Tag: Money Mindset

 

How to Manage Your Money in your 20s and 30s Like a Boss

When I moved out of my mom’s house when I was 23, my greatest fear was having to move back home – again.

In turn, I did everything I could to stretch my $1,800 a month take-home pay. By being frugal, taking on side hustles, and saving as much as possible, I was able to both squeak by and sock away a bit of cash each month. It was no easy feat, but it was doable. Remember: You don’t have to live in a van to save. Even small steps can help, like switching to a bank that doesn’t charge fees and negotiating for a lower Internet bill.

Fast forward to the present. Now that I’m in my 30s, I know that my frugality and hard-core money-saving ways paid off. Yet, there are quite a few things I wish I told my 20-something self about money.

To up your money game, here are a few pointers on how to manage your finances during your 20s versus your 30s.

In your 20s: Focus on career potential

You might not be raking in as much as you would like right out of college. But salary isn’t the only thing you should consider when evaluating job offers.

Take a look at the entire compensation package. This includes insurance benefits, employee perks, and whether your employer offers a match on a 401(k). Plus, consider this: Will there be opportunities to learn skills, work with a mentor, or move up the ladder?

I considered learning on the job as an added benefit. For instance, when I worked in the communications department for an entertainment labor union, my boss subsidized courses I took in graphic design and copyediting. That’s because those were useful skills for my current role.

And, while I was fortunate to have steady jobs that offered robust benefits, I worked in niche industries without much room for growth. Looking back, I wish I had spent more time focused on a host of job opportunities, both monetary and non-monetary.

In your 20s: Automate, automate, automate

In your 20s, it’s not surprising that you may be stressed out about your money situation. That’s why one of my favorite money-saving hacks is to automate your finances.

You can automate your savings for an emergency fund, for a car, or invest in your retirement fund. If you’re a Chime Member, consider opting into the Save When I Get Paid feature.

And yes, while you have decades before you retire, the earlier you begin to save for this goal, the better. Why is that? Two things: time in the market and the magic of compound interest. Let’s say you begin socking away $250 a month starting at the age of 25. You keep it up for 40 years until you’re 65. According to Investor.gov, if you earn an average of seven percent interest, you’ll have earned just shy of $600,000.

While I opened an IRA in my early 20s, I put in $100 and then stopped. Imagine how much I would have if I had continued putting money into it! And during one of my jobs, I failed to opt into the matching 401(k) plan until a year after I started. That’s money I left on the table.

In your 20s: Develop the discipline to cut back on spending

My friend Dave Fried, who is 39 and lives in Chicago, would tell me he treats his money as a business: You should always have more coming in than out. Fried kept this general rule of thumb in mind when he was earning minimum wage working at a screen printing shop, and when he was raking in cash selling pay-per-demand videos online.

The takeaway: It doesn’t matter how much you earn, you can always get into the habit of saving. To start, try cutting back. Try a no-spend Sunday. Or use a money management app to track your spending to see what your vices are. After having a few spend-happy months this year, I’m focusing on two major problem areas for a month: food and clothes.

When it comes to food, instead of overstocking my fridge, I’m checking my pantry before I head to the market. This helps me plan out my meals, stick to a weekly food budget, and cook in batches. As for clothes, I’ll wait 30 days before purchasing something I have my eye on.

In your 20s: Manage your debt

Sure, you wish your debt could just disappear yesterday. And while it’s tempting to conveniently forget you’re carrying a debt load, you’re going to have to pay it off eventually. Whether it’s credit card debt, student loans, or a car loan, know exactly how much you owe, and what the interest rates are.

Next, come up with a repayment plan. Figure out how much you can reasonably afford to pay off each month. It’s important to stay on top of your debt payments. Otherwise, your credit can get dinged.

In your 30s: Focus on earning potential

While your 20s is all about focusing on stepping-stones that lead to career opportunities, your 30s is prime time to make more money.

Although you can only cut so much of your living expenses, you can increase your earning potential. For example, it wasn’t until I job-hopped that I boosted my savings significantly. Another major wealth-building move for me was when I turned my side hustle of freelance writing and copyediting into a full-time gig.

In your 30s: Pay off your student loans and credit card debt

“Good debt” is loosely defined as debt for valuable assets that can grow over time. Traditional examples of good debt include a mortgage on a home or a business loan. “Bad debt” is anything that loses value over time, or has a high-interest rate, which can eat into your savings. “Bad debt” is normally thought of as credit card debt, student loans, and personal loans.

However, there are a lot of gray areas. Credit card debt can be a good thing. If you have a balance, but pay it off in full each pay cycle, this can boost your credit.

In your 30s: Continue to build your wealth

While in your 20s, you were laying the groundwork to save and invest. In your 30s, however, you’ll want to start thinking about growing your money.

There’s no single way to approach this. It depends on your personal situation, existing resources, and lifestyle preferences. For example, perhaps you want to buy your first home, or get serious about investing in the stock market. This is your time to make decisions to grow your money.

Live the life you want

As my friend Kristin Wong, author of “Get Money” likes to say, there’s a difference between living the life you can afford, and living the life you want.

And the perks of financial wellness are many — freedom from money stress, the resources and knowledge to grow your money, and the ability to live your best life.

 

Should You Get a Summer Job?

Ah summertime. With vacations, beach days, and backyard barbecues on the mind, you’re probably not thinking about getting a summer job. But whether you’re a teacher with summers off, a student on break, or you just want to save some money, summer is an ideal time to look for extra work.

Here are four reasons why you should get a summer job.

1. You can take advantage of seasonal work

Summertime boasts a plethora of seasonal jobs that aren’t available any other time of year. This is excellent news because it means a lot of employers are hiring just for the summer. It’s also great news for you as you won’t have to stress about giving your notice after only a few months. You can simply work for a short time and bank the extra cash.

As an added bonus, there is generally less competition for these jobs since they are only guaranteed for a season. Some seasonal opportunities include working in retail, lifeguarding, tourism, and landscaping – just to name a few.

To find jobs near you, it’s pretty easy to ask around, join neighborhood Facebook groups or and post what you’re looking for on NextDoor. Chances are, you’ll get a few referrals in a matter of minutes! Or, you can check out SummerJobs.com to find employers near you.

2. You’ll earn extra cash

Who wouldn’t benefit from some extra cash?

While a simple, seasonal job might not make you rich, it can certainly help you achieve your financial goals faster.

Want to pay off debt? Consider a summer job. Start an emergency fund? Save for a trip? Then you should definitely consider seasonal work.

Better yet, if you have other income from your primary job, you can stash away what you earn from your summer gig. Even an extra $200 a week can add up – helping you save $1600 in just eight weeks! That’s plenty of dough to kickstart your savings goals.

3. You’ll give your days structure

Maybe an abundance of free time isn’t for you. Or, perhaps you can use some structure this summer. Either way, a summer job can provide you an opportunity to fill your time and earn money.

Because let’s face it: There are only so many days you can sit at home before you become bored out of your mind. Summer can feel incredibly long if you don’t have anything planned. So, take advantage of your downtime and earn some money while you’re at it.

And, if you’re pushing your kids to find a summer job, this is an excellent opportunity to teach them about budgeting, saving, and time management. You can even open a mobile bank account and teach your teens how to track income and expenses while on the go.

4. You’ll learn new skills and have some fun

If you have ever wanted to try out a new career, then a summer job is the perfect opportunity to do so.

Maybe you want to take a break from teaching and work in tourism this summer. Or, perhaps you want to land an internship before heading back to grad school. Or, if you’re an entrepreneur at heart, then you can use this summer to launch your business.

There are hundreds of new skills you can learn by shaking up your routine and trying out a new summer job. Whether it’s customer service, billing, manual labor, or coaching, get out there and try something new.

Are there drawbacks to a summer job?

Of course, there are plenty of instances where a summer job may not be worth it.

For example, when you have a summer job, you lose out on time you could be spending on other things, like traveling, home improvement projects, or lazy summer days at home with your kids. A secondary summer job can also add a layer of stress to your life if you already work a demanding 9 to 5 job.

So, before you jump into a summer job, weigh the pros and cons. Just remember: While a summer job isn’t for everyone, if you have the luxury of free time this summer and can use the extra money, then why not? Besides, a summer job can be just what you need to bolster your financial goals.

 

6 Habits That Could Help You Get Wealthy, According to Psychologists

Research has shown that 40% of our daily behaviors are habitual. In other words, if you control your habits, you’ll have more control of your life.

When it comes to our finances, however, it’s easier said than done: Saving money requires overcoming millions of years of evolution.

“Our human brain is not wired for good long-term financial decisions,” explains Dan Pallesen, a clinical psychologist and financial advisor who is chief of investor behavior at Keystone Wealth Partners.

“We are wired to seek pleasure and avoid pain in the present,” says Pallesen.

Translation? If you want to build wealth — and stem the tide of Amazon Prime boxes arriving on your doorstep — you’ll need to combat your inner human.

Here are six psychology-based wealthy habits that work with (and around) your complex brain.

1. Determine Your “Why”

Before you can create wealth, you need to figure out why it matters to you.

Do you yearn to be debt-free so you’ll never get another collection call? Do you want to earn enough to go on a tropical vacation each year? Do you hope to retire early to spend more time with family?

“People whose financial goals align with their vision for their lives are so much more successful in achieving those goals than people who just try to build wealth for the sake of building wealth,” says Pallesen.

Before going any further, take out a piece of paper and write down your goals, dreams, and vision for the future. If you live with a partner, include that person in this exercise, too. By naming your “why” — and giving your money a positive purpose — Pallesen says you’ll be less likely to experience burnout on your path to financial prosperity.

2. Picture Your Goals

Remember posting photos in your locker of places you hoped to go, celebrities you wanted to date, and clothes you wish you owned? It turns out your high-school self was onto something: Literally picturing your goals can be extremely motivational.

So think back to the previous step, and surround yourself with visual aides that depict your goals and vision. We’re talking magazine clippings, inspirational quotes, postcards, and maybe even a Statue of Liberty snow globe that serves as a physical reminder of your dream of moving to NYC.

“It may sound gimmicky but you are actually training your brain to consider the big picture rather than focusing on the moment,” says Pallesen.

If you’d like to take a Caribbean cruise, for example, he recommends “taping a picture of a beautiful cruise ship in bright blue water on your bathroom mirror.” That, he says, “will be a continual reminder of what you are working towards.”

3. Prioritize the Future

Buying a flashy new watch. Upgrading your car when your old one still runs. Going out for lunch every single day. While these activities may feel good in the moment, they’re not doing you any favors in the long run.

Which is why psychologist Tamar Blank says that, before making any purchase, you should get in the habit of asking yourself if it aligns with your long-term goals.

“Every dollar spent should be an investment in yourself. One must make a conscious decision to prioritize long-term goals over instant gratification,” says Blank.

She calls this conscientiousness a “core characteristic” of people who build wealth.

Or, as Jennifer Thomas, a psychologist and co-author of “When Sorry Isn’t Enough,” puts it: “Wealthy families don’t go to Disney World now — short-term goal — and hope to start saving later. They live according to their long-term priorities and save a little bit all along the way.”

4. Pay Yourself First

Although consciously prioritizing long-term goals is important, this is difficult to put into action.

So, to sidestep your brain’s natural proclivity toward the present moment, experts say you should “pay yourself first.” This well-known financial concept involves automatically funneling money into your investment and savings accounts before giving yourself the chance to spend it.

Thomas suggests automatically transferring money from your checking account – each week, paycheck, or month – into your retirement and 529 plans. Wealthy families, she explains, “automate the process so it’s painless and they can’t mess it up.”

Pallesen, who supports this approach, also suggests automating when you get a raise.

“If you are suddenly making $200 more per paycheck, it is such a good practice to automatically have that $200 go into your retirement account and keep your lifestyle the same,” he says.

Otherwise, he warns, you’ll end up spending that money, and, ultimately, reverting “to the same level of satisfaction you had in your life” before what he calls “the hedonic treadmill.”

5. Name Your Savings Accounts

To make it a little easier to direct money toward your savings accounts, Pallesen suggests giving them aspirational names, like “Our Dream Beach House” or “Little Claire’s Education.”

“We are not naturally wired to save for the long run,” he says.

“Our brain loves immediate pleasure. But when you name an account, you are placing an emotional value on it and you are more likely to follow through in funding it.”

If your 529 account is named after your child, for example, Pallesen says putting money in it will feel good, because you’re “activating your feeling of love for your child through saving.”

Blank agrees. She says that thinking of who you’re supporting with your money can help you overcome your desire for instant gratification.

“Parental instincts and protective instincts are very strong, and can lead an individual to put their desires and even needs before those of others,” says Blank.

6. Create Accountability

Everything is easier with a buddy — so don’t be afraid to share your financial goals with the people around you.

“We are so much more likely to achieve our goals when we know that other people are aware of them. The thought of someone knowing whether or not you are achieving your goals is incredibly motivating,” says Pallesen.

While friends are a great start, you can consider enlisting professional help, too. Just like a personal trainer, a financial planner can provide education, motivation, and accountability for your goals. Or, if you’d prefer a free and tech-forward approach, try an app like StickK or a virtual financial coach like Charlie.

Wealthy Habits Build Wealth

Humans didn’t evolve to care about 401(k)s, compound interest and 45-year investment timelines. We evolved to care about today.

So, rather than getting upset about your lack of self-control or weak willpower, accept the fact that you’re human — and the fact that, to get rich, you’ve got to make your brain do things it doesn’t really want to do.

By sticking to the six tips offered here, you will hopefully build wealth and achieve your financial goals. Are you ready to give it a try?

 

What’s A Good Credit Score in Your 30s?

You likely spent your 20s growing a lot, making mistakes, and discovering yourself. Your 30s, however, are a time for refinement and fine-tuning.

While in your 20s, you were just starting your financial life. Yet, hitting the big 3-0 signaled that it was time to level up your finances. One way you can do this is by improving your credit score.

In this guide, we break down what a good credit score looks like your in 30s, and why this is important.

A good credit score in your 30s

When you’re in your 30s, you’ve had a decade to establish and build your credit. You might still have student loans, as well as several credit cards. You may even have a car loan or a mortgage.

If you played your cards right, your credit score may be in good shape. But if you spent your 20s racking up credit card bills and in denial about your student loan debt, your credit score might not be so hot. According to data from Credit Karma, the average credit score for 25-34 year olds is 628. The most popular credit scoring model, FICO, defines a “good” credit score as 670 to 739.

If you take the average credit score of 628 and add the other two data points that FICO describes as “good” – 670 and 739 – and divide by three, you get 679. And, while a credit score of 679 is a good benchmark in your 30s, having a score in the low to mid 700s is even better.

Let’s back up a bit. In your 30s, a good credit score in the 700s should be attainable. Why? Take a look at these factors to understand what contributes to your credit score and why a good score can be achievable in your 30s.

What factors make up your credit?

The length of your credit history is one of the factors that make up your credit score. By your 30s, you should have a solid credit history with years of data.

On top of that, your credit mix is another factor that contributes to your score. This refers to the different types of credit you have, like an auto loan and a credit card. By your 30s, it’s likely that your credit mix is more diverse, which can boost your score. For example, you might have an auto loan, student loans, credit cards and a mortgage. If you make your payments on time and keep your balances low, this can reflect well on your credit score.

The two main factors that contribute to your credit score are your payment history and your credit utilization. If you have years of positive repayment history and never missed a single payment, then time is on your side! This can show lenders that you’re a responsible borrower.

Additionally, keeping your balance below 30 percent of your available credit, also called your credit utilization, is important. If you have high balances, whether you pay them off in full each month or not, this can be a red flag to lenders who might think you’re a risk.

Given all of these factors, you should aim for a “good credit score” in the 700s. If you’re not quite there, don’t fret. Pay off your debt, keep your balances low, minimize the number of accounts you open, and pay your bills on time. This will help boost your credit score.

Why is having a good credit score in your 30s important?

So, why is having a good credit score in your 30s important anyway?

Your credit score can seem like just a number. But in your 30s, when you’re ready to level up your finances and life, a credit score can make or break your options.

For example, you may be ready to start a family and buy a house. Your credit score, in turn,  can influence whether you get approved for a mortgage and what interest rate you get.

Or, perhaps you want to refinance your student loans to try to save money. Good credit can help make this achievable. Plus, if you have kids and want to get a minivan, you’ll want to snag a great rate on an auto loan. And, you guessed it, a good credit score will help you get a lower interest rate.

Bottom line

Your 30s are all about coming into your own and refining everything you learned in your 20s. This is true of your credit too! This is the time to look at your mistakes, reflect and revamp. If your credit isn’t great, you still have time to improve and all is not lost.

Just think: Once you have a good credit score in your 30s, you can get the best interest rates and start reaching your life milestones without all the extra costs.

 

Credit 101: The Basics You Need to Know

You’ve probably heard the term credit. You may already know that this is an important part of building a solid financial future. But no one ever seems to talk about the specifics. For starters, what exactly is credit and why is it so important?

In a nutshell, building a healthy and solid credit history is an important part of your financial health. Just like it’s important to save a portion of your income, improving your credit can help you rent an apartment and get approved for a loan.

Are you ready to learn more about credit? We’ve got you covered. Here’s everything you need to know to begin understanding credit.

What exactly is credit?

When you buy something with credit, this essentially means you’re purchasing it now with the promise to pay for it later. Two common types of credit include installment loans and revolving credit. Take a look at what these credit types mean here:

Installment loans

This is when you borrow a set amount of money and use it for a specific purpose, like a car loan, a student loan, or a mortgage. When you pay for something with installment credit, you’ll make equal monthly payments that include interest.

Revolving credit

This is when a lender gives you a line of credit – up to a certain limit – and you then borrow from that amount and pay it off over time or even in one lump sum if you can. A common type of credit line comes in the form of money you spend on your credit card. In this instance, a credit company will extend to you a certain amount of credit and you can spend up to that amount. Your payments each month will fluctuate based on how much you’ve borrowed.

How does a lender decide whether to loan you money?

Let’s say you decide that it’s time to buy a car. You don’t have the cash to pay for it, so you apply for a loan. Easy peasy, right?

Not so fast. Before you can typically borrow that money, a lender needs to feel comfortable that you’re actually going to repay the money. To do this, the lender will look at a number of factors. The most important criteria is your credit history.

Credit history, credit report, credit score. What do these all mean?

Your credit history reflects how you’ve spent money over a length of time.

This may include how many credit cards and loans you have and whether you’ve paid your bills on time. If you’ve been paying for almost everything in cash and you’ve never borrowed any money, you probably won’t have much of a credit history. If you do, it will be summarized on a credit report.

There are three credit reporting companies that keep tabs on your credit history: Equifax, TransUnion, and Experian.

Lastly, a credit score is a number that is calculated based on your credit history. This three-digit figure indicates to a lender how likely you are to repay your debts. A higher credit score means you have a better credit history. A lower credit score means you have a bad credit history. Most of the time a lender will use your FICO credit score when deciding whether to lend to you. These scores range from 300-850.

If you don’t plan on borrowing money, should you really care about credit?

If you ever want to rent an apartment, get a cell phone plan, or buy a car, you’ll likely need good credit. Your landlord, utility company, or mobile phone carrier might check your credit. Your future employer might even check your credit.

Even if you don’t plan on borrowing money anytime soon, it’s still a good idea to build up your credit. You never know when you’re going to need it. For example, you might decide someday that you’d like to buy a house. If you have a solid credit history already in place, you’ll have a much easier time qualifying for a mortgage or any other type of loan.

Your credit history doesn’t only impact whether a lender will loan you money. It also impacts how much you pay in interest. Borrowers with a good credit history are considered less risky so lenders will usually offer them lower interest rates. And, lower rates can potentially save you thousands of dollars over time.

How does someone get a good credit score?

At a basic level, good credit comes from paying your bills and making your loan payments on time. But there are a few more things that go into it:

  • Don’t max out your credit. Lenders will want to see that you haven’t borrowed too much money. For example, if you have a credit card with a $10,000 credit limit, it’s a good idea to keep that balance as close to zero as possible. Experts advise keeping your balance below 30% of your credit limit. In this case, that would be $3,000.
  • Apply for credit only when you need it. Applying for multiple loans at once can signal to lenders that you’re having trouble with your money. So, try not to rush out and get a lot of credit cards at the same time.
  • Work on improving your credit history. The longer you’ve been building your credit, the better your score will be. Years of making on-time payments will show that you’re a trustworthy borrower.

How can I start building credit?

There’s a famous quote that says the best time to plant a tree was 20 years ago. The second best time is now. If you haven’t started building your credit history yet, now’s the time to begin.

Start by getting a free copy of your credit report from each of the three credit reporting agencies. You can also request a free credit report each year by going to AnnualCreditReport.com. Once you have the report, start by checking the information and making sure it’s all correct. The report will also include recommendations on how to begin improving your credit.

If you don’t have any credit history and you need to begin building it, there are a few easy ways to get started:

  • Get a secured credit card: With a secured credit card, you make an upfront deposit, which is usually your credit limit. If you make a deposit of $1,000, for example, you’ll have a credit limit of $1,000. After that, it works like a regular credit card. You use it to make purchases and then make on-time payments to build your credit score.
  • Become an authorized user. Do you have a friend or family member that has good credit? He can add you to his credit card as an authorized user. The catch is that your friend will be on the hook to pay for anything you charge and if his credit declines, this can also negatively affect your credit score.
  •  Apply for a store card. It might be easier for you to qualify for a store credit card, one that you are only able to use while shopping at that particular company. Just be aware: Store credit cards often come with higher interest rates, so be sure to pay off your balance each month.

Understand Your Credit and Improve Your Financial Future

As you can see, building good credit is a long game. Yet, if you play the game right, you’ll be on your way to a healthy financial future.

 

What’s a Good Credit Score in Your 20s?

When you’re in your 20s, you’re just beginning your financial life.

This may mean getting your first big paycheck, applying for a new credit card, and managing your checking and savings accounts. Yet, another important aspect of your financial life in your 20s is building your credit and establishing a good credit score.

Your question now may be: What is a good credit score and why is this important? Read on to learn how a good credit score can help you when you’re in your 20s.

What is a credit score?

A credit score is a three-digit number that represents how creditworthy you are. In other words, this number tells lenders how likely you are to repay your loans and if you’re a responsible borrower.

There are many different types of credit scores but the most popular is the FICO credit score. The FICO credit score range is from 300-850. The lower the score, the worse your credit is. If your credit score is high, your credit is in good shape.

What is a good credit score?

Now that we’ve reviewed credit score basics, your next question may be: What constitutes a good credit score? According to credit bureau Experian, a good credit score is 700 or above.

But if you’re in your 20s and just starting out, a score of 700 or higher may be tough as you’re just establishing your credit history. In fact, according to Credit Karma, the average credit score for 18-24 year-olds is 630 and the average credit score for 25-30 year-olds is 628.

FICO has different categorizations for credit scores and a 630 is deemed as “fair”. A “good” credit score based on FICO’s criteria is 670-739, a “very good” score is 740-799 and an “exceptional” score is 800-850.

So, given the fact that the average credit score for people in their 20s is 630 and a “good” credit score is typically around 700, it’s safe to say a good credit score in your 20s is in the high 600s or low 700s.

Keep in mind that when you’re in your 20s, you’re still establishing your credit history and your credit score takes into account the length of your credit history. Only time can help that part, so if you maintain good financial habits, the hope is that your score will elevate as you get older.

Why is a good credit score important?

Let’s be real, your credit score can seem pretty arbitrary. But it’s nonetheless important when it comes to getting your first apartment or applying for your first credit card.

Why is this? Because your credit score can make or break whether you get approved for an apartment. It can also determine whether you get approved or denied for a credit card. It can even affect the interest rate you get. This is crucial to understand because, if you take out a loan, interest can cost you a lot of money over time. Even the difference between a few percentage points can potentially cost you hundreds or thousands of dollars in interest.

So, having a good credit score can help you save money, and help you get better interest rates.

How can you improve your credit score?

What if you don’t have a good credit score quite yet? Or, perhaps you want to maintain your good credit and keep it in good standing?

There are a few simple rules to live by to boost your credit. Take a look:

  • The most important rule is to make all your payments on time. Your payment history determines 35 percent of your credit score, so it has the biggest impact.
  • The second rule of thumb is to make sure your credit utilization makes up 30 percent of your score – or less. Your credit utilization is how much of your total credit you use. Maxing out your cards each month can signal the alarms for lenders and make you look like a risk.
  • Lastly, try not to open too many new lines of credit. Opening too many lines of credit in a short period of time can look risky to lenders and lower your credit score.

Take responsibility for your credit score

As you can see, taking action and being responsible in your 20s can help you build your credit over time. So, refer back to this guide and start improving your credit score now. And, just think: This will help you land that apartment, buy a new car or get your first rewards credit card.

Are you ready to improve your credit score in your 20s and start adulting?

 

9 Money Goals You Should Have

Regardless of whether you live paycheck-to-paycheck or have plenty of wiggle room in your budget, it’s important to have money goals in order to pay off debt, increase your income, and save more money.

When it comes to finances, however, it’s confusing to figure out where to start. So, to help you get a jump-start on setting financial benchmarks, take a look at nine money goals to practice for the rest of your life.

1. Get Out of Debt

Getting out of debt seems like an incredibly daunting task, yet this is one of the best things you can do to maximize your money.

To start clawing your way out of debt, it’s best to set specific goals. For example, you can perhaps make double car payments until your car loan is paid off, or put an extra 25% towards your mortgage each month.

2. Save for an Emergency

Of course, you never want to deal with an emergency, such as losing a source of income or paying for an unexpected medical expense. But, unfortunately, emergencies happen, and you should make sure you’re prepared.

To do this, set up a specific bank account for your emergency fund. How much you save for emergencies is dependent on your current income and expenses. In general, it’s a good idea to have at least three to six months worth of normal expenses saved up for unexpected expenses. If you can stash away even more, then do it!

3. Invest for Retirement

This may sound like a broken record, but seriously, it is never too early to start saving for retirement. It’s estimated that millennials will need to save more than one million dollars to have a comfortable retirement.

If you haven’t started saving for retirement yet, start now. If you work for a company that offers an employer-sponsored retirement plan, get on board. Some companies even match your contribution, up to a certain percent.

If a company retirement plan isn’t an option for you, start an individual retirement account (IRA) and make regular contributions.

4. Spend Less

Everyone can use more money. And the easiest way to stash away more cash is to spend less. To do this, it’s important to be conscious of what you spend your money on. This way you can cut out unnecessary expenditures.

For example, you can pack a lunch the night before work so that you aren’t tempted to eat out the next day. Or, you can quit buying your morning coffee at expensive coffee houses and make coffee at home. You can also take advantage of sales, coupons, rewards, and promo codes so that you can avoid paying full price for your everyday items.

5. Increase Your Income

This one can be a bit scary for many people. Increasing your income generally means you’ve got to be bold and go for something bigger. Even the slightest pay raise or a new side hustle can give you some flexibility financially.

If you can do this, you’ll have more money to use on your goals like paying off debt, giving to charities, and breaking the paycheck-to-paycheck cycle.

So, consider looking for a new higher-paying job, asking for a raise, or launching that side hustle you’ve been dreaming about! If you’re still not sure how to earn extra money, there are endless, easy ways. The most common way is to get a part-time gig like driving for Uber or Lyft. This way you can set your own hours. To earn some side cash for smaller goals, try cashback credit cards or apps like Ibotta to earn extra money on everyday purchases.

6. Increase Your Insurance

Increasing coverage on your insurance can save you loads of money later on. The key is to make sure you have enough insurance in the event that you have to use it.

Bottom line, you don’t want to be left with a huge financial burden because you don’t have enough insurance, so work with an insurance agent to make sure you have the proper coverage.

7. Save for your Dreams

I don’t know about you, but I have lots of dreams that just so happen to be expensive. Specifically: I want to travel the world and own my dream home.

Although saving for your dreams may not seem like a top priority compared to other money goals, it is still important. So, even if you have to start small, start saving for your dreams right now. You owe it to yourself.

8. Break the Paycheck-to-Paycheck Cycle

Living paycheck-to-paycheck makes it harder to dig yourself out of financial emergencies.

To break this cycle, try living below your means and essentially pretending you make less money than you do. Save what is leftover each month and stash it away. It’s a good idea to be strict about your budget and even use a financial planning app to help you track what you spend. This way you’ll be more apt to stay on track and not overspend.

9. Plan to Give Back

Giving back is a wise idea as you can help other people achieve their dreams. Plus, giving to charities can provide a financial benefit to you – come tax season.

If you don’t have extra cash to donate, no worries. Donate your time and resources. For example, you can volunteer at an animal shelter, donate unwanted items to homeless shelters, or tutor underserved children.

Start Today!

Committing to these nine money goals can be an important part of your financial life, helping you form healthy habits, earn and save more money, and even give back to your community. So, what do you say? Are you ready to stop making excuses and start smashing those money goals?

 

8 Ways to Get One Month Ahead On Your Expenses

As you can probably imagine, most Americans live paycheck to paycheck. This means they spend money as they earn it.

In fact, more than one-third of American millennials (34%) say they could not come up with $2,000 in the next month to handle an unexpected expense.

But, what if you could cover all your expenses at the start of the month – before you even get paid? Then, when you get paid, imagine how much more organized and financially prepared you’d feel. You wouldn’t actually need that money for another 30 days and it could sit in your bank account.

Getting one month ahead on your expenses is a cool concept. Here are 8 things you can do to make this happen.

1. Add Up All Your Monthly Expenses

First, you’ll want to get a good idea of how much your monthly expenses are. So, go through your budget and track your spending to make sure you don’t miss anything.

Be realistic about how much you comfortably spend in a given month. Sometimes, what you actually spend doesn’t match the amount you budgeted for. Make sure you go back to your budget and enter in how much things really cost. For example, once you know you’re spending a set amount per month, you’ll know how much you need to have in order to get one month ahead and save for the following month.

2. Use Lump Sum Payments and Windfalls

If you get windfalls like a tax refund, inheritance or a bonus at your job, you can use this money to cover your expenses for the month.

Then, you can save whatever you earn during this time for the following month. Before you know it, you’re one month ahead and no longer living paycheck to paycheck.

3. Give Up a Vacation

The average vacation can cost a family more than $1,000. It may be no fun to forego a trip, but doing so will allow you to save up the money you need – fast.

But you don’t have to sit home and do nothing. Consider taking a staycation and planning low-cost or free activities during your week home from work. Then, take all that money you would have spent traveling and sock it away into your bank account.

4. Eat Through Your Pantry

If you spend hundreds of dollars on groceries each month, see if you can challenge yourself to cut that amount in half.

This may be difficult, but you can do it by getting creative and encouraging your family to use up food in your pantry and freezer. You can also shop the sales at your local supermarket and buy generic brands. Then, eat at home for 30 days and see how much money you can save.

5. Cancel Subscriptions

Try cutting out subscriptions in order to temporarily save money. This can include things like your gym membership, cable, streaming services, subscription boxes and so on.

Consider cheaper alternatives or do without for a few weeks – or more. For example, you can likely exercise outside or at home without having a gym membership.

Once you get a month ahead on your expenses and you’re into a good rhythm of saving money, you can consider adding back in your favorite subscriptions.

6. Sell Stuff From Your Home

You may have a lot of unused items lying around your house. Stop telling yourself that you’re going to fix them or use them again someday. You know that’s probably not true.

So, sell these items on eBay, or local sites like OfferUp and the Facebook Marketplace. Go all in with decluttering your home and you can earn extra cash.

7. Try Saving Half of Your Partner’s Income

If you have a two-income household, consider saving half of one of your incomes. This may sound like a stretch, especially if you’ve struggled with saving money in the past.

However, you can achieve this with dedication and the right plan. Start by committing to save half of the lower income in the family. For example, if your partner brings home $2,000 and you bring home $3,500 a month, commit to saving half of his income which would be $1,000/month.

You may have to make several cuts, like not dining out as much, finding free and cheap entertainment, reducing your utility use, driving less to save on gas, getting new quotes for lower insurance rates, and finding a cheaper phone company. Remember: All of these changes can be temporary.

8. Hustle Like Crazy

This is an option you can consider once you’d made a solid effort to reduce your expenses. Making extra money can help you meet your goals faster without sacrificing your lifestyle for an extended time.

For example, see if you can pick up more hours at work, get a part-time job or start a flexible side hustle. You can donate plasma, apply for focus groups and panel studies, walk dogs, babysit, edit resumes, clean cars, or offer your services as a graphic designer. The sky’s the limit.

Anything extra you can do to earn more money will get you closer to your savings goal.

Focus On Big Wins

Getting one month ahead on your expenses can be intimidating. So, try to focus on big wins and make sacrifices for a short period of time.

For instance, if you need to save up $4,000 to cover one months’ worth of expenses, setting aside only $50 per month will drag out the process and you can lose motivation before you reach your goal.

Instead, go after big wins that will allow you to save larger chunks of money in a shorter period of time. For example, cutting out four subscriptions, curbing your dining out habit, and not taking a summer vacation can result in thousands of freed up dollars over just a couple of months. From there, you’ll quickly get one month ahead, which will improve your cash flow and allow you to pay for surprise expenses.

 

4 ‘Rich Habits’ Millennials Should Start Developing Now

Want to be rich? Like really rich?

Rather than scheming about winning the lottery, or getting paid to invent the next Candy Crush, you might want to take a look at the things you do every single day. Why? Since your habits are the foundation for all your actions, changing them is usually more effective than hoping for a single lucky strike.

Tom Corley would know. He spent five years studying the habits of hundreds of Americans, whom he separated into two groups: the “rich,” who had annual gross incomes of more than $160,000 and net liquid assets of $3.2 million or more, and the “poor,” who earned less than $35,000 and had a maximum of $5,000 in liquid assets.

Based on his discoveries — and the striking differences between each group’s daily activities — Corley wrote a book called “Rich Habits.” Since it was published nearly a decade ago, I caught up with Corley to ask which habits were most important for millennials today. Here are the four he chose.

1. Create Blueprints for Your Life

The most important habit, says Corley, is to begin “dream setting.” (Think: goal setting, except that dreams come first.)

Here’s how to get started:

  • Create a script: Decide what you want your life to look like in five, 10, 20 years. Picture every detail, including your job, salary, partner, house, and lifestyle. Then write it all out — Corley recommends your script be at least 1,000 words.
  • Make a list: From that script, pull each specific dream into a bulleted list. For example, your bullets might be: Earn $100,000 per year, take an annual trip to Hawaii, live in a four-bedroom house on a corner lot. “Each dream is like a rung on the ladder,” says Corley. “When you reach the top… that is the moment you are living the life of your dreams.”
  • Set your goals: For each dream, list the goals that will get you there. If your dream is to live in a four-bedroom house, your goals might be to: 1) Pay off your credit card debt within the next six months, 2) Begin saving $300 per month for a down payment, 3) Improve your credit scores, and 4) Hire a trustworthy real estate agent. Ask yourself if you possess the skills and knowledge to accomplish each goal; if not, determine how you’ll acquire them.

“The components of your life’s blueprint are all of the things that make a perfect life,” Corley explains.

“Your goals are your construction team. You need to define all of the goals that will make all of your dreams become a reality.”

By dream setting early and often, you’ll understand which goals you should be pursuing — and which roadblocks may stand in your way.

2. Devote 30 Minutes a Day to Learning

When was the last time you read a book? Or took a course? If you’re like most millennials, you probably spend more time with your face in Facebook than real books.

Corley says this is a mistake. He told Kiplinger that 96% of self-made millionaires read 30 minutes each day for education, career, or self-improvement. He also found that, while 77% of poor people spent an hour or more watching TV each day, only 33% of rich people did.

“The successful see time as the most valuable asset they possess,” says Corley.

“They are continuously engaged in some constructive project to increase their skill sets, promote their business or careers, keep their minds sharp, or expand their knowledge…The wealthy invest their time; the poor spend it on wasteful activities.”

So, instead of scrolling through social media or bingeing on Netflix, pick up a book from your local library. Listen to an educational podcast on your way to work. Attend a workshop where you’ll learn skills relevant to your career. Be like the wealthy, and invest your time in educational activities that will pay off down the road.

3. Exercise Every Day

Though exercising might seem irrelevant to gaining wealth, Corley says it’s one of the most fundamental habits for millennials to develop.

Besides the obvious physical benefits of exercise, he cites a range of reasons it could help you get rich. Specifically, Corley says exercise can:

  • Improve mental function by flooding the bloodstream with oxygen.
  • Reduce stress, as well as combat its negative effects (like a weakened immune system).
  • Increase the volume of nerve tissue in the hippocampus, improving your ability to remember and learn.
  • Elevate your testosterone level — and therefore your confidence — prompting you to pursue new and challenging opportunities.
  • Boost willpower and self-control, enabling you to make good decisions and avoid bad habits that can wreck your finances and life.

To turn exercise into a habit, you’ll need to find a regimen that appeals to you. Instead of forcing yourself to run, give yourself the freedom to try a range of options, from yoga to Zumba to Crossfit to basketball. When you make an exercise habit fun, it becomes much easier to maintain.

“Rid yourself of your demons by exercising every day. You and everyone around you will be better off for it,” says Corley.

4. Experiment With New Activities

Corley recommends experimenting with a new activity or skill every six months.

Maybe you try coding. Maybe you volunteer as a tutor for homeless youth. Maybe you take piano lessons. Whatever it is, Corley promises that, “Through experimentation, you will stumble upon something that makes your heart sing — something you will want to devote the rest of your life.”

He believes we all have innate talents that set us apart from everyone else, but that you can only discover them by veering off the typical career paths. When you finally uncover your “main purpose,” as Corley calls it, he says it’ll be easier to excel at your work (and thereby reap the financial benefits that accompany excellence).

Three Mistakes Millennials Should Avoid

In addition to building rich habits, Corley says it’s important for millennials to avoid these common mistakes:

  • Multi-tasking: Do you check your email or phone every few minutes while you’re working? Corley views these constant distractions as detrimental to the success of many millennials. To stay focused (and crush the tasks on your plate) he recommends putting your phone in do-not-disturb mode and closing your email for a two-hour chunks during the workday.
  • Allowing lifestyle creep: When you start earning more, that doesn’t mean you need to spend more. Corley told Kiplinger one of the biggest mistakes people make is increasing their standard of living to match their income. “You don’t want to supersize your life just because you’re making more money,” he said. “Stuff doesn’t make you happy.”
  • Not saving enough: In lieu of spending more, strive to save more. In Corley’s study, 95% of the wealthy people saved at least 20% of their net income each year — a practice they started “long before they became rich.” (Chime’s automatic savings feature can help.)

If you’re feeling discouraged by all the rules and advice, don’t despair. The good news, according to Corley, is that “never in the history of civilization has there been so much opportunity to become rich and successful.”

By making intentional life choices and developing these basic habits, you’ll hopefully find a way to become rich — or, at the very least, to have more money. Because, even if you feel like you’re getting a late start, now is better than never.

As Corley says: “It’s only too late when you are six feet under.”

 

Women and Money: Financial Wellness Advice From Women

In March, we celebrated Women’s History Month and now that it’s April, we’re bringing awareness to Financial Literacy Month.

We wanted to celebrate both occasions by gathering the best money tips from a cross-section of women — from successful female entrepreneurs to women working in male-dominated industries

Here are 6 women who offered up their best tips on women and money, women-owned businesses and more. Take a look.

1. Sandi Knight, Senior Vice President and Chief Human Resources Officer for HealthMarkets

Sandi Knight knows how important protecting yourself is. As the Senior Vice President and Chief Human Resources Officer for HealthMarkets, an insurance marketplace, she works to help consumers get the health coverage they need.

“I think it is important that women start young in their careers understanding finances, the need for insurance and what creates wealth – and on the opposite end, debt. Insurance, especially life insurance, is critical if they have young children and even more so if they are single parents. If something were to happen to them, how would their children be taken care of?” says Knight.

Knowing the type of coverage you need in terms of life insurance, disability insurance and more can protect you from the unthinkable. While many of us don’t want to think anything will happen to us, it’s better to be safe than sorry.

2. Mira Violet, CEO of digital agency Amethyst Design

Mira Violet is the CEO of digital agency Amethyst Design. The agency helps companies with SEO, web design and more. As a woman owned business, she is all about getting paid what you’re worth.

Many women are underpaid with the gender pay gap and it’s key to boost your pay, says Violet.

“Make sure you’re being paid fairly. Ask male co-workers in the same position and experience level what they’re being paid. Look at sites like GlassDoor to compare your income to others in your job position. The culture of not talking about our finances only serves those who seek to underpay and undervalue us,” she says.

So, it’s key to talk to your colleagues about pay. Look up salaries in your area and compare what you’re earning. At the right time, negotiate your pay so that you get paid what you deserve.

3. Deborah Sweeney, CEO at MyCorporation.com

Deborah Sweeney is the CEO of MyCorporation.com, a company that helps other businesses form an LLC or corporation. Her top women and money tip for female owned businesses is to know just how you will fund your business. Funding is the bloodline of any business and you want to be clear how you will get your money.

“Starting a business is not easy, especially if you don’t have the funds,” says Sweeney.

According to Sweeney, here are seven ways women can access funding:

1.   Angel investors

2.   Pitch your business idea to venture capitalists

3.   Apply for grants with the Small Business Administration

4.   Crowdfunding

5.   Donations from friends and family

6.   Open several credit cards and increase the limits on each one. (Remember, you’ll have to pay everything back, plus interest)

7.   Ask your bank for a business loan. (Most business loan applications get rejected. You’ll need to have a high credit score to increase your chances of acceptance. Also, you’ll need a detailed business loan plan. You need to give your loan provider an exact plan on how you will spend the money. Without this information, you will likely be rejected.)

4. Gemma Roberts, Chartered Accountant for a large non-profit organization

Gemma Roberts is an accountant and also founder of TheWorkLifeBlend.com, where she helps others build flexible lifestyles and businesses. The crux of getting your money right starts with seeing where your money goes, says Roberts.

“Carry out a full audit of your spending habits. Do you have any savings? If you had an unexpected expense, could you cover it? Do you have any loans or an overdraft?”

“Once you have a good understanding of your current situation, you can set yourself specific financial goals. It might be to pay off your debt, retire early or save for a house. This can seem like a lot of work, but it’s never been easier to improve your financial wellbeing. There are a variety of apps available that help you to budget, save money and set financial goals. Many of them can access your bank account and assess your spending habits.”

In order to improve your financial well-being, knowing where your money is actually going is the first step. Then you can adjust and set goals that work for you. You can even use a bank like Chime that helps you automatically save.

5. Danielle Kunkle Roberts, Co-Founder, Boomer Benefits

Danielle Kunkle Roberts is the co-founder of Boomer Benefits, an insurance agency that helps people with Medicare. She knows first-hand what it’s like to make mistakes in business. One of her top tips for female entrepreneurs is to be wise about partnering up with others.

“Don’t partner with someone you don’t know very well just because you are nervous about starting a business. I made this mistake in 2005 and it took me two years to buy out my other two partners,” saus Kunkle Roberts.

“It’s vital that you know the work ethic of anyone that you get involved with and that all parties have the same money philosophy,” she explains.

“In my scenario, I wanted to invest all the profits back into the business but my other partners wanted to take it all home every month. This left me doing the bulk of the work to generate sales while having only one-third of the profits – my own – to invest back in. Believe in yourself or partner with someone whose work ethic you are very sure about.”

It can be enticing to want to work with others but don’t use it as a crutch. Going into business with someone is like a marriage and you want to make sure you’re on the same page when it comes to your business goals and financial habits.

6. Daniella Flores, senior software engineer

Daniella Flores is a senior software engineer who works on an all-male team for a credit company. As a 20-something Hispanic and creator of blog ILikeToDabble.com, she believes that when it comes to women and money, it’s all about paying yourself first.

“Pay yourself first every time you get a paycheck and by that I mean, automate transfers into savings accounts and investment accounts so you can grow your money,” says Flores.

“Make payments towards debt every two weeks instead of every month. Automate as much as you can, but always track where your money is going.”

With a Chime bank account, for example, you can automate your savings through our round-up program and also save 10 percent with every paycheck. Putting money away for yourself first is a great way to ensure your financial wellness.

Bottom line

When it comes to women and money, it’s all about advocating for what you’re worth and going after what you deserve.

If you’re a female entrepreneur, you’ll also want to make sure your business is financially healthy, too. Just remember: Financial wellness can provide the foundation you need to weather the storms both personally and in your business life.

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