How much I spent during two weeks of travel

I like to travel. Over the past decade, I've probably made an average of two international trips per year. But you know what? Never once in that time have I tried to track how much I spend while exploring the world. Sure, I log my numbers in Quicken (as I do for everything), but I've never analyzed the cost of an individual trip.

This month, I flew to Europe to hang out with my cousin Duane again. He and I enjoy traveling together. Because I was curious, I decided to be diligent about tracking my expenses for this trip.

Note, however, that I didn't try to do anything different. I didn't adjust my normal behavior simply because I knew I'd be reporting to GRS readers. I did what I always do. I spent in ways that felt normal to me.

I don't need a fancy hotel, for instance. Neither does Duane. We're happy with cheap, simple lodging. And because most of the time we don't book rooms in advance, we don't hunt for the best deal. When we decide to stop for the night, we look for a place to stay. When we find something reasonable ($50 per person per night is our target) and available, we book it. We don't continue to search. We'd rather use our time to explore our surroundings.

On the other hand, we're both willing to splurge on food from time to time. Our rooms aren't important to us, but what we eat is.

Similarly, we'll pay to see special sites, but mostly we're happy visiting free museums and/or walking around a city. We don't pay much for tours, etc.

So, how much did I spend for two weeks in Europe? Let's find out!

Chateau Chenonceau in France's Loire Valley

Booking Flights

This trip was sort of spontaneous. Remember, Duane has throat cancer. We expected our trip in December to be the last adventure we had together. But his health has held steady — and his doctor is making hopeful statements that he might be around for Christmas! — so we decided to make another trip.

Generally, I try to book flights several months in advance. I feel like I find cheaper options that way. This time, though, I didn't book my flight until April 19th, less than a month before our trip.

Also, I'm fussy about flights. It's not that I need to sit in business class — I'm perfectly happy in coach — but I don't like layovers. I'm willing to pay extra for a direct flight.

Unfortunately, when I searched for flights from Portland to Paris, I couldn't find any direct flights. I could, however, find a non-stop to London. I like London. It's a pleasant city. “What if,” I thought, “I flew to London a few days early and used that time to get some work done? Then I could take the Chunnel train across to Paris to meet Duane when he arrives.”

So, I booked a flight to London. It cost me $996.63 and each leg took roughly 10.5 hours.

(I don't know how much Duane paid for his plane ticket. I think it was around $600, but he had to fly from Portland to Las Vegas to Los Angeles to Paris and it took him almost 24 hours. Yuck. I'm happy to pay a premium to avoid crap like that.)

I made a small mistake when booking my ticket. In the past, I've always traveled economy. That's what I thought I was doing this time. Nope. Apparently, there's a new(-ish) airfare class called “basic economy”. This is a massive “screw you” from the airlines to their customers. It's a little bit cheaper, but you're not allowed to make any changes to your ticket once you've booked. No option to upgrade. Plus, you board dead last. And you can't choose your seat. And if you check a bag — as I did for my return flight — it costs a ton.

Edinburgh

I flew into London with no real plan for the first few days. Brandon (the Mad Fientist) had invited me to visit him and his wife in Edinburgh, Scotland, but I felt like I oughtn't do it. I felt like I should stay in London and work.

When I landed, though, I changed my mind. “Is it still okay if I come up to see you?” I asked. “Sure!” Brandon said. So, I hopped on Trainline (an awesome app that Duane and I used to buy train tickets during our December trip) and booked a ticket from London to Edinburgh. Cost: $101.92.

While waiting for my train at Kings Cross station (and watching the tourist throngs at Platform 9-1/2), I withdrew £200 for spending money, which is about $252.31. I used this cash to buy things like coffee and snacks and souvenirs. I brought home £141.15, which means I spent £58.85 (or about $74.24) cash while in the U.K.

I had a great time hanging out with Brandon and Jill. They showed me everyday life in Edinburgh, one of my favorite cities. They put me up in their spare room, took me to pubs, and we wandered together through the streets and the parks.

While there, I spent:

• $45.76 at Brewdog for beer and snacks. (Did you know that low-alcohol beer — like 0.5% to 2.0% — is a thing in the U.K.? I wish it was a thing here in the U.S. I'd buy it.)
• $17.74 at Whiski Bar for an hour of music and Scotch.
• $9.91 at Cairngorm Coffee, where Brandon and I spent a morning working.
• $33.78 at Mother India restaurant, where the three of us had a fine meal of “Indian tapas”.

In all, I spent a total of $283.35 during my three nights in Scotland.

Picnic in the Meadows with the Mad Fientist and friends

Paris

When it came time to meet Duane in Paris, I was faced with a choice. Originally, I had intended to take the train from London to Paris. But when I looked at times and prices to get from Edinburgh to Gare du Nord, I didn't like what I saw. The trip would take about 12.5 hours and the total cost would be over $350. Yikes!

“You should book a flight on EasyJet,” Brandon suggested. I've never used EasyJet, but I looked into it. For $199.45, I could fly from Edinburgh to Charles de Gaulle airport (CDG) in Paris — in less than two hours. I booked a ticket. Then, using Chase Ultimate Rewards points, I booked one night at the Hotel ibis, which is attached to CDG terminal 3. My cost: 7718 Chase points.

In Paris, I paid €17.99 for a one-day train pass, which gave me unlimited access to all Metro and RER routes. (The metro lines are the subway and local trains. The RER routes are the commuter trains that run deeper into the suburbs, going places like Versailles and the airport.) I also withdrew €200 in cash (about $222.50) to use for incidental expenses, such as snacks and souvenirs.

While I waited for Duane's flight to arrive, I visited Notre Dame to see what it looked like after the fire. (I was startled to note that when the wind was right, you could smell the ashes!) I bought an extra travel shirt. And I met my friend Amy for champagne and charcuterie. (Amy lives in Houston but happened to be in Paris for work.)

Amy, J.D., and random amused French woman

At around 18:00, I returned to the airport to pick up our rental car. I was worried this might not go smoothly, but I was wrong. Estelle, the young woman at the Avis counter, was amazing. It didn't take long for her to get met set up with a Peugot 208. Plus, she was kind enough to phone ahead to our hotel to let them know we'd be a little late. I booked the car with British Airways points. My cost: 16,600 Avios — a bargain!

As I was finishing at the rental car, Duane cleared immigration. Perfect timing! We hopped in our little car, braved Paris traffic and made our way to the garden spot of Giverny.

In Giverny, we checked into our B&B (booked with 8154 Chase points), then hurried to the only restaurant in town that was still open. Duane spent €51.00 on our dinner of duck breast and red wine.

During two nights in and around Paris, I spent $199.45, €17.99, 8154 Chase points, and 16,600 Avios (BA points). Duane spent €51.00.

Normandy

The next morning, Duane and I started our driving tour of northwest France. I'd been worried that all French drivers would be like the ones in Paris. They weren't. On the country roads, people were much more mellow. Thank goodness. (I drive like an old man. I hate speeding and tailgating.)

First, we toured Rouen, the town where Joan of Arc was burned at the stake. We saw our first cathedral of the trip, visited the (free) Museum of Fine Arts, and browsed the weekly market.

Duane and I both enjoy markets. We're happy to pass time looking at fruits and vegetables and meat and fish. For real. Plus, this gave us a chance to buy cheap food for the road. I picked up a paper sack filled with twenty baby chorizo sausages, for instance, and it cost only €5. (I think there were more than 20 sausages in the bag too. That thing lasted me almost the entire trip, and I was eating several sausages per day.)

In the afternoon, we drove to Honfleur with no plans about where to stay. The first hotel we visited was perfect: cheap and efficient. I paid €100.00 to book a room. Duane spent €54.00 on our dinner at a local pub.

On our second day, we meandered along the coast. We stopped to taste calvados (an apple brandy made in Normandy), nibbled goat cheese in Deauville, and stopped to visit the Grand Hotel in Cabourg, the site of Proust's famous memory-inducing madeleine.

Buying goat cheese and “bacon” in Deauville

In the late afternoon, we reached Bayeux. Our first hotel choice was booked, but the second had two cheap rooms available. We paid €49.00 each. For dinner, we chose an expensive restaurant (I can't remember why) that cost Duane €94.00.

After dinner, we wandered around town. It was a magical evening in mid-spring. We happened to hit the city during its “festival of lights”, and when we stopped by the cathedral, an American choir was performing a concert. We stopped in to listen.

In the morning, we visited the Bayeux Tapestry, a 70-meter long work of art that's nearly 1000 years old. In dozens of scenes, it depicts the Norman conquest of England. People think I'm joking when I say this, but I'm not: This tapestry is like a very early comic book. (And, in fact, the drawings used to plan tapestries like this are referred to as cartoons. No joke.) This visit cost me €19.00.

Seriously, the Bayeux Tapestry is like a primitive comic book

While in Bayeux, we visited Omaha Beach and the nearby American Military Cemetery. After that, we drove backroads to reach Mont-Saint-Michel, one of the most famous tourist sites in all of France (and formerly one of the top three destinations for Christian pilgrims). This island used to be isolated from the mainland by ocean tides. Now there's a causeway that leads to it, but even that sometimes floods over (as it did during our stay).

I used 14,538 Chase points to book a room on the island, and I'm glad we did. During the day, the place is packed. After 18:00, the crowd disperses and things become peaceful. It's fun to wander the ramparts with nobody to disturb you.

Here, Duane paid €89.00 for dinner.

During our time in Normandy, I spent a total of €168.00 and 14,538 Chase points. Duane spent €286.00.

Mont-Saint-Michel at high tide

Brittany

The next morning, after a quick tour of the Mont-Saint-Michel abbey, Duane and I packed up to drive to Brittany. (The island actually sits on the border between the two regions.)

As we entered Brittany, we got our first taste of fuel prices in France. To put 38 liters (about 10 gallons) in the Peugot 208, I paid €60.00. Holy cats! That's nearly $7 per gallon, or about twice what we pay here in the States.

In the early afternoon, we stopped for a couple of hours in the walled city of Dinan, which is built on a hillside overlooking the river Rance.

Looking from the ramparts of Dinan to the valley below

By early evening, we'd reached Carnac on the Atlantic coast. Carnac is famous for its “standing stones”, a collection of 3000+ domens and menhirs in the region. I love sites like this (and Avebury and Stonehenge in England), so was pleased to visit. (If you've ever read any Asterix comics, you're familiar with the stones of Carnac.)

The first hotel we visited had a cheap room available (€66.00), so we booked it. Our dinner next door was…an adventure.

Brittany, as you may know, is the source of the crepe. It's also the source of the galette (a savory crepe). Crepes and galettes everywhere in this region. Because we like to try local food when we travel, Duane and I decided to eat galettes for our evening meal. “You should get the andouille,” the restaurant owner told us, smiling. So we did.

Well. It turns out that American andouille is not the same as French andouille. French andouille is simply sliced pig intestine that has (ostensibly) been cleaned very, very well.

“This tastes like ass,” Duane said as he ate his galette. He couldn't finish. I did finish, but was a little mortified when I looked up the ingredients later. Our host seemed to take pity on us for being such good sports. When I ordered a glass of calvados after the meal, he gave me a huge pour.

I paid €46.00 for our dinner of pig-gut pancakes.

During our 24 hours in Brittany, I spent a total of €172.00. Duane spent nothing.

The Loire Valley

After a quick breakfast of coffee and crepes (€12.00 paid by Duane), we made our way to Angers, former capital of the Anjou region. (Angers is the source of both anjou pears and Cointreau liqueur.) Here, we visited our first chateau. Did you know that a chateau is a castle? I didn't — not until this trip.

Anyhow, the Chateau d'Angers is home to the amazing Apocalypse Tapestry, a 600-year-old visual retelling of the apocalypse story from the Bible's Book of Revelation. Like the Bayeux Tapestry, it reminds me of a massive comic book made from cloth. It cost us €12.00 each to see the chateau and its art. (Duane paid this.)

The Apocalypse Tapestry at Chateau d'Angers

In the evening, we experienced our big splurge of the trip. Based on a GRS reader recommendation, I had booked a night for us at the Royal Abbey of Our Lady of Fontevraud, a former monastery founded in 1101. Although many old buildings remain (and guests are free to explore them), the site is no longer an abbey. It's a fancy upscale hotel and a Michelin-star restaurant.

Going in, I'd told Duane to ignore the costs for our night at Fontevraud. “I'm paying for the hotel and dinner, and it's not part of our trip accounting. Don't try to balance it out,” I said. “I'm making a deliberate decision to splurge.”

Our room at the abbey cost us €172.00. Our meal cost €239.00. As I mentioned earlier this week, the food was fine and I'm glad I experienced it. But I wouldn't do it again.

In the morning, we traveled country roads to visit another chateau: Chenonceau. We each paid €19.00 to tour the grounds of this beautiful old estate.

In the afternoon, we moved to nearby Amboise, where Duane paid €73.00 to book a hotel. We hiked up the hillside, then tasted wine in a cave. We ate dinner at the tiny Restaurant L'Ilot, where the woman waiting tables chided us for not making a reservation — then was playfully grouchy the rest of the evening. This meal cost Duane €94.00 because he insisted we order a bottle of wine.

The next day, we stopped briefly in Blois to visit the church of St Nicolas. This place is barely mentioned in the guidebooks, but we loved it. During World War II, most of its stained-glass windows were destroyed. They've been replaced by modern windows with modern glass. The results are amazing. When light shines through them, color spreads throughout the church.

The light show from the stained glass at St Nicolas Church

We next stopped in Chartres to visit its famous cathedral, which is especially known for its stained-glass windows. And while yes, there are many of them (176!) and they're impressive, I liked the ones in Blois better.

During our time in the Loire Valley, I spent a total of €430.00, most of it for my splurge at the abbey. Duane spent €281.00. (He filled the car with gas at one point.)

Wrapping Things Up

After touring the Chartres cathedral, we didn't know what to do. We found ourselves on the southwest side of Paris, but wanting to reach the northeast corner by the following evening. We couldn't make up our minds, so I simply drove east.

Eventually, we reached Fontainebleau, which we decided might be fun to visit. But the town was packed and we were tired. Instead, we drove on until we found a budget hotel (aptly named Budget Hotel), where Duane paid €86.00 for a room. For dinner, we each paid cash at a French fast-food chain.

The next morning, we returned our rental car. I was sad to say good-bye to the Peugot 208, which had served us well. Before we turned it in, Duane paid €32.00 to top off the fuel tank.

For logistics purposes, I'd used 11,182 Chase points to book us separate rooms at the ibis Hotel once again. (It's handy having this place next to the airport train station.) We each paid €17.99 for one-day train tickets, then we rode into Paris.

With several hours to kill, we decided to walk the city. But we didn't walk the downtown tourist core. We've both done that before. Instead, we chose the Coulée verte René-Dumont, an elevated greenway akin to New York's Highline. From there, we made our way along the canal. This 5k stroll made for great people-watching.

Here, we said our good-byes. Duane wandered off to spend time on his own. I met up with my pal Matt Kepnes (a.k.a. Nomadic Matt) for a couple of beers.

In the morning, I took an early flight back to London (booked with 4500 Avios and $27.50), then boarded my Delta flight back to Portland.

On this final day, I spent a total of $47.48, 4500 Avios, and 11,182 Chase points. (At some point, I withdrew another €200.00 in spending money. I returned home with €102.66, which means I spent €97.34 of that — or about $108.41.) Duane spent €86.00 and $19.98.

The Bottom Line

After all of that, how much did I spend on this trip? Let's crunch the numbers. For two weeks (three nights in Scotland and ten in France), I spent:

• $996.63 for my flights from and to the U.S.
• $573.65
• €637.98 (about $710.63)
• 19,336 Chase points
• 21,100 Avios (British Airways points)

Converting all of my expenses to dollars, my total cost was $2277.91 plus rewards points. That's an average of $175.22 per night. (I spent $1284.28 plus points if you ignore the flight, for an average of $98.79 per night.)

If I hadn't splurged €411.00 for the abbey experience (and instead paid €100 for dinner and lodging that night), my costs would have been €311.00 less.

During our nine nights together in France, Duane spent a total of €670.99 (about $747.40) plus whatever his flights cost him (about $600, I think). That's $83.04 per night ($149.71 with his flights). Together, not counting flights, we spent the equivalent of $2031.68 and points for this vacation.

Because I've never tracked my trip spending before, I have no frame of reference for our costs. I feel like we did a good job of using money wisely — spending only on things that brought us value — but who knows? I'm sure plenty of people would spend much less on a trip like this. That would probably require advance planning, though, and half the fun for us is making this up as we go.

Here's the thing, though. How much have I been spending simply to live here at home? About $5000 per month, right? (And I'm aiming to get that down to $4000 per month.) When you compare the cost of travel to the cost of simply maintaining my lifestyle here in the U.S., it's shockingly affordable. Cheaper than living in Portland, even.

That's food for thought.

One final note: In Edinburgh, Brandon showed me how to use Apple Pay. Believe it or not, I'd never done this before. Now, though, I'm hooked. Even back here in Portland, I'm using my phone to pay for things, not my actual credit card. I think this is awesome. Duane is less convinced. But that's a subject for a future blog post…

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Big pleasure from small things

Hello, friends. I have returned from France and recovered from jetlag. (I'm not good with jetlag.) Later this week, I'll publish an article about how much my cousin Duane and I spent during our ten-day drive across Normandy and Brittany, but today I want to share one small epiphany I had on the trip.

I am a Proust nerd so was happy to stumble upon Combray

Midway through our excursion, we heeded a recommendation from a GRS reader and stayed the night at the Royal Abbey of Our Lady of Fontevraud, a former monastery founded in 1101. Although many old buildings remain (and guests are free to explore them), the site is no longer an abbey. It's a fancy upscale hotel and a Michelin-star restaurant.

Duane and I typically prefer to stay in simple rooms when we travel. We don't need fancy. For us, a hotel is a place to sleep, not a place to be pampered. Our aim is to spend less than €100 per night (or €50 per person). We do make exceptions, though. (On this trip, we also paid extra to stay the night on Mont Saint Michel.)

In this case, we thought the hotel was nice and modern, but at $193.57 for the one night, we wouldn't do it again. That's way too expensive for us. And the restaurant was even more expensive.

Duane would have been perfectly happy eating crepes or galettes (which are savory crepes) at a regular restaurant in the nearby village, but I've always wanted to eat in a Michelin-star restaurant, and this seemed like a perfect opportunity. I mean: It was right there in the same building as our hotel.

“I'll pay tonight,” I told him. “Ignore the prices. I'm making a deliberate decision to do this. You just enjoy the meal. Don't worry about the cost.”

We did enjoy the meal. It was a fixed menu at a fixed price, although we could add options. (Duane added mushrooms and I added a cheese plate.) The food was fun and fancy. Here for instance, is the pea soup with “bread”:

Pea soup with “bread” as a first course

In the end, I spent $267.41 for our meal. That's the most I've ever paid for a meal in my life. But was it the best meal of my life? No. It was good — don't get me wrong — and I loved experiencing how a superstar kitchen combines flavors, but this wasn't even in the top twenty meals I've ever eaten. There are several restaurants here in Portland that I'd prefer to dine at, and they cost much less.

But I don't mean to grouse about how little enjoyment we got for the money we spent. Just the opposite, in fact.

When we reached our hotel room after a long day of driving, I needed to freshen up before dinner. I went to the bathroom to wash my face. “Wow,” I thought as I scrubbed down, “this soap smells amazing. I love it.” This is a strange thing for me to think. I've never had positive feelings for soap before in my fifty years on this Earth.

When I'd finished, Duane took his turn in the bathroom. “Did you smell that soap?” he asked when he was done. “It smells like wood and smoke and spice. It's fantastic.”

“I thought same thing!” I said. “I'd buy some. Maybe we can find it when we get to Paris.”

“We sound like a couple of gay men,” Duane said and we both laughed. (He can get away with jokes like that because he is a gay man.) We forgot about the soap and went to dinner.

In the morning, as we were checking out, we noticed that the soap was for sale in the hotel lobby. On a hunch, I googled the manufacturer. Sure enough: The soap was produced by a small company only three kilometers away.

“Let's go buy some soap,” I said. We hopped in our rented Peugot 208 and made the short jaunt to the soap factory.

Sidenote: We knew nothing about the Peugot 208 before we picked it up at the rental company. Turns out, it's an awesome little car. France is filled with awesome little cars. Unfortunately, none of them are available in the U.S. because the car manufacturers don't think they'll sell well. Americans like big trucks and SUVs. This makes me sad. I'd gladly purchase a Peugot 208 as my next vehicle.

We spent about half an hour looking at (and smelling) the different soaps. A friendly French woman answered our questions and taught us how to better get a sense of each soap's scent. (“You need to step out of the shop,” she said, “and let the soap get warm in the sun. Then you'll know how it really smells.”)

In the end, Duane spent €20 on soap. I spent €40. We both believe it's money well spent.

Fancy soaps for sale in rural France

“I can't believe I just made a side trip to buy soap,” I said as we resumed our journey toward Amboise. “But I feel like this is a small thing that will improve my quality of life. Kim and I currently use watered-down liquid soap from a dispenser. I don't like it. Now when I come in from working in the yard, I'll actually enjoy washing my hands. It sounds stupid, I know, but it's real. Plus, it'll remind me of France and this trip with you.”

“It doesn't sound stupid,” Duane said. “There are lots of small things that make life better. I don't think we pay enough attention to them. Sometimes you can get big pleasure rom small things. More pleasure than from big things, in fact.”

“Do you really think so?” I asked.

“Sure,” he said. “Think of your brother Jeff. He likes gourmet coffee. I'm happy with a cup of coffee from McDonald's but he's not. Every morning, he gets a lot of joy from a fancy cup of coffee. For me, I enjoy having a clean car or a clean house — especially since I don't clean either one very often. I'll bet you can think of all sorts of similar examples.”

As we drove, I thought more about the pleasure we get from small things. Duane is right. There are certain tiny actions and objects that make my life better. Here are some simple examples:

• I like using everyday items I've purchased while traveling: band-aids, jackets, t-shirts, underwear, etc. I like being reminded of my trips.
• I wear two cheap turtle necklaces. I bought one for ten bucks in Hawaii. I bought the other for two or three bucks in Ecuador. I love them.
• Like many people, I have a favorite mug. I also have a favorite whisky glass. Each probably cost less than ten bucks, but they make me happy whenever I use them.
• Kim and I own several pieces of art produced by family and friends. None of these was expensive. (Some were given to us free.) We enjoy having the constant reminder of their creativity.
• One of the reasons I enjoy gardening is that every year these inexpensive plants bring my pleasure in a variety of ways: pretty flowers, tasty fruit, vegetables for meals I prepare.
• Most of all, I love to walk. It costs me nothing but gives me so much. I like being outside. I like exercising. I like the time for meditation.

It occurred to me that these are examples of conscious spending in action. When we identify small, inexpensive items and behaviors that make us disproportionately happy, spending on them allows us to get more bang for our buck. This also what Marie Kondo means when she talks about only keeping possessions that “spark joy”.

I'm unlikely to ever again in my life be so enthusiastic about soap. But I'm glad that Duane and I allowed ourselves to make a small side trip to buy this stuff. Now that I'm home and have the soap in the bathroom, it really is a small thing that gives me big pleasure. (Fortunately, Kim likes the smell of the woodsy soap too.)

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How to Build a $1 Million Dollar TFSA

Retirement might not be a top-of-mind concern for a 20- or 30-something, but these are your best years to save for future you. Thankfully, it’s ridiculously easy to create a million dollar TFSA!  What is the Tax-Free Savings Account (TFSA)? The Tax-Free Savings Account was introduced in 2009 to help Canadians save money. This account [...]

The post How to Build a $1 Million Dollar TFSA appeared first on Money After Graduation.

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#money #finance #investments

The best online savings accounts of 2019: How to find the best high yield online savings account

Finding the right savings account can get you an extra $200 for free this year.

Depending on your balance, it could make you a lot more money.

Let’s say you have $10,000 to put into an online savings account.

How much would that turn into at a big bank savings account? Most big banks have an APY (annual percentage yield) of 0.15% or less. After a year, your account would be worth $10,015. Not much of a gain there.

I love getting money for nothing, but even I have a hard time getting excited over an extra $15.

Now let’s say you take that same $10,000 and put it into an online high-yield savings account with an APY of 2.25%.

After a year, you’ll have $10,225.

That’s $225 for doing absolutely nothing. Everyone needs some extra cash on hand for an emergency fund anyway. Why not get as much as you can while it sits there? All it takes is opening the right savings account.

The best online savings accounts

We’re going to do a deep dive into what to look for, which accounts are best, how to get the highest APY, and tricks for optimizing your savings accounts.

If you want to skip all that and open an account right now, all of these savings accounts are among the best:

• Discover Online Savings Account
• Ally savings account
• Marcus by Goldman Sachs
• American Express savings account
• Barclays savings account
• Synchrony savings account

You’ll be happy with any of them. My personal favorite is Ally.

What matters when picking an online savings account

Here’s how we evaluate the best savings accounts.

User experience

Good online and mobile apps make a huge difference these days.

While I do appreciate a great user experience, I do have to say that it doesn’t matter as much with a savings account.

It needs to be good enough but not great.

Why?

Because we rarely log into savings accounts. Savings accounts usually have limits of being able to withdraw from them up to 6 times per month. By definition, they’re not meant to be used regularly.

With one of my accounts — my emergency fund that I never touch — I log into it maybe once a year during tax season to grab the annual tax form. Otherwise, I never log in at all.

So the user experience should be good enough that it’s not infuriating, but it doesn’t need to be cutting edge. That adds a lot more value for checking accounts, which we do access all the time.

Fees

For online savings accounts, it’s absolutely essential that you get an account without any maintenance fees. Monthly maintenance fees used to be common. Thankfully, just about all the online savings accounts have done away with them.

On any good savings account, you’ll rarely run into fees during normal usage. But even on the best accounts, it is possible to trigger fees for certain events:

• Returned deposit items
• Overdraft items paid or returns
• Excessive transaction fee (like going over 6 withdrawals per month)
• Expedited delivery
• Outgoing domestic wires
• Account research fees

We’ve made sure not to include any banks in our list that have maintenance fees. But you should be aware of some of these other fee items that do exist on every account.

Convenience

What we consider to be “convenient” with savings accounts falls into two buckets depending on where you are in your own personal finance journey.

When you’re building savings for the first time, it’s essential to get a savings account with no minimum balance. A $5 required balance or something like that is fine, you just don’t want to have to worry about a higher one.

Don’t put up with any account that requires a sizable minimum balance. There are so many options that don’t have any balance requirements at all. This is the last thing you should be worried about in the early days, especially if an emergency comes up and you need to withdraw cash.

Later on, what you consider to be convenient typically changes.

Once you’ve built enough of a cash buffer for yourself, you’ll care a lot less about minimum balances. Instead, your accounts, cards, and banks have all gotten complicated enough that simplicity matters a lot more than it used to. At this stage, some folks will opt for a lower APY in order to consolidate their accounts and make everything more manageable.

Is this the optimum strategy to get every ounce of growth from your cash? No, it isn’t. But the extra piece of mind can be well worth the cost. If this sounds appealing to you, check to see if the savings account at your main bank has a good enough APY without any maintenance fees. If it does, it could be your best option.

FDIC insured

Don’t ever consider an online savings account that’s not FDIC insured. This means that the account is guaranteed by the federal government up to $250,000 per depositor. If something horrible should happen to the bank, the federal government guarantees you’ll still get access to your balance, up to $250,000. This is per depositor, so the $250,000 includes the combined balance of all your savings accounts at the same bank.

Just about every savings account is FDIC insured. It’s been a standard practice for a long time. But keep a close eye on this any time you’re considering an innovative or unique approach to storing your cash.

For example, some folks will store their cash in a money market account, which operates a lot like a savings account. Money market accounts are usually FDIC insured. But money market funds, which you place cash into from a brokerage account, are not FDIC insured. A subtle yet critical difference during tenuous times.

Another example: Robinhood attempted to roll out a checking account that promised a 3% APY. That’s a checking account paying higher interest than any savings account that was available at the time, by almost 1%. Sounds amazing right?

It came with a number of catches, one of which was that it wasn’t FDIC insured. Without the FDIC insurance, we don’t consider the higher APY worth the risk.

Our stance is that every dollar of our savings should be covered by the FDIC, even if the balance is high enough that we have to split it up between multiple savings accounts.

All of the savings accounts that we review below are FDIC insured. Just keep an eye out for this if you’re exploring an atypical approach to storing your cash.

APY rates

APY rates — the annual percentage yield — are the main difference between savings accounts. The higher your APY rate, the more money that you get automatically every month.

APY rates across saving accounts generally fall into 3 tiers.

Big bank savings account APYs

For the vast majority of big bank savings accounts, the APY is terrible. Big banks assume that you want a savings account along with your checking account, so they don’t do anything to entice you for the savings account itself. Even when plenty of online high-yield savings accounts are offering an APY of 2%, big banks might only offer a 0.15% APY. On a savings balance of $10,000, that’s a difference between making $200 a year versus $20 a year.

This doesn’t apply to ALL big banks, but most of them do fall into this category. So keep an eye out for these. Unless you really want to maximize convenience by consolidating accounts and taking a lower APY, it’s worth finding a savings account with a higher APY.

High yield savings account APYs

Over the last few years, high yield savings accounts have become extremely popular. These are usually banks that don’t have branches and specialize in online banking. Since their overhead is a lot lower, they pass the savings onto you with a higher APY.

There are a few banks that have become strong contenders in this category, like Ally and American Express.

You can also expect the APY to stay updated over time. Back during the financial crisis, the Federal Reserve dropped interest rates to 0%, and most high yield savings accounts had APYs of about 0.5-0.7%. As the Federal Reserve increased interest rates, these same accounts also increased their APY regularly. Many of them are now above 2%. Whenever interest rates increase, you’ll get those increases automatically from these accounts. No need to constantly switch between accounts and chase the best rate.

Cutting edge APYs

At any given moment, there are a few banks that are pushing the APYs higher than anyone else. They’re doing this as a promotional strategy to attract more customers. Some of these banks keep pace with changing interest rates, some of them don’t.

While we don’t consider it worth the effort to chase an extra 0.1% on our APY, these banks are an option if you’re looking to maximize the APY on your savings.

Online savings account reviews

Here’s the lowdown on the most popular online savings accounts.

Axos savings account

• FDIC insured: Yes
• Minimum balance: None
• Maintenance fees: None
• APY: 1.30%

The APY is much lower than other high-yield savings accounts — it’s average at best. There’s no reason to open an Axos account unless you’ve already maxed the FDIC limits on every other high-yield savings account and have to get a lower APY to horde all your cash.

I recommend picking one of the other accounts from this list.

Discover online savings account

• FDIC insured: Yes
• Minimum balance: None
• Maintenance fees: None
• APY: 2.10%

Discover’s APY is pretty strong. Not quite the top, but it’s really close.

And if you happen to have a Discover card or checking account, keeping your accounts in one place makes everything a lot simpler.

If you have another Discover account, definitely get a Discover savings account.

HSBC

HSBC has a few different savings accounts.

HSBC Premier Savings

• FDIC insured: Yes
• Minimum balance: $100,000 across your deposit accounts and investment balances. If you go below this balance, there’s a $50 monthly fee.
• Maintenance fees: None
• APY: 0.15%

The HSBC Premier accounts are for clients who have large deposits at HSBC. Unfortunately, the APY is awful. An APY that low with a minimum balance of $100,000 is kind of insulting.

This is a good example of a classic big bank savings account. A bunch of constraints with a terrible APY. Skip these accounts entirely.

HSBC Direct Savings

• FDIC insured: Yes
• Minimum balance: $1
• Maintenance fees: None
• APY: 2.30%

HSBC does have a high-yield savings account with a competitive APY. Normally, I’d recommend this account as a main contender.

But HSBC is just a terrible bank. Every interaction with them is more difficult than it has to be. The only reason I’d ever consider opening an HSBC account if I needed a giant, international bank for some reason.

Even though this account looks great on paper, you’ll regret it if your experience is anything like ours.

Ally savings account

• FDIC insured: Yes
• Minimum balance: None
• Maintenance fees: None
• APY: 2.20%

We’re huge fans of Ally. They’ve become one of the leading high-yield savings accounts.

Yes, Ally doesn’t technically have the highest APY, but it’s darn close. And they update their APY often. So if interest rates continue to rise, you’ll get a higher APY without having to do anything.

Their account UI is pretty slick too, and it’s always improving.

I have an Ally account myself.

Feel free to stop reading here and open an Ally account right now. You won’t regret it.

Capital One 360 Savings

• FDIC insured: Yes
• Minimum balance: None
• Maintenance fees: None
• APY: 1%

I do love Capital One 360’s sub-savings account, which let you save for specific items like a down payment on a house or annual vacation in a separate account.

However, that 1% APY is pretty weak. It makes the Capital One 360 Savings a poor choice compared to the other high-yield savings accounts in this list.

Skip the 360 Savings account entirely. The APY is too low.

You can boost the APY to 2% by opening a Capital One 360 Money Market account. It’s basically a savings account, but it does have a $10,000 minimum balance. And if your balance drops to less than $10,000, the APY is only 0.85%, which isn’t worth it.

The 360 Money Market account could be worth it. First, the $10,000 minimum balance should be a trivial concern for you. Second, you could get a lot of convenience if you already happen to have other Capital One cards or accounts. If that’s the case, a slightly lower APY at 2% compared to some of these other accounts could be well worth the simplicity of having all your accounts in one place.

If you don’t have any Capital One accounts already, choose one of the other accounts from this list.

Marcus by Goldman Sachs

• FDIC insured: Yes
• Minimum balance: None, but there is a deposit limit of $1,000,000 for all your savings account and CDs
• Maintenance fees: None
• APY: 2.25%

Goldman Sachs jumped into the high-yield savings account space with one of the highest APYs.

They do limit deposits to a total of $1,000,000, but that’s not a major concern. You’ll want to split up your cash balances across multiple banks to get it all FDIC insured anyway.

If you’re looking for your first high-yield savings account, this is a fantastic option.

American Express savings account

• FDIC insured: Yes
• Minimum balance: None
• Maintenance fees: None
• APY: 2.10%

American Express was one of the first to introduce a high-yield savings account, and it’s been around for awhile now.

These days, the APY is slightly lower than some of the competitors. While American Express does update their yields frequently, they’re always 0.10-0.20% off the highest rates. While it’s still a great option, I’d choose one of the other accounts for this reason alone.

One other caveat: the American Express savings account isn’t integrated into the same login account as the American Express credit cards. Even if you have both, it feels like having two different banks. There’s no extra simplicity from trying to consolidate.

Barclays savings account

• FDIC insured: Yes
• Minimum balance: None
• Maintenance fees: None
• APY: 2.20%

Another great option. Great APY, no maintenance fees or minimum balances — you can’t go wrong with a Barclays online savings account.

Synchrony savings account

• FDIC insured: Yes
• Minimum balance: None
• Maintenance fees: None
• APY: 2.25%

Synchrony is also a great option. The APY is one of the highest and has no minimums or maintenance fees.

The 4-step process to picking the best online savings account

1. Check the banks that you currently have accounts with and see if they have a competitive savings account. If the APY is comparable to the accounts we listed above, stick with your current bank.
2. Otherwise, pick an account from this list:
   1. Discover Online Savings Account
   2. Ally savings account
   3. Marcus by Goldman Sachs
   4. American Express savings account
   5. Barclays savings account
   6. Synchrony savings account
3. Try to pick an account from a bank that you foresee doing other business with. For example, Ally has car loans and Discover has their credit cards.
4. If you’re still not sure, go with Ally.

What about sub-savings accounts?

One of our favorite savings account tricks is to open “sub-accounts.” This allows us to easily budget for bigger purchases by saving a little bit each month. We can also track everything by separating all the accounts.

For example, I have these categories in my own savings account:

• Emergency fund
• House downpayment
• Mini-retirement
• Christmas gifts
• Annual vacation

Each month, money goes into each of these separate accounts with the automatic transfers that I set up. And I can easily see how much I’ve saved towards my goals.

Ramit’s savings accounts used to look like this back before ING Direct was bought by Capital One:

Here’s a more current example in Ally:

Some savings accounts will call these “sub-accounts,” and everything will be part of the same savings account. This is a rare feature to find though.

For everyone else, simply open up multiple savings account under the same bank login. You can easily have 5-10 savings accounts at the same bank. Then treat each account for whatever saving category that you like.

This means you can get “sub-accounts” at any bank, even if they don’t have a “sub-account” feature.

Don’t chase yields

Look, there’s always a bank that has a slightly higher APY. Banks use it as a promotion strategy to get more accounts, so it’s always changing.

Regularly researching new APY rates, looking for that extra 0.05% APY, opening accounts, and transferring money all over the place wastes more time than it’s worth.

Don’t be a rate chaser.

Remember IWT’s philosophy of big wins. Focus on the major wins that really move the needle and forget about the small stuff. Chasing higher APYs on savings accounts definitely falls into the “small stuff” category.

Pick a savings account that has a competitive APY from a bank that you trust for the long term. Then stick to that decision and work on improving other areas of your life.

Money market accounts vs savings accounts

The difference between money market accounts and savings accounts can be pretty confusing.

That’s because there’s no practical difference.

Here are the similarities:

• The APY tends to be the same between both types of accounts.
• You can withdraw up to 6 times per month.
• Some have ATM cards, some don’t.
• Some have minimums, some don’t.
• Both are FDIC insured.

Basically they’re the same account. If your bank happens to offer a money market account with no maintenance fees, no minimum, and a competitive APY, feel free to use it.

Now for the confusing part: money market funds are completely different. They’re part of brokerage accounts and allow you to place cash while you wait to invest it. Since money market funds are not FDIC insured, so it’s not a good habit to store lots of cash in them.

When to get savings accounts from multiple banks

If you ask high net worth folks which savings accounts they have, sometimes they’ll list off half a dozen different banks.

At first, this makes no sense. Why all the extra complexity and different accounts?

There’s one reason: FDIC insurance limits.

Most people are limited to $250,000 worth of insurance at any given bank. Joint accounts and accounts across different categories (like retirement accounts) can increase this limit, but that only goes so far. If you have a substantial amount of cash, the only way to keep it insured is to open up savings accounts across several banks.

That’s why folks will start opening up savings accounts across multiple banks.

If you have multiple savings accounts to manage, Max will automatically move balances around your accounts to optimize for the highest APY while keeping all your cash insured. They do charge a 0.08% annual fee for the service.

As for which accounts to open, we recommend starting with these:

• Ally savings accounts
• Barclays savings account
• American Express savings account
• Marcus by Goldman Sachs

Any combination of accounts that have strong APYs will work.

The best online savings accounts of 2019: How to find the best high yield online savings account is a post from: I Will Teach You To Be Rich.

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Beyond wealth: What happens AFTER you achieve financial independence?

In their classic Your Money or Your Life, Joe Dominguez and Vicki Robin argue that the relationship between spending and happiness is non-linear.

More spending brings more fulfillment — up to a point. But spending too much can actually have a negative impact on your quality of life. The authors suggest that personal fulfillment — that is, contentment — can be graphed on a curve that looks like this:

Beyond the peak, Stuff starts to take control of your life. Buying a sofa made you happy, so you buy recliners to match. Your DVD collection grows from 20 titles to 200, and you drink expensive hot chocolate made from Peruvian cocoa beans. Soon your house is so full of Stuff that you have to buy a bigger home — and rent a storage unit. But none of this makes you any happier. In fact, all of your things become a burden. Rather than adding to your fulfillment, buying new Stuff actually detracts from it.

The sweet spot on the Fulfillment Curve is in the Luxuries section, where money gives you the most happiness: You've provided for your survival needs, you have some creature comforts, and you even have a few luxuries. Life is grand. Your spending and your happiness are perfectly balanced. You have Enough.

According to Dominguez and Robin, your goal should be to achieve Financial Independence, the condition of having Enough for the rest of your life. “Financial Independence has nothing to do with rich,” they write. “Financial Independence is the experience of having enough — and then some.” This is achieved when your savings has reached a level that will sustain you at the peak of the Fulfillment Curve indefinitely.

As many Get Rich Slowly readers have discovered over the years, the exercises and advice in Your Money or Your Life can transform your relationship with money, helping to break your dependency on Stuff. It's a great book for learning how to align your spending with your values. It provides a roadmap to Financial Independence.

Where Your Money or Your Life is less good, however, is providing advice for what to do after you've reached this goal. What happens when you achieve Financial Independence? What happens when you have enough — and then some? Many people reach this place only to find themselves wondering, “What next?” It's an important question, one that's often tough to answer.

The Power of Purpose

When you're building your wealth snowball, your goals and mission keep you focused on the future. They guide you toward the things you ought to do while helping you avoid temptation and peril. Without a clear purpose, it's difficult to stay on course during the long march to financial freedom.

Purpose is also important after you've obtained the wealth you desire.

In his book You Can Retire Sooner Than You Think, financial planner Wes Moss shares five “secrets” of a happy retirement. After surveying 1350 retirees across 46 states, Moss found that the number-one predictor of contentment is a sense of purpose.

“[Happy retirees] have a well-defined understanding of their purpose in life,” he writes. According to his research:

• 91% of happy retirees are clear and comfortable with their sense of purpose.
• In contrast, 89% of unhappy retirees report that they're uncomfortable (or only “slightly” comfortable) with their sense of purpose.

The bottom line: “Happy retirees know what their retirement money is for.”

To that end, Moss encourages his clients (and readers) to foster a handful of “core pursuits” — activities that excite them and bring them joy. By developing these core pursuits before reaching retirement or Financial Independence, you're better prepared for what comes next.

Similarly, in Choose Your Retirement, Emily Guy Birken writes that “a retirement based on values will be a fulfilling and contented experience”. Birken dubs this a “values-driven retirement”.

A values-driven retirement sounds great. But how do you discover your values? How do you pick your core pursuits? How do you decide what you want out of life? How do you answer the question, “What next?” I believe the answer goes back to creating (an adhering to) a personal mission statement.

With a mission statement, you have a roadmap to meaning. Without one, you run the risk of finding yourself lost in the woods where even your wealth won't help you find the way home.

Note: At the end of this article, I'll share a powerful exercise to help you discover purpose.

Money Without a Mission

A lot of people believe that if only they were wealthy, if only they had a million dollars, then all of their problems would be solved. Unfortunately, it doesn't work like that.

There's no doubt that money can buy food and clothes and shelter. Wealth grants access to better health care. It provides peace of mind so that you don't fall into a panic when the car breaks down. But money is only a tool. It's not a magic wand that will miraculously make you smart, fit, and kind. It's up to you put the tool to constructive use.

What happens if you achieve financial freedom without direction, if you don't use money to build a better life?

At best, you drift aimlessly from day to day, never quite sure what you ought to be doing next. Maybe you aren't destructive (to yourself or others), but you're certainly don't add anything of value to the world. I've met a couple of folks who, because they're financially secure, shut themselves away all day playing videogames. That's a shame. They have the freedom to do whatever they want…and they choose to do nothing.

At worst, reaching financial freedom without a plan plunges a person into decadence and despair. Think of all the horror stories you've heard about pro athletes, movie stars, and lottery winners who squander their riches on speed boats and strip clubs. (Here, for example, is the poignant tale of Jack Whittaker, a West Virginia man who won a $315 million Powerball jackpot in 2002. Without a plan, instant riches brought devastation rather than delight.)

Money can buy freedom, no question. But you have to seize the freedom or it all goes to naught. You may win a billion dollars in the lottery, but that won't make a difference to your health and wealth if you elect to survive on a diet of donuts and vodka while lounging watching Friends re-runs on Hulu.

“Money is important but it's far from most important,” says Jim Wang from Wallet Hacks. “This becomes clearer when you reach Financial Independence, when you no longer need to work as hard to sustain yourself. You risk losing your sense of purpose if it was deeply tied to working for an income. This is why many retirees have trouble in retirement!”

Money is important but a mission matters more.

Once you have plenty of money, it's your responsibility to make what you want out of life. (Truthfully, it always has been your responsibility.)

Fix Yourself First

For many people — including myself — I think the best answer to the question “what next?”, the best way to discover meaning and purpose, is to fix what's broken in your life. After you achieve Financial Independence, you no longer have excuses not to become the best version of yourself, whatever that means to you. As an example, here's my own story.

When I was younger, I was deep in debt. I was also fifty pounds overweight. I had time-management issues. My relationships were built on a false projection of myself. I used to think that if I could win the lottery or otherwise luck into a windfall, all my worries would go away. But when I eventually achieved complete Financial Independence, my problems didn't disappear. Quite the opposite.

It turned out that J.D. with money was the same as J.D. without money. He remained a fat, lazy procrastinator who was unhappy with his situation.

I had fixed my finances by becoming the CFO of my own life, by running my personal finances like a business. Slowly, it dawned on me. In order to fix everything else that was broken, I'd have to take responsibility for all of it.

• If I wanted to be fit instead of fat, I had to eat right and exercise.
• If I wanted to be comfortable meeting new people, I had to overcome my introversion.
• If I wanted to travel, learn Spanish, live in a walkable neighborhood, have healthy romantic relationships, write a book, become better at public speaking – if I wanted to be a better man, I had to do the work required to become a better man.

Money wouldn't magically make things better. Nobody else was going to do the work for me. If I wanted to repair what was broken, I had to do it myself. Furthermore, I realized that — like the hero of a fantasy or science-fiction novel — the power to fix my problems had always rested in my hands.

I began to make changes instead of excuses.

I lost weight, got fit, learned Spanish, traveled to Europe and Africa and South America, and began to build better relationships. I moved to a neighborhood where I could walk for 90% of my errands. I learned to ride a motorcycle and shoot a gun. I wrote a book (two, really) and became better at public speaking. I forced myself to set aside my introversion and relish the company of others, even strangers.

When I accepted responsibility for everything in my life, things got better. Lots better.

Note: My life isn't perfect, and I don't want to pretend that it is. Truthfully, I can sometimes go months forgetting that I must be my own hero. I grow complacent and slowly slide back into bad habits. I eat poorly. I play too many videogames. I drink too much wine. I don't spend enough energy maintaining friendships. Over the past year, for instance, I've packed on twenty pounds. But I know now how I ought to live — and when I live that way things are great!

Supplied with what seemed like limitless time and money, I realized that I was the only one who could fix the things that were wrong in my world. I realized that it had been up to me all along. It was a harsh epiphany.

My story isn't unique. Turns out it's rather commonplace.

For instance, Todd Tresidder (the Financial Mentor) says that after he achieved financial independence at age 35, he had a similar insight. He felt lost, directionless. It wasn't until he realized that only he could give himself direction that he found his way again.

This I believe: If you're not sure what your purpose is, fix yourself first — then move on to other goals.

Make the World a Better Place

After you've fixed yourself, you can turn your attention to making the world at large a better place. (Some folks might be tempted to focus on improving the world first. I think this is a huge mistake. You'll be much more effective if you take care of yourself first before moving on to help others.)

Here, for instance, is the story of Jason Brown, a former professional football player who gave up millions of dollars to do something more meaningful for himself…and the world. I love this story:

In 2009, after four years as a pro, Brown signed a five-year $37.5 million contract with the St. Louis Rams, which made him the highest-paid center in NFL history. He was financially independent. He could do anything he wanted, and he did not want to play football. Three years later (at age 29), Brown quit his career to become a farmer — even though he'd never farmed a single day in his life. (He learned how to grow crops from YouTube!)

But Brown isn't growing the food for himself. His First Fruits Farm raises sweet potatoes to donate to local food pantries. “When I think about a life of greatness, I think a life of service,” says Brown. He's found meaning through helping others.

Sidenote: In 2014, Brown delivered his own child after his wife went into labor on the farm and their midwife couldn't reach them in time!

Or there's Warrick Dunn, another former football player. During his first year in the NFL, when he was only 22 years old, he established Homes for the Holidays, a program to help struggling first-time homebuyers with the process.

Contrary to other reports around the web, Dunn's charity does not give homes to single mothers. Instead, in conjunction with Habitat for Humanity, Homes for the Holidays provides down-payment assistance and complete home furnishings to single-parent families that are purchasing their first home. (Not the same as giving away houses but still awesome!)

What's more — and I especially like this part of the program — Homes for the Holidays also provides financial literacy workshops.

You don't have to be a professional athlete to do good deeds once you've reached financial freedom.

After he became financially independent, Harlan founded The Plutus Foundation, a non-profit that aims to provide financial literacy and “improve financial empowerment”. And my friend Jen feels called to support Manos Unidas, a Peruvian school for disabled children.

Fixing yourself and improving the world are both excellent ways to find meaning and purpose once you've reached Financial Independence. But you know what? Another option, one that surprises many people, is continued work.

Work After Wealth

For many people who achieve Financial Independence, “what next?” is a new career. Or maybe even the same career.

After I sold Get Rich Slowly, for instance, and obtained financial freedom, I slowly reduced the amount of work I was doing until I was doing none at all. For a while, it was fun to have no commitments. I browsed the internet, read comic books, met friends for lunch. Kim I left for our grand roadtrip across the United States. But even before leaving Portland last March, she and I had both begun to recognize that I lacked a sense of purpose. I was aimless and adrift.

“When we get home,” Kim said, “I think you should get a job, even if it's just a few hours a day at Starbucks.” I agreed that seemed like an excellent idea. Instead, I started Money Boss while on the road. That gave me work and purpose again — the same work and purpose that gave my life meaning before. (Now, of course, Money Boss has been folded into Get Rich Slowly. In fact, this article originally appeared on Money Boss more than three years ago!)

Or there's Jacob from Early Retirement Extreme. After reaching Financial Independence at age 33, he spent four years pursuing hobbies like sailing, bicycle repair, and writing. Then, at age 37, Jacob un-retired for a few years.

“Financial independence allows you to do what you want whether that’s travel, raising children, saving the world, or playing golf. That’s what’s important,” Jacob writes. “What I like to do is solving impossible problems.” When he received a job offer that involved solving impossible problems, he took it. It gave him meaning and purpose. It was the right choice for Jacob and his circumstances.

Note: Some folks claim that if you're working you cannot possibly be retired. I think most of us recognize this as a bullshit semantic argument. (Mr. Money Mustache famously mocks what he calls the Internet Retirement Police.) To avoid debate, I prefer to talk about Financial Independence instead of retirement, but I believe they're essentially the same thing.

Finally, there's Jim from Wallet Hacks again. Jim is a serial entrepreneur. He's always starting businesses, even though he doesn't need the money. His work gives him meaning:

After I sold my last company, I felt a sense of emptiness when I woke up in the morning. I used to get up, excited to start the day because I had all these ideas in my head for what I wanted to try, projects I was working on, and people I needed to talk to. My sense of purpose, which was tied to my work, was taken away.

I started thinking about what I wanted to do next. I thought about what was important to me, what I really enjoyed about working outside of the paycheck, and realized that I work because I enjoy a feeling of accomplishment, I enjoy learning a new thing, and I enjoy overcoming challenges. So I set out to build a new work life for myself that touched on those…any income was an added bonus.

In his excellent book Work Less, Live More, author Bob Clyatt calls the lifestyle that Jacob and Jim and I have chosen “semi-retirement”. We're financially independent but opt to keep working. “Semi-retirees learn that a reasonable amount of work, even unpaid work, keeps them energized, contributing, and sharp,” writes Clyatt.

(Clyatt says that semi-retirement is also a great option for those who haven't yet achieved FI but are getting close. It's a way to scale back your career, to make a gradual transition from full-time employment to something more casual.)

What Next?

“When you're Financially Independent, you should make decisions based purely on your personal values,” Mr. Money Mustache once told me. “You should make your decisions as if money didn't matter. You should ask yourself: If you could live anywhere, where would you live? You should choose to do work that you'd do even if you weren't getting paid. And you should make buying decisions as if everything were free.”

But how do know your personal values? Most people have a vague understanding of what's important to them, but lack clear goals and purpose. That's why I like the following exercise, which is designed to help you discover meaning in your life.

To complete this assignment — based on the work of Alan Lakein — you'll need about an hour of uninterrupted time. You'll also need a pen, some paper, and some sort of stopwatch. When you're ready, do the following:

1. At the top of a blank page, write this question: What are my lifetime goals? For five minutes, list whatever comes to mind. Imagine you don't have to worry about money, now or in the future. What would you do with the rest of your life? Don't filter yourself. Fill the entire page, if you can. When you're finished, spend an additional five minutes reviewing these goals. Make any changes or additions you see fit. Before moving on, note the three goals that seem most important to you.
2. On a new piece of paper, write: How would I like to spend the next five years? Spend five minutes answering this question. Be honest. Don't list what you will do or should do, but what you'd like to do. Suspend judgment. When your time is up, again spend five minutes reviewing and editing your answers. As before, highlight the three goals that most appeal to you.
3. Start a page with the question: How would I live if I knew I'd be dead in six months? Imagine that your doctor says you've contracted a new disease that won't compromise your health now, but which will suddenly strike you dead in exactly six months. There is no cure. How would you spend the time you have left? What would you regret not having done? You know the drill: Take five minutes to brainstorm as many answers as possible, then five minutes to go back through and consider your responses. When you're ready, indicate the three things that matter most to you.
4. At the top of a fourth piece of paper, write: My Most Important Goals. Below that, copy over the goals you marked as most important from answering each of the three questions. (If any answers are similar, combine them into one. For instance, if “write a novel” was one of your top answers to the first question and “writing fiction” was a top answer to the second, you'd merge these into a single goal.)
5. The final step requires a bit of creativity. Label a fifth piece of paper My Mission. Look through your list of most important goals. Does one stand out from the others? Can you see a common thread that connects some (or all) of the goals? Using your list as a starting point, draft a Mission Statement. Your Mission Statement should be short — but not too short. It might be anywhere from a few words to a few sentences. Take as much time as you need to make this the best, most compelling paragraph you can write.

When you've finished, set aside your Mission Statement and walk away. Go about the rest of your life for a few days. Don't forget about your mission, but keep it in the back of your mind.

After you've had time to stew on things, sit down and review what you've written. How does your Mission Statement make you feel? Can you improve upon it? You want a vision to give you a sense of purpose that drives you day-in and day-out, through good times and bad.

Note: To make things easier, I've created a free PDF version of this project for you to download and print: Your Personal Mission Statement.

Final Thoughts

Over the past couple of years, I've thought a lot about people who set (and achieve) big goals but then lose their way. This happens all of the time.

Many people spend years digging out of debt only to fall back into the pit. Or there are folks like me who manage to lose fifty pounds but then gain it all back. (I've done that twice before. I'm in the middle of a gain right now — but I'm trying to put the brakes on.)

I think the big problem is that people forget to ask themselves, “What next?” They have a plan to get out of debt or to lose weight, but they don't have a plan for what follows. I think another issue is that people pick the wrong goals.

• Your aim shouldn't be to get out of debt. Your aim should be to boost your personal profit; debt reduction then becomes an inevitable side effect.
• Similarly, your target shouldn't be a specific weight. Your goals should be to eat right and to exercise thirty or sixty minutes each day. If you do this, fitness will follow.

A similar issue faces folks who have set the goal of achieving Financial Independence. They've set themselves target, which has no real meaning in Real Life, and once they succeed at reaching it, they're lost. They come to the realization that their goal was arbitrary, that it ought to have been a side effect not a primary aim. (It's curious to see so many FIRE bloggers lately move to “un-retire” and return to work precisely because they were floundering to find direction.)

Whether you're digging out of debt, building your debt snowball, are wondering what to do now that you've achieved Financial Independence, your happiness and well-being can be improved by having a sense of purpose. What's yours?

The post Beyond wealth: What happens AFTER you achieve financial independence? appeared first on Get Rich Slowly.

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3 Tricks We Used To Save a $40,000 Down Payment

Owning a home in Canada is a desirable milestone in life. In fact, according to a 2018 CIBC poll, 94% of millennials want to buy a home one day. However, 40% of those same millennials aren’t sure that dream is realistic because it’s so hard to save a $40,000 down payment. To these numbers, I [...]

The post 3 Tricks We Used To Save a $40,000 Down Payment appeared first on Money After Graduation.

from Money After Graduation http://bit.ly/2WWVipc
#money #finance #investments

Outsourcing my life: Why I pay others to do tasks I could do myself

When people talk about saving money, DIY is one of the first things that comes to mind.

• Learn how to fix things around the house!
• Change the oil in your Prius!
• Make your own cleaning supplies!

Do all of this (and more) and you could save hundreds of dollars a year.

And that’s great. I know lots of folks that enjoy growing a lush garden resulting in delicious produce (that can be canned or frozen) in due season. There are people in my life that find doing laundry calming, and others that will happily take on any domestic project that comes their way. Personally, I enjoy doing the dishes.

While I’m happy spending time on the things that I like, there are certain things that I hate doing — and that I will happily outsource to others.

Am I perfectly capable of cleaning my home and mowing the lawn? Sure. But why should I spend the time doing these things when I can pay someone else to do them? Here are some reasons I spend money to outsource parts of my life.

I Can Make More Money

The number-one reasons I outsource tasks I could do myself is that by doing so, I make more money. Wait, what?

When I talk about spending $200 a month on lawn care or $20 an hour on house cleaning services, many people are surprised to find that I make money by outsourcing these mundane chores.

I’m a freelance writer, so any time I free up can be used to write an article, interview a source, or work on edits. Rather than spending two hours cleaning the house, I can pay someone $40 to do it instead — and make $500. That’s a net gain of $460 each week, or about $1,840 per month.

There have been times that I take my laptop with me to get the oil changed. Jiffy Lube takes care of it for $65 and I can do work amounting to about $200 in the time I’m sitting there. That’s a net gain of $135.

In the past, I’ve used services like Blue Apron and HelloFresh to plan my meals and deliver the ingredients. That saves me the time and hassle of meal planning and grocery shopping, and allowed me to focus on other things. However, with my travel schedule, these types of services haven’t been meeting my needs.

Instead, with Instacart now available in my area, I’ve switched to getting someone else to do the shopping, while I use a service like $5 Meal Plan to plan my meals and provide me with an ingredient list.

No matter how I do it, though, the cost of these services is much less than what I can make doing a little extra work. Whether you want more time to work on a side gig, or take action to grow your business, the investment you make in outsourcing can yield dividends later.

I Have More Time with My Son

I’ll be honest. I don’t spend every minute I save by outsourcing on work or business activities. I also use the time I save on things that matter to me.

In the past, my son and I spent a portion of each Saturday cleaning the house. That’s not a super fun way to make memories with your teenager. Now, instead of spending time on chores, we can go to the museum, take a hike, or ride our bikes. It’s possible to spend the whole afternoon playing board games if we want.

J.D.'s note: I once played Exploding Kittens with Miranda. When she saw that I liked the game, she simply gave me her personal copy. Wow. How cool is that?

Plus, now that my son is doing more with his friends and has the independence of a car, being able to spend time when we can is especially important. We can go out to lunch, and he can still have time to go to the movies with his friends later. Sometimes we work on our small herb garden together in the morning, and he plays video games with his friends in the afternoon.

When my son wants to talk, I don’t have to cut him off because errands are weighing on me. Instead, I can focus on my son, knowing that I’ve outsourced tasks like grocery shopping and cleaning to others.

I Have More Time (and Money) for Self-Care

Freeing up time also means I can make more money while having more time for me.

Let’s use my above example of cleaning the house. If I used all the cleaning time to work, that would get me an extra $1,840 per month. However, I don’t use all that time to work. I probably use about half the time to work. That’s still an extra $920 per month — and an extra four hours.

I can do what I like with those four hours. Maybe I get two manicures in that month. That’s two hours gone, and $100. I don’t have to worry about it, though, because I used half the extra time already to make extra money.

Sometimes all I really want to do is just lay in bed for an extra hour and read. Or go to a movie by myself. Or, instead of work in the evening, binge-watch Netflix. Because I outsource mundane tasks that would otherwise fill my time, I can use half that saved time to make more money, and the rest of the time to do more of what I want, whether it’s baking cookies with my son, going out to lunch with a friend, or spending a Wednesday volunteering with a local service organization.

Outsourcing gives me more freedom and flexibility in my hours and in my spending. In fact, I recently discovered that the time I save (and the money I make) by having someone else handle the grocery shopping is just enough to cover personal training sessions each month. So now outsourcing has freed up the chance for me to improve my health.

Investing Extra Time and Money

I see outsourcing as a way to buy more time. And that makes it valuable. After all, time is a nonrenewable resource. That makes time more valuable than money. Purchasing that time allows me to make more choices and make the most of my time. Rather than spending time mowing the lawn or cleaning the house, I can make more money in a fraction of the time.

Take the lawn care, for example. It takes me about two hours a week to mow the lawn, trim the edges, and manage the weeds. That’s about eight hours a month from May through September, or five months. That’s 40 hours. I pay $200 per month, so $1,000 total. If I work half those hours, I can make about $5,000 extra dollars — and still have 20 hours left over to spread across those five months.

Because I outsource, I have extra time and extra money. I can use the extra time to invest in relationships with my loved ones, and to take extra time for myself. Those things pay dividends in goodwill with people I enjoy being with, as well as mental and physical health dividends for me.

The extra money can be invested as well. I might spend some of it on a trip to the spa, or to buy new camping gear, but a lot of it goes into my investment portfolio. Now that money is earning money, without the need for me to do more work for it. Or, I could take some of the money and invest it into my business, growing it so that it offers better returns down the road.

The benefits outsourcing has brought into my life by allowing me to buy more time — and use it in ways that are more profitable — have increased my quality of life, as well as improved my overall financial health.

Outsourcing in My Business

I’ve also found outsourcing helpful in my business. Over time, I’ve gradually outsourced social media posting, scheduling, podcast editing, tax preparation, and other tasks. Some of these tasks are outsourced to people, while others, like scheduling, are outsourced to free or low-cost software tools.

Just the time I save in posting on social media alone provides me with the ability to earn enough money to pay my social media manager and still have time and money left over for investment in other activities.

When outsourcing business tasks, it makes sense to identify your weaknesses. Rather than trying to turn your weaknesses into strengths, outsource your weaknesses and leverage your strengths into better profitably and improved outcomes.

J.D.'s note: This is precisely what's been going on behind the scenes at Get Rich Slowly for the past six months. My strength is writing. That's what I like to do, and that's what I'm good at. The rest of modern blogging isn't my forté. So, I brought on Tom to take care of marketing and monetization. We're working with other folks to handle social media, etc. I'm focusing on my strengths and outsourcing the rest. Speaking of Tom, he interviewed Miranda about this very topic on his MapleMoney Show podcast.

How to Start Outsourcing

I didn’t start by outsourcing everything all at once. I couldn’t afford it.

Instead, I chose one thing to outsource — one thing I could afford. At first, it was house cleaning every other week, while my son and I continued doing the weekly cleaning in between. However, after a few months of making extra money with the freed-up time, I was able to expand to the weekly house cleaning service.

Review the time you spend on various tasks. What could you be doing instead? Could you use the time more profitably? If so, consider outsourcing the task and using your newly-freed time to make extra money. Pretty soon, you could discover that the extra money allows you to outsource the next time-consuming and mundane task.

However, if there are things you like doing, even if they take up time, there’s nothing wrong with continuing to do them. Do what makes you happy. And outsource the mundane tasks that hold you back from a better quality of life.

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