It has now been a whole year since the MMM family made the jump to a low cost / high-deductible health insurance plan, so I figured it would be useful to provide an update on how the year has gone.
The one we ended up with was called the “Saver80”, a barebones but useful plan provided by Golden Rule, which is a subsidiary of the very large United Healthcare. We found it through the insurance search engine called ehealthinsurance.com, using its “sort by price” feature.
At the time of the article I received many speculation-based complaints that are now worth addressing:
Complaint: “Those Ehealthinsurance quotes are all fake window dressing – once you sign up, the real premium is much higher”. Diagnosis: Mostly False. In our case, the original quote was $219 per month for our 3-person family, and after “underwriting” they raised it to $237 after noting the costly birth of our son (since if we chose to have more kids, they would statistically incur higher costs). Not too bad. And after the Affordable Care Act is fully activated in January 2014, past medical history will no longer be a factor.
Complaint: “They always jack your premium way up after the first year” Diagnosis: False. We just got the renewal notice for the plan. I was frightened to open it, expecting a doubling of premiums. And indeed it was a premium increase notice. Our costs are rising $4.24 per month, or 1.8%. One penny of this is the “standard increase” and the other $4.23 is the “age increase”, as Mrs. MM and I are a year older and, sigh, closer to our eventual death. If we account for inflation at 3%, the premium has actually gone down.
Complaint: “High deductible insurance is risky – you’re better off with full coverage” Diagnosis: False in most cases. Although there is plenty of statistical variation involved, on average you win when you self-insure. For example, as usual this year I went to the doctor once for an annual checkup and it was covered by the plan under preventative maintenance. Now pushing 40, I feel better than ever, and I like to say that bikes, barbells and salads are my primary health plan. Mrs. and little MM each caught two bacterial infections over the course of the year that required antibiotics, and we had to pay for the doctor visits and prescriptions out of our own pockets. This raised family health care costs for the year to about $600 (plus the $2844 in insurance premiums, of course). The high-deductible plan was still the clear winner even in this unusually bad year.
Complaint: “Your plan will not be available after the Affordable Care Act comes in” Diagnosis: True and False. Existing plans purchased in 2013 or earlier will often be allowed to remain in effect until at least the end of 2014, and checking ehealthinsurance, I can see my plan is still available today, for the same price. It will probably disappear at the end of the year.
According to my correspondent Xiao Sun who is part of a small business insurance firm called simplyinsured.com, high deductible plans are not going away, just being thinned out due to stricter rules. Xiao’s summary:
Some older plans are grandfathered in, so they don’t have to change. The main rule that high deductible plans have trouble with is the 80/20 rule, which requires at least 80% of premiums to be spend on medical expenses rather than SG&A and marketing. Plans that don’t spend 80% of premiums on medical expenses are supposed to provide rebates back, though many insurers are responding by not offering the high deductible plans anymore. More on that situation on this Kaiser Health News article.
OK, What about the Affordable Care Act (aka Obamacare)?
Although some misguided souls continually spread fear and doubt over it, this new law actually has some great potential. Remember, we’re starting from one of the worst healthcare cost situations in the rich world (Canadians pay about half of what we spend per capita for full universal coverage for life – including vision). So by moving the US closer to these more successful systems, we all have a good chance at saving money over time.
For an early retiree like myself, the option for a $10,000 deductible fades away after 2014. The new limit seems to be $5,000, which seems silly to a Mustachian (after all, who couldn’t rustle up $10k in a rare medical emergency!?), but necessary in a country where most people don’t even have a grand. Running through ehealthinsurance.com again for a 2014-compliant plan, I see this as my best option:
$460 per month, with a $5000 individual deductible, $10,000 family, and $12,700 annual out-of-pocket maximum. This is for the “Kaiser Permanente Colorado Bronze” plan. Colorado residents can also do the same search on the state-run connectforhealthco.com (where the same plan is listed) and any US resident can search on healthcare.gov* (which just lead me back to the Colorado exchange).
Update: As of January 2015, more competitive providers have entered the Colorado market and I can now get a better-looking plan from Colorado HealthOP which includes children’s dental coverage for $408/month.
So we would be increasing our premiums, but cutting the deductible in half, as well as gaining prescription drug coverage (a $20 copay after deductible) and some other goodies. And the new plan is HSA-eligible, which means all costs will be covered with pre-tax money. More insurance for more money – not my favorite bet to make, but also not completely devoid of value.
But now that I’ve got you braced for a costly-yet-manageable worst case scenario, I can reveal the good news: Most Mustachian-level early retirees will get virtually free health insurance under the new law.
When you select a 2014 plan, a little box pops up: “check if you are eligible for a subsidy on this plan”. Working through the options, here is what I see for my own family:
Whoa. So although I could pay a maximum of $5520 per year for this new and improved coverage, in reality I will only pay this much in years where my annual income is over $80,000. For incomes below that generous level, the federal subsidy kicks in and my net cost drops, until I get to the point of free health insurance somewhere around $26,000. With annual living expenses of about $25,000, we could in theory live this current lavish lifestyle and get fully subsidized health insurance simultaneously, if our ability to earn money somehow dried up someday**.
So far I’ve covered these changes from my own narrow perspective: a young high-income family with considerable savings and no health issues. But the Affordable Care Act is really designed to help people less fortunate than us – students and seniors, people with existing conditions, the unemployed and quite notably self-employed entrepreneurs. With this new law, you can now drop the decades-old tradition of great fear and dependence on your employer for health coverage. You can quit your job, switch to another one, or create your own, with no more worry about who will cover you, because cost is affordable and minimal at lower incomes.
This is big. If you’ve read this blog for long, you know how excited I get about small business, self-employment, and the General Starting of Some of your Own Good Shit. It provides variety, challenge, and an early escape from The Man. And if you could see my email inbox, you would see just how many creative people are afraid to go out and do exactly that – over the mundane issue of health insurance fear. So I am going to place my bet that the Affordable Care Act will be VERY good for entrepreneurship in the years to come.
And just to maintain this country’s libertarian principles, you still retain the choice of opting out of the whole program. The penalty for failing to sign up is fairly painless – $95 for lower-income single people and rising to about $900 for a family of three making $100,000. So despite all the talk of lost liberties, your range of choices with the new health insurance law are better than ever.
Further Reading: Ezra Klein is a rather brilliant Washington Post columnist who has been digging into this and other neat policy issues for years in a column called Wonkblog. Here’s a link to everything his team has recently written on healthcare.
*Wow, I notice that the healthcare.gov site is snappy and fast now. Despite widespread controversy in the news about the supposedly catastrophic launch of this new website. Again the Low Information Diet prevails: stay calm, tune out of 24-hour-news cycle talking heads controversy, check site again a few weeks after launch, get health insurance quotes quickly.
** Unfortunately, I have to admit that this year we will have a household income above $80,000 and thus would not be eligible for a subsidy. Higher-than-forecast investment and Lending Club returns, rental house, carpentry, and real estate income plus this blog have all contributed to this. Please don’t tell the Early Retirement Police. If this terrible condition persists into 2015 and we are kicked into a new plan, I guess we will have to settle for a slightly lower savings rate. What an oppressive country!
By Peter Anderson2 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited December 4, 2017.
This past month or so we’ve been highlighting savings tips for the summer, and we’ve talked about things like saving on food, saving at the movies, saving on summer travel and so much more (see the links below).
Before we end this summer savings series, however, I thought it would be nice to highlight some of the summer savings tips that were submitted by our readers during our contest. There are some good ones here:
Summer Savings Tips From Our Readers
Here are a few of the tips our readers sent in on ways to save money this summer.
Joey – My summer savings tip – Use coupons when buying my groceries. Every little saving makes a difference.
The Happy Rock – Get your air conditioning unit checked and tuned up to help save on energy costs.
otherdeb – Know that bicycle that’s been moldering against your back porch/in your attic/in your garage, etc? Get it out, get it checked over, and start using it for local errands!
Rachel – For a cheap sun burn treatment that won’t require an extra trip to the pharmacy, freeze some of the lotion you already have on hand on a piece of tin foil. Once it’s frozen, it cools and soothes the burn and also moisturizers to ease peeling and blistering. Works great too for those who are allergic to Aloe Vera like me! Source: top10pharma.net
Sam – Turn you thermostat up to 80 and use your ceiling fans or box fans.We also turn off the AC at night and just use our ceiling fans.
finaidgirl – Since we’re moving 1000+ miles with a car and moving truck, I’m concentrating on more gas-friendly driving habits, like driving the speed limit or slower, braking more slowly and steadily, not idling, and paying to tune up the car before the trip to prevent any big issues from happening on the way.
RachaelfromNJ – Sometimes items that you own just need a good cleaning and they will look like brand new. Alot of men don’t realize that their baseball caps can be cleaned, in the dishwasher. Go to any Walmart, Target, Footlock, or any store that sells hats and you can get this plastic thing to put the hat in and all you have to do is place it in the dishwasher to clean it. It will make the hat nice and clean and save your man alot of money in buying a new hat everytime it gets dirty!
ThatOneCaveman – Vacation in or near your hometown. There are often a lot of cheap or free ways to entertain yourself – you just have to look for them. We’ll be visiting a few local museums (free entrance + free air conditioning), the zoo, the lake, and a few parks this summer – all for free!
Cindy – I’m saving money in a number of ways this summer. The first way is riding my motorcycle to work every day it’s not raining. I use about half the gas I would in my small car. Some of my co-workers, who live closer than I do, are riding thier bikes to work. That’s free and they’re getting excercise to boot, a double benefit.
Diana Corlett – Combine going green with economizing. Be inventive…come up with new ways to use and re-use. Repair what you have instead of throwing it away and buying new. Make a hobby out of garage sales…you never know what treasure you might find.
Christin – Dry your laundry on a rack outside. This saves $$ and your clothes will last longer too!
Mercedes – This summer I have decided to quit driving my kids around for activities and stay local. I have been lucky to have found things to do in the small town that I live. So far I love this simple summer life. I am kicking back and enjoying the nice weather without a hectic lifestyle.
Melinda – Continue to start our summer vacation (December here) 2 weeks before summer school holidays officially begin. No crowds at the amusement parks, lower airfares & greater discounts on accommodation
Morgan – Go on a long walk with your significant other on a nice summer evening. This is a great way to get exercise, communicate, and not spend money.
Bunny – Use ceiling fans instead of AC. Dry your laundry outside under the sun. Go to the parks for nice family outings.
EL – My summer savings tip is to use the community pool, if you have one. It’s a great, cheap outing for hot days, great exercise, and keeps you from using the air conditioner.
Lauren – I’ve planted a vegetable garden to help save money at the grocery store, not only for the summer, but into the fall and winter months as well thanks to the joy that is freezing and canning!
CelticBuffy – 1)Keep the ceiling fans going to make the house feel cooler. 2)Close the curtains on sun-facing windows to cut down on the amount of heat coming into the house 3) Grill out or eat “cool” evening meals as using the oven can really heat up the house.
Mrs.Micah – My tip is to try wearing as little as possible indoors to help keep the need for a/c down. We didn’t turn ours on until mid-June when a heat wave hit DC and I found this a useful part. Of course, if you have kids what you can get away with is probably warmer than what you can if you don’t have kids. And it requires shutting the blinds/curtains, but that’s probably a good idea anyway for reducing heat in the house.
Donna V -My husband and I have been trying to save money on our date nights this summer. We love going to the movie theater and have saved money by going on Saturday before noon when tickets are $4-5 depending on the theater.
Shawna – My tip – hang dark colored sheets/blankets over your windows to prevent the sun from coming in and warming it up too much inside (and prevent the AC from running too much). I take push pins and put one on each side of the window at the top, then I take binder clips and put one on each side of the blanket and hang them that way so that it is easy to take them down. The setting sun really heats up some of my rooms and I do this with success.
Christopher – Go out and have a family day. Go to the zoo, the park, the beach, or another inexpensive place. Pack a picnic lunch to avoid the overpriced concession stands. Play games like volley ball or baseball, build a sand castle, or ride the swings.
So there you have it! Submit your own tips in the comments below!
Money Saving Posts From The Summer Savings Series
Have your own tips? Leave a comment with your tip, or a link to your own post!
By Peter Anderson7 Comments – The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited November 26, 2017.
Sometimes the most powerful precepts in personal finance are the ones that are the simplest. We all would love to think that the reason why we haven’t gotten further ahead in our financial lives is because saving and earning money are such complicated topics that have a myriad of secrets that are beyond our grasp.
The thing is, that while certain niches in finance may be complicated or require specialized knowledge, in order to succeed you really don’t need to have a degree in finance. Some of the most powerful financial rules are the ones that are the simplest and easiest to grasp.
The Richest Man In Babylon
I have been reading bits and pieces of the 1926 book by George S. Clason called “The Richest Man In Babylon“. The book, while it was written in the 1920s has a lot of insightful things to say about saving, investing and the simple ideas behind wealth creation. It gives those simple ideas via parables or stories. One of those stories that I read today was the one the book is named for, The Richest Man in Babylon.
The parable tells us about a rich man named Arkad in Babylon who despite not having any special talents or family wealth was now known to be the wealthiest man in all the land. His friends around him couldn’t understand how he had become so wealthy, or how he had become so successful, when they had all been afforded the same opportunities that he had. So they asked him.
He responded by telling them how he had enough sense to know that he didn’t know everything, and that in order to become wealthy, he would need to ask someone who was wealthy what their secret was. So when he found the opportunity one day, he asked a money lender who came to the hall of records where he worked. The money lender told him:
I found the road to wealth when I decided that a part of all I earned was mine to keep. And so will you.
We all have the idea that everything we earn is ours to keep, but if we really think about it we all have things we need to pay for in everyday life. We have to buy food, pay for clothing, purchase or rent a place to live and so on. Much of what we earn is not ours to keep. If we really want to succeed, however, we must realize that a part of all we earn is ours to keep, and that we must pay ourselves first. If we don’t the money will quickly disappear and none of what we earn will be ours to keep. The teacher in the parable continues:
Every gold piece you save is a slave to work for you. Every copper it earns is its child that also can earn for you. If you would become wealthy, then what you save must earn, and its children must earn…
A part of all you earn is yours to keep. It should be not less than a tenth no matter how little you earn. It can be as much more as you can afford. Pay yourself first. Do not buy from the clothes-maker and the sandal-maker more than you can pay out of the rest and still have enough for food and charity and penance to the gods.
Wealth, like a tree, grows from a tiny seed. The first copper you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner may you bask in contentment beneath its shade.
We must make our money work for us, and make savings and investment a priority. We need to plant that seed as early as we can, and continue nourishing it so that the tree of wealth will grow and give us shade in the long run.
Lessons From The Parable Of The Richest Man?
This parable is rich in lessons and advice, and I probably won’t touch on them all. Here are the main lessons I gleaned from the story:
Seek out the wisdom of those who know and who have experienced success: The richest man in Babylon knew that he needed to seek out the advice of those who knew more than he did. He sought out wise counsel and received good advice that helped him to prosper.
Pay yourself first: In the parable the teacher tells the student that you must save at least a tenth of what you earn, no matter what you earn. If you can afford to save more, you should. Don’t forget to also give (I might put this before the saving part).
The law of compounding returns: The earlier you start saving and more faithfully you save, the sooner you’ll be well off and wealthy. You must also invest your money and make a return if you want to become wealthy.
You won’t miss the money you pay yourself first: In the parable it talks about how if you make your saving a habit or automatic every time you get money, it won’t seem like you’re living on less money than before. “Each time I was paid I took one from each ten pieces of copper and hid it away. And strange as it may seem, I was noshorter of funds, than before“.
The whole book is full of great lessons that we would all do well to heed. Amazing how relevant the book is even today 85 years later.
Have you read the book “The Richest Man In Babylon“? If so, what other lessons have you learned?
The rise of cryptocurrencies has led to a significant shift in the financial landscape. As crypto gains popularity, many financial institutions are adapting to this change by offering specialized banking services to accommodate crypto transactions.
This article explores the best crypto-friendly banks, explaining why they are considered top choices in the ever-evolving crypto space.
15 Best Crypto-Friendly Banks
Here are the top crypto-friendly banks and banking services providers, each offering a unique set of services tailored to the needs of cryptocurrency enthusiasts.
1. Cash App
Among its many features, Cash App allows users to buy Bitcoin and instantly withdraw funds to personal wallets.
Partnerships with banks such as Sutton Bank and Lincoln Savings Bank enable Cash App to provide banking services. This collaboration between Cash App and crypto-friendly banks ensures that customers have a convenient and secure way to manage their crypto transactions.
Sutton Bank also issues the Fold Visa® Prepaid Card, which allows you to earn Bitcoin on every purchase.
See also: How Does Cash App Work?
2. Revolut
Revolut is a UK-based fintech company that was founded in 2020. It has quickly become a major banking player in the UK, Europe, and the US, as well as a top crypto-friendly bank. Their user-friendly mobile app lets customers easily buy cryptocurrencies like Bitcoin and manage their digital assets. The app also features automatic buy orders that activate based on certain market conditions, making the crypto investment process even smoother.
What sets Revolut apart from competitors is the variety of crypto-related services they offer. Customers can stake select crypto assets, make off-chain transactions between users, and pay bills using crypto through automatic conversion to fiat currency.
With over 50 cryptocurrencies on the platform and plans to expand, Revolut is dedicated to staying ahead in the digital currency world. Although there are transaction fees for crypto payments, users can reduce these fees with account upgrades. Revolut’s upcoming launch of its native coin, RevCoin, highlights their commitment to providing a diverse and dynamic crypto banking experience for their growing customer base.
3. Quontic
Quontic is the first online bank to offer a rewards checking account that allows you to earn Bitcoin. With its innovative Bitcoin Rewards Checking account, users can easily integrate crypto into their everyday banking experience. Quontic only supports Bitcoin. However, its unique offering makes it a top choice for those looking to capitalize on the increasing prominence of digital currencies.
The Bitcoin Rewards Checking account offered by Quontic stands out due to its 1.50% rewards on all Point of Sale (POS) transactions made with the associated debit card. These rewards are paid out in Bitcoin, allowing users to accumulate the popular cryptocurrency as they make everyday purchases. Furthermore, the account acts as a secure wallet for users to store their Bitcoin, providing a seamless banking experience for crypto enthusiasts.
This FDIC-insured bank account requires a minimum opening deposit of $500 and is not available in Hawaii and North Carolina.
4. SoFi
SoFi is an innovative financial institution that has embraced the crypto revolution. Through its SoFi Invest platform, customers can trade crypto and access educational resources to learn about digital currencies.
With just a $10 minimum investment, users can start trading Bitcoin, Ethereum, Dogecoin, Cardano, and over 20 other coins on a platform available 24/7. Users can trade cryptocurrencies alongside stocks, fractional shares, and ETFs within the SoFi app, making it an all-in-one investment platform.
SoFi takes security seriously and offers a range of tools to protect your crypto holdings from theft. These include two-factor authentication, SSL encryption, partnering with trusted exchanges like Coinbase for transactions, and not sharing personal information with trading partners or custodians. This ensures that your investments are safe and secure on the platform.
The SoFi app also provides a wealth of educational resources, such as their Crypto Guide for Beginners, Crypto Glossary, and Guide to Crypto Staking, to help you make informed investment decisions. Keep in mind that due to its volatility, crypto carries a higher degree of risk compared to traditional investments.
Crypto trading on SoFi Invest is subject to a 1.25% markup on crypto transactions, which is added to the market price from the exchange. While there are no plans to allow transfers between SoFi Invest accounts and external wallets at this time, the platform’s focus on security and convenience makes it an attractive option for those interested in trading crypto.
5. Vast Bank
Vast Bank has made history as the first full-service national bank to provide customers with the ability to buy, sell, and hold cryptocurrencies. Through an intuitive mobile banking app, users can access both a checking account with a competitive 2.65% annual percentage yield (APY) and a dedicated crypto account.
As a nationally chartered and federally regulated U.S. bank, Vast Bank ensures a high level of security and reliability for its customers. By using the Vast Crypto Banking app, users can easily deposit USD into their checking account, purchase cryptocurrencies, and safely store their crypto alongside their fiat funds.
This crypto bank currently supports a wide range of popular cryptocurrencies. Among them are Bitcoin (BTC), Ethereum (ETH), Filecoin (FIL), Cosmos (ATOM), Chainlink (LINK), Cardano (ADA), Litecoin (LTC), Aave (AAVE), Bitcoin Cash (BCH), Orchid (OXT), Tezos (XTZ), and Algorand (ALGO).
Vast Bank offers the convenience and safety of traditional banking, such as FDIC insurance for checking accounts, a debit card with access to 56,000 free ATMs worldwide, account transfers, bill pay, and mobile deposits. However, it is important to note that digital assets held in the crypto account are not insured by any government entities, including FDIC or SIPC.
6. Wirex
Wirex is a standout in the world of crypto-friendly banks, offering users a seamless banking experience that supports both fiat currencies and cryptocurrencies. Available in 130 countries and boasting over 3.5 million users worldwide, Wirex provides a multi-currency account and a Visa card for convenient fiat payments.
One of the main attractions of Wirex is its generous savings interest rates, which reach up to 6% for cryptocurrencies such as BTC, ETH, and LTC. For those who prefer to save in fiat currencies like USD, AUD, HKD, or DAI, an impressive 12% interest rate is available. Additionally, users can earn an extra 4% interest when saving in WXT, Wirex’s native token.
Built on both Ethereum and Stellar blockchains, WXT offers exceptional performance and versatility within the decentralized finance (DeFi) sector. Wirex rewards its users with up to 4% WXT cashback each time they use their card for in-store or online purchases. The multicurrency card allows for hassle-free payments when traveling abroad, automatically converting to the local currency with no exchange fees, and offering savings of up to 3% on international transactions.
Beyond being a Bitcoin-friendly bank, Wirex offers a wallet app that supports over 100 coins and includes DeFi and NFT capabilities. This combination of features makes Wirex an excellent choice for those seeking a comprehensive and crypto-friendly banking experience.
7. Ally Bank
Ally Bank is an online bank that has embraced the crypto revolution, offering an array of services to support digital assets. Some notable features from Ally’s website include:
Crypto trusts: Ally offers private trusts that invest in and track the price of specific cryptocurrencies, allowing customers to indirectly trade them as they would a stock.
Bitcoin futures: Ally provides access to exchange-traded funds (ETFs) that invest in the purchase of bitcoin futures contracts. This allows customers to gain exposure by speculating on the future price of Bitcoin without directly owning it.
Crypto stocks: Ally enables customers to invest in publicly traded companies that buy and hold cryptocurrency. Buying shares of these stocks provide indirect exposure to crypto.
Ally Bank’s crypto trading services on the Ally Invest platform, integration with popular cryptocurrency exchanges, and digital asset storage and management make it a top choice for crypto enthusiasts seeking a crypto-friendly bank.
8. BankProv
BankProv is a forward-thinking US financial institution that provides a range of services, including business banking, cash management, personal banking, and cryptocurrency offerings. Embracing modern technologies, this crypto bank utilizes API banking, the ProvXchange network, and specializes in lending.
Its support for various digital assets ensures that customers can access a diverse range of investment options, making it a strong contender among crypto banks. Customers can enjoy real-time transactions through the ProvXchange network, while the API integration allows for seamless interaction with various platforms and software solutions.
BankProv provides crypto-backed loans and credit lines for organizations secured by Bitcoin or Ether, as well as equipment and infrastructure loans for crypto mining operations. Additionally, Bitcoin ATM operators can take advantage of secure cash vault services, expedited money transfers, and other perks tailored to businesses operating within the crypto sector.
9. Juno
Established in 2019, Juno is a fintech company offering a digital banking platform with hybrid accounts for managing both cash and cryptocurrencies. Despite not being a traditional bank, Juno’s exceptional services make it a top contender for cryptocurrency investments.
Juno enables users to purchase a range of popular cryptocurrencies without fees, and provides two types of checking accounts: Basic and Metal. The Basic account is free with a $5,000 daily funding limit, while the Metal account, free with monthly qualifying deposits of $250 or more, offers a $25,000 daily limit and up to six times higher savings.
Bonus rewards are a highlight of Juno’s offerings, with users earning up to 5% on cash deposits and yearly cashback for payments with cash or crypto. The JCOIN Loyalty Program allows customers to earn tokens and redeem them for exclusive discounts and cashback boosts. New users can benefit from a welcome offer, which includes bonuses for initial deposits, trades, and referrals.
Free cash withdrawals are available at Allpoint and MoneyPass® ATMs, with additional out-of-network withdrawals for both account types. Juno’s mobile banking app is compatible with iOS and Android, supporting Apple Pay, Google Pay, Samsung Pay, and debit cards. The platform also offers the unique feature of converting paychecks into crypto through partnerships with over 500 payroll providers, allowing users to automate their investments seamlessly.
10. Monzo
Monzo is an innovative online-only bank that has gained popularity in the UK for its modern approach to banking. More recently, Monzo has expanded its services to accept applications from US customers, broadening its reach in the financial market.
With a Monzo account, customers can manage all their bank accounts, including non-Monzo accounts, on a single dashboard through the Monzo app. While the bank itself does not support crypto trading, users can still invest their Monzo account funds into cryptocurrencies through crypto exchanges like Coinbase and Crypto.com. This feature provides Monzo users with indirect exposure to cryptocurrency while still enjoying the convenience and security of a modern bank.
11. Axos Bank
Axos Bank, a crypto-friendly institution, started providing its commercial banking clients with TassatPay access in May 2022. TassatPay is a private, permissioned blockchain-based digital payments platform that enables 24/7 real-time payment capabilities and has processed over $400 billion in transactions. This platform is endorsed by a primary bank regulator.
Axos also offers exposure to various crypto-related exchange-traded funds (ETFs). These include the Bitwise 10 Crypto Index Fund (BITW), Bitwise Crypto Industry Innovation ETF (BITQ), ProShares Bitcoin Strategy ETF (BITO), and ProShares Short Bitcoin Strategy ETF (BITI), among others.
12. Standard Chartered Bank
Standard Chartered Bank has demonstrated a strong interest in cryptocurrencies and blockchain technology, regularly conducting research and sharing insights on digital currencies. Recognizing the growing demand in the market, Standard Chartered is launching a crypto exchange and brokerage service to provide its customers with access to digital assets.
The bank’s direct crypto trading and investment services are still in development. However, their commitment to staying informed about the latest trends in the digital currency market and taking steps to launch new services indicates their growing involvement in the crypto space.
13. USAA
USAA, a financial institution dedicated to serving current and former military personnel and their families, provides a range of tailored financial products and services. Among these offerings is an integration with Coinbase, a leading cryptocurrency exchange.
Through this partnership, USAA customers can conveniently link their Coinbase accounts to their USAA portal, enabling them to easily monitor their digital asset balances and track transactions. This feature streamlines the process of staying informed about one’s cryptocurrency holdings and activity, offering an added layer of convenience for USAA members.
14. Fidor
Fidor is a pioneering online bank headquartered in Munich, Germany. It offers innovative banking services designed to support digital assets. Its integration with popular cryptocurrency exchanges and crypto wallet services makes it an ideal choice for those looking for a crypto-friendly bank. Additionally, Fidor provides support for ICO and token sales, giving customers access to new and emerging cryptocurrencies.
15. PayPal
Although PayPal is not a bank, it offers various banking services and has expanded its support for cryptocurrency in recent years. PayPal enables users to buy, sell, and hold cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.
By partnering with Paxos Trust Company, a regulated provider of cryptocurrency products and services, PayPal ensures a secure and compliant experience for its customers. While it does not offer the full range of services that traditional banks do, PayPal’s support for crypto makes it an appealing choice for those who want to manage their cryptocurrencies alongside other financial transactions.
Bottom Line
The increasing popularity of cryptocurrency has led to a growing number of crypto-friendly banks, offering a range of services to accommodate the unique needs of digital asset users. These banks provide an array of services, from crypto trading and custody to debit cards and loans backed by crypto.
As the crypto industry continues to evolve, it’s crucial to stay informed and choose the best crypto-friendly bank to suit your needs. With so many crypto-friendly banks available, you can now manage your crypto alongside traditional banking services, providing a seamless and efficient way to navigate the world of cryptocurrencies.
Frequently Asked Questions
What makes a bank crypto-friendly?
A crypto-friendly bank is one that supports and facilitates cryptocurrency transactions, storage, and trading. These banks typically offer a range of services tailored to the needs of digital asset users, such as integration with popular crypto platforms, crypto-backed loans, and the ability to spend crypto using a debit card.
Can I store my cryptocurrencies in a traditional bank account?
While some banks offer crypto-friendly services, cryptocurrencies are typically stored in digital wallets rather than traditional bank accounts. However, many crypto-friendly banks provide integration with popular crypto wallets and exchanges, allowing you to manage your crypto alongside your fiat currency.
Are crypto-friendly banks safe and secure?
Many crypto-friendly banks are FDIC-insured and follow strict regulatory requirements to ensure the security of your assets. It’s essential to research each bank’s security measures, such as two-factor authentication, encryption, and secure storage of crypto before choosing a crypto-friendly bank.
How do I choose the best crypto-friendly bank for my needs?
To choose the best crypto-friendly bank for your needs, consider the range of services offered, the bank’s reputation, and any fees associated with their services. You may also want to look for banks that provide educational resources, customer support, and a user-friendly platform for managing your crypto.
Can I use a debit card to spend my cryptocurrencies?
Some crypto-friendly banks and financial service providers offer debit cards that allow you to spend your crypto just like traditional fiat currency. These cards typically convert your cryptocurrencies to the local currency at the point of sale, making it convenient to use crypto for everyday transactions.
Do crypto-friendly banks offer loans and credit products?
Some crypto-friendly banks offer crypto-backed loans and lines of credit. These products allow you to leverage your crypto without selling it, providing greater financial flexibility for crypto users.
If your parents are retired or nearing retirement and concerned about their finances, they might float the idea of getting a reverse mortgage past you.
After all, in that commercial, that nice man from Law & Order says that it’s a great way to get supplemental income in retirement.
Unfortunately, there is a great deal that the commercial leaves out.
And these issues are something that the reverse mortgage holder’s family—that is, you—will likely have to deal with.
After all, your parents aren’t getting any younger.
Here is the breakdown of what those in the Sandwich Generation need to know about reverse mortgage disadvantages—before Mom and Dad sign on the dotted line:
How Reverse Mortgages Work
At its core, a reverse mortgage is a way to convert the equity in a home into cash. In order to qualify for a reverse mortgage, the homeowner must be at least 62 years old, must own and live in the home, and must have substantial equity in the home. While lenders do not require that the home be completely paid off, the homeowner must be close to the end of their mortgage term in order for the lender to agree to a reverse mortgage.
With this loan, the lender will pay off whatever remains on the mortgage (if anything), and give the homeowner a payout in one of five ways: Tenure payments are monthly payments that will last for as long as at least one borrower still lives in the home. Term payments are monthly payments for a fixed period. A line of credit will allow the borrower to draw unscheduled payments for any amount whenever needed until the credit limit is maxed out. Finally, modified tenure and modified term payments combine the monthly payment option with the line of credit option.
Unlike a traditional loan, the borrower does not need to make regular payments in installments. Instead, the entire loan plus interest will come due when the borrower passes away, sells the house, or can no longer consider the home a primary residence.
For instance, if an elderly homeowner finds himself needing regular care, permanently moving to a nursing home will mean he has to pay back his reverse mortgage. However, the borrower has 12 months of living elsewhere before the home is no longer considered his primary residence. So a short time in a hospital or nursing home will not mean that the reverse mortgage is due.
One of the big benefits to a reverse mortgage is that the payments you receive from them are not considered taxable income. In addition, the payments will also generally not affect your Social Security or Medicare benefits. On those grounds, a reverse mortgage can seem like a good way for retirees to supplement their retirement income with their home equity without having to downsize or move.
The Fine Print
So far, so good. However, there are several aspects to reverse mortgages that can make them seem like less of a good deal.
First and foremost is the fact that you owe more money through a reverse mortgage as times goes on.
At the end of the loan term, either the borrower or his heirs will have to pay back the amount of the loan—which grows with each payment made to the borrower—plus interest.
As for that interest, while there are some fixed-rate reverse mortgages, the majority of these loans use variable rates. (It is important to note that the usual way of paying off the loan is by selling the house, meaning reverse mortgage holders and their heirs do not actually have to cough up the amount of the loan when it is due, unless they want to keep the house.)
In addition, the entire point of the reverse mortgage is to cash out the equity. That means that the old homestead will have no equity (or very little) left at the end of the loan term. So sale of the house will leave no cash for the heirs.
If the borrower’s heirs are interested in keeping the home, they will have to pay off the loan in order to do so. Most reverse mortgages offer something called a non-recourse clause, which means the borrower cannot owe the lender more than the value of the home when the loan is due and the home is sold. Basically, whatever the home sells for will satisfy the loan. However, heirs who want to keep the home will still have to pay back the loan in full, even if the amount owed is more than the home is worth.
It’s important to remember that reverse mortgages are not free. Just like any mortgage, there are closing costs, including loan origination fees and mortgage insurance premiums. Some lenders also charge servicing fees during the life of the reverse mortgage.
Also, the amount that can be borrowed is dependent on several factors, including the youngest borrower’s age, the interest rate, and the appraised value of the house. So even homes that are worth quite a lot may not provide the kind of reverse mortgage amounts that borrowers are counting on.
Finally—and this can be a real kicker for the adult children of reverse mortgage holders—the homeowner still maintains the title for the house, which means he is still on the hook for maintenance, property taxes, and homeowner’s insurance. In fact, failing to maintain the condition of the house or pay taxes or insurance on it can mean that the loan becomes due. If your parents are having trouble keeping up with their household chores—including home maintenance and bill paying—these sorts of jobs will fall on you.
What Are Reverse Mortgage Disadvantages?
The answer to that depends upon several factors. First of all, your family needs to decide how important it is to keep the house in the family. If your parents are talking about taking a reverse mortgage on the house where you and your siblings were born and where you’ve dreamed of seeing your own grandchildren play in the future, then a reverse mortgage might not be a great idea. Unless you know you will be able to pay back the loan, you should plan on having to sell the house once your parents have entered into a reverse mortgage.
If the home is meaningful to your family, an alternative to a reverse mortgage is for someone in the family to buy the home from your parents and allow them to continue living in it. This will provide them with the equity in their home in a lump sum, and if that equity is $500,000 or less, they can exclude the money from their taxable income. In many ways, this is a win-win, although it does depend on someone in the family having the ability to purchase the house.
Even if you have no particular attachment to your parents’ home, you may want to think carefully about whether or not to pursue a reverse mortgage. Depending on their ability to live independently and keep up with the important tasks of homeownership, a reverse mortgage may or may not be a good idea.
If you have reason to believe that Mom and Dad only have a few years before they will need some serious help, it might make more sense to access the equity in the home by selling it and getting them moved to retirement home or assisted living facility where they will be more comfortable.
If, on the other hand, you know your Dad still fixes the roof, strings the Christmas lights, and mows the lawn, while your Mom still cleans the house from top to bottom and weeds the flowerbed every day and nothing is going to stop them, thank you very much, then a reverse mortgage might work for them. They will get to stay in their home while still enjoying the equity they worked to build up.
Are Reverse Mortgages a Good Idea?
The real issue with reverse mortgages is why your folks might need one. If they did not save adequately for retirement because they were irresponsible with their money, or if they have trouble living on a budget or a fixed income, the problem may be one that a reverse mortgage cannot solve.
If your parents keep you in the loop on their financial issues, take the time to sit down with them and their financial advisor to determine the best course of action to keep them happily puttering and wondering why you never call through many years of retirement. A hard look at numbers will help you all determine if a reverse mortgage disadvantages outweigh the potential benefits.
This guide was written in an attempt to help my wife & I save money when dining out. Over the last 6 months we have adhered to its principles allowing us to save ourselves a lot of money while still enjoying time away from home every once in awhile. I wanted to share our guide with you in order to help you cut back on your restaurant spending without having to completely cut it out.
When used, the techniques listed below often yield unexpected benefits in addition to simply saving a dollar here & there. Several of these benefits include:
An excitement for frugality – Anyone employing similar methods can vouch for the fact that once you begin practicing frugality in any way, it becomes exciting to see how much money you were blowing but now are able to save. Try incorporating frugality into your life when eating out. It may sound silly at first, but when you get that first restaurant bill after using the following methods you’ll understand just how exciting it can become.
A renewed sense of excitement about dining out – Before attempting to cut back on the frequency of dining out, my wife & I found that we just were not enjoying it like we used to. Once we stopped going out to eat three to five times per week, we rekindled our love with the restaurant experience.
Less of a “nit pick” – When you go out to eat a lot, and you spend a lot, you expect a lot. Thinking back to our experiences prior to our newly adopted frugal lifestyle, my wife & I spent most of our time complaining about what was wrong with this & that instead of focusing on the benefits of the experience itself. Now that we dine out less often, and are very conscious of the entire process, we are more appreciative and patient patrons.
These benefits did not take a long time to be realized. We noticed the first time we began using these techniques we had a much greater joy & improved attitude regarding our restaurant experience. I am absolutely sure you will have the same opinion, so let’s move on and get into the meat of this article. Some of these tips are written to help you eat out less; while most of them will help you cut down on your costs when you do dine out.
Reconsider – Shouldn’t You Just Eat At Home?
This should be your first line of defense when tempted to eat out. My wife & I used this advice just last Friday and saved ourselves between $20 – 40. We decided to stay home and ended up cooking up a nice sized portion of chicken pasta that lasted us for 3 days! We try to limit our dining out to special occasions, and maybe one “just because” night out per month.
Use Coupons To Decide Destination
Having trouble deciding where to go? Visit Restaurant.com and see if they offer any discounts in your area. A lot of times you can buy gift certificates worth $25 for only $10. Keep in mind that most times you cannot use the coupons for alcohol, tip, or in combination with other offers. Also check out if there is an Entertainment Book put together for your area. These books cost a minimal amount, and if used properly can yield savings many times their cost. Let your coupons determine where you will eat. This can actually make it more exciting as you may get to try a place you have never been before, and may have never visited if it were not for your coupon!
Set Spending Limits
Use a ceiling amount you allow yourself to spend and do not surpass it. This can also make the experience more fun as you try all kinds of new menu combinations to try & stay within your budget. It can become a competition to see who can get the best meal yet spend the least.
Order “To Go” If Possible
When ordering “to go” you will not have to buy drinks or desserts, you will not have to face the dreaded “upsell” (see below), and you will not be expected to pay gratuity. All of this will work together to keep your money where it belongs…in your pocket. Although this scenario does not give you the whole “dining out” experience it will offer you a break from cooking & cleaning up at home.
No Upsells!
In restaurant lingo, an “upsell” is anything the server or restaurant staff will offer you in addition to your meal. Normally as soon as you sit down they will not only ask what you would like to drink, they will suggest some expensive mixed drinks, or something of the like. Instead of ordering a soda, coffee, tea, juice, milk, bottled water, or any other type of drink…simply order a glass of tap water. Betsy & I notice that most restaurants are charging between $1.75 and $2.25 for these beverages.
After drinks, they will most likely try to upsell you with an appetizer. While ordering they will want you to get extra “add-on” items like mushrooms and onions on your steak. After your meal you will be asked if you would like any dessert…and maybe even some coffee to go with it! Although these things sound good, you can imagine how much it will end up costing over the course of one meal. Aside from staying home to eat, this may be the single best way to avoid high dining bills. Just stick to the entrees and whatever comes with them that is included in the price. Not only will this save your wallet, it will also save your waistline!
Order Frugally
Instead of the Alaskan king crab & 1lb Maine lobster tail meal, order a nice healthy stir fry or a chicken pasta dish. Remember that you have a spending limit that you set for yourself in step 3 that you must adhere to. If you do order an expensive meal, try to wait for a special occasion, use a coupon, or wait until the restaurant is running a special on the dish.
Split Extras – If You MUST Have Extras…
If you just have to have an appetizer or a dessert, try to split with the other diners in your party. Better yet, why don’t you just wait until you have a coupon for a free appetizer or dessert? Also, keep in mind that a lot of restaurants have free appetizers at different times during the day, so if you must have that Bloomin’ Onion, go during happy hour!
Order Off Kids Menu
My wife has been known to order off the kids menu at different times. Although she does not do this often, some may find that a child’s portion is more than enough for them. The child meals are always much cheaper than the adult size meals.
Order Off Senior Menu
Similar to the children’s menu, many restaurants have a seniors menu. Although all may not let you order off it unless you are indeed a senior, it never hurts to ask. A lot of times in life we miss opportunities because we simply fail to ask! Also like the children’s menu, the seniors menu has prices that are reduced with smaller portions. If both of these options fail attempt to ask the waitperson if you can order a half portion or a lunch sized portion. Again, it never hurts to ask.
Split Meals
This is one of my all time favorites! I always feel like I’m pulling one over on the restaurant when my wife & I order one meal to share. We ALWAYS end up well fed, satisfied, and happy with the fact that we just cut our dining bill in half! For Valentine’s Day this past year we visited one of our favorite restaurants, ordered & split their monthly international five course meal, and got out of there for just over $20…on Valentine’s Day!
Eat Half – Save Half
This is a phrase I coined that simply means to purposely eat only half your meal with the full intention of taking the other half home. My wife & I use this trick when we cannot decide on a meal to split. We simply order separate meals, eat half, and then take the other half home to have as leftovers for the next day. This way we get 4 meals for the price of two. It also helps us to not overeat when we have a huge portion of restaurant food in front of our faces…once again helping the waistline & the pocketbook!
Using these tips, tricks, & money saving methods my wife & I have been able to reduce our monthly budget for dining out from $450/month down to less than $100/month. That is a savings of over $4,000 annually, and is now being direct deposited into our savings account.
If we submit ourselves to God, and are faithful in the little things, according to His Word God will in turn bless us with much. Let me bring to your attention the parable of the noblemen and his servants in Luke chapter 19:
“He said therefore, A certain nobleman went into a far country to receive for himself a kingdom, and to return. And he called his ten servants, and delivered them ten pounds, and said unto them, Occupy till I come. But his citizens hated him, and sent a message after him, saying, We will not have this [man] to reign over us. And it came to pass, that when he was returned, having received the kingdom, then he commanded these servants to be called unto him, to whom he had given the money, that he might know how much every man had gained by trading. Then came the first, saying, Lord, thy pound hath gained ten pounds. And he said unto him, Well, thou good servant: because thou hast been faithful in a very little, have thou authority over ten cities. And the second came, saying, Lord, thy pound hath gained five pounds. And he said likewise to him, Be thou also over five cities. And another came, saying, Lord, behold, [here is] thy pound, which I have kept laid up in a napkin: For I feared thee, because thou art an austere man: thou takest up that thou layedst not down, and reapest that thou didst not sow. And he saith unto him, Out of thine own mouth will I judge thee, [thou] wicked servant. Thou knewest that I was an austere man, taking up that I laid not down, and reaping that I did not sow: Wherefore then gavest not thou my money into the bank, that at my coming I might have required mine own with usury? And he said unto them that stood by, Take from him the pound, and give [it] to him that hath ten pounds. (And they said unto him, Lord, he hath ten pounds.) For I say unto you, That unto every one which hath shall be given; and from him that hath not, even that he hath shall be taken away from him. But those mine enemies, which would not that I should reign over them, bring hither, and slay [them] before me.” Luke 19:12-27
Though it may seem silly, we need to be faithful in all areas of our lives, even going out to eat. The Lord will see your efforts and will bless them according to His Will. Praise the Lord!
I am including both a .pdf & .png version of my Frugal Dining Reference Card with this post. Please download this card, shrink it to whatever size you would like, and store it in your purse or wallet for quick reference use when dining out.
Download “Frugal Dining Reference Card”
FrugalDiningReferenceCard.pdf – Downloaded 1200 times – 75.00 KB
This post was written by Matt Jabs. Check out his sites Debt Free Adventure or DIY Natural for more frugality and healthy eating tips.
Related Posts
7 Tips For A Frugal Wedding
If you’re looking to have a beautiful wedding, but still save a few bucks, here are some tips for having a frugal wedding and reception.
As an Economic Unit in a Capitalist Economy, you probably spend most of your time scurrying about Maximizing your Utility. Right?
You buy things which give you pleasure, or sell them when the cash you’d receive is greater than the pleasure of keeping them. You choose the job that offers the best tradeoff between things like pay, stress, and time consumed, in an industry you chose based on the same criteria.
Even your leisure time is rationally allocated, optimized to get the most happiness from a finite amount of time, with cost factored in and weighed against the amount of extra work required to pay for leisure spending.
Although you’re probably having a good laugh at my deliberately optimistic oversimplification, this is the basis of free-market capitalism itself, and to a certain extent it works. In fact, most of the good aspects of our great leaps forward since the industrial revolution are byproducts of this free enterprise and trade. Neat inventions in food production, medicine, clothing, and everything else that brings us long lives and comfort, are side effects of the incredible ingenuity unleashed by setting smart and hard-working people free to run.
If that were the whole story, we could just shut down the government and sign an Ayn Rand novel into law and be done with it. But anyone with a deeper understanding of the market system is probably waiting to point out the other side of it:
Most of the bad aspects of modern society are brought about by the failure of humans to properly maximize their utility.
In other words, we make some incredibly stupid decisions. And the byproduct is pain, untimely death, and inefficiency.
The standard opinion on this inefficiency is that it’s just a few bad apples in an otherwise good system. Most of us do well at running our lives, don’t we? We know what we want, and our system is good at delivering it to us. But I’d say there is more to the story.
Most Americans, for example, are deep in unnecessary debt, overweight and poorly nourished, inactive and stressed out, and self-sentenced to a mandatory career of unsatisfying work just to stay afloat. We constantly buy things we can’t afford and don’t need, and the majority of the trading we do does not increase our net happiness.
We’re so easily manipulated that advertisers and politicians can pull our emotional strings with ridiculous ease just by replaying the same transparent ruses day after day, decade after decade.
“This $60,000 truck will bring you power and freedom to escape to the Hills of Freedom while towing your bigass boat.”
“This $60,000 SUV will keep your children save while adding a nice veneer of prestige and quality to your suburban life”
“Vote for my political party, and I’ll protect you from the other side who wants to drive this country into the shitter, attack your most core values, and take away all your prosperity for themselves.”
And all of this is done with virtually no awareness of how we are affecting our own ecosystem – the tiny veneer of air and plants that is the only thing between us and the lifeless vacuum of space. In fact, it would be difficult to imagine a less efficient way to maximize “Utility” than what the modern consumer does.
Given all this freedom, why do we screw things up so royally? Is there a way to maintain the power of the market while getting around the general idiocy of our own species?
Fortunately, the answer is built right into you, in the form of the genetic program you received at birth. The reason we suck at running our own lives is that we are evolved and programmed for a completely different set of surroundings. But this handicap can be overcome: by learning about our own weaknesses, we can compensate for them and lead much more productive, powerful and happy lives.
This is where the title of this article comes in. I recently read the book Predictably Irrational by Dan Ariely at the recommendation of some readers. It’s not often that I find a book that crystallizes so many interesting concepts in one swipe, but this book does it. Everything the author proposes just makes so much sense. But as an MIT behavioral economist with mutiple books and over 75 published papers on his resume, these are not just the blowhard opinions of a financial blogger – the man actually does his own research and has an uncanny way of sharing it with the world with perfect accessibility.
There were a few key lessons that stuck with me after finishing this book. They are useful not just as curiosities of human nature, but as practical tools for overriding our innate ridiculousness and learning to live life more sensibly. When applied to personal finance, this equates to easily amassing way more money than everyone else.
And then of course, using that wealth in a more rational way in order to have a much more fun and generous life.
Relativity
Humans make decisions in relative terms, rather than absolute ones. Given a restaurant menu with varying prices, people tend to avoid the most expensive item, but are very comfortable choosing the second one on the list. Restaurants have learned this, so they will often insert a “decoy” expensive dish (which may cost no more to prepare than the others), which allows them to raise the price of everything else, making all alternatives look like comparative bargains. The same thing happens when shopping for clothes, cars, or television sets.
Rationally, we should be comparing list prices to all other ways of meeting the same needs, and to our own income. But our genetic wiring wants us to make quick decisions and move on, and in prehistoric times, comparing in relative terms was the way to get this done.
But this built-in flaw has implications on much bigger things than restaurant choices. We design our entire lifestyles by looking around us to see what everyone else is doing. Most of us position ourselves in the middle of the herd, and start feeling deprived if we sense we are near the bottom. The problem arises when the herd is comprised mostly of sheep, responding blindly to their own irrational instincts. So as a society we have a tendency to automatically run ourselves straight off of the nearest cliff.
Market Norms vs. Social Norms
Most of us know that it is socially inappropriate to ask our friends to cough up money when we invite them over for dinner, or to offer money to a romantic partner in exchange for sex. But if you take those exact two human needs and reframe them differently: it is normal to pay for a meal at a restaurant and the world’s oldest profession continues to thrive.
This is the core of the distinction between “market” and “social” norms. As it turns out, humans obey different rules when operating in a business environment, than they do when they perceive they are among friends and family.
We are more generous when we are reading from the Social Norms playbook, and we enjoy our lives more when doing it. This is why countries and cultures with stronger family and friendship bonds tend to be happier than the cold and impersonal market-driven ones – even if their incomes are lower.
You can use this to your advantage. By bringing more social exchanges into your life, you can live more happily and build a safety net that protects you from the sharpest edges of the market system. I saw a nice example of this about a year ago, when a close friend stopped by and saved my house from flooding as part of a routine visit to water the plants. Invite your neighbors over for dinner, share children back and forth for babysitting, and loan out your tools, lawnmower, and weekend labor as much as you can.
And if you run a company, bring some social norms into the way you treat customers and employees. Instead of dinging people with every conceivable fee or squeezing employees with the lowest legal level of vacation allowance, expand your trust and generosity towards them. Watch as their dedication to you grows and provides benefits much greater than the costs.
Loss Aversion and Overvaluing What We Have
When I wrote the opening story about ‘losing’ $12,000 in an earlier article about Strength, I took some heat in the comments about it:
“You did’t lose the twelve grand, Mustache, you just didn’t get the money in the first place! Totally different.”
But that choice of words was deliberate. I work hard to remind myself that although it feels different to have a brand-new $12,000 car roll off a cliff because I forgot to set the parking brake, or have an expected $12,000 deal fail to materialize after doing all the work, the financial effect is exactly the same, and thus I should not worry about either of them.
In everyday life, loss aversion messes with us more than we realize. We hesitate to sell things we are no longer using, because we become attached to them.
“I can’t sell my pickup truck for $12,000 – I paid $30,000 for it just a few years ago!”
“I don’t want to invest in stocks, because there might be a big crash which causes me to “lose” money. I prefer to keep the money in savings where it is guaranteed not to fluctuate.”
“I am afraid to seek out a new job or find myself a new home closer to work, because I might lose some of the comforts that I have grown accustomed to in the current situation”
.
The way to get around this is to recognize your own irrational loss aversion, and work to compensate for it.
For example, I keep a Craigslist app on my phone and fairly ruthlessly fire out ads to sell unused things when I stumble across them in the storage area of our house. I try to replace emotion with the more rational friend of statistics when deciding whether I should invest money, buy a more full-coverage type of insurance, or take any other form of risk. And in our upcoming move where we are “losing” over 1000 square feet of living space, I remind myself that there is no fundamental rule of humanity that dictates three people will be any more happy with 2600 square feet of interior space than they will be with 1532 square feet. I program myself to feel the “ChaChing!” instinct, which creates immediate gratification in the event of good monetary decisions, to compensate for my natural tendency to want shiny things NOW instead of investing for later.
Marketing and How it Plays Your Ass Like a Puppet
The thing about all of these cognitive biases is that even if you don’t round them up and get control of them, somebody else will. For over a century, the field of Psychology has been unearthing these things and studying them rigorously, discovering the joys and hilarious downfalls of the human animal. And for almost as long, marketers have been picking up the research and honing it for their own advantage. I recently read a quote from the head of one of the country’s largest ad agencies, which went something like this,
“It is generally understood in our industry that we aren’t fulfilling wants and needs – we are creating them. A new product first needs to create a market for itself, before it can be sold into it.”
Isn’t that revealing? I still admire many of the funny and creative people of the advertising industry and my own Dad worked most of his career in it, running his own one-man agency for much of my childhood. In fact, some of the lessons of that industry have surely soaked into my own approach, and you could view this blog as an ongoing Anti-Advertisement which aims to apply some of those principles in reverse.
But by golly, if you are going to be out there trying to kick ass in life and as an Economic Unit, you’d better go to battle with proper armor. And that means understanding your evolutionary weaknesses so you can avoid their tendency to turn you into a Consumer Sucka. We are all idiots at heart, but the more successful among us learn to compensate for our idiocy.
So I’d like to give my thanks to Dan Ariely for writing this book and his amazing contributions to society so far – I’m off to read the rest of what he has written.
Pretty much since I learned to walk, I have had an unusual disdain for waste. I noted the inefficient route of the school bus and wondered why it couldn’t just pick us up at a few centralized locations. Tracked my allowance with multi-year forecasts and kept the dollar bills organized in a photo album. Always cast a fiery eye towards a fridge or a front door left open, a car left idling, or a credit card bill left unpaid.
This odd condition has proved to be profitable over the years, as I have naturally sought out ways to use less energy and waste less money, with very positive side effects like getting to spend more time outside and retiring from work relatively early.
This is the reason the concepts of money and energy efficiency mingle so freely on this supposedly-financial blog: you can look at your energy consumption as a very close measure of the wastefulness of your life. The ideal life, even a very modern one, will require you to spend very little of your earnings buying energy. This is a contrarian opinion for me to hold in this world of Peak Oil and energy shocks, but check out the evidence:
Transportation: The Mustache family uses less than 3 gallons of gasoline per month for most of the year. This changes for special occasions like family roadtrips, but by following the basic principles of avoiding commuting and car clown local driving, and using the bikes for errands like groceries, driving is cut by almost 90%. Savings: about $10,000 per year compared to an average family.
Electricity: Although our current 2600 square foot house is oversized for three people, we manage to run it these days on 243 kWh per month, which costs about $25.00 even when offsetting 100% of the use with more expensive wind energy from the local utility. This is done by being reasonable with the air conditioning, letting our bodies toughen a bit as the seasons change, line-drying the clothes, and using CFL and LED light bulbs*. Savings: About $1000 per year
Heating: I have upgraded some of the insulation in this house, added some South-facing windows and plenty of thermal mass, and seal the curtains and shutters up tightly on winter nights while the programmable thermostat keeps the house at 62F during the nights, 67 during the day. The water heater is in an insulation blanket and we use a low-flow showerhead. Because of this our spending on natural gas averages out to $25 per month ($300 per year), which includes all heating, hot water for showers and dishwashing, and cooking. In contrast, the average US house spends $400 on water heating and another $960 on heat, meaning we enjoy Savings of $1060 per year.
When your bills are this low, it becomes a bit difficult to save money on energy by buying high-tech upgrades. I could get a Nissan Leaf electric car, but it would sit unused in the driveway just as much as the Scion xA currently does. Could replace my 80% efficiency furnace with a 95% efficient one for $4000, but the payback period would be decades. Better to just add $100 more insulation or get a nice pair of slippers to drop the existing furnace use even more. We spend about $5 per year on electricity running the air conditioner – I’d sooner remove it altogether than upgrade it. I can’t even upgrade my city bicycle, which cost $300 brand-new in 2008 and has over 4000 miles of errands on it, because it still works perfectly and gets me around very quickly. This whole picture is an example of a Non-Emergency Energy Situation. Spending is minimal and further optimization is difficult, so energy use fades into the background where it should be.
So when does energy use become an emergency? There is no single fixed rule, but the following are some warning signals:
When energy is unusually expensive: While living in Hawaii last winter, I noticed that their electricity is generated by burning tankerloads of imported oil, which is reflected in the 30 cent/kWh price (300% of what I pay here). And all the water is electrically heated – furiously expensive. To compensate, we took many of our showers just by jumping into the turquoise-blue ocean and outfitted the Vacation Suite project with GU10 LED bulbs in its track lighting system, which use 85% less power than halogens. People who live in the Northeastern US who rely on heating oil are in a similar situation for heat.
When more than 5% of your income is on spent on energy and gasoline: Bumping up your savings rate by 5%, for example from 10% to 15% of income will slice 8 years off of your working career. Is worth working 8 more years just to stand at the gas pump?
When you have a rattly almond-colored fridge with fake woodgrain handles: Last year I ran some tests on an old fridge that a friend still had in operation. It was burning 110 kWh per month, or $135 of electricity every year. For $300 he replaced it with a nearly-new fridge from Craigslist and I measured it again. This one used 62% less energy, saving him $83 per year, which is a spectacular 28% annual return on investment! When you do the math, many of the lower-cost energy upgrades described in this article will return even more than the stock market over time.
When you find yourself driving around regularly in a car that gets worse than 35MPG: Imagine that your only vehicle was an 84-foot double-trailer Walmart semi, stuck in first gear with no muffler and a bed of nails for the driver’s seat. Would you take it down to the drive-through? Probably not. This is how ANY sub-35MPG vehicle should feel in your mind to drive regularly. It’s an emergency! Sell it! Replace it with a reasonable car!
My own Plan for Energy Efficiency
The latest sketchup model is fully detailed, and structural engineering is almost done too.(Thanks Mike B and Chris G!)
Because energy consumption is one of the biggest issues affecting humanity these days, I’ve decided to go just slightly overboard when renovating the new house. It presents an ideal blank slate for this experiment because in its current condition, it is an energy emergency. It came with almost completely uninsulated walls and ceilings, and a drafty crawlspace that lets winter air blow directly in from the outside. I found it both ridiculous and amazing that the house has existed in this condition, wasting energy for almost 60 years.
But through this blog, I had the good fortune of hearing from a reader/energy expert named Roch Naleway who manages a department of GP Conservation products. Born in Germany and having lived in the Netherlands and now Portland, Oregon, you can imagine the strict views this man has on energy efficiency. And he has been lecturing me to take my own own game to the next level on this project.
Insulation: The new insulation will be a combination of sprayed-on foam insulation, rigid foamboard with foil backing, and standard batts. The roof, all-important in a wide flat house like this one, will be insulated to R-50.
Free Solar Heat: The amount of South-facing glass in the house should provide more than enough to heat the entire structure for most of the cool season, since my region gets over 300 sunny days per year.
Supplemental Heat: The house currently has an old gas furnace with creaky mouse-filled ducts. This will be replaced with a 95%-efficiency gas boiler and radiant under-floor heat installed between the ducts from the crawlspace side. Although it will hopefully not be used much, it will be a luxurious and efficient way to warm the house, and an excuse for me to learn how to install a multi-zone boiler heat system. Also nicely compatible with roof-mounted solar water heating panels in the future.
Electricity: I will be installing a very fancy clothesline overlooking the park, and no air conditioning system at all. With LED lighting throughout, our bills should be even lower than they are today. With usage this low and a local utility that discourages grid-tied solar installations, solar panels are not practical at this time, but I will probably do some off-the grid experiments in the future – stay tuned.
Water Heating: Either a tankless natural gas heater or an electric heat pump water heater will get the job done here. I will supplement it in the summer with a Hawaiian-style outdoor shower that gets its heat entirely from a simple coil of black irrigation pipe mounted on the roof.
As the final bit of this energy efficiency experiment, I just ordered a fine new tool which should come in handy for both the blogging and construction “businesses” : an 8-foot-long bike trailer from Bikes at work that can carry huge items up to 300 pounds. With my new house only 1.7 miles from the Home Depot, I plan to use this to haul most of the construction materials, eliminating countless trips in the van and giving me some serious leg training in the process.
Energy Efficiency Shopping: If you find this field as interesting as I do, I recommend browsing around GP Conservation’s site. If you have questions about the field, ask them in the comments and I’ll try to get Roch to spend an entire workday answering them for us.
Further Reading: Wired Magazine comments on how we’ll all be using almost entirely clean energy by 2050 – I sure hope so.
* I recently upgraded the last frontier – the kitchen – with higher-end LEDs from GE. These were the first LED bulbs I found with a sufficently good “color rendering index” to make the food look tasty, and thus they finally allowed me to remove the power-hungry halogens.
In most cases, a financial plan is not entirely complete without life insurance. This is because the proceeds from a life insurance policy can help to ensure that your survivors can carry on financially in case the unexpected occurs. These funds can be used – income tax-free – for any number of things, such as paying off massive debts, paying for the funeral and other final expenses, ensuring future college education funds, and making sure that monthly bills can continue to be paid.
When you are searching for the best life insurance policy for your needs, it is important to make sure that you are going with the right type and amount of coverage. It is also important that you review the insurance company you are considering buying your policy through to determine whether it is financially stable, and that it has a positive reputation for paying out its policy holder claims. One company that meets these criteria is Nationwide Insurance Company.
The History of Nationwide Life Insurance Company
Nationwide Mutual Insurance Company and its affiliated companies make up a group of large U.S. insurance and financial services companies. The company was initially founded more than 90 years ago, and it has grown and expanded throughout the years.
This financial and insurance entity offers a broad range of products and services that can help clients with growing and protect wealth, as well as the people and things that are important to them.
The company not only has a focus on assisting its clients but is also charity minded. Just some of the entities that have been helped by Nationwide’s donations, as well as employee volunteerism, include Feeding America, and the American Red Cross. Nationwide is headquartered in Columbus, Ohio.
Nationwide Life Insurance Review
Nationwide has become a familiar name across the U.S., due in part to its famous advertising jingle, “Nationwide is on your side.” The company has featured various celebrities in its ad campaigns, such as Peyton Manning.
The long term financial goals of Nationwide have remained the same since the company’s inception – to create value for its members and its business partners. As of year-end 2015, Nationwide had approximately $26 billion in operating revenue. It is listed as a Fortune 100 company, and it consistently receives high ratings and rankings from the major ratings agencies.
Insurer Ratings and Better Business Bureau (BBB) Grade
Due to its stable financial footing, Nationwide has obtained high ratings from the insurer ratings agencies. These include an A+ from A.M. Best Company, an A+ from Standard & Poor’s, and an A1 from Moody’s Investor Services.
Also, Nationwide has been an accredited company through the Better Business Bureau (BBB) ever since September 1, 1955. The company has received a grade of A+ from the BBB (on an overall grade scale of A+ to F).
Within the last three years, Nationwide Insurance has cleared a total of 377 customer complaints via the Better Business Bureau, of which 98 were closed within the past 12 months. Of these total 377 complaints, 258 had to do with problems with the company’s products and/or services, 102 were in regard to billing and/or collection issues, 13 were in relation to advertising and/or sales issues, 3 had to do with delivery issues, and the remaining one was with regard to guaranteeing / warranty issues.
Life Insurance Coverage Offered Through Nationwide Life Insurance Company
Nationwide offers an extensive list of different life insurance policies and options to choose from. This can be extremely beneficial to the company’s customers, as they can determine which plan works the best for them – and they may also be able to change that plan as their needs change over time.
Life insurance policies from Nationwide include term and permanent options. With term life insurance, there is death benefit only protection, without any cash value or savings build up. Because of this, term life insurance can often be much more affordable than a comparable permanent insurance policy.
Term life insurance protects for a set period, such as ten years, 15 years, 20 years, or even 30 years. Nationwide offers the YourLife Guaranteed Level Term plan. With this policy, the death benefit and the premium due will remain level throughout the entire policy period.
There are also several free riders that may be added to this policy to more closely “customize” the coverage to meet an insured’s needs. These include the following:
Accelerated Death Benefit Rider
Children’s Term Insurance Rider
Premium Waiver Rider
Spouse Rider
Nationwide also offers a full line of permanent life insurance policy options. With permanent life insurance, there is a death benefit, as well as a cash value or investment component that is attached to the policy. Often, permanent life insurance is used for other financial goals that are in addition to protecting loved ones through the death benefit proceeds.
For example, because the funds that are in the cash component are allowed to grow tax deferred, this money can increase exponentially over time. It can then be either withdrawn or borrowed against for any reason, such as paying off debts, supplementing retirement income, or even for buying a new car or taking a vacation.
Several types of permanent life insurance coverage are offered by Nationwide. These include whole life, universal life, and variable life insurance. Whole life is the most basic form of permanent life insurance. Here, the death benefit and the premium will typically remain fixed – and the policy will stay in force for the remainder of the insured’s lifetime – provided that the premium is paid.
Nationwide offers the YourLife Whole Life insurance policy. This plan provides numerous benefits, including:
Permanent life insurance protection
Predictable fixed premium amount
The ability to further customize the plan with riders (for an additional amount of premium)
Guaranteed cash value
Guaranteed death benefit
Access to the funds in the cash value component
Income tax-free death benefits
There are two premium payment options on this plan. With the WL-100 option, the premium will be paid on a regular basis and will stop when the insured turns age 100. Alternatively, with the 20-pay WL, the premium will remain the same until the policy is paid-up after 20 years.
This policy also has the following riders:
Accelerated Death Benefit Rider
Children’s Term Insurance Rider
Accidental Death Benefit Rider
Premium Waiver Rider
Nationwide offers other permanent forms of life insurance, too, including Universal Life Insurance. Universal life insurance is more flexible than whole life, as the policy holder can alter the premium (based on certain guidelines) regarding due date and the amount.
Universal life insurance could be a good option for either individuals or business owners, depending on their needs. For instance, this type of coverage can be a viable option for those who wish to leave a legacy to loved ones. It can also help small business owners with their continuation planning.
There are some universal life insurance policies offered through Nationwide. These include both regular universal life insurance coverage, as well as indexed universal life. With an indexed universal life insurance policy, the return on the cash value is based on an underlying market index, such as the S&P 500. When the underlying index performs well, the policy’s cash value is credited with a return – typically up to a set cap. But, if the underlying index shows negatively in each period, then the policy holder’s principal does not lose value. Rather, it is just simply credited with a 0%.
The universal life insurance policies that are offered through Nationwide include the following:
Nationwide YourLife Indexed UL Accumulator
Nationwide YourLife Indexed UL Protector
Nationwide YourLife Indexed UL
Nationwide YourLife SUL ll
Nationwide YourLife Current Assumption UL
Nationwide YourLife No-Lapse Guarantee Ul
The company also offers several options for variable universal life insurance. With this type of life insurance policy, there is death benefit protection, as well as an investment component where the funds can grow, based on the performance of underlying investments. With variable universal life, the policy may be used for providing coverage, as well as for many other financial planning needs, such as supplementing retirement planning solutions and business planning solutions, education funding, or long-term care payment requirements.
It is important to note that with variable universal life insurance, the underlying investments may move up or down. So, while there is the opportunity for substantial gains, there may also be risk involved.
With Nationwide, there are three variable universal life insurance policy options to choose from, including the:
Nationwide YourLife Protection VUL
Nationwide YourLife Accumulation
Nationwide YourLife Survivorship VUL
Other Products and Services Available
In addition to life insurance coverage, Nationwide also offers many goods and services. These include retirement annuities, mutual funds, and retirement plans that can help businesses and their employees to save for the future and protect their investments.
Today, with life expectancies getting longer, one of the key worries that is on the minds of retirees and those who are preparing for retirement is that of running out of money. An annuity can help to reduce these fears, as it can offer a guaranteed lifetime income – regardless of how long you need it. Nationwide offers a full suite of annuity products, including fixed and variable, as well as market value adjusted. Clients may also choose to purchase an immediate annuity – where income can start right away – or a deferred annuity, where income is paid out at a time in the future.
Mutual funds can help clients to achieve their financial goals via a diverse set of investment options. Nationwide offers many of their mutual funds, which are focused on a variety of objectives, such as growth, aggressive growth, growth and income, and conservative.
For businesses, Nationwide provides some different retirement savings options. These include 401(k) plans, 403(b) plans, and 457 plans. So, depending on the type of business, a plan can be set up that most closely fits the goals of the company and its employees.
Also, provided by Nationwide for businesses is key person insurance, also commonly referred to as key man insurance and keyman life insurance, it is an important form of business insurance. … An employer may take out a key person insurance policy on the life or health of any employee whose knowledge, work, or overall contribution is considered uniquely valuable to the company.
How to Get the Best Premium Rates on Life Insurance Coverage
If you are seeking the best premium rates on life insurance coverage through Nationwide – or through any top rated life insurance company – it is recommended that rather than searching with just one, single company, you instead work with an independent life insurance agency or brokerage that can provide you with details on many different policies, companies, and prices. That way, you can determine which will be the best for you.
When you are ready to shop and compare the right life insurance for you, we can help. We work with many of the top life insurers in the industry today, providing you with the information that you require for making a sound buying decision. We can do this all from your computer, and without you having to meet in person with a live insurance agent. If you are ready to proceed, then all you have to do is just simply fill out our quote form.
We understand that choosing the very best life insurance option for you can be somewhat challenging. There are many different options to pick from, and you want to be sure that you are moving in the right direction. But we can walk you through the entire process. So, contact us today – we’re here to help.
I spent a couple hours this morning performing what ought to have been a simple home-maintenance task. The light fixture on our front porch had gone faulty, and I needed to replace it. I’ve done enough wiring projects now that the electrical aspect of the job didn’t bother me. But the woodworking? That was frustrating.
As I fumbled with the jigsaw (“Drat! Another blade bent!”), I wished again that I practiced woodworking more often. I have several friends who do so, and the skills they’ve learned help them to save money around the house. My incompetence this morning gave me plenty of time to reflect on the value of productive hobbies.
Productive hobbies When I was younger, I spent most of my spare time reading comic books and playing video games. There’s nothing wrong with a little self-indulgence, but the older I get, the more I appreciate hobbies that provide practical skills. Productive pastimes are not only fulfilling, but they can also help save money. (Sometimes they can even generate a little income!)
Here are a few hobbies and pastimes that can help to save (or make) money:
Gardening. Kris and I aren’t yet finished with our year-long garden project, but already we know that it has saved us money. (Find out just how much when we post an update this Saturday.) Even if it did cost a little more, it’s fantastic to have fresh food just feet from the front door. You don’t need a lot of space to start a garden. Consider square-foot gardening or container gardening.
Photography. Cameras can be a money sink, but photography doesn’t have to be expensive. You can have a lot of fun with a cheap point-and-shoot digital camera. With practice, you may even be able to make money selling digital photos online. I know several people who do this (and I’ve done it myself).
Woodworking. Carpentry is another hobby that can consume a lot of cash. But if you have the space and the time, you can also develop skills that yield big dividends in the long run. If I’d taken the time to learn woodworking, I wouldn’t have to pay a contractor to do some of our remodeling projects. (And I wouldn’t have cut a four-inch hole this morning when I only needed a three-inch hole.)
Knitting. As with many hobbies, knitting can be expensive, but there are ways to make it less so. Nell at Octopus Knits has pattern companies and yarn folks giving her product (yarns & patterns) to try. Some of my friends have taken commissioned projects. Kris is learning to knit adorable little stuffed animals; she could sell them for $20 a pop.
Computer repair. Because I’ve always been a computer hobbyist, I’m able to troubleshoot computer problems instead of paying somebody to do it for me. Before I turned Mac, I also saved money by building my own machines. In fact, for a couple years, I supplemented my regular salary by helping friends and family with their computer problems.
Art. Last week, I pointed to the work of lillyella, whose art generates enough income through her Etsy store that she now does it full time. In the past, I’ve also mentioned Ayla, a teenager who sells her art glass at the local farmers market. Kris has a friend who is learning how to work with stained glass, but just for fun.
Cooking. My friend Laura has a group of friends that love to cook. They recently organized a cooking evening to provide freezer meals for each of them. They decided on six menus, assigned the shopping, borrowed a church’s kitchen, divided duties like cutting, slicing, dicing, mixing, frying, cleaning, split the costs and each went home with six different items for future use. But even learning to cook for your own family can save you a lot of money.
Baking. Baking is fun for its own sake, but it can also save you money with gifts. Who wouldn’t rather have a couple dozen home-baked cookies than another useless mug? Some people can even turn this skill into a career. My aunt turned a baking hobby into a business, creating cakes and catering weddings. She provided jobs for several other family members, too!
Canning. Though Kris has always enjoyed canning, this summer has been amazing. She’s discovered it’s a hobby she truly loves. She derives immense satisfaction from preserving her own food. “It’s comforting to walk into the pantry and know that I made all of this,” she said recently. “I know where the food came from, and I know that we’ll be eating it all winter.” Though the start-up costs are a little high, they repay a hobbyist in time.
Making music. My friend Michael has a musician friend who plays the piano and has been paid to play at private events. He has another friend with a great voice. This man loves to sing, and he and his friends hire themselves out as a quartet around Valentines Day and to sing Christmas carols during the holidays. (I’m always jealous of my musical friends. I know it’s hard work to become proficient, but it looks like such a fun way to stay entertained.)
Vehicle maintenance. I know little about cars. I wish I knew more. Knowing even basic vehicle maintenance can save you big bucks. I once knew a guy who performed nearly all his own auto work. He could buy a junker car, fix it up, and resell it at a nice profit. He wasn’t going to get rich doing this, but he enjoyed the hobby, and it kept him in money for his own vehicle.
Physical fitness. You’ll never get rich running road races, but there’s no question that a healthy body can save you money. Find a physical activity you enjoy: biking, running, hiking, dancing, yoga, weightlifting. Play a team sport. Regular exercise can be fun, but it will also save you money in the long run.
The possibilities are limitless. There are countless fun and interesting hobbies that can either save you money, or maybe help you earn a little on the side.
Quick tips You’ll notice that none of these hobbies involve collecting. I’m an inveterate collector myself (comics, books, notebooks, movie serials, music of the 1920s, …), so I know first-hand how expensive it can be. Some would argue that it’s a form of compulsive spending, and I can’t really disagree. Since I’ve begun focusing on hobbies that involve doing rather than getting, I’ve spent much less money.
For some hobbies, equipment can be prohibitively expensive. In these cases, you may be able to find used stuff on Freecycle or Craigslist, or you may be able to begin with low-end gear. (This isn’t always a good option. If you think you’re going to be doing a lot of running, you should buy a quality running shoe from an expert, and not settle for cheap sneakers, for example.)
In many cases, it’s possible to jump-start a hobby by taking a course at a community college or community school. I spent a year taking photography classes, for example. The instruction and experience were invaluable, and helped me develop the skills necessary to actually sell a couple photos.
My friend Michael likes woodworking but can’t afford (and doesn’t have space for) all of the equipment. When he needs to build something, he signs up for a community college woodworking course so that he can use industrial woodworking tools at a reasonable cost.
Further reading I’m a big fan of productive hobbies, and I’m not the only one! Here are some articles on the subject from around the web:
Don’t forget that hobbies are an excellent way to make gifts for less than it costs to buy them. Kris sometimes knits gifts for special occasions. Most years she gives some sort of home-made food to our friends for Christmas. I sometimes give photographs. One of the best birthday gifts I ever received was a batch of homemade chocolate chip cookies.