One of oldest adages in investing is “no risk, no return.” These days, that old saying seems literally true, since cash is considered the safest asset, yet it earns virtually no interest. However, in this article we’ll examine whether cash is as safe as is sounds. Then, we’ll look for where to get the most bang for your bucks.

The not-quite-so-new FDIC limits
The first place, and perhaps the safest place, people turn to keep their cash is a bank to take advantage of FDIC insurance. The insured limit was raised from $100,000 to $250,000 during the financial crisis of 2008, and the increase was made permanent in 2010 by the Dodd-Frank bill. Additionally, through 2012, all non-interest-bearing accounts have unlimited coverage.

The limits apply to each “ownership category,” which includes single accounts, joint accounts, certain retirement accounts, and trusts, among others. So, you could have a single account in your name that is insured up to $250,000, your spouse could have a separate single account insured up to $250,000, and you both could have a joint account that has an additional $250,000 of coverage, for a total of $750,000 insured deposits (just in case you find a LOT of change in your sofa). Also, you get a whole new set of limits if you go to another bank — but it has to be a completely different bank, not just a different branch of the same bank. Use the Electronic Deposit Insurance Estimator (EDIE) at FDIC.gov to determine how much of your cash is covered.

Deposits at credit unions have nearly identical coverage through the National Credit Union Association. You can use the e-calculator at NCUA.gov to determine how much of your deposits are insured. Both FDIC and NCUA insurance are backed by the full faith and credit of Uncle Sam. That doesn’t feel as safe as it used to, but the reality is that it’s about as safe as you’ll find in this world. Just make sure that your bank or credit union really is insured, which you can confirm at FDIC.gov and NCUA.gov.

The insurance extends to what are generally considered cash equivalents, such as checking accounts, savings accounts, money market deposit accounts, and certificates of deposit. The insurance does not cover investments such as stocks or bonds, nor does it cover money market funds, which are very different from money market accounts. What’s the difference? We’re glad you asked.

What’s in a money market fund?
A money market deposit account is essentially a savings account at a bank or credit union that allows for a limited number of checks to be written to third parties. A money market fund is a mutual fund run by a financial services firm, and it invests in short-term debt (with maturities of a year or less) from governments and corporations. Like every other mutual fund, there is no government guarantee behind a money market fund. However, every fund strives keep its net asset value at $1. There have been only two instances of funds “breaking the buck”: one in 1994 and one in 2008. Investors in these funds lost 2% to 8% of their principal.

Chances are, the cash in your brokerage account or IRA is in a money market fund. To see what’s actually in the fund, you’ll need to visit the website of the company that sponsors the fund. (Fund information providers such as Morningstar typically don’t provide analysis of money market funds.) As an example, let’s peer inside a fund from Fidelity, the largest provider of money market funds for retail investors. Almost half of the Fidelity Cash Reserves Fund (FDRXX) is in certificates of deposit, almost 12% in Treasuries or government agency debt, and more than 17% is in short-term debt (known as “commercial paper”) from financial companies. On average, the debt in the fund matures in 56 days.

What many investors might find surprising is that most money market funds have exposure to European debt, though funds have reduced their exposure from 30% at the end of May to 10% by the end of December, according to the Fitch rating service. Meanwhile, they’ve been increasing their holdings of U.S. government debt and repurchase agreements (a.k.a., “repos”), which are a form of secured lending and, thus, theoretically safer bets.

But as the name implies, repos include an agreement by which the seller agrees to buy back the security at a later date, at a certain price. If the seller can’t honor the agreement, the buyer — in this case, the money market fund — is stuck with the debt instrument at whatever the price the market is willing to pay for it. The Fidelity Cash Reserves Fund has almost 20% of its assets in repos. The T. Rowe Price U.S. Treasury Money Fund (PRTXX), which you’d think — given the name — is invested just in U.S. Treasuries, actually has more than a third of its assets in repos. The fund’s fifth-biggest holding is debt from General Electric.

As long as the global economy functions in a somewhat normal (albeit slow) manner, money market funds are very safe. However, if there was another “black swan” event such as we experienced in 2008, it would not be a surprise if a few more money market funds “break the buck.”

Where to turn
We don’t want to overstate the risks of money market funds; the vast majority will maintain a $1 NAV. However, given their low yields — the Fidelity Cash Reserves Fund yields a whopping 0.02% — there are few compelling reasons to say with a money market fund, especially if you don’t need the money in the near term. Financial planner and columnist Allan Roth has written about choosing higher-yielding, longer-term CDs. Even if you have to pay a penalty for getting your money back early, it’s worth getting the extra yield, as long as you can leave the money alone for approximately two years (depending on the yield and early withdrawal penalty). To find the best rates, check out the GRS CD rate finder, which monitors more than 200 banks and displays the 50 highest rates. There’s no reason to get virtually no yield from a money market fund, when you can get 1% to 2% or higher from a CD that enjoys FDIC or NCUA insurance. That’s the kind of risk-reward proposition we like most.

Where do you keep your cash? Know of any banks or credit unions offering particularly good rates? Let us know in the comments.

This is America Saves Week, and I am writing to you sitting next to a jar. This jar is stuffed full (okay, imagine it gently filled — it’s a small jar) of five dollar bills. I do not feel proud that this is the best way I’ve found yet to save money consistently; somehow, having it sit there on the windowsill is a gentle reminder that there are more important things than the x (a new wireless router; mine is working, just not sparklingly), y (a quick run to the shop on the corner for a thermos of coffee), and z (delivery pizza for dinner instead of leftovers) that I could spend my available cash upon.

I can’t quite figure out why this works, but I feel that there is some deep insight here. The thing is: there is “saving” money and then there is “saving money.” In one case you are putting money away that you intend to spend later (much, much later, if all goes well). In another case you are spending money, but not quite as much as you would have otherwise. The trick is to move the extra money from the latter to the former.

1. I saw the five-dollar bill jar on Pinterest…
The five-dollar bill jar is one way, and I found it on Pinterest (for those who dig that idea board site), and it works like this: every time you come into possession of a five-dollar bill, usually as change from another purchase, you save it and put it in a jar. Some savers have an envelope in their wallet (that won’t work in my tiny wallet, but anyway…) and, every $50 or so, transfer it to a high-yield savings account. Other savers have a goal in mind, like Christmas presents, and the money is for that. I’m combining two Pinterest ideas, and I’ve painted chalkboard paint on my jar so I can write in what I’m saving for.

…but it was my 9-year-old’s idea.
I was encouraged to do this by my 9-year-old, who told me one day shortly after Christmas that he had an idea.

“Why don’t you pick an amount every time you get money, like $20, and put it in a jar to save?” he asked.

“What am I saving for?”

“Christmas presents! That way you’ll have a whole lot of money!”

The world conspired to create my jar. I haven’t counted, but there must be $30 or $40 already after just a few weeks. I think this works by setting an easily followed rule that creates an emotional barrier between me and the money. If I spend a five-dollar bill, I’ve betrayed my own set of internal rules.

2. “I’ll give you all the money older than you.”
This is a natural outcome from the inspiration given to me by my first work mentor, Herb Althouse. He was a managing director in the loan syndications group at First Union; my very first job out of college. I was not even 22 when I started work, and he thought of me as impossibly, adorably young. To emphasize my adorable youth, he would regularly dig in his pocket and give me all the coins that were older than me. Ever since, I’ve very carefully saved all the coins older than me; I won’t spend a 1970 quarter, even if that means I have to use inexact change. It’s an emotional tribute to Herb. I realize that this won’t probably result in saving a ton of money (especially not if you’re born before the 60s); but it helped me establish the limits that are now keeping me from spending my fives.

How else can we use self-imposed limits to save money?

3. The paycheck deduction is a no-brainer (literally).
I remember when I first got a paycheck, for my work as a counter girl at the Arctic Circle, a fairly tiny local fast food chain that is now even tinier. (I make very occasional pilgrimages to one of the last remaining outlets in the coastal town of Newport, Oregon; it’s not as good as I remember.) I, displaying my adolescent quant jock nature, had carefully calculated what I thought would be deducted based on the hours I’d added on my time card. Every two-week pay period, I would multiply my hours by my hourly rate and then deduct 0.06 for social security; 0.165 for unemployment; and a tax rate based on the last paycheck. I knew how much, to the last nickel, would be in my check. It was so frustrating to know how much the gross income was, and then be able to spend only the net. I had a cheerleading uniform to save for!

But, I couldn’t spend the money, and one gets used to that post-deduction amount after awhile. Most adults don’t, like 14-year-old me, sit with a notebook, a pencil, and a calculator, figuring out what each check will look like. You get used to only seeing the amount in the “net” line and forgetting the deductions. That’s why it’s so useful to take advantage of whatever automatic savings plan your employer might offer, whether it’s a 401(k) or a simple automatic deduction into a savings account you designate. The Army has a fantastic savings plan for military members deployed in designated combat zones that allows soldiers to earn 10% interest on up to $10,000. Pre-paycheck deductions allow you to create that emotional distance from the money you need to keep it in the savings account.

You very literally don’t think about it: the literal definition of a “no-brainer.” (If you’re interested in all this and speak scholarly-paper speak, you should really read more about that.)

4. Attaching your savings to a promise is a great way to make them happen.
My 9-year-old was probably inspired by the summer we saved for his Nintendo DS. I was reluctant to get him a game machine, but when his dad was deployed for the first time the two of them agreed we would tie it somehow to goals we had for his behavior. So we decided that, each time either Dad or I got paid, we would put $20 in a special envelope toward the DS: if he had been helpful over the preceding period. If he was unusually patient or wonderfully helpful, I’d add in a little extra, $5 or $10. While we were somewhat generous in assessing helpfulness, he was also quite helpful; and because I’d promised to tie the reward to his behavior, and promised him he’d eventually get the Nintendo, I had a powerful emotional incentive to keep my word.

It’s easiest to use promises to motivate your savings behavior when the term for the goal is somewhat short and the other party to the promise can monitor your progress. The physical act of putting the money in the envelope was something I did in front of my son; and we only had a few months’ time to reach our goal. You could also, if you promised a spouse or an older child, put money in an online savings account to which you both have access. Another more institutional equivalent would be if you file your taxes very early, to say that you will put some amount of money in your IRA before tax day in April. I did this for both myself and my husband this year: no motivation like not having to file an amended tax return!

5. Adding pain to both the front end and the back end is another way to save.
Yes, we’re motivated best by positive stimulus (This is my best lesson from parenting three boys with cognitive development delays.). But adding penalties is sometimes the best way of forcing ourselves to do things. I am, for instance, a wonderful saver: I can transfer money into my online savings account with the best of them! I’m rather awful at keeping myself from accessing that money if, for instance, I really want to take advantage of this one-time-only offer on super awesome film for my vintage Polaroid SX-70. Or if my friends are organizing a group buy of wool comforters (see my tax refund story).

So it’s best if I put my money in an account from which I will not be able to withdraw money easily, or without penalties. Sure, sometimes there are limits on withdrawals from savings accounts (like being penalized if you withdraw more that six times in a month), but those don’t kick in until the end of the account cycle, so that’s not necessarily a good enough penalty. I find that the “penalties” (in both brokerage fees and time for the sale to clear) of selling stock in my Sharebuilder account are far more effective as a deterrent. I have to not have money for food or the mortgage before I’ll do that. You could think of a large number of ways to add in withdrawal penalties, from structural ones, like the military’s savings plan, which only allows withdrawals every 120 days, or a 401(k), or practical ones, like adding money to some online savings or payment account, like Paypal or Dwolla, which will take a few days to “get back” if you need it, giving yourself a buffer to rethink your decision.

Adding penalties to the front end is a little more tricky, but can be accomplished by the wealth of automatic bank drafts that are available from online savings and investment accounts. The Sharebuilder account will withdraw a fixed amount of money each month from your bank account to invest in a pre-selected group of investments; you can cancel or delay it, but it will still trigger that opportunity to rethink your decision. If you’re trying to save cash, you’ll have to make your own self-imposed penalty. Maybe if you spend a five dollar bill, you have to go without something the next day (chocolate works for me as a powerful motivator!).

We all want to save. We just need help.
I don’t think there is a single Get Rich Slowly reader who doesn’t have a desire to save and to keep that money in the savings account until the emergency occurs or the goal has been reached. But it’s really hard, on both counts, and I’d be willing to bet that a surprisingly large percentage of GRS readers don’t save (or don’t save nearly enough). Starting small and easy is best; and keep in mind that we have a strong set of emotional tools at hand to help us along the way.

How can you set up emotional connections to savings, both on the front and the back end?

“Your comic collection is growing,” he told me.

“I know,” I said. We talked about the process of building a collection while I showed him some recent additions. “These comics cost a lot of money,” I told him, “but it was much less than if I’d bought them piece by piece.”

Like me, Nick has been a collector his entire life, so he understood what I meant. But while I’ve collected comic books, he’s collected stamps and coins. We may not be able to compare notes on our specific collections, but we have a good time discussing the process of collecting itself. Nick, too, tries to collect on the cheap.

No matter what you collect, there are ways to enjoy your hobby while spending less. Here are some of the ways I’ve learned to keep costs low after four decades of collecting.

Narrow your focus
Know what you’re collecting — and why. One problem with collecting is knowing when to stop. This topic came up recently at my favorite comic-book discussion forum. “At what point do you have to say enough is enough?” asked one member. How do you know when your collection is finished? How many Magic cards do you need? How many autographs? How many canning jars? How many Hummel figurines? If you don’t have a defined stopping point, your collection will never be finished.

When I was paying off debt and building savings, I cut back on my comics spending. Instead of buying everything I wanted, I decided to focus on my favorite niches. For several years, I almost exclusively bought collections of comic strips. Because there weren’t many of them, I could afford to buy almost all of the anthologies being released: Peanuts, Dick Tracy, Little Orphan Annie, Bloom County, and so on. By making my collecting more specific, I was able to indulge my hobby on a smaller budget.

Look for sales
Yes, even collectibles go on sale. When I finally found the cash to start collecting comics again in 2009, I was fortunate to discover a place that was selling back issues at 50% off their regular prices. And my favorite local comic store (Excalibur Comics in Portland — that place rocks!) regularly has 50%-off sales. I’ve been able to pick up tons of my favorite comics from the 1970s at a buck a piece. Yes, please!

Find dealers you can trust
Try to find someone with tight grading standards. Most collectibles — including comic books — are priced based on their condition. For instance, comic book conditions can be classified as Poor, Fair, Good, Very Good, Fine, Very Fine, Near Mint, and Mint. But not everyone grades the same way. What I call Good, you might call Very Good, and somebody else might call Fair. Steer clear of dealers who claim a Good comic is Very Good (or Fine!); gravitate toward those strict graders who will sell you a Good comic for the price of one that’s only Fair.

Believe it or not, Kris collects canning jars. She and a friend share this passion, and often swap tips. They’ve also found a jar dealer they trust (though the guy is a bit of a nut). They’re willing to drive out to see him because they know he has good jars. (Here’s a story about Kris’ canning jar collecting.)

Scout unusual sources
Check out yard sales, antique stores, flea markets, and auctions. If you’re patient, you can sometimes find great deals. Once at a garage sale, I found a box of comics from the 1960s in great condition. Unfortunately, this was at the depth of my debt despair. I couldn’t afford a single one. In retrospect, I’ve always regretted not finding a way to just offer a set amount ($20? $100?) for the entire box. There would have been no harm in asking.

While Kris and her friend collect canning jars, their dealer is even more obsessed. He has a house full of them. (As I say, he’s a bit of a nut.) He goes to estate sales and asks the people if they have any home-canned food in the pantry they’d sell him. He then eats the food and adds the jars to his collection.

Settle for less
Go for the minimum condition you can live with. Some collectors want their objects to be in perfect condition. They pay a premium. If you’re willing to settle for second-best (or third-best or fourth-best), you can have highly desirable objects for cheap.

I’m willing to accept Poor quality comics, for instance. Much of my collection is simply Fair or Good. These are the comics most other collectors reject. But you know what? While they’re paying $5000 for a copy of Fantastic Four #1, I paid $500. Sure, mine is falling apart. I don’t care. I read it and enjoyed it.

My cousin Nick collects ancient coins. He’s not willing to pay top dollar for the best pieces either. In fact, he buys bags of “uncleaned coins” — basically hunks of metal caked with centuries of dirt and grime — and slowly removes the patina in order to discover what’s underneath. Most of the coins he finds this way are common, but he’s also discovered some gems. Because he’s willing to accept poorer quality, he pays far less than he otherwise might.

Buy in bulk
If you have the cash flow, consider buying large lots just to get at a single piece. Buying large lots is generally a much better deal than buying individual pieces. The drawback, of course, is that you usually get stacks of stuff you don’t need. You either own the other pieces or you don’t want them. This can make buying a large lot to get at a single piece a bad idea, especially if the cost is high.

But if you have plenty of cash, you can actually make a profit doing this. For a while, I was targeting old Wonder Woman comics, for instance. Sometimes the only way to get the comics I was after was to buy six or eight at a time, including several I didn’t want or need. I did this, but then set the others aside to resell. (I haven’t actually resold anything yet, but I have a huge stack of stuff I’ll liquidate when I get the time. In the long-term, this should be very cost effective.)

Avoid temptation
I spend less money on comics when I stay out of comic shops and when I avoid comic blogs. I spend less on board games when I intentionally avoid learning about new games. (I went for years without buying new games, and I was perfectly happy. Now I’ve bought several in the past few months. Hanging out with Adam Baker has just made the urge to splurge grow stronger. He’s loves board games too.)

Be patient
When you find that one thing you’ve been waiting for in order to complete your collection, it can be tempting to buy it immediately. Don’t. Make sure you’re getting a good deal. As a collector, you need to know the market, you need to know what things are worth. And as a collector, you’ll spend far less if you’re willing to wait for the right item at the right price.

This can be easier said than done, of course. When you stumble upon a missing link, you can be afraid you’ll never find another one again. You want to buy it now, now, now. Train yourself to be patient. Know your price points. Be smart.

Borrow
Sometimes you can satisfy your urge to collect by borrowing and sharing. In my case, I was able to curb some of my craving for comics by making use of the public library. The local library system stocks some expensive hardbound compilations. Since the library owns and stores them, I don’t have to. This principle can work for other types of collections, too (though admittedly my comics situation is close to ideal).

Or maybe you have a friend with a similar interest. Maybe she collects Wedgwood pottery too. Instead of both buying the same pieces, you could build a short of shared collection, lending items to each other from time to time.

Final thoughts
In general, collecting is not a frugal hobby. My collecting habits have been a constant drain on my bank account. I’ve come to believe that collecting is merely a form of hoarding. It’s a socially acceptable way to acquire Stuff.

As with anything, though, it’s okay to collect in moderation. But if you find yourself being sucked into your hobby, that can lead to problems, both mentally and financially. Again, I say this as one who’s been there (and may still be there). If you’re going to collect, do it right.

I wrote the bulk of this article last June. Because I’ve made some major changes to my life since then, I’ve actually called into question my own tendency to collect. If I want to travel, and if I’m going to live in an apartment, is there really a place for building a collection? What’s the point? Why don’t I “outsource” the collecting — to the public library, for instance.)

Over the past few months, I’ve put the brakes on my own collecting habits. I’ve spent $0 on comics since September, and the only books I’ve bought have been for specific purposes (learning Spanish, our monthly book group, etc.) That’s not to say I’m ready to give up collecting completely, of course, but maybe I can finally spend some time reading all of the books I’ve bought before!

I’m actually curious how many GRS readers are collectors. What do you collect? And how do you do it? What strategies do you use to keep costs down?

One fine evening late last summer, I came home from a lovely dinner with friends to find a large envelope stuffed into my mailbox. Despite my slightly inebriated state, I was able to see that the envelope was from the IRS. I’d recently sent the IRS a form and had expected to receive a receipt, but I hadn’t imagined that it would require such a hefty response.

Turns out they weren’t responding to my form. Instead, I was being audited.

Anytime, Anything (Almost)
The reason I was being audited — supposed foreign income received from an internship — was absurd. Adding to the ridiculousness was that I was being audited in September 2011 for my 2008 taxes. And here we come to our first lesson: The IRS can audit you for anything that they want to at anytime before the statue of limitations expires (three years on most things). It’s never outside the realm of possibility.

In fact, I was being audited for something that didn’t exist, by the bureau of Large Business and International Compliance. You’d think that I were a millionaire with hidden offshore assets (I can only dream) for this office to mess with my measly return, but alas that is sadly not the case.

Ridiculous or not, this was actually happening, and I had to deal with it. At first, I felt anger. Then I felt fear. Fear at the enormous amount of information requested. Because no matter the reason for the audit, once they audit you they can look at everything on your return. The amount of documentation required and the number of forms to fill out was truly overwhelming.

What Would You Do?
For 2008, I had used TurboTax to file my return. I usually purchase audit protection. When I searched through my files, I could find no evidence that I had done so for 2008. Here’s our second lesson: When you file your taxes, always plan what you’ll do in case you get audited. Because I can assure you most people’s response to an audit, even just a “correspondence” one like mine, is not “Oh yay! I would love to represent myself to the IRS.”

Previously, I’d relied on an accountant, so I made an appointment with him ($250 for a one-hour session). He calculated that the amount I stood to owe the IRS was less than what he would charge to represent me. So I was on my own after that initial meeting.

Fighting the Man
Fueled by my anger and fortified by the strategy session with my accountant, I began assembling my response. This involved contacting numerous third parties for documentation, including my employer. Embarrassingly, I had to explain to the accounting department that I was being audited and ask them to write me a letter pinky-swearing that all of my income was reported on my W2. I also had to get a letter from my boss (I wrote it and he signed it) explaining why the one non-reimbursable business expense I had was relevant to my job and swearing that it was not reimbursed. Luckily, my boss thought that the audit was ridiculous as well and didn’t look at me as if I were some kind of shady tax cheat.

In the process of preparing my response, I pored over my return again and again. In doing so, I discovered I’d been careless. Using TurboTax, I had somehow downloaded my dividend income twice. This was great. It meant that the IRS would owe me money because if the IRS finds a mistake in your favor during an audit, they have to correct it.

After about 40-50 hours, I had compiled a binder with documentation for most things the IRS requested. I sent off my response in the mail, return receipt requested.

A few weeks later I got the response to my response. The IRS denied my one non-reimbursable business expense deduction. They didn’t even mention anything about the reason they had initiated the return. Now I owed back tax and interest — and an accuracy fine!

Making Peace
I had a choice to make. Initially, I thought I would fight. My accountant encouraged me to do so. The next step would be to call the examiner, and if he didn’t agree with me, to call his supervisor. If I still didn’t get anywhere, I would appeal his decision and get a meeting with a local supervisor where I’d explain why I thought the initial auditor’s decision was incorrect. I’d found a recent tax law case that was publicized in the media. I read the judge’s decision in favor of the taxpayer and thought that my case was very similar. I was fired up and ready to fight!

And then life happened, including a lengthy interview process for a potential new job that involved cross-country travel. And then I came home to another big package from the IRS requesting that I extend the statue of limitations on my return (it was about to expire in a few months).

The next day, I gave up. I phoned my nemesis, the examiner. I pleaded: “Why are you sending me more documents? I will send you the stupid check. Just leave me alone. Why do you need more time with my return. There is no more blood to be sucked from this stone!”

The IRS auditor was possibly the nicest and most patient man on Earth. He explained that he had to send the statue extension request to all returns approaching expiration. He somewhat conceded that it was highly unlikely that I had any foreign income. And when I explained why I thought he was wrong to reject my business expense, he encouraged me to write up my case and to explain why I thought I should not have to pay the accuracy fine. When I said I didn’t have the time, he offered to consider giving me an extension. When I said I just wanted to pay my taxes and get it over with, he agreed that many taxpayers do just that.

The Bottom Line
So, I sent the IRS a check for about $2000.

Yes, that’s a lot of money and I still don’t believe that my interpretation of the tax statue was incorrect. But my hard work on preparing my response lowered the amount that I owed (probably by about $1000), so I at least felt like I had done something to combat this thing. I just didn’t have the mental stamina or energy to deal with it anymore. It had already played out over three months.

I wasn’t going to be like my hero, the taxpayer I read about who fought the IRS for years, including a team of lawyers in tax court, and came out on top. Because I value the tens (or even hundreds) of hours it would require me to devote to fighting this more than I value the $2000.

In the end, the IRS got their money, but less of it than if I hadn’t been diligent in my response. And I got to walk away with my sanity.

More than other expenses, your housing costs are influenced by where you live. Some parts of the country — and some parts of the world — are much cheaper to buy a home or to rent an apartment. It’s cheaper to live in Boise, Idaho, for instance, than to live in New York City. Generally, however, there are reasons for these price disparities. Most people are willing to pay more to live in New York than in Boise, and that drives prices higher. It’s a trade-off.

I’m a firm believer in the Balanced Money Formula, which says that if you pay too much for housing, you’ll have less to spend on other wants and needs, and you’ll always feel pinched, as if you can’t afford anything. On the other hand, if you limit your housing expense to below 25% of your take-home pay, you should have lots of breathing room.

For my own part, I pay a little more than I ought to for housing. After a few years of spending $0 per month (because we paid off the mortgage after selling the blog), I’m now paying $950 for my apartment in Portland. That’s 36% of my take-home pay, and a fine example of not practicing what I preach. But I’m able to get away with this because:

• I’m still saving more than 20% of my income.
• I have ample emergency savings.
• The rest of my spending on needs is low.
• My spending on wants is extremely low, and my relatively high housing expense doesn’t make me feel pinched.

As I mentioned before, this $950/month figure seemed high to me until I started comparing notes with other Portland renters. Yes, there are places that cost less, but they all involve compromises I’m unwilling to make right now. (The biggest compromise? Location. I want to be able to walk almost everywhere, and I can do that from this apartment. That’ll help me save money on auto expenses, which balances things a little.)

What about you? Where do you live and how much do you pay on housing? What percentage of your budget does this represent? Does your housing payment cramp other parts of your life? Or have you intentionally kept it low so that you can afford to spend on other things? If you were to start over again from scratch, what sorts of housing choices would you make? Would you rent? Would you buy? Would you move to another part of the country (or the world)?

I’ve dropped a rather obscene amount of money on bodywork in the last few years. I’ve had an evolving team of chiropractors, massage therapists, and acupuncturists. I’ve bought books on physical therapy exercises. Some things have worked, others have not. In the end, the pain always comes back.

I have chronic shoulder pain. My arms also frequently go numb in the middle of the night. I don’t mean they tingle, I mean sometimes I literally cannot move my arm. I have to use my functioning hand to reposition it and get blood flowing back into the limb. It’s kinda scary.

Two (life-changing?) questions
When my shoulder bothers me enough, I usually get a massage to alleviate the pain. It’s a temporary fix — I know a 60-minute massage can’t cure a chronic problem that’s probably caused by structure and daily habits. But recently a new (to me) massage therapist asked me two questions that no one else had asked. First, she asked if I grind my teeth at night. Yes, I have in the past, and I have a TMJ (temporomandibular joint) disorder. She firmly suggested that I started wearing my night guard consistently, and in the past five days the pain has gone from a constant ache to a mild annoyance.

The second question she asked: “How old is your mattress?” Oh, man. So old, I didn’t want to tell her. The mattress my husband and I sleep on for (ideally) eight hours every night is 11 years old. I know it’s not in good shape. I just never thought it would make that much of a difference, but then, I never would have guessed that a night guard would, either. “You should think about replacing it,” she said. “Even a cheap new mattress is better than a worn-out one. One of my clients bought a $600 mattress from Costco and her back pain went away.”

The research begins
I know you’re probably thinking that a new mattress should have been an obvious solution. But after so many years of varying diagnoses, x-rays showing scoliosis (one chiropractor called it “severe,” another disagreed) and other spinal issues, I thought the pain was  a given, something I’d have to learn to manage. I also didn’t realize just how old our mattress was.

I started my mattress search in my usual way, by reading mattress-buying guides like the one J.D. wrote a few years ago. (Interesting tip: According to Consumer Reports, you’ll know in 15 minutes if a mattress will be comfortable: “Panelists who took beds home for a month-long trial rarely changed the opinion they formed after the first night. On the whole, their opinions were the same as those of our in-store testers.”)

But I also had some other concerns, such as off-gassing. Most mattresses and box springs are coated in a mixture of fire-retardant chemicals, formaldehyde, glues, stains, and coatings, all of which release gasses into the air. There are a lot of parenting sites that recommend organic mattresses for baby’s crib, but the hard, scientific data is nonexistent or vague in most of those articles. Here’s what I was able to find:

• The most widely used flame retardant, PBDEs (polybrominated diphenyl ethers), are a chemical of concern to the Environmental Protection Agency (EPA). According to their site, the “EPA is concerned that certain PBDE congeners are persistent, bioaccumulative, and toxic to both humans and the environment. The critical endpoint of concern for human health is neurobehavioral effects.” As soon as the EPA bans one kind of PBDE, another is created to replace it.
• Environmental Health News reported that because of widespread use in the U.S., Americans have PBDE levels in their bodies 20 times higher than Europeans. “Californians are the highest exposed,” says the article, “likely because manufacturers added PBDEs to polyurethane furniture cushions to meet the state’s stringent flammability rules.”
• In a University of California at Berkeley study, of 223 pregnant women studied, more than 97% had PBDEs in their blood, and each 10-fold increase in a woman’s blood was linked to a 30% decrease in her odds of getting pregnant.
• A Uppsala University study conducted 10 years ago found that two kinds of PBDEs led to neurological problems affecting learning and memory in lab mice. The lead scientist, Per Eriksson, also has shown that PBDEs cause neurological damage in lab animals at exposure levels just slightly higher than those found in humans.

For a more in-depth look at PBDEs, this Slate article outlines the studies and recent developments. I’m still not sure how much of a difference a mattress makes — is the amount of toxic gas negligible compared to, say, your laptop or carpeting? If that study exists, I couldn’t find it. In the end, you have to weigh the studies with the unknowns and decide if paying extra for an organic mattress is right for you. (Also note that if your mattress is a few years old, it’s possible that it’s finished off-gassing.)

My husband and I decided to go with organic, and we made some adjustments to the budget to cover it. After all, I’d spent much more during the past few years on chiropractic appointments — even an organic mattress looked downright cheap in comparison!

Shopping for a mattress
We’ve covered mattress shopping at GRS here and here, and those two articles have great advice for getting a good deal on a comfortable mattress. But if you’re interested in an organic mattress, the following are a few extra pointers to keep in mind:

• Manufacturers and retailers often use words like “natural,” that don’t necessarily mean anything. For example, sometimes synthetic latex is blended with natural latex, and the end-product is advertised as “natural.” Other labels to question: chemical-free (nothing is actually chemical-free, everything is made up of chemicals), nontoxic (again, nothing is truly nontoxic, even water is toxic if you drink too much), and green (there are no standards for using the word).
• While you’re at it, question the word “organic,” too. Some mattresses are sold as organic, when in reality the cotton is organic and the latex is synthetic. If you’re going to spend the extra cash on an organic mattress, make sure it’s made from wool (a natural fire retardant), organic cotton, and 100% natural, sustainably sourced latex.
• If possible, buy direct from the manufacturer. Cutting out the retailer is one way to mitigate the higher cost of organic.
• Always try before you buy. If you shop online, where organic mattresses and good deals are often easier to find, be sure to try out the mattress in a store first, or make sure that the return policy allows you to send it back. Usually there’s a restocking fee. Be sure you know the store’s policy and will be okay with the terms if the mattress doesn’t work for you.

We opted to buy our mattress from a Texas manufacturer. I found some great deals for organic mattresses online, but I liked that this was a local, 20-year-old business that had great reviews from customers. If we aren’t happy with our mattress, they’ll take it back and customize it based on our feedback, at no additional cost. “We’re in it together,” said the owner, who sold us the mattress. Additionally, if I get a note from a doctor about my back issues, the mattress store will refund us the sales tax we paid.

Next Thursday our new mattress will be delivered, and the old one will go to that big mattress store in the sky. I won’t be able to tell you with any certainty whether organic was worth the extra expense or not, but I have a feeling I’m going to owe that massage therapist a fruit basket or something.

“Where are you going to college?”

“What are you going to major in?”

“What kind of career do you want?”

As senior year flies by like a speeding car, there are certain questions I have been asked countless times by friends, family members, and coworkers. These questions are probably the same for every high school senior — what’s next? What do I want to do with my life?

Intimidating price tags on a college education
Now this isn’t a bad thing, in fact I think it’s rather positive. Deciding on what you will do after high school is part of growing up and setting a course. But with the average cost of attending a private university in the U.S. at a staggering $28,500 per year, not including room and board, the goal of attending a four-year college without debt seems unattainable to most people.

What’s even more discouraging is that with these price increases, many are going to community college. Classes are now overcrowded and difficult to enroll in.

My plan for a debt-free education
I have always had a goal of staying debt-free through college, which is why I had a formula since entering high school. Below are some things I have done to cut the cost of college for myself. They are easy steps other students can replicate no matter where they live.

• The first thing I did was to take college classes when I was in junior high. They were all online, and I did them in addition to my regular junior high classes. Back then I took them to prove to myself that I could do it, but now I realize how beneficial they were. When I graduate high school this spring, I will have 32 college credits, which equals a full year of college. What’s amazing is that these credits didn’t cost me a dime, as junior high and high school students can take college courses for free in California. Talk about a money saver — this will allow me to graduate an entire year early!
• I plan to go straight to a four-year university, but with a few sacrifices. Having the college experience of living in the dorms and making lifelong friends is something I have always wanted to experience, so I plan to make cuts in other areas. My plan is to go to a local four-year university and only live on campus the first year. The second and third year I will live at home and commute to classes and school activities. This will allow me to make friends and experience living in a dorm for the first year. I’ve estimated that doing this will save more than $20,000 in room and board expenses for those three years.
• While in college, I will be without a car. While this will be a difficult adjustment, in reality a car is not a necessity, and I can always get a ride from a friend and use public transportation to get to class when I’m not living on campus. I should save approximately $24,000 by living without a car.

My total savings from taking these three steps comes to an estimated $81,000. Not everyone can or should follow my exact plan, but when you get motivated and creative I think most anyone can find a way to get a college degree without taking out student loans.

In France, they peel apples. When I worked as an au pair, the kids would ask me to peel them. I’d sit there wondering why anyone would ever peel an apple. One morning, I grabbed an apple out of the fridge, took a bite, and the mother said, “Oh, don’t you peel it first?” They don’t store butter in the fridge, nor eggs, nor milk, before it’s opened, as UHT (ultra-heat treatment, which kills spores) milk is the norm. And did I mention they peel apples? We have so many assumptions on the right way to do things, especially with food, based on our society, and of course, our parents. Often, we don’t even know they’re there.

I heard a story from a couple about how when they first moved in together, their first argument was over condiments. They needed ketchup for the faux chicken nuggets they were eating and the man grabbed a small bowl, poured the ketchup in, and placed it on the table with a spoon to be scooped out. The woman, seeing that the ketchup bottle was not on the table yet, did what her parents always did and placed the bottle on the table. The man was appalled. What, do we live in a zoo? The bottle right on the table?! Realizing it was just cultural conditioning, and it’s not like chicken nuggets are haute cuisine in need of proper presentation, he got a good chuckle out of his knee-jerk reaction.

My former roommate and I used to argue about what goes in the fridge and what doesn’t. Bread? Potatoes? Butter? I love when our quirks and habits come to light and we question the things we’ve always done because that’s just how you do them. I love it even more when the questioning of those habits saves me money. I’ve been doing this a lot recently with my fridge and food storage.

The art and science of storing produce
When I saw the website Save Food From the Fridge, I got inspired. According to the U.S. Energy Information Administration, 99.9% of American households have a refrigerator. I follow suit, and in the past, apples, eggplants, peppers, and just about every other fruit and vegetable went in the fridge. It’s how my family did it, so it’s how I did it. Still, even with the fridge (or perhaps, because of the fridge) once every couple of weeks, some of it would spoil and be thrown away. Planning my food purchases better could surely help, but I was curious about ways to extend the self life of produce.

Save Food From the Fridge uses food biology and creative design to keep produce fresher for longer and saves electricity in the process. For example, studies show that there is a symbiotic relationship between apples and potatoes that can be exploited to keep both from spoiling. Apples emit ethylene gas which, for most fruits and vegetables, speeds up the process of ripening. If you ever have stored apples and bananas together, you know this fact all too well. But when apples are combined with potatoes, it slows down the ripening process. The website shows a wood box where potatoes are kept in their ideal condition, in the dark, while apples rest on holes above able to emit their ethylene to the potatoes.

I used to store produce like eggplants, cucumbers, and peppers in my fridge, even though it often left them slightly withered. Save Food From the Fridge suggests a simple rack with a water tray underneath so that the produce can have a constant source of humidity and hydration. That source of hydration keeps them fresher for longer than just keeping them cold, after all, they all are summer crops.

Life without a refrigerator?
My friend Knox runs a small art gallery and lives without a refrigerator. He lives alone in Chicago and has two grocery stores within walking distance, one of them is open 24 hours. He says that his refrigerator always ended up being a storage place for expired condiments and wilting greens. He doesn’t cook much, tends to eat a lot on the run, and describes himself as a forager, eating small amounts of food throughout the day — an apple and a handful of almonds, for example, in lieu of a big meal. For his lifestyle, fridge-free living works. When he travels for a month at a time, his electricity bill almost zeroes out.

For many people, even those who recycle, limit their lawn watering, bike to work, or take other steps to reduce their carbon footprint, unplugging the refrigerator would not only be inconvenient and more costly, but it also could use more energy. Not being able to store leftovers would be an issue, as would more frequent trips to the grocery store, which could mean more gas miles, and perhaps buying smaller quantities, which could lead to more packaging, more plastic, and higher costs. And what about milk drinkers?

Clearly few of us could (or would want to) unplug the refrigerator. But there are ways to reduce the energy cost of having a fridge. Check ‘em out:

• Clean the door gaskets and compressor coils once a year. (Make sure you unplug the fridge first.)
• Don’t open the door more often than you need, which reduces how often the compressor runs. If you’re in the market for a new refrigerator and are shopping for a high-end model, consider one that beeps when the door is ajar.
• Try not to place the refrigerator directly next to the oven or in direct sunlight. If you keep the external temperature lower, the fridge doesn’t have to work as hard.

Even though I live alone and have grocery stores within walking distance, I’m keeping my refrigerator plugged in. My goal is to question the things I’ve accepted as the one right way, not to make drastic changes that feel forced or inappropriate. For example, I’ve started keeping some things out of the fridge. I like what Save Food From the Fridge calls The Verticality of Root Vegetables (keeping carrots upright, for example), which seems to make them last longer. Having my food on display also makes me want to eat it — it’s not lost at the bottom of a produce bin in the fridge.

The refrigerator and food storage are two examples of how we do things a certain way just because that’s how we learned to do them. But as with most aspects of personal finance, it’s important to question and to do what works for you, not just accept learned habits. This week, questioning my fridge use has saved me money on food waste and energy consumption.

What are some ways you’ve questioned the norm and saved money?

You can have more money. And you can have it — get it — without turning your life upside down or driving yourself nuts. Seriously.

I got it that way, quietly, simply, and still am. You can, too. Maybe only a modest amount more, maybe a lot more. I don’t know. But I do know that you can have more. I’m not doing anything so far as concept and technique go that you can’t either. I just work the simple little four-point program that follows. You’re welcome to it.

Here’s what I do — and don’t do.

Never incur new unsecured debt
I don’t debt and haven’t for 28 years now.

I know: using debt as a verb is unlovely. But it helps to distinguish that act from other uses of money, to be clear about what is actually being done — not spending, buying, enjoying, but: going into debt.

Readers of Get Rich Slowly and other personal finance blogs almost certainly know that using unsecured credit is a bad idea. But I’ll tell you: It’s more than a bad idea. It’s a catastrophe. If any single thing can crush, break, and poison a life, kill anything of value or pleasure in it, it’s unsecured debt, the sustained and mounting pressure of it over months, years, and even decades.

In his play A Doll’s House, Henrik Ibsen wrote more than 130 years ago, “There can be no freedom or beauty about a home life that depends on borrowing or debt.”

True. I’ve never seen anyone for whom it isn’t.

By the time I bottomed out on debt myself, way back in 1984, my marriage was over, my books were out of print, and my life shattered. I was waking up every morning with ground-glass in my stomach thinking, “Oh God, there’s another bill coming in!” without any idea how I would ever be able to pay it. I was living in near constant pain and despair.

I was $113,000 in unsecured debt then (in today’s dollars), had expenses of $3,000 a month and a guaranteed income of only $350 a month. It was clear, finally — made brutally clear to me by the misery, the anguish even — that this could not go on. So I stopped debting, cold turkey. Because I had to. Because I knew there was no other hope for me.

From that day in March of 1984 on, I did everything and anything I had to in order not to go one single dollar deeper into unsecured debt:

• I sold things I owned.
• I gave up my apartment and moved in with a friend.
• I cut expenses to the bone, then cut into the bone.
• I said yes not only to whatever kind of new literary or teaching work I could find, no matter how little it paid, but to any work.

Slowly, slowly, things began to get better.

It was out of that bottom and my recovery from it, out of not-debting, eventually paying off all that unsecured debt, and becoming free that I wrote my first book on personal money, How to Get Out of Debt, Stay Out of Debt, and Live Prosperously. It was the first book ever on that subject, to my best knowledge, and it’s been in continuous print since 1988 (updated and expanded in 2003).

Now your circumstances may not be anywhere near as dire as mine were (at least I hope they aren’t), but the fact remains: You cannot get out of debt by going deeper into it. Nor will you be able to bring more money into your life — at least permanently, steadily — until you stop incurring any new unsecured debt. At best, that kind of debt will just continue to siphon money out of your life, relentlessly, and will be a nearly impenetrable barrier toward bringing more of it in. More that’s yours to keep

So unless you can claim that you genuinely live free of any amount — any amount — for, say, at least 40 weeks out of every year (an only partly arbitrary number) . . . stop debting. Right now.

Understand that all economies are personal
Everyone — you, I, and everyone else — has his or her own personal economy, which is separate and apart from the national economy. In fact, so far as bringing more money into your life goes, the larger economy is mostly irrelevant.

Some people have a hard time wrapping their minds around this. I certainly did.

During most of the booming 1980s, when money was washing back and forth through the economy in great tidal waves and Americans were prospering as they rarely had before, I was making very little money. This wasn’t because of any technological, social, or other kind of upheaval that had disoriented me. I could argue for that (in my own case the rise of video and cable TV, computers, changes in the publishing industry, a shrinking literacy rate, a blow to my personal life), but it would be a specious argument, mostly a function of denial.

Weren’t there some real reasons? Of course, but they came and went and I was still engaged in what I have since come to call underearning. And at the same time, there were other people whose backgrounds and experiences were similar to mine — who got divorced, for example, or were writers — who weren’t underearning.

These days, the Banking and Real Estate Collapse of 2008/2009 remains the great ogre: the bogeyman, scapegoat, and whipping boy of the moment, blamed by many for the fact that they’re in debt or can’t get ahead much. (Before the Collapse of 2008/2009 it was the Dot.com Crash of 2000/2002; before that, the Recession of the 1990s; before that . . . .) In some cases, it’s true; those events and their aftermaths did preclude some people, some few, from any chance of bringing in more money. But consider: In the very midst of those booming 1980s, more than 20 million Americans, from all classes, backgrounds, and walks of life found themselves overwhelmed by personal debt. And this: Personal bankruptcy climbed by 300 percent during those prosperous years to nearly 1 million people a year by the end of the decade.

On the other hand, at the height of Recession of the 1990s, and during the first full twelve-month period in which I practiced this simple system, along with a few supporting concepts and techniques, I brought in more money than I ever had in any other year of my life, significantly more. And that same thing is true — at the very least, some kind of increase — of everyone I have ever worked with or known who has employed this system. What I and they have had in common, in addition to the other three parts of this system, is that we recognize (or, some might argue, choose to see) that all economies are personal, even when the macro economy is struggling or in a serious downturn.

There is no denying that the larger economy does have an impact, but the most it can generally dictate, barring complete collapse, is the manner in which you earn your living and otherwise bring in money, not whether you can. Your economy is personal.

Diversify
To diversify means to spread over several areas, to introduce variety. It’s a time-honored financial principle. Corporations do it by entering multiple arenas of activity or making different kinds of products. Investors do it by buying several stocks instead of just one. The primary advantage of diversifying is that it minimizes the risk of loss. Basically it’s a practical application of the old saw, “Don’t put all your eggs in one basket.”

Diversifying in your life — your earning life, your money-getting life — can give you the same advantage: minimize the damage you might otherwise sustain in a setback such as being laid off or losing a client, generate new opportunities for you and maximize your ability to take advantage of them.

If one definition of insanity is to keep doing the same thing over and over and expect different results, another is to keep doing over and over again something that used to work, after the context has changed, and expect it still to work.

That’s what I had been doing. My first step in stopping this was to admit to myself that what I had been doing — writing novels, and in a particular way (selling them before I wrote them, in proposal form) — was no longer working, wasn’t bringing in enough to meet my needs. Once it had, but now it wasn’t. What follows is a distilled version of how I initially diversified, back in the late 1980s and early 1990s.

Diversification, then, is a process in which you identify the skills and abilities you possess in addition to those you use in your main occupation — or further ways to apply those you already do use there — and then find avenues through which to turn them into income-producing activities.

Craig, for example, a high-school teacher in Minnesota, an avid fisherman and outdoorsman, diversified by guiding parties of vacationers on fishing trips, later by creating a small business out of repairing and reconditioning antique fishing tackle and boats, and still later by making custom bamboo fly rods to order. My friend Judy Collins, the Grammy winning singer, songwriter, and author, created her own recording company, Wildflower Records, and has signed several artists to it in addition to maintaining her own demanding concert schedule.

If you’re already working fulltime, you can undertake diversification as something you do an evening or two a week or on a Saturday morning or afternoon, whatever fits your life. I’m not suggesting that you simply work more hours each week: the key is to be sure that your diversifying activities are high-paying — in the sense that they bring you, ideally, at least twenty-five percent more per hour than you make at your job or normal work.

It was out of my desire — and in my case, need — to bring in more, that I ended up writing my second book on personal money, Earn What You Deserve: How to Stop Underearning and Start Thriving.

Finally . . .

Conduct a brief nightly review
I did this each night for several months when I first started to work this system. I have done it again at different intervals over the following years. And I have recently undertaken it anew. Here is how I do it.

In bed, just before going to sleep, I review the day in this manner:

• What two or three actions did I take with money or around money that were the most helpful to me in handling it well and bringing more of it in? These might be anything from having put in a solid day’s writing to promoting a workshop, answering business email, or just simply checking my account balances and transactions online.
• Then I look for the two or three actions I took (or failed to take) that were the weakest with money or maybe even damaging to me in handling it well and bringing more of it in. Maybe I quoted too low a price for doing a piece of work, put off responding to a voicemail from someone inquiring about coaching, or simply didn’t clear my desktop at the end of the day so it would be clean and efficient for me the next morning.

With the latter, the weakest actions, I don’t criticize myself for them but simply recognize them for what they were and use the recognition to inform and help myself in making choice and taking action in the days to come. With the former, the things I did well, I just note them, acknowledge them, then file them away someplace in in my mind where at one level or another they remain useful to me as future referents.

Few other practices will make you as quickly and vividly aware of your blind spots, oversights, and weaknesses around money as this one, of the impediments you create to bringing more of it in, and maybe even of your underearning if you have a touch or more of that.

The first month I employed it was a revelation to me. I found myself nearly on a daily basis negotiating doggedly for less than I needed, turning down money, spending time on projects and busy-work that would bring in little or no income, and underearning in other ways. Today, all these years later, while my life with money has improved profoundly and continues to, I am still amazed on occasion, when I return to this practice after a period of neglect, to discover that I have been drifting back unawares toward some of the same places again.

The bottom line
You can, as I said in the very beginning, have more money in your life. You can have it — get it — quietly and simply, without turning your life upside down or driving yourself nuts. No matter who you are or what the circumstances of your life. You can have it by practicing this system.

To review, simply:

• Don’t incur any new unsecured debt, ever — in way, in any amount, for any reason.
• Understand that all economies are personal.
• Diversify.
• Conduct a brief nightly review.

Doubtless there are other effective ways to go about this. There have to be. But this is one that I know works, and it’s simple and easy to execute.

I wish you every happiness and success in doing so.

Many people think travel is expensive, that it’s too costly for the average person to enjoy. To many people, a trip around the world or a long vacation might seem like a good idea, but it simply isn’t affordable. I’m here to tell you that view is wrong.

You can afford it. I know you can. I’ve been traveling across the globe for five years. I don’t have some rich uncle, haven’t won the lottery, and don’t have my parents pay the bills, yet I’ve managed to travel debt-free for five years thanks to a combination of savings and working overseas.

Since I travel on a tight budget, I’ve found creative ways to keep my costs down without sacrificing comfort or quality. After all, what’s the point of going to Italy if you can’t afford the food? Why visit Brazil and not see the Amazon? I learned to dive before going to Australia; I wasn’t going to miss the Great Barrier Reef.

Today I want to share some easy and practical tips that can be used to save money regardless of how long you’re going to travel.

Saving on Accommodation
Couch surfing connects you with locals who are willing to let you stay with them for free. I’ve used this site multiple times. I’ve stayed with college students in England, in a mansion in Australia, and with a family in Denmark, just to give a few examples. I’ve slept on couches, futons, and have had private guest rooms to myself. Using this site, I’ve brought my accommodation budget down to zero. Though often thought of as a site for young people, you can find hosts of all ages, from young couples to seniors. If you’re worried about safety, people leave reviews and profiles are verified by the organization.

WWOOF (Willing Work on Organic Farms) matches travelers looking for work with farms that need labor. In return for working on the farm, you get free room and board. This is a very popular method of saving money in Australia and New Zealand, although you can find WWOOFing farms all over the world. This is a great option for people who want to stay in one place for a while.

You can also work for your accommodation at hostels throughout the world. It’s not glamorous work, but at least you get a free bed in return. In Amsterdam, I worked for my bed by cleaning. I got free accommodation for about three hours of work per day. You’ll find this type of work in places heavy with backpackers and where people tend to ignore visa rules. In Europe, that means in the east; in Lagos, Portugal; or Ios, Greece. In Australia and New Zealand, that means anywhere. In Central America, that also means anywhere.

Priceline and Hotwire are great sites for finding cheap hotels. If you really want to stay at a hotel but don’t want to pay a lot, use these sites to bid on hotels at up to 60% off. Use Better Bidding to see what people have paid for hotels so you don’t overbid. With the help of Better Bidding to research hotel prices in New York City, I got a room in Times Square during the Christmas season for $90 USD per night.

Saving on Food and Beverages
Cooking your food is the best way to cut down on your expenses. A week’s worth of groceries is cheaper than a week’s worth of restaurants. It’s simple and easy, but it goes a long way when it comes to cutting down your budget. I find that I spend about $50-60 USD per week on groceries, as opposed to $20+ per day I normally spend on restaurants. That’s a reduction of 50% (or more depending if I eat out at nice restaurants)!

In many parts of the world, especially in Europe, you can dine on dinner menus at lunch special prices. The plate of the day is usually the best bargain when dining out. For example, while I was in Barcelona, I went to eat at the seafood restaurants near the beach. However, dinner was around 40 Euros, which was more than I wanted to spend. Yet coming back the next day for the lunch special allowed me to get the same meal for only 15 Euros.

Though not as popular in America anymore, many supermarkets around the world still offer free samples of food. I time my food shopping for when I need a snack. It’s a good way to kill two birds with one stone. While I was shopping in Bangkok, I ate tons of free samples and managed to save myself some money. In Norway, I moved from fish vendor to fish vendor sampling enough food to fill me up for breakfast!

One of the biggest expenses I have while traveling is buying water. You need to stay hydrated, and buying water everyday costs money. Get a metal water bottle or reuse your plastic water bottle a few times to save money. I usually use mine for about four days — more if I can find a place to clean it. Now, instead of buying three bottles a day, I usually buy one per week. It’s a little savings that can go a long way.

Saving on Transportation
Forget the private coaches, backpacker buses, or whatever. Do what the locals do and take local buses or trains. It may be easier to get in that tourist bus, but it’s more fun to figure out the local transportation system and save lots of money by doing so. Even in expensive countries like Norway or Sweden, the train is never more than 3 USD!

Vans are good for both having a place to stay and as a way to get around. The overall cost of renting a van or car while you are traveling is a lot cheaper than taking a bunch of buses. You can always find cheap transportation for sale online, along with other travelers willing to help share the cost of gas.

Taxis will eat into any budget. Take the bus instead! Taxis are just a rip off. In Stockholm, a taxi cost me 35 USD while the train was only 5 USD. In New York City, a cab will generally cost 20 USD. However, a 7 day unlimited subway pass is only 29 USD! And the trains run all night! For a little more than the price of one cab ride, you can ride the trains all week.

It has a bad reputation in the United States, but in many parts of the world it’s still safe to hitchhike. It’s a popular thing to do throughout Central America, New Zealand, parts of Australia, and Central Asia. While in Belize, I did like the locals and hitchhiked all the around the country. All the locals did it and one time my friends and I shared the back of a truck with a little old grandmother.

Saving on Activities
Many cities have museum passes that are good for multiple museum entrance fees. If you’re planning to see a lot of museums, the math will always work out in your favor. For example, in Oslo, the VisitOslo card was 60 USD. However, each museum in the city is between $12-15 dollars. I saw 9 museums in the city. I saved 30 dollars with the pass plus got free transportation. By buying the Paris museum pass, I saved $85 off the normal price of the museums.

Most museums have special discount times or free nights. Before you go anywhere, make sure you look on the museum website to find out if they offer free visiting hours. Even famous museums like the Louvre and the Guggenheim offer free entrance. If I don’t have a tourism card, I always look up the museums I want to visit to see if they offer free entrance.

We often watch ads for fancy cruises, expensive resorts, and luxury holidays. These ads give us the impression traveling is expensive but it’s not. People around the world don’t spend lots of money, and you shouldn’t have to either. Using the tips from above, you’ll find that any destination you visit can be done cheaply without sacrificing comfort or fun.