A Financial Education Event

Driving Cars for Free


In our Heroes at Home Financial Event Tour, one of the most popular segments deals with “how to drive a car for free.” The concept is fairly simple, but less than 10% of Americans actually follow the steps to experience debt free living when it comes to transportation. We love our military audiences because even though some military members are “ordered” to attend our show, by the time it is over, they are laughing, they’ve learned something and they realize how much fellow Americans loves them.

So how do you do it? Just follow three steps:

  1. Start with a Debt Free Car – This is usually going to be the car you just paid off. Or, it might be a vehicle a parent or someone else gave you (it might even have seen better days). In our lives, we were “given” one car and we gave away 8 cars. It might be that you agree to be a one-car family for 18 months instead of a two-car family. This is how the Kays did it to start with. If you don’t absolutely have to drive a car (you are a one car family, public transportation, driving someone else’s car, etc.), then you can go to step #2.
  1. Pay Yourself – The monthly payment for your car that you used to pay before it was paid off is a payment you will now pay to yourself instead of to the lienholder. So let’s say your car payment was $300. You will pay yourself $300 every month for 18 months. At the end of that time, you take the $5400 you have saved and then sell your existing vehicle for as much as you can get for it. You will get more money for your vehicle if you detail it, get everything running as well as possible (without a huge investment) and then sell it yourself. Go to KBB for 10 steps on how to sell your car yourself.  Let’s say you sell it for $8000. Now you have $13,400 to work with.
  1. Pay Cash for Your Next Car – Follow my steps from my previous blog on How to Buy A Car 101 – Even if you aren’t a USAA member (for an additional military discount), you can still follow the steps listed to pay the least price possible for your next vehicle. Make a special note: You cannot do this with a new car! It has to be a used car. The average new car depreciates $8000 in 8 seconds (when you drive it off the lot). So you have to buy a car that is slightly used (or real used until you trade up). The example in my blog shows how I traded up consistently until I was driving a modest Mercedes. (Is there such a thing as a modest Mercedes? I believe there is).
  1. Trade Up Until You’re Satisfied – After you’re in a new-to-you “paid for” car, then start with step number two all over again and start paying yourself. Let’s say you bought a car for $13,400 and you got into it low (as I showed you how to do in my previous blog), then in only 18 months a used car won’t depreciate that much (if you take care of it and try to keep low mileage on it) and you can sell it for close to what you paid for it. You sell it after 18 months for $13,000 and add the additional $5400 that you have saved by paying yourself every month. Now you have $18,400 going into step #3 and you can trade up your vehicle.

Does this work? It absolutely does. Not only do I do this in my own family, but I have children who do it as well. When my kids ask for my advice (sometimes it’s nice having a mom who is America’s Family Financial Expert ®), I advise them to not be wasting money on expensive car interest payments or crazy expensive leases. The difference is enough money saved over the course of five years to be able to put money down on a house instead of having to rent. It truly adds up!

Keep trading up until you are satisfied with your car and you can trade up into a car with a substantial manufacturer’s warranty (or negotiate that warranty). I do practice what I preach, and I did this to get my 2014 Mercedes, which is under mfg warranty until 2022. The only perceived downside is that my dream car is red and I thought that red cars get more speeding tickets than other colors. But good news! That’s a myth. Pedal to the metal!

What can you do today to drive your cars for free tomorrow? Let me hear from you!

Ellie Kay

Your Money Buddy


As we are on our Heroes at Home Financial Event tour (at 17 bases in 5 countries) we often talk about how to follow through on our good intentions when it comes to money matters. The best way to do this is to have a regular money workout with an accountability partner.

A great example of this is these Newlyweds, who just finished their first Sixty Minute Money Workout and they loved it!

They did the “Money Personality” workout and discovered what personality each of them has and how they relate to money.

The number one reason marriages fail is because of arguments about money so if you can learn how to have a good workout, then you can get fiscally fit. You don’t have to be married either, you can have a “money buddy” just as you have a workout partner to help spot you when it comes to lifting weights or kicking it in cross fit.

But it begins with setting proper boundaries, so you can learn to get along and not digress into arguments. This is the same technique I shared on Nightline as I coached a couple on how to fight fair.


First of all, people need to understand that you don’t have to be a couple in order to do the workout. You can do it by yourself, or with a trusted friend, or even a family member who isn’t your spouse if you are single. But whoever you do the workout with, it’s important to set some boundaries to prepare:
• no condescension or negativity
• no interrupting your workout partner when they are talking
• no name calling
• no throwing food –
• start by saying one positive thing to each other
• end by saying one positive thing to each other
• create an environment that encourages comfort and success
• have a timer on hand (the one on your phone works well)

Step 1 – 5 Minutes – Make Up Your Mind Warm-Up
Here is where you set your timer for each section. When the timer goes off, then move on! In this section, you set the topic for the hour and begin with a “can do” attitude. It’s important to begin by saying or doing something positive. If you’re working out with a spouse, then begin by taking your spouses hands, looking into their eyes and saying something affirming.

Step 2 – 10 minutes – Strength Training
While step one was to start with affirming words and decide on your money topic, this next section is a time to write down goals on paper so that you will have a tangible and objective standard to work toward. Decide how you would like to see the topic resolved today, in six months and what the outcome of your goals will be in the long run. For example, if your topic is setting up a spend plan, you can also access tools like Mint that will help you in the workout.

Discuss obstacles that have kept you from reaching your goals in the past. If spending too much money on Amazon is slipping you up, then regulate that habit. Or if eating out too often gets you offline, then discuss ways to eliminate that obstacle.

Step 3 – 20 Minutes – Cardio Burn

In this step, you give feet to your goals. If you’re setting up a budget, then you write down the specifics and course of action for your topic of the day. This may not seem like a lot of time on this section, but realize that you may not get it resolved during the first workout. The key is to keep the discussion moving and work on what you can, whatever you missed, you can get the next time around. For example, if you’re looking to pay down debt, then go to Annual Credit Report to order free copies of your credit report. If your topic is improving your credit score, then go to Credit.com to discover where your score is weak and how to improve it. Or listen to a Periscope #CreditChat from@Experian_US. This show is hosted by Rod Griffin, our credit speaker on the Heroes at Home Financial Event tour.
Step 4 – 20 Minutes – Taking Your Heart Rate

If you are making progress on your goal, then continue to do the work. If you have gotten bogged down or you’ve reached a standstill, then use this time to redirect.

For example, if you’re developing a spend plan, and realize you are spending too much in an area, then you could redirect at this time to review this blog and learn quick ways that will help you save money in a variety of categories.
For instance, how to save on groceries.  We’ve saved over $160,000 in the last 20 years by employing a variety of tips I discuss in my books and blog.

Step 5 – 5 Minutes – Congratulations Cool Down
The workout has gone by quickly and now the last 5 minutes are dedicated to the “Congratulations Cool Down.” End your workout and sit back, grab a glass of something cool to drink and reflect on all you’ve accomplished in just one hour! You started on a positive note and you’re going to end positive as well. Take this time to tell your partner one thing that you appreciate about today’s workout in order to end the discussion well.

Keep in mind that just as you don’t get physically buff in just one workout, your finances aren’t going to get in shape after the first try either. But after you and your mate have exercised with this money workout a half a dozen times you’ll find you are making progress that can revolutionize your finances in only an hour a week!

For a free “Sixty Money Workout” review sheet, just email assistant@elliekay.com and ask for this resource.

Ellie Kay
America’s Family Financial Expert (R)

USAA Car Buying Service – “How to Buy a Car” 101

Our Heroes at Home Financial Event just finished our FY15 tour where we gave 10 presentations at six bases and we’re gearing up for FY16. In fact, you can contact us about whether we are coming to YOUR base next year.

McConnell AFB Heroes at Home Financial Eventnext! Our non-profit tour is brought to military families by USAA and one of the main topics that is of the most interest to our military families is: HOW DO I BUY A CAR and save money?

Let me start by asking you the question we ask our audiences: How do you lose around $8000 in 8 seconds?

Did you get the answer yet?

The answer is: you drive your brand new car off the lot.

Yes, the average new vehicle will depreciate $8000 in the first year. So WHY oh WHY do you continue to buy NEW? Some folks answer, “for the warranty.” But if you bought the vehicle a year old, you could do two things to make up for that 12 months of warranty you lose over buying new:

  • Warranty Purchase – you could purchase an extended warranty, which (depending on the car you drive) is only $800 to $1500 per year. This is WAY LESS than the 8K you are losing by buying new. Plus warranties are negotiable. When I had to renew the warranty on my Mercedes 280SLK, the dealership gave me their best price. Then I called USAA, telling them the best quote I got and they beat the price by $800. Plus, instead of the $200 deductible I had with the other quote, the USAA deductible was $0! I used that warranty at my local Mercedes dealership (world’s best service department) and paid $0 deducible and got the same excellent service that I normally get.
  • CPO or Certified Previously OwnedIf you get a vehicle with a CPO on it, then part of the deal is that the dealership extends the warranty a year and this is a full manufacturer’s warranty. Plus, there are more stringent inspection standards and additional roadside assistance. Once, I had a BAD salesperson who told me the car was CPO, “All our cars are CPO” she said, but she never presented me with CPO paperwork to sign at the deal’s closing. You guessed it, the vehicle was NOT CPO and she lied. Be sure you get CPO paperwork if you are told it is a genuine CPO. It costs the dealership anywhere from $1000 to $2500 to CPO your vehicle, depending on the year, make and model. You HAVE TO sign CPO paperwork that is dated from BEFORE the date you buy the car or it’s not valid. Remember that asking a dealer to make a vehicle CPO is part of the negotiating process and this will increase the value of the deal anywhere from $1000 to $2500.

A few months ago, I was on my way to Disneyland to meet another author friend and a careless driver made an unprotected left hand turn right into my vehicle (about 5 feet off the bumper). I had NO TIME to react or even take my foot off the brake. The fact that Mercedes are so well built and the fact God sent his angels to protect me are the only reasons I walked away from this terrible crash with only a few cuts and bruises.

This accident put me back in the market for a vehicle. So this time I decided to try USAA’s car buying service. Since I’m driving my Marine’s car (who is overseas) for a few months, I could take my time to find the best deal. The car buying service told me the price, the discount, gave me free access to a CarFax report, showed me a chart of similar cars purchased in my area to indicate an average, good, or great deal, and more. I compared the prices I saw on the site to Kelley Blue Book and did all my research. Then I followed the same three steps we teach in our Heroes at Home Financial Events.

Step One: Negotiate Price First

Negotiate the price of the car at a dealership apart from the value of the trade-in. Tell the salesperson you want to determine the price of the car without the trade-in. The reason you want to do this is because salespeople will often give you far more for your trade than you expected—thus hooking you on the deal. However, this higher-value-for-the-trade-in shtick can be part of the technique they use to get you to purchase the car. If a higher value is given to the trade, then they will give a lower discount on the price of the vehicle, because all the discounting went into the value of the trade.

Step Two: Negotiate the Value of the Trade-In

Now that you’ve determined the price of the car, ask what the dealer will give you for your trade-in. Most likely, you will get more for your car if you sell it yourself. A little elbow grease and some top-notch detailing can net you hundreds of dollars more than a dealer can give you, if you can find a buyer. Some people (like military families) don’t always have the time to sell their car because of mobbing schedules and so forth. So if you are going to try to trade in your car, look up the value of your existing car at Kelley Blue Book or Edmunds, then print the page (or screen shot it), and bring it with you to the car lot to negotiate the price. Bottom line: try your best to gather enough facts so that you make a wise decision.

Step Three: Secure Your Own Financing

The F&I (finance and insurance office) is where the lion’s share of a dealerships profit is made. In this office, you will have to navigate interest rates, payments, terms, additional services, and warranties. Unless you put miles on your car for business or you are purchasing a car that will cost a lot to repair (and you intend to keep it longer than the warranty lasts), extended warranties are usually not a good value. When it comes to vehicle financing, you can generally do better on interest by selecting your own creditor unless the manufacturer is offering a lower APR. Keep in mind that the .99% APR offers only go to the top 10% of those who are the FICO score elite, chances are good that you will not qualify. The credit life insurance that dealers offer is more expensive than raising your regular insurance premium by twenty thousand dollars to cover this expense. And don’t forget to go to USAA to see if you qualify for great insurance at a great price.

By following my own advice, I talked to David Cardoza, my sales representative and I was able to:

  • Negotiate the best price on the vehicle.
  • Get the USAA discount added to the deal.
  • Get a car that had less than 3K miles on it.
  • Get CPO added to my vehicle.
  • Drive a vehicle that is now under warranty until 2022.
  • Get a like-new car that had only been in service officially for a mere three months.
  • Save $9K off the brand-new-plus-CPO price.
  • Pay cash for my car (stay tuned for next week’s blog on how to pay cash for cars).
  • Get the year, make, model and color of the car I wanted.
  • Walk away feeling good about the deal and the value I got.

When are you in the market to get a vehicle, which of these tips will you follow to get the best deal?

Ellie Kay

FInancial Pre-Deployment Checklist (part 3)

Do you have your money matters in order for your next deployment?  It’s important to make sure that all aspects of your finances are lined up to be able to give your family and yourself peace of mind while you are deployed. This is the final part of a continuing series. The items on the checklists from last week and from this week will make all the difference in minimizing stress not only for yourself, but for your loved ones as well.

  • Servicemembers Civil Relief Act

In addition to legal protections, the Servicemembers Civil Relief Act (SCRA) provides certain financial protections for active duty members of the regular forces,

A servicemember’s protections under the SCRA are not automatic and require that the servicemember requests the protections such as limitation on interest rates, and payment schedules. You will likely have to prove you’re your military service may make an impact on your ability to pay.

All interest rates can be reduced to 6 percent for accounts established before active duty and can include mortgages, car loans, credit cards and even some student loans. This only applies to loans before you became an active duty servicemember, it does not include loans you received after becoming a servicemember.

The SCRA also protects from foreclosures and repossessions and helps with termination of residential leases and auto leases. These are before military service or if you receive PCS orders from CONUS to OCONUS or a deployment for a minimum of 90 days.   

  • Savings Accounts

It’s important to build a personal savings account of  6 to 12 months worth of income

Calculate how much you’ll need by this formula (BAH + ME) x 6 = Goal Savings

Never use PAYDAY LOANS to supplement your savings because in these you pay 200% to 500%. Instead, go to PentagonFoundation.org for a $500 loan with a $3 service charge and no interest for one month. It’s called the ARK (Asset Recovery Kit) program.

The Savings Deposit Program – SDP – While deployed and after 30 days in a combat zone, service members may be eligible to participate in the Savings Deposit Program (SDP).  The program is available to service members during assignments and deployments to specified locations. The SDP pays back a guaranteed 10 percent annual return on investment (2.5.percent.quarterly) on up to $10,000 contributed from un-allotted current pay and allowances. Upon withdrawal, a service member’s contributions to SDP will not be taxed, but the interest earned will be.  Interest continues 3 months after the servicemember is out of the zone.

  • SBP – Survivors Benefit Plan – This program provides monthly payments to the servicemembers elgible beneficiaries in the event they

Cost – no cost while you are activeduty. But during retirement there’s a monthly deduction which can be no more than 6.5 percent of your gross retired pay.

Beneficiaries – spouse, legal child, former spouse (if court ordered), the child must be under 18, if over 18, then in college (up to 22).

  • SGLI Servicemembers’ Group Life Insurance

SGLI is a low-cost term life insurance protection policy offered through the Department of Veterans Affairs 
(VA) for servicemembers on active duty. Even though SGLI coverage is automatic, before servicemembers deploy, they should confirm that their beneficiary(ies) designation is up to date.

Servicemembers are automatically covered for the maximum amount of $400,000 unless coverage is declined or elected at a lower amount and this costs $26/month plus $1/month for traumatic for a total of $27.

Family Servicemembers’ Group Life Insurance (FSGLI) automatically provides life insurance coverage to spouses and dependent children when the service member is covered by SGLI up to $100,000 for the spouse and $10,000 per child unless the servicemember declined the coverage in writing. Coverage amounts for FSGLI cannot exceed the coverage amount selected for the servicemember under SGLI. The cost is very affordable for the spouse such as $5/month for a female 35 or under and it is free for children under 18.

Whether you are single or married, it’s important to check off the above items to make sure you and your family are financially ready for deployment. Thank you for your service please know that America appreciates both you and your family.

Ellie Kay

Buying a New or New-to-You Car This Fall

What is the least expensive car to drive?

The least expensive car for you to drive is probably the vehicle you are currently driving! So consider driving that paid-for car a little longer and take the money you would spend on a car payment and put it into a car fund in order to reach the goal of eventually paying cash for your cars.

People talk themselves into a new car for a variety of reasons such as gas mileage. However, when you calculate gas mileage and the money “saved” when compared to interest payments and depreciation on that new car, you will find that you do not even come close to saving money. The average new car depreciates roughly 30 percent within the first eighteen months, with an average loss of value of five thousand dollars as soon as you drive it off the dealer lot. So if it really is time to replace your car, always consider purchasing a used vehicle first.

However, there are occasions when a new car may make sense. For example, when interest rates are incredibly low or your family needs the warranty (because of high mileage commutes). Try to get and end-of-the-year clearance model or a demonstrator model. If possible, buy the car at the end of September, which is the end of their fiscal year.

The following tips can apply to buying a new or used car, but each sales point should be negotiated separately.


Negotiate the price of the car at a dealership apart from the value of the trade-in. Tell the salesperson you want to determine the price of the car without the trade-in. The reason you want to do this is because salespeople will often give you far more for your trade than you expected—thus hooking you on the deal. However, this higher-value-for-the-trade-in shtick can be part of the technique they use to get you to purchase the car. If a higher value is given to the trade, then they will give a lower discount on the price of the vehicle, because all the discounting went into the value of the trade.


            Now that you’ve determined the price of the car, ask what the dealer will give you for your trade-in. Most likely, you will get more for your car if you sell it yourself. A little elbow grease and some top-notch detailing can net you hundreds of dollars more than a dealer can give you, if you can find a buyer. Some people (like military families) don’t always have the time to sell their car because of mobbing schedules and so forth. So if you are going to try to trade in your car, look up the value of your existing car at http://www.Kbb.com/ or http://www.Edmunds.com/, print the page, and bring it with you to the car lot to negotiate the price. Consider negotiating the price and trading at the same time. Bottom line: try your best to gather enough facts so that you make a wise decision. Unfortunately, we often see the deal inaccurately as the smell of new leather and gleam of fresh paint job cloud our sensibilities.


The finance and insurance office is where the lions share of a dealerships profit is made. In this office, you will have to navigate interest rates, payments, terms, and warranties. Unless you put miles on your car for business or you are purchasing a car that will cost a lot to repair (and you intend to keep it longer than the warranty lasts), extended warranties are usually not a good value. When it comes to vehicle financing, you can generally do better on interest by selecting your own creditor (unless, of course, the manufacturer is offering a lower APR). The credit life insurance that dealers offer is more expensive than raising your regular insurance premium by twenty thousand dollars to cover this expense. And don’t forget to go to USAA to see if you qualify for great insurance at a great price. We’ve been with this company for three decades!

What is your favorite part of buying a car?

Ellie Kay

America’s Family Financial Expert (R) 

Plan for the Worse, Hope for the Best

Are you ready for a natural disaster?

When we were living at Columbus Air Force Base in Mississippi during the mid-1990s, I had to survive my share of “natural” disasters. They ranged from toddler Jonathan “naturally” trying to stick a knife in the toaster oven, to little girl Bethany going “au-natural” while guests were over, to a full-blown natural disaster in the form of a massive tornado.

For the latter, it happened when the kids and I were all on the road. I remember nearing the exit of the base, when I saw a neighbor’s flag still up and decided to take it down for them. Low and behold, the tornado passed by us from the direction of the exit! Our guardian angels were definitely clocked in that day, but it reminded us to be better prepared for the next disaster.

According to a survey by Harvard University, 40.4 percent of American citizens are at average or higher risk of being a fatality. And with recent tragedies like the Oklahoma tornados and Colorado fires, it puts it in perspective. Here are a few ways you can get prepared for a flood, fire, storm or other disaster:

  • Stockpile supplies: You don’t have to be paranoid to be ready for an emergency. Stockpiling an adequate supply of non-perishable food and medications can be vital if you’re trapped for any length of time due to a hurricane, winter storm or other long-term disaster. Create a budget for emergencies and shop smart to save big on duplicate items you’ll need.
  • Get tech-savvy: True, you may not be able to connect to the Internet during a disaster, but your computer or smartphone can actually help. USAA has a great list of apps for situations like this, such as a CPR instruction app and a flashlight app. You can also sign up for weather text alerts, plus you can back-up files and insurance documents on your computer via sites like Dropbox and Google Drive.
  • Invest in a shelter: If you’re one of the six percent of the population living in a high-risk area, you should especially consider a shelter or safe house. Even if you don’t, now might be a good time to take the extra precaution, as some counties offer rebates up to $3,000. Do some research and see if you qualify before you decide.
  • Have your insurance in order: Are you covered for a fire? How about a flood? An earthquake? You don’t want to wait until you file a claim to see if your insurance will pay for your loss. USAA, Allstate and State Farm are among the most popular and highest-rated by customers for homeowner’s insurance, so it might be wise to check them out.
  • Know the facts: You probably know you shouldn’t drive during a tornado or wait out a hurricane, but what about other disasters? Knowing the steps for preparation and recovery can save you money and possibly your life. USAA is also a great resource for doing research on this.

Don’t let disaster catch you unawares; it’s better to hope for the best, but plan for the worse. If there’s one thing I’ve learned, it’s that when you trust your intuition and do your research, you’ll be prepared when the storm hits.

What are YOU doing to prepare?

Ellie Kay


Five Top Money Moves for 2013

This month I’ll be on over 25 television and radio stations talking about the Top Five Money Moves for 2013. So look and listen for yours truly in the media. My long time stylist, Ricardo, saw me on a national show and said, “You looked and sounded just like you do when you sit in my chair!”  My daughter, Bethany, was in the salon with me and piped in with, “That’s what happens when you’ve been on television as much as my mom has.” I could have sworn she rolled her eyes when she said it, but she insists she didn’t. I really do loving helping families do money matters smarter and media helps me get the good word out to these people across the country.

According to a recent survey, 40 to 45% of American adults make one or more resolutions each year. Among the top new year’s decisions are resolutions about weight loss, exercise, and money management or/ debt reduction. While a lot of people who make decisions during the new year do break them, research shows that making a decision to change is useful. People who explicitly make resolutions are 10 times more likely to attain their goals than people who don’t explicitly make resolutions.

If one of your resolutions involve getting fiscally fit, then there are five things individuals, couples and families should do every January, year in and year out, to help their financial picture. These five money moves will help you pay down debt, save more in your emergency fund and be prepared for possible financial setbacks in 2013. They include:


1) CUT COSTS ON FIXED EXPENSES – there are some expenses that people rarely check, but they could be missing out on hundreds of dollars of savings.

  • For one thing, it’s important to call your homeowners insurance provider and ask about getting a better rate. Oftentimes, you don’t think about this policy because the bank may cover this premium and you put that renewal to the side—wrong answer. The other biggie in fixed expenses is auto insurance.
  • If you drive less, in safer ways, and during safer times of the day you can save money on your car insurance. If you are military or a military legacy (child of someone who served), be sure to compare prices at USAA for car, home and other benefits to members.
  •  One final, quick tip to cut costs by shopping around, is for groceries. Go to couponmom.com where the site will tell you what’s on sale in your neighborhood, which items have coupons, double coupons and store coupons. Using this layered savings approach in the store helped our large family save $160,000 over the course of twenty  year!  (Yes, you read that right, it’s not a typo).

2) COMPLETE TAXES EARLY & FREE– The sooner you file, the sooner you’ll get your refund.  Even as this year’s tax laws get settled, you can still get your return started online.  I recommend the online TaxACT Free Edition has everything you need to prepare, print and e-file your federal return free.  TaxACT and I have worked together to help American families and specifically military families, because their tax solution guides you step by step through your return and guarantees your biggest refund. It’s fast, easy and even offers free help. Remember that the fastest way to get your refund is to do your taxes online,  e-file and choose direct deposit .  And once you have that refund, put the money to smart use like paying down consumer debt, bolstering your savings or saving to pay cash for your next car. Or, if you are a Kay kid, then you can use it to buy your Mama a really nice present!

3) CATCH UP ON SAVINGS – In money moves one and two, you freed up extra money by cutting costs and getting your refund back early. I recommend that you take a hard look at your emergency fund. If you are a single income family, you should have twelve to fifteen months of living expenses in this fund. If you are a dual income family, you need six to nine months of living expenses. With uncertain employment situations, it’s important that you save for a rainy day. Use 50% of that tax refund and money saved from cutting fixed expenses to help build up your emergency fund. Then every time you save money on expenses, write a check or transfer those funds into this important account. It will become a habit and you’ll build that account up more quickly.

4) CUT OUT DEBT – If you took 50% of the money you gained from steps one and two and put it in your emergency fund—good job! Now it’s time to use the other 50% to pay down credit card debt and get started on the “snowball effect” of getting rid of consumer debt. This snowball plan works by paying off the credit card with the highest rate first. Then you take the payment you would have made on that first card and put it toward the next card on your list, thus doubling up on that payment. Each time you pay off a card, you keep taking what would have been that minimum payments on paid off cards and put them toward the next credit card balance. You will eventually find yourself making triple, quadruple payments and you can see why we call it the “snowball effect,” thus getting ahead of interest charges and paying your debt down more quickly.

5) CARE AND SHARE MORE – This is a good time of the year to map out a strategy to give more and get more out of your giving so that you can itemize your deductions. Go through closets and donate clothing and furniture to IRS- approved charities, but keep track of your donations. Go to the giving arm of the Better Business Bureau to check out the status of charities before you give. Ask charities for receipts. You usually get more for each item than you would selling it at a yard sale.  Remember, monetary donations and certain expenses for volunteering are also deductible.

Happy 2013
Ellie Kay

Frugal Living – The New Normal

In today’s economy—with the stock market looking more like a roller coaster than a steady climb, with gas prices hovering well above where they were in recent years, and with household expenses continuing to price families out of too-tight budgets—many families are looking for good ways to save money without injuring their lifestyles. I’ve put together a handful of quick tips that will pad your wallet without cutting corners.

One great way to save on everyday activities and outings is a coupon book.  Entertainment.com offers a coupon book that is available for 150 metro markets and costs between $25 and $45. Preview the coupon booklet for your area (or an area where you will vacation) to see if the coupons are ones you will use.  You’ll not only save on eating out, but you can also save on movie theaters, theme parks, dry cleaning, and local shopping.

  • Average advertised total book savings – $17,000
  • To only redeem 25% is annual savings of $4250
  • A mere 10% redemption savings is $1700 per year

Dining out is a necessity for some families with busy schedules or long commutes, and for some it’s a luxury reserved for special occasions. If you want to try out a new restaurant, but you don’t want to pay full price, you can go to Restaurant.com, a site that issues coupons and gift certificates for over 6,000 eateries around the country. Our family picks a spot and pays $10 for a $25 gift certificate—we save over 50% in the process!

  • Average restaurant bill for a family of four is $86
  • Family saves $43 x 52 weeks = $2236

Two absolute necessities for any family are Home Insurance and Auto Insurance. The average family can save a good deal of money with just a little homework and a short conversation with your insurance agent. For your home, you should raise your deductibles to at least 3% of the total value of the home and make sure to only insure the replacement value of the dwelling (usually 80% of the selling price of the home) because you’re insuring the home not the dirt.

  • This is an average homeowner’s savings of  $250 per year.

For auto insurance, make a phone call to ask for all the discounts that your company may offer. Some companies offer discounts that include: combining homeowners’ and auto policies with the same carrier, non-smoker discounts, good student rates, car alarm systems, storing the vehicle in a garage versus carport or street, rating the most expensive car with a stay-at-home (or for pleasure only) rating, being between the ages of 30 and 60, and discount for driver’s safety course certificate (taken to keep a ticket from appearing on the driving record.).

  • This could save the average two-car family with a youthful driver $900 per year.

One great place to save a few extra dollars that many families don’t consider is simple home updates. If you still have young children at home, you may want to wait to have your furniture recovered. By purchasing a quality slipcover for $65 instead of buying a new sofa for $850, you save $785. By placing a crocheted doily for $15 on the coffee table  to cover scratches made by a speeding Corvette (Hot Wheels size!) you save $115 over buying a new table for $130.

  • Total savings on simple in-home updates is $900

One of the most draining line-items in a family’s budget are unexpected and costly repairs. These fixes can add up over time, but they can get a lot more expensive if not quickly addressed. My guiding principle is: Repair now, save later. Broken tiles and chipped grout in the kitchen and bathrooms should be fixed immediately in order to minimize water damage to tiles and the wallboard.

  • The average repair to damage of this kind costs $350
  • Preventative maintenance is about a $30 repair for a savings of $320

Armed with these tips and more to come, you can save money on every-day expenses. It’s simple to live rich for less; it just requires a little creativity, a little know-how, and a lot of savings!

USAA Patriot Day


The first time I heard of USAA was when my minivan had a close encounter with a garage door. It was a sad day. We were moving with five kids 7 and under and Bob went onto the base to fill out the outprocessing paperwork. My plan was to go to a friend’s house and do laundry since all our household goods were en route to the new destination. These friends knew I hated the laundrymat with five kiddos, so they offered theirs. She gave me the code for her garage door (they were at work). I was so distracted with the kids and the move, that I “forgot” Bob had put the travel pod on top of the van.  I entered the code, got in the van and drove into the garage. The pod tore off the door and glass came raining down on the van. Bad day.

     But apparently, USAA is used to distracted, military moms of many, because they took care of the van, the garage door, and my injured pride in one fell swoop. The adjustor was kind instead of being appalled–I got the feeling he had seen worse. Even if he hadn’t, he was out to make me feel better. We were back on the road by the next day and I wouldn’t revisit USAA until two years later, when I had yet another close encounter with a garage door. This time it involved a partially opened door that is not visible in the rear view mirror of a Suburban when there are five screaming kids in tow–especially when one’s hubby is on alert to fly in harm’s way in his F-117A Stealth fighter.

     I had the privilege of visiting USAA headquarters when they brought out a bevy of bloggers to San Antonio. Home of the alamo and 5 million square feet of USAA office buildings. There’s a reason this company is some 16,000 employees strong–they have a lot of work to do to provide the best service possible to its members. From cutting edge innovation in mobile banking to prescient wealth planning, they know how to help everyone from a distracted mother of many to a military member in the red zone.  It’s what they do best.

     One of the most significant ways USAA showed the bloggers their core values of service, loyalty, honesty and integrity was to invite us to their “Patriot Day Event.” This event honored first responders, family members of victims and military members in a powerful and patriotic presentation that featured Colonel Mark Tilman, USAF (Ret), who was the Air Force One pilot on 9/11. He gave us a play-by-play of that life-changing day from a birds eye view. Then the bagpipes marched and played, “Amazing Grace.”  The audience cried, we laughed at the jabs he made about Texans… but we all remembered. We will not forget.

     After the Colonel addressed the 16,000, we had the honor of having him come into our blogger group and address 30 of us. One of the behind-the-scenes stories he told was about President Bush, after the war had begun and soldiers began coming home wounded. The President requested that wounded warriors be allowed in the receiving line for Air Force One. A line that was normally reserved for senators, congressmen, generals and other dignitaries. At one event, a young Marine, who had lost both legs , was in a wheelchair at the end of the line. In full dress uniform, he bravely began to hold a salute with a damaged right hand as soon as the jet landed. The Presidential aides radioed the on ground personnel to inform the “W” that this young man had trouble holding a salute. From his vantage point in Air Force One, Col Tilman saw the aide whisper to the President and watched the Commander-In-Chief push him off. Another radio call immediately came through, “The President says he know how to welcome home a Marine.”

      Then, the most powerful man in the world, walked past the dignitaries, to the wounded warrior. He got down on his knees in front of the wheelchair, and wrapped his arms around him. The President waived over the family, who was behind the security barrier, and they all hugged each other with tears of tribute to the proud Marine.

     No, we will not forget.

Thank you USAA for this experience…and oh, yeah, thank you for the garage doors.

Ellie Kay

America’s Family Financial Expert (R)

Healthy, Wealthy and Wise

Our son, Jonathan, is a senior this year and we’re glad he made it this far! Last year, he had a concussion on the soccer field that could have ended quite badly. The total hospital bill for that little trip was over $18,000! According to the Healthcare Cost and Utilization Project, if you or your child broke a leg, you would incur costs in excess of $15,000. It’s no wonder that in my experience with mainstream American families, I’ve found that the greatest financial concern they have is how find affordable health insurance.

Be Healthy

The best protection against rising medical costs is still prevention. So get involved in a healthy workout program or plug into a support group to regain control of your health such as www.weightwatcher.com.Another great program is First Place 4 Health (www.firstplace4health.com) for men and women of all ages. Using a support system that incorporates prayer, balanced eating and exercise plans, this non-profit group provides the opportunity to change your life, not only physically but spiritually and emotionally.

A healthy lifestyle can also have other advantages. Many health insurance companies offer a refund on an annual premium if the insured can prove that they have attended a health and fitness center three times a week.

Be Wealthy

There’s no need to pay more than necessary for health insurance.Compare plans and prices by going to a non-intrusive site such as www.Ehealthinsurance.com. It’s possible to get a relatively anonymous quote instantly without the intrusion of a salesperson calling your home or office. It’s also a good place to compare plans by remembering that you shouldn’t buy what you don’t need. For example, if you do not need maternity benefits, eliminate them from the plan you choose.

If you can consider a higher deductible, then the money saved on premiums could go into a Health Savings Account (HSA), which is basically a health insurance policy you can bank on. When an HSA-eligible policy is purchased in conjunction with an HSA account, then the Health Savings Account is funded with pre-tax dollars, and taxable income is reduced at the same time. The money in this account is used, tax-free, to fund healthcare related costs including prescriptions, insurance deductibles and over the counter medications. The money that is not used in this account is rolled over from year to year and can serve as a retirement plan.

You do not have to insure all family members on the same policy. If there’s an employee benefit in a group plan, it doesn’t mean all family members have to be covered on the same plan. An average family can save as much as $2500 a year by pulling family members out of pricey group plans and purchasing individual health insurance. The exception to this would be if the family member has a pre-existing condition (such as asthma, a heart condition, high cholesterol, etc) that might be temporarily or permanently excluded in an individual plan. In that case, it would be better to pay the higher premium in order to keep the comprehensive coverage consistent.

Be Wise

Know the difference between health insurance and discount health or medical “cards.” According to the Coalition Against Insurance Fraud, many companies are selling so-called discount health cards to consumers seeking affordable healthcare. Usually for a monthly fee, the cards claim to save subscribers money by offering discounts on physician visits, hospital stays, prescription drugs, dental work, eye care and other treatment. The CAIF says that, “Discount health cards are spreading rapidly. Many may offer valuable, money-saving benefits for people without health insurance. But these cards can also be confusing, because they are not insurance. You still must pay the medical bills yourself. These cards simply offer lower prices on services that accept these discounts.”

If you have a question about a policy or a card before you buy, go to www.insurancefraud.org to make sure you’re being wise in your choices.

Finally, for the 45.8 million uninsured Americans, who may feel they cannot afford health insurance, go to the non-profit arm of a previous site found at www.EHealthinsurance.org to see what services and benefits are available for your particular situation and in your state and community.

Ellie Kay

America’s Family Financial Expert (R)

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