Can Kindle Unlimited, Amazon’s new e-book service, save me money? My math

Source: d-221 books via Flickr under a Creative Commons license

Oh hi.

If you’re like me, you are a voracious reader.

Whether food labels, street signs, or even this blog, it seems like I’ve always got my nose buried in something!

Amazon, already famous for their text-heavy website, decided to give us something even better this month when they announced Amazon Kindle Unlimited — a program that lets $10-a-month subscribers read as many e-books as they want.

What’s more is that you can read it without actually owning a Kindle too, because they have free apps for pretty much every mobile OS out there (Shockingly, even Windows RT), meaning that if you’ve got a smart phone, some other e-reader like a Nook, or a laptop or desktop, you can  take advantage of this as well.

So great; some new product is out there. Big deal. The question that really matters to me is can this thing save me money?

A little bit of Kindle math

The question sounds pretty simple on the surface. Kindle e-books cost between $8 and $11 each, so if you read more than one book a month — or more than 12 a year — then you should be better off.

But there are a couple extras in there.

For many books, you would also get the option to switch back and forth between reading the e-book and listening to an audiobook versions without losing your place. This would actually be pretty neat for people like me who like to switch between those two media when I go from the comfort of my sofa to a hectic subway journey with three transfers (or driving a car).

The thing I might appreciate most is not feeling guilty about giving up on books that I would have regretted buying. (This raises the question of whether it’s good practice to only read books that start out well…).

But having Amazon Prime already sorta gives you a bit of free reading

One of the less discussed benefits that comes with Amazon Prime is that you get access to Kindle First, which lets you read an editors’ choice new release or even not-yet-released book every month for free.

Anyhow, are you guys signing up? Has anyone already signed up who can report back on their thoughts?

Reader question: How do I apply for an income-based repayment plan for my student loans?

Source: David Goehring via Flickr under a Creative Commons license

A happy Saturday to you and welcome to Debt BLAG!

Last weekend a reader asked about how to apply for one of the three income-based repayment options the Department of Education offers for repayment of federal student loans.

I’ve written multiple times on this blog about why I think it was a good idea financially for me to apply for an income-based repayment program, and I’ve been having a surprising number of chats recently with whether allowing borrowers to repay based on their income is good public policy or even morally OK, but I don’t think I’ve ever walked through the logistics of how to simply apply for it.

So I’ll do that today.

First, a note on vocabulary: I use “income-based repayment” as an English phrase meaning repayment based on income. “Income-Based Repayment” (Note the capital letters; henceforth IBR) is also one of three repayment plans administered by the Department of Education — as passed into law by Congress and signed by the President — that adjust minimum monthly payments proportional to a borrower’s income. The other two are Pay-As-You-Earn (PAYE) and Income-Contingent Repayment (ICR). I’ll try to keep this all as unambiguous as possible.

How to apply for an income-based repayment plan

The steps:

  1. First, sign into your account at
  2. Then, head to this page to apply for an income-based repayment plan. The same link works for IBR, ICR, and PAYE.
  3. Then, just fill out your information and walk through the different screens, including linking your application to your federal tax return. You’ll have to include additional paperwork if your current income is significantly different from what your tax returns show, but otherwise, it’s pretty simple
  4. There’s one step where it asks you to pick a repayment plan; decide the one you want and select that checkbox. You can also click a checkbox that will let your loan servicer pick the one with the lowest monthly payment.
  5. Finally, read the terms and conditions, review the information you entered, sign electronically, and click submit.

That’s about it. Don’t forget that you’ll need to resubmit this form every year, and you should resubmit it any time your income changes.

Good luck!


5 personal finance goals for your 30s — that I thought up after dominating a 5k

This past weekend, I won a 5k.

OK, that’s not even close to accurate; I won my age division of men in our 30s…among a very small field of runners. Here’s an Instagram picture of me with my trophy (posing with the 5k’s fastest woman in her 30s):

And, of course, the two fastest runners overall beat me by a good three minutes each. I believe the fastest man was in his early 20s and the fastest female appeared about 17.

Hearing their times reminded me of two things:

  1. Humility. Because those two winners could have changed and eaten a peanut butter sandwich by the time I had crossed the finish line.
  2. That people of different ages should have different goals. Because my heart would have jumped straight out of my chest if I ever managed to run that fast (probably not accurate)

Let’s transition to personal finance

Oh, but that’s how I treat my finances too.

I spent my 20s building up skills, making mistakes, learning lessons, having experiences, and doing all manner of things that my body is either no longer capable of or that just wouldn’t make sense for someone in his 30s.

For many of us, the 30s are a time of transition — where we finally start to get it, whatever “it” is. It’s also when more people start depending on us, whether at work, at home, or other places.

Here are the things I’m trying to bang out in my 30s:

1. Advance my career

I spent my 20s developing career skills in entry level work and in school, figuring out what I’m interested in, and what I’m good at. Now that I’m in my 30s, it’s time to apply those skills to increased responsibility, increased output, and increased pay.

And it’s just as important to keep on challenging myself, both to keep those skills fresh and to learn new ones.

Not to mention that I should continue networking, seeking mentorship, and doing all the things necessary to continue growing.

2. Get out and stay out of unsecured debt

I managed to pile on quite a bit of unsecured debt in my 20s.

Now that I’m in my 30s, making money, and building up an emergency fund, there’s really no good reason to get into more debt.

3. Invest for retirement

Here’s a scary thought: if you’re in your 30s, you’re probably closer to retirement than birth.

The good thing is that I’ve still get a good amount of time before I really have to retire. That means there’s plenty of time for the money I put away into a 401(K) or IRA to grow into something real nice, so it’s important to put as much away as possible.

4. Rainy day savings

Back in my 20s, I thought nothing of sleeping on a friend’s couch when times got tough.

That’s slightly less OK in my 30s. Building up an emergency fund will keep that from happening

5. Get health insurance

I never went without health insurance in my 20s, but probably might have had it not been provided by my job, meaning that a couple huge emergencies as I left my 20s could have been even more traumatic.

Ensuring that I have insurance and access to care in my 30s will help keep health problems from turning into a financial catastrophe.

You know what else is pretty good health insurance? Exercising and eating right. It’s a good idea to do that as well.

Don’t inflate your lifestyle

I think not inflating your lifestyle is a pretty good way to sum up all five of these personal finance goals for your 30s.

When you start making more money in your 30s, it could be easy to convince yourself into thinking you deserve to own all the toys you could only dream of in your 20s. Or even worse, you could convince yourself into thinking you deserve all the toys your friends are showing off on Facebook.

Focus on whatever it is that you decide your goals are and be happy living within your means.

40s you will definitely be grateful :)

Alright, these are my five. What goals am I missing for people in their 30s?


Should you ditch your to-do list for a tending list to maintain the things you care about?

Source: Alison Christine via Flickr under a Creative Commons license

It’s no secret that I love a good quantifiable goal. As I do every month, I’ve laid out some things I’d like to complete in July here:

And like many of you, I keep a to-do list of the things I’d like to accomplish in a given day or work week. It is very satisfying to knock out a task and the check off a box.


But if you’re like me, you might get frustrated when items keep re-appearing on your to-do lists, either because they’re difficult to finish in a week — or EVER! — or because they’re the sort of task that really doesn’t have a clear endpoint.

If you’re also like me, you might have already stopped putting these things on your to-do lists for just that reason.

Enter the tending list

For tasks that are ongoing, why not try out a “tending list” in favor of a to-do list?

Think about it like a garden; no one ever says, “Welp, I’m off to go finish my garden!”

Nope, you plant some seeds, pull a couple weeds, prune a few leaves, perhaps; but you’re never really “done” with it.

Now, think about some of the tasks in your life: maintaining your relationships or doing nice things for people. For personal finance, these could be keeping your resume up to date, making sure your tax documents are in order, or staying abreast of economic news.

Each of these might not fit on a to-do list, and yet, you might still want a gentle reminder to work at them from time to time.

A tending list, updated yearly or monthly, might make more sense for those things that you want to give a little bit of time to, perhaps every time you pass a list on your fridge or check the Notes app on your smart phone.

And you’d be surprised, if you devote 15 minutes to something on a tending list every day, why, that’s almost a couple hours a week, and a couple hours can definitely make a dent in making some progress on these never-ending tasks.

Anyhow, it’s an idea that I believe I’ll try out.

How about you? What would you put on your tending list?


Some hot, sweaty July 2014 goals, including selling off some stuff

How I'll treat my debt this month. Source: Imgur

How I’ll treat my debt this month. Source: Imgur

Good morning and a happy Friday to one and all. It is time for me to lay out some goals for the month of July.

You know what I like about goals? That even as I get older, they stay the same age. Actually, it would probably be more accurate to say that as I get older, my goals grow with me.

And get older I did, this past month. Having just had a birthday, of course I can’t help but reflect a bit on what’s really important. Here’s one thought that’s been bouncing around my head quite a bit: I’ve noticed that when a lot of people talk frugality, they usually talk about how or what you should buy. Maybe sometimes, frugality should be about not buying things at all.

It’s an incomplete idea that I need to mediate on a bit, but let’s use that as a starting point for some goals.

Goal #1: Sell off some stuff

Man, there is a good amount of stuff just always around here. Maybe things would be simpler — and I’d have a bit more cash — if I just managed to sell off some of this stuff. $150 worth; let’s say that much.

Goal #2: Pay off 1% of my student loans

Man, a lot of the time, it feels like the one life goal I have is paying off this student loan debt. Sure, knocking my student loan debt down by 1% may not seem like much, but considering that I’ve got six figures worth and that they’re always accruing interest, knocking off 1% of the principal feels pretty challenging.

Goal #3: Lock down an investment plan

It’s been a while since I’ve audited my investment plan. I’ve been sending a lot of money that way over the last several months, and it only makes sense that I should make sure it’s going somewhere good.

Goal #4: Keep adding to my emergency fund by doing the 52-week savings challenge

I’m doing the 52-week savings challenge!

For the last 26 weeks, I’ve been adding an increasing amount to my savings account every Wednesday. It started with $1, then $2. In the last week of June, I deposited $26!

My goal for July is to keep on just keeping on, by putting $27, $28, $29, $30, and $31 into my savings account. That will bring me to a cool $496 added to my emergency fund for the year.

Goal #5: Update my renters insurance

It’s getting embarrassing that I haven’t taken recent pictures of what I’m insuring. Gotta do that this month for sure.

Oh, and those are my personal finance goals for the month. What are yours?


Small Business Tip: 10 Steps to Cash Flow Heaven

labRunning a small business means having to cut costs and keeping a constant eye on expenses to just to turn a modest profit. There are several low and no-cost strategies which small business owners can utilize to realize much larger profits. Here are the top 10 tips used by seasoned small business professionals to increase their cash flow to heavenly proportions.

1. Have a Gross Profit Goal

Measure and set a gross profit goal. Be sure the accounting system that is being implemented is properly categorizing costs. This will help you to properly do a comparison with competitors in the same industry. Review this information to ensure the costs of goods and services is not more than the costs being spent by competitors. Data for this type of comparison can be obtained from trade associations, according to the Houston small Business Chronicle. This allows business owners to set gross profit margin goals. Having access to this type of comparative information on a regular basis can help business owners take quick action to adjusting practices and have more control over profit increases.

2. Make the Right Small Investment

Making a small investment in a bar code scanner from premium companies like Shopify can make a huge difference in the bottom line of a small company. These devices do much more than just make the retail checkout experience more efficient and accurate, according to Social Media Today. These bar code scanners can be an excellent tool for keeping track and managing inventory. Having an easy method to do this is a great way for a small business to track the investments they are making into products and to increase sales.

3. Review Historical Growth

After getting a handle on reviewing gross profit margins, small business owners are ready to take their business analysis to the next level. This entails doing something called the “drill down”. This means taking a look at historical growth profits by looking at profits in way most business owners would consider being the reverse order. First, look at the total gross margin, then the gross margin by department, gross margin by product and then the gross market by SKU number. Looking at the information in this order allows the business owner to clearly view and identify which aspects of a business are helping to meet profit goals as well as which are hindering the process.

4. Analyze Pricing and Product Strategies

Find ways in which to add value or customize products and services which are being offered. Following industry related journals and trade publications which review the latest trends can offer suggestions for how this can be done. Once a plan has been devised, the cost of products and services can be increased. This is a simple way to increase cash flow into a business and remain ahead of the competition.

5. Try Purposeful Discounting

Any small business needs to discount goods and services from time to time to remain alive in the marketplace. Small businesses need to offer discounts strategically, as advised by the Small Business Authority. Businesses which offer discounts by habit, instead of doing so with a purpose, tend to make their consumer base numb to their efforts. This means they do not generate the full sales they could from discounting products and services. Instead a discount should be scheduled and advertised in such a way that it seems rare and special for the discount to be offered. This creates a sense of urgency in customers and can do a lot to increase sales.

6. Purchase Smarter

When making inventory purchases, a small business owner always needs to keep purchases within a target margin that is in alignment with their consumer’s price points. This may mean taking the time to negotiate with vendors. When negotiations don’t yield the proper margins, business owners need to look into other vendors who might be willing to work with them at the price point they need to make their profit goals.

7. Try Counter-Cyclical Products

When a business experiences a slow season, it is a good time to introduce counter-cyclical products or services to the business core. This can be done to generate incremental profits and increase cash flow. A wise business owner should take the time to study which of these types of products in their industry would work for their business during times of traditionally decreased sales.

8. Learn What Others are Doing

Business owners need to take the time to get in touch with their industry leaders and learn from their experience. Often, people who have been successful in a particular industry are willing to share their knowledge with those who are newer to that industry. Listening to the wisdom of these experienced individuals can do a lot for a business’s bottom line.

9. Get Creative

Getting a fresh perspective can be one of the most profitable moves a business can make. Business owners should take into consideration suggestions from their customers and their employees. These individuals offer a perspective that is often lost on business owners. The information obtained from this form of research could yield some very profitable ideas.

10. Be Bold

Always seek a new positive risk. Not doing this can make a business and its profits stagnate. Stepping outside comfort zones and taking chances is where successful business owners find new profits.

Do student loans affect my credit score?

Source: Images Money via Flickr under a Creative Commons license

Oh hi.

When talking with friends, I hear this sort of statement all the time: “I’ve been paying my student loans on time for years now; why isn’t my credit score going up?”

It’s an important question! And one that takes some digging to get the answer to.

A couple truths

Before continuing, here are a couple things that are true.

  1. Having good credit is important. My credit score determines the interest rate I’ll borrow at when buying homes, cars, and other things. Not only that, bad credit may make it tough get a cell phone, rent an apartment, or even secure a job because one in seven employers checks applicants’ credit reports. (Source: MSN)
  2. Less debt is better than more debt. To use specific numbers, being $100 in debt is better than being $200 in debt. An extension of this truth is that no debt is better than some debt and there are many reasons why I should pay off debt.

Student loans are installment loans

My credit score is determined by the three consumer reporting agencies (or credit bureaus), who look at a number of factors to come up with the number, including the following five (Source: Equifax):

  1. The number of accounts I have.
  2. The types of accounts.
  3. My available credit.
  4. The length of my credit history.
  5. My payment history.

Student loans really come into play under #2 and #3 (and #5, but I’ll discuss that later).

Under #2, the two types of accounts are revolving credit and installment credit.

  • Revolving credit is an arrangement where I have a set limit up to which I can borrow, which once repaid can be re-borrowed again until the terms of the arrangement expire. Credit cards are an example of revolving credit.
  • Installment credit is made up of loans for a fixed amount of money, paid off under terms set when I get the loan.

Student loans fit into installment credit.

Now, under #3, my available credit is measured by looking at my balance-to-limit ratio, which compares, as a percentage, the money I’ve borrowed to the limits I’m allowed to borrow. Obviously, a lower percentage is better here. Importantly, according to the consumer reporting agencies, the “balance-to-limit ratio applies only to revolving accounts.” (Source: Experian)

And this answers my friends’ original question; paying off your student loans on time doesn’t make your credit score go up very much because your student loan balances don’t factor into your balance-to-limit ratio.

And now, to go back to the second of my truths, there are many great reasons that I should pay off my student loans and even do so early; however, that it might increase my credit score isn’t one of them.

Student loan delinquency is treated like any other delinquency

Wait, but that’s not really the end of the question, because there is a way that student loans can affect your credit score.

Going back to #5 on the list of things that make up your credit score, your payment history is determined by how many accounts of yours go delinquent.

The Department of Education considers your student loan delinquent as soon as you miss a payment, and your loan servicers report all delinquencies of at least 90 days to the three consumer reporting agencies. (Source: Ed)

And once those consumer reporting agencies know about a delinquency, they’ll keep it on your credit report for seven years. (Source: Experian)

In other words, while making student loan payments on time may not help your credit score very much, missing student loan payments can hurt your credit score a whole lot.

Welp, have a great day!

July 2014 net worth update — the birthday edition wherein I cross $50,000 in total debt paid off

Source: Anton Novoselov via Flickr under a Creative Commons license

Well hello and welcome to the month of July. And sorry for the long title.

Today, I’ve completed another month of my long journey toward my debt paydown and completed another year of life, and so think this a fitting time to do a reality check with a little bit of net owrth update..

It’s crazy to think how much my personal finance outlook has changed over the last year. In that vein and just for fun, I pulled up the net worth update from the last time I had a birthday, right here:

I was working hard at paying off debt, but was definitely in far more dire straits; I still had credit card debt — to the tune of $12,000! — and my net worth was an even more cartoonishly negative six figures. Yikes!

Today, I’ve paid off all of my credit card debt and have yet to go back, and my net worth is only half as negative as it was back then.

What’s more, one of my goals was to become less terrible at blogging. It’s sad to see that even a year on, I still haven’t accomplished that :(

Let’s just look at the numbers.

The numbers

July 2014 numbers

Click to enlarge

Good stuff: I crossed a huge milestone this month; the total amount of debt I’ve paid off since starting crossed $50,000, which feels like an unreal amount. This was indeed a big month for paying down debt — a very big month indeed. I have been slipping recently on paying down my student loans, but managed to knock $1000 off their principal balances in June.

Another good thing? I mentioned it earlier, but at -$66,700 my negative net worth is only 58% of where my negative net worth was the last time I had a birthday. Negative net worth is bad, of course, but I’m happy that I’m quickly pushing it in the right direction.

Bad stuff: I wouldn’t call it necessarily bad, but I spent a solid amount of money on birthday celebrations and prepaying for wedding travels later in the summer. Actually, on second thought, that’s definitely good stuff, but it is money that I didn’t send to debt paydown.

Questionable stuff: You may have noticed that I added percentage changes to my monthly changes. I think this helps with understanding how big the changes are relative to the small (for retirement) or big (for debt) bases I’m starting with. I’m not sure whether a percent change for net worth makes sense while it’s negative; thoughts?

Also, check out this chart I made:

Click to enlarge

Click to enlarge

Easy enough to understand, right? Every month my net worth goes up by a certain nominal amount, and some of it is because my debt went down and some of it is because my retirement savings went up.

You may notice that the orange portion of each is growing each bar has gotten bigger this year. I’m questioning that strategy right now. Any thoughts on it?

I think I’ll continue making this graph, with the hopes that the total nominal amount trend upward as my base gets bigger (or less negative). I’ll note that I don’t quite see that happening yet and it’s making me want to dig into why that is.

It looks like I’ve got lots of thinking to do.

How did everyone else do in June?

Halfway through the 52-week savings challenge, how are you doing?

Source: Ken Teegardin via Flickr under a Creative Commons license

Good morning, y’all.

A huge goal of mine for 2014 is to increase my savings by taking part in the 52-week savings challenge.

The premise is simple — in theory, at least.

The first week, you save $1; the second, $2, and so forth for all 52 weeks of the year.

If, like me, you saved $1 at the beginning of the first week — January 1, 2014 — then today is the day that you should have made the halfway deposit of $26.

Why it works

The 52-week savings challenge is tougher in practice than you might think. Sure, it might seem easy or even trivial in those first few weeks. But all the while, you’re building habits.

And not just building habits; you’re building your savings. I just passed $300 in additional savings a couple weeks back! This morning’s deposit brought me up to $351 for the year already. Not bad!

And as the amounts have gotten higher with every week, it’s become very noticeable. If I’m eyeing something that might be frivolous, I just think about not being able to add that week’s savings and ease back. I started by setting up calendar alerts for each time I had to add savings, but now I even keep a list in the notebook I carry with me of the next week’s coming deposit.

Checking off that box is very satisfying!

So, is anyone else doing this challenge? If so, how is it going? Got any encouraging words?