $3.99 without it here!

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

FinancePlanToday.com

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If you haven’t started a budget read our post on how to budget and get started today!!

We like to budget a month at a time using our spreadsheet budget template. Download it here: https://FinancePlanToday.com/budget-template-xlsx.

If you are already budgeting you’ve experienced the ups and downs that come with the territory.

Having a budget is not always easy, but sticking to it can seem impossible at times. However, there are some things that you can do to increase your chances of sticking to a budget for the long haul.

One of those things is flexibility.

This is something we have fine-tuned over many years of trial and error. Early on, we made the mistake of being WAY too rigid with our budgets. It felt very restrictive and it simply wasn’t fun. Sure enough, we’d end up walking away from budgeting for a few months until we realized we weren’t making any progress on our debt.

Yep, we’ve even avoided going to the doctor when one of us broke a few toes simply to avoid the cost. That wasn’t smart. But it can be exhausting to feel like a failure if you miss a budget target. This is why flexibility is so key.

Unless you’re a robot who loves pain and misery, keep reading and let us show you 3 tips that have allowed us to succeed in sticking to a budget!

#1 Modify old habits/routines to fit your budget

Give yourself leeway to make changes on the fly! Change can be a good thing and can also be fun!

For example, one thing we started doing is going to the public library to borrow books to read. For the past couple of years it was a personal goal of ours to read more often, and we had been relying an Amazon Kindle books.

By going out to the library and taking advantage of a service our hard-earned tax dollars pay for, we also were able to keep reading while cutting out the cost of Kindle books. We were surprised to learn that we could request books and the library would buy them!

Recommendation: If you are looking for an AWESOME book to read, we recently read Shoe Dog and LOVED it. It’s the story about the founding of NIKE, and it will inspire the hell out of you!

One other thing we’ve started doing is inviting friends over for dinner more often instead of always meeting up at a restaurant. You could also set up a rotating schedule with a group of friends and make it a weekly event!

The benefit here is that it has forced us to become better cooks (to avoid being ridiculed for our lousy cooking skills) while saving money. This satisfied our palates and taught us some new skills while also being a really fun activity that everyone loves! Now we all compete to see who’s the best cook.

#2 Budget moderation

“Everything in moderation, including moderation”. – Oscar Wilde.

This amazing quote holds true even for your budget! If you budget, you’ve probably found yourself in the following scenario. It’s getting closer to the end of the month and the budget is starting to get tight so you need to buckle down to make sure you stay on track.

You’re not sure if you’ll be able to make it and it stresses you out. Sound familiar? We’ve been there too. One thing that has really helped is knowing that staying on track does not mean sacrificing everything at all costs. Sometimes life happens and gets in the way.

For example, imagine the following: Your significant other surprises you by coming home from work early and says they’d love to see the new movie that just came out in theaters. The only problem is you’ve exhausted your monthly entertainment budget already.

If you’re like us, you’ll be torn. What do you do?!

If you really want to see the movie, just go and enjoy it! In a few years you’ll never look back and regret seeing the movie. Things like this pop up ALL THE TIME. Remember that YOU are in charge of your budget!

To stay on track you can always allocate a little less to next month’s entertainment budget category. Or pull funds from another category where you’ll be able to come in under budget. You can also pull back the next week to make up for it.

Don’t deprive yourself of unexpected opportunities for the sake of a few bucks. You’ll be able to make up for it as long as you stay organized. Prioritization is everything! Especially when sticking to a budget.

This will allow you to set money aside to learn how to invest! A skill that everyone needs.

#3 Guilt free budget spending

This tip is actually easier said than done. When you have concrete financial and retirement goals, it is normal to feel guilt when spending money. The guilt comes from using money for fun that could have been spent towards reaching your goal.

Will you be closer to your retirement goal if you put every single penny towards retirement? Yes! But that is just not how life works. We aren’t robots and neither are you.

It’s totally normal to have your perspective shift. Maybe those $300 shoes don’t seem as appealing as they used to, now that you are so focused on your financial goals. But for the things that really bring you joy (like giving to charity, or going away for the weekend), it’s worth it to prioritize them.

Live your best life!

We allocate money in our budgets to spend freely on anything each month. No questions asked. No guilt associated. If we have any left over, we roll it over into next month’s budget.

If we have our eye on something more expensive we save this for a few months until we have enough in our free-spending category to buy it. We sometimes also use this category for fun activities we didn’t plan for that pop up (see #2 above).

Give yourself permission to spend this money without guilt. Sticking to a budget is already hard enough without feeling bad about it! Don’t look back or question it. This is probably the most IMPORTANT category in our budget.

It allows us to buy things we want while helping us stick with the rest of our budget. This has been HUGE in allowing us to recognize the things we WANT and what we truly NEED. It can give you peace of mind, which can make all the difference when you are trying to stick to your long term financial goals!

In budgeting, as in other areas of your life, it’s important to be kind to yourself. Don’t be too hard on yourself and remember that this is a marathon, not a sprint. Rome wasn’t built in a day, so if you want to build your dream life and retirement, it’ll take a lot of hard work. You got this.

Francisco Maldonado

Francisco Maldonado, MD is a personal finance expert who was raised in poverty by a single mother and had to learn everything about personal finance on his own. In addition to running  Finance Plan Today with his twin brother, he’s been featured on Forbes, Business Insider, CNBC, US News, The Simple Dollar, and other top publications. Francisco is a physician who borrowed over $200,000 to pay for his medical training and understands debt payoff strategies and frugal living. He received his M.D. from the Mayo Clinic School of Medicine, the most selective medical school in the country, and a Bachelor’s degree in physiology from the University of Minnesota. He is currently a radiology resident at Northwestern University.

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