Tag: Wealthy Habits

 

Money Mindsets That Are Keeping You Poor

The word “wealthy” conjures up images of depraved oil tycoons. Morose and isolated, these rich folks had to enjoy their wealth alone. At least that’s what I believed when I was a kid.

Growing up, I was taught to share pretty much everything with my older brother. To have more than him was considered selfish. And, if you were greedy, that was even worse. I made the assumption that rich people were inherently bad.

This myth blocked me from pursuing wealth. I figured it was better to earn a modest living and be frugal than bear the stigma of being rich and lonely. It was only after doing some inner work that I got past this limiting belief. I realized that having extra scratch doesn’t mean you’re greedy, selfish or unethical. Money merely enhances who you already are. And the more you have of it, the more freedom you can enjoy. To me, it’s all about syncing up your money to your values.

Chances are, you also have your own money stories that get in the way of your financial goals.

Here are five common money misconceptions that may be blocking you from achieving wealth.

You need a ton of money to start saving

While it certainly doesn’t hurt to have a healthy sum of disposable income, it isn’t a requisite to saving money.

The most important thing is to make it a priority and to start somewhere. Do I hear a grumble? Believe you me, saving doesn’t have to be difficult. And there’s a reason why “pay yourself first” is considered a pillar of personal finance. If you’re a Chime member, the Save When You Get Paid feature helps you tuck away a percentage of each paycheck.

By prioritizing savings over spending, you’re taking your financial well-being and your goals seriously.

You need to make a certain amount to get serious about finances

Once again, this is an easy excuse to not save money. It’s far easier to brush off saving until you make, say, $120,000.

When I was making $30,000 at my first job out of college, my rent in Los Angeles ate up a third of my income. But I still wanted to save money, so I started side hustles. And even though my side hustles raked in a mere $1,000 a year, I was committed to saving. By being judicious about what I spent my money on, I managed to save $5,000 my first year on my own.

When I started earning more, I kept the same habits and avoided lifestyle creep. As a result, I was able to make greater headway on my savings goals.

Other people have it easier

As they say, compare and despair. We all know someone who gets a generous allowance from their parents, or is making a cool six-figures at a posh job.

It may seem easier for them to build their worth, but appearances can be deceiving. You don’t know what debt load they carry, or if they struggle to stay on top of their bills like everyone else.

While you’ll need to get real and be honest with your own financial situation, everyone can start small. I’m a big fan of auto-saving, and there’s a reason why it’s recommended by personal finance gurus. Auto-saving is easy and you can start small. Five bucks in a cushion account adds up to $260 a year. Double your auto-savings amount to $10 a week, and that’s $520 annually.

I’m not privileged enough to focus on net worth

This is a bunch of bull. Earning more and spending less is something we’re all capable of. While we don’t have control over greater forces—tax codes, inflation, getting laid off—we do have agency in our saving and spending decisions, and in our ability to earn more.

Thinking that net worth is for a privileged few is getting in your way. If I was able to build my savings making very little, so can you.

To figure out your net worth, tally up your debt. This includes student loans, credit card debt, and car loans. Next, add up your assets—money you have sitting in savings, retirement accounts, savings apps, and so forth. Then, subtract your debts from your assets to determine your net worth.

It might be an unpleasant endeavor to find you have negative net worth. But it’s only in taking an honest look that you can work toward being in the green.

I’m an artist and will always be poor

Just because you have creative pursuits doesn’t mean you will always be stuck in the poor house. By fusing your vision and talents with entrepreneurism, you can make a decent living.

From freelancer marketplaces to online platforms, there are tons of resources to help you build your own business. Granted, being a self-employed creative or artist does come with its own host of challenges. For one, you’ll likely have to deal with variable income. Because your cash flow can change month to month, it’s tough to stay on top of bills and save for anything.

Chime can help. With its Get Paid Early feature, you can get direct deposits up to two days early. In turn, this can help you pay your bills on time.

Bust those myths today

Busting harmful money mindsets can help you earn more, save more, and land you in positive net worth territory. Just remember: Building your net worth may be a slow and steady climb. So, stay the course and over time, you’ll move closer to your financial goals.

 

5 Money Management Podcasts You Should Be Listening To

In our digital age, podcasts are the continuation school for busy grown-ups. They’re snack-sized audible lessons packed with digestible information.

What better way to learn about the world and satiate your curiosities? Consume them during your morning commute, your lunch break, or listen to them while doing household chores.

For those wanting to level up on their money management skills, an easy way to go about it is to check out a podcast. Want to know what are all the money nerds listening to these days? Here’s a roundup of our favorite shows about the mighty dollar.

Harsh Truth

Art and money is rarely talked about. For artists or creative freelancers such as myself, you may want to learn the ins and outs of art as a business. The Harsh Truth podcast, co-hosted by artists Gondek and Frankzilla, does just that. How do successful creatives make a living and what money struggles do they face? What changes are taking place at the intersection of culture and commerce? Plus, there are also some amazing stories on how guest artists developed their craft and unique styles.

What it teaches you about money: Most artists aren’t trust fund babies. And contrary to popular belief, they don’t hate money. In fact, they want more of it, and don’t typically struggle with the fears of being a sellout. It turns out that most artists think hard about how to make a dollar and run their own businesses. Making money is an important sign of career validation. An artist’s journey is tough and they run the risk of getting ripped off, both in terms of money and intellectual property.

HerMoney

Sorry, boys. But Jean Chatzy’s HerMoney is one for the ladies. Featured topics and guests run the gamut from how to earn more to money and relationships to overcoming your fears about investing. Chatzy taps into her powers of being a personal finance celebrity and has some big-deal guests come on her show, notably Jen Sincero, Daniel Pink, and David Bach.

What it teaches you about money: Achieving financial wellness requires looking at the big picture, such as earning more, learning how to negotiate, and mastering your money mindset. It also means you’ll need to focus on the nitty-gritty, like the importance of auto-saving for your goals and keeping tabs on your account balances with a bank app. There’s so much to get your head around. It requires an open mind, focus, and commitment.

Bad With Money

Those who live, eat, and breathe money get a bad rap about living in an echo chamber. As nearly half of Americans struggle to save $400 for an emergency, the “I am going to retire at 30” and “I have half a million saved for retirement” leads to many an eyeroll.

That’s why voices like Gaby Dunn are so important. Her podcast Bad With Money views money from a feminist and queer perspective, and chats about finances for those who suck at money. By offering a platform for different voices to share their qualms and struggles with money, Dunn’s show helps you you face your money woes and improve your relationship with it.

What it teaches you about money: Many people are bad with money. Don’t be fooled by the swarm of personal finance blogs and tales of success. More people are drowning in debt than touting positive net worths. There are more underemployed folks than those earning six-figure incomes. That being said, there’s room to better your situation.

But avoiding thinking about the topic altogether won’t help. By being honest with where you’re currently at, you can take the steps to form positive habits and learn how to make improvements.

Afford Anything

I’ve long been a fan of Paula Pant and her motto: “You can afford anything, just not everything.” Pant’s podcast Afford Anything is an extension of this truism, and she explores topics that run the gamut from strategies for saving for retirement to how to live a meaning life.

As Pant is well-known for escaping her day job and achieving financial independence through rental properties, you can find a handful of episodes on FI/RE (financial independence, retire early) and house hacking. But beyond how-tos, Pant also delves into quandaries people might face: How to give to charity while achieving financial independence, and how to be happy with less.

What it teaches you about money: As someone who is financially independent, Pant offers a unique perspective on what money represents. What happens after you’ve worked hard, and were clever enough to aggressively save so you can retire early? For Pant, it’s not having fancy things, or slaving away at an office job. It’s about spending time with your loved ones, and doing what you enjoy, whether it’s traveling, spending time in nature, or reading a good book. How you spend your resources, particularly your time and money, defines how you spend your life.

Beyond the Dollar  

As the name implies, Beyond the Dollar takes a deep dive at the emotional aspects of money. How does debt affect mental health? And can one create a money-life manifesto? Entering its fourth season, I’m eager to check out new episodes as Sarah Li Cain is flying solo – sans former co-host Garrett Philbin – as the host of this thought-provoking, soul-digging show.

What it teaches you about money: Financial wellness just isn’t about information, numbers and math. There’s an emotional, even a spiritual component with money. Li Cain’s show helps you understand the role your emotions and mindset play in to your decisions, and what might be getting in the way of reaching your goals.

Learn More, Improve Your Money Situation

There’s no shortage of ways to consume information, and these podcasts make it easy to learn more about money.

In turn, you can form positive habits, change harmful money mindsets, and educate yourself on how to save for your goals and build wealth. Dig in!

 

The Important Relationship You Shouldn’t Overlook

Less than one-third of Americans feel confident in banks, according to a Gallup poll. This is about the same level of confidence Americans have in the criminal justice system or the presidency. Yikes.

If you’re wondering what’s to blame for this, you might consider the 2008 financial crisis, which was engineered by Wall Street. Or the cascade of bank scandals, which have besieged stalwarts like Wells Fargo and Citibank. Or the abundance of banking fees, which cost the average American $329 per year.

Rather than looking backwards, however, we’d prefer to focus on the future. We’d like to zero in on how Americans can change their relationships with banks. So, we’d like to start with a simple question: If your bank was a person, would you remain in your relationship?

Indeed, just like a bad boyfriend, a negative relationship with your bank can damage your entire perspective — and a good relationship can make everything better. Here’s how (and why) to ensure you and your bank fall into the latter category.

How Your Finances Affect Your Mental Health

While there’s no denying your finances have an impact on your psyche, a recent survey from Northwestern Mutual revealed just how much:

  • 25% of people feel anxiety about money “all the time” or “often.”
  • 44% call money their main stressor — more than their personal relationships (25%) or job (18%).

These statistics are not surprising, according to financial planner and money coach Debbie Sassen.

“Money management skills are something a lot of us are missing,” says Sassen.

“We didn’t learn them from our parents — it was a totally taboo topic of conversation — and we didn’t learn them in school… So from the outset, as adults, we feel vulnerable and intimidated about money,” she says.

With high fees, scandals and impersonal customer service, many of the big banks exasperate these feelings. “Generally and broadly, there’s a lack of trust among millennials in the financial industry, and it’s deserved,” financial planner Ariel Anderson told Fast Company.

“We constantly read headlines about the missteps of banks like Wells Fargo; we lived through the financial crisis,” states Anderson.

One such millennial is Valerie Stimac, a travel writer for Space Tourism Guide. At her traditional bank, she paid an estimated $7.95 per month to maintain her checking account.

“It felt like they were taking advantage of me, rather than providing a service. “It was frustrating to have a bank I felt like I couldn’t trust,” says Stimac.

It Doesn’t Have to Be This Way

One Gallup poll found that, at the least trusted bank, a mere 12% of customers strongly believed the company had their best interests at heart. At the most trusted bank, more than five times that number (64%) felt the same way.

Clearly, where you bank matters, and not all banks are built the same way. (Some never even charge fees.) Sassen, the financial coach, says a trustworthy bank “can be your friend” and “help you create a good safety cushion.”

In search of that “friend,” travel writer Stimac left her bank after more than a decade.

“Switching banks has been the best decision I’ve made,” she says.

“[Now] I trust my bank to look out for me as a customer — and to look out for my money, which is the foundation of my financial future.”

Stimac is far from alone when it comes to switching banks. Dan Pierson, founder of Bolt Travel, says he “got really tired of paying $12 a month for my checking account, then getting hit with $35 overdraft fees on $2.50 coffee purchases.”

So, after moving to a new city where his brick-and-mortar had no physical branches, Pierson switched to an online-only bank.

“My banking has been much simpler since moving online, and the customer service is significantly improved. It feels great to be backed by a bank that’s aligned with my financial goals,” he says.

Ready to Break Up With Your Bank?

Banking doesn’t have to be a miserable, fee-ridden chore. It can be free, and easy – and maybe even fun.

Obviously we’re biased, but we think Chime is all that — and more. By charging zero fees, offering early direct deposit, and encouraging automatic saving, we strive to overturn the negative experiences you may have had with other institutions.

We thrive off trust and transparency; on working with you, rather than against you. And we want you to like us as much as we like you.

In our opinion, that’s the way every relationship — whether it’s with a business or a human — should be. Don’t you agree?

 

Daily, Weekly, Monthly Habits to Help Your Finances

Just like dirty laundry that tends to pile up if left unintended, keeping your financial house organized can feel like a gargantuan task. As my former boss used to say before we tackled a huge project: How do you eat an elephant? One bite at a time.

As you step into the new year, boosting your finances will come down to creating manageable tasks.

Here are a handful of simple habits you can form, in both in the short- and long-term, to improve your financial situation on a daily, weekly and monthly basis. Read on to learn more.

Daily: Check Your Balance

Checking your bank balance achieves several goals: You can check for fishy transactions, make sure your transactions are accurate, and glean insights on your spending patterns and habits. More importantly, keeping tabs on your bank account balance can help you see if you’re in financial hot water or if you’re in danger of incurring overdraft fees. No bueno.

I check my bank balance through a bank app every morning. It takes all but five seconds, and gives me an idea of how much I have left to spend until the end of the month.

Daily: Auto-Save

While you technically only need to set up recurring transfers once, setting your savings to auto-pilot is something that will help you with both short- and long-term goals. I auto-save for pretty much everything: vacations, musical instruments, writing retreats, a down payment for a car, and so forth. I even auto-save into a splurge fund that I use to spend on whatever I darn please. Setting this up is easy and only takes a few minutes. Even five dollars a week adds up to $260 a year. And trust me, that money can certainly come in handy down the line.

Speaking of this: If you’re a Chime member and set up direct deposit, you can even auto-save a percentage of your paycheck.

Weekly: Create a Weekly Spending Plan

Behavioral economics have shown that you’ll gain greater control over your finances if you review your budget weekly. Because you’re dealing with fewer transactions, it’s more manageable to see what is coming in and out of your accounts. And even though a lot of bills are paid monthly, breaking up your budget into weekly increments will help you anticipate and predict your expenses. What’s more, if you get paid bi-weekly, you may have less money the second week than the first.

I budget for everything the week ahead. If I know I’ll be going out for dinner or out with friends for happy hour, I’ll factor this in and scale back on, say, how much I spend on groceries that week.

Here’s another idea: Set aside a certain amount for your recurring, predictable bills. Then divvy up the remainder for your discretionary spending. Over time, you’ll be able to gauge how much you roughly spend each month for groceries, gas, eating out, entertainment, personal items, and so forth.

Weekly: Commit to Changing One Small Thing

What’s one minor adjustment you can make to improve your finances? It might be brown-bagging it to work a few days out of the week, or perhaps taking public transit. Spend a tad too much time on Instagram following your favorite influencers and brands? Try unfollowing for a month and see if you can rein in your purchases.

Small changes I’ve made include creating a “want” list of items I’d like but don’t necessarily need. Then I wait about a month to see if I’m still feeling the urge to splurge. I’ve also stopped eating out while I’m out and about on my own. Instead, I’ll typically dine out with company.

Monthly: Do a Budget Check-In 

While it’s best to create a spending plan every week, check in at least once a month to see what tweaks you can make it the coming months. For instance, last year I realized I’m far better off paying for a series of yoga classes than joining a gym. And because I rarely used my Deskpass subscription, which is the ClassPass equivalent of co-working, I canceled my membership.

Monthly budget check-ins also help you plan for one-off expenses, like insurance premiums and spending over the holidays.

Monthly: Go on a Money Date

Carve out some dedicated time each month to go on a money date—either with yourself or with a partner or friend. It’s a great time to check on the progress of your goals and envision what you ultimately want. You can even populate a vision board with what you want to achieve with your money. For example, maybe you want to take time off to work on a passion project, manifest a magical vacation to Bora Bora, or purchase your first house.

Money dates are also a great time to iron out challenges. If you anticipate a rough financial patch, drum up solutions on how you can get through the coming months. Or, if you and your partner disagree about your financial goals, a money date is a good time to hash things out.

Monthly: Autopay Your Bills

If you can swing it, set up autopay on as many bills as possible. Of course, that’s far easier if you have a steady paycheck. If you’re a freelancer or gig economy worker, and get different income at varying times, consider syncing up your bills to retainer clients. For instance, let’s say you’re a freelance graphic designer. You have one client who pays you a certain amount each month, and the money typically drops into your bank account on the 15th of the month.

Because that’s money you can count on, assign that paycheck to your “big rock” bills (aka rent or credit card bill).

Another tactic? Get ahead one month on your bills. This means that by the end of any given month, you’ll have enough cash in your account to cover the next month’s bills. While this seems like a tall order, you can get started by saving up a month’s worth of living expenses to get the ball rolling.

Break It Down Into Bite-Sized Pieces 

Tending to financial well-being is definitely more feasible if you chunk things down. By following these tips and committing to an hour or two a month to organize your finances, you’ll be on your way to forming better money habits.

 

How to Set Intentions for the Year That Will Make You Wealthy

With the new year quickly approaching, this is a great time to consider your goals for 2019.

With this in mind, have you ever considered setting intentions instead of resolutions for the new year? Intentions are anticipated outcomes. They help to guide your actions, both big and small throughout the year. Intentions also allow you to push yourself beyond simply thinking about desirable outcomes.

Want to learn more about intentions and how they can lead to personal growth and financial wealth? Read on to see how you can implement intentions into your life.

Resolutions versus intentions

Still confused about the difference between resolutions and intentions? To further explain, here are the definitions from Vocabulary.com:

Resolution: A decision to do something better or to behave in a certain manner.

Intention: An anticipated outcome that is intended or that guides your planned actions.

Based on these definitions, resolutions are based solely on desirable outcomes, while intentions use desirable outcomes to guide your actions. For instance, instead of setting a resolution, such as losing 10 pounds this year, you can set an intention to focus on your health. This intention, in turn, may result in you losing weight – maybe even 10 pounds. In a nutshell, intentions guide your actions, which may include committing to exercising, eating more wholesome foods, and focusing on self-care. See the difference?

Tips for setting intentions for the new year

Now that you know how intentions differ from resolutions, you can start to set them. Here are 6 tips to get started.

1. Split your life into categories

Not sure where to start? Consider focusing on an area of your life that you’d like to improve upon this year. Life categories are different for everyone, but some may include:

  • Relationships
  • Finances
  • Career
  • Personal Development
  • Religion/Spirituality
  • Health
  • Personal Interest/Hobbies

2. Find your why

Next, pick one of the life categories above. It’s not enough to just say you want to improve something – you’ll have to discover what you’d like to improve and why.

So, say you want to improve your finances this year. Then ask yourself “why”? Take some time to really think about this. If you journal, you can even try writing out your answers.

Once you find your why, write it down and make it visible. This is the fuel that will drive you throughout the year, so refer back to it often to stay motivated.

3. Set goals

Let’s continue to use the example of improving your finances. Now it’s to time to break this down even further to consider what specific areas you want to improve upon. For instance, you may include outcomes such as:

  • I want to pay off my debt
  • I want to build my emergency fund
  • I want to pay all of my bills on time

Now that you know what you want to do, you need to set SMART goals. SMART is an acronym that suggests goals that meet the following criteria:

  • Specific
  • Measurable
  • Achievable
  • Relevant
  • Time bound

An example of a SMART goal would be to pay off $10,000 of student loans in 12 months. That goal is specific (it indicates what kind of debt you will pay off), measurable (it specifies how much debt), achievable (assuming you have some income this year), relevant (it provides results), and time bound (to be achieved within 12 months). Got it?

4. Break down your goals

Now that you have a SMART goal or two, break it down to determine what specific actions you must take every month, week, and even day in order to achieve your new year’s intention.

For instance, if you want to save $6,000 in an emergency fund this year, you will need to commit to saving at least $500 a month. That equals $125 a week, or about $17 a day. By doing this, you’re more likely to stay on track throughout the entire year.

5. Commit to rejuvenating yourself

You’ve been down this road before: You commit to a goal 100 percent, and then a few weeks later, you find yourself tired, bored and burned out.

If you can relate, you likely didn’t give yourself enough breaks. It’s hard work to achieve all your goals, so give yourself some rest!  Need some self-care tips? Check out this article from Psychology Today for a few ways to get started.

6. Create space

Having a hard time concentrating on your goals? Try creating space.

Creating space helps eliminate clutter. Whether it’s physical or emotional clutter, ridding yourself of it can only help clear your mind and surroundings to focus on what really matters.

With fewer distractions, you can focus on your intentions. You’ll be less likely to become run-down, give up or get distracted. To create space, Prevention Health suggests starting small. Even decluttering a single drawer can go a long way in reducing stress.

Take advantage of helpful tools

Whether your new year intention is to grow your finances or improve yourself in another way, Chime’s mobile wallet and money transfer features are here to help. By socking away your hard-earned dollars into a fee-free online savings account, you can watch your cash grow.

And just think: Saving more money allows you to more readily reach your financial intentions this year. Are you ready to make this year your best year?

 

How to Change Your Money Mindset Next Year, According to Science

This year you’re going to do things differently. That fancy cappuccino you buy every day? You’ll make coffee at home. That no-fee bank account you said you’d sign up for? This is the year you’re going to open it.

If all goes according to plan, you’ll accomplish these financial goals, as well as all the others you’ve set over and over, year after year. Yet, have you ever wondered why, despite your good intentions, you haven’t accomplished them already?

Perhaps it’s because you haven’t addressed the roots of your financial behavior: your money mindset. That’s right: What you believe about money has a powerful effect on what you do with your money. With that in mind, here’s how to make changes that last in the upcoming new year.

Accept Your Starting Point

Your money mindset has been brewing for a long, long time.

“We all develop and suffer from certain money beliefs, biases, and behaviors that are developed based on our family history and how we approach money decisions,” says Victor Ricciardi, a finance professor at Goucher College and co-editor of “Investor Behavior” and “Financial Behavior.”

It should come as no surprise that if you’ve had positive experiences with money, you’re more likely to have better money habits, says Ricciardo. And if you’ve had negative experiences, chances are you have poor habits.

So, consider how the past may have shaped your current mindset, then release yourself from blame — and accept that the only thing you can control now is the present. That, in turn, will help shape your future.

Recognize Your Biases

Cognitive biases are a core part of your beliefs, and Ricciardi says behavioral finance research has revealed several common ones. Take a look at these two beliefs that may affect your biases:

  • Representativeness: This theory, according to Ricciardi, posits we have an “automatic inclination to make judgments based on the similarity of items, or predict future uncertain events by taking a small portion of data and drawing a holistic conclusion.” When it comes to your money, that might mean assuming one tech stock is a good investment because other tech stocks have performed well. Or it might mean avoiding stocks entirely because the market crashed in 2008.
  • Anchoring: Ricciardi says this involves “selecting an initial reference point and slowly adjusting to arrive at a final judgment.” Say you see a pair of jeans for $300, and then later find those same pants marked down to $150. Whether or not $150 is a good price for jeans, you might think they’re a bargain simply because of the original (anchor) price.

“We need to make an individual effort to understand our biases and how these mistakes might result in poor investment outcomes,” explains Ricciardi.

Are you scared of the market? Are you addicted to the sales rack? Analyze the biases that might be contributing to those behaviors, and then do your best to address them.

Explore Your Beliefs

When determining which biases you hold, it also helps to reflect on the past. Ricciardi recommends recording how you’ve responded to previous financial events, and then considering which biases might have shaped your reaction.

You should also write down your current money beliefs by answering questions like:

  • What did your childhood teach you about money?
  • How does spending money make you feel? How about earning money?
  • What do you think about being “rich”? What about being “poor”?
  • How do you wish you felt about money?

If you want to keep going, financial planner and success coach Natalie Bacon offers more thought-provoking suggestions on her blog, including this one from life coach Brooke Castillo: “How would you spend $1,000,000… if you received it right now? Would you tell people? Why or why not? What would you make this money mean? What would other people make it mean?”

Before changing your money mindset, you’ll need to fully understand it — and these questions will help you uncover the truth.

Choose Abundance Over Scarcity

What did your beliefs reveal? If you’re like many people who struggle with money, you may discover that you focus on scarcity rather than abundance.

“A person with a scarcity mindset believes there is a finite amount of money to go around. A person with an abundance mindset believes there is plenty for everyone,” explains financial therapist Lindsay Bryan-Podvin.

To change your mindset from scarcity to abundance, you’ll need to consciously reframe your everyday thoughts. Here are some examples of how to do this, according to Bryan-Podvin:

  • “$50 isn’t going to save me in a crisis, so there’s no point in starting an emergency fund” → “While $50 probably won’t help a ton in a crisis, by starting to save I’m investing in my future safety.”
  • “I could die tomorrow, so why wouldn’t I book this weeklong excursion through South America?” → “That South American trip has been on my bucket list forever! I bet I can start saving money and stocking up on airline miles now, so I’ll be able to go in a year or two.”

You can also practice money affirmations. A few of Bryan-Podvin’s favorites are: “I release all negative energy over money,” “I am aligned with the energy of abundance,” and “Money expands my life’s opportunities and experiences.”

Educate Yourself

Regardless of what you may think right now, you are not doomed to be “bad with money.”

Vicki Bogan, who teaches finance at Cornell University and directs The Institute for Behavioral and Household Finance, says this all-too-common belief can usually be attributed to insufficient education.

“People who lack financial literacy often become scared or emotional about financial decisions and as a result do not do anything to actively manage their finances,” she says.

To combat this, she recommends learning about common topics like budgeting, money management, and financial planning.

Bryan-Podvin agrees. Rather than making a blanket statement about your financial ability, she suggests getting specific about what you’re struggling with — whether it’s investing in retirement or understanding your taxes — and then educating yourself in those areas.

“We aren’t taught about money, and yet we’re expected to know how to create a spending plan, set aside money for retirement, and save for children’s futures. Often, going over personal finance definitions and concepts can help,” she says.

Determine Your Values

Even with all the education in the world, you’ll never stick to your goals unless you figure out why you’re working toward them in the first place.

“Saying ‘I want to save’ because a blogger said it was important doesn’t do much,” explains Bryan-Podvin. Likewise, “Thinking about opening up a Roth IRA is meaningless if you don’t have a why behind it,” she says.

So, before taking the next steps toward financial freedom, ask yourself what you value. If it’s health, for example, you’d probably be fulfilled by buying fresh produce instead of fast food, or rock climbing shoes instead of high heels. If you value adventure, you’ll feel more fulfilled saving for a big trip than racking up big bar tabs.

“Once a person has their values figured out, creating a plan that sticks becomes so much easier,” says Bryan-Podvin.

Create a Financial Plan

One essential part of being human is making mistakes. And when you inevitably slip up, having a financial plan will help you stay on track. So think about  how you want your life to look, and how money plays a role.

Because you’ve taken the time to understand your biases, beliefs, and values, you’ll be able to develop a plan that isn’t like everyone else’s — a plan that makes sense for you. Maybe you want to become a homeowner, retire early, or stop living paycheck to paycheck. Whatever it is, Ricciardi says creating a long-term plan will help you make better financial judgments.

The Future Depends on You

If you want to change your future, you’ll need to change your mindset first.

“Making money a positive force is best done by reminding yourself that money is powerful,” says Bryan-Podvin.

“If you don’t control it, it will control you. Finding a healthy, empowered view with money can make a huge difference,” she says.

And that, right there, is the key: empowerment. By combining thoughtful reflection with ample education, you can gain financial confidence and control – once and for all.

 

8 Healthy Habits to Establish an Awesome Money Saving Plan

New year, new you.

A new year is also the perfect time for new money habits. As it turns out, your habits are a major part of your daily life. In fact, 40 to 45 percent of what you do is based on habit formation. But, here’s the good news: Once you form a good money habit, you’re more likely to stay with it. The tough part? It takes time and effort for a habit to stick—66 days, to be exact.

To get you started on drumming up an awesome plan to save your moola, here are 8 healthy money habits to form:

Track Your Spending

These days it’s super easy to track your spending. There are a handful of free apps to help you manage and save your money. The nifty part is that you can track your spending by the day, week or month. You can also break it down by categories.

I recently looked through my transactions and discovered that I was eating way more junk than I thought. While these sorts of reality checks aren’t always fun, they’re an important first step to turning your money situation around.

Your Inflow Needs to Be Greater Than Your Outflow

Back in my 20s, my pal “Dumpster Diving” Dave Fried told me that you need to treat your money like a business. Your cash inflow needs to be greater than the outflow. Mind you, Fried  wasn’t the richest guy. He worked minimum wage at a screenprinting shop, and his finest luxuries were bowling and cheap beer. But he never carried debt and lived within his means.

The takeaway: If you find your credit card debt increasing every month and you’re spending more than your paycheck, take a close look at what’s going on. From there, you can commit to some long-lasting changes.

Automate as Much as You Can

This is by far my fav healthy money habit. That’s because it’s easy and you only have to do it once. Then you can sit back and relax.

If you enjoy a steady paycheck, you can automate all your bills, savings goals and investments. If you’re a Chime member, you can even set up autosave to sock away a portion of your paycheck.

While I’m a freelancer, I’ve made a point to get a month ahead. I set all my bills and some of my savings goals on autopilot. This way I’ll have enough in my bank account to get through the following month.

Spend Only What You Have

Easier said than done, right? To start, leave the credit cards at home and clear out any “saved” items in the online shopping carts of your favorite retailers. Instead of whipping out your credit card, opt to take cash out of the ATM.

It also helps to separate what you can spend on discretionary expenses—eating out, groceries, shopping, personal items and entertainment. I actually have a debit card just for variable spending, and check in on my balance every few days to make sure I’m on track. For instance, if you can afford to spend $1,000 a month on discretionary stuff, transfer just that amount to a separate debit card, or take out $250 a week in cash. Try it for a week and see how it goes.

Link Specific Income Flow to Savings

In our modern side hustling era, it’s important to remember to save any extra money you earn from your gigs. To help you out, you can try syncing up different income streams to your savings goals.

Let’s say you make money from an ebook, pet sitting, and driving for a ride share company. Any cash you don’t need for your living expenses can go toward your savings goals. For instance, money made from your ebook can go toward your vacay fund, earnings from pet sitting toward your debt, and rideshare income can be socked away into your emergency fund.

Try the WOOP Approach

Besides being fun to say, WOOP is a strategy that is a hybrid of two existing habit-forming tactics. WOOP stands for Wish, Outcome, Obstacle, and Plan. It’ s also known as MCII, which stands for Mental Contrasting, Implementation Intention. Here’s how it works:

First off, pick a behavior that’s hard to change yet doable to achieve. For instance, blowing a good chunk on fine dining and drinks the Friday you get paid or exercising for 10 minutes first thing each morning. Then, imagine an awesome-sauce future where you’ve achieved the desired outcome. For example, having a robust rainy day fund or making serious headway on paying off your debt.

Secondly, consider what currently gets in the way of achieving this goal. For instance, if you’re having trouble holding on to your paycheck, it may be because you love going out a lot and lack willpower. If you have trouble doing those yoga stretches or burpees first thing in the morning, maybe it’s because you feel crunched for time.

The second part of WOOP encompasses simple statements or motivating mantras that help you tackle the obstacle. This will help you push through the obstacle and stay on track.

Pay Attention to Somatic Knowledge

It’s important to be cognizant of what you experience and feel in your body. By paying attention to your natural responses to situations and triggers, you’ll gain powerful knowledge that will help inform your decisions.

For example, how do you feel the morning after spending a quarter of your paycheck at the bar? Or what flurry of emotions do you feel when you see something you really want in a store window?

As someone who struggles constantly with scarcity mentality about my money, I feel a bit of hesitation and dread when I spend more than a certain amount on a single item. While logically I know it’s the right purchase and I can afford it, my body tenses up.

The long and short of it: By paying attention to your body’s response to different money situations, you’ll gain a greater understanding of your relationship with your money, and how you can go about making changes.

Come Up With Specific Money Goals

Sure, you want to be “better with your money” in the new year. But what, specifically, does that mean?

For me, I have ambitious retirement goals. Retirement may feel like light years away, but I know it’s important to get a jump on it. So, I’ve assigned a desired amount I want to save each month to hit my goal for the year. That nitty-gritty specificity helps me take action, see my progress and stay motivated.

A pro tip: Be sure to name your savings accounts for desired goals. For instance, instead of just “savings account 2,” label it “Hawaii 2019.” This is another way to stay motivated to hit your savings goals.

Small Steps, Major Changes

There’s no better way to kick-start the new year than to focus on bettering your financial situation. By following these 8 healthy habits, you’ll have an easier time achieving money happiness and hitting your financial goals. In turn, you’ll feel less stressed out and in greater control. And that’s something worth celebrating!

 

Should You Donate to Charity If You Are in Credit Card Debt?

Donating to charities and nonprofits is one of the most fulfilling uses of your money, but should you hand over your hard earned dollars to a nonprofit if you have big debt? Probably not. Let’s take a look at why, how you can have a greater long-term impact, and other ways to contribute outside of your checkbook so you can put your finances first.

Why credit card debt should keep you from donating

Finance experts often argue about whether or not any type of debt could be considered “good debt,” but there is a nearly universal agreement that credit card debt is bad for consumers. If you have credit card debt, you’re likely paying upwards of 20% APR on your balance.

If you have an $8,000 credit card balance with a 20% interest rate, that means you will pay around $1,600 per year in credit card interest. When you have to pay hundreds or thousands of dollars per year in high-interest payments, you should not be giving generously to a religious organization or anywhere else.

If someone from your church pressures you to give up to 10% of your income when you can’t afford it, they don’t really have your best interest in mind. They have their own interests at heart. While writing a check to your church may give you a warm fuzzy feeling, it just puts you in more debt!

Turning around debt so you can make regular donations

If you don’t have any debt and want to donate to a favorite cause, that’s wonderful! If you do have debt, you should focus on getting out of debt so you can confidently contribute to a meaningful cause.

When you have credit card debt, you generally have to make big interest payments in addition to your efforts to pay off your balance. If you give $100 per month to charity, that is $100 per month you could use for your debt freedom efforts. Each month, that $100 could get you closer and closer to a debt-free lifestyle.

Once you have your debt paid off, you may find you have enough to easily donate to your comfort level without the struggles you had before. After all, you no longer have any interest or principal payments due. That credit card payment of hundreds of dollars per month can turn into a combination of savings and charitable contributions that better align with your long-term financial goals.

Giving is good, but be careful

Bill Gates and Warren Buffett started a movement of more than a dozen billionaires who have pledged to give away at least half of their wealth. These philanthropists are great inspiration for all of us non-billionaires, but we need to take a more pragmatic approach to giving.

I personally give to a few causes, including religious ones, but I have never had any credit card debt. In the days I had student loans and car loans, I was not in the habit of donating to any nonprofits or charities. These days, however, I only have a mortgage. That allows me to give to my favorite organizations without adding extra financial strain to my family.

Tithing is a common practice at churches around the world. The worth tithing comes from the same root as a tenth, or 10%, of your income. If you have credit card debt, donating 10% of your income is very irresponsible.

When you board a commercial flight, the flight attendants remind you that “you should always put your oxygen mask on yourself before helping others.” If you are unconscious, you can’t help anyone else let alone yourself. With your money, it works the exact same way. Credit card debt is the same thing as a depressurized cabin. If you can’t afford to pay off your debt, you can’t afford to take care of anyone else.

With the right financial discipline, you can turn around financial struggles and get your donations underway. But always be sure to pay off your high-interest debt before giving away money to others.


This article originally appeared on Due.com

 

5 Financial Resolutions You Can Meet Before the End of the Year

January is a month of change for many people, especially when it comes to finances.

A new year marks a time when you might reflect on the past year and assess your financial wins and losses. If you do decide to make financial resolutions, that’s only half the battle. Sticking with them is the hardest part. So, why not get a jump on this and start improving your finances right now.

Here are 5 financial resolutions that you can meet – and keep – before January rolls around.

1. Get on a Budget

Having a clear budget is a key element to your financial success. A budget helps you plan out your spending so that you know where your money is going. It’s also key to have a budget in place before setting big goals, like paying off a ton of debt.

Once you create your budget, you’ll want to make sure it’s realistic and sustainable so you can stick to it long-term.

To start, track your spending to get a feel for how much your regular expenses truly are. Then write down all your fixed, variable and hidden expenses. List out all your sources of income, and subtract your expenses from that income amount. The goal is to end up with a positive number or at least zero. This means that you either have money left over or you’re spending exactly what you’re making.

Here’s another budget benefit: You’ll be less stressed and overwhelmed about money because you have a plan.

2. Switch to a Better Bank Account

Have you settled for a bank account that charges you fees just because it’s a pain to change banks? Maybe you’re comfortable with your bank even though you know there are better options out there.

If you’re tired of hidden fees and monthly maintenance charges, it’s time to switch banks. You can start by comparing options. Take into consideration finding a bank account with no fees and a bank that lets you set up direct deposit and get paid early. Also, factor in whether ATMs are convenient and accessible, and whether the bank is mobile-friendly.

Once you narrow it down to your final choice, all you need to do is apply and move your funds over.

3. Stop Using Credit Cards Unwisely

If you’re in credit card debt or struggle with controlling your spending, you don’t have to wait until the new year to turn things around.

You can change your habits and start using credit cards wisely before the end of the year. For starters, limit the number of cards you carry in your wallet. Avoid impulse purchases and temptations by unsubscribing from retailer’s email lists and staying away from stores that trigger you to overspend.

After that, get into the habit of paying your bill off in full instead of carrying a balance each month. You can even simplify things by just charging one recurring purchase to your credit card each month (like a monthly Netflix charge) and paying it off every month.

4. Cut Your Spending by 10%

Sometimes it’s easy to accelerate your spending during the year without even realizing it. Lifestyle inflation occurs when you start naturally spending more money as a result of an income increase.

You can combat this by doing an expense audit every few months to make sure you’re not overspending in several areas of your budget.

With tons of holiday sales currently going on, you may be able to cut quite a few expenses to lower your overall spending by at least 10%. Can you find a cheaper gym membership or start working out at home? Can you shop around for more affordable car insurance? Can you cut cable or lower your grocery spending? Once you start going through your expenses with a fine tooth comb, you’ll realize that you can easily cut back by 10% – or more.

5. Open a Retirement Account and Contribute Regularly

If you haven’t opened a retirement account, now is the best time to get started. You can open a 401(k) through your employer or an Individual Retirement Account (IRA) on your own.

Opening a retirement account is easy, but contributing to it regularly can be challenging. Luckily, you don’t have to start out by making huge contributions. Instead, start by contributing what you can, and then slowly increase the amount over time.

Saving something is better than nothing and will help you create the habit of setting money aside for retirement. To make things easier, you can even set up automatic transfers from your checking account to your retirement account.

Financial Resolutions Don’t Have to be Complicated

Don’t psych yourself out by setting overarching financial resolutions that you assume have to be stretched out over a 12 month period. Instead, write down what you want to accomplish or change and break it down into smaller chunks. You may want to look at habits you can create and steps you can take within a 30 day period.

Finally, by following the 5 steps above, you can start improving your finances at any time. There’s no reason to wait until January rolls around.

 

How Gratitude Can Make You Wealthy

Two weeks ago, I was due to fly home on an early-morning flight from a conference in Cleveland. There was just one problem: The airplane was knocked out of commission by a mechanical issue and the flight was canceled. A mob of angry customers rushed upon the poor customer service agent.

I was last in line. By the time I reached the desk, the woman looked up at me, expecting the same furious reaction. Instead she got this: “I know it can’t be easy on you to deal with all these people, and I really appreciate your help in getting me home.”

The surprised agent looked up. I told her where I was going. The bad news: She initially didn’t find any flights to get me home that day. Then she double-checked and found a flight out, but it was on a different airline leaving right then. She called and asked the airline to hold the plane so I could run down and make it. I did, and I arrived home that same day just a mere hour after my originally-scheduled time. I don’t know if expressing gratitude prompted her to check again and get me on a flight. But, I do know that I got home in time to complete my freelance work and I got paid right on schedule.

This is just one example of how gratitude can make a positive difference. Did you also know that gratitude can make you happier — and therefore wealthier? Read on to learn more.

Gratitude Can Broaden Your Social Network

There are numerous studies that show how expressing gratitude promotes “prosocial behavior.” This means you’re more likely to engage with potential friends, colleagues, and supervisors, cementing those friendships so that your network expands.

A robust social network can also lead to higher-paid work opportunities, not to mention you’ll have more people to call upon when your car breaks down or you need helping moving.

Gratitude Rewires Your Brain for Happiness and Health

There’s a lot of research that shows how gratitude and happiness are strongly linked. Take, for example, one of the most widely-cited studies on gratitude. The authors of this study divvied people up into various groups, some of whom journaled negative things, neutral things, or positive things they were grateful for each day.

At the end of the study, people who journaled about gratitude exercised more, had fewer medical problems, slept better and for a longer periods time, were more optimistic, and felt more connected to those around them.

Indeed, it doesn’t take a brain scientist to see how these attributes can make you more productive, healthier, and wired to go make more money.

How to Practice Gratitude

Have we convinced you? Good! Let’s get ready to be grateful.

The first thing you should know is that practicing gratitude isn’t a one-and-done thing. You can’t make a single donation to a charity and expect the good vibes to last forever, for example.

Instead, you need to make gratitude an everyday practice. In fact, two other scientists showed that daily gratitude journaling can have lasting impacts on how your brain registers gratitude. This can happen in as little as three months.

Expressing gratitude literally rewires your brain, but only if you do it frequently. Take a look at three ways you can start practicing gratitude:

  • Say “Thank You” to at Least One Person per Day

No, we’re not talking about the generic “thank yous” that you pop on the end of your emails. You need to either write out why you’re thankful in that email, and/or say it to someone face-to-face.

If you’re a supervisor at your work, this goes doubly for you. In one nifty experiment, a university alumni donations manager who expressed gratitude towards call-center employees managed to increase the number of calls made by employees by 50%.

  • Keep a Gratitude Journal

I admit, I was super skeptical when I first tried this myself two years ago. “Jeez, this is hokey,” I thought. “How will thinking happy thoughts help me out?”

But, like we saw above, there’s actually some serious science that shows how gratitude journaling can literally rewire your brain. And in my case, keeping a gratitude journal actually helped me double my income after about a year.

This one is my favorite because you don’t need to share your “experiment” with a doubtful world. You can do it in the comfort of your own home, without anyone knowing, and without it taking up a ton of time.

All you have to do is write down three things per day that you’re grateful for. They don’t have to be profound revelations; it can be as simple as “today, I’m really grateful for having heat in my apartment, because it’s cold outside.” You can expand upon them if you want, or just leave them as bullet points. It’s your journal; do what you want as long as you’re consistent.

  • Send Thank You Cards

Here’s another idea. Buy a box of thank you notes, and make a practice of sending out at least one per week. You’ll brighten someone’s day, and provide yourself with an opportunity to express gratitude.

How Will You Spread Thanks?

Expressing gratitude is a wealth-generating tip that only achieves results if you put in the work. You can’t just read about it and not actually do it.

So, we challenge you: How will you practice gratitude daily? And how far can that goodwill go toward helping you boost your bank account and save for your financial goals?

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