Monthly Archives: March 2017

Is Amazon Prime’s $99 Annual Fee Worth it? It Depends (AMZN)

With more than 64 million people paying $99 a year for Prime membership with Amazon.com Inc.

Amazon.com Inc AMZN 967.99 + 1.16% ), this would appear to be a good deal. However, for the other 50 million-plus Amazon shoppers asking the question “Is Amazon Prime worth it?” the answer depends on how much they think they can benefit from the long list of Prime perks.

The Value of Free Shipping

Initially, the major draw for Prime membership was the free shipping, which was a good enough reason for many Amazon shoppers who joined. Considering that the average amount spent by Prime shoppers is $1,200 versus about $500 for nonmembers, the savings on shipping costs may be more than enough to justify the membership fee. The big difference could be attributed to the free shipping Amazon members get on most purchases, which others do not. However, if nonmembers buy an average of one item a month from Amazon, paying an average of $12 for two-day shipping, Prime membership would be worth the cost. Even for an average shipping cost of $6 for five-day shipping, the cost of membership may be worth it if at least 16 items are purchased during the year. For more patient shoppers who don’t think they will make that many purchases, Amazon does offer free Super Saver shipping on many items when the total purchase is at least $35 with a five-to-eight-day delivery.

When You Need It Now

For diehard shoppers who can’t wait for free two-day shipping, Amazon Prime has added additional shipping perks, including free same-day delivery in some areas on eligible items. Amazon also offers free one-hour delivery on some items in some areas through Amazon Prime Now. Members can always upgrade to one-day shipping for as little as $2.99 per item.

The Rest of Amazon Prime’s Benefits

With the likes of Wal-Mart Stores Inc. (NYSE: WMT

Wal-Mart Stores Inc WMT 80.40 – 0.32%) competing for online shoppers’ business, Amazon has had to continuously add new benefits to sweeten the deal for Prime members, and it seems to be working. How much value Amazon actually adds to the membership depends on the lifestyle habits and preferences of the prospective member. For people who buy music and movies online, those who like to get advanced notice on Amazon deals, those who can benefit from unlimited photo storage and those who enjoy getting free books, there may be added value in addition to the free shipping. However, many of Amazon Prime’s benefits come with some limitations, so a nonmember would have to carefully consider each along with the alternatives.

Free movie and TV streaming: with its Instant Video service, Amazon is aggressively pursuing the streaming video market. Like Netflix Inc. (NASDAQ: NFLX

Netflix Inc NFLX 171.40 + 1.34% ), Amazon offers its own lineup of original content, including television shows and movies. The major benefit Amazon offers is the ability to download movies and television shows for viewing offline. Amazon also added Showtime, Starz and other streaming services to its menu, though there could be additional monthly charges for individual subscription to these services. In comparison, Netflix costs around $95 a year for its own content and add-on services.

Free music streaming: members also have access to Prime Music, which offers advertisement-free access to more than a million songs. The song library may not be nearly as big as other popular music streaming services, but nonetheless, this service is included in the membership.

Free books: prime members have access to Amazon’s Lending Library, which allows them to check out one book per month. With more than 500,000 titles, there should be enough to satisfy most people’s tastes. There is also Amazon’s Kindle First, which offers members the opportunity to choose from four new books for a free download each month.

Free photo storage: Amazon Prime Photo offers members free unlimited photo storage with automatic uploading from a smartphone or camera.

Free Trial and Other Ways to Pay

Amazon offers a free 30-day Prime membership trial, which may be enough time to try some of the services. If not, Amazon now allows for monthly payments of $10.99, but that adds $32 to the cost. However, members can cancel at any time. Amazon offers college students a six-month free trial, after which they pay just $49 annually.

For people who shop regularly on Amazon, the free shipping is still the main draw for Prime membership. However, the additional perks add enough value for just about anyone to feel they are getting a good deal.

 

Tips for Your Household Expenses

Becoming a millionaire may not be your ultimate goal. But everyone wants to enjoy financial freedom and learning where we can easily save money will help us on that journey. So whether you want to be the millionaire next door or just be able to have financial peace, these 10 tips will help you achieve your financial goals.

Clarity Money

Clarity Money is an app that works great if you pay all your bills with your bank account. It simply ties into your account and shows any monthly payments that you have. This allows you to see if there are any services that are no longer bringing you value or if you are not using anymore. (For related reading, see: 7 Money Saving Tips for Eating Out.)

Cut the Cord

For those that have not cut cable out, it may be time. Cable can add at least $30 per month to your monthly expenses. This could be lunch, gas or even money invested for your future. With services like Sling, Netflix, Hulu and Amazon Prime Video it is making less sense to have cable anymore.

Call Your Internet Provider

If you have already cut the cord, you should still negotiate a lower rate for your internet. Every time my wife or I have called our internet provider to “switch” providers they have offered us a lower payment in the end. Recently my wife called and we actually received a lower payment than we were paying and with a faster speed than we had. Remember it costs more to attain new customers than to retain a customer, you have the leverage.

Bulk Purchase Household Goods

Everyday items should be bought in bulk. Toilet paper, paper towels, napkins, detergent (dishwasher and washing machine), toothpaste etc. It is cheaper for companies to package items in bulk which makes it cheaper for us as consumers. Take advantage of this.

Use Your Dishwasher

Dishwashers actually do save you time and money. They use the same amount of water every time you wash your dishes compared to washing dishes throughout the day. You don’t realize how much water and money is going down the drain. (For related reading, see: Alternatives to Cable TV.)

Home Energy Audit

Many energy providers will conduct free energy audits to see if your house is running as efficiently as it could. Even if your energy provider doesn’t provide this free service you can conduct one yourself with this guide.

 

The Two Cheapest Days to Fly in August

Why Are These Dates a Big Deal?

The big deal is what these August dates represent: the start of the cheaper fall season. The airlines know that by these particular dates, kids are mostly back in school so demand slacks off significantly. Airlines still have to fill those empty seats, though, so they lower their ticket prices. Last month, for example, Southwest advertised a big sale for domestic travel, good for flights starting Aug. 22. Note: These cheap summer dates vary slightly year-by-year, but always occur in late August. In fact, this year’s Aug. 22 date may vary a day or so for some U.S. travelers depending on the departure city and route.

How Much Can You Save?

This, too, can vary. Generally speaking, travelers save anywhere from 11% to 20% off the peak summer airfares. The amount within that range will depend in part on where you take off, where you go, and whether you fly non-stop or on connecting flights. In almost every case, though, you will save something. Here are some examples of roundtrip fares found this week on FareCompare, my airfare comparison search site:

Los Angeles – New York, nonstop

  • Aug. 19-21 – $483
  • Aug. 26-28 – $403

Seattle – Dallas, one-stop

  • Aug. 19-21 – $381
  • Aug. 26-28 – $292

Boston – Dublin

  • Aug. 19-26 – $750. one-stop; $1,128, nonstop
  • Aug. 26-Sept. 2 – $590, one-stop; $979, nonstop

Note: The earlier Europe price of $750 may actually skew a bit high because it was found just a couple of weeks in advance of the travel date. Shoppers generally find the best Europe prices when they book three to four weeks in advance. Still, these fares offer a pretty good idea of what can be saved – which leads us to the next step.

When Should You Shop for These Cheaper Dates?

If you plan to fly on or shortly after Aug. 21/22, the time to shop is now. Again, 21 to 30 days in advance is ideal for booking flights on larger legacy carriers (including American, Delta, United). You have a little more leeway on the smaller, low cost carriers like Spirit and Frontier, which can offer deals one to two weeks before departure.

Are There Other Good Dates to Fly?

Flying throughout the fall is generally a bargain, especially if you stick to traveling on the traditionally cheaper days (Tuesday, Wednesday, Saturday; weekdays for international flights).

Cheapest fall travel period: Early November. As long as you avoid flying the days immediately surrounding Thanksgiving, you will find some genuine deals, especially in the first couple of weeks in November. Then, once the Turkey Day travelers come home you’ll see more good deals through mid-December.

Then What?

Suggestion: Make plans now for a winter vacation in January. If you can take off after the first week in January, the savings can be unreal (and this is true for a lot of international trips like Europe). Some Caribbean destinations might be pricey because that’s when people want to go.

If your first-choice destinations are too expensive, check out prices to Florida beaches like Miami or Ft. Lauderdale instead and you may find your bargain paradise.

How to Create a Budget You Can Actually Stick With

Do you feel like your finances are out of control? Are you charging too much on credit cards each month? Do you feel like you are always strapped for cash? Do you sometimes wonder where you are going to come up with enough money to pay your bills? If any of these describe your financial situation, putting a budget in place may help you. Here are five easy steps to take to start the process of creating a family budget that you can stick with.

The best way to start developing a budget is to begin tracking your current spending. For the next month, track every cash and credit card expenditure – some people prefer paper tracking, but there are many online and app-based trackers available to help you. This will give you the most accurate picture of where your money is currently going and will be very helpful later on in deciding what spending habits you may be able to reduce or cut out altogether. (For more, see: 6 Budget Must-Haves.)

Get an Accurate Picture of Your Income and Expenses

This is truly the first step in developing a budget. You need to know how much money you have coming in each month and how much you have going out to pay bills. Write it all down, track it with an app, or use a spreadsheet, but you need to get a clear picture of your income and expenses. Make sure you also include quarterly or semi-annual expenses in your budget as well, for example real estate taxes, life insurance, and homeowner’s or renter’s insurance.

Figure Out Your Disposable Income

Your disposable income is the money that is left over each month after all of your bills have been paid. This is the money that can be spent on discretionary items. To figure out your disposable income, add up all of your income, add up all of your expenses, finally, subtract the expense total from the income total.

Total Monthly Income – Total Monthly Expenses = Disposable Income

Disposable income can be used for the items that are wants and not needs. If discretionary spending is too high, this is the best place to start cutting items from the budget.

Decide What Can Be Cut from Your Budget

Besides discretionary spending, such as eating out, shopping for unnecessary clothing, shoes, or toys, there may be some other line items on your budget that can be reduced. For instance, can you save money by choosing a smaller cable or satellite package for television? Is there a cheaper internet service provider, or a way to save on your home phone? Many times, you are even able to call these types of service providers and ask for current promotions that could save you money as well. (For more, see: The Beauty Of Budgeting.)

Include Savings as a Part of Your Budget

While savings are technically a discretionary part of your budget, you really should look at it the same as you would any other expense each month. Why look at it as an expense? Because it should be accounted into your budget every month.

It should be just as important to put money into your IRA or 401(k) as it is to pay your rent or mortgage. Setting money aside for retirement each month can be made easier if you have the money come directly out of your paycheck from your employer and go to your 401(k). If you are self-employed, you may want to set up a separate savings account that a set amount of money goes to each month to be invested. If savings are set aside even before you get your paycheck, it will be easier to keep this a priority.

Make Sure Your Budget Is Realistic

Don’t set your budget and yourself up for failure. Trying to trim your budget is good, but don’t try to trim it to the point that you won’t be able to live within that budget. For instance, if you don’t allow yourself any spending cash during the month for eating out, you may find it too restrictive. So instead of cutting this out entirely, budget it in – but at a lower level than before. So, if you used to eat out every day during your lunch hour, try cutting that down to only eating out once per week – it will save money, but you won’t feel so deprived.