Tag: Debt

 

10 Quotes to Remember if You Want to Achieve Financial Freedom

Do you ever dream of spending your days doing what you want? Do you visualize spending your money how you please, without stress or worry?

Indeed, achieving financial freedom is a dream for many of us, but getting there can seem out of reach. Sometimes it’s hard to know where to start.

If your goal is to achieve financial independence, you’ve got to start taking steps to achieve your goal – right now. Here are 10 quotes to inspire you. Take a look:

1. “Rich people believe ‘I create my life.’ Poor people believe ‘Life happens to me.’” — T. Harv Eker, Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth

Financial freedom starts with having the right mindset to pursue wealth and all of your audacious goals. This quote reminds us that people who are rich have an active role in designing their dream life. They’re not passive players in the game of life or building wealth.

2. “Your assets are your employees. Invest more on those performing well. Let the non performers go.” ― Manoj Arora, From the Rat Race to Financial Freedom

Let your money work as hard as you do. Your assets include your hard-earned dough and you’ll want to invest that money in a place with high returns, like index funds. Don’t store all your cash in a savings account or in other assets that ultimately don’t serve your goal of financial freedom. Imagine you are the CEO of your money — your assets are your employees. Who should be fired? And who should be promoted?

3. “Money is something we choose to trade our life energy for.” ― Vicki Robin, Your Money or Your Life

Have you ever been at work and just wished you were at home with your kids or on the beach somewhere? The process of working and making money is something we trade for our life energy — energy that we want to use elsewhere. When we save money and pursue financial freedom, we can have some of our life energy back and choose to live life as we want, not as we have to.

4. “The secret to wealth is simple: Find a way to do more for others than anyone else does. Become more valuable. Do more. Give more. Be more. Serve more.” ― Tony Robbins, Money Master the Game: 7 Simple Steps to Financial Freedom

Pursuing financial freedom means breaking the status quo. You can no longer live in the ‘average’ but you have to go beyond. This quote reminds us that to build wealth and be successful we must give, serve, and be a cut above everyone else.

5. “Being rich is having money; being wealthy is having time.” — Margaret Bonnano

Money is an important part of financial freedom. But it’s simply a vehicle to pursue living your best life. You can always make more money but you can’t make more time. Knowing this distinction can help you build wealth in a way that frees up your time so you can be truly wealthy.

6. “To get rich, you have to be making money while you’re asleep.”  — David Bailey

I hate to break it to you but if you limit your money-earning abilities to eight hours a day, you’re not going to find financial freedom. In order to build wealth, you must make money when you’re sleeping. This means earning interest on your savings in a high-yield savings account. This means investing in retirement vehicles and the stock market. This means finding new passive income streams. The bottom line: figure out how to earn money ‘round the clock.

7. “Risk comes from not knowing what you’re doing.” — Warren Buffett

There’s some level of risk with almost everything we do, especially when it comes to the stock market and your money. You might be afraid to invest because it’s risky. But, if you understand how the stock market works, you will have more confidence to pursue financial freedom.

8. “A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” — Suze Orman

The ‘what ifs’ of life can plague your mind. What if I get sick? What if I lose my job? It can be paralyzing. Financial freedom offers the ultimate antidote to life’s worries: peace of mind.

9. “Financial freedom is freedom from fear.” — Robert Kiyosaki

Have you ever felt stifled or stuck because you were fearful? You were scared to quit your job because of money. You were afraid to move because you weren’t sure about the opportunities you’d have in a new place. Fear can consume us and keep us stagnant. Financial freedom helps alleviate those fears so we can pursue action.

10. “It is not the man who has too little, but the man who craves more, that is poor.” —Seneca

When we think of people that are wealthy, we may think of people with nice houses and fancy cars. But that’s not necessarily what truly wealthy people look like. In fact, if we keep wanting more and more, we will be stuck in a limitless cycle that keeps us poor. But if we take an inventory of what we already have — and stay grateful — we can enjoy what we have and build a wealthy life around what is truly important.

 

Biggest Financial Regrets Across America

For three years in a row, American adults have the same top financial regret. A May 2018 survey from Bankrate looks at the top financial regrets among Americans and how they deal with those financial regrets. By looking at the most common regrets, we know where we can best focus our future efforts on our investments, bank accounts, and beyond.

The top financial regrets of Americans

The number one financial regret among Americans is not saving for retirement early enough. This financial regret claims the top spot for the third year in a row in Bankrate’s annual Financial Security Index survey. This answer was number one for 18% of respondents.

Number two on the list is not saving enough for emergency expenses, with 14% of respondents most regretful about this. For workers in any profession, an emergency fund is an important part of maintaining financial stability. For freelancers and entrepreneurs, it is best to save at least six to 12 months of expenses in emergency savings.

The third most common regret is taking on too much credit card debt, with 10% of responses marking this as number one. This is no surprise, as Americans have over $1 trillion in credit card debt. The average household holds $8,600 in credit card debt.

Number four on the list is taking on too much student loan debt, a top regret for 8% of respondents. Americans have nearly $1.5 trillion in student loan debt. 44.2 million Americans have student loans, according to Student Loan Hero data.

The fifth most common financial regret is not saving enough for a child’s education, coming in with 7%. Both number four and five on this list share a commonality: they relate to a high cost of college. Number one and number five also have a big common trait: they both involve savings. These two topics are an important part of Americans’ biggest financial struggles.

Last on the top financial regrets list is buying more house than you can afford, with two percent of respondents choosing this answer. Like college, housing costs generally go up, up, up over time. In some areas, buying even a modest home takes up a huge portion of take-home pay.

Here is the full results care of Bankrate:

Biggest financial regrets
via Bankrate

How Americans respond to financial regrets

The list of common financial regrets does not yield many surprises to those who follow economic news, but how people respond to their biggest regrets is a bit more interesting. A full 25% have no plans to deal with their biggest financial regret and continue to go on living with it.

Dealing with financial regrets
via Bankrate

A nice relief, however, comes from the 49% who are already working on addressing their biggest financial regret. Whether it is debt, savings, or something else, a good budget and focus on finances can help overcome most money challenges.

While better than the quarter of Americans with no plans to address financial regrets, 19% plan to start work on their money problems within a year while six percent plan to do so later on in the future.

Only with a long-term focus on your finances can you rise above the statistics and go forward with no money regrets. While most of us would want to be wealthy someday, it takes a real effort to turn that dream into a reality.

Avoiding the biggest financial regrets

The best way to avoid many common financial regrets is simple: avoid going into debt. While it may not seem like a big deal swiping a credit card for a TV or choosing the expensive out-of-state school, credit card debt and student loan debt payments are a very real.

The next major focus to avoid a big regret is to save. Start with even $1 per week. No amount is too small. You can always increase it later. But if you don’t start saving, you will never build up savings to pay for a home, education, or retirement.

Thanks to the time value of money, the sooner you save, the better. Compound interest and compound investment values help your money grow over time. If your money has more time to grow, the impact of that growth is exponentially helpful.

Live a life free of financial regrets

Recovering from financial regrets is very difficult. Rather than turn around a difficult situation, avoid it from the start. That is one of the best paths to lifestyle satisfaction and a life free of financial strain and worry.


This article originally appeared on Due.com.

 

We Asked College Aid Experts How to Pay for School

While it’s hard to deny the value of a college education, rising costs have made it harder for students to afford their degrees. Average tuition at public, four-year schools surged to $9,970 for the 2017-18 school year and those costs rise to $20,770 per year when you add room and board, according to the College Board. A private school or an advanced degree, will cost you even more.

With these figures in mind, it’s important to know you don’t have to follow the crowd when it comes to earning a degree. You can plot a different path by looking for ways to reduce the cost of admission or by attending a different school.

Many college aid professionals and counselors wish you would consider alternative options. When it comes to paying for college, here’s what the experts have to say.

Pricey schools don’t always pay off

Ben Luthi, college expert for Student Loan Hero, says you can get a quality education without paying a premium. To accomplish this goal, you may have to consider a different school than the one you want to attend.

“The name of your school might help you get your first job, but it likely won’t matter for the rest of your career,” he said. That’s why you should make sure you include more affordable schools in your college search.

“And if you’re already in school and you’re overwhelmed with the cost, consider transferring. I’ve worked with countless people who went to colleges that I’ve never heard of,” he said.

Joe Orsolini, who serves as president of College Aid Planners, says many students and parents get hung up on college rankings or where a school lands on a best-of list. As a result, they make poor decisions regarding their undergraduate education.

“The reality is that nobody cares where you got your undergraduate degree,” he said. “Do you know where your doctor earned their undergraduate degree?” Probably not.

Focus on your return on investment

Robert Farrington, founder of The College Investor, says too many people think of college as a time to find themselves without thinking of the long-term consequences of their student debt.

“Students need to think of college as an investment, and so they need to focus on the ROI of that investment,” he said. “Why are they going to college? What will it cost? What can they expect to make after graduation in their first job? Based on those answers, students can get a good glimpse of their potential ROI.”

When you focus on your return on investment and think of college as a business transaction, you can avoid borrowing too much to pursue a degree that won’t pay off. Farrington suggests making sure you never borrow more in student loans than you can earn in your first year after graduation.

“That will allow you to realize an ROI on your education and keep your student loan debt at a manageable level,” he said.

You can save if you don’t live on campus

Debbie Schwartz, founder of Road2College.com, says students who have the option to live off campus or at home should consider it (just remember you’ll need renters insurance if you live in an apartment).

“In many cases, room and board can be more expensive than tuition,” she said. If you can live with your parents or another family member or share an inexpensive apartment or house with other students, you can reduce the amount of cash you need to borrow for school.

Take the right courses in high school

Kathy Hart, a California-based scholarship consultant and college coach, says many students assume harder courses will help them get into college. Unfortunately, this isn’t always the case.

“Take classes in high school that allow you to be successful,” she said. In other words, don’t fall victim to the pressure of having to take Advanced Placement coursework if you know if you can’t earn an A. If you can’t, an AP class could hurt your chances of getting into the school you want.

Apply early for scholarships

Jocelyn Paonita Pearson, scholarship expert and founder of The Scholarship System, believes all students can secure scholarships. She also believes they should start searching for grants as early as sophomore or junior year in high school and apply for every scholarship for which they qualify.

“Despite the majority of stories we hear, there are many students out there that manage to graduate debt-free,” she said. The key to earning scholarships is taking the time to find them and applying, and unfortunately this can require a big investment of time and effort.

Pam Andrews, college admissions coach for The Scholarship Shark, says it’s important to think about other types of aid as well – including federal or state grants and merit scholarships. Merit aid can be especially lucrative if you have excellent grades.

“Know what the college offers in merit aid, how you can qualify for it and what it takes to maintain it,” she said. “It is also important to know the application deadlines to apply for merit aid. Sometimes those deadlines are before a college’s application for admissions deadlines.”

Never assume you won’t qualify for a scholarship. Andrews says it’s important to approach the scholarship system with an open mind and without any limiting beliefs.

“If you don’t feel like you can succeed then you’re less likely to act or even think about acting,” she said. “Having the right attitude towards winning scholarships is the first step because it then moves the student to take action.”

Tuition may keep rising, but some states and colleges have made tuition free. Here’s where.


This article originally appeared on Policygenius.com.

 

Money Stress Is an American Problem; Here’s How to Fix That

Americans are stressed out about money.

The statistics about Americans and money aren’t great in most cases; in 2015, 76% of CFP’s said that their clients number one financial stressors was healthcare costs. A 2016 survey of Baby Boomers revealed that 60% fear running out of money in retirement. And 30% of adults in the US feel stressed about money constantly.

Money is supposed to be a tool. But when you don’t understand it, or earn enough of it, it gets to feeling stressful really quickly.

If you’re feeling stressed out about money, here are a few ways to calm down and sort the situation out.

Take a Deep Breath

When you’re beginning to feel that money stress get out of control, take a deep breath. Stress is physically unhealthy for us and it keeps us from being really productive. Before you can do anything else, you need to take care of yourself.

Figure Out Your Numbers

Numbers always tell the truth. Sometimes it might be difficult to hear that truth, but it’s always the first step.

You can start by listing out all your monthly expenses and categorizing them into needs and wants. This helps you see where you can cut back, if you can cut back at all. Second, do the same thing with your debts; list them out so that you know what you owe and where to send it.

Knowing your numbers gives you the power to change them. Whatever your next move is, reduce your money stress with figuring out the numbers.

Learn About Money

Learning and reading about money is a great way to demystify it. If something feels foreign to you it’s probably going to stress you out more than the thing that feels familiar. Money stress will go away over time as you learn more about money.

You can read blogs and books about money. Start listening to money podcasts. You can talk to friends and family about how they manage their money. There are a lot of options to learn about money once you start looking. Here’s a list of three books about money to kickstart your journey.

Start Small

Taking one step today and one step tomorrow is the way to go. Don’t try and climb your money mountain all at once. Small things become big things, and time can be your friend.

For example, something you’ll hear a lot in the personal finance world is that you need to have an emergency fund with 6 months living expenses saved in it. That can take months, if not years to save! But starting off my saving $50 a month is great- it lays the groundwork for your emergency fund and introduces the habit of saving.


This article originally appeared on Due.com.

 

Too Broke to Date? How to Handle Relationships and Money

As student loans and housing costs have risen over the past 15 years, you may have accumulated your fair share of additional financial baggage. Indeed, millennials are struggling to meet traditional markers of financial success.

Whether you are in debt or have an apartment you can’t really afford, you’re not alone. And, while you struggle to pay your bills and get ahead, you may not feel comfortable discussing your financial sitch with a new romantic partner.

Here’s the deal though—studies show that conflicts about money are related to divorce. While you may be far away from wedded bliss, learning to talk about money—the good, the bad and the ugly—with your romantic partner is a smart skill to practice. Here’s everything you need to know about how and when to share your financial truth.

Understand your money

If you don’t understand your own financial situation, it’s impossible to talk about money. Period. Because of this, the first step to discussing your financial status with a romantic partner is to make sure you know what you’re talking about. This doesn’t mean you need an MBA in finance, but it does mean that you need to understand the basics—including what’s on your bank account statements and credit card bills. You should also have at least a rough monthly budget and be able to stick to it. From here, you can then opt to make a few quick changes that will boost your confidence and your bank account balance. Here are 3 suggestions:

Step #1: Switch to a bank with no fees.

Step #2: Cut out unnecessary expenses (like subscriptions you never use).

Step #3: Track your spending and earnings.

The changes may feel minor, but being proactive with your finances is an important first step. Now it’s time to get clear about how you feel about money.

Own your emotional baggage

The more you understand about your own relationship with money, the easier it is to confidently talk about it with a new romantic partner.

For Jeff Proctor, a 28-year-old entrepreneur in Blacksburg, Virginia, it was his own self-doubt that made it difficult when he started dating his girlfriend more than two years ago.

“At the time, I was at a low point in my first attempt at entrepreneurship. My income was effectively zero. With business expenses mounting and my own personal cash reserves running dangerously low, it definitely had an effect on our relationship, but not in the way you might expect. We were both perfectly content with being frugal and not making fancy dates the norm, but what was hard for me was my own self-perception of being inferior,” says Proctor.

“My girlfriend was on a very upward career trajectory, so I almost felt like I had to hide my current lack of success. Since our relationship was so new, I was very self-conscious about that,” he recalls.

When you start dating someone new, you may be under pressure to impress that person. And, this can bring out your own internal insecurities. To help combat this, remember that trust is more important than perfection.

Honesty is key

When you feel self-conscious about something—student loans, debt, low income—it’s tempting to hide it, but that’s actually the worst thing you can do when you’re getting to know a new romantic partner.

Debbie Todd, CPA, and CEO at iCompass Compliance Solutions, LLC and 1 Hour Impact, says:  “Be honest with yourself about your real financial picture. Don’t ‘puff and bluff’ your way into seeming to be in better shape than you are. Pretending and lying only makes it worse.”

If you potentially see a future with someone you’re dating, it’s important to be honest because the truth will eventually come out, says Todd. With this in mind, it’s infinitely better to mention your financial baggage on the third date than to mention it three days before you’re getting married.

Here’s the deal: if a romantic partner is worth your time and energy, then he or she is going to be understanding about your financial situation. If not, you’re probably better off without that person.

“It sounds cliché, but you really do need someone who loves you for you, and doesn’t care about your financial situation…When I hit entrepreneurial rock bottom and had to go back and get a full-time job, my girlfriend still supported and believed in me,” says Proctor.

“Fast forward to now, and I am 100% full-time in my business and making more than I have ever made before,” he says.

If you’re doing the work—paying your debt, saving what you can, working hard at your job and taking positive financial steps—then you don’t have anything to be ashamed of. The right boyfriend or girlfriend will understand. The likelihood is that he or she also has some financial regrets to share with you.

Sooner is better than later

Disclosing your financial status to a new romantic partner is hard because it requires vulnerability. But the longer you delay the conversation, the harder it will become.

“[Disclosing your financial status] is probably not a topic for a first or second date, but if you both think the relationship has significant potential, then the ‘money talk’ should commence shortly after,” says Todd.

“One of the key reasons why relationships (and marriages) end is squarely pointed at money issues. You don’t have to be financially rich to be happy, but you do have to have a rock-solid foundation of trust, honesty and willingness to address major life areas of the relationship. Money is surely one of them,” she says.

Remember: there’s no set timeline for talking about money, but the rule of thumb is simple – sooner is better than later.

Bottom line

Money is complicated and everyone makes mistakes and has regrets. With this said, large student loans, credit card debt and other financial situations don’t define who you are as a person or who you are as a life partner.

Take time to review your finances and check-in with your emotions. After that, follow the advice here. Before you know it, you’ll be ready to take the plunge with your new love interest and come financially clean.

 

Relationships and Money: 5 Financial Questions to Ask Your Partner

First comes love, then comes…financial discussions?

Sure, talking about money may not be the most romantic thing in the world, but it is important in any relationship. Whether you are just starting to get serious with your partner or you’ve been married for years, there is no better time than the present to talk about cash.

Let’s back up a bit. This doesn’t mean that you should ask financial questions on a first date. Yet, if things get more serious, it is vital to know where your partner stands financially. In fact, according to a recent Experian survey, 59 percent of those who have been divorced say finances played a role in the breakup of their marriages. Furthermore, 20 percent of these people went on to say that financial conflict was a significant factor in their divorce.

To avoid major financial issues with your partner, it’s important to be the same page when it comes to saving money and prioritizing financial goals. Ready to talk about money with your love interest? Here are 5 money-related questions you should ask your partner – starting right now.

1. What are your financial goals?

Asking your partner about his or her financial goals is a relatively broad question, and this makes it the perfect conversation starter. Once you understanding your partner’s goals, you’ll then have a better idea of how to support him.

So, ask your partner about his or her short-term and long-term financial goals. How does he or she envision the future? What type of lifestyle does he imagine? As long as your partner is willing to open up and share information, this is a great starting point. It will hopefully offer up a way to naturally guide your conversation.

2. What’s your current debt situation?

Before you become serious with your partner, it’s vital to know what you’re getting yourself into. Down the road, if you want to get married, your partner’s debt will become your own. While this may not be a big deal for some people, it may be a make it or break it factor for you.

So, find out if your partner has debt. If so, what actions is he taking to pay it off? Does he have a solid debt-repayment plan?

Debt doesn’t necessarily have to be a deal breaker. If your partner has a realistic plan to pay it off, then you can rest easy. On the other hand, you may want to think twice before you get too serious with someone who is taking no action to pay off $100,000 of debt. This type of monumental debt can put a serious strain on your relationship.

3. What leisurely spending do you refuse to give up?

We all like to spend money in different ways – and in different amounts. This means we don’t always agree when it comes to spending choices. Failing to understand and accept how your partner spends money can create a major barrier in your relationship.

For instance, when my husband and I were dating, I couldn’t understand why he spent so much money on his favorite hobby – golf. Secretly, I was upset at how much he was spending. It wasn’t until we talked about it that I understood the importance of personal spending priorities. Golf was important to him.

Once we discussed this, we both understood the concept of individual spending freedom. Although we have since merged our finances, we still each get to spend a certain amount of money each month – on whatever we want.

4. Do you have plans to return to school?

Graduate school isn’t for the faint of heart. It requires a huge time commitment, not to mention a large financial obligation. In fact, according to Peterson’s, the average cost of graduate school is $30,000 at a public university, or $40,000 at a private college.

Many people desire to go back to school for one reason or another, but the decision can’t be made in the spur of a moment. Why? It takes two to tango when you’re in a relationship. Graduate school may require you to live on your partner’s income while you work toward a degree.

In short, graduate school is more than just a financial decision – it’s a lifestyle choice. If your significant other is considering graduate school, it’s time to start preparing.

5. How can we handle our finances together?

As a committed couple, you undoubtedly have many shared expenses. Do you have a plan in place to manage your finances – together?

For instance, how can you manage money together so you both reach your financial goals? How will you pay for dates? What about shared expenses, such as travel? If you live together, how should you best split rent and utility payments?

To avoid future frustration or resentment, talk about how you would like to handle finances together. Whether you split everything 50/50 or one of you pays more than the other, make it a point to create a system that works for both of you.

Happy Finances Lead to Happy Relationships

As a couple, you want to ensure that you meet your savings goals and financial commitments – together. By having money conversations on the regular, you’ll have an opportunity to talk through financial challenges and figure out how to achieve your money goals.

Just remember to be honest. This way you’ll avoid resentment and be on your way to a healthy and happy financial relationship.

 

Couples on FIRE: 3 Tips from 3 Millennial Couples on How to Achieve Early Retirement When Dating

Financial independence, or the ability to retire early and work when you want, is the latest craze in the finance world. But here’s the truth: if your partner isn’t on board with saving large percentages of your salary, then it’s nearly impossible to achieve this goal.

Here’s how Financial Independence Retire Early (FIRE) works. You save enough money to never have to work again. This can be done through a variety of tactics, like passive income or investments. But most people pursuing financial independence tend to have a few things in common: high savings rates, automated finances and optimized earnings.

Financial independence doesn’t happen overnight. For most people, it’s a process that takes years. That’s why it’s important for FIRE millennials to find a frugal money match. Take a look at 3 tips from 3 red hot millennial couples who are dating while handling FIRE.

#1: Know your individual financial goals

Here’s the deal—it’s hard to find your perfect money match if you’re unclear about your own money goals. This is especially true for people who are pursuing FIRE. The concept of early retirement is becoming more well-known, but it’s not the norm, and that’s why it’s important to clearly define and articulate your own money goals.

Years before 27-year-old Gwen Merz met her boyfriend Erik Tozier, she started working towards financial independence. For Merz, it was about personal freedom.

“Financial independence allows me to make decisions I wouldn’t otherwise have the luxury to make. I saved for five years and accumulated $200,000. That money allowed me to quit my job and move to Minneapolis to live with my boyfriend, and also allowed me to take a chance at becoming an entrepreneur,” says Merz.

For Stephanie Kibler, a 31-year-old living in Fairfax, Virginia, pursuing financial independence began as a way to become “rich” in the traditional sense—fancy cars, expensive clothes and big houses. Now, it means much more than that.

“The more I learned about money and financial independence, the more I realized that what I wanted was not so much the stuff that I thought rich people had. I wanted the freedom to buy things that brought value to my life without using debt to do it,” says Kibler.

“It’s not necessarily about buying anything fancy or expensive for me, but knowing that I can buy things that I want or need without relying on an employer or my next paycheck to supply that purchasing power,” she says.

#2: Be honest about your dating deal-breakers

Pursuing financial independence and early retirement is not for the faint of heart. It requires that both partners work together to make short-term sacrifices. Sometimes this means cutting expenses and earning more through additional hours at work. Because of this, most people who pursue financial independence have some sort of dating deal-breaker when it comes to a partner’s money habits.

“A large amount of consumer debt was a deal breaker,” says Merz.

“If they lived beyond their means and had a lot of debt from over-consumption, that would signal to me that we weren’t going to be compatible. I was prepared to deal with student loan debt as that’s at least necessary in some situations. I also looked at their attitude toward debt. If it was normal to have debt and they weren’t inspired to pay it down quickly, I knew we wouldn’t be compatible,” Merz says.

For some millennials pursuing FIRE, similar money beliefs are key when it comes to a romantic partner.

“If my girlfriend were a big spender, it would have made our relationship much more difficult,” says Cody Berman, a 22-year-old in Massachusetts.

“Given my inherent frugality, we would have surely ended up arguing about a purchase or spending decision,” says Berman.

For Kibler, it took personal experience to figure out her financial deal breaker before she met her husband, Grant Kibler.

“I once dated a guy who very literally didn’t believe that he would live to retirement age. He didn’t see the point in saving for retirement, but more importantly he was generally reckless with things like credit cards and health insurance…It ultimately did not make sense to date someone who couldn’t picture himself growing old—someone who believed that I would outlive him by several decades and wasn’t making financial plans for that.”

#3: Be comfortable growing together, not apart

When it comes to maintaining a successful long-term relationship, it’s crucial that you and your partner grow together. For couples pursuing FIRE, this often means growing jointly-held investments and savings. It also may mean growing together in terms of lifestyle dreams and goals.

Even if you and your partner begin the relationship with different money interests, it’s still important to find common ground.

“At first, I was a full-blown finance nerd. I am all about the numbers and could look at spreadsheets all day,” says Berman.

“My girlfriend, however, couldn’t care less about the math, tax hacks, or technical side of financial independence. She eventually got on board when she realized we could live a life of absolute freedom. She could pursue her dream projects and we could travel the world,” he says.

If you’re in a happy relationship, but your partner is reluctant to seek financial independence, Berman says that it’s important to “figure out what your partner wants and use that ‘want’ to pitch the FIRE lifestyle.”

Another way to ensure that you and your partner are growing together instead of apart is to plan finance dates. For Kibler and her husband, money dates are monthly occurrences where they discuss finances to help keep them on the same page.

“We sit down once a month at the kitchen table with my laptop. I show him our numbers, and we discuss what we’re going to do with our savings for the month,” says Kibler.

“We have a lot of little conversations about money throughout the month, but we don’t worry about it too much because the course is usually set during those monthly meetings. The little conversations throughout the month are course corrections, like piloting a plane, to keep us on the flight path we agreed to already.”

Bottom line

Pursuing FIRE requires a lot of dedication and planning, but for these couples, working together towards a shared goal of financial independence has made all the difference. Whether you’re single, married, dating or somewhere in between, talking about money with your other half is always a wise idea.

 

The History of Overdraft Fees

Overdraft fees are a wolf in sheep’s clothing. While a bank often markets overdraft protection as a way to help you out when you make an occasional budgeting error, it’s really just an expensive form of credit.

Think about it: in 2014, the Consumer Financial Protection Bureau (CFPB) found that the majority of overdraft fees were charged on transactions of $24 or less. With a median fee of $34 at the time, the same type of charge on a loan for a similar three day period would result in an annual percentage rate (APR) of 17,000%.

How did we get to this point? And what can you do about overdraft fees? Read on to learn more.

A short history of overdraft protection

An overdraft occurs when you’ve written a check, taken a cash withdrawal or used your debit card in an amount that exceeds your available funds. Most banks and credit unions offer overdraft protection, and this covers your shortfall in exchange for a fee.

The first overdraft authorization happened in 1728, according to the Royal Bank of Scotland. An Edinburgh-based merchant named William Hog received permission from his bank to temporarily withdraw more money from his account than he had available. This cash credit, as it was termed, was the forerunner of the modern overdraft. At one point, 18th-century philosopher David Hume called the cash credit idea “one of the most ingenious ideas that has been executed in commerce.”

But, let’s now think about this in terms of modern times. In 2017 alone, consumers paid $34.3 billion in overdraft fees, according to PYMTS.com. So, it’s possible that if Hume knew what would become of the cash credit idea, he may have changed his tune.

The modern overdraft

It’s unclear exactly when banks started charging overdraft fees. But according to Moebs Services, a research firm that focuses on financial institutions, these fees have steadily increased over time.

In 2000, for instance, the median overdraft fee was $20 among banks and $15 at credit unions. In 2017, those fees increased to $30 and $29, respectively. That said, some of the biggest banks in the U.S. charge between $34 and $36. While there are still some institutions that don’t charge fees on overdrafts of less than five dollars, this is not a universal feature. Also, some institutions charge extended overdraft protection, which adds more fees if you don’t bring your balance back to zero within a certain period. These time periods can range from one day to a week.

What you can do to avoid overdraft fees

While overdraft fees are ubiquitous, it’s possible that you’ll never have to deal with them. For starters, you can budget your money in a way that you never overdraw your account. And, if you make a mistake, you can also get your account back in the black before the end of the business day.

There are also three things you can do to boost your chances of never paying an overdraft fee. Take a look:

1. Opt out of overdraft protection

In 2009, the Federal Reserve Board announced a new rule prohibiting financial institutions from charging overdraft fees on ATM and one-time debit card transactions unless the customer opts in for overdraft protection on these transactions. The rule, which was made under Regulation E, went into effect in July 2010.

Yet, according to a 2017 study by The Pew Charitable Trusts, nearly three-quarters of people who overdraft don’t know they have the right to opt out. Guess what? You can opt out! By doing so, any transaction that overdraws your account will simply be declined.

This may not be ideal in some situations. For example, a credit card company may charge you a returned payment fee if a payment doesn’t go through due to an insufficient balance. For other transaction types, however, the only negative impact from a declined payment may be an embarrassment.

2. Get an account with a bank that offers alternatives

Rather than charging a flat fee every time you overdraw your account, some banks offer less punitive forms of overdraft protection. For example, some banks set up automatic withdrawals from a savings account to cover overdrafts.

Let’s say you overdraw your account on a Monday morning and your account is still negative at midnight. Instead of charging you an overdraft fee, the bank will transfer cash from your savings account to cover the negative amount.

Another option is an overdraft line of credit. Again, instead of charging you a flat fee, the bank charges you interest — say 18% — on the negative balance. While this might seem high, if you overdraw $24 and bring your account back to positive within a few days, the accrued interest amounts to pennies.

3. Get an account with a bank that doesn’t charge overdraft fees at all

With the rise of challenger banks, many new institutions have addressed some of the major issues with the traditional banking system, including the problem of overdraft fees.

If you open an account with Chime, for example, you’ll never pay overdraft fees. Period. This means you don’t have to find some other way to avoid the problem because there’s no problem to begin with.

The bottom line

Overdrafts have been around for a long time, but the penalties keep getting worse. The good news is that there are plenty of ways to avoid overdraft fees, and some financial institutions don’t charge them at all.

If you’ve paid an overdraft fee recently, it may be a good time to look into alternatives at your bank or switch banks altogether.

 

What Rappers Get Wrong About Money

Livin’ large, cavorting around town in fancy cars, and spending the Benjamins on hot chicks and flashy rags. Do rappers in general give the wrong message about moola? You bet.

Granted, these songs stem from personal experience, creative expression, and an individual perspective. And there are plenty of rap songs that give a nuanced look at money and what it represents to the artists. That being said, rappers oftentimes do give the wrong message on how wealth is built. They also tend to exude unrealistic money habits (note: cool money management apps are not included.)

Here are some songs that reveal what rappers get wrong about money, as well as some #truthbombs. Warning: song lyrics may be explicit.

“Money Bag” by Cardi B

What It Says About Money: To appear like a wealthy “money bag,” one must be driving Bentleys, Maybachs and Ferraris. To be blingy is to be wealthy.

#MoneyTruthBomb: Sure, you may look like a million bucks, but the truth is: you could be swimming in deep debt. And, depending on your values and life goals, true wealth is expressed differently. For some, this means having the option to take some time off work to see the world. Others may decide to live out of an RV. There are times when wealth simply means enjoying financial freedom, and not having to stress out about money.

At the end of the day, money is a tool – nothing more, nothing less. Like modest types like Warren Buffet and Dave Grohl, some real-deal money bags prefer not to flaunt it.

“1st of tha Month” by Bone Thugs and Harmony


What It Says About Money:  Now that you got paid, you should blow it on dope, booze, and other vices.

#MoneyTruthBomb: Waiting on your paycheck sucks. Whether it’s the first of the month or the 15th, we’ve all been there. You shouldn’t have to wait to get paid to treat yoself. In fact, if you’re a Chime bank member and set up direct deposit, you can get paid up to two days early.

To boot, spending it all on your vices is just plain irresponsible. A smarter way to spend on those guilty pleasures is to save for them. This way you won’t feel like you’re missing out on life too much while also keeping an eye toward the future.

“It’s All About the Benjamins” by Puff Daddy


What It Says About Money: We should aim to have massive wealth so we can achieve big baller status and flaunt our wealth. Wads of cash are to be spent on flashy rides, swimming in hot women, and donning five-carat diamond rings.

#MoneyTruthBomb: Blowing your cash and living entirely in the here and now will only lead to destitution. Before you know it, you’ll be in the poorhouse.

I consider this a half-truth. In my humble opinion, money is – in many ways – everything. It affects our physical and emotional well-being in profound ways. If kept unchecked, money woes can create stress and prevent you from living life to its fullest.

There’s nothing wrong with being money-hungry. By all means you should focus on building your wealth. But, it’s best not to blow it. Instead, practice a bit of prudence. While you should certainly enjoy life, you should save for the future, too.

“I Get Money” by 50 Cent


What It Says About Money: If you have a lot of money, you should try to spend all of it on the high life.

#MoneyTruthBomb: Instead of blowing your hard-earned money to appear rich, you’ll want to spend it in line with your values. You should also set some aside some cash for emergencies, and prioritize your other saving goals such as retirement, a house and your kids’ college fund.

“$ave Dat Money” by Lil Dicky


What It Says About Money: I thought I’d end things on a positive note and include a rap song that revealed a money truth. Granted, this is a tongue-in-cheek rap song that goes against the mainstream, but it makes a point to preach good money habits. Yes, save that money, don’t charge on credit and buy off-brand at Walgreens. Build your savings as soon as you can, and purchase your flights for travel well ahead of time.

#MoneyTruthBomb: Chances are that true wealth isn’t going to come from an unexpected windfall of cash or inheritance. If you want to enjoy high net worth, “slow and steady” wins the race. It’s those everyday habits that will help you build that stash of cash.

Keep It Real By Focusing on Developing Solid Habits

These rap songs may spread unrealistic ideas about financial habits and how to make money, but this doesn’t mean you have to live your life this way. Instead, try focusing on the nuts and bolts of financial wellness, such as understanding spending triggers and automating your savings. This will set you on the right path to a financially fit you.

 

3 Ways to Prepare for Student Loan Payments

The time has come. College grads are about to walk into the real world.

If you fall into this group, this also means it may be time to start paying back your student loans. According to Student Loan Hero, 71 percent of 2017 graduates carried student loan debt.

And, monthly student loan payments are typically between $200 to $300 a month. That’s a lot to swallow, especially if you won’t be earning much at your first job.

To help you tackle your student loan payments, it’s important that you first understand your repayment options, including the ins and outs of grace periods. Take a look at our primer on preparing to pay down your debt.

Understand your “grace period”

First things first: What is a grace period?

A grace period gives you a period of time after you graduate during which you do not need to make payments. When this timeframe ends, you’re on the hook to start making payments. If you don’t have a grace period, your payments start kicking in immediately.

“The first thing recent grads should do is see if they even have a grace period,” says Adam S. Minsky, an attorney specializing in helping student loan borrowers.

While most undergrad loans do have some sort of grace period, Minsky says the length of time can vary depending on the type of loan you received. For example, direct subsidized government loans have a grace period of six months, whereas The Federal Perkins Loan Program has a nine month grace period.

Got multiple student loans that you’re thinking of consolidating? If you really need a window of time to prepare become making payments, be aware that consolidating loans can make that grace period go away. Yet, there is a way around this caveat: make sure you put a grace period “delay” on your application. This will alert the servicer not to process the loan consolidation application until the end of your grace period, says Minsky.

Weigh your repayment options

Did you know that as a borrower you can choose different options for paying back your loans?

In the case of federal loans, you have seven different repayment options to choose from, depending on your eligibility. These repayment plans determine how much you pay, when you pay, and how long it will take you to completely pay off your loans.

Typically, if you do not request a repayment option, you’ll automatically be placed in the Standard Repayment plan. Under this plan, your monthly payments are fixed and spread out over 10 years. However, there are several other plans that may work better for you.

For example, you may qualify for an Income Driven Repayment Plan, whereby payments would comprise 10 percent of your discretionary income. In order to start the process and be considered, you must first fill out the application on the StudentAid.gov site. Another option is the Graduated Repayment Plan. For this option, your monthly payments start out on the low end and increase over time. Only certain types of federal loans are eligible for this plan. You can find out whether or not you are eligible by visiting StudentAid.gov. To figure out which repayment option is best for you, you can also run the numbers via calculators provided by StudentLoans.gov and StudentAid.ed.gov.

Some types of borrowers – particularly those with government jobs or those employed by a non-profit – can enroll in a repayment program under the Public Service Loan Forgiveness Program (PSLF). This program forgives the balance on Direct Loans after you make 120 qualifying payments.

The earlier you start making qualifying payments, the sooner you’ll reach the requirements needed for forgiveness. Just be aware: any payments you make during a grace period don’t count, so you’ll have to forgo the grace period by immediately enrolling in a repayment program, according to Minsky.

Start making payments ASAP

Let’s say you landed a job right out of college. If this is the case, you’ve got some money coming in and you may want to start paying back your student loans during your grace period.

“Since 2012, there’s no interest subsidy for most federal loans during the grace period, so you can save money long-term by paying something towards your student loans during this time,” says Minsky.

Even if you don’t have a full-time job lined up, you can still start paying back your loans immediately. Perhaps you can get a part-time job while you’re hunting for a job in your field. Or, you can start a side hustle and take advantage of the gig economy.

You can also sit down and create a budget incorporating your student loan payments.

Final Thoughts

As you can see, the more you understand your student loan repayment options, the better off you’ll be. So, make sure you educate yourself on the types of loans you have and your applicable grace periods. From there, you can create a plan to pay back your loans. Once you wrap your mind around this and budget for your payments, you can start saving for your other goals.

Banking Services provided by The Bancorp Bank, Member FDIC. The Chime Visa® Debit Card is issued by The Bancorp Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. Chime and The Bancorp Bank, neither endorse nor guarantee any of the information, recommendations, optional programs, products, or services advertised, offered by, or made available through the external website ("Products and Services") and disclaim any liability for any failure of the Products and Services.