Investing in Food Stocks

You may not know what the future holds, but you know there’ll be a meal involved. A good meal or grocery trip is not only a necessity for survival, it can also be part of an investment strategy.

While restaurants and grocery stores may come to mind, the world of food stocks is larger than one might think, encompassing everything from a grain of wheat to the latest on-demand app.

Food stocks and the industries surrounding them have long been a part of investors’ portfolios. The most recent figures show that Americans dedicate close to 10% of their disposable income on food, a level that’s been consistent for about two decades. Roughly half that is spent for food at home, and the other half is on dining out.

But some types of food stocks can hold more risk than others. Read on to learn the history of food stocks in the market, the types of food stocks, and the overall risk profile of these investments.

Are Food Companies Consumer Staples or Discretionary Stocks?

Looking at the market as a whole, food stocks are part of the “consumer staples” industry, which is considered to be a “defensive” sector in investing. Defensive sectors are those less closely tied to the economy. That means even if the economy is in a recession, consumer staples are seen as less risky and more stable than other industries.

However, no stock is recession-proof. And not all food stocks are actually consumer staples. For instance, restaurant companies typically fall into the consumer discretionary category, which consist of “cyclical stocks,” or those tied to how well the economy is doing. That’s because of how people tend to dine out when they have more income to spend in their pockets.

Recommended: Investing With the Business Cycle

When deciding whether to invest in a food stock, beginner investors might want to research which industry the company falls under: consumer staples or consumer discretionary.

Different Types of Food Stocks

Food stocks include more than just memorable brands. It’s more encompassing than just consumer-facing brands or restaurants. Anything that helps food get to your plate can be considered part of the food supply chain.

Food stocks generally fall under these seven sub-industries:

Farming

Food stock investing can start at the granular level–investing in raw agricultural commodities like soy, rice, wheat, and corn. Farming stocks can also include the ancillary companies that foster that growth–companies that create and distribute insecticide and herbicide or build the industrial-size farm equipment to help harvest goods.

While one might think investing in farming stock would be actual farms, the reality is the opposite. About 98% of farms in the U.S. are family-owned and therefore, not publicly traded. So investing in farming stock primarily means the chemicals and machinery that help harvest the raw product.

Farming stocks can waver based on things like the weather and current events. It can be challenging to predict the next rainy season or drought, sometimes making it hard to track and predict value. In addition, tariffs and trade agreements can influence the performance of these stocks, making them more volatile.

Recommended: Understanding Stock Volatility

Food-Processing Stocks

Companies that work in food processing buy raw ingredients that are combined to make items in the grocery store aisles or on restaurant menus.

Some names and brands in the food processing sector might not be familiar to the casual investor. More often than not, these companies are behind the scenes, operating at a large scale to provide the world oils and sweeteners.

Food processing stocks have their own quirks when it comes to investing. Unlike farming, they’re less influenced by the whims of weather or season, but they still have an associated set of risks. The costs associated with this industry vertical are vast, and price competition across brands can lead to drops or jumps in the market.

Stocks of Food Producers

Further up the supply chain comes food producers, where novice investors are more likely to know these brands and companies from daily life and dietary habits. Food producers take the raw ingredients provided by processors and create the items found on store shelves.

Break this vertical down further to find “diversified” and “specialized” producers.

As the name suggests, diversified food producers are companies that create a ton of different products under the same name umbrella, like Nestlé, which makes everything from baby food to ice cream.

Then there are specialized producers. They make consumer products as well, but these companies often cater to a narrower audience, producing only a few items, often within the same vertical.

In times of recession, luxury or expensive food processing stocks might take a dip. Additionally, consumer trends can influence the market. Take the alternative meat craze–a popular investment trend in recent years. Investors saw larger-than-average returns for the industry due to interest in the trend.

Food-Distribution Stocks

Distribution companies have little to do with consumption or production and focus more on logistics and transport. These companies send products across the country and world.

Distribution companies range from very large, reaching national distribution, to fairly small, where they connect specialty retailers. The distribution market might have its long-term players, but investing in it comes with its own risks.

Grocery-Store Stocks

Grocery stores have become big business in the investment game. The next link in the chain, grocery stores are where the products end up once a distributor drops them off.

Grocery store investments are hardly recession-proof, but the necessity of groceries as a staple for consumers suggests these investments take a lesser hit in a market downturn.

Recommended: Investing During a Recession

Restaurant Stocks

Restaurants are an additional resting place for food distributors. In economic downturns, discretionary restaurant spending is usually the first to go, making this industry within food investing slightly less stable than the others. Additionally, this arena might be most susceptible to trends.

Food-Delivery Service Stocks

The newest addition in food stocks is more about tech than good eats. Online delivery services have burst onto the scene, and with a limited history of performance, are considered to be riskier than the traditional food stocks outlined above.

Right now, delivery service companies are still duking it out across the country, expanding to new cities and slashing the price of services to entice customers.

Pros and Cons of Investing in Food Stocks

With all the ingredients in order, it’s time to highlight a few of the basic pros and cons of investing in food stocks.

Pro: Food stocks, particularly those that are consumer staples, can perform consistently. Food stocks can be a relatively safe, recession-resistant investment (but remember all stocks have inherent risk).
Con: Food stocks perform consistently. For an investor looking for a higher-risk investment, the steady year-over-year earnings might not be as enticing for someone trying to build a high-return portfolio.
Pro: Familiarity with brands. Many food stocks are also commonly found in investors’ pantries and refrigerators. For someone new to investing, buying stocks in the brands they trust and use could be a great way to dip their toes in the market.
Con: Not all food stocks are immune to ups and downs in the economy. Some companies, particularly restaurant groups or those that produce higher-priced products, may be hurt if discretionary spending by consumers pulls back.

The Takeaway

Investing in food companies can actually lead to investing in a wide range of different companies–those that are defensive and more immune to economic shifts, those that are cyclical and rise when the economy is hot.

It can also involve wagering on stocks that have long been a part of the food supply chain, as well as startup unicorn companies that are using innovative mobile technology to deliver meals to consumers.

For individuals who want to try their hand at picking food stocks, SoFi’s Active Investing platform may be a good option. Investors can buy traditional stocks, exchange-traded funds (ETFs), or even fractional shares of some companies. For those who need help, the Automated Investing service builds portfolios for SoFi Members and Certified Financial Planners can answer questions on investing.

Get started with SoFi Invest today.


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Tips for Navigating Night Classes

When the sun is setting, happy hour consists of a stiff caffeinated drink or two for some. Their brains are still on the job.

More on liquid stimulants later, but add that sort of choice to the list when it comes to getting an education: Commute or live on campus, study full time or part time, and pick a major, to name but a few.

Once you’ve landed on a college and enrolled, it’s time to sign up for courses and plan your schedule. In many cases, schools offer courses throughout the day and evening to accommodate a broad range of students and their different schedules.

Night classes may be a convenient option for students who have to balance work and school. Given the cost of education, this is a large share of the student body. In 2018, 43% of full-time students and 81% of part-time students were employed during their studies.

Taking night classes can be an adjustment from studying during the traditional 8-to-5 window. Staying focused after a long day of work or rewiring your brain to study at night can be challenging.

Whether you’re gearing up for a degree’s worth of night school or a one-off evening class, take a look at these tips to survive night classes.

Nocturnal Animals

Generally speaking, night classes take place between 5 and 10 p.m. College night classes typically follow the traditional semester schedule, though there may be shorter timelines for special-interest topics or certificate programs.

Because night classes are geared toward nontraditional students with family and work obligations, they typically occur once a week for two to four hours, but it depends on the course credits and subject matter.

Although this condensed format may mean fewer trips to campus, it can also make for much longer days. Students may want to keep the following issues in mind.

Controlling Caffeine Cravings

When feeling tired, it may be a natural inclination to grab a cup of coffee or other caffeinated beverage to get a boost of energy and keep going. While this may help a student get through a night class or hammer out an assignment at the last minute, it can disrupt sleeping patterns, creating further fatigue the next day.

Caffeine can last up to 12 hours in the system after consumption. Even for night owls, a coffee or a Red Bull® or a Monster® after lunch could keep them awake well beyond when they want to go to bed.

If cold turkey seems like too drastic a change, you might want to try experimenting with less caffeinated beverages, such as tea. Everyone is different, and the goal is finding the sweet spot between staying awake and engaged during night classes and not losing precious sleep later on.

Staying Nourished and Hydrated

Staying focused during night classes can take practice and preparation. Packing healthy snacks and water is one way to maintain energy and feel comfortable as class discussions and lectures progress into the later evening hours.

If a professor doesn’t permit eating in the classroom, a student can likely squeeze in a quick bite beforehand or during break time.

Remaining Active

Between work, studying, class time, and other obligations, exercising may seem like a luxury that there isn’t enough time for. This can feel especially true on days when a full day at work is followed by a three-hour night class.

The Department of Health and Human Services recommends that adults complete at least 150 minutes of moderate-intensity exercise a week. Broken down over the whole week, that’s about 20 minutes of exercise a day.

If you’re really in a pinch, fitting in a brisk walk before night classes start or during the midway break in a three-hour seminar can help with your energy and work toward meeting the 150-minute threshold.

Befriending Classmates

Night classes can draw a more diverse student body than traditional college classes. For discussion-oriented classes, this can enrich the conversation with more perspectives.

It is also an opportunity to network and find a study buddy or two. Because night classes usually meet only once a week for a 15-week semester, even one absence could lead to falling behind or missing out on critical information. Classmates can be a resource for sharing notes and staying in the loop on what happened in class.

Also, becoming friends with classmates could make lengthy night classes more fun and add motivation to keep up strong attendance.

Creating a More Flexible Work Schedule

Even full-time students can expect to have at least one or two nights free from scheduled classes. If you have a flexible work schedule, you’re already in a position to craft an ideal balance of work, school, and social life.

However, if you’re working some version of the standard 9-5 schedule five days a week, the days with back-to-back work and class can feel like a marathon. Getting an education takes work, but you may not get the most out of it if it becomes something you dread.

Redistributing work hours to accommodate your night class schedule might prevent burnout. For instance, being able to come in an hour later on mornings after night classes and make them up later in the week can spread out the workload and help in catching up on sleep.

Talking to supervisors may feel intimidating, but if your college night classes are providing skills and knowledge to perform better at your job, you can make a case for getting some wiggle room at work while you finish school.

Avoiding Procrastination

As school traditionally runs from morning to early afternoon, conventional wisdom dictates completing homework and assignments the night before, at the latest. With night classes, the window to procrastinate can be extended later in the day.

Planning can help a student avoid a situation that requires picking between going to work or completing an assignment for class. Mapping out assignment due dates at the onset of the semester is one method to stay on track.

Managing Time

Between exams and papers, college classes often have a steady stream of readings and assignments to keep up with from week to week. Setting aside specific time frames to study for each class may counteract an urge to slack off between major assignments. Repetition can also improve knowledge retention, compared with cramming at the last minute.

After taking care of other responsibilities, such as an internship, job, or team practice, it may be difficult to recall readings and information at the end of a long day. Finding a moment before night class to review your notes could better prepare you to participate in discussion or ace a quiz. Creating a brief study guide covering key themes and topics for each week could help if you’re pressed for time.

Pacing Yourself

Before going full steam ahead with a full course load, you can consider testing the waters with one or two night classes. Education is a financial and career investment, and figuring out what’s right for your work-life balance could be the difference between burning out and graduating.

Keep in mind that whether you study full time or part time could affect financial aid or scholarships.

Exploring Night Class Options

Night classes are offered at community colleges and four-year universities alike. Researching multiple options could help a student find an ideal balance of cost, reputation, student body demographics, and campus environment.

Online courses are another option to consider. Synchronous courses may still have online lectures and discussions but allow students to participate from the comfort of home.

Paying for Night Classes

Education comes at a cost. Beyond tuition, taking night classes may require buying textbooks, paying for a parking pass, and other associated fees.

Work-study programs, scholarships, and grants could cover all or part of these expenses, but some students take out loans to pay the remaining cost for their degree or night classes.

Federal loans can come with protections, flexible repayment benefits, and loan forgiveness in certain cases.

When federal loans and other aid aren’t enough, private student loans are an option to consider. Students enrolled full or half time may qualify for a loan from SoFi, whose no-fee private student loans offer flexible repayment plans, helping students find an option that best meets their needs.

SoFi is here to help you reach your educational goals. It takes only minutes to find out what you’re prequalified for.



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7 Tips on How to Take Pictures of Items to Sell

To put it simply: knowing how to take pictures of items to sell online has almost as much of an impact on your success as the actual object. It’s the presentation, the first way a shopper sees your product.
Before Christine Soojung Han of Vintage Sooj even shoots a photograph, she asks herself some philosophical questions. What is she trying to achieve with this photograph? What is she hoping to emulate or what kind of mood does she want to evoke? In essence, what story is she telling with the photograph.
Lighting was the first piece of advice that Chen offered. Finding the right place in your home is a matter of finding south-facing windows and, ideally, more than one window. You want to have lots of natural light. How the light comes through your window will change by season and time of day.

Pro Advice on How to Take Pictures of Items to Sell Online

Han found natural light to be too fickle. She started out with simply soft sunlight, but that was too dependent on the weather. So she bought soft boxes for light and studio lighting for about 0 and that upgraded her lighting set-up.

1. Decide What Style Photography You Want

“Avoid a crazy wallpaper wall,” she said. “That’s not for everybody and it really becomes a distraction. You want to be able to look at your furniture and not your wallpaper.”
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Chen would post as many photos as possible if she could, but social media sites limit how many photos a seller can post. Chen’s adage is: take as many photos as possible. More photos offer more details and more chances for someone to fall in love with your item.

2. Find the Right Background. Be Consistent.

Ready to stop worrying about money?
You don’t have to have fancy equipment to start: smartphone cameras work fine.
When Han first started, she used props in some of her photos, like pampas grass or a stool. She found the props to be distracting, so now she models the clothes in most of her photos and adds accessories to the outfits. She doesn’t want to take attention away from the product itself.
But don’t worry, we’re about to let you in on some tips to make bank on. We consulted with the pros so you don’t have to do all of that legwork. Instead, let two eCommerce gurus guide you through the art of putting your best foot forward — photographically speaking, that is.
For Chen, staging is pivotal to creating a lived-in scene with her furniture. The important thing with staging is to strike a balance between domestic beauty and distraction. Chen suggests simple objects like a round mirror or a couple of white or black-covered books. She always likes to have vases on hand to hold flowers cut from her garden.
With clothing, much of that comes down to style: do you want something moodier with shadow or do you want crisp and clean images? Is this a stylized portrait or is this simply about the clothes? Researching and having a style of image in mind that you want to achieve makes it easier from the outset.

3. Lighting Matters

Elizabeth Djinis is a contributor to The Penny Hoarder.
Source: thepennyhoarder.com
Chen takes photos to show how deep a dresser drawer is or what the top surface looks like. She shares photos of the furniture legs and hardware, because that can make a difference to a buyer and is often another aspect of her design. If she can add a video, she does. A video gives people the sense of the full scope of an item and what it looks like in natural daylight.

4. Stage Your Photograph

Chen echoes the same premise for furniture.
When it comes to furniture product photos, Chen says, capturing the details is key. What makes your piece special? Take a photo of that. Examples of Chen’s clean photo styling can be studied on Instagram.

5. Capture the Details of Your Items

Chen calls taking a good photo “50% of the work.” She recently bought a dresser online for . Although Chen usually sands, paints and refurbishes the furniture she sells, this piece was in such good shape that she did nothing to it. She took some well-lit and aesthetically appealing photos and sold it for 5. She made almost 0 off of the dresser with little additional work.
Both Han and Chen say photos have made a difference in attracting buyers. Han will often reshoot a piece that hasn’t sold after some time. She might try different lighting or a different background to highlight the piece. Once she posts that new photo, she can usually sell the item right away.

6. Edit Your Photos

Often, entrepreneurs who start an online business aren’t photographers. Sometimes, they don’t even have a background in a creative industry and it’s unlikely they will have camera equipment beyond their smartphones. They’re passionate about their businesses selling vintage clothing or refurbishing vintage furniture, but they’re self-taught. For many, the internet has been their teacher.

7. Use Multiple Photos

Chen doesn’t like to use artificial lighting, because she finds it changes the color of the furniture in photos.

Photos Make a Difference

The axiom “photo, photo, photo” may be to online selling what “location, location, location” is to real estate.
“You see people use printed backgrounds or landscapes, but I think, no matter what you decide to use, it shouldn’t be distracting, because you want the attention to be on the clothing,” Han said.
Both Han and Sara Chen of the upcycled furniture company Sara Chen Design suggest keeping the background clean and neutral. Chen uses white walls as her backdrop, but in the last year, she has spruced it up by adding board and batten wood paneling to her staging wall. Chen has a space in her house specifically designated for staging, a luxury not everyone has.
Han, who started her business in a tiny apartment, began taking photos with a bedsheet as her background. That got tedious because she had to steam the wrinkles out each time. Now, she uses color paper backdrops that she bought cheaply from a photographer who was looking to downsize equipment. Examples of Han’s backgrounds can be studied on Etsy. Scroll through the pages to see where she used bedsheets. <!–

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“Photos make such a big difference,” Chen said. “You need to take time to take better photos if you want to sell for more money.”

How to Refinance Your Home Mortgage – Step-by-Step Guide

Deciding to refinance your mortgage is only the beginning of the process. You’re far more likely to accomplish what you set out to achieve with your refinance — and to get a good deal in the meantime — when you understand what a mortgage refinance entails.

From decision to closing, mortgage refinancing applicants pass through four key stages on their journey to a new mortgage loan.

How to Refinance a Mortgage on Your Home

Getting a home loan of any kind is a highly involved and consequential process.

On the front end, it requires careful consideration on your part. In this case, that means weighing the pros and cons of refinancing in general and the purpose of your loan in particular.

For example, are you refinancing to get a lower rate loan (reducing borrowing costs relative to your current loan) or do you need a cash-out refinance to finance a home improvement project, which could actually entail a higher rate?

Next, you’ll need to gather all the documents and details you’ll need to apply for your loan, evaluate your loan options and calculate what your new home mortgage will cost, and then begin the process of actually shopping for and applying for your new loan — the longest step in the process.

Expect the whole endeavor to take several weeks.

1. Determining Your Loan’s Purpose & Objectives

The decision to refinance a mortgage is not one to make lightly. If you’ve decided to go through with it, you probably have a goal in mind already.

Still, before getting any deeper into the process, it’s worth reviewing your longer-term objectives and determining what you hope to get out of your refinance. You might uncover a secondary or tertiary goal or benefit that alters your approach to the process before it’s too late to change course.

Refinancing advances a whole host of goals, some of which are complementary. For example:

  • Accelerating Payoff. A shorter loan term means fewer monthly payments and quicker payoff. It also means lower borrowing costs over the life of the loan. The principal downside: Shortening a loan’s remaining term from, say, 25 years to 15 years is likely to raise the monthly payment, even as it cuts down total interest charges.
  • Lowering the Monthly Payment. A lower monthly payment means a more affordable loan from month to month — a key benefit for borrowers struggling to live within their means. If you plan to stay in your home for at least three to five years, accepting a prepayment penalty (which is usually a bad idea) can further reduce your interest rate and your monthly payment along with it. The most significant downsides here are the possibility of higher overall borrowing costs and taking longer to pay it off if, as is often the case, you reduce your monthly payment by lengthening your loan term.
  • Lowering the Interest Rate. Even with an identical term, a lower interest rate reduces total borrowing costs and lowers the monthly payment. That’s why refinancing activity spikes when interest rates are low. Choose a shorter term and you’ll see a more drastic reduction.
  • Avoiding the Downsides of Adjustable Rates. Life is good for borrowers during the first five to seven years of the typical adjustable-rate mortgage (ARM) term when the 30-year loan rate is likely to be lower than prevailing rates on 30-year fixed-rate mortgages. The bill comes due, literally, when the time comes for the rate to adjust. If rates have risen since the loan’s origination, which is common, the monthly payment spikes. Borrowers can avoid this unwelcome development by refinancing to a fixed-rate mortgage ahead of the jump.
  • Getting Rid of FHA Mortgage Insurance. With relaxed approval standards and low down payment requirements, Federal Housing Administration (FHA) mortgage loans help lower-income, lower-asset first-time buyers afford starter homes. But they have some significant drawbacks, including pricey mortgage insurance that lasts for the life of the loan. Borrowers with sufficient equity (typically 20% or more) can put that behind them, reduce their monthly payment in the process by refinancing to a conventional mortgage, and avoid less expensive but still unwelcome private mortgage insurance (PMI).
  • Tapping Home Equity. Use a cash-out refinance loan to extract equity from your home. This type of loan allows you to borrow cash against the value of your home to fund things like home improvement projects or debt consolidation. Depending on the lender and jurisdiction, you can borrow up to 85% of your home equity (between rolled-over principal and cash proceeds) with this type of loan. But mind your other equity-tapping options: a home equity loan or home equity line of credit.

Confirming what you hope to get out of your refinance is an essential prerequisite to calculating its likely cost and choosing the optimal offer.


2. Confirm the Timing & Gather Everything You Need

With your loan’s purpose and your long-term financial objectives set, it’s time to confirm you’re ready to refinance. If yes, you must gather everything you need to apply, or at least begin thinking about how to do that.

Assessing Your Timing & Determining Whether to Wait

The purpose of your loan plays a substantial role in dictating the timing of your refinance.

For example, if your primary goal is to tap the equity in your home to finance a major home improvement project, such as a kitchen remodel or basement finish, wait until your loan-to-value ratio is low enough to produce the requisite windfall. That time might not arrive until you’ve been in your home for a decade or longer, depending on the property’s value (and change in value over time).

As a simplified example, if you accumulate an average of $5,000 in equity per year during your first decade of homeownership by making regular payments on your mortgage, you must pay your 30-year mortgage on time for 10 consecutive years to build the $50,000 needed for a major kitchen remodel (without accounting for a potential increase in equity due to a rise in market value).

By contrast, if your primary goal is to avoid a spike in your ARM payment, it’s in your interest to refinance before that happens — most often five or seven years into your original mortgage term.

But other factors can also influence the timing of your refinance or give you second thoughts about going through with it at all:

  • Your Credit Score. Because mortgage refinance loans are secured by the value of the properties they cover, their interest rates tend to be lower than riskier forms of unsecured debt, such as personal loans and credit cards. But borrower credit still plays a vital role in setting their rates. Borrowers with credit scores above 760 get the best rates, and borrowers with scores much below 680 can expect significantly higher rates. That’s not to say refinancing never makes sense for someone whose FICO score is in the mid-600s or below, only that those with the luxury to wait out the credit rebuilding or credit improvement process might want to consider it. If you’re unsure of your credit score, you can check it for free through Credit Karma.
  • Debt-to-Income Ratio. Mortgage lenders prefer borrowers with low debt-to-income ratios. Under 36% is ideal, and over 43% is likely a deal breaker for most lenders. If your debt-to-income ratio is uncomfortably high, consider putting off your refinance for six months to a year and using the time to pay down debt.
  • Work History. Fairly or not, lenders tend to be leery of borrowers who’ve recently changed jobs. If you’ve been with your current employer for two years or less, you must demonstrate that your income has been steady for longer and still might fail to qualify for the rate you expected. However, if you expect interest rates to rise in the near term, waiting out your new job could cancel out any benefits due to the higher future prevailing rates.
  • Prevailing Interest Rates. Given the considerable sums of money involved, even an incremental change to your refinance loan’s interest rate could translate to thousands or tens of thousands of dollars saved over the life of the loan. If you expect interest rates to fall in the near term, put off your refinance application. Conversely, if you believe rates will rise, don’t delay. And if the difference between your original mortgage rate and the rate you expect to receive on your refinance loan isn’t at least 1.5 percentage points, think twice about going ahead with the refinance at all. Under those circumstances, it takes longer to recoup your refinance loan’s closing costs.
  • Anticipated Time in the Home. It rarely makes sense to refinance your original mortgage if you plan to sell the home or pay off the mortgage within two years. Depending on your expected interest savings on the refinance, it can take much longer than that (upward of five years) to break even. Think carefully about how much effort you want to devote to refinancing a loan you’re going to pay off in a few years anyway.

Pro tip: If you need to give your credit score a bump, sign up for Experian Boost. It’s free and it’ll help you instantly increase your credit score.

Gathering Information & Application Materials

If and when you’re ready to go through with your refinance, you need a great deal of information and documentation before and during the application and closing processes, including:

  • Proof of Income. Depending on your employment status and sources of income, the lender will ask you to supply recent pay stubs, tax returns, or bank statements.
  • A Recent Home Appraisal. Your refinance lender will order a home appraisal before closing, so you don’t need to arrange one on your own. However, to avoid surprises, you can use open-source comparable local sales data to get an idea of your home’s likely market value.
  • Property Insurance Information. Your lender (and later, mortgage servicer) needs your homeowners insurance information to bundle your escrow payment. If it has been more than a year since you reviewed your property insurance policy, now’s the time to shop around for a better deal.

Be prepared to provide additional documentation if requested by your lender before closing. Any missing information or delays in producing documents can jeopardize the close.

Home Appraisal Blackboard Chalk Hand


3. Calculate Your Approximate Refinancing Costs

Next, use a free mortgage refinance calculator like Bank of America’s to calculate your approximate refinancing costs.

Above all else, this calculation must confirm you can afford the monthly mortgage payment on your refinance loan. If one of your aims in refinancing is to reduce the amount of interest paid over the life of your loan, this calculation can also confirm your chosen loan term and structure will achieve that.

For it to be worth it, you must at least break even on the loan after accounting for closing costs.

Calculating Your Breakeven Cost

Breakeven is a simple concept. When the total amount of interest you must pay over the life of your refinance loan matches the loan’s closing costs, you break even on the loan.

The point in time at which you reach parity is the breakeven point. Any interest saved after the breakeven point is effectively a bonus — money you would have forfeited had you chosen not to refinance.

Two factors determine if and when the breakeven point arrives. First, a longer loan term increases the likelihood you’ll break even at some point. More important still is the magnitude of change in your loan’s interest rate. The further your refinance rate falls from your original loan’s rate, the more you save each month and the faster you can recoup your closing costs.

A good mortgage refinance calculator should automatically calculate your breakeven point. Otherwise, calculate your breakeven point by dividing your refinance loan’s closing costs by the monthly savings relative to the original loan and round the result up to the next whole number.

Because you won’t have exact figures for your loan’s closing costs or monthly savings until you’ve applied and received loan disclosures, you’re calculating an estimated breakeven range at this point.

Refinance loan closing costs typically range from 2% to 6% of the refinanced loan’s principal, depending on the origination fee and other big-ticket expenses, so run one optimistic scenario (closing costs at 2% and a short time to breakeven) and one pessimistic scenario (closing costs at 6% and a long time to breakeven). The actual outcome will likely fall somewhere in the middle.

Note that the breakeven point is why it rarely makes sense to bother refinancing if you plan to sell or pay off the loan within two years or can’t reduce your interest rate by more than 1.5 to 2 percentage points.


4. Shop, Apply, & Close

You’re now in the home stretch — ready to shop, apply, and close the deal on your refinance loan.

Follow each of these steps in order, beginning with a multipronged effort to source accurate refinance quotes, continuing through an application and evaluation marathon, and finishing up with a closing that should seem breezier than your first.

Use a Quote Finder (Online Broker) to Get Multiple Quotes Quickly

Start by using an online broker like Credible* to source multiple refinance quotes from banks and mortgage lenders without contacting each party directly. Be prepared to provide basic information about your property and objectives, such as:

  • Property type, such as single-family home or townhouse
  • Property purpose, such as primary home or vacation home
  • Loan purpose, such as lowering the monthly payment
  • Property zip code
  • Estimated property value and remaining first mortgage loan balance
  • Cash-out needs, if any
  • Basic personal information, such as estimated credit score and date of birth

If your credit is decent or better, expect to receive multiple conditional refinance offers — with some coming immediately and others trickling in by email or phone in the subsequent hours and days. You’re under no obligation to act on any, sales pressure notwithstanding, but do make note of the most appealing.

Approach Banks & Lenders You’ve Worked With Before

Next, investigate whether any financial institutions with which you have a preexisting relationship offer refinance loans, including your current mortgage lender.

Most banks and credit unions do offer refinance loans. Though their rates tend to be less competitive at a baseline than direct lenders without expensive branch offices, many offer special pricing for longtime or high-asset customers. It’s certainly worth taking the time to make a few calls or website visits.

Apply for Multiple Loans Within 14 Days

You won’t know the exact cost of any refinance offer until you officially apply and receive the formal loan disclosure all lenders must provide to every prospective borrower.

But you can’t formally apply for a refinance loan without consenting to a hard credit pull, which can temporarily depress your credit score. And you definitely shouldn’t go through with your refinance until you’ve entertained multiple offers to ensure you’re getting the best deal.

Fortunately, the major consumer credit-reporting bureaus count all applications for a specific loan type (such as mortgage refinance loans) made within a two-week period as a single application, regardless of the final application count.

In other words, get in all the refinance applications you plan to make within two weeks, and your credit report will show just a single inquiry.

Evaluate Each Offer

Evaluate the loan disclosure for each accepted application with your objectives and general financial goals in mind. If your primary goal is reducing your monthly payment, look for the loan with the lowest monthly cost.

If your primary goal is reducing your lifetime homeownership costs, look for the loan offering the most substantial interest savings (the lowest mortgage interest rate).

Regardless of your loan’s purpose, make sure you understand what (if anything) you’re obligated to pay out of pocket for your loan. Many refinance loans simply roll closing costs into the principal, raising the monthly payment and increasing lifetime interest costs.

If your goal is to get the lowest possible monthly payment and you can afford to, try paying the closing costs out of pocket.

Choose an Offer & Consider Locking Your Rate

Choose the best offer from the pack — the one that best suits your objectives. If you expect rates to move up before closing, consider the lender’s offer (if extended) to lock your rate for a predetermined period, usually 45 to 90 days.

There’s likely a fee associated with this option, but the amount saved by even marginally reducing your final interest rate will probably offset it. Assuming everything goes smoothly during closing, you shouldn’t need more than 45 days — and certainly not more than 90 days — to finish the deal.

Proceed to Closing

Once you’ve closed on the loan, that’s it — you’ve refinanced your mortgage. Your refinance lender pays off your first mortgage and originates your new loan.

Moving forward, you send payments to your refinance lender, their servicer, or another company that purchases the loan.


Final Word

If you own a home, refinancing your mortgage loan is likely the easiest route to capitalize on low interest rates. It’s probably the most profitable too.

But low prevailing interest rates aren’t the only reason to refinance your mortgage loan. Other common refinancing goals include avoiding the first upward adjustment on an ARM, reducing the monthly payment to a level that doesn’t strain your growing family’s budget, tapping the equity you’ve built in your home, and banishing FHA mortgage insurance.

And a refinance loan doesn’t need to achieve only one goal. Some of these objectives are complementary, such as reducing your monthly payment while lowering your interest rate (and lifetime borrowing costs).

Provided you make out on the deal, whether by reducing your total homeownership costs or taking your monthly payment down a peg, it’s likely worth the effort.

*Advertisement from Credible Operations, Inc. NMLS 1681276.Address: 320 Blackwell St. Ste 200, Durham, NC, 27701

Source: moneycrashers.com

12 Hotel Chains With Free Breakfast – Everything You Need to Know

I confess I’ve grown spoiled in my expectations of free breakfasts. If I’m staying at a hotel rather than an alternative like Airbnb, I only book properties where I can enjoy free breakfast.

Yes, it saves me a little money and helps keep my travel habit affordable. But it also makes traveling easier, scratching one less worry off each day’s itinerary. You just stumble to the elevator, and the next thing you know you have a cup of coffee in one hand and a croissant in the other.

Of course, not all hotel breakfasts are created equal. While some hotel chains offer free breakfasts to everyone, others only provide it to guests with elite reward member status.

Whether you’re looking to save money, time, effort, or all of the above on your next vacation, you can count on free breakfasts from the following hotel chains.

Different Types of Hotel Breakfasts

Hotel breakfasts come in three varieties: continental, buffet, and a la carte. This gets slightly confusing because continental breakfasts are served as buffets.

Continental Breakfast

At the low end of the hotel breakfast spectrum lie continental breakfasts. Although set up as a buffet, continental breakfasts lack any precooked food or heat platters.

Common options include cereal, oatmeal, yogurts, pastries, bread, and sometimes deli meats and cheeses. If you’re lucky, they might include a self-operated waffle iron along with premixed batter. They also usually include beverages like coffee, tea, and juices.

A continental breakfast isn’t so much a balanced meal as a breakfast-shaped snack, sufficient to hold you over until you find a good bagel shop or an early lunch.

Buffet Breakfast

What distinguishes a continental breakfast set up as a buffet from a true buffet breakfast?

Hot food.

At a minimum, buffet breakfasts should include a heat platter with scrambled eggs and bacon or sausage. But they could include many more hot food options as well, in addition to cold fare like cereal and fruit.

A La Carte Breakfast

The best breakfast buffets also include made-to-order stations, where staff members cook omelets or other dishes to your custom specifications.

In some cases, you can also order off an a la carte menu. Or there may be no buffet at all, and you order the entire breakfast from a menu, all included with your stay at the hotel.


Hotel Chains That Offer Free Breakfasts to All Guests

Now that we’re clear on terminology, which hotel chains include free breakfasts for everyone?

Surprisingly, free breakfasts dominate the lower- and mid-ranges of the hotel market, not its upper echelons. At least, free breakfasts for all guests, not just elite-level members.

1. Hilton Brands

Many of Hilton’s 15 hotel brands offer free breakfast of one sort or another. Keep an eye out for the following Hilton hotel brands to eat cheap on your next vacation.

  • Hampton by Hilton. The Hampton by Hilton chain offers continental breakfasts, but most do include a waffle iron and oatmeal with hot water for at least a couple of hot breakfast options. One nice twist Hampton offers on the continental breakfast is free on-the-go breakfast bags you can snag on your way out the door.
  • Home2 Suites by Hilton. A step up the breakfast food chain, Home2 Suites offers a couple more hot breakfast options. They rotate hot “artisan-style” breakfast sandwiches and bowls daily, in addition to the standard continental fare and a waffle iron. Other highlights include hard-boiled eggs, grits sometimes rotated with the oatmeal, and an “Inspired Table™” in the breakfast area with power outlets to charge your devices.
  • Tru by Hilton. Hilton’s Tru brand offers a limited hot buffet breakfast with scrambled eggs, chicken sausages, and of course waffles, plus the standard-issue yogurts, cereals, and so on. Tru touts an impressive 35+ toppings available for your breakfast creation.
  • Homewood Suites by Hilton. Homewood Suites features basic hot breakfast foods like scrambled eggs, sausages, bacon, and breakfast potatoes. It also includes pastries, cereals, oatmeal, fruit, and other continental breakfast staples.
  • Canopy by Hilton. Although they don’t claim all properties provide it, this smaller Hilton brand offers a complimentary artisanal breakfast with fresh ingredients and local produce in many of its locations. Double-check with the hotel though before assuming they provide it for free.
  • Embassy Suites by Hilton. With a full hot buffet breakfast including eggs, bacon, and oatmeal, the Embassy Suites also features a made-to-order omelet station. After chowing down on a la carte omelets, be sure to squeeze some fresh fruit in your breakfast from the cold foods section as well.

2. Best Western Hotels

Best Western claims more than 4,500 franchised hotels around the world, with roughly 2,000 of them in North America. Almost all include free breakfast, as the brand strongly encourages but doesn’t require franchisees to offer it.

The quality and quantity of options of those breakfasts vary by location. Some go all out with full hot breakfast buffets with eggs, sausages, bacon, potatoes, and even breakfast sandwiches and a la carte omelet stations. Others limp by with yogurts and other continental breakfast options.

Most offer at least a waffle iron, pancake griddle, or French toast to add another hot option beyond oatmeal. Plus most include a healthy assortment of fruits.

3. InterContinental Hotels Group (IHG)

Several of IHG’s chains advertise free breakfasts, although they vary both by chain and property. Again, do your homework before counting on a gourmet spread.

  • Holiday Inn Express. Given a makeover in 2018, the free breakfast at Holiday Inn Express hotels now includes items like egg white omelets, bacon and sausages, cinnamon rolls, and a one-touch pancake machine. They also spruced up the continental side of their breakfast foods, with Chobani yogurts and whole wheat English muffins. If you oversleep, they also provide prepacked to-go breakfast bags as well.
  • Staybridge Suites. This IHG brand promises a hot buffet breakfast, which includes scrambled eggs, bacon, and waffles. Don’t expect any bells and whistles, but you can find the full continental breakfast along with a basic hot breakfast buffet.
  • Avid Hotels. The breakfast at Avid Hotels looks more continental, mostly consisting of oatmeal, fruit, cereal, slices of breads, and yogurts. They do also provide hard-boiled eggs and some on-the-go options such as breakfast bars you can grab on your way out.

4. Country Inn & Suites by Radisson

Most Radisson hotels do not provide free breakfasts, at least not without elite member status. But Country Inn & Suites proves an exception.

Hotels in this chain provide two rotating hot breakfast entrees every day, and I confess they sound pretty tempting. Customizable breakfast burritos, biscuits and gravy, an omelet station, eggs Benedict, French toast, and bacon with eggs and toast are all featured in the rotation.

Beyond the hot entrees, you can expect the usual waffles, oatmeal, fruits, and cereals. One standout option is the parfait station, allowing guests to build their own perfect yogurt parfait.

5. Marriott Brands

With 30 hotel brands, most of Marriott’s hotels don’t offer complimentary breakfast. But a handful do, at least outside the Asia Pacific region, where the conglomerate does not require properties to offer breakfast.

  • Residence Inn by Marriott. The extent of these breakfasts vary by location, but the brand promises a “full American breakfast.” Expect a basic continental breakfast with a couple of hot options.
  • Springhill Suites by Marriott. Although mostly continental fare such as yogurt and fruit, some locations offer hot eggs, spinach, and other minimal hot buffet items.
  • TownePlace Suites by Marriott. Similarly, most TownePlace Suites properties offer a basic hot buffet breakfast that includes eggs, sausages, and waffles in addition to the cold continental options.
  • Fairfield Inn & Suites by Marriott. This brand offers a few hot options such as eggs and breakfast meats, along with a waffle iron, fruit, toast, and the usual corporate breakfast items.
  • Element by Marriott. Although Element offers the standard Marriott limited hot buffet breakfast, what sets it apart is actually its afternoon offering: a complimentary adult beverage in many locations.

6. Wyndham Brands

Many Wyndham chains provide at least a continental breakfast, and a few offer basic hot items as well.

  • La Quinta Inn & Suites. I once lived at a La Quinta for three weeks when my travel nurse girlfriend’s employer failed to produce corporate housing for us on time. For the first few days, I enjoyed the continental breakfast of cereal, yogurt, fruit, and waffles. After three weeks of it, though, I didn’t eat waffles again for several years.
  • Wingate by Wyndham. Wingate hotels offer a basic hot buffet breakfast with eggs, bacon, waffles, as well as continental breakfast options.
  • Hawthorn Suites. Similarly, Hawthorn Suites provides simple hot options such as eggs, breakfast meat, bagels, and oatmeal.
  • Travelodge. Most Travelodge locations offer a free continental breakfast with minimal frills, but you should at least get some fruit, toast, yogurt, and other basics.
  • Howard Johnson. HoJo offers a free “Rise & Dine” continental breakfast in most locations. Expect the usual cold options.
  • Baymont Inn & Suites. While Baymont advertises a “hot breakfast,” the only hot items at most locations are waffles and coffee. Expect a standard continental breakfast.
  • Days Inn. Wyndham knows its marketing, and in this case pushes the “healthy breakfast” angle. Again, it’s a standard continental breakfast.
  • Super 8. This chain also provides continental standards, including waffles, fruit, and cereal.
  • Microtel Inn & Suites. This brand provides a continental breakfast, which usually includes bagels and a toaster in addition to the classics.

7. Choice Hotels Brands

Most Choice Hotels chains offer free breakfast in one form or another.

  • Sleep Inn. This basic hotel chain includes a free hot breakfast buffet for all guests, including eggs and breakfast meats. They rotate the exact options, but sometimes include biscuits and gravy or sausage patties, and pancakes in addition to waffles.
  • Quality Inn. This chain offers a similar hot buffet breakfast to that of the Sleep Inn brand.
  • Comfort Inn. Another standard of Choice Hotels’ lineup, Comfort Inns also provide free hot buffet breakfasts. The waffles sometimes have multiple flavor options for some variety across multiple mornings.
  • Clarion Pointe. In 2018, Choice Hotels separated its Clarion brand into several sub-brands, and most standard Clarion hotels stopped offering free breakfasts. The slightly higher grade Clarion Pointe branded properties do still offer a free basic hot buffet breakfast with eggs and breakfast meats in most cases.
  • MainStay Suites. The MainStay Suites brand offers free continental breakfast, although many properties include an oatmeal station so guests can customize their hot oatmeal with a range of toppings.
  • Econo Lodge. This basic hotel chain provides a standard free continental breakfast.

8. Drury Hotels

Most Drury Hotels provide all guests with a complimentary hot buffet breakfast. It includes eggs, sausage, breakfast potatoes, the ever-present waffle iron, fresh fruit, oatmeal, and all the cold continental options.

The family-owned hotel chain touts that “the extras aren’t extra” as its slogan, and its free breakfast doesn’t disappoint.


Hotel Chains That Offer Free Breakfast With Elite Status

Some hotels charge standard guests for breakfast but offer it as a free incentive for guests with some sort of elite status with the brand. Each hotel chain has its own travel loyalty program and tiers, with different pricing and perks. Some are even free. Research each individually before committing, as some offer far greater value than others.

9. Marriott Properties

Many of the higher-end Marriott brands charge for breakfast — unless you have elite status with them.

Marriott features six status tiers currently: Member, Silver Elite, Gold Elite, Platinum Elite, Titanium Elite, and Ambassador Elite. Customers in the highest three tiers enjoy free breakfasts at many Marriott properties around the world.

Those properties include:

  • Marriott Resorts (not hotels)
  • Sheraton Hotels
  • Westin Hotels
  • Marriott Courtyard (if the property has a lounge)
  • Four Points Hotels
  • Protea Hotels

Breakfasts range from a full hot buffet up to completely customized a la carte breakfasts.

Joining the Marriott membership program comes with a suite of other benefits too, and makes for an alternative way to earn travel rewards without a credit card. Just remember that it doesn’t make sense to spend more than you would have otherwise to save a little money on breakfast. Spending an extra $50 to earn $25 in benefits is a losing proposition.

10. Hyatt Properties

The Hyatt corporation offers a four-tiered membership program called World of Hyatt. Tiers include World of Hyatt Members, Discoverists, Explorists, and Globalists at the top.

Different membership types earn you free breakfast at different Hyatt hotel brands. For example, Hyatt Place hotels provide free breakfast for members at all four tiers. Many other Hyatt brands only provide free breakfast for members at the Globalist level.

As you explore the following Hyatt brand hotels, verify specifically whether they offer a free breakfast for World of Hyatt members, and at which minimum tier:

  • Park Hyatt
  • Grand Hyatt
  • Hyatt Regency
  • Hyatt Zilara/Ziva
  • Hyatt Place
  • Hyatt House
  • Andaz
  • Alila
  • Thompson
  • Hyatt Centric
  • The Unbound Collection
  • Destination
  • Joie de Vivre
  • Hyatt Small Luxury Hotels and Resorts

At all properties, diners can expect at a minimum a full hot breakfast buffet, often with a la carte options such as an omelet station, and in some cases a full a la carte breakfast menu.

As a final thought on Hyatt hotels, some offer complimentary breakfast if you book directly through Hyatt’s website rather than a third-party website like Expedia or Travelocity. Check Hyatt’s own website first when making reservations for a Hyatt hotel.

11. Hilton Hotels

Similarly, the Hilton Honors loyalty program includes four tiers and features free breakfasts for some members. The levels include Member, Silver, Gold, and Diamond.

Gold and Diamond members receive free breakfast at any Hilton hotel in the world. The brand’s hotel list includes:

  • Conrad
  • Canopy
  • Curio
  • DoubleTree
  • Embassy Suites
  • Hampton Inn
  • Hilton
  • Hilton Garden Inn
  • Home2 Suites
  • Homewood Suites
  • LXR
  • Motto
  • Signia
  • Tapestry Collection
  • Tru
  • Waldorf Astoria

The hotel breakfasts across this group vary considerably. Some hotel brands offer only a continental breakfast. Others offer a hot buffet breakfast, and still others offer full a la carte breakfasts.

Do your homework on individual hotels and their breakfast offerings before booking.

12. Radisson Hotels

The Radisson Rewards program also features four tiers: Club, Silver, Gold, Platinum. Only Platinum members get free breakfasts, and only at participating properties.

Guests need to read the fine print carefully, too. The member must be the registered guest — as opposed to, say, their spouse — and only the member receives free breakfast.

As free breakfast benefits go, the Radisson Rewards program wins the award for most stingy.


Credit Card Hotel Networks Offering Free Breakfasts

One other way to score free hotel breakfasts includes elite credit cards, which include a range of travel benefits through a network of hotels. It makes for another opportunity for travel perks, even without specifically owning a travel rewards credit card.

Amex Fine Hotels & Resorts Network

Platinum American Express cardholders get a wide range of perks within the Amex Fine Hotels & Resorts network. It includes more than 1,000 hotels around the world.

Cardholders see benefits similar to those earned by elite hotel memberships. Some of those benefits include:

  • Daily free breakfast for two guests
  • Early check-in when available (usually noon)
  • Guaranteed 4pm late checkout
  • Room upgrades
  • Complimentary Wi-Fi
  • Other amenities unique to individual properties

Many of the hotels in the network are high-end luxury hotels, offering either upscale hot buffets or a la carte breakfasts. In other words, expect breakfasts to impress.

Chase Luxury Hotels & Resorts Collection

Chase’s network operates extremely similarly, where more exclusive cardholders get access to hotel perks at an equally large network. Chase advertises access to their Luxury Hotels & Resorts Collection as a perk with the following cards:

However, I’ve informally heard that some other Chase cardholders also get access to the network. The following cardholders can try accessing the network as well:

Visa Signature Luxury Hotel Collection

Holders of Visa Signature cards get access to a similar network of upscale hotels with over 900 properties worldwide through the Visa Signature Luxury Hotel Collection.

Hotels in the network offer similar perks, including free breakfast, early check-in, late checkout, and so on. But one unique benefit to Visa’s network is that it guarantees the lowest available rate. Cardholders never pay more than the rate advertised elsewhere online, unlike some hotels in the other two credit card networks, which may charge more for customers availing themselves of the benefits.


Final Word

There may be no such thing as a free lunch, but a free breakfast? Well, sometimes.

Keep in mind that many hotel chains are owned by franchisees, and not all properties participate in the overall company structure for free breakfasts. Even among corporate-owned hotels, some properties don’t offer the standard free breakfast either. Be sure to check each individual hotel before booking to ensure it offers free breakfast for guests.

Source: moneycrashers.com

Diderot Effect – Psychology of Buying Unnecessary Things & How to Avoid

When I relocated to a new city, I moved from the apartment where I had lived for seven years to a newer one that had been better maintained. When I started unpacking my belongings, I was struck by how shabby my stuff looked in comparison and overcome with the impulse to buy new things for this beautiful apartment.

Thankfully, before I pulled out my credit card and started a buying frenzy, I remembered a short essay I’d read in a college philosophy class and realized I had fallen prey to the Diderot effect.

What Is the Diderot Effect

Named for the 18th-century French philosopher Denis Diderot, this effect describes the phenomenon in which the introduction of a new purchase or gift makes your existing possessions look dingy, old, or unexciting, thus sparking a spiraling pattern of consumption.

Say you buy a new couch, and you start looking at your existing area rug and side tables with a critical eye. So you replace those, and now your whole living room looks newer — at which point, the bedroom furniture starts to look outdated.

The Diderot effect is all around us, and it influences our purchase choices across all categories: the clothes we wear, the items we use each day, even our cars and houses.

So what is the Diderot effect, how does it work, and what can we do to avoid falling victim to the endless cycle of consumption and spending it provokes?

The Origin of the Diderot Effect

A French philosopher active during the Enlightenment, Denis Diderot was perhaps best known as the co-founder of the Encyclopedie, a general encyclopedia published between 1751 and 1772.

Diderot also wrote widely, publishing a number of essays on a range of topics, including “Regrets for my Old Dressing Gown, or A warning to those who have more taste than fortune” in 1769. This is the work in which he describes the phenomenon that would later be coined “the Diderot effect.”

The story goes that Diderot was either gifted or purchased a new dressing gown, which prompted the now-famous essay in which he laments this acquisition. “My old robe was one with the other rags that surrounded me,” Diderot writes.

But once he has the beautiful new robe, everything around him starts to look shabby in comparison, including his physical appearance underneath the robe. He feels the new robe demands that his other belongings keep up with the same high standards, so he begins replacing his old possessions with new ones.

Out go the modest prints he had tacked to the wall, to be replaced with framed paintings instead. He replaces his old straw chair with a new leather one and acquires a fancy inlaid armoire. The rate of accumulation snowballs from there, until he finds himself with debts he must pay by continuing to work and write.

In his essay, he warns readers, “Let my example teach you a lesson. Poverty has its freedoms; opulence has its obstacles.”


The Diderot Effect in Modern Consumerism

Consciously or not, we express ourselves through our possessions, whether they’re brand-new luxury goods or well-loved items passed down through several generations.

Possessions aren’t the only way to tell the world who we are, of course, but they are one of the subtle ways we convey our sense of self to others, often without needing to say a thing. How many times have you tried on an article of clothing or looked at a piece of furniture and thought, “This just isn’t me”?

When we buy things, we want them to fit into our existing tastes and standards. However, when we bring something new into our lives, we can’t help comparing it to the things we already own, which makes us look at the old items with a more critical eye.

Before you know it, the purchase of a new couch leads you to replace everything in the room, from the furniture to the light fixtures, in an effort to make it all “match.” What started as a new sofa becomes a spiral of consumption with no end in sight.


How to Avoid the Diderot Effect

You can probably identify examples of the Diderot effect in your own life. It’s common, especially in our consumer-driven culture.

Thankfully, there are a number of ways to avoid falling prey to the Diderot effect and stop the spending snowball before it picks up too much speed. Here are a few tactics to try.

1. Reduce Your Exposure to Temptations

The less exposure you have to brand-new things, the less likely you are to desire them. No one who lives in modern society can escape advertising entirely; marketing is simply too ubiquitous. But you can do everything in your power to reduce the temptation.

Stay away from physical stores, which are deliberately laid out to trick you into spending more. Avoid online shopping and unsubscribe from marketing newsletters and store emails. Cut down on the amount of junk mail you get and stop following shops and brands on social media.

If you don’t see as many ads or items beckoning for you to buy them, it’s much easier to control your desire for newer, fancier, more expensive stuff.

2. Put the Brakes on Your Consumption

If you have to tell yourself no each time you encounter something you might want to buy, you’ll quickly exhaust your reserves of self-discipline. Instead, set parameters for yourself and your family so you only have to make a single decision.

For example, you might decide you’re done with purchasing clothing new. You can buy secondhand and vintage items, and if you can’t find exactly what you want in those marketplaces, you simply don’t buy anything.

This way, you’re not saying no to fast fashion or retail stores over and over again, every time you walk past one on the street or get a tempting flyer in the mail. You simply decided to say no once and never look back.

Think about how you can impose a similar restraint or rule for your spending in other categories. Maybe it’s as simple as not buying any new furniture or household goods until your credit card debt is paid off, or doing a no-spend month or pantry challenge with your family.

Perhaps you choose a limit for your shopping budget, and once you hit that limit, that’s it for the month — the envelope system is a great way to do this.

3. Lend and Borrow

Instead of buying new stuff, borrow what you need and lend what you have. This strategy can sometimes take a little more effort, but the payoff can be tremendous, both in the cost savings you’ll see and in the relationships you’ll be able to forge with your friends and neighbors.

From lawn mowers to power tools to camping equipment, explore all the ways that you can borrow instead of buy, and be equally willing to lend what you own. Host a clothing swap with your friends. See if your local public library, church, or community center has a kitchen- or tool-lending library. Join a Buy Nothing group or other frugality group in your area, and talk to your friends and neighbors about how to pool your resources.

Borrowing not only saves you money, but it also prevents you from falling into the trap that Diderot did. Rather than buying new items that make the old ones look less exciting, you see these things for what they are — utilitarian items to be borrowed, used, and then returned to their owner — rather than a reflection on you and your tastes.

4. Reduce, Reuse, and Recycle

Get into the habit of making what you already own last as long as possible.

Instead of replacing a piece of electronic equipment when it breaks, see if it can be repaired. Instead of buying your child a new backpack every school year, have them reuse last year’s or switch with a sibling or friend.

Instead of buying a whole new wardrobe for a new job, refashion or repurpose a few key pieces to quell your desire for something new and match your current aesthetic.

6. Match New and Existing Items

When you’re purchasing items for your home, pay close attention to the items you already own. Look for colors, materials, and designs that fit well with your current stuff instead of feeling at odds or out of place.

Go into a purchase expecting to own each item for a long time, and only purchase things that will fit in with — rather than stand out from — what you already have.

The same goes for your wardrobe. Look for pieces that work with your current clothing and accessories so you can easily mix and match rather than feeling compelled to buy an entirely new wardrobe.

You can still introduce new elements into your style if you want to make a change, but do it gradually rather than overhauling everything in one fell swoop.

7. Follow the “One In, One Out” Rule

One surefire way to avoid thoughtlessly bringing new things into your house is to stick to a “one in, one out” rule. By this rule, every time you bring something new into your home, you must get rid of something else.

Don’t allow yourself to simply set the old item out by the curb and forget about it. Instead, try to sell it on Craigslist, figure out how to donate it to a secondhand store like the Salvation Army, or give it to a friend or family member.

This is more work than simply putting something out for the trash, but that’s the point. By creating a little bit of work for yourself, you’ll be better able to resist the urge to buy new things except for when you really need them. This makes it harder to simply whip out your credit card and buy your way to a whole new living room while kicking the old stuff to the curb.

8. Reframe How You See Physical Objects and Symbols of Wealth

When you see a big new house or shiny car, instead of feeling envious, remind yourself of all the expenses that come with maintaining those pricier items. A bigger house means bigger expenses, from higher monthly payments to higher heating and cooling costs.

A luxury car not only costs a fortune but also requires costly insurance and upkeep. Remind yourself that living more modestly frees up your money for important financial goals, such as saving for retirement or reaching financial independence.

Rather than striving to acquire bigger and “better” things, practice gratitude for what you already have. Consider this famous quote from Epicurus: “Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things you only hoped for.”

What are the things you once hoped for that now you take for granted? Make a list of those and revisit it the next time you find yourself wanting to redecorate or upgrade.


Final Word

By employing these tactics before my instinct got the better of me, I was able to keep my new house purchases to a minimum and avoid going over budget. I bought only the things I really needed and picked objects that fit within my current aesthetic.

Using Craigslist and relying on carpentry and other DIY skills to retrofit existing storage solutions and decor, I made my apartment homey and comfortable without falling victim to the Diderot effect.

Source: moneycrashers.com

DC Studio Apartments Offering One or Two Months Free

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studio-apartments-offering-two-months-free

If you are in the market for a new apartment, this is the absolute best time to secure a new place. Apartments and neighborhoods where you never were able to get concessions are now giving away up to two months free. This is of course due to the fact that while many people were able to work from home, they took that opportunity to leave their Washington, D.C. apartments and move out to the suburbs or home with mom and dad or become digital nomads. That left many apartment buildings with vacancies to fill and that’s where your luck begins!

Last month we highlighted apartments with move-in specials. This week, we are highlighting DC Studio Apartments offering two months free. You’ll see there is a wide range of offerings from rent control apartments in Northwest DC to brand new luxury apartments in SE neighborhoods like Capitol Riverfront.

Act quickly, as soon as the summer heats up and there are more signs of movement in the District, you will see prices start to rise and rent specials dry up.


Hilltop-House-kitchen

Hilltop House

1475 Euclid Street NW Washington, DC.

844-259-7670

Studios starting at $1350

Get TWO MONTHS FREE

Hilltop House is in the Adams Morgan neighborhood in NW Washington, D.C. The building has mostly studios, but on occasion, a one or two-bedroom apartment comes available. The building is within walking distance of Safeway and Harris Teeter and many restaurants. All utilities are included in your rent price.


The Shawmut

2200 19th Street NW, Washington DC

844-300-2186

Studios starting at $1350

Get TWO MONTHS FREE on Studios

The Shawmut is a pet-friendly community in the Adams-Morgan | Kalorama Neighborhod. The building is in walking distance of many restaurants, grocery stores, and shops.

Apartments-with-one-month-free-2800-woodley

2800 Woodley

2800 Woodley NW, Washington DC

833-623-4036

Get One and a Half Months Free

Studios starting at $1495

2800 Woodley is a gorgeous building set back in a tree-lined residential neighborhood just four blocks from the Woodley Park Metro. The apartments have shining parquet floors, energy efficient appliances, and all utilities are included with your rent.

apartments-with-two-months-free-brunswick-house

Brunswick House

1414 17th Street NW, Washington DC

844-287-1930

Get Two Months Free on Studios

Studios starting at $1395

Brunswick House is conveniently located near the Dupont Circle Metro. It is also within a few blocks of Whole Foods Market and a number of restaurants. Brunswick House Apartments have hardwood floors and all utilities are included with the rent.

apartments-with one-month-free-DC-Meridian-Park-Apartments

Meridian Park

2445 15th Street NW, Washington DC

833-233-2513

Get Two Months Free on Studios

Studios starting at $1390

Meridian Park Apartments have a fantastic location between Adams Morgan and Columbia Heights. The apartment community is located right next to Meridian Park, walking distance to multiple metro stops and just blocks from two grocery stores.

Avec-on-H-1-Bedroom-AV1adBMx-Kitchen(1)

Avec on H

901 H Street NE, Washington DC

833-715-2382

Get Two Months Free on Studios

Studios starting at $1541

Avec on H is a brand new apartment community on H Street. The building has a two-block long rooftop with a pool, grilling areas, community garden, dog park and outdoor living rooms. The community also has a fitness center and clubroom. Right now they are offering two months free on studio apartments.

That’s our round-up of studio apartments in DC offering up to two months free. Want to see more options? Do a free search at apartminty.com and sign up for the mailing list to get notified as more specials come available!

Amazon and the Amazon logo are trademarks of Amazon.com, Inc, or its affiliates.

Source: blog.apartminty.com

How to Save Money on Business Travel – 21 Ideas To Reduce Trip Costs

It doesn’t matter if you’re an executive at a large corporation or a small-business owner. It’s likely you sometimes have to travel for work.

Business travel is also becoming more common. According to Statista, worldwide business travel spending has more than doubled since 2000. While spending has recently declined due to the COVID-19 pandemic, traveling for work is still a reality for some and should eventually recover.

Business travel often involves international travel or significant domestic travel. Trade shows, conferences, networking events, and meeting new clients can require you to hop on a flight to do business in a new city or country. With airfare, hotel costs, transportation, and general travel expenses, costs rack up quickly.

If you want to save money on business travel, you’re in luck. There are numerous ways to reduce travel expenses beyond just booking economy.

Saving Money on Business Airfare

Of all business travel expenses, airfare is often the costliest. Booking flights in advance and sticking with economy are the two most straightforward ways to cut travel costs. But there are other ways to find cheap flights and reduce airfare costs.

1. Book Cheap & Discounted Flights

If you’re trying to save on business travel, booking flights early is the best way to find deals. Last-minute flights are usually expensive, and the more time you have to shop around, the better.

But that’s not the only trick you can use to find cheap flight options.

  • Book flights with layovers, provided the savings are worth the extra travel time.
  • Use airline search engines like Expedia, Travelocity, and CheapOair to find low-cost airfare.
  • Try alternate airports to your closest airport if they have lower prices.
  • Book directly through an airline carrier since some airlines don’t appear on airline search engines.
  • Take a red-eye (overnight) flight.

You can also take travel planning a step further and possibly score free flights or serious discounts. One popular strategy is to buy airline miles during a promotion, which is essentially buying a future flight at a discount. You can also earn airline miles without a credit card by opening a Bask Bank account or even participating in focus groups.

As long as you browse travel sites for deals and remain flexible, there’s no reason your next business flight should be full price.

2. Avoid Airline Fees

Finding cheap airline tickets is an effective way to reduce travel costs. However, if you aren’t careful, unnecessary airline fees can turn an otherwise frugal trip into a significant business expense.

The best way to avoid airline fees is to read the fine print carefully and stick with the right carrier. Some airlines, like Southwest and United, are generally lenient with checked bag fees and carry-on luggage, and you can sometimes avoid paying for these conveniences altogether.

If your airline charges for checked baggage, consider traveling light and just bringing a carry-on. If you need a suitcase to pack business attire, use a luggage scale to weigh your bag at home to avoid paying for overweight baggage.

Finally, resist paying for airline fees like early boarding or picking your seat if you aren’t picky about getting the aisle or window seat. These sound like luxuries, but these expenses add up quickly and don’t necessarily improve the quality of your flight.

3. Skip Airport Parking

Another common airport travel expense is parking. If you’re traveling for a week or longer, the daily cost of airport parking adds up. For example, at John F. Kennedy International Airport in New York, 24 hours of parking is $18 in the economy lot, meaning seven days of parking is an additional $126.

Thankfully, you can avoid parking fees entirely. One method is to take an Uber or Lyft to the airport. Alternatively, having a co-worker or family member drop you off is your next best bet. Public transportation is also worth the extra time if it saves you from expensive daily parking fees.

4. Book Through Rewards Websites

Booking your flight and hotel through a rewards website helps you save money on vacation and personal trips. But the right website can also cut business travel expenses.

Rakuten lets you earn cash back for shopping at thousands of partners. Creating an account is free, and once you shop at an eligible partner, you earn cash back in your account. You get paid quarterly as long as your account has $5, which is easy to do if you score cash back on a flight or hotel stay.

Rakuten has numerous travel partners, including:

  • Travelocity
  • CheapOair
  • OneTravel
  • Cheapair
  • Orbitz
  • Priceline
  • Holiday Inn
  • Extended Stay America
  • Hotels.com

Rakuten also has non-travel partners you can use to save even more money. For example, it lets you earn up to 5% cash back at thousands of restaurants, which helps you save if you eat out or take clients out for meals. Additionally, Rakuten partners with office supply companies, print shops, and electronics retailers, so you can save on a variety of business-related expenses.

It might seem strange to use a rewards website for business expenses. But if you’re trying to cut costs, every bit of savings counts.

Read our Rakuten review for more information.

5. Always Use a Travel Rewards Credit Card

If you’re a frequent business traveler, you need a travel rewards credit card. Typically, these cards let you earn points for travel-related expenses like flights and in-flight purchases alongside everyday spending.

You can often redeem points for discounted flights and even free airfare if you stack enough points. Plus, many travel rewards credit cards offer additional perks like hotel discounts, priority boarding, and airport lounge access.

Popular travel rewards credit cards include:

  • Chase Sapphire Reserve Card: Earn a $750 travel bonus for spending $4,000 in your first three months; $300 annual travel credit; triple points on travel and dining; perks like lost luggage and trip cancellation coverage; $550 annual fee
  • American Express Platinum Card: Earn a $750 bonus for spending $5,000 in your first three months; $200 annual airline fee credit; quintuple points on flights and prepaid hotels; $200 annual savings on Uber rides and food delivery; various hotel upgrades and discounts; $550 annual fee
  • Chase Sapphire Preferred Card: Earn a $750 travel bonus for spending $4,000 in your first three months; double points on travel and dining; quintuple points on Lyft rides; perks like lost luggage and trip cancellation coverage; $95 annual fee

There are other travel credit card options, including lucrative cash-back credit cards. If you’re a business owner, you can also look at small-business credit cards like the Chase Ink Business Preferred credit card. This card has numerous travel perks and an impressive $1,250 account opening bonus if you spend at least $15,000 within the first three months of becoming a cardholder.

Ideally, your credit card should offer enough travel perks and other rewards to help you save money even with the annual fee.


Saving Money on Accommodations

Finding a pleasant hotel or rental can help foster a successful business trip. Ideally, the location is close to clients or any event you need to attend and has ample access to restaurants for client meetings. Ultimately, you want to strike a balance among comfort, convenience, and affordability.

That can be difficult to get right. The worst-case scenario is that employee performance suffers because of location or simply being too cheap when booking. On the flip side, always sticking with 5-star luxury suites isn’t cost-effective.

As with airfare, there are several tips you can use to reduce how much you spend on accommodations.

6. Negotiate With Hotels

As an independent traveler, calling a hotel and negotiating room prices isn’t always feasible. But business travelers have a slight advantage, especially when traveling in larger groups.

Hotel chains want to incentivize visits from business travelers because it’s reliable, repeat business. If you’re heading out of town for a conference or meeting, take time to call nearby hotels to see what they can offer.

If it’s a frequent trip and you plan to return regularly, let the hotel know. You might find the manager is willing to drop your room price or at least give a free upgrade to keep you happy.

7. Try Dosh Travel

Dosh is a popular cash-back reward app that pays you for shopping at hundreds of partners. Once you link a credit or debit card to Dosh, you automatically earn for shopping at eligible retailers. That’s different from apps like Ibotta that require you to preselect offers before shopping.

Dosh works with dozens of companies, including:

  • Walmart
  • Pizza Hut
  • Sephora
  • Macy’s
  • Uber
  • Old Navy

Currently, you can earn with Dosh at over 100,000 stores across the United States. However, Dosh is also a way to save money on your next business trip.

With Dosh Travel, you can earn up to 40% cash back for booking a hotel through the app. Dosh works with more than 600,000 hotels globally, so there’s no shortage of choice.

You need at least $25 to withdraw your balance, but a single hotel stay can easily earn this amount. Additionally, Dosh partners with local restaurants and Uber Eats, so you can save money taking clients out and feeding your employees. With partners like Walmart and Office Depot, you can also earn cash back for buying office supplies, which can help you reach $25 faster.

Read our Dosh app review to learn more.

8. Consider Airbnb

If your company is traveling with multiple employees, it’s likely everyone needs their own room. Ultimately, that means a substantial hotel bill, even if you negotiate prices or find a deal.

Before you spend thousands of dollars on multiple hotel rooms, search Airbnb’s business accommodations. The platform has grown beyond vacation rentals, and you can find top-rated homes and boutique hotels that also have collaborative workspaces. Plus, Airbnb listings also mention nearby activities and attractions you can use for team building.

Airbnb isn’t always cheaper than hotels, but large groups are likely to save money. Even when you factor in cleaning charges and service fees, Airbnb has some remarkably low nightly prices. Plus, you can negotiate with hosts to get a lower price, and your amenities are likely better than a single hotel room.

If you want to save money and increase your comfort, using Airbnb for your next business trip is certainly worth it.


Saving Money on Food

It’s standard practice for employers to pay for employee meals during business trips. And taking clients and potential customers out for food and drinks is common during business travel. But expenses like client dinners and catering for your team add up quickly unless you implement some money-saving tips for food costs.

9. Schedule Breakfast & Lunchtime Meetings

The practice of wining and dining exists for good reason. For existing relationships, taking clients out shows them you appreciate their business. Similarly, taking a prospect out for food and drinks helps establish a more personal relationship and lets you discuss business in a less formal environment.

However, dinner is almost always more expensive than breakfast or lunch. If you treat a client to a nice dinner with a main course and drinks, you could easily spend $100 or more for the meal, depending on where you go and how many diners you have.

For example, at Scarpetta, a popular Italian restaurant in New York City, most dinner entrees range from $30 to $45. If you add two drinks and an appetizer, that’s another $50 or so for your bill. With an 18% tip, you’re paying around $140 for dinner for just you and one client. When you multiply that by several dinners over a business trip, expenses rack up quickly.

To save money on client meals, schedule breakfast or lunch meetings instead. The brunch menu at Scarpetta, which runs until 3pm, is noticeably cheaper than the dinner menu, with most entrees costing $18. Even with drinks, brunch or lunchtime dining likely brings your bill down to around $80, saving you over 40% on your meal with a client.

For breakfast, you can also find trendy restaurants and cafes suitable for client meetings, like La Parisienne, where a breakfast meeting for two costs around $40 to $50.

You don’t have to go to fast-food restaurants to save money on taking clients out. Instead, research several restaurants with affordable lunch and breakfast menus in the city you’re traveling to so you have some options.

10. Use Corporate Meal-Delivery Services

You may also need to feed your team on business trips. For that, you can save even more using corporate food-delivery services instead of catering companies, time-consuming reimbursement, or cash per-diem allowances.

For example, if you’re running a team event, try using DoorDash for Work to order everyone’s food. Perks of DoorDash for Work include:

  • No delivery fees
  • Lower service fees
  • Easy-to-create group orders
  • Spending limits and reimbursement options to let employees expense their meals

Uber Eats also has a corporate option that lets team members place group orders. As an employer, you can create rules like stipends and hours during which you cover employees’ expenses.

11. Scout Ahead for Cheap Food Joints

Often, if you book accommodations in a city’s downtown business district, you’ll find yourself surrounded by expensive restaurants and bars. But if you’re a mile or more out of downtown, you can probably find cheaper restaurants that are still suitable for client meetings and employee dining.

When booking accommodations, scout the area for affordable restaurants and nearby grocery stores. You should also search for quick and cheap restaurants or even food trucks that are nearby. That’s especially handy if you’re attending trade shows or events and only have time for a quick bite during a lull in the day.

12. Book Cooking-Friendly Accommodations

You don’t need a hotel with a complete kitchen for business travel. But having a microwave and small stovetop means you and your employees can cook some meals rather than relying on hotel food services and eating out constantly (a boon for those on special diets or with food allergies or restrictions).

The savings can add up quickly. For example, if you book a room with a stovetop, you can make a quick breakfast of eggs and toast rather than eating out each morning. That means you’re spending $1 to $2 at most for breakfast instead of $10 to $20 going out. However, if the cost of the room is significantly more expensive than a room without a kitchen, the savings likely aren’t worth it, so consider how impactful potential food savings is when booking accommodations.

For long business trips, companies like Extended Stay America have rooms with a full kitchen and let you save up to 31% on nightly rates if you book for 30 nights or longer. Booking an Airbnb is also ideal for saving on food since you typically have access to a full kitchen.


Saving Money on Transportation

While transportation usually doesn’t cost as much as airfare or accommodations, getting around a new city can still be a significant business travel expense. If you want to cut costs, there are several tricks you can try.

13. Use Rideshare Apps

As a business traveler, your first instinct might be to use an airport car rental service or even a higher-end rental company like Silvercar. However, when you consider car rental upsells and various hidden fees, it can be challenging to find a cheap car rental option.

Plus, if your trip consists of meetings and conferences, you won’t spend much time behind the wheel, making your rental car a near waste. In that case, you’re better off using rideshare apps like Uber and Lyft to travel.

Uber and Lyft also simplify corporate travel budgeting. For example, companies can set travel stipends and track ride history to ensure employees are only expensing business rides rather than personal.

If you’re responsible for approving reimbursement requests, you can quickly check the time, pickup, and drop-off location of every ride an employee expenses. If a ride seems like it wasn’t for business purposes, ask for clarification so your company doesn’t accidentally pay or attempt to take a tax deduction for personal employee expenses.

14. Book Accommodations in the Right Location

In an ideal world, you can skip renting a car or using rideshare apps altogether by booking accommodations within walking distance to wherever you need to go for your business trip.

If you’re attending a trade show or conference, check to see if they have arrangements with nearby hotels to offer special prices for attendees. Alternatively, book your own accommodations within walking distance. Even if you pay slightly more per night, the savings on a rental car or rideshare apps is probably worth it.

15. Save Money on Gas

For some business trips, renting a car or driving your own vehicle is more economical than taking a flight or using rideshare apps. But if you’re driving, anything you can do to save money on gas helps make your trip cheaper.

For starters, use a gas credit card to earn rewards for refueling. Popular gas credit cards include:

  • CitiBusiness AAdvantage Platinum Select Mastercard: Earn 65,000 bonus miles for spending $4,000 within your first four months; earn 2 AAdvantage miles for every $1 you spend at gas stations and car rental companies; earn unlimited 1 mile per $1 you spend on other categories; $99 annual fee that’s waived for your first year
  • Costco Anywhere Visa Card by Citi: Earn 4% cash back on gas for the first $7,000 per year and then 1% thereafter; 3% cash back on restaurants and travel purchases; 2% cash back on Costco and Costco.com purchases; 1 cash back everywhere else; no annual fee
  • Wells Fargo Propel American Express Card: Earn a $200 bonus for spending $1,000 in your first three months; earn unlimited 3% cash back on gas, restaurants, rideshares, transit, flights, hotels, and car rentals; earn 1% cash back everywhere else; no annual fee

To complement your gas credit card, use apps that help you find cheap gas stations, like GasBuddy. With GasBuddy, you can also get up to $0.25 off per gallon by signing up for Pay With GasBuddy, a free fuel rewards card you use like a debit card to pay at the pump and save.

Finally, when driving, use an app like Waze to avoid traffic and find the most efficient route possible. That’s especially important in an unfamiliar city where you don’t know your way around very well. Driving more efficiently helps reduce fuel consumption, ultimately saving more money.

It’s essential to conduct a cost-benefit analysis of driving versus flying and using rideshare apps or a rental car. But if the savings point toward driving, there’s no reason to pay full price at the pump.


Other Tips to Save on Business Travel

If you can cut down on airfare, accommodation, and transportation costs, you’re already on track to keep business travel more affordable. But there are other tips you can use to save money and keep trip planning simple.

16. Have a Trip-Approval Process

If you want to cut business costs, you need to understand your annual expenses to identify areas of wasteful spending. Therefore, every business budget should have a designated portion for business travel expenses and an approval process for trips.

You don’t need an extensive corporate travel policy to take a client out for lunch or drive across town for a meeting. But for out-of-town trips, it’s worth getting management involved. Ideally, employees should submit a trip summary that includes:

  • The purpose and length of a trip
  • The employees who are attending
  • A rough estimate of cost

The summary should then pass to human resources or management for approval.

While this might seem redundant, this process is useful for tracking costs and whether trips result in business development. Plus, as a business owner, you might find that you can skip certain trips or involve fewer employees after reviewing the details more closely.

17. Create a Travel Stipend

A trip approval process helps an organization budget for business travel expenses and forces teams to put more thought into deciding to travel in the first place.

But your business travel policy should also outline a daily employee stipend.

Creating a travel stipend for business travel benefits everyone. For employers, a travel stipend makes budgeting simpler. For employees, a stipend helps clarify limits and ensures there aren’t any awkward post-trip conversations about expensive restaurant or bar tabs.

You should also decide on a reimbursement method. One option is to open a business credit card for traveling employees. For example, Ramp lets you create unlimited virtual and physical cards for employees and pays 1.5% cash back. Plus, there’s no annual fee, and Ramp also collects and stores receipts automatically to help track spending.

Alternatively, you can let your employees spend with their own cards and submit expenses for reimbursement. However, ensure your employees know they need to provide receipts.

But weigh the pros and cons of leaving it in your employees’ hands. Making employees pay for expenses means they have to front significant costs like hotels and flights. That could put employees having financial issues in a tight spot they’d rather not discuss with their employer. And it also means they get to leverage their own credit card rewards that otherwise would have gone to the business.

18. Look for a Corporate Travel Agency

If you’re booking a simple business trip, working with a travel agency probably isn’t worth it. Travel agents used to be incredibly helpful because they could find exclusive deals and would book your trip for you. These days, booking travel plans online is straightforward, and you can find travel deals with a few searches.

But if you’re planning a complicated business trip with multiple employees and hotel bookings, a corporate travel agency could be worth it. Agencies charge a fee to ensure a smooth journey, but it could pay for itself if it prevents one of your employees from taking time out of their day to plan an entire trip.

19. Always Keep Receipts

Another simple way to save on business travel is to keep receipts for tax season. There are numerous tax deductions for self-employed individuals and small-business owners, but you need to track expenses to claim them accurately.

Business travel expenses are also deductible. Examples of deductible expenses include:

  • Travel by train, airplane, bus, or car between your home and business destination
  • Shipping baggage or business products to other work locations
  • Using your car for business purposes
  • Accommodations and business-related meals
  • Tolls, parking fees, and rental car usage for business purposes
  • Dry cleaning
  • Taxis and shuttle services

Keeping paper receipts is one way to track your spending. Alternatively, personal finance apps like MoneyPatrol let you save receipts on your smartphone to ensure you’re ready for tax season.

20. Plan Ahead

If you leave trip planning until the last minute, it’s almost impossible to find low prices or deals. That means paying more for flights, hotels, and transportation. Plus, feeling rushed is a surefire way to have a worse trip and potentially forget a critical part of planning.

Give your organization more time to plan trips whenever possible. Ideally, your company should have a calendar of upcoming trips throughout the year to help budget and plan business travel.

That responsibility can fall to department heads or relevant employees, but it needs to be prioritized if employees regularly travel for work.

21. Prioritize Impactful Savings

One of the worst ways to reduce business travel spending is to save money in a way that hurts your business’s image. For example, if you take a client out for lunch, choose a decent restaurant instead of a fast-food joint and cover the bill.

Similarly, there’s little point in nickel-and-diming your way toward a cheaper travel budget. If you spend hours agonizing over rental car prices to save $15, that’s hardly worth your time as an employee.

Ultimately, you should focus on efficient trip planning and tackling major expenses. Find cheap airfare and accommodations, consider sending fewer employees on trips, and always maximize rewards with the right business credit card.


Final Word

Business travel can be a significant expense. But as long as you plan and budget accordingly, there’s no reason for business trips to hurt your bottom line. In fact, business trips are an excellent way to increase business revenue if they create new opportunities.

Just remember to factor upcoming trips into your annual budget and create a trip-approval process and travel stipend. You can also conduct a yearly business checkup to review whether business travel costs have paid for themselves with new opportunities.

Source: moneycrashers.com