Tag Archives: money

How I save money by NOT doing Auto-pay [and in some cases from it]

I was looking at my electricity bill the other day and something caught my attention [Yes, I do look at my bills every month and in general if there is something that talks about saving money, it gets my attention] There is a difference of $2.5 depending on the option you choose for billing (see the image below for the available options) – say if the bill is $100, it’s 2.5% cashback, which is more than most of credit cards provide; it’s even more cashback in winter when the electricity bill is lower (assuming the heating uses gas).


That was an example of how you could save money by autopay, which works well for necessities such as utility bills. I still have reminders in my calendar just to track when the payment is due, but not having to worry about opening the computer -> going to the website ->  looking up for logon info in Keepass -> entering the credit card or bank account number -> paying -> shutting down computer is great! Considering on an average of 5 – 6 bills every month and if each one takes 5 – 10 mins of your time, it’s a waste of almost an hour that you could spend watching “Stranger Things” on Netflix.

According to one statistic about 61% of Americans have at least one bill on autopay, which is great but what about the payments for discretionary items. Should we still set it to pay automatically? That’s the question we’re trying to answer. Tell me if any of the following sound familiar:

  • Only exercise you get from your gym membership is thought of going back someday, when you see the monthly charge on your card
  • You keep getting Rolling Stones in your mail and use it as mouse-pad
  • You hardly order anything from Amazon anymore, but continue to have prime membership thinking you may need something urgently that’s only available on Amazon and free 2-day shipping is the only way to get it


You think about canceling the service next month, which turns into next month again then you move and the next person who rents the apartment gets to use those magazines as napkin. Where does it end?! Right there when you cancel the auto payment. I recently let go of my Amazon Prime membership and few others that I was still using but didn’t value anymore. It may not sound too much per month, but that’s the trick they play to make it sound less. That $19.99 membership doesn’t sound a lot until you calculate the yearly cost which is $239.88 and now all of a sudden you can afford the JLo concert you always wanted to go to! [not saying you should spend the savings, in fact investing is a better option, but at least now you got more options]

Also when you don’t care about certain specific things anymore but still like to use it sometimes, that $9.99 Spotify subscription for example, you can always look for cheaper alternative. Like most of the thinks in life, automating payments can help or hurt depending on how you use it. My advice: use it wisely!

Chase Sapphire card annual fee [prorated] credit

If you have multiple credit cards with annual fee, you should review [at least once a year] whether all of them are still worth the fee; if not, downgrading to a no fee card is a good idea.

I was reviewing my cards few weeks ago and realized that I didn’t Chase Sapphire Preferred anymore. It was September already and they charged the annual fee in Jun, so I wasn’t sure whether I was going to any any prorated refund; but as I like to say, “you never know until you try.” I looked up online to see what other folks have experienced and found these articles from MillionMileSecrets.com and DoctorOfCredit.com. Knowing there was a chance, first I looked up on what card I wanted to downgrade to – I didn’t want to cancel the card and lose the credit limit. I figured I could take change freedom unlimited because it had no annual fee and unlimited 1.5% cashback. I could also transfer these points to other chase card using ultimate rewards. wallet_coins

I called the customer service and explained the situation, they were willing to do a product transfer (I had owned this card for 3 years, so I wasn’t just trying to use the card for points then get rid of it) but said they don’t do annual fee credit so even though I could do a product transfer now, it’s better to wait till next Jun so I can take advantage of the features that comes with Sapphire card. I wasn’t very keen on that but understood the point.

A week later, new statement generated and I paid the bill in full, like I always do. I decided to call again about the fee refund since I didn’t really like the idea of paying for a card I didn’t need. After going through the same story again, this time I was told that I would get prorated refund. Score! A week later (this morning when I checked), I had the credit in my account.


Since it was a product change, they didn’t do a hard inquiry to my credit. The good thing is, while the other card is in transit, my current card still works!

Next time if you’re talking to a bank agent and are not satisfied with the response, it’s always a good idea to call back again later.


If you think money doesn’t buy happiness, you’re not spending it right

There are a lot of skeptics out there – don’t let them tell you what money can or can’t buy! I’ve always been a believer of the fact that money spent right brings happiness, but of course it’s not the panacea for all the problems out there.


Over the years, I’ve seen several research papers and read books about it and a lot of those resonate with me. One of the first studies I came across had the point of diminishing returns at $75,000 – the 2010 research talks about evaluation of life and emotional well being and how money affects those.

So those of you who’re reading this article and make more than 75K (adjusted for inflation this would be more like 85K in 2017), let us know in comments whether life has gotten happier after the magic income.

Then I saw the fascinating  research of Michael Norton (see his TED talk below) about how can money buy happiness – when you spend it on someone else. The speech highlights specific data points and details of the experiments that were performed.

If you’re convinced and/or inspired by Norton’s speech, consider making donation to redcross for Hurricane Harvey or Hurricane Irma  disaster relief fund (or DonorsChoose.org for that matter)

The Book “Happy Money: The Science of Smarter Spending” has some great findings too about how to spend money to become happier.

  1. Buy Experiences
  2. Make it a Treat
  3. Buy Time
  4. Pay Now, Consume Later
  5. Invest in Others

Taking examples from my life, I’d be lying if I said I donate money for selfless reasons [it does feel good to help others, thus helping oneself). I’ve also written about enjoying experiences in life more than buying things. Even simpler pleasures in life such as using dishwasher that frees up time adds to the happiness (#3 from the list above).

What are some of the ways you’ve spent money that made you feel happier?

The Truth about Home Security System

After we bought our house, I started looking for a security system – mostly for the peace of mind; I pay everything by credit card so not like I am hiding money under the mattress or in freezer. I researched scores of companies and devices including traditional ones such as ADT and more innovative ones such as Canary; looked at camera systems, local alarm vs central monitoring etc.

alarm-system[funny story about ADT – the person I was talking to said they are in home security business for more than 140 years; I said: “it was before world wars and at that that the technology wasn’t too advanced, what/how did you guys monitor?” After a long awkward silence he admitted that he wasn’t sure what they did back then.] I also didn’t like the fact that they pulled my credit score/history without letting me know.

Eventually I got one and while I was registering it with the county (some counties require you to register alarm system with them) I saw this on their website, “If you would like to schedule a Home Security Inspection, please call <phone number>” I was glad to see that county was willing to do a security inspection. Few weeks later a sheriff came to do the inspection – he gave me few general security tips such as: have a lock in the backyard gate etc., which I thought was useful! Then it was time to test the alarm system; we verified that everything was working as expected, then opened the front door to let the alarm go. Sheriff said, “if it takes more than 1.5 mins (90 seconds) for them to call, you need to have a talk with them because anything longer than that is too long.”

 hourglasI got the call in just about 90 seconds, but what the conversation with Sheriff after that was shocking and eye opening! He continued, since the alarm is working as expected, let’s talk about what happens in case someone trespasses in a house:

  • 1.5 mins to call the first person
  • if he doesn’t pick up another minute to call the secondary person
  • if both go unanswered, another few mins to call police dept
  • few more mins for police dept to call person on duty
  • depending on the traffic, police arrives anywhere between 30 – 45 mins later

We are effectively looking at anywhere between 45 mins to an hour before police arrives when a burglary happens – no security company ever tells you this important piece of information. Still think spending hundreds (if not thousands) of dollars on home security system is justified? Think again!

  • Having a security system gives you piece of mind, and that’s why I have it too, but don’t end up paying too much for the monthly monitoring cost.
  • The frequency of false alarm is high, which can cost you fine from the county too, besides wasting other resources:


Spend little time and money on securing the house in other ways too: things as simple as putting a lock on the backyard door and removing ribbon from the garage opener goes a long way ensuring security of the house.


How much house payment can you afford?

Earlier this year we were looking to buy our first house; I did what any sane person would “googled what to do”, and found a lot of advice on internet – some of those were pretty good. Talking to a real estate agent, first thing he asked was: “how much can I afford?” I guess that’s not an unusual question to ask, but it got me thinking. How much I can afford and how much I am willing to pay for a house are two different things!

While it’s good to know how much you can afford based on your financial situation, it’s important to understand the difference between affordability and willingness to pay. Making rash decisions while buying a house make you house poor; once you have decided the budget, you can always look up online calculators. Here are others things we considered:

  • How big of a house: number of rooms, total sq ft. etc.
  • Which area: Distance from work [and airport], downtown, other fun stuff to do, good neighborhood
  • Floor plan: Open floor-plan preferably; didn’t think much about one vs 2 story
  • Financing options: 15 vs 30 yr. mortgage 
  • Tax rate for the county
  • Getting pre-qualified: while this is a good idea, it’s not necessary. I never got pre-qualified and I think it’s a personal choice
  • Recurring cost after buying the house: taxes, insurance, utilities, etc.

lifestyle segmentation for the zip code

After looking at, what seemed like, millions of houses, we were able to narrow it down. From my marketing analytics class, I remembered something cool [called lifestyle segmentation], and looked up the zip code of the house we liked. We eventually bought the one that we liked, and moved in few weeks later. 

Following are few learnings that I’d like to share:

  • Tax rate can vary significantly, sometimes within just few miles: there are more than 0.5% rate difference between the house that we bought and another house that we were considering few miles down the road – pay attention!
  • Get the house inspected: even for a new house; as our inspector said, “I always find something, doesn’t matter whether it was just built”
  • 15 vs 30 yr mortgage: this is a highly debated item, and there is a lot of information available online. [I can probably write a whole post just on this] I picked 30 year because of following:
    • Since the mortgage rates are historically low, it makes more sense to invest the difference somewhere else
    • I can always pay more if I like, but if I went with 15 year, there is no option to pay less 
    • If things go south, and I lose my job, I wouldn’t be stuck with higher payment
  • Get money back on the commission that Real Estate agent gets: you can always negotiate this, but some companies advertise it too, Redfin being one of those – this helps pay towards the closing costs!
  • Paying for mortgage point: this is another debatable item; in my opinion it’s not worth paying for, specially since closing cost + furniture + house setup will already set you back thousands of dollars

Hopefully some of these will resonate with you; If there is one takeaway from the story – let it be the fact that what you want to pay should be less that what you can afford to pay!