Category Archives: Finance

Create a Winning Action Plan to Reduce Your Financial Stress

If we were to conduct an informal poll on the street today and ask people what they are most stressed about, money would be one of the most common responses. It is easy to assume that financial stress exists only for low income families or those dealing with some sort of unusual crisis, but the truth is that everyone, rich or not, deals with financial stress on a regular basis. In fact, many people literally become ill because of their money worries.

A 2015 study by the American Psychological Association revealed that money is the leading cause of stress among adults under age 49. Respondents reported losing sleep over their worries, experiencing elevated blood pressure, and the compulsion to check their account balances, among other side effects.

I can attest to the cold fact that financial stress is scary, even crippling. I’ve experienced a wide gamut of money-related worries myself, including health concerns, job loss, and student loan debt. Each time, the burdens I experienced impacted my ability to function normally.

When we experience financial stress, the psychological weight of our worries not only impacts our abilities to perform usual day to day functions; it also makes it much more difficult to form and act on a plan to wipe out the cause of the financial stress.

If you’re feeling overwhelmed or burdened by your financial situation, whether it involves job loss, enormous debt, feeling stuck in your job, or lack of a long-term game plan for your money, your situation is not hopeless. Set aside a block of time, grab a pad of paper, and follow the steps below to create an action plan to crush your financial stress.

Money is the leading cause of stress in the world today. You can reduce your financial stress by creating a winning action plan today! This guide is a quick read and the steps described take only minutes to complete.

Where to Start? Write Down the Causes of Your Financial Stress

When you are stressed about money, it can sometimes be difficult to pinpoint the exact causes. You may be dealing with immediate, time sensitive stress, like debt collectors and their annoying phone calls or late payment notices in the mail. You may be overwhelmed by long-term tasks that you’ve been putting off for years, such as getting life insurance, forming a will and trust, or refinancing your mortgage.

The best way to start to eliminate your financial stress is to do a brain dump. Grab a pad of paper and create a specific numbered list of everything money-related which is currently causing you to experience stress.

It can include things like regular bills, insurance matters, car registrations, taxes, mortgage refinancing, life insurance needs, scheduling medical appointments, and grocery shopping. It may also include far-off future events to plan for, such as weddings, college, retirement goals, long-term care plans, estate plans, and more.

When you create this list, remember: nothing is off limits! If it involves money and it is bothering you, write it down!

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Scan Your List for Quick Wins

Once you’ve finished your list, scan through it several times to look for quick wins, i.e. items that you can tackle right away to reduce your stress. For example, if you have a stack of unpaid bills sitting on your desk, pay them right away and set-up auto pay with your bank to avoid future stress.

From here on out, make it a habit to take care of future quick win items as soon as they arise. The following guidelines should help:

  • When bills arrive in the mail, pay them right away.
  • Handle all mail items only once. When you open it, decide right away what action is necessary based on the nature of the mail, i.e. pay the bill, file the document for later use, or shred it.
  • Schedule reminders in your calendar or mobile device for any time-sensitive financial events.

Rank Remaining Items

Now that your list of items causing financial stress is smaller, it is time to rank remaining items according to their priority. The most effective way to do so is by ranking items according to their urgency and overall importance.

To rank the remaining items by urgency, or time sensitivity, use a scale of 1-5. Rank items which are not time sensitive as a “1” and urgent items as a “5.”

Next, rank your items according to their overall importance in terms of financial weight. This extra step will serve as added protection to make sure that expensive and potentially costly items don’t slip through the cracks (i.e. missing a mortgage payment, failure to pay your federal tax obligations, etc.).

At this stage, it is easier to rate and sort the remaining sources of financial stress according to the four quadrants below.

Transferring the items on your list to the chart above will provide a visual action plan and reduce your financial stress because you will be able to clearly see what action is needed. Start by addressing the Urgent/Important quadrant, then Urgent/Not Important, followed by Not Urgent/Important and Not Urgent/Not Important.

The Best Way to Reduce Financial Stress

The method described above is not a magic bullet to prevent financial stress, but it does represent a simple and effective plan to reduce it in a manner of minutes.

No matter what obstacles your present situation has placed in your way, the presence of an action plan can provide the hope that you need to channel your emotions into action. Grab a pad of paper and pen and create your plan today!


How do you cope with financial stress?

Money is the leading cause of stress in the world today. You can reduce your financial stress by creating a winning action plan today!

The Best Financial Advice Is Not Sophisticated

Advice and pro tips on just about every topic imaginable are available in just a few clicks or swipes on a pocket-sized device today. The best financial advice is no exception. Based upon the wealth of information available to everyone with a mobile device, there are increasingly fewer and fewer reasons for the lack of wisdom and overall financial mismanagement which are common today.

Ironically, we just may be living in a period of the worst personal financial mismanagement of all-time, despite access to information having reached an all-time high.

Recently, I read a Yahoo Finance article about Derek Sall, the owner of Life and My Finances, who impressively paid off over $116,000 of debt before turning 30. In the article, Sall shared his best financial advice.

“The best tip I can give is just live your own life,” he said. “The best way to just live simply and be content is just to turn it all of and hardly pay attention to it at all. Because that’s what gets people in the most trouble.”

As I read this, I nodded my head in agreement with Sall. It’s very good advice from someone who has earned the right to talk the talk by walking the walk, so to speak.

Then I scrolled down and started reading the comments section – the place where mis-informed and overconfident readers typically congregate to spread poor ideas on large sites like Yahoo.

Apparently, Sall’s advice struck a nerve with the internet trolls. Here is a selection of some of the comments:

  • “Fake news”
  • “Thanks for the useless ad for [Derek’s] blog.”
  • “How much did you get paid for this useless tip?”
  • “So the tip is to just ‘live your life’?”
  • But folks . . . Not to rain on anyone’s parade here, BUT . . . If everyone did that, only buying what they need, just think how many people would be out of manufacturing jobs, retail jobs, mortgage jobs, etc. Also how much sales tax would the government be missing out on?”
  • “nothing new here”
  • “Bet this guy makes $100,000,000 on suckers who buy his book. There is no get-rich-quick scheme that is legal. BEWARE.”
  • “That’s awesome that this guy is out of debt. But it seems like he missed out on doing a bunch of stuff while in the prime of his life. I go to work to make money. The point of having some money is so I can do things that I want to do, as well as save some of it.”
  • “Let me guess, he cancelled his cable and quit getting a morning latte at Starbucks, it works every time.”
  • “The tip is don’t spend money, okay got it.”

After reading through all of the comments, the exact reason why so many people manage their money poorly occurred to me:

The best financial advice is not sophisticated.

Some things in life are just better when they are simple and uncomplicated. Despite countless common lies, the best financial advice is not sophisticated.

Complicating the Uncomplicated

More and more, it seems that people want to reject any kind of advice which is simple at its core. We are prone to rejecting basic ideas in favor of the more complex, as if complicated advice is somehow better by default.

Based upon the comments above, many readers assumed that there was no way Derek achieved debt freedom simply by living his own life on his own terms. In their minds, the secret to financial success had to be more complicated.

This attitude is all wrong.

The truth is that achieving financial success isn’t complicated and the best financial advice out there is not sophisticated.

The Best Financial Advice is Simple

The main reason I’ve always been interested in money and personal finance is because money is simple. It doesn’t have a mind or life of its own, and it does exactly what I tell it to do. It’s like every dollar I possess becomes a tiny employee who exists to answer to my every bidding.

And at the end of the day the total value of my money is largely dependent upon the actions of one person: me. My choices determine whether my financial net worth grows or dwindles.

If I use my basic arithmetic skills and reconcile my earnings and expenses properly, I can be sure that I stay in command of my  choices and my money. And if I plan ahead a bit, I may even save money!

Many people can’t bring themselves to accept that money management is really this easy and simple. They insist that such a basic approach – keeping a budget, spending less than what is earned, and saving the rest – is only for unsophisticated simpletons.

The truth is that there is a tremendous degree of sophistication in simplicity. And realizing and embracing this truth is not only one of the keys to overall financial well-being; it’s one of the keys to happiness in general.

The problem is that we live in a society which has completely rejected simplicity. Take a walk through your local grocery store with open eyes and you’ll see what I mean – dozens of varieties of toothpaste, entire rows devoted to snack foods, and more flavors of ice cream than Dairy Queen.

Variety makes life interesting, to be certain, but there is a breaking point in which complexity leads to analysis paralysis. This is true of grocery shopping, and it is true of personal finance.

Some things in life, including money, are just better when they are simple and uncomplicated. It’s time for all of us, the internet trolls included, to accept this truth, embrace it, and live happily.


What is the best financial advice you’ve ever been given? Is it complicated?

Some things in life are just better when they are simple and uncomplicated. Despite countless common lies, the best financial advice is not sophisticated.

How to Live on One Income and Still Live the Good Life

The dual income family is quickly becoming the norm. According to one study, even as long ago as 2002, only 7 percent of U.S. households were single income families in which only the husband worked. In 2017, the demands of debt, car payments, and other money stress have made it even harder for families to live on one income.

The dual income family is now normal. But you can live on one income without poor quality of life. In fact, you can live the good life! Read how we lived on a single income while still having fun!Dual income households have some advantages over single income households, but I firmly believe the choice largely comes down to personal preference and individual circumstances. But the choice to live on one income doesn’t have to be as restricting or depressing as it may sound. It’s very possible to live well on a single income even if it is modest.

My wife and I are proof that it is possible to thrive, have fun, travel, and live on income all at the same time. Today, we both work multiple jobs – like Dave Ramsey says, Live Like No One Else So Later You Can Live AND Give Like No One Else – but our life was radically different in 2010.

Operation: Live on One Income

My wife, Meg, and I were married in July 2010. I had completed my first year as a music teacher and she was a college senior. I was laid off by my school district because of crippling budget cuts shortly before our wedding, so when our pastor said the whole “richer or poorer” line during our vows, it took every ounce of strength I had in me not to laugh out loud.

I spent the first month of our marriage collecting unemployment and interviewing for jobs without any luck. One week before school resumed a huge weight was lifted our shoulders when I was offered a return to my old job out of the blue.

Getting my job back was a major victory, but it still gave us one income stream. Some people in our lives doubted that we could live on one income, but to be honest, we were just thrilled to have an income! Still, we knew that life wasn’t going to be perfect or easy.

How We Did It

At times, living on one income was stressful and even depressing. I wasn’t bringing in fat stacks of cash as a second year teacher, so we had to be very intentional about how we spent and saved every dollar I earned. We also decided to focus on the big things in our budget and doing everything we could to keep them in check. We didn’t overlook the little things, either, but we knew that we could find more bang for our bucks by focusing on the big things.

First, we made a unique budget every month and pledged to stick to it. I tracked every single transaction every single day using Gazelle Budget so we could always have an accurate picture of our spending for the month. When all of the budgeted money had been spent for a category, we literally didn’t spend another cent. If it was crucial, we decreased the budget for another category to add more money to categories in need.

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Second, we constantly looked for ways to save as much money as possible on groceries. This category was the second largest part of our part next to our rent, and we knew that keeping food spending under control would be important. We shopped mostly at Aldi and picked up sale items at a few other local stores. Leftovers became our go to meals a few nights per week, and we never went out for lunch. On average, we spent between $350 and $400 per month on groceries. Some months we really stepped up our game and spent as little as $250.

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Third, my wife and I found a place to rent for far less than the average rental price in the area. Before we got married, I spent at least five hours per week searching listings and making phone calls about available apartments and condos. My hard work paid off when we found a nice 3 bedroom, 1.1 bathroom condo for rent for 25% less than the area average. Avoiding corporate apartments saved us thousands of dollars over the four years we rented.

What We Didn’t Do

Now that we both work and own a home, I often think back to the days when we lived on one income. We were definitely frugal in many ways, but we could have cut back even more in many areas.

First, we paid for cable TV and DVR service with Comcast. It was one of the few luxuries we allowed ourselves, to be honest, and even though our cable and internet cost us around $90 per month at the time, it served as our main entertainment. We rarely went out to the movies, checked out concerts, or even went bowling.  So even though cable was expensive, it probably helped us avoid temptation to spend more money.

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Second, we still ate our at restaurants once or twice per month. Looking back, I can’t really justify this spending. It would have been cheaper to cook at home, but we honestly cherished the few nights out each month. And most of our meals out were using discounts found on Groupon or Restaurant.com, which usually helped us eat out for under $20.

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Third, we still stopped for an occasional trip to Starbucks each month. It’s obvious that drinking coffee is much cheaper when you do it home, but we did a good job of keeping coffee spending in check overall. Again, we knew that focusing on the big things would have a bigger impact on our budget so we didn’t sweat the occasional $4 latte.

You Can Live Well on One Income

If you gain anything from reading this article, I hope you see that it is possible to live on one income without accepting poor quality of life. My wife and I only lived on one income for a little less than a year, but we could have done it much longer. We didn’t suffer or go without necessities. We didn’t even pursue ways to make extra money!

Related:

21 Simple Ways to Make Extra Money Even If You’re Busy

Maybe living on one income is your choice, and maybe it’s not. It’s important to remember that more money isn’t always the answer to your problems. Dual income households have problems, too. How you will live comes down to personal preference and individual circumstances whether you have one income stream or several.


Do you live on one income? What tips and tricks help you to do so?

Improve Your Health – Financially, Physically, and Mentally – With These 9 Tips

Financially-minded people – like me – spend a lot of investing in their finances, and with good reason; breaking away from the rat race requires daily diligence. But what use is good financial health if you lack good physical and mental health? Money is important, but it is only one piece of the pie. Even if you have one area under control, you can improve your health by taking steps to grow grow in all three areas.

Most financial experts attest to the value of also maintaining physical and mental health. You only live once and you deserve to be happy. Make new habits and improve your health - financially, physically, and mentally - by following these 9 tips to live your best life.Pete Adeney, better known as Mr. Money Mustache, swears by regular weight lifting and almost constant movement to maintain his physical health. Sam Dogen, the mastermind behind Financial Samurai, is a 5.0 rated tennis player. Even the Oracle of Omaha, Warren Buffett, though largely driven by data and logic, carefully monitors his rational self for any signs of irrationality. The three have different backgrounds and experiences, but they similarly demonstrate the importance of healthy balance – financially, physically, and mentally.

Improving your health doesn’t require an expensive gym, a psychiatrist, or an investment broker. These can be great places to start, but you can improve your health by taking conscious stops to cut bad habits, replace them with healthy practices, and make those changes a permanent part of a healthy lifestyle.

9 TIPS TO IMPROVE YOUR HEALTH

We all have to start somewhere; the key is to start now! These 9 tips will help you improve your health – financially, physically, and mentally – and live a happy life.

1. Drink lots of water

Did you know that the average human body is 65% water? Your body needs water, and drinking lots of it is the quickest way to improve your health.

I love coffee and an occasional soda, but nothing primes my mind, body, and soul like water. Dehydration occurs anytime you take in less water than you use, and performance suffers even due to mild-dehydration. On the flip side, proper hydration increases energy, aids in healthy weight loss, and reduces stress.

So pour yourself a glass and keep reading.

2. Start Running

Humans have been running since the beginning of creation. In a sense, we were born to run. Children instinctively know how to run and start running shortly after learning to walk. So why do people begin to see running as a chore as they age?

After a long day of teaching, showing houses, and writing, I look forward to running. It is the best medicine for clearing my mind, reducing stress, and thinking creatively. In fact, I have written many of the posts on this blog while out on a run.

All you need to get started with running is a decent pair of running shoes, headphones, and athletic shorts/shirts. Later, if you want to get fancy, you can use a FitBit or Garmin GPS watch to track statistics like mileage, heart rate, calories burned, and split times. I’ve used the Garmin 405 CX for five years and it still meets all of my needs; it has even survived -30 degree Fahrenheit temperatures, monsoon-like rains, and a few unfortunate falls on icy trails.

3. Eat Healthy Food

You’ve heard all the complaints about healthy eating.

  • It’s too expensive to eat healthy food.
  • Healthy food is boring!
  • I can’t give up my (insert junk here). . .

Bad habits and good marketing have made sure that these ideas stick in our brains. Healthy food can be expensive, but it doesn’t have to be that way. And if you know how to cook effectively and use basic spices, you can turn perform stove top miracles with only lean chicken, broccoli, and potatoes. Say goodbye to junk food cravings!

This year, my wife and I have completed one round of the Whole 30 diet. (Super fans have now thrown an apple through their computer screen, because Whole 30 isn’t a DIET. It’s a LIFESTYLE!) We ate chicken, lean beef, pork, potatoes, eggs, and plenty of fruits and vegetables. I use even learned to drink black coffee like an adult. We lost weight, improved our moods and concentration, and saved money by staying away from restaurants.

Recently, we started using Zaycon Fresh, a program that has made our healthy eating efforts even easier and cheaper. Zaycon partners with local farmers to provide high-quality, farm-fresh food at prices which beat your local grocers. Their online ordering system is easy to use, and your local economy benefits because you are shopping locally.

When a local sale begins, Zaycon will send you an e-mail with all the details – this week they sent deals on bacon straight to my heart inbox! Because they focus on a select number of meats and eliminate middle men, we’ve saved a lot of money and still managed to eat well.

If you are a blogger and would like to join the Zaycon Fresh referral program, it is easy! It only takes a few minutes to get started.

4. Automate Your Financial Life

Most of friends are always stressed out about money. If you’ve ever been surprised by forgotten bills, late payment notices, or overdraft fees, you need to automate your finances as much as possible. I automate any payments which can be automated, from utilities and savings to my mortgage payment and investing.

You only live once and you deserve to be happy. Make new habits and improve your health - financially, physically, and mentally - by following these 9 tips to live your best life.My favorite automated savings tool is Digit. It is so effective that my wife and I were able to use our Digit savings to pay for a trip to Las Vegas last fall. The secure mobile app links with your checking account and uses sophisticated algorithms to help you save money only when you can afford it by moving funds to an external savings account. You can pause savings and transfer money back to your checking account at any time with quick text commands. Digit is FREE to use, currently pays bonuses every 3 months, and ensures that you save money each month. And if you refer a friend who signs up, you’ll receive a $5 bonus when they complete their first transfer!

If you’re looking to finally start investing for your future, you can automate that, too! Betterment is a sophisticated platform designed specifically for busy  people who don’t have time to research individual stocks or mutual funds. Their advanced algorithms and Smart Rebalancing methods can help anyone develop a portfolio designed to meet their investment goals and minimize tax losses. You can open an IRA, taxable brokerage account, or even roller over an existing account and receive one month FREE if you deposit more than $10,000.

Perhaps you’ve already been saving and investing diligently for several years but have grown tired of managing and monitoring a variety of investments in your IRA, 401k, and taxable accounts. Personal Capital is a FREE tool that can help you monitor all of your investments in one place. If you need personalized guidance, they will even provide more affordable advice tailored to meet your personal goals.

Personal Capital is the only tool I trust to monitor all of my financial assets in one central location. Start your free account today!

5. Read Every Day

Did you know the average millionaire reads at least two non-fiction books per month? This statistic has remained my motivation to read daily and commit to my personal growth. At any given time, I have a stack of books on my nightstand, with topics ranging from leadership to entrepreneurship, money, running, and spiritual development. I know my ability to grow on my own is limited, but learning from others and emulating their success can lead to unlimited growth.

Daily reading stimulates healthy thought and ensures that you maintain an ability to look outside yourself. If you know the names of the last few people who were eliminated on reality TV but can’t name three ideas you’ve read and implemented this month, that needs to change if you want to improve your health.

6. Be Mindful During Mindless Activities

You probably spend several hours each week performing tedious, mindless tasks like laundry, dishes, yard work, and house cleaning. Are you using time to improve your health?

When I do laundry, dishes, and yard work, I often to podcasts. I used to dread these tasks but now find myself looking forward to them because I learn something new that I can apply to better myself.

My wife and I also have mastered efficient meal preparation. We prep for the entire week on Sunday afternoon after church. By working as a team and using Crock Pots for many meals, we are able to free up several hours during the work week. Our budget benefits as well because we aren’t making frequent runs out for fast meals out of convenience.

7. Adopt a Dog

There are countless dogs in your local community shelter just waiting to find their forever home and humans to love. My wife and I bought our two dogs because she is allergic to all but a few select breeds, otherwise we would have adopted dogs in need. Adoption is affordable and easy, and what you invest in vet bills and bags of dog food will be regained ten fold in improvements to your physical and mental health.

8. Practice Silence and Solitude

Silence and solitude seem counter-intuitive to people who aim for efficiency in everything, but they are crucial. The truth is that rest and relaxation help us to recharge.

Many people wear busyness as a badge of honor – you know the type I’m talking about. I find these people usually end up burned out and unhappy. A few of my close friends seem to be unable to rest unless they are on vacation. A planned getaway can be a great time to rest and see the world. But a staycation is often just what I need to recharge and avoid burnout – and it is financially smart.

I’ll be vulnerable for a moment – between teaching full time, my real estate business, and this blog, I appear to be the poster child for busyness. But I rarely feel stressed because I set boundaries to protect my mental and physical health; planned solitude keeps me revved up for whatever is next.

9. Limit TV Time

There is a strong correlation between success and low TV consumption, as countless studies show. Most of the time I am disciplined enough to limit TV time, and sometimes my subconscious lures me into watching three hours of Breaking Bad re-runs – yeah science!

Literally unplugging your TV is a simple way to improve your health. By making it a bit tougher to mindlessly run to Stars Hollow every time you feel stressed, you will begin to form better habits which help you to unwind, accomplish more, and keep moving. You can always plug in the TV later!

LET’S GET STARTED!

The best time to improve your health is NOW! You can put yourself on the path toward improving your physical, mental, and emotional health today if you’re willing to build even a single new habit. What are you waiting for?

And a friendly reminder – Don’t forget to check out two FREE and easy tools to improve your health fast, Digit and Zaycon Fresh

Achieve Better Money Management in Only 10 Minutes Per Day

 

I am often asked, “What’s the key to better money management?” I always remind people that money is like unsorted laundry: it is helpless without you. If your finances require some decluttering, whether minor or major, now is the time to take control and do what is necessary to provide the organization and structure your finances desperately need.

You can start by implementing these five easy steps toward better money management. If you do, you’ll spend no more than 10 minutes managing your money per day!

1. Automate Your Finances As Much Possible

What's the key to better money management? Taking control! If you follow these five recommendations, you can manage your money in only 10 minutes per day!I value time as much as I value money. By automating common expenses, such as mortgage or rent payments, utility bills (such as water, trash, electricity, gas, television/internet, and mobile phone), life insurance and disability monthly premiums, car payments, student loan payments, retirement account contributions, and even savings, you can save yourself significant time, energy, stress, worry, and, of course, money. As an added bonus, your days of writing countless checks, licking envelopes, and purchasing stamps will be over forever!

Most major banks will allow you to set-up auto-pay on these bills with very little effort involved. You can even negotiate with most providers to establish a chosen day of the month for your auto-draft to occur, which will allow you to spread out your payments to align with your pay periods. Some institutions, particularly student loan servicers, may provide a small APR reduction when you sign-up for auto draft and paperless billing.

And if you find yourself drowning in student loan debt, I recommend you pursue a better interest rate and refinance your student loans with SoFi. I no longer have student loans, but I recommend SoFi wholeheartedly. Plus, they currently offer a $100 sign-up bonus!

Related Post: Escape From Student Loans: How Two Educators Paid Off $17,831.65 in 54 Days

2. Sign-up for Paperless Billing

One of my daily chores is walking to the mailbox. You can restore fun to the act of walking to the mailbox each day by signing-up for paperless billing with all providers who offer this service. Doing so will literally and figuratively decrease the clutter in your mailbox and your finances.

Furthermore, with electronic copies housed by your various institutions on secure servers, your information will be protected, you will be less likely to experience identity theft, and you will not need to fear losing an important document or missing a bill in the mail.

While you’re at it, be sure you have identity theft protection in place, too! I recommend Identity Guard over all other providers due their high customer service rankings and comprehensive monitoring. See for yourself and sign-up for a free 30 day trial!

3. Use an Online Budgeting Tool

When it comes to monthly budgeting, I believe everyone should create at least one budget utilizing paper, a pencil, and a calculator. In the interest of decluttering and saving time, however, the average consumer has plenty of online budgeting tools from which to choose.

After utilizing Gazelle Budget for many years, I recently transitioned to a paid subscription version of EveryDollar, a product created by the team at Ramsey Solutions. EveryDollar is a very effective way to create detailed monthly budgets, track spending by linking with all of your financial accounts, and monitor progress on your goals. I particularly enjoy the features which allow users to create sinking funds and budget for irregular expenses. And the best part is that my wife and I can both use the app!

4. Use Cash Allowances to Pay for Basic Spending

While an automated budgeting platform can certainly ease the burden of tracking a multitude of debit and credit transactions within your monthly budget, I recommend providing cash allowances within basic categories such as groceries, restaurants, gas, and discretionary spending. You can include these cash allowances in your budget with one simple transaction on the first day of the month.

5. Eliminate Your Debts

For many families, debt can represent a significant percentage of their monthly budgeted income. When you shed the shackles of debt, you free up additional streams of income which may be re-allocated as automated contributions toward liquid savings, a home down payment, retirement accounts, non-retirement investments, or savings toward the purchase of rental properties.

Additionally, without multiple debt obligations, the sheer number of your monthly transactions will be reduced. Fewer transactions will lead to even greater simplification. You will also experience the peace that comes with no fear of missing a payment or incurring late fees and interest charges. Lastly, you will not experience guilt each month as financial institutions earn interest on your hard-earned income.

Final Recommendations for Better Money Management

If you are willing to dedicate a few hours this week, you can implement the above steps to get on the path toward better money management – then maintain a routine in less than 10 minutes per day! The sacrifices you make in doing so will pay great dividends, pun partially-intended, for your financial future. As a result, you will be free to turn your attention from fretting and worrying about your finances and onto building your future.


Readers, what are your tips and tricks for better money management?

Change is Hard

January is a month for hope and optimism. You wouldn’t know it based upon the doom and gloom floating around in the newspapers and social media this year, but most folks are as optimistic as ever during the first month of a new year. They know change is hard, but emotions fly high.

The distance between change and complacency is small - a single step in the right direction. Change is hard because complacency is easier. But you can win!Many people hit the gym and begin a new diet with dogged determination that they will finally lose that extra weight. Others pledge to finally start saving for their dream purchase or investing for their retirement. Some people pledge to reestablish their priorities with regard to work, family, friends, and leisure.

The month of January represents new beginnings. A clean slate. A chance to start afresh and anew.

It is an opportunity to implement changes big and small. Yet January also brings about a sobering reminder each and every year:

Change is hard.

Figuratively speaking, the distance between change and complacency is very short. The difference is a single step in the direction of our goals. But taking that single step is often challenging.

Change is hard, complacency is easier

The human search for homeostasis has led us to really enjoy our comforts. I know that is why I love dining out, even if at McDonald’s. It is why I love sports, TV, and movies. It is why men love their recliners. These things provide comfort.

In order to change, you and I have to exit that comfort zone. On purpose. Repeatedly. We have to force ourselves to live on the edge of discomfort. Sometimes we may have to face our fears.

To lose a few pounds, I need to stay away from the comforts of restaurants and overindulgence in dairy, fried foods, and beer, and increase my intake of lean protein, vegetables, and fruits.

If saving money is my goal, I need to take a long, hard look at my spending habits and trim away waste. Psychologically, this type of self-correction is very necessary yet incredibly difficult to achieve with honesty and integrity.

Improving the performance of my investments is a difficult change to enact. It reveals that simple human desire and motivation are not always enough if we seek complex change. Sometimes we can do everything right and still fall short of our goals. This leads us to fear failure and avoid change.

Even our goals change from time to time. For example, a few months ago on my 30th birthday, I set five primary investment goals for the next year:

INVESTMENT GOALS
1 – Max out both of our IRAs for 2016. $11,000 total investment.
2 – Invest a minimum of $2,000 with Fundrise.
3 – Grow my overall account value with Betterment.
4 – Increase our overall net worth by 50%.
5 – Set a target date for early retirement and formulate a plan to get there.

Related Post: The Fundrise eREIT: Accessible Real Estate Investing for the Average Investor

As I write, we are most likely to fail at goals 1 and 3. Instead, due to changing circumstances, we opted to invest funds earmarked to achieve these goals in finishing our basement. These circumstances even led us to make a surprising decision – we borrowed money to complete this project. Gasp, I know. But the extremely low interest rate combined with maintaining liquidity were just too significant to pass up.

Even the decision to change our investment goals and instead invest in our home was not an easy one. My wife and I went back and forth on it many times, even though we knew that completing the project would instantly increase the value of our home by an additional 40-50% beyond the initial investment.

We hemmed on and hawed over a decision that would increase our net worth? Yup.

Change is hard because the act of change admits that are wrong in the present. Sometimes this hefty dose of humility can be too much to accept.

Change is hard because it is an act of giving up something to gain something else. And we don’t know if we all we hope to gain will be better than that which we are giving up.

Change is hard because we are often left swimming upstream, fighting against the currents of life. Two or three steps forward followed by one step backward only feels like progress for so long to our instant-gratification-seeking hearts.

Change is hard because it requires renewed commitment on a daily basis. As my father-in-law often says, there is no glory in yesterday’s victory.

Change is hard because we do not always instantly see the fruits of our labor. This is why your local gym is full in January and half empty again by the end of February.

So how can you and I change?

Change Comes From Within

I’m reminded of a vivid training scene in Rocky III, in which an over-the-hill Apollo Creed is training Rocky Balboa for his rematch with Clubber Lang. Creed pummels Rocky with a steady stream of right hooks, and Rocky’s lifeless approach to improving his technique leads Creed to question, “What’s the matter with you?!”

Rocky responds, “Tomorrow. We’ll do it tomorrow.”

A fired up Creed denounces this attitude, stating repeatedly, “There is no tomorrow!”

Rocky continues to go through the motions in training until he hits the ultimate low point. Creed deserts him and states, “It’s over.” Rocky is really on the ropes this time.

When he needs it the most, Rocky’s wife, Adrian, provides a dose of wisdom.

“Apollo thinks you can do it. So do I. But you gotta wanna do it for the right reasons. . . Not for the people, not for the title, not for the money, or me – but for you.”

“And if I lose?”

“Then you lose. But at least you lose with no excuses. No fear. And I know you could live with that.”

I think I could live with that, too. Can you?


How are you striving to change in 2017? How will you sacrifice to make it happen?

Leave Behind These 8 Bad Financial Habits in 2017

 

This post, “Leave Behind These 8 Bad Financial Habits in 2017,” is a guest post by Carol Soriano, a consultant for PawnHero.ph, the very first online pawnshop in the Philippines. A writer at heart and a social media enthusiast, she is passionate about personal finance, investment and all money matters.

It’s 2017! Were you able to save up money for the New Year? Have you been able to reach your financial goals? If you failed to do so, it’s time to turn over a new leaf and correct those bad money habits from the past year.

Are bad financial habits preventing you from Taking Back Control of Your Life and Money? Ditch these 8 bad habits in 2017 and get back on track!Your financial goals should include setting target digits for your savings account and having funds to cover you during emergencies and whatnot. Should you ever find it hard to reach your money goals even after trying, there must be a rooted bad financial habit that’s keeping you from achieving financial success.

To help you reach your goals in 2017, below are eight bad financial habits that you should be really ditching this new year!

1) Living from paycheck after paycheck

A common financial crime amongst the working class is having a one-day millionaire lifestyle. This means getting by living from paycheck after paycheck. They may have the job, but they don’t have the stable income. If this is a habit to which you’ve become accustomed, stop!

This is troublesome to your financial and personal well-being since living up to the “first day after paycheck versus last day before paycheck” meme is just exhausting. This scary habit leaves you without any safety net as you only rely your financial security with your job, and the thought of it is alarming! If you only have one stream of income like your job, then you especially might want to reconsider your saving habits.

2) Being brand conscious

They say, you are what you wear, but not entirely! Sometimes, a good Prada covers up the real financial situation. There are those who maintain their financial reputation through brands. But as Psychology 101 dictates, material things do not maintain steady happiness. Having a brand conscious mindset won’t get you to your financial goals.

So, while you cannot afford to both buy a branded item and save money at the same time, make it a priority to save first! Save for the first three months and eventually, you will make it a habit to be frugal instead. Those brands can wait; your finances don’t.

3) The love for foreign products

Going to grocery stores and shopping on the imported aisle section just because you think it defines who you are—expensive—doesn’t help… at all! Frankly, you can go after budget-friendly goods and save more. The only difference is the brand and the tax that comes along with it. So, go local, spend less to save more moolah.

4) Investing for instant gratification

Those social media money talks about investing on networking and other easy money schemes can be a headache. Keep in mind that money doesn’t grow on one sitting while waiting for recruits to cash in. It doesn’t work that way. But there are those who still fall prey to this investment pitfall.

If you are serious about growing your money, get inspirations from overseas workers-turned-entrepreneurs who became rich through smart investing. Remember, investing requires patience.

5) Dependence on family or friends for financial stability

Being dependent on family or friends for financial stability is a bad habit to follow. If you have been making them your last resort for financial security, there’s something wrong with how you manage your finances. There’s nothing more embarrassing than being capable of earning yet incapable of paying off debts.

Strive to a point to save enough, avoid wants, prioritize needs and save your face from asking a favor to owe money from your family or friends.

6) Lack of financial literacy

Being financial literate means understanding how money works to make more. If your expenses are greater than your savings, you have a big problem. But don’t feel bad, you can still be financially savvy. By asking the right people, learning about investments and developing a saving habit, you can become financially literate. Moms are known to be good with money. Try getting budgeting tips from moms to learn from the best.

7) Late working age

Traditional working age is 21 (FinanceSuperhero note: This varies from community to community), but it doesn’t mean you have an excuse to make money mistakes at this age. In fact, you are a young adult. That means you need to be financially responsible as well.

Your money habits start young, and like the saying goes, old habits die hard. Always start young with how money is being managed.

8) Aspirational lifestyle

While most try to climb from lower to middle class, the majority live for the aspirational lifestyle. Peer pressure and social media may have played an important role to establish this ideal. The practice of sacrificing a budget for the sake of an aspirational lifestyle is damaging. If this is one habit you’ve been living through, then it is high time to quit.

Final Word

Financial security should be a serious responsibility when adulting. You don’t want to be frowned upon for your bad money habits, and most of all you do not want to regret not having been a smart saver at a young age. So, with the New Year, you have a fresh start and a clean slate to make your financial goals count! Stop promising and start doing. It will pay off!

 


Has your 2017 gotten off to the start you imagined? What bad money habits do you need you ditch this year?

Are You Destined to Follow in Your Parents’ Footsteps?

In life, we receive so much from our parents; overall looks, hair color, height, and a host of other genetically-driven predispositions are largely hereditary. Sometimes, we follow in our parents’ footsteps, and sometimes we do not. With some notable exceptions, we get what we get, and life keeps rolling on – for better or for worse.

Recently, I read an article in The AtlanticRich People Raise Rich Kids – which caused me to ponder the financial impact our parents have upon our life trajectory. The issues explored and conclusions drawn in the article are thought-provoking, to say the least.

If “Rich People Raise Rich Kids,” does that imply that the corollary, i.e. “Poor People Raise Poor Kids,” is often true?

We receive much from our parents: overall looks, hair color, etc. But are we destined to follow in our parents' footsteps in other ways? Of course, life experience shows us the impact our parents can play in financial futures. Plenty of people are born into money, but countless folks create their own wealth. Many of us will learn to manage money, for better or worse, in the same manner demonstrated by our parents. Others will seek their own path, if they bother to pay attention at all.

And all of this says nothing of the fact that our trajectories may change over time, though change can be hard to set into motion. The poor can become rich, and the rich can lose it all, sometimes in shocking fashion. This is America, after all. *Cues chants* USA! USA! USA!

The power and importance of environment is one point which I tend to agree with wholeheartedly from the aforementioned article. My life story bears out this truth every step of the way.

My Story

I grew up in a typical middle class home in West Michigan. My mom worked as a departmental secretary for a reputable regional bank, and my dad worked in manufacturing for one of the largest aerospace engineering companies in the country. Mom earned her Associates degree, while dad entered the work force after completing high school.

We lived in a 3 bedroom, 1 bathroom ranch home which was conveniently located within a few miles of everything: school, work, shopping, and my grandparents. Our family was solidly middle-class, though I had no idea or even any understanding of what that meant at the time.

My parents made the very best of the overall environment in which I was raised. When I was four, they sold our house and moved to the other side of town so I could attend the best schools in the area. I didn’t know at the time, but my mom often remarks today that this move was a financial sacrifice in may respects.

For reasons which I still do not fully understand, I was born with a sharp edge to achieve, and this desire only strengthened itself as I grew up. I didn’t want to just do something – I wanted to win, to be the best, to get a share of the spotlight. Of course, it didn’t work out every single time, but that internal motivation was sometimes a difference-maker.

Equally important, my internal motivation was complimented by external factors. My grandfather always pushed me toward the improbable and believed so much in me that I began to believe in myself.

My self-belief and confidence was shaken many times, but I survived and grew stronger because my parents were not of the helicopter variety. They allowed me to be independent, solve my own problems, and experience difficulty. I learned to bend without breaking.

My parents supported all of my far flung endeavors – competing in chess tournaments all across the country, basketball leagues and camps, and music lessons – and encouraged me to do my best. I was strong-willed and in hindsight demanded a lot. I was lucky to have good parents who provided opportunities.

The rest of the story is simple. I went to college, got a job, and moved out of state, like countless other people before and since. I am not special, and my life is not remarkable. My parents, extended family, and the environment they cultivated for me, on the other hand, are special and remarkable.

Foster a Great Environment For Your Kids

So how can today’s parents foster a positive environment for children and put them in a position to become successful? The following solutions offer a good starting point:

Get to know your children. A one-size-fits-all approach will never work. In the interest of transparency, I am not yet a parent, but my experience as a teacher illustrates the importance of knowing children as individuals. Spending time with them is the best way to get to know them.

Model a balanced, prioritized lifestyle. Kids are impressionable and form a surprisingly-high number of conclusions at young ages. As adults, they will remember how you spent your time and model their own priorities after yours in many ways, whether consciously or not.

Teach them how to save money. For most children today, spending will come easily and saving will not; our instant-gratification culture is to blame. If you show your kids how to save, they will experience a valuable lesson.

Allow your children to fail and encourage them to persevere when they do. They will learn important lessons as a result. They will become resilient, strong, and unafraid to fail, all of which are characteristics which will help them to succeed.

Related: How to Overcome the Fear of Failure

These practices are not perfect, but they will help you to create a growth-inspired environment for your children. They just may follow in or even exceed your footsteps as a result.


In what ways have you followed in your parents’ footsteps? What did they specifically do to help you in that regard? For parents – how are you helping your children to follow in your footsteps?

The Big 100: Reflections on the Journey

Sometimes I keep my nose so close to the grindstone that I momentarily lose touch with everything going on around me. This ability channel tunnel vision and focus my attention is good at times and burdensome at others. It leads me to accomplish many of the goals I set into motion, yet it often stifles my ability to switch gears.

I have been in two primary gears the past several weeks: school-mode and real estate-mode. At times, my real estate side hustle has been the equivalent of a second full-time –albeit, a very fun, second full-time job which feels like anything but a j-o-b.

As you may imagine, I’ve lost focus and time on the blog during that same stretch. Posts have been a bit more sporadic, and reading and commenting on my favorite blogs has been sparse. Yet somehow, I find myself siting here ready to publish this post, number 100, and marveling at how far this little website has come in only 7 months.

Any blogger will gladly tell you that maintaining your own blog requires tremendous commitment. The hustle and bustle of life fight to test that commitment. They challenge a blogger’s resolve. Today, as I enjoy time to reflect upon the goals and mission which inspired my creation of this site, I am reminded of its value.

If the use of my time were simply a matter of achieving the best financial outcomes, I would certainly cease devoting time to such a relatively low-income hobby and funnel all of my available discretionary time toward my real estate business. In the grand scheme of things, increased efforts in this area hold the highest probability of increased returns, mathematically speaking.

As I reflect, it is hard to envision where and how commitment factors into the equation. It’s been over a decade since I last studied calculus, and I don’t think basic arithmetic will get the job done in this case, so let’s distill this down in the only way I know how:

Personal finance has surprisingly very little to do with figures and a lot to do with feelings.

Many financial writers argue that separating feelings and money is vitally important. They speak as if a consistent level of stoicism is the solution to all financial woes. I used to think in this manner.

Other writers feel that some emotions and feelings – namely peace, joy, and contentment – should not be separated from our financial outlooks, while some – fear, jealousy, and embarrassment, among many others – have no place in a healthy financial outlook. I agree with many folks in this camp.

The more I write and reflect upon the role of money in my life,  my vision for “Restoring Order to the World of Finance” becomes simultaneously clearer and murkier. (It’s no surprise to me that it has taken 100 posts to reach this level of clarity; truth be told, I consider myself to be a rather slow learner.) Rationality, logic, and planning are constantly at war with personal biases, behavioral tendencies, and the chemical/biological processes which influence them. In short, personal finance is complicated stuff.

So what should we do about all of this? Keep thinking, feeling, experimenting, testing, discussing, and growing, for starters. Continue learning from others. Challenge patterns and long-held assumptions.

As for me, I will keep writing. My thoughts and feelings on personal finance have changed more in the last 7 months than I ever could have imagined. I’m looking forward to learning more as this journey continues to unfold.

Here’s to another 100 posts and a continued resolve toward Restoring Order to the World of Finance,

Finance Superhero

 

Four Financial Lies People Actually Believe

During the past several months, I’ve noticed a consistent problem is being perpetuated among those who doubt the benefits and joys of common sense financial management. There is a prevailing sense among many people that their situation is somehow different, special, or daunting, and that these specific circumstances prevent them from paying off debt, building emergency savings, buying a home, or investing for retirement. For these people, whining and complaining drive the self-pity train toward mediocrity. They have bought the financial lies.

Most people are quick to give in to their own inner whining and accept the path of least resistance. I do it time to time, and so do you. WE have bought into financial lies!

Common Financial Lies

Over the years, I have heard a number of financial lies. As they are repeated over and over, louder and louder, many people buy into the myths. Then they join in and spread the nonsense themselves. In no particular order, here is a collection of common financial lies:

1. The little guy never gets ahead.

I often wonder who started this myth and why it continues to linger in the collective consciousness of the people. It is ironic that this statement is believed by so many, while countless underdog stories prove otherwise.

For example, consider the life of businessman Tom Gores. Born in Israel, Gores moved to the United States prior to turning five years old. He grew up playing playing football, basketball and baseball at Genesee High School in Genesee, Michigan. He stocked shelves at his father’s grocery story in nearby Flint, graduated high school in 1982, and attend Michigan State University, where he earned a Bachelor of Science degree in Construction Management.

A host of financial lies continue to spread and stop the average person from winning with money. Reject these typical financial lies immediately!
Photo credit to Carlos Osorio/AP/Detroit Free Press

Gores did not experience a privileged upbringing by any stretch of the imagination.

Today, Gores’ net worth is $3.3 billion. The founder of Platinum Equity and majority owner of the NBA’s Detroit Pistons, Gores is a self-made man. His high school coaches credit his business successes to his competitiveness, perseverance, and decision-making. None of them expected the quiet-but-talented athlete from a town of 24,000 people to follow the path Gores has blazed, but the little guy did it.

2. I’ll always have debt of some kind. It is a necessary tool for most people.

People mean well, but they spread financial lies like wild fire! Are these common financial lies holding you back from becoming wealthy?My head nearly explodes every time I hear this or a similar variation. Yes, debt is a tool, and I do believe it can be used wisely in select situations. But to insinuate that it is necessary hints at a larger problem: Americans are drowning in consumer debt.

I will not sport a holier-than-thou position and claim that debt has not helped me. Debt has allowed me to earn two college degrees and buy a house. However, these experiences would have been unquestionably sweeter had debt not been part of the equation.

3. I’ll always have a car payment/car lease because I can’t afford a nice car without one.

This financial lie makes my blood boil. The truth is that moving up in vehicle is a process which need not involve debt nor take long if you are willing to be patient for a short time. Mathematically-speaking, a car payment is costly and a car lease is usually the worst method of operating a vehicle.

Related: The Finance Superhero Rules for Car Buying

Let’s suppose you currently own a $2,000 beater car. While it is likely to depreciate over the next 12-24 months, I am willing to bet the vehicle could be sold for $2,000 in 18 months with careful marketing. Let’s also suppose that you saved $250 per month for 18 months prior to selling the beater. Through this flipping method, you could afford a $6500 vehicle. Continue the plan for another 18 months and an $11,000 vehicle is in reach. One additional cycle could allow you to purchase a vehicle valued at $15,500.  In four and a half years, you’ve moved up in car from a 1993 Honda Civic to a 2013 Hyundai Elantra. And you did it without a single payment! Of course, saving more than $250 per month could significantly change the conversation.

4. I deserve to be paid more than my current salary.

I find this phrase (and similar offshoots) is most often uttered by millennials. Please allow me to apologize for the collective whining of my generation.

Most millennials really need a lifestyle and attitude adjustment, not a salary adjustment. While the millennial median income is admittedly low across the United States, that hasn’t stopped millennials from living far beyond their means.

Facebook envy and the fear of missing out is largely to blame. Pictures of new cars and new houses lead the average millennial, especially men, into foolish spending in order to maintain appearances.

I am not saying that millennials should not increase their earnings. However, I am saying that whining is not the way to achieve that increase. If you believe you are underpaid, demonstrate your worth. Gather statistics which prove your worth and present them to your supervisor at the appropriate time.


Readers, what financial lies do you most often hear? Why do you think they continue to spread?