What Is Affirm?

What Is Affirm? How It Works & When to Use It for Smart Personal Finance

What Is Affirm and How Does It Work? A Personal Finance Guide

If you’ve shopped online lately, you’ve probably seen the option to “Buy Now, Pay Later with Affirm.” It sounds appealing - split your purchase into manageable payments, sometimes with 0% interest. But is it a smart financial move?

In this guide, we’ll cover:

• What Affirm is and how it works
• Whether Affirm is better than a credit card
• When it makes sense to use Affirm
• Tips to use it responsibly 

🔍 What Is Affirm?

Affirm is a Buy Now, Pay Later (BNPL) platform that lets you finance purchases over time instead of paying the full amount upfront. It partners with major retailers like:

• Apple
• Walmart
• Peloton
• Expedia

When you choose Affirm at checkout, you’ll typically see options to:

• Pay in 4 (four interest-free payments every two weeks)
• Pay monthly (installments over 3 to 60 months, depending on purchase size)

Interest rates can range from 0% to 36% APR, depending on your credit and the retailer.

💳 How Affirm Works: Step-by-Step

Select Affirm at Checkout
Choose Affirm as your payment method when shopping online or in-store with participating partners.

Get Prequalified
Affirm performs a soft credit check (no impact on your score) to determine eligibility.

Choose a Payment Plan
You’ll see a few installment options - including duration and interest rate - before confirming.

Make Monthly Payments
Payments are made via the Affirm app or website. You can use a debit card, bank account, or autopay.

⚖️ Affirm vs. Credit Cards: Which Is Better?

Feature	Affirm	Credit Cards
APR	0%-36%	21% average (often 0% intro offers)
Late Fees	None	Yes (typically $25-$40)
Interest Accrual	Fixed, upfront	Rolling, variable
Rewards	❌ None	✅ Yes (cash back, points)
Credit Check	Soft pull	Hard pull

🟢 When Affirm Wins:

• You’re offered a 0% APR promo
• You want predictable monthly payments
• You want to avoid late fees

🔴 When Credit Cards Win:

• You want to earn rewards
• You can qualify for a 0% intro APR card
• You need flexible spending power

🧠 Smart Ways to Use Affirm for Personal Finance

✅ 1. Budget Big Purchases Without Interest

Buying a new phone, mattress, or laptop? If you get a 0% APR offer, it’s essentially free financing - no interest, no hidden fees.

✅ 2. Avoid Credit Card Debt Traps

Credit cards can lure you into minimum payments and mounting interest. Affirm gives you a clear end-date with fixed payments.

✅ 3. Build Credit (Carefully)

Paying on time could help your credit score, especially if you’re new to credit or attempting to rebuild your credit. As of April 1, 2025, all of Affirm's payment plans and payment activity opened and generated on or after this date are being reported to the credit bureau Experian. As of May 1, 2025, all plans and activity opened and generated on or after this date are also being reported to the credit bureau TransUnion. For plans opened prior to April 1, 2025, only a limited number of plans and certain information on activity were reported to Experian, only. Please see this page on Affirm's own website for more information on how Affirm is reporting to the credit bureaus.

✅ 4. Maintain Financial Discipline

Because each Affirm loan is tied to a specific purchase, it prevents the revolving temptation of a credit card limit.

⚠️ Risks and Pitfalls of Using Affirm

Like any form of debt, Affirm can be risky if you don’t use it wisely.

• Interest rates can be high (up to 36% APR)
• Too many loans = budget overload
• Missed payments can hurt your credit
• May tempt overspending - buying what you don’t need

🧾 Tips to Use Affirm Responsibly

✅ Stick to 0% APR offers only
✅ Use it for essentials or large purchases, not impulse buys
✅ Limit yourself to one Affirm loan at a time
✅ Set up automatic payments to avoid missing due dates
✅ Compare Affirm’s APR to your credit card or personal loan rates before accepting

🎯 Should You Use Affirm? Final Thoughts

Affirm is not free money. But when used strategically, it can be a great personal finance tool, especially if:

• You’re offered 0% APR
• You need to space out a big purchase
• You want a simple, transparent payment plan

Just remember: the goal is to control your spending, not let another app control you.

🙋‍♀️ FAQ: Affirm and Personal Finance

❓Does Affirm affect your credit score?

Affirm uses a soft credit check that won’t impact your score when applying. But if you’re approved for a loan on or after April 1, 2025, your loan and all associated account activity is being reported to the credit bureau Experian. Loans and activity opened on or after May 1, 2025 are also being reported to TransUnion. Therefore, any missed payments can certainly hurt your credit. On the flip side, paying your Affirm loan on time could boost your credit score. This is especially helpful if you’re new to credit or attempting to rebuild your credit.

❓Can you pay off an Affirm loan early?

Yes - and there are no penalties for paying early. In fact, it can reduce the total interest you pay.

❓Is Affirm a good alternative to a credit card?

Yes, in certain situations - especially when you’re offered 0% APR or want the comfort and predictability of an unchanging payment schedule.

📌 Summary: Affirm at a Glance

Pros	Cons
0% APR offers available	High APRs possible (up to 36%)
No late fees or hidden charges	No rewards or perks
Clear, fixed payment terms	Can tempt unnecessary spending
Soft credit check	Not all loans (opened before April 1, 2025) reported to credit bureaus

Want help deciding whether Affirm or another financing option is best for your next big purchase? Drop your question in the comments, and/or bookmark this guide to refer back to next time you check out. Browse the library of personal finance articles here at Mr. Robertson's Corner blog for additional tips, strategies, and how-to guides to save, invest, budget, and spend wisely.

Personal finance resources for students and teachers

Personal finance simulation games

The following links provide detailed descriptions and reviews of, along with discussion questions for, personal finance simulation games.

"Build Your Stax" personal finance game - You have 20 years to make as much money as you can through seven different types of investments. As the game goes on, you'll be confronted with unexpected expenses that pop up in real, everyday life, costs like home repairs, family emergencies, and speeding tickets. Sometimes, you might gain money unexpectedly, too, like winning a prize or contest, or finding money on the ground.

"Time for Payback" personal finance game - Your ultimate goal is to survive to the end of the game, meaning you graduated college, managed to juggle all your priorities, and found employment with a starting salary that adequately covers all the debt you accumulated during your college years through your various choices and decisions. Will you make it?

"PlaySpent.org" personal finance game - Can you survive financially for one month? This is a very eye-opening, thought-provoking simulation. The decisions you'll have to make, and the situations you'll encounter, mirror everyday real life for a lot of people. You'll learn a lot about yourself, including your spending habits, your goals and ambitions, how you reason through decisions, and what you're willing, or not willing, to sacrifice.

"Monopoly" as a personal finance game - On the surface, it may appear that Monopoly is an awesome game when it comes to teaching entrepreneurship, and it is, right? But Monopoly is also wonderful at teaching us some things about personal finance, if we dig a little deeper.

Essays and reflections on the benefits of living simply, saving, and strategizing

The Minimalists - Meet The Minimalists, Joshua Fields Millburn and Ryan Nicodemus, who present a compelling case that getting rid of all the clutter in your life - the clothes you never wear; all the stuff in your basement, closets, and/or storage unit you're not using; the long hours you're working and mounds of debt you're taking on in order to keep up appearances and look "successful" to all your friends, neighbors, co-workers, and perhaps even family members ("Keeping up with the Joneses"), etc., etc. - can help you live a more meaningful, purposeful life. Learn a little bit about their personal journeys and how they, in turn, learned these valuable lessons in some pretty hard ways.

Dave Ramsey and The Minimalists - Learn how personal finance guru the legendary Dave Ramsey approaches the subject of money in comparison to The Minimalists. We'll discover that they arrive at the same conclusions, but perhaps just take slightly different perspectives to get there.

Building your own personal economy - Written in May 2020. If the coronavirus pandemic can teach us anything from a financial standpoint, it's that we each need to focus on building our own personal economies. We can't trust, or rely on, other people, politicians, or broken-down systems to do that for us.

Strategies for saving money

The envelope budgeting system - a timeless, classic strategy for easily paying the bills while paying yourself - if you're willing to cultivate and maintain a little discipline.

Browse our "Shopping" category - a collection of previous blog posts offering all sorts of tips and strategies on how to save money on groceries, dining out, car insurance, cell phone expenses, Christmas gifts, and a lot more!

30 Easy Ways to Save Up to $1,000 - presented by Dave Ramsey and his team

How to Save Money: 22 Simple Tips - presented by Dave Ramsey and his team

How to Save Money Fast - presented by Dave Ramsey and his team

Complete personal finance curriculum for your classroom

Next Gen Personal Finance

Practical Money Skills - sponsored by Visa

Practical Money Skills curriculum for students with special needs

Personal finance vocabulary

Personal finance vocabulary list - a good starter list for high school students of common vocabulary terms, along with brief definitions and practical examples for each word.

Difference between stocks and bonds - a great blog post with easy-to-understand explanations about these two different forms of investments.

Living on your own, paying taxes, credit cards, understanding your paycheck, more

Getting Started Teaching Personal Finance - an awesome article written for Edutopia by Kailen Stover, a family and consumer sciences teacher in Colorado. From the article: "Lessons on credit and credit cards, taxes, and how to find an apartment and make the rent are invaluable for high school students. Here is a beginner’s guide to building hands-on and real-world opportunities into personal finance education."

Anatomy of a paycheck - a great video lesson, only a little over five minutes long, given by Sal Khan over at Khan Academy. In this video, Sal breaks down all the expenses and deductions that come with your paycheck. You may have heard of, or have already used, Khan Academy before. Launched by Sal himself, a Harvard and Massachusetts Institute of Technology (MIT) –educated former hedge fund analyst, the Khan Academy is a free online education platform. The Web site features an extensive variety of courses and tutorials in areas like math, science and engineering, computer programming, arts and humanities, economics and finance, test prep, career exploration, the college admissions process, and a lot more. Within the economics and finance course offerings, Khan has a subcategory devoted to entrepreneurship, featuring exclusive interviews and conversations he conducts with top entrepreneurs and business leaders.

If your school/district or home/family has a BrainPOP subscription, look these subjects up on BrainPOP for great video lessons, quizzes, games, and other learning activities:

• Credit Cards
• Taxes
• Budgets
• Comparing Prices
• Mortgages
• Debt
• Banking
• Interest

Personal finance vocabulary list

Following, in alphabetical order, is a list of vocabulary words, along with my own definitions and explanations I wrote for them. These are ideal for high school students taking a personal finance class or simply wanting to get a better grasp of, or head start on, various money management concepts. By no means is this list of vocabulary words and their corresponding definitions and explanations meant to be exhaustive. Check back from time to time, as this personal finance vocabulary list for high school students may be expanded upon.

Budget - "A spending plan for your money. You are telling your money where to go and what to do." - Dave Ramsey

Checking - A checking account is an account you have, typically with a bank or credit union, allowing you to write checks to other people or to businesses without having to carry cash on you. The money for these checks comes out of your checking account when these other people or businesses cash your checks. These days, it's more common to see people using debit cards tied to their checking accounts for purchases rather than paper checks (see Debit). You are responsible at all times for keeping money in your checking account to cover your checks or debit card purchases. Not having enough money in your account when checks or card purchases are made against your account can result in heavy overdraft fees.

Credit Card - A plastic card issued to you by a bank, credit union, or credit card company. A credit card is a form of loan that must be paid back by you. When you use a credit card to make a purchase, you are not using your own cash to pay for the purchase. Rather, you are using money loaned to you by the issuer. Typically, if you don't pay your balance by the end of the month (or your assigned due date), you will also have to pay interest, which can be very high.

Debit - When we mention the word "debit," we're often talking about a debit card, but not always. A debit card is like a credit card, in that it is a plastic card with an account number and expiration date. It has your signature on the back. All like a credit card. The big difference, though, is that a debit card is backed by your own cash. It's really your money being used for purchases, not money loaned to you by a credit card issuer that you must pay back (and usually, with interest!) A debit card is usually tied to a checking account, meaning the money used to make debit card purchases comes right out of your checking (see Checking).

Debt - Put simply, debt is any amount of money, from one or from many different sources, that you owe. It could be money that you owe a family member or friend. It could be money you owe on credit cards, student loans, a mortgage, a car loan, etc.

Income - We usually think of income as money we earn from our jobs (wages, salaries, sales commissions, etc.), but income can come from a variety of sources. For example, income can be generated from investments you own, like stocks, bonds, and mutual funds. It can also come from rental income on properties you may own. In this scenario, you own a home, apartment complex, commercial property, or even land, and other people (or businesses) are paying you to live there or run their business.

Investment - An investment, simply put, is you giving your money to an individual, a business, a financial advisor, or a bank in exchange for the potential to get your money back, along with more money just for you giving your original money in the first place! We say potential, because it is possible for you to lose money. Your investments may come in the forms of stocks, bonds, mutual funds, precious metals, or business opportunities, to name a few examples. Check out this previous blog post on the differences between stocks and bonds.

Loan - A loan is money issued to you on credit. The money is not yours. You don't get to keep it. You must pay it back, usually with interest. A few examples of loans include credit cards, student loans, a mortgage, a car loan, and a business loan.

Mortgage - A type of loan you take out from a bank or credit union allowing you to purchase a home or perhaps even a commercial building, if you're in business. Like any other loan (car loan, credit card, student loans, etc.), it must be paid back with interest added.

Salary - A salary is a type of income that you make from your job. Usually, when we discuss the term "salary," we are talking about an income that you are guaranteed to make in a full year. For example, you may get a job someday with a salary of $60,000, as opposed to being offered a wage of, say, $25.00 per hour. A big benefit of being paid in salary is that you know for sure what you'll make in a year. A major potential downside, though, is that you will most likely not receive any additional compensation for overtime, holidays, etc., like hourly wage earners would typically earn. You also will most likely end up putting in many more hours during the typical workweek than your wage-earning co-workers.

Savings - Money that you keep on reserve for an emergency, a "rainy day," or maybe for a particular thing you'd like to buy someday. While many people think of the word "savings" as money that is held in a savings account or Certificate of Deposit (CD) at the bank, it doesn't need to be. In any case, savings is money that is usually easily accessible, meaning it's not tied up in investment or retirement accounts.

What do you think of this attempt to build a solid working start to a list of high school personal finance class vocabulary words? What do you think of the definitions and explanations of money concepts presented here? What would you change, if anything? What words would you add to this list? Please feel free to share your thoughts in the comments section below! We appreciate your insights and contributions!

Dave Ramsey and The Minimalists

As I'm drafting this post, I'm sitting in a high school personal finance class that I'm assisting in. I was last in a personal finance class a couple years ago, during the 2019-20 school year. Though the classroom teachers have been different, the content is largely the same, with many of the lessons and overarching concepts drawing from the work of Dave Ramsey and his team.

Dave Ramsey's teachings about saving, investing, budgeting, and spending wisely are phenomenal. A couple years ago, thanks to he and the personal finance class I was assisting in at the time, I tried a time-tested strategy known simply as the envelope system, or the envelope budgeting system. I'm still sticking to it, and it's working great for me.

I had a brief chat with the classroom teacher this morning about the immense value of a high school personal finance class. I told him that I have a love-hate relationship with the course. I hate it because it reminds me of all the money mistakes and poor choices I've made in the last 20 years. I never had a class like this, and had to learn by trial and error (mostly error) and my own research over the years. On the other hand, though, I absolutely love it. I love it because I'm genuinely excited for the futures of these students who are taking it. I love it because I still occasionally pick up strategies and ideas that can help me, like the envelope system. I firmly believe that personal finance should be a required course in high school, not an elective. My message to these students and to all of you who may be taking a course like this is: Take it seriously. Learn all you can. Take good notes. You have the greatest asset on your side right now - time. You have time. And if you treat your time like the wonderful asset it is, along with developing good money habits early on, then you can, in fact, become a millionaire at a relatively young age.

Anyway, the main point of this blog post is supposed to be that, if you're a high school (or even college) student taking a personal finance course, you should check out The Minimalists - Joshua Fields Millburn and Ryan Nicodemus, respectively.

The Minimalists' philosophy on money very closely mirrors Dave Ramsey's. In fact, Dave Ramsey has provided rave reviews for The Minimalists' books, and has made appearances in their film projects. But The Minimalists are approaching the subject of money from a different angle.

Whereas Dave Ramsey is largely more focused on the practical math and economics of saving, investing, and avoiding needless spending and debt, The Minimalists come at it from the perspective that getting rid of all the clutter in your life - the clothes you never wear; all the stuff in your basement, closets, and/or storage unit you're not using; the long hours you're working and mounds of debt you're taking on in order to keep up appearances and look "successful" to all your friends, neighbors, co-workers, and perhaps even family members ("Keeping up with the Joneses"), etc., etc. - can help you live a more meaningful, purposeful life. By living a simpler lifestyle and only holding onto the possessions that truly add value and/or joy to your life, you are able to devote more of your time, energy, and other resources to things that really do matter - to creative pursuits and hobbies that bring you joy; to the relationships in your life; to giving back to others; to making memories through unforgettable experiences like dream trips and life-changing goals you set for yourself; and so on.

So if you're a high school or college student taking a personal finance course, I highly recommend you look into The Minimalists on your own. Joshua Fields Millburn and Ryan Nicodemus truly are rock stars, in my opinion. Dave Ramsey agrees. Or do I agree with Dave Ramsey? Anyways, their books, blog, podcast, and documentaries on living a more fulfilling life are awesome. Their own individual life stories on where they came from and what ultimately led them down the path of minimalism are inspiring. Their philosophy pairs very well with Dave Ramsey's.

In closing, make use of the greatest asset you have right now - your time. Work your time wisely, and make your time work for you. Listen to us older folks. Don't commit 20 years of painful financial and lifestyle mistakes if you don't need to.

End-of-season clothing sales

Save money on clothes by shopping at end-of-season sales

If you don't mind not having the very latest fashions, you can save plenty of money by shopping at end-of-season sales. Moreover, if you can wait for an item to reach the most discounted rack in the store, then you can expect to save up to 80 percent on your purchase.

To give you a better idea about when to shop for your different wardrobes, here is a general timeline for end-of-season clothing sales:

Spring clothes: April through June
Summer clothes: July through September
Fall clothes: October through December
Winter clothes: January through March

It should also be noted that certain specialized items tend to go on sale around the same time each year. These items include formal party wear in January, bridal gowns in April, athletic clothes in May, and bathing suits in August.

Also, keep in mind that while the larger discounts do tend to occur near the end of a sales cycle, the longer you wait, the less of a selection you'll likely find. If you wait too long before buying an item, it may sell out at your local retailer. If there's a particular piece of clothing that you have your heart set on owning, consider purchasing it at a mid-range discount to lower your odds of it selling out in your preferred size, color, or style.

Save money on non-essential spending

Save money by tracking your non-essential purchases

It's easy to lose track of your spending if you don't pay attention to your purchasing habits. Inexpensive non-essential purchases, in particular, can be especially harmful to your overall budget because minor splurges tend to fly under the radar more often than larger, more substantial purchases. To get a better handle on your finances so you can find areas of potential savings, consider using a spreadsheet or notebook to track your non-essential purchases.

When tracking your non-essential purchases, take note of the categories in which your purchases fall. For instance, if you grab a drink at your local coffee shop each morning, consider labeling such purchases as "morning coffee" so you can better track the true cost of your morning ritual. Regardless of the specific labels you choose, just remember that the more categories you track, the easier it will be for you to spot areas of potential savings.

After a month or so of tracking your non-essential purchases, you should have a decent idea about where most of your discretionary money is going. This information is key and if used correctly, can help you save money. After all, once you know where most of your discretionary money is going, you can cut back on your spending in the worst offending categories. Armed with this knowledge, the rest is up to you. So long as you commit to making a serious effort, savings should be noted almost immediately.

How to save money on Christmas gifts

Five ways to save money while Christmas shopping

It's far too easy to overspend while shopping for Christmas gifts - especially if you don't know what you want to buy and if you leave your shopping until the last minute. So, to help keep you from overspending this holiday season, here are five ways to save money while Christmas shopping. After these five tips, we also discuss the Four Gift Rule, another easy strategy you can implement to save money on your Christmas gift list.

1. Start early.

Your gift options will be limited if you wait too long. This means, you'll probably end up buying anything that grabs your interest, regardless of how much the items cost. By starting your Christmas shopping early, you can take advantage of additional sales cycles and be more selective about what you buy.

2. Make a list.

Before you go shopping, make a list of people you need to buy for with ideas about what you'd like to get each person. Bringing a thorough list of the items you'd like to buy can help keep you from accidentally buying too much for certain people. Overspending on certain people often leads to overspending on others to maintain a sense of balance.

3. Shop online.

Online shopping allows for easier price comparisons, so shop around online to find each item's best price before spending any money. Do be sure to factor in the cost of shipping when comparing prices, however, and look for free shipping options whenever possible to further increase your savings.

4. Get couponing.

There are various couponing apps and websites that provide coupon codes and printable coupons for many of the more popular stores. You can often save fifteen percent or more by simply typing in the right coupon code or handing over the right printed coupon during the checkout process.

5. Use moneyback apps and credit cards.

Moneyback apps and certain credit cards will give you back a percentage of your total spend amount from every qualified purchase you make. By simply clicking through an app or paying with the right credit card, you can receive a little money back each time you purchase a gift.

Saving money while Christmas shopping doesn't have to be an impossible task. By starting early, making a list, shopping online, couponing, and using moneyback apps and credit cards, you'll be able to avoid overspending this holiday season and maybe even get a little money back in return.

Christmas on a budget: The Four Gift Rule

If you're strapped for cash this Christmas, you might be looking for new ways to cut back on your spending. One way to do this is to enact the Four Gift Rule. So, just what is the Four Gift Rule? It's exactly what it sounds like, but with a small twist. While the main idea is that you only give four gifts to each participating person, the small twist is that you must prepare a gift for each category of want, need, wear, and read.

By following the Four Gift Rule this Christmas, you can drastically cut back on your overall gift spending, while ensuring that each recipient receives a gift they want, a gift they need, a gift they'll wear, and a gift they can read. Be sure to consider each gift carefully because the key here is quality, not quantity.

Another benefit of having a four gift Christmas is that you'll also save money on wrapping supplies, which too can be quite expensive. Plus, you'll spend less time picking up piles of wrapping paper after the gift exchange, so you can spend more time enjoying the rest of your day with family and friends.

It can be hard to find ways to cut back on Christmas spending, especially if you have a large list of people to buy for. That is why ideas like the Four Gift Rule can be quite useful during the holiday season. So, if the Four Gift Rule sounds like something you'd like to try this Christmas, then don't hesitate to suggest the idea to any family members or friends that you tend to go a little overboard on. If all goes well, then the Four Gift Rule might even become your newest Christmas tradition!

No-spend days will help you save money

Save Money by Designating No-Spend Days

No-spend days, or days when you actively avoid non-essential spending, can be a great tool for people looking to save some money. The idea is simple - each day you avoid making frivolous purchases is a day you save money. In fact, committing to a single no-spend day per week can help cut frivolous spending by around fifteen percent.

Here are a couple of tips to help keep you on track during your designated no-spend days:

1. Avoid window shopping.

Remove temptation by steering clear of shopping opportunities - both online and off. No-spend days are far easier to adhere to when you aren't confronted with things you want to buy.

2. Look for free activities to pass the time.

To make your no-spend days more enjoyable, find alternative ways to pass the time without spending money. For example, if you feel like going to the cinema, watch a movie at home instead.

Do remember this money-saving strategy can only be effective if you implement it in good faith. If most of your frivolous spending happens on weekdays, for example, then don't designate Saturday or Sunday as your no-spend day because it won't help you save any money.

It's also important to keep in mind that the spending restrictions should only apply to your wants and not your needs. Essential spending, like that for household bills, repairs, gas, and groceries, can and should continue as usual. It's your non-essential spending habits this strategy looks to address.

How to save money on meals

Three Simple Money-Saving Tips for Mealtime

When money is tight, it can be worth examining your current budget to find potential areas of savings. As food is a major expense for most people, mealtime may provide the perfect opportunity to save some money. Here are a few money-saving tips that can help you spend less on your meals.

1. Price match your grocery purchases.

Many grocery stores offer price matching as a way to help their customers save money. If you don't already price match your groceries, then consider doing so from now on. All you'll need in most cases is a current advertisement from another qualifying store showing the same product for a lower price.

2. Go meatless for one or two dinners a week.

Meat is often the most expensive part of any meal. Therefore, if you want to save some money at mealtime, consider going meatless for one or two dinners a week. For a little extra fun, use your new meatless meals as a chance to experiment with new flavors and ingredients.

3. Create a vegetable garden.

Growing vegetables can be a great way to save money at mealtime - especially during the summer months. Even a small windowsill garden can help cut down on grocery expenses if you don't have the time or space for anything larger. If you're feeling especially ambitious, consider renting a plot in a community garden to maximize your savings.

Best ways to buy groceries

Buying groceries like a pro – tips and advice

With the cost of groceries constantly on the rise, most shoppers have taken notice of their increasingly high grocery bills. They’ve also noticed how time consuming grocery shopping can be and that poor buying choices are being made when they are in a hurry. Because of such problems, people are looking for a better way to shop. Luckily, the answer is simple. By following some advice and changing a few shopping habits, anyone can start buying groceries like a professional.

#1 – Create a shopping list

Creating a shopping list can shorten the time spent buying groceries. No longer will last-minute meal decisions need to be made as you wander up and down the aisles, because you’ll know exactly what you need to buy before you even enter the store. Having a grocery list also prevents the type of aimless shopping which can lead to filling your cart with unnecessary food, just because you were unsure of what to buy. Impulsive purchases are what send grocery bills through the roof.

For those wondering how to create a detailed list of groceries, start with a comprehensive meal plan. Decide how long the groceries should last and plan out in detail each meal during that time frame. Once you know which meals you will be preparing, you’ll know exactly what foods should be added to the list. Be sure to add specific quantities where required, so you don’t end up buying the wrong amount of food as you are shopping.

#2 – Search for fliers and coupons

Before throwing your junk mail into the recycle bin, set aside the grocery store fliers. If you are one of the lucky few who don’t receive junk mail, rest assured, most fliers can be found on the Internet. Though grocery stores often post their latest flier on their Web site, there are other Web sites that link to several of the latest fliers that can save you the trouble of searching for each one separately. A quick search for "online fliers" should point you in the right direction.

By reading the fliers, you’ll know which sales you’ll benefit most from. You should visit the stores advertising several of the items you plan to buy. It isn’t worth saving a few pennies on salad, if it requires extra time and gas to run across town to buy just the one item.

Though coupons are no longer required for most sale items, it can still be beneficial to do a quick search. You will find that many coupons provide excellent savings. Don’t be tempted to use them all, however, as it doesn’t save anyone money to buy unnecessary things.

#3 – Never shop hungry

Though it might sound strange, a common mistake for grocery buyers is shopping with an empty stomach. People often buy unnecessary things when they are hungry, so it’s best to leave the shopping for later if you haven’t eaten.

Shortly after a meal is one of the best times to shop for groceries. Before leaving, however, you should give your stomach some time to settle. This is often the perfect time to check your local fliers and search for coupons.

#4 – Buy “in season” produce

For nutritious foods that don’t break the bank, the produce section is the best place to look. In fact, some of the cheapest foods for sale are fruits and vegetables. This becomes especially true for any produce that is currently in season. Better yet, seasonal foods will also reach their peak freshness during this time.

With worldwide food delivery, most kinds of produce are available year round. Certain foods, however, will be at their peak during different seasons. These include:

Spring: apricots, carrots, pineapple, snow peas, spinach, and strawberries.
Summer: beans, blueberries, broccoli, corn, cucumber, peaches, peppers, raspberries, and tomatoes.
Fall: apples, cauliflower, grapes, mushrooms, pears, squash, and sweet potatoes.
Winter: citrus fruits, leeks, radishes, and turnips.

#5 – Avoid ready-made foods

Pre-prepared foods may offer convenience, but are more expensive to buy and are often anything but nutritious. This is because they tend to be filled with ingredients like sugar, salt, and fat – all things a healthy diet should not include. Instead, cooking from scratch can save you money and allow for meals that contain more of the vitamins and minerals your body needs. It also allows you to substitute for ingredients you like, while leaving out the foods you’d rather not eat.

#6 – Sample different brands

It’s a myth that only leading brand manufacturers sell the best food. In fact, many of the products sold under the store brand label are made and packaged by the same factories that produce the popular name brands that you have come to know and love. Some store brand foods even taste better than the leading brand, but cost much less.

If you find a product that doesn’t meet your standards, simply try another brand until you do. There’s no harm in testing different brands. Just avoid bulk purchases until you know if the product is right for you. If later on you still prefer the leading brand, you can always switch back.

By following some simple advice and changing a few of your shopping habits, it’s easy to avoid the common mistakes shoppers make when buying groceries. In doing so, you will save time and money, while benefiting from eating healthier foods at home. There has never been a better time to start shopping more efficiently, so what are you waiting for? Start buying your groceries like a professional!

The truth about cash-back rewards

Breaking change: The original cash-back rewards program

A couple days ago, during my drive into work at the high school I work at, I was thinking of some more personal finance topics to explore and write about for you here on this blog. I recently rekindled my interest in personal finance, as I'm assisting a student in a personal finance class this semester. I'm also trying to clean up some debt, save more, and budget better, so being in this class could not come at a better time for me. I'm getting back to some basics, rediscovering some tips and strategies, and learning some new ones. I'm learning along with these students, and it's been a blast. Among the major highlights for me so far, I'm entering my third week trying the envelope budgeting system.

Anyways, I had this "genius" moment come to my mind during my drive to work the other morning, although I'm pretty sure I'm not the first one to have thought about this in this way. Here it goes:

Many credit card companies offer cards that give the cardholder cash back on purchases. It's an incentive to get as many people hooked on their product - credit cards - as possible, and it doesn't really cost these credit card companies anything to do so. Case in point using simple math: If a card gives you 1.5% cash back on purchases, you have to spend $1,000 on the card just to get $15 back. That doesn't sound like much of a deal, does it? Yet, we as consumers fall for this all the time, and I've certainly fallen for it over the years. It's a psychological trap. We think in our minds we're being rewarded, and to some degree, we are. But that assumes we're always able to pay off the entire balance of the card on time. The credit card companies are banking on us not always paying our full balances off on time so that they can charge huge amounts of interest. Suddenly, that "reward" is quickly eaten up by all that interest.

So how about trying this instead: Paying cash for as many things as you can, and putting away the coins that you get back in change. Look at breaking change as being the original cash-back rewards program. There's no risk of huge amounts of interest with this simple, back-to-basics strategy, and, before you know it, all that change is going to add up to some real cash.

10 things millionaires do not do

10 things millionaires do not do:

From the book, The Millionaire Next Door: The Surprising Secrets of America's Wealthy, by Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D. 

10) Spend more money than they earn

9) Socialize with people who waste money

8) Desire instant gratification

7) Buy brand-name clothes (or pay full price for them)

6) Visit the tanning bed

5) Carry debt

4) Impulse buying

3) Replace what is not broken

2) Eat out on a regular basis

1) Buy brand new cars


From personal finance expert Dave Ramsey:

30 Easy Ways to Save Up to $1,000

How to Save Money: 20 Simple Tips

How to Save Money Fast
 
8 Ways to Turn Saving Money Into a Game

The envelope budgeting system

One of the classes I'm assisting in this semester at the high school I work at is a personal finance course. I'm really loving it, and I, too, am learning a lot.

Anyways, for about a week now, I've been trying a form of budgeting known as the envelope system. We were learning about it in class last week. The envelope budgeting system has been around for a very long time, and I was already familiar with it before class last week. I just never really tried it myself.

Here's the general gist of the envelope system, along with my spin and take on it.

Typically, the envelope system involves taking physical envelopes and assigning each one to a category of spending. You then place cash in each envelope (how much is up to you), and you only use the cash you have in each of the envelopes for their assigned categories. Once you run out of cash in an envelope, then you're done spending in that category until you can refill the envelope (next paycheck? next allowance day? next month? you decide.).

Now, for bills that you have taken out of your checking account automatically (like car insurance, rent, utilities, etc., etc.), keep them that way. Leave those expenses on autopilot. The envelope system is best used for purchases like groceries, restaurants and entertainment, clothing, gas, miscellaneous odds and ends, etc.

The concept behind this old-school way of paying cash for items is that it limits you to spending only the money you have in the envelope. And the challenge is to spend the money in the envelope wisely, because it's a finite amount. It will run out, if you spend too much, too fast. See, psychologically, it's all too easy to end up spending far greater amounts of money in the long run when we use plastic, whether it be in the form of credit or debit cards, because our minds are telling us that we have more money available to spend. Make sense? So, for example, if I go into a clothing store on a set mission to buy a pair of pants that I need (not want, but need - big difference!), and I have a credit or debit card along with me to make that purchase, it becomes a lot easier to end up purchasing other clothes that I don't need, because I know I have a lot more money, relatively speaking, available to me with the plastic than I would have with, say, a $50 bill in my wallet.



Now, I've put my own unique spin on utilizing the envelope system. I have five envelope categories for purchases. Those categories are: groceries, dining out/entertainment, gas, clothing, and online purchases. But I also created a sixth envelope for a saving category, rather than a spending one. I'm attempting to save 10% of my income. That's right - in addition to trying to better track and manage my spending, I'm trying to intentionally save more by earmarking 10% of my income each pay period.

What's also cool about the way I'm customizing the envelope system for my purposes is that some of the categories aren't very necessary, and that's by intentional design. For example, I don't typically make many online purchases. And I don't buy clothing too often, either. But if I'm socking away, say $50 per pay period, in each of those categories, I could end up with a nice little pile of unspent cash after several months. I can then decide to transfer some or all of it to my saving envelope or to one or more other spending envelopes that tend to be utilized more often.

So far, it's way too early to tell how well this system is working for me or how I feel about it. I am, however, optimistic and excited to enter my second week. It is definitely a challenge, no doubt. I can tell that doing this form of budgeting will certainly require a lot of discipline and patience.  

For more great ideas and insights about using the envelope budgeting system, check out these additional resources by financial expert Dave Ramsey. Our personal finance class utilizes a lot of Mr. Ramsey's material. Awesome stuff. Very practical advice and strategies that you can begin implementing right away.

The Envelope System Explained (podcast)

Dave's Envelope System Explained (written article)

How to save money on cell phone expenses

It's easy to lower your cell phone bill with these simple tips and strategies.

While cell phones are a relatively modern convenience, they have become something that many people would struggle to live without. If you, like most people, depend on your cell phone and aren't willing to give it up, then it may become necessary to find ways of lowering your monthly cell phone expenses.

One of the easiest ways to save money on cell phone expenses is to review your past usage history and alter your plan accordingly. Believe it or not, you could be overpaying for services you don't actually use. For instance, many people pay for unlimited data but never exceed three gigabytes of data usage per month. In such cases, consumers can easily save money by downgrading their plans.

Another way to save money is to shop around. Different wireless providers offer similar services at a range of prices. If switching to a different provider can get you a similar plan for less than you are currently spending, then consider switching. Also, keep an eye out for new deals as wireless providers periodically change up their plans.

A final strategy that can reduce your cell phone bill is calling your current wireless provider and asking an agent about possible discounts. If you know of another provider with cheaper services, mention that to the agent. Such conversations may push the agent toward offering you a better deal, just so you'll stay on as a customer.

How to eat healthy on a budget

Eating healthy can be a challenge - especially when you're on a tight budget. But being strapped for cash doesn't mean you have to subsist on a diet of only unhealthy foods, however. When money is tight, try these simple tips that can keep you eating healthy for less.

1. Buy in-season fruits and vegetables.

Fresh produce generally costs less while it's in season, so when you're shopping for groceries, be sure to seek out in-season fruits and vegetables. If you need to purchase produce that is out of season, compare the item's fresh and frozen prices to see which is currently more cost-effective.

2. Buy day-old bakery items.

Despite tasting almost as fresh, day-old bakery items are cheaper than their freshly baked counterparts. The only downside - day-olds are often packaged in larger quantities. Fortunately, freezing the extras can help you maintain their freshness. For the healthiest options, stick to wholegrain baked goods.

3. Buy dairy products in larger sizes.

As dairy products like milk and cheese tend to get cheaper per serving as sizes go up, opt to buy the larger sizes whenever possible. Do check, however, that the products' expiration dates are far enough away so the items can be fully consumed before they spoil, or else this tip may actually end up costing you more in the long run.

As you can see, it's possible to spend less while still maintaining a healthy diet. So, to help ensure you're still eating healthy while on a budget, give these tips a try the next time you need groceries, but find yourself strapped for cash.

How to save money while dining out

If you're on a tight budget, you may try to save money by avoiding certain activities like eating out. While eating out is generally more expensive than dining at home, there are ways to spend less while enjoying a nice meal at a restaurant. If you'd like to save a little money while dining out, consider making these money-saving changes.

1. Go for lunch.

Many restaurants have separate menus for lunch and dinner. While the portion sizes are generally reduced at lunchtime, so are the prices. By choosing to go out for lunch instead of dinner, you can save money.

2. Stick to water.

Beverages can add a substantial cost to your overall bill, whether it be soda, coffee, or especially any alcoholic beverage. You can save quite a bit of money while dining out by forgoing pricier drinks and sticking to water.

3. Skip dessert.

A round of desserts won't be cheap when eating out, so keep down your costs by skipping dessert. If you really can't go without dessert, then stop by the grocery store on the way home. You'll likely find several dessert options at a fraction of the cost.

4. Utilize coupons and discounts.

Keep an eye out for restaurant coupons when going through your mail. Also, inquire with your server about any available discounts for students, veterans, seniors, etc. that you or anyone else in your party may qualify for. By utilizing coupons and discounts, you can further reduce your bill.

Exploring your local library

Are book stores making you poor? Borrow from your local library instead

With the price of many books being quite expensive, it’s no surprise that heavy readers are looking for cheaper alternatives to support their hobby. If you happen to find yourself spending way too much on books (many of which you only end up reading once), then it’s time to check out your local library to see what they have in stock. You’ll still find plenty to read, but you’ll no longer have to worry about the price on the back cover.

Regardless if you are looking to read a book from one of today’s hottest authors or a series that has received very little press, there’s a good chance that you will be able to find what you are looking for at your local library. By borrowing books whenever you can and only buying books as a last resort, you can save a great deal of money.

If you are the kind of person who likes to be right up to date with the latest book crazes, you’ll be happy to know that many of the larger libraries order in several copies of their most popular books. This is a common practice for new releases, the latest installment of a series, or books that have been made into popular movies.

Even so, without knowing a few tricks, some of the most popular books can be hard to get a hold of. If you are having trouble borrowing a particular book because it is always checked out, don’t wait around for it to be put back on the shelf. Chances are the book has a waiting list that your name should probably be put on. Library staff can let you know how to go about adding your name to the list.

If you are unable to check out a certain book right away, there is no reason to become discouraged. Take the opportunity to read another book while you are waiting. Remember, it doesn’t cost you anything to borrow a book, so you’ve got nothing to lose even if the book you decide on isn’t quite your cup of tea. Simply return the book and borrow another one instead.

There will be times when you have a specific book in mind that you’d like to read, only to learn that the library doesn’t own a copy of the book. To help combat this problem, many libraries offer what is known as an interlibrary loan (ILL). By using the interlibrary loan service, your library can help you to borrow your desired book from another participating library that has an available copy.

The one thing that you must remember to do is return the books on time. You’ll never save any money if you return the books past their due dates because you’ll end up having to pay late fees. Granted, these fines aren’t all that expensive, but they can certainly add up if you continue to keep books past your allotted time. Be sure to inquire about the cost of fines when opening a new library account, so you know what to expect if you do end up with an overdue book.

If you’ve been spending more money on books than you’d like and are looking for a way to save some money, then it’s time to stop buying your books and start borrowing them from your local library instead. If you choose to make the library your main source of reading material instead of your local book store, then you will be able to save a lot of money while still reading to your heart’s content.

A lot more than just books...

But beyond just books, libraries offer so much more to help us learn, grow, and discover. This statement rings especially true in today's highly-digitized world, where smart devices and plenty of other forms of technology have made it a lot easier to take in new knowledge and insights. Libraries, like the rest of the world, have had to modernize their offerings and services by keeping pace with the rapidly-changing technology scene in order to remain relevant and competitive.

For example, many libraries now offer portable Wi-Fi hotspots that you can borrow if you don't have regular Internet access at home. Many libraries also now loan out video games and game devices, as well as offer access to subscription streaming services that allow you to view movies and other digital content. For children and youth, specifically, makerspaces have become really popular.

All of this is above and beyond the usual collections of DVDs, CDs, news and article databases, desktop computer stations, and e-books and e-book devices. And the cost to you to be able to access all of this great stuff? All free with your library card. All of it. So what are you waiting for? Go to your local library and start exploring. If you haven't been to your library in quite a while, get reacquainted. You won't be disappointed! 

Five ways to save on car insurance

Most drivers know all too well that car insurance is a costly expense. Fortunately, there are several ways that car owners can save money on their car insurance premiums. If you'd like to save money on your car insurance, consider implementing these five cost-saving measures.

1. Do your homework.

If you haven't purchased your car, then do a little homework before you do. By looking into the average insurance costs for different types of vehicles, you'll know which cars cost the most to insure. Knowing this information when choosing a car can save you substantial amounts of money on future car insurance payments.

2. Shop around.

Different insurance companies offer different policies at different prices. That's why it can be worth shopping around for a better deal, even if you already have car insurance. After shopping around, sign with whatever company offers the best value for your money.

3. Bundle your insurance.

Another way to save money on your car insurance is to bundle it with another insurance policy. A popular bundle offered by most insurance providers combines both your car insurance and your home, renters, or condo insurance. If your car insurance is currently with a different provider than your home insurance, inquire with both companies about the potential savings of bundling the two. When each company has provided you with a quote, choose whichever option is best for you.

4. Choose group insurance.

Insurance providers often give their best rates to groups. If your employer, business association, or alumni group deals with a group insurance provider, ask them about the benefits and cost of their car insurance policies to see which provider offers the best protection for the lowest fee.

5. Ask for discounts.

Simply asking your insurance provider for a discount can sometimes be enough to lower your car insurance premiums. Many providers offer discounts for low-mileage drivers and drivers with accident-free records. Those who have taken a defensive driving course may also be eligible for additional discounts. By asking your insurance provider about possible discounts, they can work with you to find any discounts you may be eligible for.

Because insuring a car is never cheap, it's always worth looking into ways to save money on your car insurance premiums. So, if you want to lower your car insurance expenses, consider doing your homework, shopping around, bundling your insurance, choosing group insurance, and asking for discounts.

Five ways to save money on groceries

When cash is tight, saving money on groceries tends to become a priority. Thankfully, there are ways to get more groceries for less money so you won't have to go without. Below are five things anyone can do to save money while grocery shopping.

1. Read the fliers.

You can save quite a bit of money by buying items that are on sale. Before doing any shopping, read the fliers to find the weekly sale items, so you can add them to your list of things to buy.

2. Use coupons.

Using coupons is a great way to save money. Depending on the value of the coupons, you might even come back with some completely free items.

3. Buy generic brands.

Despite often being cheaper, certain generically-branded foods taste just as good or better than their name brand counterparts. Save money by buying generic products whenever they make for suitable alternatives.

4. Price match whenever possible.

It can get expensive traveling from store to store to take advantage of weekly sales. Instead of visiting several stores and buying just a few items in each, try to do all your shopping in a single store that price matches.

5. Make a list and stick to it.

You can easily overspend if you go grocery shopping without a plan. Make a list of desired items that fit within your grocery budget and stick to it while shopping.

Grocery shopping on a tight budget can be a losing battle if you fail to plan ahead. To spend less money on groceries the next time you go shopping, be sure to read the fliers, use coupons, buy generic brands, price match whenever possible, and stick to your list of things to buy.

Save money with the 24-hour rule

The "24-Hour Rule" for Non-Essential Purchases

It's easy to overspend if you are an impulsive shopper - especially if you like to shop online. That's why, if you need to stick to a budget, you should always follow the 24-Hour Rule when considering non-essential purchases.

What is the 24-Hour Rule regarding non-essential purchases? It is exactly what it sounds like - before making any non-essential purchases (especially costly ones), take 24 hours to decide if you really need the product or service in question. Also, take the opportunity to consider if the purchase will fit within your budget.

If it turns out that you don't really need the product or service and making the purchase will put you beyond your set spending limit, then consider putting off the purchase until a later time. If the purchase won't exceed your set spending limit and you still want to buy the product or service after 24 hours have passed, then it's probably okay to splurge.

By setting aside 24 hours to really consider any non-essential purchases, you can stop yourself from impulsively buying products or services you may not really want or need. So, the next time you're about to make a non-essential purchase, keep the 24-Hour Rule in mind and ask yourself if you really need the product or service in question and if now is the most appropriate time to be making a purchase.