Tag: Money Mindset

 

Are Millennials Losing Money to Bad Investments? The Data Says Yes.

Bad investments happen all the time. But when you think about bad investments, your mind likely goes right to the stock market where a lousy stock pick can lead an investment value to $0. Investments come in all forms, including a savings account or other cash-based asset class. But this is a big mistake! In an era where savings accounts offer poor returns, you may need to put a little more risk in your portfolio to avoid a bad investment. Follow along to learn why cash is a bad long-term investment, who is the worst offender, and what you can do to turn things around.

When cash joins the bad investments category

Cash is the most stable and secure option to store your assets, so what makes it a bad investment? With cash, the value of your holdings does not grow at a rapid rate. While your cash may grow when stashed in a bank account, the interest rates are terrible compared to other investments. As of this writing, just a few savings accounts offer over 2% annually, according to Bankrate. That is $20 for every $1,000 you have saved. But while the number of dollars in your accounts grows, the value of your account shrinks!

For July 2018, the annualized inflation rate was 2.9%. If you were earning 2% interest in savings, your account would lose just under 1% per year at this rate. For example, let’s say you have $1,000 saved at 2%. At the end of the year with simple interest, you would have $1,020. But the value of that slowly decreases over the year. Due to inflation, even with the $20 interest, your money would be worth $990 at the end of the year in terms of the dollars you started out with.

Because of the increase in the cost of groceries, movies, gas, and everything else across the economy as measured by the Consumer Price Index (CPI), you have less money than you started with if you invest in a savings account.

Who is investing the most in cash?

In the July 2018 Financial Security Report from Bankrate, 30% of Millennials said they think cash is the best place to invest funds they won’t need for ten or more years. This is entirely wrong, for the reasons explained above. Over time, Millennials and everyone else who put too much of their funds in cash will end up losing.

Of course, some cash makes sense. You should keep a cash emergency fund and any short-term savings, like a car fund or home down payment, in cash. But if you won’t need the cash for at least ten years, you can confidently invest in better performing assets knowing you have years ahead to recover if the markets take a turn for the worst.

Most Americans understand this vital concept. 32% responded that the stock market is the best place for a 10+ year investment. Fortunately, most recognize the risks of cryptocurrencies, and only 2% suggested that’s the best long-term investment. But cash came in second place with 24%, and the favorite for Millennials. Gen X, Baby Boomers, and the Silent Generation all knew better saying the stock market is the best place to invest long-term.

Best alternatives to cash investments

Millennials follow the trend of all Americans with poor savings rates. A 2016 Federal Reserve study found the average Millennials held just $2,600 in median savings. While that is more than you need for a $400 emergency, it is far from financial security. To help boost savings overall, make sure to participate in an employer-sponsored investment plan like a 401(k) if you have access.

For the self-employed, look to automatic deposits in an IRA or another self-employed investment vehicle. While Social Security appears to be safe and stable today, it is essential to save and invest on your own just in case those dollars shrink or dry up before you hit your target retirement age.

Most investment advisors suggest saving at least 10% to 15% of your gross income for retirement to ensure you maintain the same standard of living when you reach your golden years.

Focus on long-term goals for investment success

If you worry too much about little swings in the stock market, you could lose out on well over a million dollars in investment gains over the course of your career. While coming into careers during the Great Recession put the fear of investment losses in real estate and stocks into many Millennials, completely avoiding lucrative investments is the wrong choice.

Learn about how important investment classes work and structure your portfolio to follow along. In the worst case, pour your investments into a professionally managed target date retirement fund so you know your money is handled with your best interests in mind. But don’t put it all in cash. That is an expensive mistake every Millennial should avoid.

 

5 Things to Do with Your Money If You Get a Raise

Getting a raise can make you feel on top of the world. You get to do the same job for more money. Who wouldn’t want that?

Still, it’s important to put your raise to work if you don’t want it to disappear. Lifestyle inflation can take over when you’re complacent, which is why you should create a plan for your newfound wealth.

Before you do anything, wait a few weeks to let your raise sink in. Ask yourself what you want out of life and how your excess funds can help you achieve it. From there, come up with a strategy to put your raise to work.

Here are some of the best options.

1. Boost your 401(k) contributions

If a wealthy retirement is at the top of your list of future goals, using your raise to boost your retirement contributions is a smart move. This is easy if you invest for retirement through an employer.

With a work-sponsored account like a 401(k), all you have to do is increase your retirement contributions in an amount commensurate with your raise. If you scored a 5% raise, for example, head to your workplace human resources department and ask about increasing your contribution this much. Your employer may ask you to fill out a new W-4 form to set your new contribution level.

This strategy is easy since it’s automatic and conducted via payroll. You may never see the money from your raise, but it will grow for the future thanks to compound interest.

2. Open an IRA

Another option to consider is opening an individual retirement account. You can open this type of account whether you have a workplace retirement account or not.

There are two main types of IRAs to choose from — the traditional IRA and the Roth IRA. In 2018, you can contribute up to $5,500 across both accounts (or $6,500 if you’re age 50 or older).

Money contributed to a traditional IRA can be tax-deductible if you meet certain income requirements. Once you contribute, your money grows tax-free until retirement.

With a Roth IRA, on the other hand, you contribute with after-tax dollars. However, your money grows tax-free and you can take tax-free distributions once you reach age 59 1/2. You can also take out your contributions to this type of account at any time without penalty, which is why some people use this account to save for college or other goals.

3. Pay down debt

Paying down debt is a smart move since it can help reduce interest costs and increase cash flow. Since the average credit card interest rate reached 17% in May, according to Bankrate, it’s easy to imagine how paying off high-interest debt like credit card bills could improve your finances.

While your raise won’t arrive in a lump sum, you can still use it to pay down debt faster. Add the amount of your raise to the monthly payments you make each month, starting at your highest-interest debts. You’ll pay down debt faster and reduce the interest you pay.

4. Build an emergency fund

If you don’t have an emergency fund, you’re setting yourself up for a world of hurt. After all, cars need repairs and roofs need replacement — and insurance doesn’t always cover your bills.

Most experts suggest you have three to six months of expenses saved in an emergency fund. This way, you’ll be okay if you lose your job, take a pay cut or face unexpected medical or home repair bills.

You can use a raise to start building your emergency fund. Open a new savings account designated for your emergency fund only, then set up regular contributions on payday or once per month. If it seems like you’re saving for no reason, think how grateful you’ll be next time a surprise expense pops up and you have the cash to cover it.

5. Set up targeted savings accounts

Investing and debt repayment are important, but what if you want to have some fun? Whether you set aside money for retirement or pay down debt, you can still allocate part of your raise toward something you want.

Whether it’s a family vacation, a new deck for your backyard or a new car, set up a targeted savings account and automatic contributions. Even if you can only contribute $20 of your raise each week toward the cause, the money you save will add up — especially if you put it in a high-interest savings account that earns a decent return.

A raise means you’ll have to redraft your budget. Check out our simple budget template to get started.


This article originally appeared on Policygenius.com.

 

Stop Wasting Money by Avoiding Bank Fees: Here’s How

It’s nice to feel like your financial institution has your back. After all, you entrust a bank to hold your money and help you manage it. With this in mind, why do so many big banks charge unnecessary fees?

Citibank and Bank of America both charge a $12 monthly maintenance fee if you can’t keep a minimum balance of $1,500 in your account or if you don’t have direct deposit. Wells Fargo has a $10 account maintenance fee if you don’t meet its requirements. On top of these charges, many big banks also charge a $35 overdraft fee.  These bank fees take a bite out of your hard-earned money and who benefits from this? The big banks — many of which have not had the best reputation lately or taken consumers’ best interests to heart.

But you don’t have to accept this. You can stop wasting money. Read on to learn more about bank fees and how you can avoid them.

The truth about bank fees

For many traditional banks, bank fees have simply been the status quo. Many consumers may not even realize they’re paying a monthly maintenance fee on their checking account or recognize that they could be charged multiple overdraft fees if they overdraw their account.

In fact, BankFeeFinder.com, powered by Chime, found that the average household is paying $329 in bank fees. That’s a cross-country flight! And as of 2016, overdraft fees from big banks were an astonishing $33 billion. Not million, billion.

Bank fees are unfair to consumers who are getting nickeled and dimed by their own financial institution. It’s especially unfair for young consumers who are just starting their financial lives, many of whom are saddled with debt and dealing with stagnant wages.

Many of these banks have minimum balance requirements in order to avoid the monthly maintenance fee. So, essentially, if you’re broke and don’t have how much money, you end up paying a price. Doesn’t that seem counter-productive? Your bank should be helping you build wealth, not punishing you because you don’t have a certain amount in your account.

As the big banks continue to charge unnecessary bank fees like monthly maintenance fees and overdraft fees, there are new options on the market that allow you to just say “no” to fees.

The rise of no fee bank accounts

In a post-Recession world, I think all of us are a little more mindful of our money. We’ve started questioning many of the structures that were part of the economic downfall — and subsequently bailed out.

While many of the big banks have recovered, American consumers have not, which sets the stage for major change in the banking world.

In the INC article “Why the Banking Industry is Ripe For Disruption,” author James Paine states: “To put it simply, the banking industry is ripe for disruption. The average consumer has little to no trust in their bank, they just use the cheapest option they can find. Combine that with a total lack of competition at the top-level of the industry and what you’re left with is an industry in desperate need of change.”

Because of this, there’s a new wave of startups looking to disrupt the status quo and shake things up in the banking industry. By doing things differently these new financial companies can put the power back in consumers’ hands and put money back in their pockets. These startups and online banking apps are providing a much-needed alternative to the old banking systems that no longer serve us. For example, the last several years have seen a rise in no fee bank accounts like Chime, Capital One 360 and Ally.

At Chime, we’re committed to offering a no monthly fee checking account with the simplicity and accessibility of a mobile app. No fee bank accounts are becoming the new norm and we’re excited to be a part of this trend. Because seriously, fees suck.

Avoiding bank fees with Chime

Chime was created as an alternative to costly banks and fees. Our mission is to help consumers not only keep their money but get ahead with their money. We’re not profiting off you at every corner.

We’ve ditched the unruly bank fees that many traditional banks still charge. Instead, we offer:

  • No monthly fee checking accounts
  • No overdraft fees
  • No minimum balance requirements
  • No foreign transaction fees
  • No in-network ATM fees
  • No ACH bank transfer
  • No card replacement fee

In fact, you don’t have to stress about having a certain amount in your account to avoid a monthly maintenance fee. If you lose your card, we’ve got you covered as well and won’t hit you with a fee. We won’t add insult to injury and charge an overdraft fee if you overdraw from your account. Even more, when you’re traveling you won’t be charged foreign transaction fees. We’re committed to being fee free and helping you hold onto your hard-earned dough.

Opening a no fee bank account

Not sure how much you’re losing to fees? Check out BankFeeFinder.com to see how much you may be paying in fees. Those fees can add up fast and it’s time to reclaim your money. It was yours to begin with and you can keep it that way by using online banking apps that don’t charge fees.

Whether you are opening your first bank account or you’re ready to switch from a big bank, it’s easy to join Chime. In fact signing up for Chime will take less than two minutes. It’s totally free and won’t affect your credit score. So, if you’re looking to avoid bank fees, you can open an account with Chime and ditch your old bank for something better (if we do say so ourselves).

Final word

In this day and age, there’s absolutely no reason for you to pay bank fees. Why settle? You can opt for something better that won’t hit you up for a fee for every little thing. Using online banks like Chime, you can say goodbye to fees forever. Imagine if you had $329 a year back in your pocket. What would you do with it?

 

Are You Rich and Don’t Even Know It?

What does it mean to be “rich?” Does it mean an ability to afford basic needs like a home, clothing, and food? Is it an arbitrary earning rate, like $100,000 per year or $1 million per year? Is richness measured by how much money you have in the bank? While there may not be a clear answer to what makes someone rich, many people do try to categorize us by earnings, assets, and other measures.

One common way to look at your wealth is to compare yourself to others. That often comes in the form of “keeping up with the Joneses,” or feeling bad if you can’t. Some recent studies showed the average income in some of America’s biggest cities, and where the top and bottom incomes are found in the United States. Let’s dive in to see how you compare and the answer to the pressing question: are you rich?

Top 50% income rates

Depending on where you live, the mid-level income varies widely. The highest average income in the country is Silicon Valley, with a top 50% threshold of $110,000 per year. That’s right! You need to make six figures just to reach the median income in The Valley. Nearby San Francisco has the next highest average income at $96,700 per year, according to Census Bureau data.

But if you can live anywhere on your income and want to feel rich, consider a move to America’s Southeast. In New Orleans, you only need to make $48,800 per year to join the top half of incomes. Nearby Memphis is another city where you can be in the top 50% below $50,000 year, with a $49,800 income putting you square in the middle.

Are you rich? Salary needed to reach the top 50%.
via HowMuch

Those are the extremes of metro areas in the United States for 2016. The infographic compiled by howmuch shows that the vast majority of cities require an income in the $60,000 to $80,000 range to reach the top half of incomes.

This income breakdown also helps to show why some cities are more attractive than others. Why would someone move to Washington D.C. where you have to earn over $95,000 per year to join the top half when you could move to Atlanta, not far away and a lot more affordable? In Atlanta, $62,600 per year puts you in the upper 50% of incomes.

Compare your total income to the chart above to see if you land in the top half of income earners in your city, or if you need to hustle to earn a little more to join the top half.

Can moving make you rich?

Here’s an interesting question to ask yourself. If you are not self-employed, could you move to a new city in search of wealth? If you make the average income in a low paying city, would moving to a higher average income city lead to a raise? The answer is maybe.

In my own experience, I was able to move to a new city and get a 40% raise in the process. Much of that, however, was due to a new MBA, working with a high-quality recruiter, and changing from a low paying industry to a highly profitable one. But in some cases, if you have the right skills you can absolutely do the same. Just keep in mind that you may be able to get a raise in your current hometown before you uproot and move to a high-income city that may also cost a lot more in comparison to where you live today.

Are you rich already?

Nearly a decade ago, I had a lively debate with another personal finance blogger about what makes someone rich, or at least upper class. He argued that a $100,000 income in San Francisco does not mean it is easy to get by. That may be true, but it could just be a matter of how you are trying to get by. Perhaps you have let lifestyle inflation take you into a more expensive living situation than you can really afford, but that does not make you poor.

Maybe you are rich. Compare your standard of living to that in other parts of your city, other parts of the country, and other parts of the world. If you have a high income and still struggle with the bills, stop looking at your neighbors and start looking at your budget. If you manage your money right, you may be able to live a rich lifestyle on what you make today. If you can find happiness living within your means, you are on the right track for a lifetime of happiness and success.


This article originally appeared on Due.com.

 

5 Frugal Celebrities—and What We Can Learn From Them

Sure, you may know that rap songs and the baller lifestyle can send the wrong message about money. On the other hand, what about beloved celebs who live frugal-fabulous existences?

We’ve rounded up our top 5 sweet money-minded celebrities. Take a look at some financial tips we can glean from their penny-pinching ways:

1. Dave Grohl

Ah, yes, the Frugal Gods look quite fondly at my hubby in a future life (swoon.) The drummer of Nirvana and frontman of The Foo Fighters is known to deposit his paychecks straight into his bank account. He also drives a family car. (Note: he also splurged on a $140,000 Tesla.)

Grohl’s money mindset was formed at an early age when his mom suffered a stroke while working on her taxes. Grohl has been reported to say, “And it left this indelible mark on me that was ‘Money will kill you’, that people spend their lives dying inside because of money.”

What we can learn: Your early experiences with money will shape your relationship with it. The memories and emotions you felt in your younger years may help you understand why you behave the way you do.

Are you a big ole miser, like Scrooge McDuck? Are you prone to overspending when you’re feeling bored or anxious? Or, if you’re like Grohl, did the association between “money” and “death” become deeply ingrained in you from an early age? To get to the root of your money story, look toward your past.

And of course, pay yourself first. While you may not be uber wealthy, commit to stashing away a percentage of your income with every pay cycle. If you can auto-save a portion of each paycheck, that’s even better.

2. Lady Gaga

The pop singer may be worth a cool $275 million. But, even though she bought an estate in Malibu for $23 million, she still loves a good deal. She cuts coupons while out shopping, goes bargain hunting for clothes, and has even tweeted about her frugal finds.

What we can learn: Spending money is all about what you value. If it makes you happy, drop a ton of money on luxurious digs—but only if you can afford it.

Plus, it never hurts to save where and when you can. But only do it if it’s something you naturally enjoy. If you like couponing and scouring swap meets, more power to you. If bargaining for lower rates on your cable subscriptions is more your speed, then let that be your mode for slashing expenses.

3. Sarah Jessica Parker

The actress and Sex and the City star dresses her son in only hand-me downs from relatives. The reason? She refuses to spoil her kids, and believes that they shouldn’t be entitled to the fruits of her labor and immense success.

What we can learn: A dollar earned is a dollar cherished. There’s value in working hard for your money. And, maintaining consistent cash flow can be challenging. That’s why you should start saving money right away. It also doesn’t hurt to get access to your cash as soon as you can. Pro tip: if you’re a Chime member, when you sign up for direct deposit, you can get paid up to two days early.

4. Zooey Deschanel

Besides recently getting rid of her bangs (which caused a stir on the interwebs), Zooey Deschanel got divorced in 2012 and her financials were revealed. While she was worth three million at the time, she spends $2,000 a month on clothing, $1,500 to charity, $800 in utilities, and $300 on her phone bill.

What we can learn: Okay, so having a money spend of 2,000 buckaroos on clothes isn’t exactly the norm. But relatively speaking, this girl lives within her means. Only buy things you can afford, and don’t go over budget. On top of that, spend in accordance with your values. If you are big on reducing your carbon footprint, then shop second-hand or buy from eco-friendly companies.

5. Jay Leno

 Apparently the classic car collector and former talk show host only spends money from his comedy routines. In other words, he saves all the money he raked in from The Tonight Show. He started doing this back when he worked two jobs: one at a Ford Dealership and at McDonald’s. He spent the money he earned from one job and stashed the rest.

What we can learn: There is a great lesson on money management tip for artists, freelancers, and other members of the gig economy. If you’re juggling different gigs or clients, use the paychecks from several clients on your living expenses. The rest can go toward discretionary spending or savings.

Having trouble figuring out which paychecks should go toward your expenses? Choose the gigs that are more consistent where you’re raking in more dough. That way you’ll be sure you can pay your bills on time.

Final Word

Just because you’re rich and famous doesn’t mean you need to spend your dough like there’s no tomorrow. In fact, the more money you have, the more financial decisions you’ll be tasked with making. The key is to make the most of what you have, and to manage it well.

 

10 Quotes to Remember if You Want to Achieve Financial Freedom

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Financial Infidelity: Do You Keep Money Secrets from Your Spouse?

Financial infidelity means keeping a money secret from your spouse. With a divorce rate today of about 50 percent, any form of infidelity could easily lead to a relationship breakdown. And while a little white lie about money may seem like no big deal, but financial infidelity is as serious as any relationship secret. Let’s take a look at how money and relationships intersect and what you can do to make your relationship as open, honest, and fair as possible with a focus on long-term relationship success.

Is financial infidelity a big problem?

Before we dive into how to solve money troubles with a significant other, it is important to understand the problem. If you fight with your significant other about money, you are not alone. A study last year found that 48 percent of American couples argue about finances. That is huge! Nearly half of all couples argue about money.

study from SunTrust found that money is the leading cause of relationship stress. The survey found that 1 in 5 Americans has made a purchase of $500 or more secretly without telling their spouse. Six percent of respondents go as far as to keep a secret bank account! If you don’t trust your spouse so much that you need to secretly keep money without their knowledge, you probably have bigger relationship and trust issues than just money, but money is clearly the big symptom of the discord.

How to avoid money fights in a relationship

There are a few specific personality traits and money disagreements that tend to percolate to the top. According to Elite Daily, here are the four biggest causes of money friction in a relationship:

  1. Spending versus saving – If you have a saver mentality and are dating or married to a spender, you know how frustrating it can be when your SO (significant other) splurges on even the smallest purchases. From a daily lunch at the local burrito or sandwich shop to a big dollar purchase online or at the store, watching money fly out the window can push you to the edge! If this is an issue in your relationship, consider the other’s perspective and try to calmly explain yours. Finding middle ground and creating fun money budgets for each half of the couple can help smooth things out.
  2. Expectations that one partner pays more – The battle over who pays goes far beyond the first date. Even long-time couples often have different views on who should be bringing what to the table. In many cases, the male is expected to pay for the majority of costs, even if both partners have similar earnings. There is no right or wrong way to approach this. Open communication and setting clear expectations can help avoid this little argument turning into a blowout.
  3. One partner earns a lot more – If you earn a lot more than your partner, or they earn a lot more than you, stress and double standards are probably not far behind. It is easy for the lower earner to expect the higher earner to pay more. But when income in a relationship is not distributed equally or distributed as earned, it can lead to resentment.
  4. Wants versus needs – One man’s trash is another man’s treasure. One partner’s need is another partner’s frivolous purchase. What one of you thinks is a need versus a want may differ. It is okay to have different values, as long as they don’t bust the budget. This is where a fun money budget comes into play. If you have a certain amount to spend guilt-free, you don’t have to fight over it.

Set shared goals but allow for individual freedom

In real life, things don’t always look like a movie. After the honeymoon period wears off, real-life goals, stresses, and obligations remain. Never go into a relationship expecting your partner to change. If you don’t like their money habits, it may be better to cut things off from the start. (Credit score dating anyone?)

When you do get into a serious relationship, you have many money questions ahead. As you tackle them one by one, remember that it isn’t reasonable to expect your SO to never spend money. Even if you are the primary income earner with a stay-at-home spouse, you have to expect that they will want to treat themselves every once in a while. And that’s just fine!

To find the right balance between family savings, shared fun money, and individual fun money, work together to create a good budget you can stick with over time. Tweak as necessary until you have it right and both of you are on board with the plan.

Work together for a financial infidelity free lifestyle

Just as you wouldn’t want to find out your significant other had a secret relationship on the side, it can be devastating to land on the wrong end of financial infidelity. If you are keeping financial secrets, it’s time to change that and move to an open and honest relationship with clear, trusted communication about money. If you suspect your spouse is cheating with money, consider confronting them for an honest discussion. Long-term financial success requires an effort on both sides, and with honesty and a team driven focus on your money goals, you can get on track for a long and happy financial future together.


This article originally appeared on Due.com

 

6 Reasons an Online Bank Account is Better Than Traditional Banking

After a hectic day, the last thing you want to do is stand in line trying to get your banking done.

Yet, with the rise of online banking, waiting in line doesn’t have to be an issue anymore. Now you can do your banking without even leaving home. Online banking is not only more convenient but gives you the ability to save money, time, and even the planet.

Keep reading to learn more about why online banking is better than traditional banking.

Online Banks Have Lower Fees

Brick and mortar banks have enormous operational expenses that online banks simply don’t have. For example, they need specialized buildings to secure your money, state-of-the-art technology and equipment, and a large staff. They’re in the business to make money, not just store yours. That means fees go up when the bank’s expenses go up. With online banking, fees are kept to a minimum because the bank’s expenses are kept in check.

It’s Easier to Access Your Online Bank

Traditional banking hours aren’t always convenient. For some of us, getting to the bank before closing means leaving work early. It can also mean fighting traffic in the middle of the day, taking time off work, and waiting in long lines. If you do your banking online, there is no traffic and no banking hours. Yes, you may end up on hold waiting to talk to a customer service representative, but at least you can get stuff done while you wait.

Easy Deposits via an App

Most banks will let you make your deposits through one of their many ATMs. But what if you’re not near one of these cash machines? With online banking, making a deposit is as easy as snapping a picture and uploading it to an app. No added stops and no worries about leaving your deposit in an ATM all night (and hoping it’s picked up in the morning). But, if you really want to go to an ATM, most online bank accounts now offer access to a broad ATM network. Chime, for example, allows its members to use more than 30,000 ATM locations nationwide – for free.

Saving Money Can be Automatic

With online banking, saving has never been more simple. For example, you can set up automatic transfers to move money from a checking account into your savings. You can even start small by having Chime round up each transaction made with your Chime debit card. The rounded up amount will be automatically deposited into your savings account. If you want to take your savings efforts further, you can automatically move 10 percent of your paycheck into your savings account each time you get paid. This way your savings is funded with very little effort.

Experience Exceptional Customer Service

Because there are no buildings to staff and maintain, digital banks can often dedicate more resources to their customer service department. When you have questions or concerns, you just have to call. With customers all over the US (or perhaps even the world), the customer service departments at online banks are usually available outside regular business hours. Plus, if you don’t want to pick up the phone, most online banks offer chat features online or via an app.

Do Your Banking Online Because it’s Right for You

Online banking is a great tool. But remember, before you make the switch to an online bank, look at your own banking habits and determine if it is the right move.

Here are some questions you may want to ask yourself when determining if online banking is the best fit you:

  • Do you like going into a branch and talking with your banker or the tellers? If so, you may want to stick with a brick-and-mortar bank.
  • Is it a pain in the neck to get to the bank? If so, an online bank may be your best bet.
  • Do you have complex interactions that are easier done in person? If yes, you may be better off with your current physical bank branch.

As you can see, it’s up to you to decide what type of banking is best. Just keep in mind that if you’re looking for convenience and lower costs, you may want to keep your bank in your pocket.

 

How to Budget for Love

I don’t care what hardcore romantics say. You can put a price on love. In fact, with more single people than ever in the U.S., singles are throwing down some serious dough in search of a soulmate — or just a suitable partner.

Let’s look at some numbers, shall we? For starters, dating services alone make up a $3 billion dollar industry. And according to a Match.com survey, the average single person in the U.S. spent $1,596 on dating in 2016.

As it may take you months —  or even years —  to find love, you may want to sock away some funds for dating. Take a look at 4 cost centers to factor into your “love” budget:

1. Dating Site Subscriptions

While there is no shortage of free dating apps — Tinder, Bumble, OkCupid and Plenty of Fish for starters — you might consider signing up for a paid dating site. Those who pay for a dating service tend to be more serious about finding a partner, after all. Prices vary depending on the dating service and subscription you choose. Popular dating site eHarmony, for example, charges $39.95 a month for a three-month subscription. But, if you opt for a six-month subscription, it’s $29.95 a month, which works out to $180 for half a year.

If you have more cash than time to find love, you can link up with one of those elite matchmaking services, such as Kelleher International. These services, which oftentimes include coaching too, can cost anywhere from $5,000 to $50,000 (yes, count those zeros) a year.

2. Dates

Whether you grab drinks at a bar, partake in fancy dinners, or buy tickets to see one of your favorite bands, dates add up quickly. Unsurprisingly, according to the Match.com survey, men spent $1,855 a year on average, compared to $1,423 spent by women on dating. This includes everything from dating subscriptions, new outfits, entrance fees to clubs, and beautifying oneself.

While you can go splitsies, there will still be times when you’ll want to treat your date. And let’s not forget those expensive “let’s kiss and makeup” reconciliation steak dinners out (they do happen).

3. Weekend Getaways

When you’re dating, don’t forget about those impromptu weekend trips. While it depends on what you and your partners want to do, it’s safe to budget $1,000 a year or more on trips with your boo — based on my personal experiences. And, if you are in a long-distance relationship, you’ll need to factor in travel expenses to spend quality time with your significant other.

When I was dating more actively, my partners and I would go on trips at least several times a year. This easily added up to at least a thousand bucks a year in travel, which included long weekend getaways up the California Coast, friends’ weddings, or a short summer stay in other parts of the country. 

4. Special Occasions

According to the National Retail Federation, a person can spend about $136.47 on Valentine’s Day. So, it’s not surprising that you might want to budget for getaways and gifts for occasions like birthdays, holidays, and anniversaries.

Depending on your relationship dynamic, spending money on special occasions can be negotiable. One of my exes and I actually moved our anniversary celebration date so that it wouldn’t bump against a month that was super crowded with birthdays or major money-burning holidays like Christmas. This way we could allocate ample time and money to celebrate our anniversary.

Save for Love to Alleviate Stress

If you’re actively dating or plan to start the process soon, you can start to save up for these expenses by adding a bit of padding to your discretionary spending each month, or, better yet, start earmarking money into a dating fund. The search for romance is rarely easy, and expenses can quickly balloon. However, setting aside some funds for dating will alleviate some of the stress that comes with romantic courtship.

 

Why Aren’t Millennials Negotiating for Higher Salaries?

Speaking on behalf of the millennial generation, it seems like we’re always defending two things — our reputation of being “lazy and entitled” and the financial and economic opportunities afforded to us in a post-Great Recession world.

At the same time, many of us have experienced the burden of student loan debthigh living costs and wages that aren’t keeping up. In some ways, it feels like the cards are stacked against us. So, with that said, we should be angling to earn as much money as we can and we should be paid what we’re worth. Yet, unfortunately, only 37 percent of millennials have ever asked for a raise, according to PayScale.

True story: I didn’t ask for a raise

I am not proud to admit this but when I was an employee working in the non-profit sector I never asked for a raise. Not once. Not ever.

Why? I felt “lucky” to have a job. I didn’t want to seem too “demanding” or “greedy”. When you have bills to pay and student loan payments that are more than your rent, a steady salary is something you want to keep. You don’t want to rock the boat.

Throughout the years, I’ve lost out on thousands of dollars by not negotiating. In fact, I only started negotiating when I left the non-profit world for self-employment. It was only then that I realized I had to ask for more if I wanted to actually make a living.

Why millennials aren’t negotiating

While I’m not proud of my story, it’s not just me. Millennials are less likely to negotiate compared to their older counterparts.

According to PayScale, some top reasons millennials don’t negotiate include:

  • They are uncomfortable negotiating salary
  • They don’t want to be viewed as pushy

To a lesser extent, some millennials are actually afraid of losing their job if they ask for more money. All of these reasons make sense given the economy and environment we’ve been thrown into. Even so, millennials need to realize that many employers actually expect you to negotiate.  Not only that, but your employer may perceive you as more confident if you negotiate, according to a study by NerdWallet.

To that end, it’s important to know that when you receive a job offer, the employer has already chosen you out of a pool of other candidates. It’s very unlikely they would rescind the offer if you negotiate.

Plus, if you’re already killing it at your job — and you have the data and research to back it up — it only makes sense that you negotiate because you’re an asset to your employer. You can typically negotiate 10 to 20 percent more than you are offered or currently making. What do you have to lose? Read on to find out.

Losing a million dollars?

What if I told you that you could potentially lose out on a cool million dollars by not negotiating? You’d probably think, “Yeah right.” Unfortunately, that’s the truth according to Business Insider and Salary.com.

How can this be? Not negotiating doesn’t just affect you now, but it affects your lifetime earnings.

States Business Insider: “It works like this: Say two people are given a job offer of $45,000, which is close to the average for a new college graduate. One negotiates an initial $5,000 bump and a 4% raise every three years, but the other accepts the offer without negotiating and sees only the standard 1% pay increase each year. After a 45-year career, the difference in their lifetime earnings is a whopping $1,037,773.”

As you can see, the math is sobering and we can’t afford to not negotiate.

Tips for negotiating

Now that you know you need to negotiate, how do you get over the fear and get started?

To begin with, remember this: Anything that is worthwhile is rarely easy. You have to move through the discomfort first. With this in mind, understand that many employers may perceive you as confident for speaking up! The key is to do your research so that you know how much you can command given your expertise, location and skills. Some good resources to use are PayScale.com, Glassdoor.com, or Salary.com.

Before you actually approach your boss, practice with a friend who can give you feedback. Write down everything you bring to the table and rehearse your narrative until you remove any hint of doubt in your voice. Keep in mind that the worst thing your employer can say is “no”. And, just because they say “no” initially, doesn’t mean the negotiating is over. Consider negotiating for something else that’s important to you, like more vacation time, working from home or career development classes.

The point is: You can’t afford to leave money on the table. You’ve worked hard for this. You deserve it. So go out, negotiate, and get it!

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