5 ways to save on back-to-school clothes

  1. Check the closet before shopping  and make a list so you don’t duplicate what you already have
  2. Take advantage of tax free shopping: go to www.taxadmin.org and find out if your state has a “Tax Holiday” on back-to-school shopping
  3. Take advantage of retailer’s special coupons
    • Sign up for store’s email list
    • Check out retailer’s Twitter feed for coupons and deals
  4. Use your smart phone to comparison shop for school clothes in seconds

  5. Get your kid’s involved and figure out what your kids have to have and what they want to have. Make a list create a budget and then don’t stray from the plan when it comes time to hit the stores!

Live Rich,
David Bach


My 9 LAST MINUTE Holiday Tips to Save You Money

The holidays are HERE, and many of us will get caught up in the excitement of the season and be sent into a last minute spending frenzy. In fact, The National Retail Federation reports that holiday shoppers are expected to spend an average of $704.18 on holiday gifts and seasonal merchandise this year.

If you find that the only holiday tradition you have is to overspend, take heart in the old saying that ‘traditions were made to be broken.’ This year, I challenge you not to overspend! If you follow these tips and use a little creativity and commitment, you’ll be kicking off a new year this January without the burden of holiday debt – which is the best gift that you can give yourself!

So to help you this year, I’m giving you my 9 LAST MINUTE Holiday Tips to save you money:

1. If you haven’t started yet, make a detailed list.
Write out who you’re buying for and how much you can afford to spend for each gift. When you add it all up, you’ll know if you need to cut back the list or perhaps decrease your spending limit per person. Impulse purchases will quickly get you off track, so bring the list with you when you shop — and resolve to stick to it.

When making your list think about chipping in with a family member or friend. Or getting for something less costly but more meaningful — a carefully chosen book, a favorite photo in a frame, even a homemade treat made with love.

2. Use cash.
If, like the average shopper I mentioned above, you spend $700 on gifts and then charge it all on your credit cards. Then you only make the minimum payment each month, at a rate of 18 percent you’ll end up paying another $700 in interest and it will take you 131 months to pay it all off!

Paying with cash makes your spending more real and will cut down on your urge to splurge. If you can’t afford to pay for a gift with cash, then more than likely you can’t afford it.

3. Shop online.
A recent study by management consulting firm Accenture says that 59% of shoppers expect to buy more than half of their gifts online. When it comes to online shopping, remember – online prices often beat out in-store prices, but will require you to use your credit card. Shop with the card that has the lowest interest rate and keep track of what you’re charging. If you don’t pay your balance off in full, you’ll more than wipe out the saving benefits of buying online.

According to The National Retail Federation’s Shop.org division a record 92.5% of online retailers will offer free shipping at some point this holiday. If you meet the minimum purchase requirement, you’ll want to take advantage of free shipping offers for gifts you plan to ship long-distance. You’ll save yourself a bundle, not to mention long lines at the post office.

4. Compare prices.
Another advantage to shopping online is the myriad of comparison tools available on the Internet to help you find the best deal. Check out sites like Shopping.com, ShopZilla.com and PriceGrabber.com.

Most sites will even offer a bottom-line comparison, which shows you the best deal with tax and shipping included. For big-ticket items, comparing prices before you buy will pay off big-time.

5. Use coupon codes.
This is one of my favorite ways to get some good deals while shopping online. Don’t leave that “coupon code” field blank when you’re ready to check out. Take a moment to visit sites that offer discount codes for hundreds of stores — from Amazon to Zappos. Check out: RetailMeNot , CouponCabin, Buxr, BradsDeals, and Coupon Sherpa.

6. Draw names from a hat.
With a large family or group of friends, it’s just not feasible to buy a gift for everyone with out spending a fortune. Instead, pre-select names from a hat so that each member of the family or group only buys a gift for the name that they’ve chosen. Set a spending limit and have some fun with it. Visit SecretSanta.com for entertaining variations on this idea.

7. Donate to a charity.
For the person who has everything, consider making a donation in their honor to a charity that holds special meaning for them. At JustGive.org you can buy a donation certificate to give as a gift. Your recipients can then choose a charity to donate to and as a bonus, you’ll get a nice tax deduction.

Be sure to save your receipt, and make sure the charity you ultimately choose is legitimate. Check them out first at GuideStar.com or Give.org.

8. Host a potluck dinner.
You can do a great job of keeping your gift list in check and then blow your whole budget on an overly expensive dinner for your guests. Steer clear of splurging on lobster tail and filet mignon when you’re on a tuna fish budget. If it’s your turn to host family and friends this year, take some of the burden off by asking your guests to each bring a favorite dish or dessert.

9. Wrap with recyclables.
Sometimes we end up spending more on wrapping paper than we do for actual gifts. When I was a kid and we ran out of wrapping paper, my creative mom used the comics from the Sunday paper to finish the job. It looked cool and didn’t cost a dime.

Happy Holidays! Live Rich!
David Bach


The Four Basic Rules of Emergency Money

So how do you go about protecting yourself with a cushion of money? There are four basic rules that you need to know.  

1. Set yourself a goal. I’ve always said that every family should have a cash cushion of at least three months’ worth of expenses. In other words, estimate how much you spend each month on essentials (mortgage or rent, utilities, food, health insurance, etc.), multiply it by three, and that’s your minimum goal for emergency savings. If you typically spend $3,000 a month, you want to have at least $9,000 put away in a reserve account not to be touched unless there’s an emergency. Should you try to save more? Absolutely. How much more depends on what you feel you’ll need to be able “sleep well at night.”

2. Make it automatic.  It is so important that you make your emergency fund automatic. That means every single time your paycheck is deposited, your checking account is set up to automatically sweep money into a separate savings account you’ve set up for your rainy-day fund.  I suggest you start by moving 5% of each paycheck to your emergency account until you reach the goal you set for yourself above.

3. Put it in the right place. Once you’ve made the commitment to funding a rainy-day account, the next decision you have to make is where to park it. I used to emphasize the importance of finding a place that would give you a reasonable return on your money. But these days, with interest rates at rock-bottom levels and the stability of many financial institutions still in question, I worry more about security. Of course, interest rates won’t stay in the basement forever. But until they recover, which may not be for a long time, I’d focus less on the kind of return you’re getting and more on making sure your emergency money is safe and accessible.

4. Leave it alone. The reason most people don’t have any emergency money in the bank is that they have what they think is an emergency every month. What’s a real emergency? It’s not just having to buy a new dress for that special party. Or deciding you’ve got to get a new dishwasher because the old one is making noise. A real emergency is something that threatens your survival, not just your desire to be comfortable. So unless your family is about to go hungry or be thrown out into the street, you shouldn’t be dipping into your emergency fund.

Back to the Basics with the Latte Factor®

Getting a handle on your spending can be a big challenge. You have to really work to keep what you work so hard to earn. Luckily, there’s an easy, fun way to do that. You have to find what I’ve termed, The Latte Factor.

What is The Latte Factor®?If you’re a regular reader of my books and articles or if you have seen any of my appearances on various TV shows such as NBC’s TODAY show – Money 911, you may already know about this phenomenon that I call the Latte Factor.

The Latte Factor® is based on the simple idea that all you need to do to Finish Rich® is to look at the small things you spend your money on every day and see whether you could redirect that spending to yourself. Putting aside as little as a few dollars a day for your future rather than spending it on little purchases such as lattes, bottled water, fast food, magazines and so on, can really make a difference between accumulating wealth and living paycheck to paycheck.

Example: In purchasing a $3.50 latte every day for a year, one would spend $1,260. If that money were invested at 10% over 10 years, it would grow to $21,870!

Use the Power of The Latte Factor®
Over the years, I have received thousands and thousands of emails, letters and thank-you cards from people who have used the Latte Factor—and the Latte Factor Challenge—to change their lives by changing how they think about spending money and how they really spend it. Some saved $5 a day by brown-bagging a sandwich from home instead of buying one at work. Others saved hundreds of dollars a month by giving up cabs for buses, dropping their premium cable channels, and foregoing regular manicures and massages.

Everybody’s spending habits are different, and so are everyone’s solutions. What we all have in common is that every one of us is capable of cutting back. Find your Latte Factor now! Go to www.finishrich.com/lattefactor, to calculate your Latte Factor, download the Latte Factor worksheet and your complimentary Latte Factor iphone app!


Wow! I picked The Automatic Millionaire up in frustration over my finances. My frustration quickly disappeared to give way to excitement. What a great read a real eye-opener! I did your latte factor test and found that I was spending $5-$10 a week just on the cheap movie rentals each week at the Drug Mart. I have a habit of going there after work to get something for unwinding and relaxation in the evening. The Latte worksheet is very clear and amazing in the reality of compounding interest in the few entertainment dollars. Just eliminating this habit will increase my cash allocation for more practical and long-term purposes. I realized that little spending habits like these does not help with debts. I am 28 years old and have credit and loan debt. I am setting up automatic deposits for savings to pay myself and making extra payments on my debts in advance such as the examples in your book suggest. This feels amazing and liberating. Thank you so much for your awesome book to empower anyone in every situation.
- Amber, Mount Gilead, OH

As I was reading about the Latte Factor, I already knew what my “latte” was. I travel a lot and get bored on airplanes so I buy magazines…about 4 per week. At $3.99 and $4.99, that adds up. What I didn’t realize was all the other little incidentals I pick up in airports. Gum $1.99, bottled water $1.99, playing cards $4.99 and I even spent $40 on wine at an airport last week! In fact, in one day, I spent over $90 of my own money on a company expensed trip. I wasn’t even paying for my own food or gas! And I complain that my debt is too high and I never have enough to pay bills, much less save, but after seeing this I think I can find free ways to entertain myself and carry a refillable water bottle and SAVE $90! Thanks David for opening my eyes.
- Joy, Burleson TX

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