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I am currently paying $500 every month into my student loans.  I am in the deferment period, which means that my loans have not “priced” yet.  I am not required to make any payment at all.  Whatever balance is outstanding at the end of the six month period will be amortized to create my future monthly payment.

I don’t have a whole lot in my cash savings account.  I am keeping myself on a tight budget to pay down my student loans as rapidly as possible.  At the current rate, my loans will be completely paid in two years.  I have about enough saved for two months of expenses at my current spending rate, which could be lowered if needed.

I am required to begin paying the loans in September.  Should I keep paying the $500 per month until September and then make the minimum?  Should I save up now while I can and start making higher payments when I have more put away?  Should I do something completely different?

What do you think, save or pay off the loans?  Please give me your thoughts in the comments.

In all of my time blogging about saving money, I have never mentioned a great site that was recently featured by Lifehacker.  BillShrink is a site that is dedicated to finding you the best deals on services you most likely already have.

BillShrink recently added a section for finding the best local deals on TV service.  It also has extensive data for cell phone service, banking, credit cards, and local gas prices.

I just found out that I am overpaying for cable TV, though I have been debating pulling the plug for quite some time.  The site can surely save you money when finding a new service.  It might also inspire you to change.  Let us know if you save any money from BillShrink in the comments.

I live paycheck to paycheck.  There you go, I admit it.  However, I am there intentionally.  We all make choices in our lives that impact our financial situation.  Sometimes those choices have the unintentional affect of making us live paycheck to paycheck.  Others give themselves enough financial flexibility that they don’t worry about their bank account balance.  I propose something completely different.

As you know, I use Mint to monitor my budget.  I think it is a great tool to keep my spending on track.  I usually go over in some areas and under in other areas, but do everything I can to make sure I do not go over my total spending goal.

I have a backup plan, however, for when Mint is not enough.  I only have enough money in my checking account for two weeks of spending.  I move everything else into a savings account each payday.

This goes along with the idea of paying yourself first.  Every paycheck, I automatically take out 3% (matched by my company) for my 401(k), 3% for my Roth, and 3% in my company discount stock purchase plan.  Once the cash hits my bank account, I automatically put $250 per paycheck into student loans.  I then manually take a step to pay myself: I put $200 into my savings account.  I can live off of what is leftover.

Some weeks, that is a little tight.  I have made it through with only a little clearance a few times when I make my bi-weekly credit card payment.  That forces me to evaluate my spending and lifestyle.  I have cut back on eating dinner out and spending on things like movies and hobbies to make everything balance.

If you have trouble meeting your savings goals, try my strategy and let me know how it works out.  I know this is the extreme version of paying yourself first, but it has been working for me.  My savings are up and I am still happy with my lifestyle.  I just have to make sure that my lifestyle does not exceed my income and savings goals.

How to you make sure you stay on budget?  Please tell us in the comments.

Trent at The Simple Dollar wrote a great post, complete with calculations, on why you should consider rounding up payment to the next dollar, ten dollars, or hundred dollars.  The scale of savings on rounding up your credit card or car payments can be huge, but nothing compares to the might mortgage:

Rounding up to the nearest hundred dollars If you decide to round the payment up to the nearest hundred dollar increment, you’ll submit a payment each month for $900 – an overpayment of $94.77. Your payments would end six years and four months earlier and your final payment would be only $2.95. This would result in a total savings over the life of the loan of $34,605.19.

Take a look at the original post to see how it works.  To make it work, it helps to automate your finances.  If you follow Trent’s plan for a $150,000 mortage and round up about $100 per month, you save more than the cost of a brand new car.

I have been a member of Upromise for nearly a year, and I am thinking it might be time to pull the plug.  I tried the toolbar and registering my cards to the account.  I think I ended up with two transactions that paid me anything.  I will let the picture speak for itself:

Fifty two cents!  That’s it.  Far from the average savings of $458 that Upromise suggests.  Here is what I have decided about the site:

1. Unless you get their credit card, you are not going to make all that much anyway.  The credit card is a way for them to make a lot of money and pass a small amount of it to you.  This works like any other credit card rewards program, but pays for college instead of other rewards.  Not such a great deal if you ask me.

2. Unless you make a crazy effort to go to Upromise restaurants and online stores, you won’t make much else.  That is where I got my fifty two cents.  One trip to a restaurant (not on purpose) that is supported by their program and a website domain renewal, which I would have done anyway.  So, it takes spending money to really earn anything back from Upromise.

Overall, I would not recommend this program.  I try to only endorse sites I really like myself, and this one did not earn the Eric seal of approval.

If you want to lose weight, there are two important parts of the puzzle: eat better and exercise.  Those two areas combine to have a big impact, but one is much more important.  It is easier to skip the burger than swim laps for two hours to burn it off.  To make a big difference, you need to control the input, not the output.

The same logic can be applied to finance.  Budgeting, the exercise of personal finance, can make a big difference.  Going from no budget to watching your expenses can save you a lot of money.  However, as some financial bloggers point out, it is important to go for the big kills rather than a nickel here and a dime there.  Cutting your rent, insurance, and cable/Internet bills can save big over the course of a year.  Even more important, though, is income.

If you can save $10 per month by asking your cable company to lower your bill, that is $120 per year, not too shabby.  But if you can get a raise of $100 per month, that is $1200 per year, which is a bigger impact.

What we see here is that controlling your income can have a bigger impact than controlling your expenses.  Easier said than done, right?  WRONG.  There are two major methods to increasing your income.  1. You get a raise or increase income from what you are doing already.  2. You create a new source of income.

I have created new sources of income from a few places over the last year.  The most successful has been eHow, where I have made over $1,000 in the last 18 month.  If I did more there or added another supplement, I can have that grow by more.  It only took a few hours to get started on making that $1,000, why can’t you do it.

Getting a raise is also possible, even in today’s economy.  If you are worth it, your company will pay you more to stick around.  I got a raise of nearly 20% in the same time period my group laid off about 15 people.  If I can do it, you can do it.  Just work hard and be the best at your job.  Sometimes that takes time and careful negotiation, but it is possible.

Ramit over at I Will Teach You to Be Rich is kicking off a series on earning more income, and it is worth a read.  I know there are silent readers out there, please come out of the shadows and let us know if you have secondary income streams in the comments.  Any residual income?  If not, tell us in the comments too.  As a community, I am sure we can come up with some good ideas.

For Chanukah, I asked for and received a Roku.  Roku is like a cable box for the internet.  My box brings in unlimited Netflix streaming videos (20,000 available) and music from Pandora.  It can be setup to do much more.

I decided, upon getting the gift, to cut my Netflix subscription from 2 DVDs at a time for $13.99 per month to 1 DVD at a time for $8.99 per month.  Sure it is only $5 per month, but that is $60 per year.  I can do a lot with $60.  The cheapest Roku costs $80, so this is a 16 month break even point for what I look at as an entertainment investment.

For now, I am sticking with cable as well, but it definitely makes me think.  If I could Hulu through the box as well, and have a digital antenna, it would make me think a lot harder.

So far, I have not used the box a lot but I like it.  It works just like a cable box.  It was easy to setup and has its own remote.  I started watching season one of Dexter on my Roku.  It is just like watching it on TV, but I can pause and leave and come back.  I guess it is like a cable box and DVR in one.

Almost every investment firm offers a 529 account.  They talk about how great it is and how everyone should have one.  Most people have no idea how a 529 works or what it is.  This post will give you a breakdown on the basics of a 529 and what you need to know if you are going to get started with this type of account.

What It Is

Explained simply, a 529 is an education savings account.  529 plans allow you to save for future education expenses.  The funds can be for your future education, your kid’s future education, or any other family member.  Generally people use them to save for graduate school or their child’s future college expenses.  529 funds can be withdrawn to pay for “qualified expenses” such as tuition and fees.

Why You Want One

You might be thinking that you can stash away cash in any old savings account or investment account and do the same thing.  Not exactly.  A 529 account is special because of its tax status.  You can make contributions to a 529 account “pre-tax” from you income.  Like a 401(k), 403(b), or traditional IRA, you can deduct 529 investments from you income before you are taxed on it.

How It Works

 A 529 works just like a 401(k) for the most part.  Many employers offer to make deposits in a 529 account automatically.  This is the best way to fund a 529.  If you can just set it up and forget about it, you will never have to worry about writing a check or transferring the funds every month.

Also like a 401(k), you can pick how it is invested.  You can leave your 529 funds in a savings account or CD, or you can invest it into mutual funds or stock.  If you open your 529 through a brokerage firm, you have total flexibility to invest as you please.  Companies like Charles Schwab or Oppenheimer often give suggestions of how to invest 529 funds to have the cash ready when you need it.  This is probably the best route if you are saving for your own education.  Just remember, like any investment, there are risks.  The firm can help you figure out what is best for you.

While investment firms all offer a 529, you might be better off to check with your state government.  Many states operate a 529 fund where you can safely keep your child’s future.  I know my state, Colorado, has a plan that many parents start investing in when their children are born.  Some state funds perform very well while some have suffered from stock market losses.  Check into your state for details.

Where To Start

Start with your employer.  Look into making an investment straight out of your paycheck.  If you can, you can most likely manage your funds easily and invest into an assortment of funds.  You will have to do a little paperwork when you set it up, but it is easy from that point on.

If you can’t invest in a 529 through your employer, look into a state government or private option.  Compare fees and how easy it will be to make contributions.  Also look into what you will need to do when you are ready to make a withdrawal.  For some plans, it is as easy as writing a check.  Others are more complicated.

Finally, before you make your first investment, take a little time to read the IRS website for 529 details.  It is important to know what you can use 529 funds for and what the penalties might be for withdrawing early.  Be well versed in how the 529 codes work when you get started.  If you have a tax adviser, consult with him/her as well.

It really is that simple.  Use the automatic investing plan to make things easy, even if you can’t with your employer.  You can use bill pay or automatic transfers in an online bank account to fund your 529.  Keep track of the paperwork for tax season.  You can save a lot on taxes if you use this investment method correctly.  It is also nice to have the peace of mind that your education, or your child’s education, is going to be funded without worry.

I recently gave in and took the dive into Upromise.  Upromise is a program designed to give you cash back from select purchases (namely restaurants, online stores, and grocery) to fund a 529 college savings account, pay for college loans, or go directly to education expenses.

Anyone can sign up.  An adult can sign up today for their children and may amass quite a 529 by the time their kids turn 18 and head to school.  Through the program students can sign up family and friends to fund their account.  The nice part, and the reason you know it is not a scam, is that there are no fees to sign up and take advantage.  Rather than write a long post on it, I will link to several good posts I have found about Upromise.  Please take a look and comment here if you already participate or sign up because of this post.

You promise also offers coupons for affiliate companies and a credit card to earn rewards faster.

Upromise Earn Free Money for College – Cash Money Life

Upromise Tuition Tales: $10000 Giveaway » Poorer Than You

UPromise Review: Free & Automatic College Savings

Upromise College Savings Review | Suburban Dollar

Lately I have noticed that the majority of my shopping has taken place online, rather than brick and mortar stores.  As I have transitioned to buying things online, I have found that you can save a ton of money just by typing in a store name on Google.  Here is a list of some online coupon sites that can save you cash online.

RetailMeNot - This site has gained somewhat of a cult following on the frugality blogs.  Sites like Consumerist and Wise Bread tout this as one of the best savings resources out there.  I recently found GoDaddy.com coupon codes on RetailMeNot that saved me a little money renewing the domain for this website.  Also check out sister site BugMeNot to gain access to a free list of logins for free websites that require an e-mail and password.

FatWallet - Fat Wallet is another big online coupon repository.  In addition to online coupons, this site has cash back shopping deals, printable coupons, and a coupon sharing forum for users to post deals they found elsewhere.

CouponCabin - Coupon Cabin has a large searchable directory for online purchases.  It is worth a look if you can’t find anything good on RetailMeNot.

Coupons.com – This is one of the oldest coupon sites out there.  It has a focus on printable coupons to take with you to the grocery store, though some other coupons are on the site as well.

Wow-Coupons.com - This site has a US and British version featuring both online and printable coupons.  The feel of the site is a bit spammy but you can find some deals if you can see past it.

Other sites worth a look include UltimateCoupons.com (another spammy feeling site), mycoupons.com (feels a bit spammy too), and ValPak.com (yes, the people who send you the coupon junk mail).