How to Save Money on Food

Learn how to save money on food without cooking every meal at home or only eat ramen.

When you realize just how much money you spend each month on food, it can be eye-opening. From the higher price of organic foods to the excessive cost of eating out with your coworkers every day, there are plenty of ways that food can be a runaway cost in your budget. But with a little planning, you can learn how to save money on food without cooking absolutely every meal at home or only eating discount ramen for the rest of your life. You can eat well, indulge your inner foodie and still stay on budget.
Woman counting expenses with calculator at supermarket, learning how to save money on food

Step 1: Understand the cost of food

Know what food costs, so you know how to save

Comparing price per unit is a good way to save money on foodIt’s common wisdom that when it comes to making meals at home versus dining out, at-home meals should save money. But is that always true? It depends on what you buy and how smart you are about shopping.

If you buy prepared meals from the grocer or frozen meals, the costs savings can be minimal… unless you use coupons. So, saving money on food usually requires a combination of cooking and smart shopping.

You also need to be aware of other factors that increase the cost of food:

  • Organic produce and organic proteins are always more expensive
  • Fruit and vegetables are cheaper (and often on sale) when they’re in season
  • Store-brand or local products may give you a discount over national brands
  • Preparation generally increases cost – for instance, block cheese is usually cheaper than shredded

TIP: Take some time to get familiar with when produce is in season, so you can cook meals when produce is at its cheapest. The USDA offers a basic seasonal produce guide.

Time: 5 minutes

Step 2: Check coupons and grocery store circulars first

See what’s on sale and where you can double up on discounts

Shopping with couponsHere’s a secret to shopping. In many stores, you can usually pair manufacturers’ coupons with in-store deals that you find in grocery store circulars. For example, find a coupon good for a dollar off on two pizzas. Then find a BOGO (buy one get one) offer on the same pizza. Now you get two pizzas for a dollar less than the price of one.

Couponing will help you get discounts on prepackaged meals, frozen foods, snacks and pantry items. This can be a big help for things like packing lunches and dinners for nights when you won’t have time to cook.

Tip: Don’t want to waste time clipping coupons and having them scanned in checkout? Go digital!

Tip: Gradually build your pantry by waiting for key ingredients to go on sale. Here’s Food Network List of Basic Pantry Items.

Time: 30 minutes per week

Resource:’s Coupon Center

Step 3: Set a weekly meal plan that works for your schedule

Don’t get complicated on days where you’re short on time

If you're cooking a meal for the firs time, don't do it on a busy nightPlan your meals for an entire week and be practical. Choose recipes that match your enthusiasm for cooking and with consideration for your schedule. Have a tough meeting every Wednesday afternoon that tends to run late? Make that a night you cook a frozen meal or do semi-homemade.

Meal planning allows you to make sure you use ingredients fully, instead of letting things go bad. If you buy meats for the week, freeze proteins for later in the week so they don’t spoil. If you’re buying something like heavy cream and one recipe will only use half the container, find another recipe that will use the other half.

Tip: Also consider tricks like making foods ahead of time on the weekends or prepping casseroles and freezing them. Any trick you can use to make weeknight meals easy is one less meal you didn’t mean to eat out.

Time to plan: 30 minutes per week

Time to shop: 30 minutes – 1 hour

Step 4: Take advantage of deals when dining out

Look for the apps, offers and credit or debit accounts that help you save money

Using a cash back credit or debit card can help you save money on foodThere are plenty of ways to save money when dining out. You can find deals in apps like Groupon and Living Social to get discounts on meals. Many banks (and credit unions) offer cash-back offers if you use your debit card at certain restaurants. Or you can use a rewards credit card that offers cash back on your meal.

There are also restaurant apps that help you find places to eat and reservations. Many of these services, such as OpenTable, give you points for using their app. Once you get enough points, you can redeem them for a gift card.

Like using coupons and in-store deals, you can also pair savings on dining out. So, you find coupons for discounts on meals, make the reservations through an app that offers points, then pay with a debit or credit card that gives you cash back.

Tip: Restaurant apps and other finder apps like Yelp always list the average cost you can expect to pay. Check this while you’re choosing restaurants to avoid bills that are out of your budget.

Time: 15-30 minutes

Step 5: Only dine out to treat yourself

Meals out and lunches with coworkers shouldn’t be an everyday occurrence

Cheerful business colleagues talking about something funny on a lunch break in a restaurant.This doesn’t mean that you should only eat out on birthdays and holidays, but it does mean dining out should be done in moderation. If you’re eating out for dinner 3-4 times per week, and then you’re eating lunches out with coworkers every day, you’re overspending on food.

In general, you shouldn’t eat out more than 2-3 times per week, including work lunches. If you’re budgeting to pay off debt or reach a savings goal, you should eat out even less. But don’t cut eating out completely! Make sure to treat yourself, so you don’t succumb to saving money exhaustion, which usually leads to overspending.

Step 6: Make any big meals at your home potluck

You can drop serious cash on a big dinner or party, so divide the cost

Make party spreads potluck to spread out the cost of a big mealBig family meals and parties can easily bust your food budget. Just because you’re hosting, it doesn’t mean you’re the only one that needs to incur the cost. The best idea is to split up the cost by making things potluck or BYOB. Have guests bring a dish or bring their own alcohol. If it’s a party, you can provide the mixers, but everyone brings the hard liquor they want to drink.

Tip: Meal planning for big meals is essential. Count portions for guests carefully so you don’t overspend and end up with food waste. Only cook to feed an army if you have an army of people coming over for dinner!

Step 7: Be smarter about food when you’re on vacation

Food can end up being a big credit card expense when you travel

Pack snacks for family road tripsIt’s not always possible to get away from using credit cards on your vacation. You may not want to carry a lot of cash, and if you’re traveling aboard, your debit card probably won’t work. But this doesn’t mean that you should just spend with a total disregard for your budget.

Here are a few tips for how to save money on food while traveling:

  1. Get a coupon book for restaurant discounts from the city’s visitor center or from your hotel concierge.
  2. Find a hotel that offers free continental breakfast.
  3. Consider getting a hotel with a kitchenette, so you can cook some meals at home.
  4. Take snacks and drinks or buy them at a nearby convenience store, so you can avoid vending machines.
  5. If you’re driving, pack food to eat on the trip, so you don’t have to stop for fast food.

How to Save Money on Groceries

Follow this guide to learn how to save money on groceries to feed your family – and your finances.

You have to eat to live and you have to pay to eat. It’s a vicious, hungry cycle. If you’re wondering how to save money on groceries without losing too much of your free time, this guide can help. Shows about extreme couponing make it seem like a full-time job, but it doesn’t have to be that way. Start by getting organized and setting a realistic budget and the rest of these steps will fall into place.

how to save money on groceries

Step 1: Create a monthly budget.

Your first step is mapping out exactly how much you want to spend on groceries each month.

Don’t forget to factor in things like cleaning supplies and toiletries – groceries aren’t limited to food. offers a range of budgeting resources, so you can make a budget that works for you. The 50/30/20 budget helps you split up your income efficiently to cover your needs, wants, and savings. Tiller, a budget spreadsheet system, can also make it easier to plan out your spending.


Find a budgeting tool that minimizes the hassle of managing your money, so it’s easier to stick with planning and saving.

Add some room for indulgences into your budget. If you plan to be as bare-bones as possible, you could get frustrated and give up more easily. Rewarding yourself is a responsible part of budgeting!

Estimated Time: 1-2 hours

Step 2: Plan your shopping trips around grocery store sale schedules.

Grocery stores run on specific shipment and sale schedules that you can track.

This means that you can anticipate sales before they happen and only stock up on something when you know you’ll get the best deals. For example, every time the Super Bowl rolls around, there are great specials on frozen foods and snacks. After Thanksgiving, you can stock up on all the hearty ingredients that go on sale. Love chocolate? Post-Valentine’s Day sales will be perfect for you.


This guide from the Six Dollar Family blog explains the best times to shop for different items throughout the year.

Estimated Time: 15 minutes

Step 3: Compare prices and check out grocery store ads.

It may be more convenient to go to only one grocery store, but it can result in better prices if you shop around.

Different stores also have sales at varying times, so check out their weekly ads. Don’t forget about gas prices, though. If a store 15 miles away has slightly lower prices, the cost to get there may mean it isn’t worth it.


BeFrugal has a long list of stores with links to their weekly ads. Look for stores near you and find out what they have on sale.

Estimated time: 1-2 hours

Step 4: Find coupons for the products you want.

Online coupon sites make it especially easy to get the products you need at lower prices.

Search the web for the type of product you want followed by the word “coupon” and thousands of results will come back. Keep your eyes open for products you may need to replace soon or you’ve avoided before because of their prices. also has a Coupon Center that you can browse.


Finding coupons before you make your list helps you be more efficient about when you buy things you need. For example, you may not be out of your favorite laundry detergent yet, but a $1-off coupon that expires next week means you should buy it now for the best deal.

Estimated time: 2-3 hours

Step 5: Make a list and stick to it.

Creating a list is one of the most important steps of this guide.

Only write down what you know you will use, otherwise you could end up losing money on food you never eat. Grocery stores are designed to be tempting. It can be difficult to resist picking out unnecessary foods from those beautiful displays of new products, freshly made sweets, and expensive pre-packaged meals. Put on your grocery shopping blinders when you’re at the store and stay focused on getting only what you need.


A great way to shop and save is to invest in frozen and canned foods. They last much longer and are very versatile ingredients, not to mention they’re usually cheaper. Frozen vegetables also retain more nutrients.

Estimated time: 25 minutes

Step 5: Check the prices again at the store.

Not only should you double check the prices for the brands you have on your list, but you should also keep an eye out for comparable items at lower prices.

In addition, there could be in-store sales that you missed when doing research online and in weekly ads. This is also your chance to take advantage of stores that have price matching programs. Some stores, including Walmart and Target, will match lower prices on qualifying products. Read more about the programs here.


At most stores, there is a section of the price sticker on the shelves that lists an item’s price per ounce. This price is a better indicator of the value of the product. For example, you may think that a $4 jar of tomato sauce is better for your budget than a $5 jar, but because of differing sizes, the $5 jar may have a better price per ounce.

Estimated Time: 1-2 hours

Step 6: Ensure that everything checks out correctly.

Grocery shopping can be exhausting, but don’t think getting to the checkout line means you can relax.

Keep an eye on every price as it’s being rung up. A sale may not register correctly or there may be price discrepancies that you were unaware of. Don’t be afraid to speak up if you think something is wrong.


Don’t forget to use any of your paper or electronic coupons!

Estimated Time: 5 minutes

Step 7: Store your groceries properly.

Learning how to properly store things is as much a part of how to save money on groceries as tracking sales.

Even if you’re a master at couponing, all that work is worth nothing if your purchases go bad in just a few days. Make your food lasts longer by reading up on how to store it the right way (and when to throw it out).


Use this guide for storing fruits and veggies, this guide for meats/seafood, and this guide for dairy products.

Estimated Time: 5-10 minutes

Bonus: Consider meal planning and meal prepping.

Planning out your meals and prepping them all at once can save you time and money.

Making a weekly menu plan for all your meals means you will know exactly how you are going to use all of your grocery store purchases. You can’t have waste if you have a plan for everything! Meal planning and prepping also enables you to be prepared for situations where you are in a rush. If you wake up late, you already have some overnight oats stashed in the fridge. If you need a quick dinner, you already have the recipe planned out and the ingredients chopped. Getting started will take some adjusting because of the time it takes to plan, but if you get used to it, it’s worth it.


The Budget Mom has a meal planning freezer challenge that can help you jump right into this money-saving hack.

How to Save for Retirement

Retirement can be hard for people to understand because it’s not something you can buy, but it’s something you need money for. And it’s not something you need money for in a few years, like buying a house or car. It’s something that, for most people, is decades away. But financial companies and even your employer are trying to get people to think more about saving for retirement because for most of us, we can’t work forever. This guide helps you understand how to save for retirement

When is the right time to start thinking about retirement?

It's time to learn how to save for retirement
Retirement, in general, usually enters your life the first time you get a job with an actual paycheck. Each paycheck you get has money deducted from it that goes toward Social Security. That’s a government program that provides retirement benefits, as well as disability and survivor’s benefits to Americans.

But the idea of saving for retirement probably won’t enter your life until you get a full-time job. It happens when your company offers something called a 401(k) plan. These are employer-sponsored retirement plans. Your employer takes money out of your paycheck and invests it for you via an outside company. Companies can also provide a financial incentive in the form of a match, allowing you to save more for retirement. A 401(k) is often the first time that people start actively saving for retirement.

Why do you need to save for retirement?

Individuals are living longer than ever, but the retirement age hasn’t changed much. The average retirement age for Americans is 62. However, many of us are living until almost 80, and a chunk of us make it to over 100, which means we will need some form of income for at least 15 years after our last paycheck.

Years ago, it was the protocol for companies to “provide” for your retirement through pensions, or defined benefit plans. But according to a recent Willis Towers Watson study, only 16 percent of “Fortune 500” companies offered a defined benefit plan, whether it was traditional or hybrid (with a 401(k)), to new hires. This is a drop from 20 years ago when 59 percent of the same employers offered jobs with pensions.

And while Social Security can provide some financial help, individuals can no longer solely depend on the system to take care of all their financial needs. For those of us who aren’t living like Scrooge McDuck, we need some kind of backup plan. This is where saving for retirement comes in.

Retirement planning can help you figure out how much money you will need when you are no longer working. Recent research from the TransAmerica Center for Retirement Studies shows the average income for a retiree is $32,000. The number is higher for married retirees ($48,000) and much lower for those who are unmarried ($19,000). The majority of this comes from Social Security retirement benefits, but many say they still struggle with everyday expenses. Proper planning can help you avoid that struggle and allow you to live your retired life to the fullest.

How to save for retirement

Assessing the health of your 401K nest eggThere are many different investment vehicles to help you save for retirement. The easiest way for many of us is to use a 401(k) through our company. It will automatically deduct money from your paycheck and put it into an account. Then you invest the money in a mix of stocks, bonds, and cash. How the money gets invested depends on the company you are with. Some companies let you choose how you want to invest while others give you a suggestion based on your risk profile. Others will put your money in their own selection of investments based on the year you will likely retire. The older you get, the less risky your investments tend to become as you will be needing more of that money sooner.

Even if you leave the company, the money in this 401(k) will continue to be invested until you decide what to do with it. You can roll it over into another account (where it will still be invested), you reach retirement age and start getting disbursements, or you cash it in.

Individual Retirement Accounts, or IRAs

Individual retirement accounts are like 401(k)s, except they are not provided by your employer. You can open an IRA by visiting a local financial services firm, or even finding one online, and creating an account. It is similar to a 401(k) in that your investments will be based on your risk profile and other retirement needs. Some companies provide you with an adviser to understand your needs and help you create a retirement plan. These retirement planners will look at all aspects of your life and ask you questions about how you anticipate your lifestyle to be once you’ve retired. From there they will formulate an amount you need to invest in order to achieve those goals when you reach full retirement age.

Unlike a 401(k), where the money is taken out of your paycheck, you will need to have money transferred from your checking or savings account on a regular basis to mimic a 401(k).

Traditional IRAs vs. Roth IRAs

With a traditional 401(k) or IRA, taxes will not be deducted until you start taking disbursements on the money. This means that the money you invest is actually tax deductible each year when you file your taxes. When you start taking disbursements, you will pay taxes on the amount then, whatever your tax rate might be.

However, there is another form of retirement account called a Roth. This type of IRA takes out taxes before you invest the money. This means that when you retire, you’ll get whatever money you are being disbursed, tax-free. This can be really useful if you expect to be in a higher tax bracket when you retire. You cannot deduct Roth contributions from your yearly taxes. However, there are certain limits to who can invest in a Roth and how much you can put in.

Roth IRA Limits

There are some basic rules for those wanting to contribute to a Roth. The main rule is that how much you can contribute depends on your adjusted gross income. As you make more, the amount you can contribute decreases. At a certain income level, you are no longer able to contribute — at least in the traditional way.

Can contribute the maximum of $5,500 (or $6,500 if over 50)

Single/Head-of-household: $120,000 or less

Married Filing Jointly: $189,000 or less

Can contribute a reduced amount

Single/Head-of-household: $120,000 to $134,999

Married filing jointly: $189,000 to $198,999

Not eligible to contribute

Single/Head-of-household: $135,000 or more

Married filing jointly: $199,000 or more


There’s more to Roth IRAs, but these basics can help you decide if it’s a good choice for you.

Using an HSA as a retirement vehicle?

Health Savings AccountHealth Savings Accounts are frequently a topic of conversation when starting a new job or getting a new insurance provider at work. Most people think of them as an alternative to a PPO or HMO. However, for those in the know, an HSA can be a secret retirement fund.

An HSA is an alternative to a Health Maintenance Organization (HMO) or a Preferred Provider Organization (PPO), where you have a high-deductible health plan and no other health insurance. You can contribute money via your paycheck. This helps offset your taxable income, or via additional funds, which are tax deductible. Most people who have this account carry a small balance for use as its intended purpose, taking care of medical expenses, such as doctor and specialist visits.

But for many affluent Americans, they max out the contribution amounts, which currently are $3,350 for individual health plans and $6,750 for a family plan. But they pay out of pocket for medical expenses, allowing their HSA money to grow throughout the years.


Many of you might be wondering what the difference between an HSA and an FSA. Well, an HSA can be used to pay for medical expenses but can also be used as a retirement investment. A health savings account can be used to pay for doctor’s visits, procedures and the like. But you can also let it sit, untouched, earning money for as long as you don’t use it. Your HSA carries over with you from job to job as well.

An FSA is a Flexible Spending Account. It’s also used for health care, including eye doctor’s visits. However, you can only contribute a maximum of $2,650 to it. These funds must be used by the end of the year they were distributed. Otherwise, you will lose them.

Interesting HSA Facts

Once you put money into an HSA, it grows tax-free. You can use that money without penalty at any time on qualified medical expenses without facing any tax penalty. If you do decide to use it on something other than a medical expense before retirement age (65), you will face a 20% penalty. Once you reach 65, you are allowed to take as much as you want and use it for what you want, there are no required minimum distributions.

The HSA is definitely a health plan, but it is often used as a third investment account next to 401(k)s and IRAs. While it is still best to use this for medical expenses, which have a tendency to jump as you age, it can be a nice addition to your retirement savings if you plan correctly. When planning your retirement, make sure think about how this money could be used for long-term care facilities, hospital stays and more.

How much should I save for retirement?

Again, this all depends on the kind of lifestyle you would like to live in retirement. If you plan on living modestly in a house that will be paid off, you likely will not need as much in retirement savings as someone who wants to travel the world and spend money on their grandchildren. Certified Financial Planners can help you plot out your savings and investing plans so that when you are retiring, you won’t need to worry about potentially running out of money due to illness or unexpected expenses.

What Can I Do Now To Prepare For A Recession?

Question: I’ll turn 25 in December and am in line for a major promotion at work. I grew up during the Great Recession, so I’ve been very careful about not blowing my money on a house or an expensive car. I live in a modest apartment and still drive the Honda I had in high school. 

Thing is, I still have $14,000 in student loans to pay off, and a couple grand on my credit cards from last holidays. I have an emergency fund of $1,200, and no other debts. But what if there’s another recession in my lifetime? What can I do to prepare better than my parents, who lost their jobs a year apart and were already seriously in debt when that happened?

This has me seriously freaked out.   

— Rebecca in Rhode Island

Howard Dvorkin answers…

I don’t want to scare you, Rebecca, but I feel safe making this prediction: There will be another recession in your lifetime. In fact, it might be a lot sooner than you think.

While I’ve mused about the next recession myself — wondering if the spark will be an auto bubble, student loans, or even a retirement crisis — other experts have become more emphatic.

Zillow Research polled 99 financial experts, and while their opinions on the date of the next recession varied from the fourth quarter of 2018 (only 4 percent) to the first quarter of 2022 (6 percent), one stat was startling…

Only 1 expert thought a recession would happen after 2022.

I’ve been around long enough not to make predictions about the economy, sports games, or the Oscars. I simply mention this as proof that recessions are a part of life.

Hopefully, the next one — whenever it is —won’t be as devastating as the Great Recession of a decade ago. I’m a CPA and not a psychologist, but it seems like you’re experiencing some post-traumatic stress from your adolescence. I can try to alleviate your stress with some factual advice.

Don’t go for the gold (or silver)

First, let me tell you what not to do. Last year, a reader’s husband wanted to invest in silver, as a hedge against the next recession. While it’s true that precious metals skyrocket in value during economic downturns, it’s also true that they don’t help you when you have bills to pay.

The wife told me the couple still had debts to pay. It makes no sense to prepare for a recession by ignoring bills that come with steep interest rates to buy metals or stocks in them that earn no interest themselves.

Don’t panic

You’re in pretty good shape, Rebecca. Your biggest debt is your student loan, and you have options there. While you can’t simply get rid of that debt, you can make a serious dent in it by exploring several proven options — including federal programs that can greatly reduce your monthly payments. Check out How to Get Out of Student Loan Debt.

Do prepare

You’re not alone, Rebecca. Many survivors of the Great Recession are worried about the next one. That’s why put together this report: How to Recession-Proof Your Finances. I urge you to read it because I think you’ll find you’re already halfway there.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Ask The Expert: How Can I Avoid Overdraft Fees?

Question: I just started to budget a few months ago, after reading articles and blogs. I’m in debt, and I’m working on that. I have no credit cards due to poor credit management, and I have a small savings account that I can only put $10 a month into.

My main concern is using my overdraft protection funds to cover my bills. I get paid twice a month on the last day of the month, and the 15th of the month. (If that date falls on the weekends, I get paid the day before.)

After figuring out all my expenses for the month, I’m in the negative. I split up my bills between the two paychecks. I have two automatic payments that come out on the 30th of the month. This causes my account to go into overdrafts ($28 fee per item).

So when my direct deposit comes in, it deducts what I owe and leaves me short on funds for paying rent or car insurance — unless my overdraft kicks in again. This is a constant struggle on my part.

Sometimes my overdraft will be a little over $100. The next payday it will be over $300. I have my budget to the bare bone and I’m still coming up short. Any suggestions?

— Josephine in Alabama

How To Never Pay An Overdraft Fee Again

How can I avoid overdraft fees? A reader is hit with these fees every month because she can’t make ends meet. When I council smart people who are constantly being hit with overdraft fees, I know it’s a symptom of a much bigger problem.

These people aren’t lazy, they aren’t forgettnig to check their bounces. No, they’re just like Josephine, good people buried under bad debt. It might seem weird that when I hear about constant overdraft fees I may start thinking about bankruptcy.

Bankruptcy is a last-ditch maneuver towards financial freedom. But based on what Josephine has told me so far bankruptcy may be an option. It sounds scary and it’s a last resort, but it’s not a death sentence.

I urge you to read’s report the pros and cons of bankruptcy. I also mentioned bankruptcy because Josephine is just the kind of person it’s designed for, she provided me with a detailed list of her finances which she meticulously maintains.

She’s obviously the kind of person who will spend and save responsibly. If she can just get back to zero. If you have an issue like Josephine’s please call

Howard Dvorkin answers…

Using overdraft protection to juggle debt is like drinking poison because you’re thirsty – but then you drink the antidote right after. Eventually, this process takes its toll.

Better to solve the original problem.

I can understand why you feel you have no other choice, Josephine. When you’re struggling week to week, it’s hard to step back and look at the big picture. That’s what credit counseling is for.

A certified credit counselor will give a free debt analysis, reviewing your entire financial picture to see what programs exist to help you out. Based on the details you’ve provided, this might sound like an odd thing to say, but: I believe you’re going to be just fine.

How can I say that when your numbers don’t add up? I’m simply impressed that you’ve crunched all those numbers. You’d be surprised, Josephine, how many Americans have no clue what their income is, much less their debts.

The first step to solving a financial problem is quantifying it, and you’ve done that. When you speak with a credit counselor, that phone call will be so much more productive because the data is right at your fingertips.

Based on what you’ve told me so far, bankruptcy may be an option. That sounds scary, and it’s a last resort, but it’s not a death sentence. I’d urge you to read’s report, The Pros and Cons of Bankruptcy.

I’ve been asked about bankruptcy many times, from questions like Is It Possible To Get Credit Cards After Bankruptcy? (yes) to Will Bankruptcy Keep Me From Buying A Car? (no, but it will cost more to get an auto loan). I’ve even been asked Can I Declare Bankruptcy Twice?

While a credit counselor often spends a lot of time just trying to understand the contours of someone’s debt, in your case, the conversation can focus on the best solutions. If that’s bankruptcy, then I expect you’re just the kind of person that last-ditch option was designed for: Someone who will appreciate the clean slate, and will prosper in the future.

If you don’t call, Josephine, call someone who can get you the help you need. You’re a success story waiting to happen.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

How Can I Convince My Boyfriend To Buy Fewer Gifts This Holiday Season?

Question: My boyfriend is driving me crazy. He agreed that we would both tighten our belts so we can save to get married and get a house and start a family. For the most part, he has been good about this. Then the holidays roll around. 

He believes you need to spend a lot of money on gifts for everyone. When I remind him of our plans, he says, “But these are our friends and our families, I’m not going to be a Scrooge to the ones I love most!”

He also says it’s no big deal to run up our credit cards, because we can make the minimum payments, as little as $15 or $25 a month. If it gets really bad, he says we can sign up for programs that will cut our monthly payments by half. And if THAT fails, we can declare bankruptcy and just start over with a clean slate.

I know he’s full of it, but I don’t have the facts to explain it to him. Can you? He’s a good man the rest of the year, but the holidays might actually break us up.

— Katrina in Michigan

Howard Dvorkin answers…

The holidays are marketed as a time for families to come together. Sadly, I’ve seen them rip families apart — precisely for the reasons you just described, Katrina.

Your boyfriend proves that a little financial knowledge can be a dangerous way to live. Let me give you the facts…

Minimum payments equal maximum cost

For Halloween, compiled an interactive map called Credit Hell. It shows you just how long it takes to pay off the average credit card balance if you only make minimum payments, and it’s broken down by state. For Michigan, it would take 16 years and four months — and in 35 other states, it takes longer.

When you make minimum payments, you rack up huge interest charges. Sure, you don’t have to pay up right now. You will pay even more later.

DMPs are effective but not easy

When your boyfriend mentioned cutting his monthly credit card payments in half, he was most likely referring to a debt management program. Called a DMP for short, these are administered by nonprofit credit counseling agencies and can reduce your payments by 30 to 50 percent. They’re powerful tools, but they’re not panaceas.

I suggest you consult the report, Debt Management Program Pros and Cons. One big con: You can’t open any new credit cards while you’re enrolled in a DMP. That makes sense, because credit card spending is what got you into trouble in the first place, but there are similar restrictions you need to know about.

Bankruptcy is serious business

Likewise, I suggest you read — or insist your boyfriend read — The Pros and Cons of Bankruptcy. From student loans (which aren’t discharged) to your credit score (which will take a hit), bankruptcy is a last resort. Thinking of it as an easy way out is like driving your car recklessly because, “Hey, I have airbags to protect me if I crash!”

 If none of this sways your boyfriend, Katrina, I have one idea that’s been known to work wonders: Talk to his parents. I bet you they’d be horrified by his approach to holiday spending, and they’ll be the first to tell him: We love you, not what you buy us. Take us to a movie or a reasonable dinner, and we’ll be happy.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

We Might Win $100,000. What Should We Do With It?

Question: My husband is now part of a class-action lawsuit. It looks like he’ll win around $100,000. He wants to use it to buy a $92,000 condo near us and then spend $8,000 fixing it up so we can rent it.

He says this way, we can make much more than $100,000. I want to use the money to pay off our mortgage and maybe even our credit cards, since we have around $10,000, I think, on five or six cards.

My husband says this is short-sighted, and that every rich person has debt, and that wealth is simply juggling your debts. We’re at loggerheads. What do you think? 

— Marilyn in Lousiana

Howard Dvorkin CPA answers…

If you really want to know what I think, Marilyn, here it is. You both need to take a deep breath and consider what you’re proposing.

Here are the troubling signs I see from your email…

  • Lawsuit settlements are often taxable. This being taxes, it get complicated. For instance, if the settlement includes money for “pain and suffering,” that’s not usually taxed because the IRS might consider it a reimbursement for your injuries. However, the point is: You need to ask before you count on the money.
  • Lawsuits are rarely slam dunks. Right up to the end, not only can the verdict change, but so can the terms. I’m concerned that you might be counting your settlement before it’s sealed.
  • Credit card debt is one figure you can know for sure. You say you “think” you’re carrying $10,000 on “five or six” credit cards. Before you decide what to do with new money, you need to be sure what’s happened to your old money — right down to the penny.

For the purposes of illustration and education, let’s assume you get a cool $100,000.  If the condo costs $92,000, I’m assuming your husband hasn’t factored in closing costs, insurance, and other expenses. Just selling a home can add $15,000 in hidden fees. Even if buying this condo is half that, you’re already over budget if you need to make $8,000 in renovations.

Now let’s turn to paying down your existing mortgage. You don’t mention what your interest rate is, but let’s assume it’s 5 percent. You also don’t mention what the interest rates are on your credit cards, but the national average right now is hovering around 15 percent.

I’m sure you see where I’m going with this. Paying off your credit cards will save you around 10 percent more than paying off your mortgage. If you really want to know what I think, Marilyn, I suggest paying off your credit cards with whatever money you may be awarded.

Next, I’d make sure I had at least three months of living expenses in an emergency fund. If hurricanes Harvey and Irma have taught us anything, it’s that a natural disaster can cost a lot of money.

Finally, with whatever settlement money is left, I would look at other debts I have: an auto loan, student loans, personal loans. These I would pay off from highest interest rate to lowest. Finally, I might indeed pay down some of the mortgage.

Whatever you do, Marilyn, I urge you to gather facts and make dispassionate decisions with your husband. Facts like I’ve outlined here can help avoid a fight over this windfall — if it becomes a reality.

Even if it doesn’t, you can use this experience to still do the things I’ve outlined here.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Where Is the Safest Place To Live In The United States?

Question: So Hurricane Harvey and Hurricane Irma trashed two of our biggest states. Wildfires are doing the same in California, which is our biggest state. Last winter, there were blizzards where I lived that killed people.

Every time there’s a big natural disaster, the news shows homes that are destroyed. I hope these people had insurance, but even if they did, the deductibles are sky-high. My homeowner’s insurance deductible is $10,000 because I can’t afford any less than that.

I’m a computer programmer who works remotely. So I can work anywhere. I want to live somewhere where I don’t have to spend a lot of money fixing up after Mother Nature gets mad. Any ideas?

— Mac in Vermont

Howard Dvorkin answers…

Natural disasters are one of the leading causes of catastrophic debt. The others are divorce, illness, and accidents. If they all have one thing in common, it’s this: They can happen to anyone at anytime.

As a financial counselor for more than two decades, I’ve spoken with Americans who have been wiped out in natural disasters all around the country. So I had the same question you did, Mac. I asked researchers to answer it.

They came up with this animated map…

An animated map of extreme weather events in the United States from 2005-2015

As you can see, there’s really no place safe from hurricanes, blizzards, tornadoes, wildfires, earthquakes, floods, avalanches, mud slides, and sinkholes. Any of these can destroy a home.

Even if you could find such a place, you might end up paying more to live there in other ways. has written about the most expensive ZIP codes in every state in the nation, and if one of them should have no natural disasters, you may not come out ahead.

Better than trying to avoid natural disasters is preparing for them. While the federal government has helpful information on how to physically get ready for each type of disaster — see Prepare for Disasters and Emergencies — preparing financially is much simpler.

Basically, you need an emergency fund. Ideally, it should have three months of living expenses. Realistically, that’s not possible in a nation where the total credit debt is nearly $1 trillion. That’s $16,245 per cardholder.

That’s why ran this brazen, definitive headline earlier this year: None of Us Are Ready for an Emergency.

Mac, I don’t know what your debt situation is, but if you don’t have cash laying around to create an emergency fund, read this: How to Prepare for and Deal With an Income Emergency.

Finally, let me talk you off the ledge. Financial counselors like me talk so seriously about all debt disasters because we want Americans to be prepared. Perhaps we’re trying to scare them into action. However, we don’t want to paralyze you, either.

The statistical odds of your home being wiped out by a natural disaster are slim. More likely is some damage at some point during your life. So don’t give up by telling yourself, “I’ll never save three months of living expenses, so why bother?”

Anything you sock away for later can help you ease a debt disaster. If you start now, by the time bad luck catches up to you, it won’t keep you down for long.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

Am I An Idiot For Wanting To Lease A Car?

Question: The Mercedes C-Class is a hot-looking car, and I can get a lease for 36 months at $399 with $4,193 down. My girlfriend (who might be my fiance one day) says that’s a big waste of money.

But here’s the thing: A 2017 C-Class goes for almost $40K. I’m getting one for three years at around $18,500. So I’m looking at what I save, while she’s only looking at what I’m spending. Who’s right?

— Aiden in Florida

Howard Dvorkin CPA answers…

When personal finance experts like myself gather, we agree this is one of the most common questions we’re asked. Buying a car versus leasing one has been a hot topic these past few years, because leasing skyrocketed.

In 2016, 31.9 percent of all new vehicle sales were leases — almost a third, which still amazes me. However, the pace is off this year, according to the car experts over at Edmunds. They say leasing has dipped to 31.1 percent.

“Leasing remains a popular choice among car shoppers, but the era of steady growth is over,” says Edmunds executive Jessica Caldwell. “This year we’re seeing a drop-off in trade-ins going toward leases, signaling that the pool of people opting to lease is shrinking.”

I think this is a good trend, because leasing only makes financial sense in a very few situations. It doesn’t in yours, Aiden.

I followed up with you after receiving your email and learned you need the car to drive to work, which is a 40-mile round trip. That means you’ll drive 10,000 miles a year just for your job (figuring 50 weeks a year).

The lease you’re considering penalizes you for more than 12,000 miles a year. Are you really certain you’ll only drive 2,000 miles a year that aren’t for your commute? That’s a mere 5.5 miles a day.

Also, you tell me you like to take your two wild-and-crazy Great Danes on road trips. Why does that matter? Because in your lease is a clause that says you’ll return the car in “original condition, less normal wear and tear.” You admit your dogs like to chew on upholstery. You’ll pay a pretty penny for that.

Finally, you admit you really want this car not for financial reasons, but because you’ve simply “fallen in love with it.” I’m no expert in love, but I as a CPA for more than two decades I know this: Love can be expensive, especially when it’s unrequited. No car will return your love.

Bottom line, Aiden: You’re not an idiot. You’re a human being. It’s natural to be lured by a hot set of wheels. However, if you love your girlfriend more than you love a car, listen to her in this case.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

How Can I Save Major Money On Minor Surgery?

Question: I’m a 45-year-old school teacher and don’t have health insurance, but sometime in the next few months, I’ll need to get a painful plantar wart removed. When should I sign up for health insurance so I can get treated without paying for extra months when I don’t need to be treated? And can I drop the coverage right after? Is that what Obamacare is?

— Beth in New Hampshire

Howard Dvorkin CPA answers…

I don’t often write about healthcare. It’s a complex topic, and as a financial counselor, it’s difficult to advise people on how to best spend and save on their health coverage for their specific situation.

In your case, I can only tell you this: Please stop looking at health insurance like it’s investing in stocks. You can’t time the market, and you certainly can’t time your healthcare.

Sadly, a study last month from the research firm Bankrate found in the past year, a quarter of American families “have decided not to seek medical attention when they needed it because of the cost.” Of those, 13 percent had no health insurance.

The same day that study appeared, so did another from GoBankingRates, which showed prescription drug prices are rising faster than inflation. In 2016, drug prices soared 10.7 percent, and “pharmacy costs for employer health insurance providers have increased 21 percent in the past 10 years.”

That’s costly, because the same study showed that nearly half of all Americans filled a prescription every 30 days between 2009 and 2012.

What does this mean for you, Beth?

It means you need to do some homework. I’m unsure from your letter if you’re paying the penalty for the Affordable Care Act or if you had an exemption. I also don’t know if you have a job where health insurance is offered but you didn’t take it.

If you teach at a public school, you have a healthcare plan available to you, and I urge you to sign up for it — even if you think it’s costly. It’s better to cut spending elsewhere to have at least minimal coverage. If you think a plantar wart will be pricey, other procedures are far more expensive. I don’t wish to be morbid or cynical, but if you suffer a chronic illness or lingering pain from a car accident, you’ll really wish you had that insurance.

I also don’t wish to be impolite, but at your age, Beth, you need to have health insurance. While 25-year-olds may be able to skate by with no coverage, not so for 45-year-olds.

As a business owner myself who has struggled to find affordable plans for employees, I realize the burden of those monthly payments. I urge you to read this story about healthcare expenses and to consult the human resources department where you work. There’s no easy answer, Beth, but there are answers, tough as they may be.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.