Monthly Archives: April 2017

Info The Cheaper Dates to Fly This Summer

Summer is almost upon us and no one loves it more than those who decide how much you’ll pay for airline tickets. This is their time to pump up the prices, something we’re already seeing in sales for peak travel periods in June, July and August.

Demand is the culprit, as usual; the kids are out of school, the weather is good, that’s when people want to fly. The airlines know this, and they also know we’ll pay (and should ticket buying slack off, they simply lower them a bit before attempting another increase). You know all this, too, but you may not know the summer dates to fly (or avoid) that can ease the strain on your wallet. See if any of these travel periods work for you.

Summer Dates to Fly, Summer Dates to Avoid

These dates are based on average prices from my company’s vast storehouse of airfare data. For certain routes and cities, it may be off a day or so for the very cheapest flight. This is why I also urge any airfare shopper to (1) Always compare airfare prices on a comparison search site, and (2) Always search a day or two ahead and behind your targeted itinerary dates. The savings may surprise you.

U.S. Domestic Travel

  • May 20: This is the last day of the cheaper spring season. As long as you begin your trip on this date or earlier, you’ll find better fares.
  • June 14: The final day to begin a trip and enjoy cheaper pre-summer fares.
  • June 15 – Aug. 29: The peak summer season for 2017. If you must fly now, see the tips at the end to help cut costs. The next time you’ll see prices this high will be during Thanksgiving.
  • Aug. 30: A good day to begin a late-season trip because fares will be lower; this cheaper period continues through mid to late October when another dip occurs. In fact, one of the best times to fly is during the first couple of weeks in November since demand is always low just before Turkey Day.

Travel to Europe

  • May 12: OK, the bad news first. This is the date the expensive summer season gets underway so you’re not going to get the pre-season deals. However, over the past year we’ve seen historical lows for Europe, so a summer flight may not make you feel anywhere near as much pain as previous years. A few examples of roundtrip fares, found on my site on May 10, for travel in July:

Boston to Rome – $551

Los Angeles to Copenhagen – $680

New York to Paris $654

New York to London $695

  • Aug. 21: Fares drop for fall, which to me is the perfect time to tour the Continent – smaller crowds at the airport, short lines at attractions.

Travel to Asia

  • June 9: A fairly significant price hike begins; if possible, start your trip by June 8.
  • July 20: Another price hike. Again, fly earlier in the month or at least start traveling June 19.
  • Aug. 7: Summer prices begin to drop.
  • Aug. 20: A more significant price-drop gets underway.

How to Make Peak Season Travel Cheaper

If you must fly during summer’s priciest period, you can still save something; here’s how.

  • Compare airfares: This may sound so basic but many folks continue to ignore this advice because they know their airline is cheapest. Newsflash: No airline always has the best fare on every route. See Which U.S. Airline Costs the Least? It Depends.
  • Fly cheaper days: On domestic flights, this is typically Tuesday, Wednesday, Saturday. For international travels, mid-week flights are often cheaper than weekends. Airline Ticket Prices: What a Difference a Day Makes explains the details.
  • Be flexible: Can you drive a little further to a bigger airport? It could save you money. Can you endure a connecting flight even when a non-stop is available? It could save you money. For more, see The Cheapest Way to Buy Two or More Airline Tickets.

A final way to way to save money is by using a carry-on bag, still free on most airlines (be sure to check, especially if flying what are known as discount airlines such as Spirit or Norwegian). By the way, I use a carry-on even for trips to Europe where I’d get a checked bag for free, mainly because the bag that travels with you is the bag that doesn’t get lost. Enjoy your summer.

Best Budgeting Software For You

The best budgeting software helps you manage your money in a way that is organized, provides the detail you require and yet is easy enough to follow that you will actually stick with it.

Here are four budget software systems that meet those criteria. Each system is distinguished by how it best fits your personal approach to managing your finances.

1. Best for Fans of Zero-Based Budgeting

You Need A Budget (YNAB for short) is built on the zero-based budgeting principle that calls for you to “give every dollar a job.” With YNAB you need to be involved in your finances and willing to change old habits to make the system work.

In addition to “give every dollar a job,” YNAB follows three other rules: “embrace your true expenses,” “roll with the punches” and “age your money.” According to YNAB, following those four rules will allow you to get out of debt, save money and stop living paycheck to paycheck. It’s a tall order, but YNAB users say it works.

This browser-based subscription system runs on both Windows and Mac computers. Available Android and iPhone apps sync data to the desktop. YNAB connects to your bank and credit card accounts to download transactions, but it does not offer a way to track investments. Following a 34-day free trial, YNAB costs $50, billed annually.

2. Best for Envelope Budgeters Anxious to Go Digital

Mvelopes is based on the familiar (pre-computer) budget system of putting cash in envelopes each pay period. Each envelope is labeled for an individual bill or discretionary expense. For discretionary expenses, when an envelope is empty, spending in that category is done for that pay period.

Mvelopes makes the envelopes digital but it does much more. It links to bank and credit card accounts, allows you to see past spending and assign money to future “mvelopes.” You can set up the system to move money out of your “spending” envelope into a credit card payment envelope so you don’t run up your credit card balance.

The basic free service supports four bank accounts and 25 spending envelopes. Premier service (unlimited accounts and envelopes) costs $95 per year. The system is online and works with both Macs and PCs. Android and iPhone apps let you manage your accounts, add and edit transactions, adjust your budget and monitor expenses. There is no provision to handle investments.

3. Best for Tracking Spending for Free

Mint was acquired by Intuit in 2009 and remains a quintessential and wildly popular free online budgeting and expense-tracking software system. Mint lets you track expenses across credit cards, bank accounts (checking and saving) and even investment accounts.

You can even use the program to sign up for alerts if you overspend in a category. In short, Mint gives you a ton of information but doesn’t provide advice. It provides a great overview of your financial health. The alerts could be very helpful if you tend not to pay attention to your finances on a regular basis.

In addition to the browser-based online system, Mint has both iOS and Android apps. Mint offers online synchronization and includes bill-payment options as well as limited investment monitoring. There’s even a free credit score tracking option. (Also see: 4 Best Personal Finance Apps for 2017.)

4. Best for Those Who “Want It All”

Quicken Premier 2017 is, by most accounts, the most complete personal finance and budget software tool available. That also makes it one of the most complex software packages available. That complexity is mitigated somewhat by the fact that there are three different Windows versions plus a Mac version available.

All versions, which you must install on your computer, allow you to create and follow a budget. Each higher version provides additional features. From a budgeting perspective all versions of Quicken also let you track your spending, import bank transactions, pay bills and more.

The Premier Windows version adds future financial planning, debt reduction, retirement planning, portfolio maintenance and management, a mutual fund finder feature and tax advice on investments.

The Quicken 2017 mobile app is free and available in iOS and Android versions. The app syncs with all Quicken versions. Quicken Premier sells for $99.99.

The Bottom Line

With the exception of the Quicken line of products, most budgeting software today is online and subscription-based. That makes it easily compatible with any computer system and also available on just about any device.

The Quicken advantage is mostly in the depth of the features offered. There’s almost nothing about managing money in a home that Quicken doesn’t cover extremely well. Many people, however, don’t require or want that degree of complexity.

Any of these applications would work well for most people. Decide which approach best fits your personality and goals, download or sign up, and enjoy the financial peace of mind that comes from taking control of your budget.

Make $50K a Year and How Much Rent Can I Afford

The rent you can afford on a salary of $50,000 – or any salary, for that matter – is not the same as the amount for which you qualify. Qualification is often based on a rule of thumb, like the “40 times rent” rule, which says that to be able to pay a certain rent, your annual salary needs to be 40 times that amount.

In this case, 40 times $1,250 is $50,000. Therefore, if you make $50,000, you qualify for $1,250 per month in rent. For more on the topic see Renters’ Guide: The Rental Process.

Problems With the ‘40 Times Rent’ Rule

One drawback with this formula is that the calculation uses pretax or gross income. Although you make $50,000 a year, the amount you have to spend – your take-home pay – is less.

Another issue with the “40 times rent” rule is that it is a general rule and doesn’t take into consideration your particular financial situation. It doesn’t calculate your expenses. Instead, it simply assumes that if you spend one fortieth of your salary on rent, what’s left will be enough to pay all your other bills and obligations.

A Better Rule of Thumb

A slightly more realistic guideline suggests spending 30% of your take-home pay on rent. This rule allows for taxes, retirement and other deductions before arriving at a rent figure.

On your $50,000 salary, if your monthly take-home pay is $3,500, for example, your monthly rent should not exceed $1,050.

But there’s still the issue of your specific expenses. For that you need a budget, especially considering that $50,000 may not go too far if the cost of living is high where you hope to find an apartment.

The Budget-Based Approach

The best way to determine how much rent you can afford is to add up your actual monthly expenses and subtract them from your monthly take-home pay.

This budget-based approach takes more time, but is more accurate and helps you avoid unpleasant surprises, such as running out of money and finding that you can’t pay one or more bills.

Utilities – Start with utilities, services such as water, sewer, trash, electricity, oil and gas. Water, sewer and trash are often included in rent, but not always. Other utility costs include cable, Internet, telephone, and even security and maintenance in some apartment complexes.

The cost of electricity and oil and/or gas can vary depending on the age and condition of the apartment. A well-insulated apartment, for example, will cost less to heat.

The best way to determine the likely cost for utilities in a new apartment is to ask the landlord or query several current residents.

Food and Incidentals – This category includes groceries, cleaning supplies, paper towels and other items that you use and replace on a regular basis. If you already have a grocery budget, use that as your basis.

If you are moving out on your own for the first time, establishing a grocery and supplies budget isn’t difficult or time consuming. An hour a week should be plenty of time to plan meals, and the savings can add up. For more on setting up a food budget, see How to Manage Your Grocery Budget.

Transportation – Your monthly car payment, gasoline, oil and maintenance will make up most of your transportation budget. Include parking and tolls if they are a regular expense for you. If you rely on public transportation, use those costs instead. If you own and use a car and also use public transportation, include both.

Loans and Credit Cards – You must account for loan payments like student loans and revolving (credit card) debt as part of your budget. Keep in mind that the more you can pay, especially on revolving credit, the faster the balance will come down. Don’t just pay the minimum due unless you have no other choice.

Renter’s Insurance – It is not a luxury. Renters insurance protects your personal belongings from loss or theft and provides liability protection in the event you are sued because someone is injured on or in the property you rent. These protections are not provided by your landlord.

For more, check out The Average Cost of Renter’s Insurance.

Retirement and Savings – Contributions to a company-sponsored 401(k) or retirement plan will be deducted before you are paid and do not have to be counted. Any savings that come out of your take-home pay, however, does.

Don’t forget to set aside a small amount for an emergency fund to cover an unexpected expense such as a car repair. See Building an Emergency Fund for advice.

Discretionary Spending Clothing, dining out, gym membership and hobbies are just a few things that fall under this miscellaneous or discretionary-spending category. It’s the most flexible part of your budget and can be scaled down or even eliminated as needed.

Your Rent Allowance

Subtract your monthly budget total from your monthly take-home and the amount left is the most you should pay for rent – what you can realistically afford. If the amount is too small for available apartments in your area, take a hard look at your discretionary spending first and other categories as needed.

You may also need to weigh the options of moving to a less expensive locale or sharing an apartment with roommates. In many communities, a salary of $50,000 may not stretch too far, especially if you have student loans to pay off.

About Amazon Monetizes Convenience (AMZN)

Convenience is addictive and dangerous. With no incentive to be inconvenienced, the modern world allows us to bask in our ability to be as lazy as possible. We can live like 19th-century lords and ladies with a variety of products and services to cater to our whims as if we still employed servants. Today, Inc. (AMZN Inc
+1.45%) has found a way to monetize convenience culture and to provide us with ample opportunities to do as little as possible.

The Ultimate Convenience

Amazon provides the perfect excuse to never leave the house again. For a $99 fee, Amazon Prime will literally delivery anything you could dream of needing — a small price to pay for endless convenience. In some cities you can have that item within two hours or pay an extra fee to have it in an hour.

The U.S. has a huge convenience culture, from drive-thru restaurants and banks to fully stocked supermarket shelves year-round. With Amazon, not only do Americans now get to enjoy all of this convenience, but they can also find and buy anything they’d like without having to fight through people at the mall. What’s more, the days of sifting through bargain bins and going from store-to-store looking for the perfect item are long gone. Today, a well-worded search term can find the exact thing you’re looking for in less than a second. One click later and your credit card is charged and the package is on its way to your doorstep.

Amazon Prime

In a perfectly convenient society, a person can wake up in the morning and enjoy a cup of coffee while reading a free book from Kindle Unlimited on her Fire tablet or watching something on Amazon Video. Halfway through, she might remember to order a gift for her mom. She can browse through the Amazon app to find the perfect thing and have it gift-wrapped and delivered across the country. The order will take seconds and the delivery only a few days. (See also: Amazon Lowers Minimum Order for Free Shipping to $25 (AMZN, WMT))

At lunch, that same person could order take-out via Amazon’s new delivery service, purchase ingredients for tonight’s dinner to be delivered straight away and then re-stock her home office supplies or buy a new blanket for her bed. In fact, if a Prime member notices that the temperature is falling when she puts a movie on in the evening, she can have that blanket delivered before the movie’s over.

Amazon Prime makes convenience the default option. Why would you leave the house to run errands when your phone can do them for you? Amazon’s Dash button, Amazon’s Subscribe & Save service and Amazon’s to-the-door delivery options have created a lifestyle where no one needs to go outside and interact with others at all.

The Consequences

Obviously the biggest consequence to this convenience culture is that people will become less active and interact with each other in-person less frequently. While the effects of convenience culture have been well documented, the increasing popularity of Amazon Prime and the increase of offerings of Amazon Prime will augment the problem in unimaginable ways.

It could be argued that Amazon makes our lives simpler so that we can focus on less mundane tasks. However, the feeling of finding the perfect dress after a day of shopping or the fun of discovering new foods at the grocery store are little things that we’ll lose as we become more and more dependent on the convenience that Amazon provides. (See also: Amazon’s New Echo Speaker Will Have a Touchscreen (AMZN, GOOG))

Amazon’s Point of View

Increasing dependence is like gold for shareholders. Getting an entire generation of people addicted to a product or service is extremely profitable for any company. As more people become used to the services that Amazon Prime offers, the retail world that we currently know will become increasingly disrupted. Today Wal-Mart Stores Inc. (WMT

Wal-Mart Stores Inc
-0.55%) is found throughout rural America. With lower prices and the ability to bypass heading to a busy superstore, how soon will it be before the Walmart that we all know is completely different or shuttered for good?

Walmart and other big box retailers have already had to adapt to stop from losing customers to Amazon. As Amazon has become larger, it has ironically had the same effect on Walmart that Walmart had on small businesses 20 years ago. Amazon is showing us a world in which we don’t need to leave the house or go outside or talk to anyone and can still get anything we want, hassle-free, delivered to our doors.