The Penny Hoarder |
- 5 Carpooling Apps to Help You Save Money on Transportation
- The 10 Best Places for Digital Nomads
- 12 Ways to Save Money on International Travel
- Dear Penny: I'm 75 With $235K of Student Loans. Should I Default?
- 6 Ways to Fight Shrinkflation and Get More for Your Dollar
| 5 Carpooling Apps to Help You Save Money on Transportation Posted: 04 Jul 2022 09:00 AM PDT When we were kids, our parents told us not to get into cars with strangers, but that's before we all had smartphones in our pockets and the price of gas skyrocketed. Now, if you need to get around, carpooling is a way to save at the gas pump — or the electric car charging station. We've rounded up the best apps for carpooling, whether you're catching an Uber or looking for someone to share commuting costs.
Pro Tip Safety comes first when carpooling. Tell someone the details of your carpool like who, when and where, even sharing your location. Be sure you know the safety features in each app, too.
Best Carpool Apps for Short Rides & Commuting
5 Carpool Apps to Help You Save
UberX Share  Key Features
UberX Share  Uber is one of many ridesharing apps that enable you to summon a car to your location when you need a ride. No more attempting to hail cabs with your hand or a phone call. Uber also allows users to select from different types of rides, one being UberX Share (formally known as Uber Pool). UberX Share is a carpooling option for those who don't mind sharing a ride with other passengers. The benefits of UberX Share are the same as any other carpool. Your ride costs less because you share the cost with someone else and you reduce your ecological footprint by eliminating separate trips. To use UberX Share, launch the Uber app, enter your destination, then select "UberX Share" for the ride type. After pausing during the pandemic, UberX Share is being slowly relaunched. If you don't see UberX Share as an option now, check again next time you book.
Pro Tip Many apps and carpooling services suspended shared rides during the pandemic and are beginning to restart now. Check an app's website for information about when and if shared rides will resume.
Lyft Shared Key Features
Lyft Shared  Arguably Uber's biggest competitor, Lyft also offers on-demand rides through an app. Lyft's version of carpooling is Lyft Shared and allows drivers to pick up and drop off other passengers during your ride. Using Lyft Shared saves your wallet and gives you that eco-friendly feeling, eliminating the need for more vehicles on the road. Lyft never puts more than two riders in a vehicle, so don't worry about it getting too cramped. Grabbing a Lyft Shared ride is simple. Launch Lyft, put in your destination, then select the "Lyft Shared" option from the type of vehicles available. Lyft Shared isn't available everywhere yet but remember to look for it when you book.
Waze Carpool Key Features
Waze Carpool  You may know Waze as a turn-by-turn navigation app that alerts you to an accident or speed trap ahead on your route. But have you heard of Waze Carpool? Waze Carpool is a completely separate app from Waze that allows you to find users to carpool with on your way to work, school or just about anywhere. Waze Carpool is not an on-demand car service like Uber or Lyft. You input your schedule with the hope that drivers on the same route will offer to carpool with you. You pay the driver a fee but you'll generally find it to be much lower than conventional ridesharing services. Or you could be the carpool driver and have riders pay you. You can set your own price or follow Waze's recommended price, which factors in gas prices and trip distance. To get started, download Waze Carpool to your phone. Once installed, create an account and put in your travel needs for the work week. Just remember that your ride isn't set until you are paired up with other users and everything is confirmed, which may take some time.
Via Key Features
Via  We love Via, as it's exactly what we want from a carpooling app: speedy scheduling, fast confirmations and price savings. Simply drop a pin on the map showing your pick up point and a second pin for your destination. Via works like Lyft and Uber with hired drivers standing by to take you to your destination. The difference is that carpooling is the default with Via. If you need a private ride, Via isn't the service for you. If you're OK with a shared ride, this is the premier choice. The major downside to Via is that coverage is extremely limited. For example, Via is available in New York City, but only covers a small portion of the city. Via is an amazing option for those who can use it. Otherwise, check the company's website for its service area.
Pogo Key Features
Pogo  Available on Created by a mom, Pogo helps parents find carpools for wherever their children need to go, whether it be school, the library or afternoon sports. Pogo allows parents and friends to join a common pool and see when rides are needed. Parents can add events to a calendar with pickup and drop-off destinations, noting whether a child needs a ride or the parents can offer a ride to others. Pogo is specialized compared to other carpooling apps, but can relieve stress for parents and save money on transportation costs via a reliable network of known drivers. Pogo allows you to connect with other parents in your community, too, such as those whose children attend the same school as your child. Once you download the Pogo app, you'll need to create an account to get started, but you can then immediately begin planning carpools. There is even a built-in messaging platform to easily coordinate carpools with others in your pool. Best of all, Pogo doesn't cost a dime. Frequently Asked Questions (FAQs)
Is There an App for Carpooling? There are many popular apps for carpooling, such as through ridesharing apps Uber, Lyft or Via. For a more traditional carpooling experience, you can utilize Waze Carpool or Pogo, which helps parents find carpool options for their children. Does Waze Pay You to Carpool? You can sign up as a Waze Carpool driver. Waze doesn't pay you but you can get payments from riders through the app. You can set your own price or follow Waze's recommended price, which factors in gas prices and trip distance. Waze Carpool is a great way to offset the cost of your commute by giving others a lift in the process. Is Waze Carpool Popular? Waze Carpool currently logs over half a million rides each month. You'll have to give Waze Carpool a try, though, to see if the carpooling app is popular in your community and offers a large user base. The availability of carpooling options may differ depending on where you live (urban vs. rural areas) and the routes you travel. Michael Archambault is a senior writer for The Penny Hoarder specializing in technology. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||
| The 10 Best Places for Digital Nomads Posted: 04 Jul 2022 07:00 AM PDT Suddenly, the label "digital nomad" is everywhere. Remote workers are now taking their salaries and setting up shops outside of the U.S. and now we've got a name for that. Or at least they're dreaming about it, and wondering about the best cities for digital nomads. It's enticing to envision yourself working remotely from Italy's Amalfi Coast or dining after work in one of Mexico City's sophisticated restaurants or even living the expat life on Bali. But a little bit of research shows that achieving the digital nomad lifestyle is not as simple as packing a bag and laptop. It can also be pricey if you have your heart set on a Parisian apartment. Lisbon may fit your wallet better. Oh, and make sure the internet speed is fast enough to handle your workload. And not every country allows someone to just uproot their lives and move there — to find the ones that do, you'll need to start looking for three words in particular, "digital nomad visa." Don't give up just yet. There are plenty of countries happy to have remote workers and in many of them, the cost of living — especially rent — is lower than what you would typically pay in the U.S. Truth is, the money you make from your remote American job might go further someplace else. What Is a Digital Nomad?A digital nomad is someone who lives in one country and works in another. They may do all of their work from the country they live in, but they're working for a company or clients that are based in another country, usually their home country. This work lifestyle has accelerated because more people switched to remote work during the pandemic. An Investopedia analysis found that as of July 2021, 24 regions offered a digital nomad visa, including countries in Europe and Central America. Often, these countries require certain minimum salary amounts or proof of funds to qualify for the visa. Each country with a digital nomad-esque program may not call it that and will have their own requirements. This is not a one-size-fits-all legal term. In Costa Rica, a temporary residency visa allows you to live in the country for two years, but it requires a monthly income of $2,500 or a deposit. Germany has a program that allows freelancers and self-employed workers to live there for up to three years, but the applicant must have a German residence and bank account, health care and register with the tax office. Ideally, a digital nomad is looking to work remotely for a matter of months, maybe a year, and at a significantly lower cost of living. Best Places for Digital Nomads
We've broken down the countries that will save you the most in cost of living while still offering you a desirable quality of life. 1. PortugalBest All-Around ExperienceCity to consider: Lisbon Like most countries, Portugal has a digital nomad visa that is desirable but requires a few steps to have in hand. The lead applicant will need to have some form of passive income that equates to roughly $9,000 a year, according to Atlys. Applicants also have to show proof of accommodation, have health insurance and open a Portuguese bank account. The good news is that the cost of living in Portugal is a lot lower than that of the United States. Blogger Joanna Horanin estimates that a one-bedroom apartment costs around $900 monthly and utilities are $100 a month. A meal for a mid-range restaurant is about $16 per person while an Uber ride from the outskirts to the city center is $7.50, Horanin said. She puts her total monthly calculation — for rent, food and fun — at around $1,400 a month. Given that the average monthly cost of living for a person in the United States is around $3,200, that's a big savings. 2. ColombiaBest Luxury Living on the CheapCity to consider: Medellin In Colombia, the process of applying for a freelancer visa is largely a matter of paperwork. Aside from your resume and passport photos, you must show your last six months of bank statements that attest that you're earning at least $2,350 every month. In what is a harder feat, you will also need to secure references from employers in Colombia who say they will work with you. The visa itself costs about $282. Once you've done that, you'll find the cost of living in Colombia highly desirable. Most foreigners who live in Colombia live on between $1,000 to $2,500 a month, according to Cheapest Destinations Blog. Depending on where you live, rent can be half the cost of what it might be in the United States. In 2019, the average cost for a furnished apartment in Medellin's ritziest neighborhood was $800 to $1,100, based on numbers cited by How to Expat. By contrast, the average monthly rent for a one-bedroom apartment in New York City's Upper East Side is around $4,000, according to Zumper. 3. ThailandBest Money StretcherCity to consider: Chiang Mai So Thailand's digital nomad visa is not exactly a digital nomad visa — it's actually called an elite visa. The best part: It's incredibly non-restrictive. The visa can last for as much as five to 20 years, according to Expat Den. There are some restrictions. You can't work for a company in Thailand and you'll have to shell out some money to get the visa. If your cost-benefit analysis still puts the answer at yes, then a low cost of living beckons. The average cost of living in Thailand is 40% lower than it is in the United States, according to SmartAsset. Budget at least $1,500 per month to live in Thailand — $2,000 allows for a comfortable lifestyle. To really drive the point home, a one-bedroom apartment in Bangkok costs about $562 per month in rent versus roughly $1,600 for a one-bedroom apartment in Atlanta. Bought your ticket yet?  4. IndonesiaBest Expat ParadiseCity to consider: Denpasar in Bali If you've read Elizabeth Gilbert's "Eat, Pray, Love," then you know that Bali in Indonesia is a veritable expat paradise, full of people from all over the world. The country is in the process of creating a digital nomad visa that would be valid for five years and wouldn't impose taxes on income earned overseas, according to Fortune. The current reality is a bit less desirable — hopeful residents can either stay for 60 days as a tourist, try to get a temporary six-month work permit or become a local tax resident after more than six months, taxed at the same rate an Indonesian would be. For those who do choose to stay, the cost of living is immensely lower than that of living in one of the United States' most expensive and desirable cities, New York. Roughly $2,500 a month in Bali will offer the same standard of life as $8,700 in New York, according to the site Numbeo. To rent a one-bedroom in the city center will cost you about $540 a month in Bali. A three-course meal for two people at a mid-range restaurant might cost about $24 in Bali versus at least $100 in New York. 5. Sri LankaBest Cheap Apartment HousingCity to consider: Colombo Digital nomad visas can be a valuable tool for countries that want to make additional income off of non-citizens. In Sri Lanka, the digital nomad visa lasts for 12 months and can be renewed, according to a Harvard Business Review analysis. The visa application process costs as much as $500, and the country does impose a minimum income on applicants. The income you make, however, is not subject to Sri Lankan income tax. When comparing Colombo, Sri Lanka, one of the country's capitals, with the cost of living in a smaller U.S. city, like Tampa, the numbers fare well. A one-bedroom apartment in the city center might cost as little as $345 in Colombo versus more than $2,000 in Tampa, Florida, according to Numbeo. Utilities for an almost 1,000-sq.-ft. apartment could run as little as $22 in Colombo versus almost $170 in Tampa. Groceries, on the other hand, can be comparable, depending on the product. One-gallon of milk, for example, is $3.75 versus $4.08 in Colombo and Tampa, respectively. But one pound of cheese is $6.18 in Tampa versus $2.66 in Colombo. The overall savings are clear. 6. RomaniaBest Income Tax BreakCity to consider: Bucharest Much like Sri Lanka's program, Romania's digital nomad visa is good for 12 months and can be renewed. The main difference is that the fee is much less prohibitive at $126, according to the Harvard Business Review. The country does impose an income minimum and requires the applicant to purchase health insurance, but your income is not subject to Romania's income tax. The program was only recently approved, so it is in its early stages. Living in Romania is cheaper than living in the United States, though the cost of living difference is at a lower degree than other countries. Rent prices in Bucharest, Romania's capital, are roughly 60% lower than those in St. Louis, Missouri. A one-bedroom apartment in Bucharest runs about $500 in the city center versus almost $1,200 in St. Louis. Salaries are also much lower. The average person in Bucharest makes less than $1,000 a month after tax while the average person in St. Louis makes almost $3,500 after tax monthly. Certain items, like a fitness membership, Levi jeans or eggs, can actually be more expensive in Bucharest. But in general, across consumer prices, rent, restaurant and groceries, Bucharest's cost of living is lower than that of St. Louis and thus other comparable U.S. cities. 7. MalaysiaBest Cosmopolitan LifestyleCity to consider: Kuala Lumpur If you want to live in Malaysia, you have a choices on how best to work remotely from this Southeast Asian country. You can easily stay as a tourist for 30 or 90 days. But if you want to spend some real time here, go for the Foreign Knowledge Entrepreneur, which applies to someone who has an idea for a business. This is the best fit for someone who already has a business plan or seed funding. Once you secure the visa, you'll likely find the cost of living to your satisfaction. A three-bedroom apartment in the city center of Kuala Lumpur, Malaysia's cosmopolitan capital, is around $850 a month, according to Numbeo. A three-course meal for two people at a mid-range restaurant might cost as little as $18. Better yet, a pint of domestic beer is only $3.40. If you want a slower pace, Georgetown on the island of Penang is known for its street food and vibrant art scene.  8. MexicoBest Ease of LivingCity to consider: Merida With stunning weather, delectable food, vibrant culture and close proximity to the United States, Mexico is a perfect place to get away from it all and still get some work done. Mexico has a digital nomad visa that allows for a one-year stay with opportunity for renewal and a small fee — $45. Wages earned are subject to income tax, and there is a minimum income required. Luckily, some of that pain will burn off when you realize how much you're saving in cost of living. Rent prices in Mexico City are almost 80% lower than in New York. A meal at an inexpensive restaurant could cost as little as $8. A 12-oz Coke bottle is less than $1. Better yet, the rent for a one-bedroom apartment in the city center is around $715. Merida in the northern Yucatan and on the Gulf of Mexico is another city to consider. It's much smaller than Mexico City though the cost is about the same. 9. SpainBest Classic Euro ExperienceCity to consider: Madrid For someone who wants the traditional "living abroad in Europe" experience, then Spain's digital nomad visa is the way to go. The new visa works for people who are employed by non-Spanish companies or earn 80% or more of their income from non-Spanish companies, according to Spain Visa. The is for a year, and successful applicants must still register their stay in the country within one month of arriving. While you still get more bang for your buck in Spain, it's probably the lowest value on this list. Rents in Madrid are about 56% lower than in a city like Washington, D.C. — a one-bedroom in the city center might cost around $1,050 in Madrid versus more than $2,000 in D.C. A meal for two people at a mid-range restaurant is more comparable — around $63 in Madrid versus $75 in D.C. But living in Spain likely won't be just about the cost of living. It's an experience unto itself. 10. CuracaoBest for Tropical LivingCity to consider: Willemstad Maybe you've stopped in this Dutch port city on a Southern Caribbean cruise and thought it would be nice to spend more time wandering through the markets amid the pastel-colored colonial architecture. One big bonus is that Curacao is just outside of the hurricane belt that can put residents of many Caribbean islands on edge for about six months a year. Curacao welcomes digital nomads with the proper paperwork for up to six-months. A studio apartment in Willemstad's city center goes for about $500 a month and you can apply some of that apartment savings to an Internet package. That $60 or so a month will ensure you can attend any Zoom meetings and get other work done. Digital nomads don't pay an in-country income tax. Curacao is on Atlantic Standard Time which is the same as the U.S. East Coast in the summer and one hour ahead in winter. How Do I Get a Digital Nomad Visa?The process to get a digital nomad visa differs by country, but it does have certain things in common. To get the digital nomad visa, you'll generally have to fill out an application explaining why you want the visa, what you do for a living and providing any relevant documents. The permit to allow you to live and work remotely in another country may also be called by another name. You may have to make an appointment with the country's regional consulate office or an embassy in the U.S. At your appointment, you'll have to have your documents in order and submit them to the consulate. If all goes well, you should receive your passport shortly thereafter with a visa inside. Writer Elizabeth Djinis is a contributor to The Penny Hoarder, often writing about selling goods online through social platforms. Her work has appeared in Teen Vogue, Smithsonian Magazine and the Tampa Bay Times. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||
| 12 Ways to Save Money on International Travel Posted: 04 Jul 2022 05:00 AM PDT After two years of staying relatively close to home, more travelers are looking to get out and see the world in 2022. A recent survey by IMG Travel revealed that 96% of participants planned to travel internationally in 2022 — 11% more than pre-pandemic levels. More than half said they felt more comfortable traveling internationally this year, according to the survey. If you too are ready to hop on a plane or a boat, how can you make sure you're getting the most for your money — especially with current gas prices and inflation? We've got ideas to help you save money and still see the world without piling on debt. 1. Travel During the Off SeasonThe offseason is when fewer travelers flock to a particular region. It's all about when you travel and where you're going. For Europe, the offseason is November through March. In Southeast Asia, it's June through October. North America's offseason varies by the region. During the offseason, you'll save money with cheaper international flights, more budget-friendly lodging options and smaller crowds. Pro Tip Many people are planning revenge travel or vacation vengeance trips even as inflation rises. Here's how to scratch your travel itch without draining your bank account. 2. Choose a Good Travel Credit CardMake sure you're using a travel credit card that doesn't charge foreign transaction fees. The going rate on most credit cards is 3%, meaning you'll be charged $30 for every $1,000 you spend overseas. Some credit cards have rewards programs to earn free or discounted travel and include travel insurance, which can cover lost luggage and expenses (such as meals, lodging, rental cars) that come with delayed or canceled travel.  3. Avoid Airport ParkingDaily parking at larger metropolitan airports — and smaller airports too — can be really costly. In just 10 days, you can easily spend more than $100. Instead of driving yourself, save money by catching a ride with a friend, taking public transportation or using a rideshare service. Even if you don't live close to the airport, paying for a ride with Uber or Lyft may still be cheaper than parking nearby. To be sure, Uber and Lyft both provide ride estimate calculators you can use, then compare the estimate to your parking costs. 4. Research All Your Lodging OptionsSure, look at hotels in the area but don't rule out other options like Airbnb. You could very well find that it's less expensive to stay in a short-term rental — either the whole place or just a room — than a hotel room or suite. For example, the average cost of an Airbnb in Italy is $108 per night. A three-star hotel in Italy will cost at least that much, and most likely a lot more. Choosing an Airbnb will not only give you more space, but you'll also have access to a kitchen. You'll be able to buy groceries and make your own meals, avoid spending extra at restaurants and enjoy cooking with what you find at local markets. 5. Be Smart When Converting CurrencyYes, look into a credit card that doesn't charge foreign transaction fees, but also make sure you don't get dinged by currency exchange fees. Check with your bank about purchasing foreign currency before you leave. For example, Wells Fargo offers 70 currencies available for use in more than 100 countries — meaning you can put foreign cash in your pocket before you even leave home. Avoiding exchange kiosks at airports can help you save too. Not only can it be a hassle to find local cash when you land, exchange kiosks charge services fees and exchange rates much higher than banks. Pro Tip Did you know that many banks and credit unions buy back foreign currency? So you can scramble to spend your last few euros if you want but no pressure. 6. Check on Your Phone PlanWhat's in your hand and could cost you a pretty penny in extra fees when you travel internationally? Your phone. If you just hop on the plane, travel to another country and start using your phone, you could rack up hundreds or even thousands of dollars in roaming fees. Check with your provider before you leave instead. You may be able to temporarily switch to an international plan or buy a travel pass to dodge roaming fees. With AT&T, you can use your phone like you normally would for $10 per day while overseas. Similarly, Verizon offers a monthly plan that costs $100 and a daily plan for $10. Another option is to buy a local SIM card, which can be cheaper for longer trips than a daily travel pass. There are pros and cons to switching SIM cards, so do your research before you leave. 7. Consider Travel InsuranceIf you don't have travel insurance through a credit card, you should consider purchasing coverage. Premiums may cost up to 10% of your total trip when you buy a travel insurance policy from a provider. Travel insurance may seem like an unnecessary, additional expense but that policy protects your investment, just like property insurance. You've spent thousands of dollars on your trip. If something happens, you won't recoup any of that money — and may spend even more in an emergency — without travel insurance. Travel insurance typically covers trip cancellation, trip interruption, emergency medical care (including transportation), delayed and damaged baggage, and travel delays.  8. Pack LightIt goes without saying, but we'll say it anyway: Pack light and stick to carry-on bags as much as possible! Checked baggage fees can run into the hundreds, especially if you have several flights. Think about versatility as you pack, wear bulky items and be thoughtful about your toiletries to get everything you need into a smaller bag. Also, don't waste your personal item on a small purse or bag. Take a backpack or a larger bag if you can. If you plan to pick up souvenirs, remember to leave room in your luggage. Or plan ahead and pack a pair of cheap shoes —like water shoes — that you'll use but don't mind leaving behind in exchange for a little extra space. 9. Get Creative with LaundryYou can pack even lighter when you're intentional about laundry — because who wants to spend time looking for, then sitting in a laundromat in Paris? You may have access to a washer if you rent a house but you can also do laundry yourself in a hotel bathtub or sink. It's free, though not the easiest solution. If you're a frequent traveler or tend to rough it, investing in a wash bag may make sense. The portable, 5.3-ounce Scrubba wash bag folds down tight and doesn't require electricity, yet has a flexible, internal washboard to help you wash your clothes anywhere — hotel, tent, RV. For a nine-day trip, you might only need a few outfits if you're able to quickly and easily take care of laundry. 10. Take the Red Eye on a WeekdayLate flights are almost always the cheapest flights, especially compared to international flights that leave in the morning on weekends. Maybe not the most comfortable option, a red eye flight on a weekday helps you save on airfare and possibly lodging if the flight covers one night of your trip. Head to the airport early, grab dinner and a drink and relax before your long trip. The long flight will allow you to rest onboard and get mentally ready for the vacation ahead or your return to home. Pro Tip Keep your travel budget focused on what you actually want to spend money on and spend less at the airport. 11. Be Intentional About What (and Where) You EatYou've done your research on everything else, it only makes sense to do the same about your dining choices. Do you want to eat out for every meal or once a day? Are there certain restaurants or foods that you want to try? You can save money on food when you travel by eating out for lunch instead of dinner, bringing or picking up snacks from a store and carrying a water bottle that you can refill. Research your dining options ahead of time so you can budget and take advantage of discounts where you can, like happy hour prices. 12. Save Early and Often for Your TripLong before you depart, set a target amount for your trip and start a sinking fund to begin saving money. A sinking fund is simply a way to budget and save for big expenses such as a new roof, a car or a trip overseas. Let's say you've set a $3,000 budget on a trip you're taking in two years. If you set aside $125 per month in your sinking fund, you'll have the trip covered in 24 months. Just take how much you want to save and divide it by how long you want to save, i.e. $3,000 x 24. Even without a specific trip in mind, you can set up a revolving sinking fund to save for travel. Whether you save the full amount or not, you'll have a good financial base for your next trip abroad. Robert Bruce is a senior writer for The Penny Hoarder. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||
| Dear Penny: I'm 75 With $235K of Student Loans. Should I Default? Posted: 03 Jul 2022 07:00 AM PDT Dear Penny, I am 75, and my husband is 83. I have been paying on my student loans for 16 years and the balance has gone from $200,000 to $235,000. I am on an income-driven repayment plan and work primarily to pay my loans. My IDR payment is $1,056 as of today. I also draw on Social Security. In the event that I default, the penalty is to attach a 15% withdrawal from my Social Security payments, it seems more practical to default and pay only $215 per month versus more than $1,000-plus. Your thoughts? -J. Dear J., The reality is that you're never going to be rid of these loans. You probably don't want to work until the day you die. And even if you did, it's still highly unlikely that you'd climb out of student debt. But I don't think you need to default, which would destroy your credit on top of putting part of your Social Security at risk. The better solution is to get your student loan payments as low as possible and then make the bare minimum payment. That means you'll need to be OK with seeing the balance creep higher and higher each month. Federal student loans are forgiven upon the death of the borrower, so you wouldn't need to worry about your husband or anyone else being on the hook for this debt when you die.
Let me clarify for readers that the advice I'm about to give applies to federal loans only — and since you're on an income-driven repayment plan, your loans are clearly federal. Unfortunately, those with private loans have far fewer options for relief. Anyone reading who's struggling with private student loans should contact their servicer to see what options are available. In your situation, I wouldn't be making loan payments at all as long as federal student loan forbearance is in effect. Taking advantage of 0% interest rates to knock out as much principal as possible will make sense for some borrowers who plan to pay off their loans in full, especially if they have no high-interest debt. But since your goal should be to make your payments as low as possible, obviously, you'll want to pay $0 a month for as long as possible. As long as forbearance is in effect, all those $0 payments still count as on-time payments for income-driven repayment plans. You can contact your servicer to request a refund for any payments you've made since March 2020. If any of your student debt consists of private loans, use the refund from your federal loans to knock out as much of the balance as possible. That's a short-term fix, of course. As of this writing, forbearance was scheduled to end Aug. 31, 2022. I wouldn't count on this deadline being extended again. But given that it's already been extended six times, I certainly wouldn't be surprised if borrowers get another reprieve, either. Long term, the easiest solution is to stop working. You're on an income-driven repayment plan, which means that your payments are capped at 10% to 20% of your discretionary income, depending on what type of plan you're enrolled in. It sounds like you earn a pretty decent amount if your payments are $1,056, and I'm guessing you're paying extra each month. If you retired, your discretionary income would no doubt drop substantially, which would lower your payments as well, since they're based on income and family size instead of the loan balance. A family of two living in the lower 48 states with an adjusted gross income of $40,000 could expect monthly payments between $104 and $362. The same family with $100,000 of income would pay anywhere from $604 to $1,362. But retirees who live primarily off of Social Security sometimes wind up with $0 payments. You'll need to continue applying for recertification each year to keep your loan in good standing. Under income-driven repayment plans, your remaining student loan balance is typically forgiven after 20 years, though for some plans, it's only forgiven after 25. You've been making payments for 16 years already, so it's possible that forgiveness is in sight. Historically, forgiven loan balances have been taxable as ordinary income, but under the American Rescue Plan that passed in 2021 for COVID-19 relief, balances that are forgiven through 2025 aren't taxable. Some observers think it's possible Congress will eventually make this break permanent. If you have health conditions that make working difficult, you may want to discuss with your doctor whether you meet the criteria for a Total and Permanent Disability (TPD) discharge. To qualify, you'd need to be permanently unable to work. Many older borrowers meet the criteria but aren't aware that they qualify. This is one of the rare instances that you'd qualify for full forgiveness if you meet the requirements. The likelier scenario, though, is that you'll need to treat these loans the same way you'd handle a chronic health condition. The disease may not have a cure, but you can make the symptoms manageable. Trying to climb out of debt? Here are 50 ways to bring in some extra money this month. Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now | ||||||||||||||||||||||||
| 6 Ways to Fight Shrinkflation and Get More for Your Dollar Posted: 02 Jul 2022 07:00 AM PDT If you've had a sneaking suspicion that things you buy are getting smaller, you may be right.
The size of the product has dropped, but the prices stayed the same — and even increased in some cases. What's going on at our grocery stores? Those are just a few of many, many examples of "shrinkflation" — a term coined to describe when companies reduce the size of a product but keep the price the same. Though shrinkflation is more prevalent now with growing inflation, it's actually been going on for years, according to ConsumerWorld.org founder, Edgar Dworsky who's been following shrinkflation since 1995. Shrinkflation can be so subtle that you don't notice it. So how can you spot shrinkflation at the store and make sure you're getting the most out of what you buy? 6 Ways to Beat ShrinkflationBeating shrinkflation starts by simply being a savvy shopper. You'll need to pay more attention while shopping and be willing to change up your habits. Here are some ways to do just that: 1. Buy the Store BrandDon't hate on store brands. They're cheaper, often just as good and sometimes even better than name brands. When it comes to shrinkflation, store brands also have another advantage: They're usually the last brands to reduce size. Shrinkflation experts like Dworsky say to look to store brands, or even other name brands, if you notice your favorite brand has started to shrink its product's size. 2. Compare the Price Per OunceThis is called unit pricing. You simply divide the total price by the quantity to determine the unit price. For example, if a carton of soup is 12 ounces and costs $2.40, the unit price on the soup would be 20 cents per ounce. This hack isn't just for groceries though. Look at the price per ounce or per item for toothpaste, baby wipes, razor blades, etc. Most stores include the unit price next to the total price on the tagged shelves below the items. Unit pricing is required to be disclosed in many states, while many retailers still choose to disclose it even when it isn't mandatory. 3. Buy in BulkBuying in bulk from retailers like Costco and Sam's Club not only helps you save money, but it will also help you reduce the amount of shrinkflation you experience. In many cases, goods bought in bulk are a better deal because they typically have a lower price per unit. Let's say a single apple costs 75 cents at the grocery store, and a three-pound bag at Costco containing six apples costs $3. You'll save 25 cents per apple by purchasing in bulk. This is especially true with dried goods, which last much longer. The more of these types of products you already have on hand, the less you'll need to buy from the grocery store — potentially avoiding the back-and-forth waves of shrinkflation. One great online alternative to buy in bulk is Amazon's Subscribe & Save program. 4. Consider Other StoresInflation has even affected discount stores like the Dollar Tree, Family Dollar and Dollar General. Not everything costs a dollar anymore, as some items have been raised to $1.25 or $1.50. That said, you can still find a lot of good products, including pantry essentials, for an amazingly low price. From pasta and eggs to cereal, chips and snacks — all for a dollar-ish. There are deals to be found at other places too. Drugstore rewards programs and plentiful coupons can drop the price of your shampoo or granola bars to little or nothing. 5. Shop OnlineShopping online is more of a timesaver when it comes to shrinkflation than anything else. You can compare prices and unit pricing quickly without wandering the grocery store and struggling to read the fine print on a price tag. You can also quickly compare prices between stores — or even just other sellers — and brands to see where your dollar will go further. Then, even if you choose to visit the store in person, you should have a good idea about how it handles shrinkflation. 6. Take Advantage of Discount AppsStores like Target and Walmart have apps with an extensive collection of digital coupons to help you save. Make a shopping list, and possibly a meal plan, then browse through these apps to find which coupons are available for the goods you need. Other apps like Checkout51 and IBotta help you get cash back rewards and offer weekly discounts at many grocery stores. Robert Bruce is a senior writer for The Penny Hoarder. This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017. This posting includes an audio/video/photo media file: Download Now |
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