The 10 Golden Rules of Money Etiquette

We know how awkward – and frightening – talking about money can be. Yup, it’s oftentimes considered more taboo to chit chat about the “M” word than about sex and politics.

While shooting the hay about your job may be less anxiety-inducing than your debt situation, having convos about financial matters is super important.

Yet, as the saying goes, “there’s a time and place for everything.” If not well-timed or in the proper context, chatting about finances can simply create tension. To avoid socially awkward situations, money faux paus, or full-on blow-ups, here are the 10 golden rules of money etiquette:

1. Thou shall not inquire about one’s debt during family functions

 That’s right. No meddling about Uncle Harold’s outstanding credit card balance or cousin Ave’s student debt load in front of spectators at a 4th of July grill-out or during Thanksgiving dinner.

Or even worse, it’s probably not a good idea to start a convo about how much debt is owed to you. What’ll most likely happen? Probably nothing productive. Instead, you’ll probably painfully endure mad-dog glances for the duration of the meal.  

What to do instead: If a family member’s debt involves you (can you say authorized user, or long-overdue loan?) carve out some private time to suss things out. If the person is in a bad financial situation, see if you can talk to him one-on-one about how to build solid credit card habits. But tread carefully! You don’t want to set off any landmines.

2. Thou shall not ask to split the bill afterward.

Does this sound like a likely scenario? You’re enjoying a lovely patio brunch with some pals. Your meal companions order double espressos, bottomless mimosas, while your frugal self meagerly gulps on tap water. When the check drops, your friends say they’re too tipsy to do math, and suggest splitting the bill evenly. You know, for the sake of convenience.

What to do instead: Oy vey, this is one of my personal pet peeves. Figure out the payment sitch beforehand. Otherwise, you’ll be tasked to be the “uptight one” who wants to divvy up the bill according to what each person ordered. Note that you may be expected to be the one that has to calculate the tab. This is far better than paying more than you budgeted. You can also decide ahead of time to use an app to split the tab. Easy peasy.

3. Thou shall not text about serious money matters with your partner.

This is a money faux paus I’ve ashamed to admit to. This happens when I’m feeling particularly brave and resolute about having “a talk” on budgeting or how to best split bills. I’ll then send my partner a mini-novella of a text. In turn, he gets agitated or feels blindsided. A likely reply: Let’s discuss IRL.

What to do instead: It’s simply not in good taste to bombard your partner with long-winded texts about serious money topics. Instead, carve out some time to discuss spending habits or your financial future. It doesn’t have to involve a five-course dinner. You can chat en route to the supermarket, or during an evening walk around the neighborhood. Just make sure it gets done.

4. Thou shall not outright ask about another’s salary.

While discussing salaries isn’t always a social no-no, it’s deemed outright rude to ask someone how much she earns. Why? It can easily lead to feelings of inadequacy, or cause your friend to go into “compare and despair” mode.

What to do instead: If you suspect you make more than your friends and family, it’s easy to be the one mouthing off about how much you take home. It’s quite a different story if your friend earns more than you. But please, don’t be the clueless one who lives in a self-absorbed, more financially-astute than-thou bubble.

If you’re dying to talk salary, start by broaching topics with lighthearted money topics. For instance, mention a great deal you nabbed at a sample sale. Or how you’re trying to cut back on eating out. Or… you might even start out with a general discussion on career planning or investing in your professional life. Then feel things out, and take it from there.

5. Thou shall not hide important financial information.

If you have outstanding debt, or made a money boo-boo in your younger years, you’ll need to let the cat out of the bag eventually. You loved ones deserve to know the truth. Plus, remaining silent is a borderline act of financial infidelity, and can lead to feelings of hurt and betrayal.

What to do instead: Be upfront with those who could be negatively impacted by information you don’t share. Otherwise, this may just lead to more problems down the line.

6. Thou shall not ask for one’s credit score on a first date.

…Or net worth for that matter. A relative of mine once had his date ask him what tax bracket he fell into. The proper response? “None o’ your business.” You’ll probably want to make sure you have similar interests and values before prodding about someone’s net worth. Just sayin’.

What to do instead: As you know, talking about money matters is a super sensitive topic. When you’re just getting to know someone, you want to be extra careful. When on a date, I’ve learned to look for subtle cues on how my date manages money. Granted, as a personal finance writer, many times my date will outright express an interest in money management or flat-out admit they’re terrible with money. It’s a start, and will lead to more serious discussions as the relationship progresses.

7. Thou shall not ask for money during a friend’s birthday.

Sad but true: I have been guilty of this. Granted, I was a broke college student at the time. My good friend checked out some books at the university library using my card. He lost them during a bad breakup, and I was fined three hundred dollars.

On his birthday, I brought up the topic and suggested coming up with a repayment plan. The lighthearted chit chat in the room dramatically faded into dead silence. #majorfail

What to do instead: Approach the situation with kid gloves. In private. You really don’t know what is going on in the other person’s life. My friend eventually paid part of it of back, only to have his car towed, and he needed the moola to get his car back. We were both riding the broke student train. While three hundos was nothing to scoff at, especially at a time when I subsided on mac and cheese, I realized it was best to just let it go.

8. Thou shall not push your frugality on another person.

Yup, this was former me. I used to assess people’s capacity for frugality with a harsh, critical stare. And just like how some youngins would only choose friends who drove certain cars and carried certain brands of handbags, I picked my friends based on how good they were at scouting a killer deal.

What to do instead: While hanging out with frugal folks can help you stick to your budget, it’s also great to have friends with different money philosophies and habits. It’ll not only help you be more open-minded and compassionate, but you’ll build your resistance to FOMO.

9. Thou shall not judge others on their money decisions.

There’s no point in harshly judging others on how and why they spend their money. People have varying relationships with money, mindsets, and ways of being. Just because you may decide to do something differently doesn’t mean what they’re doing is plain wrong.

What to do instead: If you really want to help others with their finances, be the cheerleader or accountability buddy they need in their life. Only help out if they ask for it. Sure, you’ll want to tout the benefits of auto-transferring a portion of your paycheck, or saving for an emergency fund. But, put a lid on it – for the time being. Otherwise, you’ll come off as intrusive, which will just lead to ill feelings of resentment.

10. Thou shall not debt shame.

Debt shaming can feel just as bad as looking down on someone who doesn’t have a lot of money. You just don’t know what kind of situation someone is in, and what factors led them to their current state of affairs. Debt can create a lot of stress, anxiety and depression.

What to do instead: Be a pal. If someone shares tales of debt woes, nod and commiserate. Offer up resources and tips if you think it would be useful.

Bottom Line

Stick to these golden rules of money etiquette, and I assure you, you’ll be a well-regarded money nerd. It sure beats being the insensitive, out-of-touch one who just doesn’t get it and is privy to an eyeroll – or two. Trust me, your relationships and social life will be better off for it.

 

 

Does the 20% Savings Rule Actually Work?

When it comes to saving money, experts often suggest saving at least 20% of your income. While this may be a good financial rule of thumb, it doesn’t work for everyone.

To figure out whether the 20% savings rule is the best option for you, it’s first important to understand more about this method of saving money. From there, you can decide whether it’s right for you. To learn more, read on.

A Quick Review of the 50/20/30 Rule 

The 50/20/30 rule is a minimalist-style budgeting tool that refers to how much of your take-home pay you should save and how much you need to allocate for expenses and other goals.

The rule simply states that 50% of your income should be devoted to essential expenses like housing, food, and utilities. Another 30% should go toward discretionary spending on the fun stuff. This leaves 20% for your savings, which can be earmarked into a savings account,  an emergency fund, and a retirement account.

Is 20% Always the Right Amount to Save?

I know what you may be thinking. While it sounds pretty simple, saving 20% of your income can be unreasonable it you’re just starting out or trying to make ends meet.

For this reason, 20% isn’t always the magic number. If saving this amount is out of your reach, then start with a lesser amount. The most important thing is that you start somewhere and save a set amount of money that works for you.

I can remember how awful I felt when I was laid off from my job during the Great Recession and was forced to stop contributing to my retirement accounts. At the time, I had no other choice. I could either continue to invest for my future or I use that money to buy groceries. Fortunately, I knew that this time in my life would pass, and that I would be able to get a handle on my finances and start saving again. I was right. As time went by, I was able to increase my savings rate until it exceeded my original savings goals.

With this in mind, remember that the 20% savings rule is really just a rule of thumb.

Does the 20% Savings Rule Work?

Yes, the 20% rule works – at least for the most part. If it didn’t work, financial experts would not continue to praise its simplicity. So, if possible for you, it’s a good idea to start saving 20% of your income today.

The bottom line: if you can consistently devote 20% of your income to savings over the long-term (think: decades), you’ll have a better shot of retiring comfortably.

But, just because the 20% rule works, keep in mind what was discussed above: it may not work for you. If your financial situation is less than stellar due to debt or other unfortunate circumstances, you may need to find an alternate route to a healthy financial future. If you think you need another savings method, take a look at the helpful tips below:

  • Create a budget. To start saving whatever you can, it’s a smart idea to first figure out how much money is coming in and going out each month. To do this effectively, we suggest tracking your expenses and creating a budget. This way you can identify areas where you can trim the financial fat, freeing up funds to save. For instance, if you track your expenses and realize you’ve been spending an average of $400 in restaurants for the past three months, you’ve just identified something you can significantly cut back on. Not only is cooking at home good for your waistline, but it’s good for your bottom line. And that’s a win-win.
  • Automate your savings. Life can easily get in the way when it comes to saving money. Too often than not, the end of the month rolls around and you realize you didn’t set anything aside for savings. To help get around this, try making saving money automatic. In fact, Chime makes it simple with its Automatic Savings feature. Here’s how it works: each time you use your Chime debit card, your transaction is rounded up to the nearest dollar and the round up amount is deposited into your Chime Savings account. Plus, you can set up your account to automatically transfer 10% of each paycheck into your savings account. This makes saving money a no brainer!

Start Saving Money Now

There you have it: an explanation of the 20% savings rule, why it’s so popular, and what you can do if you need other savings options. Remember, there is more than one route to a healthy financial future. Are you ready to start saving more money today?

 

12 Budget-Friendly Activities for Spring

Apart from affecting your mood, the changing seasons can also influence your purchasing decisions – big time. However, with some proper planning, you can keep your spending habits under control regardless of whether it’s winter, spring, summer or fall.

With that in mind, springtime ushers in warmer weather and outdoor activities. If you’re on the hunt for budget-friendly activities, check out our top 12 suggestions:

1. Get active

There are many ways to become your healthiest self without breaking the bank. As the weather warms up, consider ditching the gym membership in favor of outdoor workouts like hiking, jogging and swimming (if you have access to a free community pool or nearby body of water). Also, depending on how long your commute is, you can think about biking or walking to work during the spring (and summer, too).

2. Volunteer your time

You don’t always have to shell out big charitable donations in order to give back. In fact, one of the most valuable things you can do is donate is your time. Now that spring has sprung, it’s time to emerge from your hibernation and seek out these opportunities. For example, why not 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.

3. Relax

It is so important to invest in your mental health and spring provides many therapeutic activities that don’t cost a thing. Every day, pencil in a few minutes to listen to the birds singing, enjoy the rain or take in the beautiful spring blooms. You can even go for a walk in a local park or discover nearby hiking trails. These activities are simple but may help relieve stress and boost your mood.

4. Enjoy nature

Piggybacking off the last point, Sami Womack from A Sunny Side Up Life says that “especially in the spring, I’d recommend that everyone find something to do that involves nature.” To save even more money, Womack suggests packing a picnic lunch so you don’t have to go out to eat after your exploration.

5. Work on your garden

For the past few years, my husband and I have really enjoyed building a vegetable garden. It costs us around $50 (dirt, fertilizer and seeds.) This is relatively inexpensive for several months’ worth of fresh, delicious tomatoes, zucchini, kale, peppers and cucumbers! This is also an excellent way to reduce our grocery budget, plus we always have extra produce on hand that we can gift our friends whenever they host a BBQ.

6. Play board games

Unfortunately, not all spring days are nice enough to spend outdoors. With this in mind, you’ll need a few ideas to occupy your time when you’re stuck indoors on a rainy day. My favorite tip is to choose board games that can teach you money lessons, like Monopoly.

7. Visit a farm or petting zoo

Visiting a zoo or an aquarium can get pricey. However, many local farms offer free tours and other activities that you can enjoy while the weather is nice. For example, I live pretty close to Pennsylvania and found this petting zoo that offers free admission. Others may charge a $1 admission price and that’s hard to beat.

8. Take in free festivals

Start visiting your city’s website and follow your local municipality on social media to learn about free events such as festivals and outdoor concerts. This also offers an excellent opportunity to meet people if you’re new to town. For example, New Brunswick, N.J. is the closest metro area to me and the Official Tourism Website of New Jersey gives an up-to-date listing of fun local events to consider.

9. Explore your city

Alli Rosenblum‎ from FinancialliFocused says one of her favorite low cost things to do in the spring is to play tourist in her own city. She says this is a great time to “learn the history of your city/state or even check out some local artists.” Rosenblum suggests starting with your city’s free visitor’s guide. Why? Even though you’re a local, you may find a treasure trove of budget-friendly ideas that are new to you.

10. Take up kite flying

I’ll be honest: it’s been many years since I even thought about flying a kite. But a friend recently let me know that this activity is high on her spring to-do list. She even plans to make her own kite from scratch so that this outdoor activity is even more affordable.

11. Spruce up your home

Spring is the perfect time to take on some DIY home improvement projects, declutter your closets and deep clean your abode. You can also take the fun outside and tidy up your yard or even help clean up a local park.

12. Host a yard sale

One of my favorite ways to raise some extra cash is to throw a yard sale. Think of this as another great seasonal side hustle, as well as a fantastic way to spring clean your house! Better yet, funds raised through a yard sale can help you build up your emergency fund, pay off debt or plan your next girls’ trip.

Three Bonus Tips for Spring

While you’re out enjoying the weather with the activities above, here are three more cost-saving strategies that will help you keep more cash in your pockets this spring.

1. Spring Clean Your Budget

It’s always worth it to revisit your budget every few months to make sure that you are still on the right track with your financial goals. This spring, take the opportunity to analyze your expenses for the past three months and identify a few areas for improvement. For example, you might consider saving money by canceling subscriptions you no longer use and negotiating utilities to lower your monthly costs.

2. Turn the Heat Off

Depending on where you live, now might be a good time to switch off the heat, open up the windows and watch your energy bill shrink.

3. Get Ready for Summer

Sinking funds are my secret tool for handling upcoming expenditures, especially in the summer when you may travel more than usual. What’s a sinking fund? This is specific fund that helps you save for a particular goal, like an upcoming vacation or major home repair. For example, you can anticipate expenses ahead of time and then allocate money to a certain fund with each paycheck. This way, the money will be waiting for you when you need it.

Better yet, you can build up your sinking funds by automating your savings. Chime makes it easy for you do this by helping you to save as soon as you get paid. If you open a Chime bank account and select Automatic Savings, Chime will automatically transfer 10% of every paycheck directly into your savings account. Another awesome Chime benefit is that you can save every time you spend. Chime actually rounds up each transaction made with your Chime debit card to the nearest dollar and transfers the round up amount directly into your Chime Savings account.

And there you have it: by automating and planning ahead, you’ll be on your way to saving for your summertime adventures!

With that, we wish you a happy and healthy budget-friendly spring!

 

How Pet Sitting Can Help You Go on Vacation and Put More Money In Your Pocket

Have you ever thought about pet sitting to help you go on a summer vacation?

Well, I’ve done it and it works. Over the past few summers, I went to Chicago to dogsit for some friends. I scored free room and board, and pet sitting allowed me to afford a sweet summer getaway that I couldn’t have swung otherwise. Intrigued? Can you hear the spare change jingling in your pocket from the excitement?

Here’s how you can go about pet or house sitting to save big bucks on travel this summer:

Plan Far in Advance

You’ll want to book a pet sitting gig as far in advance as possible. In fact, year-round professional house and pet sitters like Kelly Hayes-Raitt, author of How to Become a Housesitter: Insider Tips from the HouseSit Diva, book up to a year in advance. Securing a gig  ahead of time gives you some breathing room to learn about your clients and iron out all the details before you jump in and show up on the doorstep.

To get going, try visiting sites like Nomador, Workaway, and TrustedHousesitters. You can also check out HouseSitSearch, an aggregator of house sitting search sites.

Pro tip: while you’re figuring out where you’re going, consider renting your place while you’re away. Of course, you’ll want to proceed with caution. If you’re a renter and your lease explicitly states that you cannot sublease your place, don’t do it. You may be subject to eviction. On the other hand, if you own your home, you can check into a short-term vacation rental site like Airbnb and perhaps earn some additional cash.

Lay Out Expectations

Will room and board be covered completely, or will you be expected to pay for utilities and other costs while you’re there?

In my situation – in exchange for caring for a sweet pooch – my pal Dave Fried, a filmmaker, gave me a place to stay and covered my flight from Los Angeles to Chicago (as part of the deal, I paid for my way home). Not only did I have access to a nice kitchen where I could cook and store foodstuff, but I could also work remotely out of Fried’s place (free wifi for the win). While Fried and his partner Greg Slade were kind enough not to charge me for using their water and power, your clients may have a different arrangement in mind. So make sure you ask about all the specifics.

Another thing to consider when you accept a pet sitting or house-sitting gig: will there be roommates or other people in the house when you’re there? If so and you’re ok with this, find out what their schedules are like. Also find out if you’re expected to do additional tasks to help out the roomies. In my situation, Fried was away but Slade, who owns a barbershop, was around while I was there. It was still my sole duty to take care of the dog.

Remember: every situation is different. For example, your clients may also require that you water the houseplants, move the car during street cleaning, and go through their mail and alert them of any scary notices.

Make New Friends and Keep the Old

Make an effort to forge a friendship with the homeowner before you house sit, recommends Hayes-Raitt.

To do this, you can connect through Skype, email correspondence, social media, or phone calls. And, make sure you inquire about local haunts and ask where you can find the best deals on groceries. In other words, get the inside scoop.

Another idea: ask the homeowner to introduce you to one of his friends. This way you’ll have a local you can meet up with and someone nearby to let you know about neighborhood activities and restaurants, says Hayes-Raitt.

I was fortunate to have some friends from L.A. who had moved to Chicago. Plus, former Chicagoans who now live in Los Angeles were kind enough to connect me to some of their Chi-town pals. Their recommendations, combined with poking around the Internet, gave me plenty of ideas for summer fun during my stay. In fact, my friends tipped me off to cheap eats and the best ethnic markets with killer deals on produce. In addition, they told me about free summer concerts, street festivals, and movies in the park. And, in order to save more money while still having fun. I also cooked as much as I could and biked instead of taking public transit.

Hunt for the Best Travel Deals

If you want to continue traveling after your gig, you may want to check into deals that will help you extend your trip. Why not take advantage of your location and see some additional sites or cities?

To do this, try checking for bargains on flights to nearby cities, or discounted bus fare on Megabus or Wanderu. After one of my trips to Chicago, I then visited Ann Arbor, Michigan. For future Chicago dog sitting stints, I’m planning to trek over to Madison and Milwaukee, as well as Minneapolis.

It’ll Still Cost You, So Budget Accordingly

Even though my lovely Chi-town pals hooked me up with a bike, I was still a “tourist” and spent a fair share of moola. After checking my bank account statements, I indeed spent more on weekend bike rides, dining out, and touring local haunts than I would have spent at home. So, make sure you budget for your trip and save up some extra cash.

Pro tip: if you’re a Chime member, it’s a good idea to enroll in Automatic Savings. When you do this, Chime will round up every transaction you make on your Chime debit card and deposit the round up amount into your Savings account. This way you can start socking cash away now – without even thinking about it.

Try a No-Spend Weekend

After realizing I spent more than usual while dog sitting, I committed to spending zero “new” cash for an entire weekend once I got home.

This meant taking advantage of free entertainment, such as movies in the park and art openings. I also dug into my wallet and found an unused gift card. Score! All told, my no-spend weekend helped me reset and stick to my budget.

Ready to Pack Your Bags?

Scoring a summer house or pet sitting gig can indeed help you save loads on your travels, while giving you the opportunity to take a low-cost vacation. Just keep in mind that creating a budget and saving your pennies in advance will give you some extra spending money while you’re away. Are you ready to book your first house sitting gig?

 

Why Career Planning is Important and How to Do It

Millennials are more than three times as likely to switch jobs than older generations, according to a recent poll by Gallup. But with all the job hopping going on, it can be difficult to craft a long-term career strategy.

A solid career plan is important in that it can provide a roadmap for your future. This, in turn, helps you make informed choices about your current job situation as well as future career moves. A broader career plan is also important when it comes to helping you stay inspired.

Interested in creating your own career plan? Here are three reasons why you may want to do this right now.

1.  You’ll leverage your strengths

People who tap into their strengths at work are six times more likely to be engaged, according to Gallup. So, if you want to enjoy your career and collaborate more with your co-workers, it’s key that you understand what your strengths are. Once you know this, you can leverage those strengths.

If you’re now thinking that this flies in the face of the common advice that you should work on improving weaknesses, well, that’s important as well. Yet, when it comes to enhancing your career, focusing on your weaknesses shouldn’t be your main strategy, according to BiggerPockets.com.

2. You’ll take steps in the right direction

No one is going to develop your career for you, and a successful career doesn’t happen by chance. In order to succeed, you’ll need to know where you want to go. This way you can work on developing skills to help you achieve your milestones.

For example, if you’re a customer service agent but want to become the CEO of the company, you need to know what steps it takes to get there. For example, it can start with becoming a supervisor then working your way up to a team manager. From there, you may want to develop additional skills so that you can jump from middle management to the executive team, and so on.

When you have a career plan in place, you will be more apt to take steps in the right direction. With this mindset, you’ll also be less likely to blame external forces when things don’t pan out as you planned. Instead, you can take a step back, make a course correction and get back on track!

3. You’ll develop more confidence

If you don’t know where you’re going, you may end up lost or in the wrong place. In addition, if you don’t have a clear goal in mind, it’s harder to gain the self-confidence needed to take advantage of opportunities when they appear.

For example, if you want to become a team manager but you have no plan to achieve this goal, you may not be prepared to compete with others for the job. This, in turn, can be disheartening. Bottom line: you need a plan to both give you a direction and a sense of purpose in your daily work life. This makes it easier to be intentional about your work. For example, if your goal is to replace your manager when she gets a promotion, you may choose to ask her to mentor you. This then becomes part of your career plan.

Three tips for creating your best career plan

Now that you understand why it’s a good idea to have a career plan, let’s discuss how to go about putting it into place. Take a look at these three steps and you’ll be on your way.

1. Think big

Don’t sell yourself short with your career plan. If you don’t currently have the skills necessary to land your dream job, that shouldn’t stop you from aiming for this goal. Plus, by looking at your written out plan, you may gain more motivation.

Also, don’t restrict your career plan to your current job or path. If your dream job entails doing something that isn’t related to your current career at all, spell out the steps that it would take to make the switch.

2. Define your strengths and what you enjoy

Building wealth is a main motivator when it comes to career planning. With that said, money shouldn’t be your main objective. Why? Focusing on money alone can lead to an unhappy job experience and early burnout.

Instead, focus on what you enjoy doing and what you’re good at. If you’re having a hard time pinpointing your talents and what you love about your job, don’t be afraid to ask family members, friends, or even a trusted co-worker. They may have some insight based on past conversations.

This exercise may shed some light on talents you weren’t aware you had. Better yet, you may discover that there aspects of your current job that you want to carry over to your next position – regardless of whether it leads to a windfall of money in the form of a higher salary.

3. Be adaptable

There’s no guarantee that your career will turn out exactly as you planned. Another thing to note: as you take steps toward your dream job, you may notice your preferences have changed over time. So, don’t be afraid to adjust your career plan. Doing this doesn’t mean that you’re giving up on your dreams. It simply means that you’re recalibrating.

When I first graduated from college, my goal was to start at the bottom of a large corporation and work my way to the top. But when I couldn’t find a job for six months, I had to come up with a different plan. Instead, I got an entry-level job at a bank and started blogging about personal finance in my spare time. While I didn’t make much money from the blog itself, it launched me in a different direction. My writing career was born.

As you go through your own planning process, you can determine what to tweak and what to keep status quo. An added perk: if you remain adaptable, you may be surprised at the doors that open for you. Perhaps you’ll even find yourself in a brand new career. When and if this happens, you may want to go back to your original career plan and add in new goals.

The bottom line

Career planning is important because it can help you leverage your strengths and build confidence. More importantly, it encourages you to take ownership of your career. The guidelines here are just that: guidelines. You can use these tips and tools to help you create the best navigation system for you. Are you ready to map out your career path and enjoy the journey?

 

How to Save Money on Clothes and Still Stay Fashionable

It’s important to feel good about the way you dress, but that doesn’t mean you should blow your budget to stay fashionable.

Nonetheless, buying clothes can take a big bite out of your budget. In fact, the average American spends about $150 per month on clothing. It might not sound like a lot, but that’s nearly $2,000 per year.

Let’s get real: if that $150 was invested in a retirement account every month and earned 6% interest for 20 years, it would have grown to nearly $70,000. And, even if you earned zero interest and simply saved that $150 a month for one single year, you’d have $1,800 in your bank account. Yikes. So, how can you buy some fashionable threads while still saving money?

To help you find a balance between trendy and broke, we’ve compiled a list of 4 ways to stay fashionable on a dime. Read on to learn more.

1. Shop Your Closet (and Your Friends’ Closets!)

Instead of heading to the store to do your clothes shopping, try heading to your own closet. It might sound counterintuitive, but the truth is that most Americans only wear 20% of the clothes they own.

In other words, take yourself on a shopping date…in your own closet.

“Get creative. Spend an afternoon going through your entire closet and trying to find new ways to mix and match or restyle what you already have,” says Kali Hawlk, a 28-year-old money expert at Going Beyond Wealth in Boston, Massachusetts.

“I’ve generated some of my favorite outfits this way,” she says.

But what if you finish shopping in your closet and are less than impressed with the results? It’s time for the second step: shop your friends’ closets. Like you, your friends are probably tired of wasting money on clothes they rarely (or never) wear.

“If you can, share clothes with your friends. It makes it easier on your whole group if you know you can borrow that trendy blazer or cute dress for a certain occasion, and they can borrow from you instead of buying something new,” says Hawlk.

If you’ve never shared clothes with your friends before or feel awkward about talking about money with your friends, don’t worry. The easiest way to introduce the idea is to offer up an item of your own. The next time a friend is stressed about what to wear to a job interview or first date, offer her a dress from your closet. Chances are that she will return the favor and, just like that, you’ve started shopping in each other’s closets.

2. Do Research…and Then Wait

Here’s the truth: stores are designed to overwhelm and trick consumers into spending more money. The fluorescent lighting, loud music and abundance of options can make it hard to focus on what you actually want or need.

When Hawlk realized she was feeling overstimulated every time she entered a clothing store, she decided to make strategic changes.

“I used to end up randomly grabbing pieces that don’t coordinate with the rest of my wardrobe or match my style—and I always ended up regretting those purchases. Now, I try to spend time browsing fashion blogs and Instagram accounts to find pieces and styles I like, and then I make a note of it or save it to Pinterest. I try to set that aside for a while and come back to it later. It helps me rethink what I really want, and what truly reflects my style. Then, I start searching for pieces that are similar to the ones I liked and saved.”

As Hawlk explains, the key to saving money while still getting the clothes you want is to research and then let it simmer. Here’s how you can implement this:

  1. Get inspired by browsing online.
  2. Save the pieces you like or create a fashion mood board.
  3. Close your computer tabs and walk away.
  4. Check back on your mood board a few days (or weeks) later.
  5. If you still want or need the pieces, begin the shopping search.

3. Use Apps to Buy Second-hand Clothing

So, what’s the best way to find the clothing you want to purchase? Shop on used clothing apps. Apps like ThredUp, Poshmark and Tradesy allow people to sell gently used clothing items to other app users. This means you can snag some great deals.

“My all-time favorite way to stay fashionable without breaking my budget is with used clothing apps. It’s like a giant, organized, online Goodwill where you can search for exactly what you want. You can get just about anything, from high-end brands to brand-new-with-tags clothes from places like Target for a fraction of the retail price. I always browse the site first before heading to a store,” says Hawlk.

But here’s the deal—apps like these can be overwhelming. There are thousands of items listed in one place. In order to use an app effectively and not fall into the trap of wasting money on regrettable purchases, be sure to do your research ahead of time and know exactly what you’re looking for.

4. Dig Deeper

Fashion is important, but it’s also important to feel confident. After all, confidence is the best accessory.

“Do some deep work to better understand yourself and what you truly value,” says Hawlk.

After she started dressing in a way that fit her personality, Hawlk says she didn’t feel the need to shop as much. And when you don’t shop as often, you save money.

Striking the Perfect Balance

As you know, clothes are an integral (and non-negotiable!) part of life. There’s nothing wrong with wanting to look and feel your best, and a curated, comfortable wardrobe can help. Luckily, you don’t need to break your budget to make it happen. By following the tips above, you can have the best of both worlds—a closet filled with clothes you love and a bank account with money.

 

How to Budget for Spontaneity

Budgeting is one of the best ways to save money, and it’s so simple — create categories, set aside a certain amount of money for each category, and then only spend what has been designated for that account.

But what do you do when your best friend asks if you’re free for dinner, and you open your budgeting app and realize that your “dining” budget only has a few dollars left in it? You don’t want to cancel plans with your best friend, so you make the decision to transfer money for dinner from your savings account. Just like that, you’ve blown your budget.

There will always be last minute dinners with friends, drinks with colleagues, or unexpected celebrations. Unfortunately, spontaneity can often derail your budget. Luckily, there’s a simple fix: preparing for spontaneity.

It might sound counterintuitive, but here’s how it works.

Cash-back websites

Did you know you can earn money from shopping online? It’s true. Websites like Ebates and Topcashback will give you cash back on your online purchases when you shop from their website.

Here’s how it works. The websites earn money through affiliate links from the stores that customers use to shop. To encourage customers to use the link, the cash-back websites share a percentage of their profits with the customer (that’s you!).

The best way to earn cash back is to pick one cash-back website, install the cash-back button (a reminder to use the website that appears at check-out), and always use it when you shop.

Cash-back credit card rewards

If you’ve never used cash-back credit cards, you’re missing out. The premise is simple: use your credit card to earn points that you can redeem for cash or other perks.

Most credit card rewards range from 1% to 2% of your purchase, and some cards offer rotating categories. But there is a catch. In order to take advantage of the rewards, it’s important to pay your card on time and in full every month. If you don’t, you’ll end up paying more in fees and interest than you could earn in cash-back rewards.

Cold, hard cash

Budgeting for spontaneity doesn’t have to be difficult. In fact, it could be as simple as going to the ATM and getting out cash at the beginning of the month.

This money is designated as your “fun” money: It can only be used for an unexpected movie date with friends, celebratory beers, or Sunday brunch. It’s spontaneity with a limit, because when the cash is gone, so is that month’s fun budget.

Give yourself a tip

You tip for a good haircut and a cocktail from the bar, so why not tip yourself? That’s the premise of the app TipYourself. Every time you accomplish a task or goal, you can use the app to send yourself a tip. The goal can be as simple as drinking eight glasses of water per day or as complex as repainting your bedroom wall, and tips can be as small as $1.

The secret to using an app like TipYourself? Setting aside your “tips” for fun. Here’s how it works: set your goals, accomplish them and enjoy a spontaneous adventure with someone you love (and yes, that includes yourself).


This article originally appeared on Policygenius.
Image: Youngoldman

 

Here’s Why You Should Switch to Online Banking

When it comes to banking, individuals often default to what they know best. And that’s traditional banking. Unfortunately for them, they’re likely going to face a lifetime of long lines and hidden fees. Well…it’s not that bad but there are surely better solutions. Thanks to online banking you can now do all your banking without ever leaving the comfort of your own home.

If that’s not convincing enough, here are a few other reasons why you should make the switch to online banking.

Convenience

The bottom line is that it’s much easier to access your online bank than a traditional one. When you use a traditional bank you need to adhere to their business hours in order to access your funds and accounts.

If you work full-time then it’s often difficult to carve time out of your day to make a trip. Not only that, once you’re at the bank you often need to wait in a long line before you’re even able to speak to the clerk. I don’t know about you but waiting in lines at the bank can be grueling.

With online banking, you can easily access all your accounts online. No lines no hassle.

Lower Fees

Compared to online banking, traditional banks have much higher operating expenses. Those extra expenses mean more fees pushed onto the consumer. In this case, that’s you.

With online banking, you can avoid many of those fees since there’s much less overhead.

Quick and Easy Deposits

The majority of traditional banks will let you deposit checks through an ATM. With online banks, you can easily deposit checks through their mobile application. Simply snap a picture, sign the back, and voila your money is in your account!

In addition, the majority of online banks offer access to a huge network of ATMs so if you’re ever in need of some cash you’re still in luck!

Higher Yields

This goes back to the fact that online banks have much fewer expenses than traditional ones. Because of this online banks can offer higher rates on savings accounts.

When looking for a new bank make sure you always calculate your potential earnings on CDs and savings accounts. Many individuals make the mistake of jumping ship before doing the math. Is it really worth switching your accounts for an extra $50 a year? When making the switch always comparison shop to make sure you’re getting the best deal.

Simple Money Management

One of the best perks of online banking is the ability to easily access and manage your money. Paying bills and other related tasks have never been more simple.

Most online banks offer the ability to check accounts, pay bills, transfer funds, and send money all from a single dashboard.

Pro tip: Look for an online bank that gives you automated savings options. For example, you can set up automatic transfers from your checking to savings account each month. Some platforms allow you to automatically round up your debit card purchases and deposit that amount to your savings. This way you’ll always be putting money away. Remember, every bit counts.

Final Thoughts

It’s no secret that we’re moving towards a completely digital economy. One solution at the forefront of this is online banking. If you’re still relying on a traditional bank then you should definitely look to make the switch today. You won’t regret it.

 

A Crib Sheet for Getting Your Money On Point in 2018

Welcome to January, the time of year where we promise to do better. Common, and yet nebulous goals, include diet, exercise, time with family and friends or living life to the fullest. Also on the docket: money. If financial health is your New Year’s resolution, it helps to set specific goals. Here’s a crib sheet for getting your money on point in 2018.

1. Kill high-interest debt 

Most credit cards carry over 15% annual percentage rates (APRs), so keep balances non-existent to avoid paying unnecessary interest. Already owe? Look into transferring those debts to a 0% APR balance transfer credit card.

2. Boost retirement savings 

Inquire with human resources to bump up the money going into your 401(k) by a few percentage points. If you got a raise, you can save more for retirement without noticing a difference in your take-home pay.

3. Get an emergency fund 

Start by saving $1,000 and keep saving until you have at least three to six months of expenses stashed away.

4. Save for a splurge 

If you want money to travel, upgrade your home or just do something fun, budget for it by setting up and rolling any extra dollars into a separate savings account. That way you avoid tapping your emergency fund.

5. Get life insurance

To ensure your family is protected financially in the event of your death. (Bonus: Term life insurance rates are currently at a 20-year low.Here’s why.) If your income, responsibilities or family size has increased, consider whether you need to up coverage.

6. Shop around for a better deal

 On well, everything. That includes your credit card APR (see above), auto insurance, homeowners insurance, cable television and internet service.

7. Question your money choices

Look at your spending, fixed expenses and investment strategy to see if you’re set up to live your best life. If not, be open to change. (Listen to Confucius, perhaps?)

8. Calculate your net worth 

That’s the sum of your investments and assets minus your liabilities — and probably the best gauge of your financial health at any given time.

9. Check your credit report 

Your credit is also incredibly important to your financial health since a good score qualifies for better rates on loans, insurance and more. See where you stand by getting your free annual credit reports from the three credit reporting agencies – Experian, Equifax, and TransUnion – at AnnualCreditReport.com.

10. Brush up a bad credit score

By fixing any errors you find on your credit report, paying down big debts and limiting new credit applications.

11. Look into refinancing 

With interest rates hovering near record lows, now’s a good time to refinance a house, car or even student loans.

12. Track your spending for a month 

If you spent more than you should in 2017. Write down every purchase you make and keep a close eye on your credit card bills. You might be spending more than you want on food, entertainment or miscellaneous expenses without even knowing.

13. Create a monthly budget

Nobody likes the dirty “b” word, but that doesn’t mean budgets aren’t helpful. In reality, budgeting is one of the best ways to afford everything you want in life. The new year is a great time to create a one. Plus, we’ve got a simple spreadsheet that’ll help you set up a budget in five minutes or less.

14. Automate your savings 

Not saving enough? Set up automatic bank drafts to a savings account so you have no choice but to hit your savings goals in the new year.


This article originally appeared on Policygenius.
Image: wundervisuals

 

Spend Smarter With These Simple Tricks

As with most lifestyle changes, making healthy financial choices can take discipline. However, once you put your mind to it and create a plan, you’ll be on your way to achieving your financial goals.

As you embark on this path, keep in mind that you’re bound to fall off the wagon and go back to your old ways, like overspending. We’re here to help you stick to your goals. So, the next time you find yourself in a tricky situation and need help making healthy financial choices, take a look at the following common scenarios.

Scenario 1: You want to buy all the things at Target

Ever have one of these days? You know, those moments when you have the impulse to spend because you think it’ll make you feel better.

This experience is totally normal. However, overspending comes with long-term implications. You’ll likely experience guilt and may even find yourself in credit card debt if you’re not careful. If you find yourself in this situation, be sure to ask yourself the following questions:

  • Are your emotions in check? Identifying your “triggers” will help you find ways to address your stressors  – before you go on that spending binge. For example, are you hungry, angry, lonely or even tired?
  • Can you do something more productive instead of spending? Perhaps you can run a bath or go workout to relieve stress. Once you’re finished, you may forget about the temptation to blow your budget.
  • When was the last time you treated yourself? Confession time: during the first six months of my journey to debt freedom, I became so restrictive that I didn’t allow myself to spend money on anything outside of the necessities. This meant no eating out, no clothes shopping and no Starbucks. After a while, though, I reached a breaking point and ended up going on a major shopping spree. I almost went back into debt. So, make sure you don’t deprive yourself and treat yourself every once in a while. Just remember, you don’t need to spend a huge amount and it’s a good idea to add a line item to your budget that’s earmarked as “fun money”.

Scenario 2: You want to make a big-ticket purchase

For me, the definition of “big ticket” is an item that costs between one to three months of my income. Although what you consider “big ticket” may be different, think of it this way: making a big purchase impacts your finances significantly, so instead of jumping in head first, ask yourself the following questions:

  • Do you really need it? A year ago, my husband and I bought a second car that we don’t use as much as we expected. Had we asked this question before making the purchase, perhaps we would have continued to share one car and put that money toward another goal.
  • Can you hold off on the purchase? If you are fine without the item now, you can probably refrain from buying it – at least for a while longer. By delaying your purchase, you may find a cheaper alternative or perhaps you can take advantage of seasonal discounts.
  • Can you sink before you swim? Using a sinking fund has become a huge game-changer for me. In a nutshell, a sinking fund allows you to anticipate expenses ahead of time and allocate money to these expenses in each paycheck. I’ve got a sinking fund for holiday shopping, vacation and even one for my future kids! For me, these funds remove some of the guesswork from my financial decisions as the money is allocated and available.

Scenario 3: You’re ready to save for future goals but don’t know where to start

You may have already accomplished a major step in financial adulting: moving out of your parents’ house. Now that you’re living on your own, it’s time to consider other goals to create the lifestyle of your dreams. My goal is to become financially independent by age 40 and this includes being able to retire early if I want to.

Whatever your end goal is, the following healthy financial choices will help you get there:

  • Create an emergency fund ASAP. A good rule of thumb is to save three to six months of living expenses in your emergency fund. Your fund should be kept separate from your regular checking and savings accounts.
  • Pay down debt quickly. If you’ve got student loans and/or credit cards, create a plan to free up your income sooner rather than later. With the debt snowball method, as soon as your smallest debt is paid off, you can use the freed up money to tackle your next debt faster. Alternatively, you could choose the debt avalanche approach where you focus on paying off the highest interest-bearing debt first. While you pay down your debt, stay focused by envisioning a life with zero payments whatsoever.
  • Start building wealth. Even if you just graduated college, a great way to invest in your future is to contribute to a 401(k) retirement plan – especially if your employer offers a matching contribution. Financial experts recommend contributing the maximum amount to your 401(k), if possible. The max limit is $18,000 in 2017 and $18,500 in 2018.
  • Start a side hustle. Did you know that the average American watches more than 30 hours of TV per week? This is a good time to conduct an honest audit to see how you spend your spare time. If you’ve got oodles of extra hours on your hands, perhaps you can start making money instead of watching TV. My friend currently tutors on the side for five hours a week at a rate of $30/hour. That’s $600 per month or $7,200 annually. She’s using the money to build up a sizeable emergency fund. Not interested in tutoring? There are plenty of other side hustles out there to choose from.
  • Bank with an institution that has your back. If you’re fed up with big banks that charge hidden fees, why not consider opening an online bank account like Chime. Chime offers an innovative approach to banking that actually encourages saving and makes it easier for you to sock money away seamlessly, without fees. If you open a Chime bank account and select Automatic Savings, Chime will automatically transfer 10% of every paycheck directly into your savings account. Another awesome Chime benefit is that you can save every time you spend. Chime actually rounds up each transaction made with your Chime card to the nearest dollar and transfers the round-up from your Spending account into your Chime Savings account.

Are you ready to make a healthy financial move?

Remember: with a little discipline, you can stick to your goals and make smart money moves starting right now. And, if you need some help, refer to this resource for inspiration and guidance. Here’s to a financially healthy new year!