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.

 

How to Work Together as a Couple to Get Out Of Debt

They say two heads are better than one. Well, not if those heads are butting over financial decisions like when and how to pay off debt.

Indeed, being on the same financial page as your partner is crucial. But when it comes to paying off your debt, this isn’t so easy. Take it from me. When my husband and I first started our financial journey, we had different ideas about how to approach debt. This created frustration on both ends and slowed down our progress. Eventually, we started working together and paying down debt aggressively.

To help you get on the same page as your partner right away, take a look at these 5 tried-and-true tips. Hopefully, this will save you time, money and frustration.

Be Open About Money

If you’re in a long-term relationship, it’s important to talk openly and honestly about money. Plain and simple.

If you have skeletons in the closet when it comes to your finances or debt, it’s time to come clean. Financial infidelity and miscommunication can lead to money fights and often make the situation worse. Instead, plan money dates and lay it all out on the table. What accounts do you have? How much do you owe independently and as a couple? Although you don’t have to combine debt totals, this is recommended if you’re married or already living together.

It’s also important to discuss how your debt makes each of you feel. From there, you can work on steps to get out of debt and develop better money habits.

Work Together to Make Lifestyle Changes

When you work together as a couple to pay off debt, you shouldn’t view it as his debt or her issue that is hindering you from making progress. Remember: you’re in this together.

If you feel like your partner is a spender, talk to him or her respectfully and suggest some changes you can make as a couple. Maybe you can encourage him or her to start packing lunches to take to work, and you can do the same. Or, instead of going out to dinner and a movie every Friday night, maybe you can get into the habit of cooking dinner at home and going for a bike ride or to a free concert in the park. Odds are, you both may need to improve your money management habits. Why not work on it as a team and support each other?

Jen Hayes, who runs the blog Frugal-Millennial, says it takes teamwork and dedication to pay off debt as a couple. Hayes and her husband started out with $117,000 of debt in 2013 and they’ve already paid off $88,000.

“We both reduced our expenses and increased our income. We cut back on expenses by renting a room from my parents, driving an 18-year-old car, and finding free things to do for fun,” she says.

Hold Each Other Accountable

Paying off debt often takes time and requires sacrifice.

To this end, knowing that you’re not alone can be motivating. For this reason, think of each other as an accountability partner. My husband and I, for example, commit to weekly finance dates. This is a time when we talk about money in our household and discuss our debt repayment progress report. Checking in often reminds us that we need to stay on top of our goals – together.

Find Flexible Ways to Make More Money

When you put your debt balances together, you may be in for sticker shock. But, here’s the good news: your double income can help you pay off this debt faster.

You can also boost your earnings and improve your financial habits. For starters, if you and your partner both work, you’ll already have two incomes to consider when budgeting for debt payments. Then, if one or both of you start bringing in extra money on the side, you’ll likely be able to pay off your accounts even faster. Case in point: both my husband and I have side hustles to generate more money. You can do this too! Whether it’s babysitting, walking dogs, freelancing, or driving for a rideshare company, you just need a few hours each week to earn extra money on the side. You can then throw all of this toward paying off your collective debt.

Do What Works Best for You as a Couple

When asked how she and her husband paid off so much debt in just a few years, Hayes answered with this: “Do what works best for you as a couple.”

For some couples, this may mean moving back in with parents to save money. For others, it may mean cutting out gym memberships or swapping out expensive hobbies for more frugal ones.

While some people insist that all couples have joint bank accounts or weekly budget meetings, every couple is different. At the end of the day, you and your partner have to come up with a money action plan that you can both stick to.

 

The Hidden Costs of Dating

When it comes to dating, spending money on dinner or a movie may seem like a no-brainer. But, in the quest to find “the one,” all those dinners and other dating costs add up – big time.

Yes, dating can be a money suck. For this reason, it’s important to budget accordingly and be prepared for the costs that go along with the dating game. Luckily, we’re here to help with a primer on the hidden costs of dating. You may want to start saving money now!

Beautifying Yourself

First things first – you probably want to dress to impress. If you’re a lad, this may mean a sleek blazer or a signature timepiece. If you’re a lady, you might do some online shopping to bring out your most alluring self.

Case in point: When Morgan Quisenberry, an advertising professional who blogs at Diary of an Online Serial Dater, was newly single six years ago, she spent a lot of money on getting “gussied up.” Besides pouring money into new outfits, Quisenberry, 35, shelled out about $40 at Drybar to get a blow-out and $60 for a pro to do her makeup – for each date. Looking back, those costs weren’t worth it. “I feel like guys don’t really notice or appreciate the extra effort you put in for a date,” she says.

The moral: even if you don’t go the extra mile with professional updos and makeup, buying cosmetics and hair products for your own best DIY look can add up.

Intimate Wear—and Other Things

While your dude friend may be groveling over the fact that he’s been paying more than he would like on dinner dates, movie tickets, and what have you, let’s not forget about the amount of cash a lady may be shelling out for sexy lingerie. Sure, you can go Dutch on dates, but garb for a fun night out, intimate apparel included, can easily cost you – and you alone – anywhere from $30 to a few hundred bucks.

Transportation

When you live in an urban sprawl like L.A., dating someone across town can feel like a long-distance relationship. And shuttling from each other’s places can take time and cost money for gas or ride share services. For Quisenberry, who went on about 100 dates in five years, she averaged about $20 per date on rideshares. So, make sure you factor in transportation costs.

Dating App Subscriptions

If you’re hardcore serious about finding “the one,” you might want to consider paying for a dating subscription. If you want a premium subscription plan on a free dating app, such as Tinder Plus, you could be paying anywhere from three dollars to more than $20 a month. To sign up for OKCupid’s A-list, for example, it’s $19.99 for a month-by-month subscription and $9.99 a month if you sign up for a six-month package. Features include robust search options, no ads, and the ability to visit profiles incognito.

For strictly paid dating sites? It’s $42 a month for Match.com and $60 a month for eHarmony. While you can get a discount if you sign up for several months at a time, you may also be looking at several hundred dollars a year for your online dating subscriptions.

Matchmaking Services

An elite-level matchmaking service will cost you elite level dollars. We’re talking upwards of several thousand dollars. Quisenberry decided to go for it after finding that “all men in L.A. had a Peter Pan syndrome.” After much deliberation, she signed up for a “Five-Bachelor Package” at a high-end dating company. This included three coaching sessions with a professional matchmaker and five dates with potential mates.

Baby-Making Prevention

Fact: many of us are doing everything we can not to have babies. At least while we’re single. The good news is that most insurance plans cover birth control. But, if you’re getting birth control without insurance coverage, it can cost anywhere from $10 to $50 for a month’s supply of birth control pills, according to Planned Parenthood.

If you’re a lady who wants to get an intrauterine device (IUD), most health insurance plans do cover the cost, but may not pay for all brands. If you don’t have insurance, expect to pay upwards of $1,300 for the IUD, plus any additional fees for the actual procedure.

Time Costs Money

You know what they say: while you can technically make more money, you only have so much time. Not only can dating be a money suck, it can be a huge time suck, too. Swiping left and right, engaging in chats that may go nowhere, quibbling over whether your feelings are reciprocated—you get the picture. Indeed, dating can be a complete hit or miss, and there’s no guarantees and no definitive time frame as to when you’ll meet a suitable partner.

With this in mind, make sure you factor in all of the not-so-obvious expenses. This way, you can budget more effectively for love – even if it takes a lot longer than expected.

 

Struggling With Money? Here’s Why You Need to Speak Up

It’s not easy to talk about money, especially when you’re not managing it well. In a society where appearances are sometimes more important than the truth, it’s easier to put on a good face — and maybe buy a shiny new car — than to admit that you’ve got money issues.

It doesn’t help that money is a taboo topic. According to a 2014 survey by the American Psychological Association, 32% of Americans feel uncomfortable talking about money with family. But even if you grew up thinking that talking about money is a no-no, here are 5 reasons why discussing your struggles is crucial to your financial future.

1. Vulnerability is empowering

The main reason it’s hard to talk about money problems is the fear of judgment. In some families or circles of friends, that fear is more than a mere possibility. But if you continue to act like nothing’s wrong, nothing will change.

Even if you don’t expect your family or friends to be super helpful, talk about it anyway. The act of sharing something you’re grappling with can give you the emotional strength to face it.

This process also forces you to be honest with yourself about your situation. Once you reach this point of self-honesty, it’s easier to take the next step and address it.

2. They might have some good advice

There may not be a financial advisor or money coach in your family or circle of friends, but that doesn’t mean your friends and family can’t offer guidance. Since they all deal with their personal finances on a daily basis just like you, they may have experiential knowledge that may be useful.

And, since money can be a tough topic to talk about, it’s likely that you don’t know what their experiences are until you ask. For example, if you’re considering bankruptcy, a family member or friend may be able to talk about a similar experience and how they got through it financially and emotionally.

Even if they don’t have experiences that they can draw upon, your family and friends may still know about some options that you haven’t considered yet. But again, you won’t know until you ask.

Along these lines, your inner circle may know of some good resources you can tap into. They may know a financial advisor or money coach that can help you out. Or perhaps they recently read a great book on managing finances, or know about some good websites that offer helpful advice on various personal finance topics.

3. They’re not perfect either

We’ve all made money mistakes.

Even if your family members or friends are in a good place financially, they may still be able to empathize with your situation based on past experiences. In some cases, that empathy can help you feel as if you’re not alone. It may also give you the confidence to get back on the right track.

4. They can keep you accountable

By reaching out for help, you may get more than you expect. For example, maybe someone in your inner circle will even volunteer to be your sounding board, aka accountability partner.

As you’re working toward improving your financial situation, having this partner can help you stay on track. For example, you can set up a time to chat with this person once a week to talk about how you’re doing. Or, if she has experience managing money, you can even ask her to take a look at your budget and help you see your blind spots.

5. They care about you

Above all, it’s important to understand that your family and friends care about you and want you to succeed.

This doesn’t mean that discussing money will be an easy conversation. It also doesn’t mean that your family and friends will have all the right answers. But it does mean that your loved ones will do anything they can to help you figure things out.

Next steps

Some of the best financial advice you can get comes from the people closest to you.

As you consider your situation, think about family members or friends that you feel most comfortable approaching to talk about your finances. And, if you don’t feel comfortable at all, push yourself a little. Once you get over that first conversation, your path forward will become a lot easier.

 

4 Ways to Pay Off Debt Faster

American consumers are carrying an unprecedented amount of debtRecent statistics lay out the unpleasant facts: as of 2015, households carry an average of nearly $16,000 in credit card balances, $27,000 in car loans, and a whopping $48,000 in student loan debt. It doesn’t have to be that way. In fact, a small but significant number of Americans are entirely debt free altogether. It does take patience and discipline to reduce the amount you owe to creditors, but it does not have to take forever. Here are four great tips to pay off your debt faster, and get on the road to debt-free living.

Freeze Your Debt

One of the first steps to take in paying off your debt is to immediately cease accumulating it, especially when it comes to credit cards. Once you have resolved to pay down your debt as fast as possible, stop taking additional loans out, or charging your credit cards, and focus your efforts on paying your existing debts down. Some people, for symbolic as well as practical purposes, either cut up or actually freeze their credit cards in Tupperware containers in their freezers. This serves as a constant reminder to the mission at hand and makes charging additional items on your credit cards a challenging affair.

Pay More than the Minimum

The minimum payment due on credit cards and other debt is not your friend. In many cases, particularly with credit cards carrying a high APR, paying the minimum monthly payment each month on a high balance will take you over a decade to pay the card down. You will continue to accrue interest charges, slowing down your debt payoff considerably; your credit rating could also take a hit when you only pay the minimum balances as well. Wherever possible, attempt to pay a minimum of 45 to a 100% above your minimum payment during each billing period, and start accelerating the decrease in your outstanding balances.

The Snowball Pay Down Technique

Many people have had considerable success rapidly paying down their debts using something called the snowball technique. In the snowball technique, you list out your outstanding debt balances from lowest to highest and commit to paying the minimum payment on all of them. Then, you commit more money each month to paying down the debt with the lowest balance. Once that debt is complete, you pay down the next bill, applying the minimum monthly payment and any extra money you had previously committed to the recently paid off debt. Once this debt is paid off, you repeat the process with the next one, until you are debt free. A recent study indicated that consumers who approach debt repayment in this manner are more likely to pay off their debts than those who do not.

Consolidate Your Cards and Loans

If you have a variety of outstanding debt, especially credit card debt accumulating at a high APR, consider consolidating all of this debt via a balance transfer. If you have a decent credit rating, there are many credit cards and some banks that will allow you to consolidate all of your debts into a single loan at a lower interest rate. Many credit cards actually encourage you to do so by offering low or no APR for a period of time, which gives you further incentive to pay down your debt rapidly. Consolidating your debt in this manner will help you escape high-interest bank fees, which accrue interest each month and slow down your ability to pay off debt. A single, consolidated loan also makes it much easier for you to track all of your debt in one statement, and to address it, another key factor in accelerating your debt pay down.

 

7 Things I Gave Up While Getting Out Of Debt

A few years ago, I was staring down an enormous amount of debt. I had no idea how to tackle it.

I had recently graduated college, and while I didn’t have any student loans, I did have some credit card debt. I also had racked up some hefty medical bills after my new baby spent his first week of life in the hospital. To top it off, my husband and I had bought our first house. All told, we had zero savings left and were in debt to the tune of $140,000, including our mortgage.

Things continued to worsen and by the time our son was six months old, we were getting collection calls and I was seriously worried about our financial future. This wasn’t how I wanted to live my life. It was time to make some big changes.

I dusted off a copy of The Total Money Makeover and read the whole thing in one sitting. Then, I read it a couple more times to make sure I had absorbed every last bit of information on how to get out of debt. Over the next five years, my mission was to become completely debt-free.

We paid off our credit cards and medical debt, saved up three months worth of living expenses, and then started attacking our home mortgage. During this time, we managed to pay off $35,000 in debt. We then bought a new home to accommodate our growing family. Although we do have a larger mortgage now, that is currently the only debt we have. If you had told me that I’d be in such a secure position back in my days of ignoring collection calls, I wouldn’t have believed you.

So, how did I go from financial floozy to money maven? To be honest, I gave up nearly all my spending. Take a look at what I had to sacrifice to get myself out of debt.

1. Vacations

My husband and I took only one vacation during these five years. We spent two days in Vegas and spent less than $1,000, including airfare. While we still made the occasional trip to visit my family in California (a four-hour drive away), other vacations were off the table while we focused on debt-free living.

2. Eating out

Aside from birthdays and anniversaries, there were precious few times we would splurge on a date night dinner. We only rarely went through a drive-through for food and never had take-out dinners unless we had a gift card. This frugal food budget wasn’t all deprivation though. We both learned to cook and spent many evenings trying new dishes. It became our own cheap form of entertainment. In fact, I would often invite my friends over for drinks and dinner and this turned into a fun monthly tradition.

3. Pre-packaged food

During our debt destroying days, our grocery budget was the first thing to get slashed. I would often spend less than food stamp allowances on our weekly grocery budget. That meant making refried beans and bread from scratch because the pre-packaged counterparts weren’t worth the extra pennies to me. It was a lot of effort, but hey, at least it got us eating more whole foods, right?

4. Gifts and cards

While I would try to save up money for birthday and Christmas gifts, it usually wasn’t enough. So instead of buying gifts, I often made them myself. To be honest, I probably didn’t save much as I still had to buy supplies. But, I enjoyed making my own cards and wrapping gifts in simple craft paper – something I still do today.

5. Gym classes and membership

While I do love a good yoga experience, the truth was, I couldn’t afford the pricey classes while getting out of debt. I gave up gym memberships and fitness classes, opting instead for the free alternative of Youtube workouts and running. Even now that I can afford to pay for this luxury, I like the flexibility of working out at home so much that I still opt not to go to the gym.

6. Haircuts and other beauty fixes

For five years I didn’t get my nails done, my brows waxed, or buy my favorite beauty brands. I only got my hair cut once or twice a year. And, there was a two-year period when I decided to forgo professional haircuts completely (until a very unfortunate “I’m going to cut my own bangs” night). My minimalist beauty routine saved me thousands over those five years. This all went straight towards paying off our debt.

7. Cleaning products

Don’t worry, I didn’t let my house become a total pigsty, but I did stop buying cleaning products for a while during our debt paydown. On my quest for the ultimate frugal lifestyle, I experimented with lots of DIY cleaning products that cost a fraction of the big name brands. Lesson learned? Vinegar cleans just about everything and it’s dirt cheap.

What was worth giving up?

Honestly, making my own cleaning products and gifts was probably going a bit overboard, but in the end, kicking my debt to the curb was worth every penny-pinching endeavor. If you want to pay down debt, don’t be afraid to get creative when cutting costs. You might be surprised by how many things you can live without when you have a clear financial goal in mind.

 

Should You Side Hustle to Get Out of Debt?

Unfortunately, it’s all too common for people to carry debt. It could be from having a home mortgage, a car loan, student debt, or any number of other reasons.

However, if you have debt, no matter the reason, there are only so many things you can do to get out of it. You could consolidate your debts in order to try to pay it off more easily. Or, you could try to cut your expenses to the bare minimum in order to throw more money at your bills.

But what about working another job? Should you side hustle to get out of debt?

Here are a few things to think about before you decide to take on a side hustle to pay off debt.

1. Set Your Own Schedule

Depending on the type of side hustle you decide to do, you might be able to set your own schedule in your side hustle. For example, if you do the bookkeeping for a business you may be able to do it from home and work when you want to.

Of course, there are any number of other side hustles you could do that would allow you this kind of freedom. But the advantage is that you have a flexible schedule which is one thing that makes a side hustle an appealing choice to help you get out of debt.

2. Use Your Skills

The side hustle allows you to use the skills you already have to help you get out of debt. Let’s say you are great at math. You may be able to side hustle tutoring students in math which is a win for you and a win for the students you help.

Or, you could clean houses if you are good at cleaning well and fast. The point is to turn your strengths into a marketable skill you can earn money from to help you get out of debt.

3. Do What You Like

When you like what you do it is easier to stick with it. That is why it’s important that you enjoy whatever you choose to do as a side hustle to get out of debt.

Liking your side hustle can also help you to stay motivated and work harder. You may find that you are more tired and sleep less with a side hustle. But when you like what you do and you see your debts decreasing, it can be worth the sacrifices.

4. Know Where to Draw the Line

When you choose to side hustle to get out of debt you must also know what your limits are. It can be hard on your family when you side hustle because they may see less of you.

In addition, if you are sacrificing some sleep to do your side hustle, it can wear you down and even be hard on your health. You must know where to draw the line. After all, you must sleep and rest sometime.

Obviously having a side hustle that allows your schedule to be flexible can help with this situation. But you must pay attention to the needs of your family and spouse as well as your own when considering a side hustle.

Nobody likes to have outstanding debt. As to whether or not you should side hustle to get out of debt, only you can decide.

 

5 Money Myths That Can Harm You Financially

You may have heard that sticking to good financial rules of thumb can help you achieve financial security. But, you may also want to be aware of money myths that can have major negative implications.

To help you stay informed and make smart money moves, you may want to read up on these 5 money myths.

1. Checking your credit hurts your credit score

With credit reports, there are two types of inquiries: a hard inquiry and a soft inquiry. A hard inquiry happens when a lender checks your credit report — at your request — to make a lending decision. Hard inquiries can knock a few points off your credit score and stay on your credit report for two years.

A soft inquiry happens when a company or person checks your credit report to pre-qualify you for a loan or credit card or perform a background check. It also happens when you check your credit score. Soft inquiries don’t affect your credit score in any way.

If you believe this myth and don’t check your credit score often, potential errors or fraud could go undetected long enough that it would be hard to clear up quickly. And, a ruined credit report can also make it hard to get approved for credit when you need it.

2. A home is a good investment

There’s no guarantee that your home will appreciate in value at a reasonable rate. We only need to look to the Great Recession to see how quickly home prices can plummet.

Even some homeowners who could afford their monthly payment were “underwater” as the value of their home descended below their loan balance.

There are also extra costs involved with owning a home that should be considered in calculating your return. For example, homeowners insurance, private mortgage insurance, and property taxes are all mainstays with many mortgages. Maintenance and unexpected repairs can also get pricey.

That’s not to say a home can’t be a good investment for someone who is willing to take on the risks. But, it’s important that you don’t make such a long-term financial commitment thinking you’ll automatically make money – especially if the housing market suffers another crash.

3. All debt is bad

Focusing all your efforts on paying off debt can leave you without adequate emergency fund and retirement savings. When creating a plan to tackle your debt, keep all of your financial goals in mind.

Mathematically, low-interest debt can be good if you’re using it as leverage to work toward your other goals. For example, say you have $10,000 left on your auto loan with a 2.49% interest rate. You can put an extra $200 a month toward the debt, or you can put that money into your retirement account, where you could realistically get a 5% to 7% return over the years.

4. Carrying a balance on your credit card boosts your credit score

If you’re paying off your credit card every month, that means there’s no balance to report to the credit bureaus, right? Not necessarily. Credit card companies typically report your card balance to the credit bureaus once a month, and the reporting date is rarely the same as the due date.

So, unless you don’t use your card at all, it’s likely that the company will always report a balance. What’s more, credit card companies don’t report whether or not you’ve paid in full, just whether you’ve paid on time.

As a result, carrying a balance doesn’t have any effect on your credit at all. Instead, it could lead you to paying interest unnecessarily for years – and that’s money that you could use for other things.

5. Buy high, sell low

It’s a common emotional response to buy into the stock market when things are going well and to sell as the market tanks. The problem with this is that you’re losing money by buying your stocks at a premium and selling them at a discount.

Instead, think of stocks as groceries. Focus on what can provide you the most value for your money and avoid overpriced items until they go on sale.

If you invest in mutual funds, use the dollar-cost averaging method, investing a fixed amount every month regardless of how the market is doing. This strategy can mitigate the risks that come with a volatile market.

Don’t believe everything you hear

Not every money tip you hear is in your best interest, no matter how good it sounds. If something sounds even a little off, spend time researching it to make sure it holds water. This is especially important when it comes to debt and investing, as these often involve a lot of money over time.

The more you know, the more control you’ll have over where your money goes. This, in turn, makes it easier to reach your financial goals.

 

Should You Make Charitable Contributions When You’re Drowning In Debt?

While millennials get an unwarranted bad rap for being lazy, they don’t usually get called generous. But, millennials are part of a truly giving generation. In fact, a recent survey showed that 85% of millennials made charitable donations in 2015.

Indeed, if you’re a millennial, you likely already donate to a cause you believe in. At the very least, you’ve probably thought about which nonprofit organization you’d like to support. This brings us to an important question: Is it a good idea to be charitable if you’re saddled with thousands of dollars in debt? As with any other money decision, your answer should depend on your personal circumstances and preferences. But know this — if you have a penchant to give, there are many creative ways to do so without getting into more debt or hurting your plans to achieve the debt-free dream. Read on to learn more.

Avoid Impulse Giving

A new study from Fidelity Charitable found that 71 percent of millennial women give to charity “in the moment.” This makes me feel proud to know that we are such a passionate generation. At the same, impulse giving can be viewed as a form of impulse spending and this can bust your budget – especially when you’re already strapped for cash.

A good rule of thumb is to come up with set times to make charitable contributions throughout the year and stick to them. I like to give weekly at church and donate a larger amount around Christmas. Since I’m still on my journey toward debt freedom, I’ve also limited my impulse giving to in-kind donations. For example, I participate in social sharing and volunteering my time (more on this one later).

In order to figure out your own giving breakdown, be sure to evaluate charitable giving against your other money priorities.

Get Your Money Priorities in Order

The purpose of creating a list of priorities is to rank your financial goals in order of importance. Once you’re clear on your priorities, you will be more likely to devise a plan to achieve your goals. For example, your list of financial goals for the next 12 months could look something like: paying off 50% of your student loans, moving out of your parents’ house and giving to two charitable causes.

These events don’t have to be mutually exclusive. In other words, you don’t necessarily have to pay off all of your debt before you can start planning to move out on your own or begin donating to your favorite charities.

To get going, start with priority number one, such as paying off debt. With the debt snowball method, as soon as your smallest debt is paid off, use the freed-up money to tackle your next debt even faster. Alternatively, you could choose the debt avalanche approach where you focus on paying off the highest interest-bearing debt first.

Now that you have an action plan for your financial obligations, you can tweak your budget to determine how much of your income you can use to pay down your debt and how much you can allocate to other priorities that are important to you. When it comes to charitable giving, the good news is that you don’t have to give a lot to make an impact.

Most Nonprofits are Powered by Small Donations

Most nonprofits run on the cumulative effect of small donations and appreciate all contributions, regardless of the size. America’s Charities noted in a recent survey that “If the individuals who donated $10, $25, and $52 each decided that their donation wasn’t enough to make a difference, the 2015 pledge results for [one] particular nonprofit could easily have been $100,000 or $200,000 less…”

One simple way to free up funds for donating is to save up all your change each week. Or better yet, put out a change jar at your job if your employer will allow it.

You can also put your Chime bank account rewards to good use. If you enroll in the automatic savings program, Chime rounds up each purchase you make to the nearest dollar and places this amount in your savings account. On average, if you swipe your debit card twice a day every day for a year, you’ll have about $400 in your savings account.

You can easily donate this money to your charity of choice when #GivingTuesday rolls around.

Your Time Can Be Just as Valuable as Your Money

One of the most valuable things you can donate is your time. By volunteering with an organization, you may get the chance to work directly with individuals who are in need. Opportunities like this allow you to take a look at your own circumstances and practice gratitude more often.

On top of this, you could possibly pick up some new skills along the way which may be valuable as you seek to take your career to the next level.

Not sure where to start? Check out your town’s Salvation Army, church or library to see if they are in need of volunteers. Or register with Volunteer Match to find a local cause to get involved with.

Ask Your Employer to Help

In addition to these options, you can also check out your company’s corporate social responsibility (CSR) policy to see how your employer can get involved. Most organizations will match employee contributions dollar-for-dollar while others will even triple or quadruple these amounts.

Some corporations also offer volunteer grant programs, which means they provide monetary donations to organizations where employees volunteer on a consistent basis. You’ll typically need to provide a time sheet confirming the hours you volunteered before your company will send in a donation. For example, a company could offer a $250 payment to a nonprofit for every 15 hours that you volunteer. This is an impressive opportunity because you can donate your time and raise money on behalf of your favorite cause.

Charitable Giving is a Smart Tax Move

Apart from the altruistic reasons of being a do-gooder, charitable giving also yields benefits come tax season. In addition to monetary contributions, many organizations also accept physical goods, such as clothing, furniture or canned food. However, before stopping by a charity with a car full of stuff you’re no longer using, check to see if the organization accepts in-kind donations. Also, remember to ask whether your contribution is tax deductible and make sure to get a receipt.

According to the IRS, you can generally deduct anywhere from 20% to 50% of your adjusted gross income (AGI). However, if you choose to take the standardized deduction, you won’t be able to deduct any charitable contributions.

Be Careful Who You Give to

Before you give to an organization, check to see if it has been properly vetted. There are many scams out there that claim to be legitimate yet they are actually fronts to fund personal coffers. Sites like GuideStar, GreatNonprofits, and Charity Navigator are helpful because they provide independent reviews on various nonprofits. Charity Watch also provides details on how organizations actually use the funds you donate, ensuring that you make the most intelligent giving decision possible.

Armed with these guidelines, it’s time for you to flex your altruistic muscles and see how charitable giving opens doors for those in need. You may be surprised to find your sense of purpose without breaking the bank or sacrificing your debt-free dreams.