Tag: Wealthy Habits

 

How to Make Your Life Work with Two Jobs

We talk a lot about saving money, but there’s another big way to improve your personal finances: Make more money. Working a second job can be a good way to do that, and a new study finds workers with two jobs perform just as well as colleagues with one job.

But moonlighting comes at the expense of personal and family time, the study published in the Journal of Business and Psychology finds. The study, led by Brian Webster, an assistant professor of management at Ball State University, looked at the job performance and engagement of a sample of bartenders and teachers who moonlighted in a range of jobs.

Webster believes successful moonlighters understand their employers expect them to be focused at work.

“There seems to be that recognition that if I’m at work and I’m doing this, I’m going to perform adequately,” he said.

If people can’t perform, they leave. Webster noted the study didn’t look at people who used to moonlight, but stopped.

This is good news for employers, who can count on their workers being focused, but that extra time and energy has to come from somewhere, and that somewhere tends to be family, the study finds. Only about 4.9% of workers have multiple jobs, according to the Bureau of Labor Statistics, but over the course of a lifetime, many people could find themselves moonlighting, Webster said.

So how can moonlighters find a healthy balance?

How moonlighting affects you

People moonlight for two reasons, Webster said: To make more money or to do something they enjoy, like an accountant teaching a class on weekends. Warren Robbins, senior sales associate for Policygenius, found himself needing to do the former in 2015, when he took a job as a bartender while working full-time at a health insurance company.

Robbins had just learned his partner, now his wife, was pregnant. The pregnancy wasn’t planned, and the two decided they needed more money.

His solution was to take a second job. Robbins worked 8 a.m. to 5 p.m. Monday through Friday at his day job and took on two overnight shifts at a bar, from Saturday night into Sunday and Sunday night into Monday at 4 a.m.

“My sleep schedule was all messed up,” he said.

The beginning of the week was tough, Robbins said. He would sleep all day Sunday after getting off work early that morning, work a night shift at the bar and then get to the office on maybe four hours of sleep.

His focus and drive at work suffered. So did his personal life.

“It was tough,” Robbins said. “I never saw my wife, and if I did, it was after work on a weekday. We never got to spend quality time.”

The only moments he could take for himself were during closing time, when he would pour himself a Guinness, lock the door and count the money as the sun rose.

How to find balance

Moonlighting can be stressful, but there are ways to make it better, said Paul Gionfriddo, president and CEO of Mental Health America. The first is to get enough sleep.

Sleep deprivation can take a toll on your mental and physical health, he said.

Also, take time each day to rest and recharge to relieve any stress from work.

“It’s free to sit back for 15 minutes and just rest,” Gionfriddo said. “It’s free to spend 20 minutes and take a walk.”

Find even a short amount of time for something you want to do, whether it’s family or a hobby, as a break from people telling you what to do, he said. If work becomes life and life becomes work, you can lose sight of who you are and who you want to be.

It’s important to be able to say why you’re working so hard, whether it’s to save for a trip, or support your family or retire early, he said.

“If you lose purpose in what you’re doing, then you’re in a real downward spiral that can lead to some real serious mental health problems,” Gionfriddo said.

You may not notice the signs of a problem, he said. You don’t necessarily have to feel suicidal to be clinically depressed.

If you feel excessively tired, or your eating habits suffer, those could be signs your mental health is suffering, Gionfriddo said.

“A lot of these things happen on a continuum,” he said. “It’s not that one day I have depression and the day before I didn’t.”

The Mental Health America website has free and anonymous screening toolsthat can tell you whether it’s likely you have a mental health condition like depression or anxiety. The tools also offer more information on mental health conditions, referrals to services, self-help tools and engagement with other people who may have the same condition.

If you do have a diagnosable condition, the law offers protections against being fired or disciplined for that condition, Gionfriddo said.

“There’s no shame in having a mental health condition or concern, even a diagnosed one,” he said. “In fact, the sooner you seek help for it if you think you need help, the quicker your recovery and the more likely your recovery is going to be.”

Before moonlighting, you may want to talk to your boss to see if your current schedule can bend enough to take on a second job, Webster said, or try to find a second job flexible enough that it won’t strain your existing schedule too much. You may also want to look for a second job that complements your existing job.

“If you enjoy what you do, the two jobs might benefit or contribute to each other in some way,” he said.

Robbins only moonlighted for three months. The birth of his son made his second job impossible. He wouldn’t moonlight again, given the choice.

“It was this period where you would get revived just to get depleted again,” he said. “I would never do that again.”

A second job isn’t the only way to boost your savings. Try making these small changes.

If you or anyone you know is experiencing suicidal thoughts please call the National Suicide Hotline at 1-800-273-8255 or contact them online.


This article originally appeared on Policygenius.com.

 

Hygge Hacks for Healthy Finances

Have you ever heard of hygge?

The concept of hygge has been around for centuries, but it has recently resurfaced as a popular lifestyle trend. In fact, the word hygge was on the short-list for Oxford Dictionary’s Word of the Year in 2016.

So, what does hygge mean? While it can’t be directly translated into English, this well-known word in Denmark loosely means “coziness.” It’s the practice of slowing down and prioritizing time spent with the ones you care about and doing more of the things you love the most. Incorporating hygge into your life can help you find more joy, but it can also improve your finances.

Read on to learn more about how practicing hygge can help you can spend less, save more, and prioritize your financial future.

Does hygge lead to happiness?

Hygge is a Danish concept (pronounced hoo-ga). According to Visit Denmark’s website, hygge is described as “creating a warm atmosphere and enjoying the good things in life with good people.” Visit Denmark goes on to say: “The warm glow of candlelight is hygge. Cozying up with a loved one for a movie – that’s hygge, too. And there’s nothing more hygge than sitting around with friends and family, discussing the big and small things in life. Perhaps hygge explains why the Danes are some of the happiest people in the world.”

And they must be onto something. Denmark has been named one of the happiest countries in the world for the last four years, according to studies done by the World Happiness report.

So, it certainly doesn’t hurt to incorporate some hygge into your daily life.

What does hygge have to do with your finances?

The concept of hygge means trying to find joy in the little things in life – and usually those things are cheap or even free.

You don’t need a fancy lifestyle in order to be happy. You don’t need an enormous house, expensive cars, or luxury vacations to find joy or peace. You can find hygge by slowing down, taking in the moment, and spending more time doing the things you truly love.

How to embrace the concept of hygge this year

There are dozens of ways you can incorporate hygge into your life – for free. Here are a few tips to get you started:

  • Stay in instead of going out

You can have just as much fun spending an evening at home as you can going out to a fancy and expensive restaurant. So, try having a hygge-ful evening by lighting the fireplace, baking some cookies and reading a book.

By staying in, you won’t just sneak in your fill of hygge, but you could save a good chunk of change simply by not going out on the town.

  • Give hygge-related gifts

Gifts can not only be expensive, but can often be forgotten after a year or two. Maybe it’s time for you to give the folks you care about the gift of hygge.

Gifts like candles, cozy socks, books, and gourmet coffee make great gifts and these presents also give the gift of well, presence. These gifts won’t break your budget and your loved ones will also get the chance to incorporate hygge into their lives.

  • Enjoy a home-cooked meal

What could be more hygge than a home-cooked meal? By cooking at home more often, you’ll get to regularly enjoy the benefits of hygge.

Not only can you eat dinner in your favorite and most comfortable clothing, but you can create a warm and inviting ambiance by lighting candles and dimming the lights. As if this isn’t enough, you’ll save a boatload of cash.

So, instead of going out, invite your friends and family over for a home-cooked meal. Or, lower the cost and increase the hygge even more by hosting a potluck, where everyone can bring over their favorite, home-cooked dishes to share.

  • Decorate with frugal, hygge decor

With winter just around the corner, now is the perfect time to invoke a sense of coziness in your home and practice hygge while you’re at it. Fortunately, home decor doesn’t have to be pricey – there are plenty of frugal ways to liven up your home.

You can decorate with candles, family photos and plants. From there, get creative. These items are easy to find, don’t cost much money, and up the hygge level of your home.

Prioritize time with family and friends

The bottom line: the idea behind hygge is to spend time doing more of the things that are truly important to you.

As you can see by the examples here, you don’t have to plan extravagant get-togethers or even leave the house in order to enjoy time with your loved ones. In fact, most people can claim that the best memories spent with family or friends are the times spent just sitting around, catching up at home.

Now it’s your turn to up your hygge ante. So, invite guests over, crack open a bottle, and enjoy shared plates around the fireplace this winter. By doing so, you’ll save money while creating memories that will last a lifetime.

 

The Best Budgeting Habits to Help You Save Money

You may have grown up believing that netting a six-figure salary, winning the lottery, or getting a windfall of cash will be your ticket to wealth. But those beliefs may have done you wrong financially.

Want to hear a #truthbomb? The road to wealth is far less sexy and way more practical. Take it from a money nerd like me. My emergency fund certainly didn’t grow overnight. Ed McMahon didn’t come knocking on my door with an oversized check. I didn’t amass a gazillion views on my YouTube channel, catapulting me to viral video superstar status.

How did I grow my money sitch? I tweaked my mindset, behaviors, and habits gradually, and  over time, I managed to improve my relationship with money. From there, the money in my savings account grew.

Now your question may be: how do you do the same thing? Let’s start with the essentials, shall we? It all boils down to budgeting. Yes, that “b” word is ugly, especially when you feel like it will deprive you of having F-U-N. But here’s the thing: without a budget or money plan, you’ll be prone to spending your money willy-nilly. What’s worse, you may overspend.

To help you avoid pitfalls and improve your money habits, take a look at our budgeting tips.

Pick Your Approach

If you’re new to budgeting, there are a number of methods to keep things simple and stay on track:

50/30/20 Budget: This popular budgeting approach breaks up your budget into three major sections:

  • 50% goes toward needs (rent, bills, and insurance, and debt)
  • 30% goes toward wants (clothing, concert tickets, mini splurges, cool gadgets)
  • 20% goes toward your savings

Zero-Sum Budget: With the zero-sum budget, each dollar you get is assigned a task. So if there’s $50 left over in your budget, you’re not done yet. You need to figure out what to do with those “extra” buckaroos. Yes, even those bonuses from work, or a surprise cash gift from your Aunt Genie need to be allocated appropriately.

Anti-Budget: For those who want to essentially set it and forget it, the anti-budget is definitely worth considering. First, figure out how much you want to save. Then, squirrel away money for your savings goals, investments and paying off your debt. Whatever is left over can be spent on whatever you please. This is the mode for those who are lazy about budgeting.

Track Your Spending

Unless you have an uncanny ninja sense for where your money is going, you’ll want to monitor your cash outflow. This is the case with every single dollar. Why? Well, tracking your funds will help you figure out exactly what you’re spending your money on. In turn, you’ll be able to make adjustments. Pro tip: using a money management app will save you loads of time, plus help you save more cash.

For instance, when tracking my cashflow, I discovered that I am spending far too much on groceries. While I don’t normally have assigned amounts to each spending category, I resolved to do this.

Automate

There’s no better budget-saver than automation. Because your willpower acts like a muscle, every decision you make wears down your ability to make the best future choices. So the fewer choices you have to make about money, the better off you’ll be.

By autosaving, you’re looking out for the long-term without having to make extra effort. If you’re a Chime member, you can set up a payday rule to autosave a portion of your paycheck each month. And if you sign up for direct deposit, you can get paid early. This comes in particularly handy if you have side hustles and need to set aside part of your earnings for Uncle Sam.

Create a Buffer

If you get a bit spendy in a given month, don’t freak out. In fact, plan for it. That’s not to say you should be going on shopping blowouts and purchasing designer handbags and shoes each month. But allow for a bit of overspend by including a bit of padding. I like to keep a bit of a cushion in my savings account.

Set Alerts

Just like how retailers try to remove points of friction (aka barriers) to get you to spend more, adding in your own barriers will help you spend less. I receive a daily text notifying me of the balance in my main checking account. Plus, I get an email whenever I spend more than a designated amount in a single credit card transaction. This way I can keep tabs on my spending. If I find myself putting too much on one of my cards, I momentarily freeze it until I get back on track.

March to the Beat of Your Own Drum

There’s certainly no cut-and-dried approach to budgeting. While these habits will most likely help you live within your means, it’s a good idea to exercise creative license. Over the years I’ve tried a number of things, including tracking every transaction on a spreadsheet and creating a budget on a money management app. The key is to figure out what type of budgeting works for you and stick to it.

Ready to Make It Rain?

Just like you, your budget is a living, breathing thing, bound to constantly evolve. By checking in on it regularly, making adjustments along the way, and finding your own style, you’ll build wealthy habits that will help you grow your money and achieve your financial goals.

 

9 Financial Empowerment Tips for the Newly Single

Ending a long-term relationship can be a complicated affair. Not only do you have to learn how to be single all over again, you’ve got to tackle all life’s various responsibilities on your own. Taking ownership of your finances as a newly single person can be especially challenging.

“Suddenly finding yourself divorced or single can be overwhelming, particularly if you’ve relied on a dual income and your partner to handle the finances,” Leah Hadley, certified divorce financial analyst and senior financial adviser at Great Lakes Investment Management, says. “You’re in a new place in life, and you’ll probably have a new perspective on what your life and retirement will look like.”

With careful planning and an eye on the details, you can take charge of your money. Here are nine financial empowerment tips for the newly single.

1. Take inventory

First, you should complete a thorough inventory of your finances. This review should include:

  • Accounts: Make a list of each financial account in your name, whether you share it with your ex or not. This includes bank accounts, credit cards, retirement and investment funds and any other accounts that contain liquid assets.
  • Property: Next, list your other assets: cars, your home and valuable property.
  • Cash flow: You need a thorough understanding of your monthly cash flow. Take note of your monthly income and your outgoing expenses, including bills, child support and savings, with the understanding that you may need to adjust your budget.
  • Monthly bills: As you total your monthly expenses, make sure you know what bills you’re still expected to pay post-breakup, and keep track of the due dates so you don’t miss a payment.

“After one has a working understanding of their cash flow, debts and savings, one can develop a strategic plan to work toward increasing savings (personal and investments), decreasing debts and working toward their future goals,” said Margaret M. Koosa, CEO at The Alchemists, Your Wealth Concierge.

2. Create a budget

Now that you know your income and expenses, you can put together a realistic monthly budget. This simple spreadsheet can help.

Account for necessities such as rent, bills and groceries, then prioritize savings. Recreational and discretionary spending should come last. Your budget may be more conservative than you’re used to, but having one and sticking to it will help keep you in good financial health.

3. Split your accounts

During a divorce, splitting up joint accounts is sometimes a legal affair. But when possible, work with your ex to shut down credit cards, bank accounts and utilities. Work on opening up accounts in your name. You may need to establish your own health insurance coverage, utilities and even Netflix account.

4. Understand your divorce decree

If you’re going through a legal separation, your divorce decree will influence how you restructure your finances. For instance, you might have to account for child support or alimony payments in your new budget. Some divorce settlements also mandate an ex-spouse maintain or buy life insurance with the other as their beneficiary. That way, your ex and your shared dependents are protected from the loss of income in the event of your death. Be sure you understand what your settlement requires to set yourself up for financial success.

5. Update beneficiaries

If your divorce decree permits (or you weren’t legally married) and you no longer want your ex as the beneficiary on any of your financial accounts, update that information immediately.

“Newly single people should update their beneficiaries on all of their insurances, financial accounts, estate documents (will, power of attorneys, healthcare proxy, trust), etc. to reflect their post-divorce intentions.”

Keep in mind, there are situations where you might want to keep an ex on a certain account. We mentioned life insurance above, but the same rules generally apply to disability insurance, which protects your income — and your ability to pay child support or alimony — in the event you become too ill or injured to work. Learn more about updating your insurance policies specifically post-divorce.

6. Review tax implications

If you previously filed taxes as a married couple, your tax situation may change dramatically. Filing as a single person might be beneficial, especially if you previously were a dual-income family. But there are many wrinkles, such as if you sold a home or have kids. Review the tax implications of your separation carefully and look into whether you should change the amount of money your employer sets aside from your paycheck for Uncle Sam during the year.

The Internal Revenue Service has a calculator that tells you how much to have withheld from each check based on your filing status, number of dependents and income. Use it as a starting point — and make sure you are extra-diligent at tax time.

7. Reassess your retirement

Because your financial outlook may be very different as a single person, evaluate how you’re preparing for retirement. Without your partner, you may need to adjust your retirement savings to make sure you have enough money in your golden years. It’s never a bad idea to increase your retirement savings for better financial security, especially since there are easy ways to do so in five minutes or less.

8. Check your credit

Divorces and breakups can be hard on your credit. Closing old accounts, applying for new credit cards or loans, and liquidating assets can have major implications for your creditworthiness. Check your credit report periodically to look for unpaid bills that got lost in the shuffle and old accounts you forgot to close. You may even want to make sure your ex isn’t opening accounts in your name.

You can pull your credit reports from the big three credit bureaus for free every 12 months at AnnualCreditReport.com. There are numerous websites and credit card issuers that let your monitor your credit score at no charge every month, too.

After the dust settles, you should be able to build strong credit by practicing good financial and debt management habits.

9. Hire a professional

If navigating the waters of personal finance as a newly single person is too overwhelming, you might want to enlist professional help.

“The day-to-day expenses might be overwhelming at first, but thinking ahead is also important,” Hadley says. “Develop a strong partnership with a trusted financial adviser. Knowing that you have someone in your corner who can explain the short and long-term implications of your financial decisions can be a huge asset.”


This article originally appeared on Policygenius.com.

 

20 Awesome Ways to ‘Treat Yourself’: A Chime Guide

You work hard. You want to do the right thing and save money. But you also want to treat yourself and enjoy life a little. All work and no play sucks. Right?

The good news is that when you use Chime, you can save money and treat yourself at the same time. How does this magic happen? Using Chime’s
Save When I Spend feature, your purchases can be rounded up to the nearest dollar and your spare change is then automatically deposited into an optional (and free!) Chime Savings Account.

To celebrate you and encourage you to YOLO-on-the-cheap, we’ve come up with this guide on how to treat yourself. Take a look.

1. Get your Pumpkin Spice Latte

I hereby give you permission to get yourself a Pumpkin Spice Latte this fall #nojudgement. In the personal finance world, conversations about lattes run about ad nauseum. We’d like to just stop that conversation in its tracks and say go ahead. Get your latte and brighten your day.

2. Take a local dance class

One way to treat yourself is to get moving and take a dance class. Try something new. You can check out Groupon for sweet deals. I bought a Groupon for belly dancing classes and it comes out to about $5 per class. Now this is what we call an inexpensive and fun way to get your groove on.

3. Go gourmet

Learning how to save money means sacrificing some things, like eating at home more and going out to dinner less. But that doesn’t mean that you can’t indulge at a lower price point. One way to have a fancy gourmet dinner for two is to get a baguette, some brie (or other fancy cheese), some meats, and a bottle of wine. I used to do this and it costs about $20 for two people. At $10 per person, including alcohol, it can’t be beat. Also, it requires little effort and feels fancy.

4. Write a thank you note

Writing a thank you note is a dying art. While it’s always good to write a thank you note to someone you appreciate, I’m going to switch it up a bit and encourage you to write a thank you note to your future self. What will you be thankful about in 10 or perhaps 20 years from now? This can put you in a positive mindset and get you thinking about where you want to go in life.

5. Get some new skivvies

Want to feel like a bold and brave new person? Do you want to treat yourself with something fun and not break the bank so you can still save for a rainy day? Get some new underwear. Seriously. You can get something lacy and fun. Or perhaps it’s time for rock some new comfy granny panties. Do whatever floats your boat and makes you feel like a secret superhero under your clothes.

6. Buy some herbs

Want to spice up your life? Buy some herbs…ahem, not that kind. You know, the kind you can cook with or add to drinks. You can go to Trader Joe’s and buy some fresh mint or basil. Add that to a jar of water and boom — infused water.

7. Ditch technology (for now)

If you are honest with yourself, you know that the majority of your day is likely spent in front of a screen. A computer screen, a TV screen, your phone. Sure, these devices can give you some enjoyment and entertainment, but it can be a lot. Give your brain a break from being a constant consumer of information and let it just be. Ditch technology for at least two hours each day (and this doesn’t include your sleeping hours or when you’re in the shower!) If you can do the whole day, do that.

8. Read for pleasure

After ditching the technology, commit to reading for pleasure. Not for work. Not for self-improvement. Read something for FUN! Something that can take you away for a bit. Better yet: read a real book where you have to turn actual pages.

9. Get a new phone case

If you want to save money and treat yourself, look for a new fun phone case. Let’s be real. You spend a lot of time on your phone and have probably dropped it a few times. Protect it and enjoy what you’re looking at with a new phone case. Need inspiration? Check out this Faux Mink case in the delicious color of Golden Apricot.

10. Get a massage (at a discount)

Wondering how to save money on self-care and relaxation? Go to a school! You can get a massage at a huge discount by going to a local massage school. The same goes for haircuts, facials, and more. Go to a local beauty school and rack up the savings.

11. A mug just for you

Mornings can be rough. But having a special mug that is just for you can help you start the day off right with a little dose of inspiration. Consider this “Not Today Satan” coffee mug on Etsy.

12.  Buy a mug warmer

Now that you have your favorite mug, invest in a mug warmer. We’ve all been there: you get carried away with work and go back to your tea or coffee…and it’s luke warm, or worse, cold. Keep it hot and fresh with a mug warmer.

13. Get a reel viewer

If you’re a nostalgic toy lover, getting your own reel viewer can be the perfect way to treat yourself and a fun way to preserve your memories. You can add your own favorite photos too. Not only is this fun for you but a great conversation starter and an awesome and unique way to share your favorite memories with others.

14. Act it out

When you want to learn how to save money fast, you may have to cut back on entertainment and going out with your friends. But that doesn’t mean you can’t have any fun. Invite your friends over and ask them to bring their favorite piece of text — a poem, an article, a play — and have everyone read aloud to each other. At the core, many of us are storytellers and hearing your friends read their favorite text aloud can be a special thing.

15. Make it hot

If you like things hot and love a robust flavor, indulge in a special hot sauce. It can take your meal from boring and bland to straight fire. We’re pretty sure that hot sauce sales went up when Beyoncé crooned “got hot sauce in my bag, swag”. If it’s good enough for Queen Bey, it’s good enough for you.

16. Do whatever you want

As adults we get stuck in to-do lists and “shoulds”. It’s hard to hear your own voice sometimes and know what you really want. So, let go of responsibilities for one night. The dishes will be there tomorrow, I promise. If you want to nap, do that. Want to watch To All the Boys I’ve Loved Before a 3rd time? Do that. Want to work on the next great American novel? Do that, no self-judgement. Do whatever makes you feel good.

17. Go down memory lane

A great way to save money and spend nothing is to take a trip down memory lane and look at old photos. Look at your old vacation pics. Pictures of you and your SO when you first started dating. Look at that crazy photo from childhood and remember who you used to be. Looking at old photos can bring a feeling of joy and take you back to a fun time.

18. Try a new recipe

Cooking is a process of trial and error and following directions on a recipe can lead to a great new meal. You don’t have to be a master chef to make something that tastes good. Consider trying a new recipe. The process of cooking can help you slow down, stay in the moment, and experiment.

19. Party for one

Get your favorite food, a favorite glass of wine or cocktail and put on your favorite music. Dance in your living room and enjoy everything just how you like it. Throw yourself a party for you and only you.

20. Play hooky

Some days you just don’t want to go to work. And maybe sometimes you shouldn’t. Now, we don’t recommend this strategy often, but once in a blue moon you should play hooky. Do something fun during the week or stay in your PJs all day.

It’s All About You

There you have it: 20 fabulous ways to treat yourself. Better yet, all of the ideas here are affordable and some of them cost no money at all. We invite you to slow down, enjoy life and give yourself a break once in a while. You deserve it.

 

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.

 

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.

 

Over 60% of Americans Don’t Know What They Need to Retire

A recent study found that 61% of Americans don’t know how much money they need to retire. This concerning statistic highlights a major problem with retirement savings in the United States. A huge number of Americans have little to no retirement savings despite advice to stash away cash for a comfortable future. Let’s look at some important retirement savings rules to make sure you are not part of this scary statistic.

Americans don’t know how much money they need for retirement

A new study from Bankrate found that six in ten Americans do not know how much money they need to retire. With a large wave of Baby Boomers reaching their golden years and preparing to leave the workforce, millions of Americans may be in for a big surprise when the regular paychecks stop flowing in.

While Social Security or an increasingly rare pension plan can offer a safety net to aging Americans, most of us need much more than we will get from the government to maintain the same standard of living in retirement.

The study went beyond asking what people need to retire. Older Americans fared slightly better than Millennials in the survey and fewer than 2 in 5 non-retirees indicated that they feel their retirement savings are not on track.

Using the 15% rule to save for retirement

To avoid a ramen diet in retirement, you should follow best practices for retirement savings today. That may include contributing the maximum allowed amount to an IRA or Roth IRA in addition to participating in an employer-sponsored retirement plan like a 401(k).

One quick and easy option to meet your retirement needs is to save at minimum 10% to 15% of your gross income (that’s your income before taxes and deductions). This is easy to do automatically in most employer retirement plans.

To reach the maximum $5,500 per year in an Individual Retirement Account (IRA) or Roth IRA, you should save $211 per pay period if paid every other week to reach the target savings rate at the end of each calendar year.

If you make $50,000 per year, that means you should save $7,500 per year, or $625 per month, at the very least to maintain the same quality of life in retirement. But remember that this is just a minimum. You can save far more for retirement if you choose!

Calculate your actual retirement needs

While saving 15% or more for retirement is a good estimate on how much to save, you should do better and estimate your actual financial need in retirement. This is a tricky thing to calculate with a ton of accuracy, as you have to estimate your retirement date, how long you will live, and how much you need per month to get your total number.

Lucky for you, a Ph.D. is not necessary to calculate your retirement need. There are a handful of useful tools that make it easy and quick to estimate your financial requirements for retirement.

This in-depth calculator from AARP gives you detailed results on your retirement readiness. The Kiplinger calculator gives you a quicker result in estimating your retirement needs, but with a little less detail.

You control your retirement destiny

If you are behind on saving for retirement, there is no one to blame but yourself. But don’t dwell on the past and savings that have yet to take place. Instead, focus on the future and boosting your retirement savings starting today. That is the only way you will get on track to reach your retirement goals.

It may seem like a long way off, but your retirement is just around the corner in the scheme of things. Take the steps you need now so you don’t end up in a difficult situation in retirement. Many older Americans find themselves stuck working in retirement or skimping at home to make ends meet. Even if you can’t start by saving a full 15% of your income, you can start with something. Some retirement savings apps let you start with as little as $1 or $5!

Start saving and get yourself on track for your dream retirement. Your future self will thank you.


This article originally appeared on Due.com.

 

How to Avoid Regrets About How You Spend Your Money

How you spend your money is a loaded subject. Nearly half of Americans deem finances a hard subject to address with others. They rate it more difficult to navigate than politics or religion. Sixty-eight percentwould rather disclose their weight than talk about finances. More than 40 percent don’t even broach the subject with the person they marry before entering into holy matrimony. Even to yourself, how y0u spend your money is a topic you most likely avoid thinking about.

However, treating money as a taboo subject hurts people. Families tend to feel chronically anxious due to a lack of clear conversations about money. Many times, with little discussion about goals and expectations, people end up following some financial gurus’ guidelines to the letter. This can actually be damaging to their personal finances. Plus, it can make them feel like “financial sinners” for making different choices. That”s why it’s time to think differently about how you spend your money.

Rules About How You Spend Your Money Can Lead to Regret

James Lenhoff, CFP, the president of Wealthquest and the author of “Living a Rich Life,” has seen dozens of clients who’ve accumulated a lot of money in their later years — and a lot of regrets. “Many of them get to a stage where they realize they didn’t create many memories with their money,” Lenhoff says. “They’re watching their kids have families and regretting all the things they didn’t do — they’re seeing the breaks or weaknesses in the logic.”

These clients often see their own kids are reluctant to take vacation time or splurge on a family excursion, yet many of these behaviors have been “inherited.” However, it’s hard to lay all the blame at their feet in a society that champions short-term “good” feelings over long-term satisfaction. “Society reinforces this mistake of thinking that status symbols and things are worth more, encouraging us to buy the bigger house, the newer car. The messaging is all geared toward making us feel better about ourselves,” Lenhoff explains. “In the end, we all want experiences, but society has confused us into thinking products areexperiences.”

In order to combat that messaging, most personal finance books give us rules to follow that keep us from splurging. But, it’s a Catch-22 because the money “rules” teaches us to grit our teeth and “do the right thing.” This is always assumed to mean saving more. “There’s an assumption among some financial experts that we need to treat people like children, give them harsh black-and-white boundaries,” Lenhoff says. “Like kids, they develop a sense of shame for disappointing Mom and Dad. The behavior is so deeply ingrained that even when they have saved enough, they are paralyzed by the ‘rules,’ and they can’t let go and use some of their money to enjoy themselves.”

Forces That Impact How You Spend Your Money

These two forces are always fighting within us. That means many people end up being filled with money-driven regret for one of two reasons. First, they spent their money on products, which didn’t fulfill them. Second, they hoarded their money, waiting for the right time to spend it.

However, they could never relax enough to do so when it was time. The good news is that those outcomes aren’t inevitable. There are steps you can take to avoid financial regret.

As Lenhoff says, “Nobody lived beyond their means because they couldn’t do math; they were emotionally motivated to do something.” He recommends that younger savers and spenders approach their relationship to money in a way that may be antithetical to the “rules.”

Find out where you stand

Because of the taboos surrounding money discussions, most people don’t actually know where they fall on the financial spectrum. Are they in a healthy position or not? Many couples, Lenhoff explains, contain a “Go” and a “Whoa”: The “Whoa” is the self-controlled saver, while the “Go” is the free-spirited spender. “Go” assumes they’re fine, but “Whoa” assumes they’re not. The problem is that neither one really knows who is right.

To overcome this, you must have a clear-headed conversation to lay out what you have and where you’re going. What does it take to make your life work right now? And, what are your non-negotiable goals for your family? A financial planner can help you outline how far ahead or behind you are on hitting those targets. Then, once you’re confident that you’re saving what you need to save each month to fund your goals, you can spend the rest as you like.

Don’t be fooled by others’ exteriors

In a world where we’re constantly cajoled to keep up with the Joneses, people often look around and feel their neighbors, friends, and family members are doing better.

But, the secrecy surrounding money — and the prevalence of living on credit cards — has erroneously led us to assume others are killing it. In reality, they could simply be swimming in debt. Don’t make decisions on how you spend your money based on how well you believe others are doing.

Use your net worth as your golden rule

Many people are overly focused on their income as a measure of progress. However, your income doesn’t matter if you aren’t using it to grow your net worth. If your net worth didn’t go up last year, that’s a problem no matter how much income you had. Your net worth changes only through saving or paying down debt.

You should be doing both. Don’t focus so much on paying down low-cost debt that you miss opportunities to save for future goals. Make sure you’re using your income to grow your assets over time. A growing net worth is the clearest indication of financial health.

Avoid budgets

Budgets are very restrictive, and they start from made-up numbers. Lenhoff says, “Most people approach budgets with ‘What can I squeeze myself into?’ They should start with ‘What’s my current reality?’” Just because you could eat freeze-dried Ramen for six months doesn’t mean it’s likely you will.

And, a shoestring budget that’s a far cry from your usual existence will feel overly prohibitive. Also, it’s impossible to stick to. Instead, create a spending plan that focuses on how you’ll spend your money rather than on how you’ll avoid spending your money. Acknowledge that you will be spending money so you can plan to spend it wisely.

Think not just about how the money will serve you in the future

There’s truth in the saying, “You can’t take it with you.” Therefore, you need to celebrate milestones along the route to your biggest goals. Enjoying the money you’ve earned while meeting your financial obligations and saving for your long-term goals shouldn’t be considered taboo but smart. It’s giving you pleasure now and later. This is what money that exceeds your necessities is intended to do.

While money may often be treated like a dirty secret, it doesn’t have to be a source of pain and regret. By shifting your mindset about how you spend your money now, you can ensure you use it in a way that brings you peace today and security tomorrow.


This article originally appeared on Due.com.

 

Behavioral Hacks and the Gig Economy: 4 Tactics for Financial Wellness

When it comes to finances, freelancers and other gig economy workers have it tough. Not only do we struggle with unpredictable cash flow, but we also have to deal with our own benefits and insurance.

Yet, while it may be stressful at times, there are things you can do to modify your money habits and boost your financial wellness.

Behavioral science, or the study of why humans and animals do what they do, can help us better understand our behaviors and how they play into our money matters. Take a look at Common Cents. A financial research lab at Duke University, Common Cents conducts in-depth studies to help low- and moderate-income households in the U.S. achieve financial wellness. From their research, they’ve garnered some insights into behavioral science and financial health. For instance, you can use a money-saving app to meet your financial goals.

Here are 4 other ways you can change your behaviors to help you slay your money woes.

1. Label Your Savings Accounts

This may seem like a minor thing, but behavioral research reveals that simply labeling a savings account increased total deposits in Ghana by 31.2 percent – after only nine months.

Why not try this? Just coming up with simple labels for your savings accounts can help boost your savings. For example, I have labels for my specific accounts for self-employed taxes and emergency savings. I also have a gift fund, “fun” fund, art fund (to buy and make art stuff), retirement fund, and more recently, a house fund. This helps me stay motivated.

Here’s another tip: you can have fun with your labels to remind you of saving for things that matter to you. When I was younger, I used silly labels for my savings accounts, like ‘Buddha Statue Fund” and “Guinea Pig Fun House” fund. That bit of silliness made saving money more enjoyable.

2. Match Payment Dates with Paychecks

Research suggests that most people pay their bills when the paychecks roll in. Then, they spend the rest of their money right up until the next payday. Yet, this isn’t so easy when you’re a gig economy worker. Why? If you’re in this boat, you likely get paid different amounts at different times from various clients. (Cue #facepalm.)

To help you pay your rent and bills on time, try assigning paychecks to specific bills. For instance, you can earmark money from your biggest retainer client toward your rent, student debt and credit card bill. The smaller amounts that you receive at random times? This can go toward your savings and discretionary spending. Or, if you’re a Chime Member and enrolled in direct deposit, you can get paid up to two days early. Score!

If you’re a part-time gigger, use the money from your main 9-to-5 job toward rent and bills. And try putting the essentials on autopay. The Common Cents report found that millennials were about 10 percent more satisfied with recurring transactions than non-recurring ones.

3. Add Friction in the Right Places

From a consumer psychology standpoint, friction is anything that makes it harder for someone to spend money. That’s why retailers do all they can to make shopping – both in stores and online – as painless and quick as possible. To get you to spend more, retailers remove these points of friction. For instance, a point of friction while shopping in a store is having trouble locating an item. After scouring the aisles, you may get frustrated and leave without buying anything. So, retailers do all they can to make it easy for you to locate things and drop them in your shopping cart.

To make it hard for you to spend those hard-earned dollars, try adding in your own friction. Want to keep a healthy reserve for your emergency fund? Sock it away in a separate account. Out of sight, out of mind. And, if you’re wary about spending too much on happy hour and meals out, try setting aside a certain amount each week toward discretionary spending. Then, spend only this amount on your dining out.

4. Automate, Automate, Automate

While you should squirrel away some of your income, doing so can be mentally taxing. Add to that deciding how much to save and this can induce anxiety. Once you finally settle upon the amount to save, you’ll then have to figure out how to transfer money between accounts. We’ve all been there.

Auto-save to the rescue.

Automating your savings is one of the most painless ways to save money. Why? Well, for starters, the weight of decision-making doesn’t fall in your hands. And, because it’s all done automatically, you’re much more likely to actually save.

According to the 2017 Common Cents Lab Annual Report, automatic savings aren’t mentally accounted for as earnings. “Automatic withdrawal for savings has such a powerful effect that people can forget that the money was even earned. As a result, they don’t mentally account for this money as part of their paycheck,” stated the report. Plus, when the “opt-in” is the default, versus the “opt-out”, people tend to save more.

The bottom line: if you can automate your savings, you should do it. Even if you don’t have a lot of extra cash on hand, start with just a few bucks each week. Chances are that you won’t even miss it. I remember starting out by saving $20 every week. That’s five coffees or two lunches during the week. While I didn’t miss spending that dough on everyday expenditures, after a year I was $1,040 richer. That’s a thousand bucks I could use toward a fun vacay, getting a tech upgrade, or holiday spending.

Small Changes Lead to Big Wins

Indeed, insights from the eye-opening field of behavioral economics can help you boost your financial health. And, if you’re a freelancer working in the gig economy, you can start improving your own financial habits by adopting the 4 steps here. Before long, you’ll be hitting your money goals and bulking up your savings account!

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