Southwest Rapid Rewards Card

I usually don't travel too much, and as I've mentioned before, I am a little wary about the environmental aspects of flying.  That said, I have booked flights using Southwest Rapid Rewards twice in the last week.  I've been totally impressed by their rewards system, so I want to talk for a minute about how I got my rewards miles.

Contrary to popular belief, you don't have to travel all over the world to rack up airline rewards miles.  Instead, what I've done is apply for credit cards that give you airline mile bonuses.  In this case, Chase offers a Southwest Rapid Rewards card, that gives you 50k rewards miles after just one purchase on the card.  There is a $69 annual fee, but in my opinion, it is well worth the bonus points.

Here's how it worked out for me:  I booked two flights for about 23k points each.  These were both last minute flights, and would have cost me $400 each if I'd paid cash.  I still have 4k rewards points left, which can be used for $40 in gift certificates to various stores.  All this for a $69 fee, and one credit card application.

Breakfast tips

I have been eating the same thing for breakfast for the last 10 years or more: a cup of coffee and a pastry.  I'm sure there are healthier things I could be eating, but this is what gets me through until lunch time.  For several years, I would go to a coffee shop every day and get breakfast.  This cost about $6/day including tip.  I know you've heard a million times to make your coffee at home and save $3.  But, just as importantly, you can make your pastries at home, and save $2.50 or so a day.  Here's a link to the basic recipe that I use:

Muffin Recipe

I generally omit the crumb topping.  The great thing about this recipe, is you can make your muffins with basically any fruit you want.  I've tried strawberries, peaches, blackberries, and raspberries, all of which have been quite tasty.  One other hint: I make 2 dozen muffins at a time, and freeze them.  Just heat one up in your oven for 5 minutes or so, and they seriously taste like they were freshly made that morning.  Enjoy!

Tracking spending

I'm a pretty lazy guy, and I don't like balancing checkbooks, writing down all my purchases, or really anything that feels like make-work.  But, I know its important to track your spending, and to try and maintain a budget.  One tool that makes this much easier is Mint. 

Before I get into describing all the great things mint does for you, let me address one big issue with using Mint, or any website like Mint.  You will have to enter your usernames and passwords for all of your bank accounts, in order to really track your spending on Mint.  I'm not too excited about the idea of spreading my passwords around, but, in case my passwords are compromised, I do know that I can dispute any fraudulent charges.  Also, I'm pretty good about watching my accounts, so I should catch any issues pretty quickly.

The really advantageous thing about Mint is that it categorizes all your spending for you.  So, you can see how much your spending on groceries vs. eating out vs. utilities, etc.  I like to look at these categories, and figure out, if there's anything we could spend less on.  Also, this is good information to have when talking about your family budget with your spouse.  Even if you decide that you must spend $2000 on groceries each month, at least you are now aware of what your spending habits are, and you're talking openly about them.

Mint also allows you to set up allowances for each of your spending categories.  When you go over your spending limit, Mint sends you an email, letting you know.

College Financial Aid

My brother is transitioning from junior college to state university, to get his bachelors degree.  Along with that transition comes the much higher costs involved with 4 year universities.  So, I've been helping him think about how to pay for school, reduce costs, maximize financial aid, etc. 

One tip I got while going to college saved me a lot of money.  I took a break from school between high school and college.  So, when I got to college, I had been earning a fair bit of money the previous year.  When I went to fill out my free application for student aid (FAFSA), it looked as though I would continue to make that same amount of money throughout college.  I knew that I would have to work much less during college, but that was not reflected on my FAFSA form.  So, I went back to the financial aid office for what is called a "Professional Judgement".  At the university I went to, this amounted to filling out a form that described why I thought I would be making significantly less money next year, than I had last year.

This could apply to many different situations, perhaps one of your parents was laid off, or retired.  Maybe one of your parents pay is sales based, and the economy is such that their bonus will be smaller this year.  The main point is, by getting a Professional Judgment, you can make sure the financial aid office is taking in to account all of your personal circumstances when offering financial aid.

Amerisave - Up Front Mortgage Lender

Rates for 30 year mortgages are significantly higher today than they were yesterday.  I called my preferred lender, and talked about refinancing yesterday, but the rates weren't quite low enough for me.  Hopefully they will go lower over the coming days.  In preparation for lower rates, I want to talk a bit about mortgage lenders.  I am a big fan of up front mortgage lenders.  These are basically lenders that make all of the costs associated with a mortgage, clear up front.  The most interesting piece of information that is divulged by most up front mortgage lenders is the yield spread premium (YSP).  This is basically the amount of money you can get for accepting a higher interest rate for your loan.  You can think of it like paying points, in reverse, because, that is exactly what it is.

I refinanced my home loan recently with amerisave.  They are an upfront mortgage lender, and had the best deal on rates, closing costs, and YSP that I could find.  The key requirement I have for any mortgage lender is: do what you say you're going to do.  On this score, Amerisave did well.  The loan I eventually closed was exactly the loan that was represented to me in my original good faith estimate.  Also, the communication from Amerisave was phenomenal.  If you look for reviews of Amerisave on the web, a lot of people comment that they have a hard time getting in touch with their mortgage processor.  I think Amerisave took this criticism to heart, because my mortgage processor would always get back to me within an hour, whenever I tried to contact him.  That is great service!  At the end of the day though, the main question is, did they give me the rate they promised at the price they promised.  They did this as well, so I was very happy with Amerisave.  My only minor quibble was the amount of documentation they wanted.  I have not refinanced since 2009, so maybe the level of documentation required by all lenders has risen, but it was a little crazy all the forms I had to fill out.  Regardless of the massive paperwork, I would definitely recommend Amerisave to anyone looking to refinance their loan.

Refinance NOW!

Are you considering refinancing your home loan?  Have you been waiting to lock your rate?  Today is a great day to lock.  10 year treasury rates are at 1.96%.  You can easily get a 30 year fixed mortgage at 3.75% with no additional points.  That isn't to say there will be no closing costs, and probably additional origination fees.  You can get a loan with no closing costs right now with a slightly higher interest rate of 3.875%.

If you're underwater on your loan, there are some good opportunities coming up to refinance into a lower rate.  I'll talk about those options in another blog post soon.

Southwest Rapid Rewards

I don't love flying.  Its not that I'm afraid of the plane crashing.  The problem for me, is with the amount of carbon emissions produced when flying.  I know I am polluting the atmosphere every time I fly on a plane.  But, there are times when I feel that I really must travel by plane.
I'm leaving tonight to go see my brother and father in San Francisco.  They are both having some health issues, and I really want to head out there to support them.  Fortunately for me, I have quite a few Southwest miles.  I am not a huge fan of Southwest, their planes seem pretty old, the service is just OK, and there are no TV's.  But, their prices are great, and I recently found out that booking rewards travel with Southwest is really easy and convenient.
I booked my flight last night for travel today.  There were no additional fees for booking last minute, and the total cost for the round trip flight was 23,759 RapidRewards points.  That is roughly equivalent to $237.  Great deal, I thought.  But, here is the kicker: after I booked my flight (arriving in SFO at 6:45), I found out that my brother had a dinner reservation with my Mom at that time.  I really wanted to go to dinner with them.  So, this morning, I changed my flight to a flight that lands at 4:30pm.  I paid exactly $0 to make this change.  Needless to say, I am really happy with my RapidRewards experience thus far!