You Have To Play to Win! (Not a Lottery Ad)

There have been a lot of moments lately where I’ve felt like giving up something that I was previously excited about. You may relate- this is fairly common:

Step 1: You think up a great idea for a project, or for some new undertaking- a lifestyle change, a new diet, a new job, a new attitude.

Step 2: You begin this challenge with gusto and verve, ready to go.

Step 3: Progress is fast and furious- you’ve really got something going. What a good idea you have! Go you!

Step 4: Progress halts. Movement is tough. Are you moving backwards?

Step 5: Maybe this wasn’t such a good idea. Maybe you aren’t the one for the job.

Possibly distraction moves in. Another task takes the place of this new creation. Scrolling Instagram for hours seems like a great idea. Netflix calls loudly. Procrastination ensues, followed by giving up.

BUT: if you quit the game before you’ve played, can you win?

Last month I decided to create a bunch of Budget Planners. I began to sell these budget planners on Amazon, and none really sold. I immediately got discouraged, and stopped making planners entirely for a short while- leaving my project half completed.

Facebook feeds were scrolled. A lot of email got deleted. But then, in a sudden burst of clarity, it became apparent to me that I had to play to win. And I hadn’t really played- I had only started. Even if my books aren’t successful, the steps to playing are clear: continue even when a downward dip sets in. Making the creation that does well isn’t the end game. Putting more out there is the end game. Continuing is the end game. Growing is the end game. And that’s the trick that keeps me playing. If my books do well, great. If not, back in the game. Even if they do well- back in the game. The game continues on. There are many more projects/creations/jobs/mentalities/habits/endeavors/people to play with. And there are many more downward dips ahead- but that’s normal. There are also uphill catapults!

Don’t stop!

 

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What the Heck are Fixed Index Annuities? (And are they a good idea for retirement?)

One of the ways I fall asleep at night is by reading nonfiction books. I like these books, don’t get me wrong, but they still don’t totally suck me in and keep me awake like fiction books sometimes do. Usually, as I’m in bed reading my nonfiction book of choice for a few minutes, my eyelids get heavy and I drift off. It’s a very effective, as well as instructive, bedtime routine.

For quite awhile, my nightly book of choice has been Tony Robbins’ Money, Master the Game. I’m a big Tony Robbins fan, as I enjoy his motivational talks and writings, and was extremely excited to see that he’d written a book on finance- one of my favorite topics.

I devoured a lot of the beginning of the book (which got me through quite a lot of bedtimes as the book is 638 pages long). I really enjoyed most of the way Tony Robbins was trying to make finance information accessible to everyone, and he even included interviews with finance experts I loved such as Jack Bogle from Vanguard. A bulk section of the book was concerned with savings accounts and starting a retirement account, as well as the magic of compound interest- I love these subjects. These are some basic money topics to me, but I enjoy being reminded, and many people don’t understand concepts such as compound interest, which Robbins makes easy.

However, somewhere in the last third of the book, I got lost. The subject of Fixed Index Annuities came up and stayed prominent for many, many pages. Robbins was touting how great annuities are, and how the right annuity would bring you retirement income for life. I was extremely confused and started thinking “how have I not heard anything about any kind of annuity from any finance blogger or writer or podcaster ever before?” I was baffled. For years, I’ve listened to the podcasts and read a few of the blogs and books of some quite entertaining and well-known finance professionals including Suze Orman, Dave Ramsey, Farnoosh Tohlrabi, J. Money, Shannon McLay, Ramit Sethi, Paula Pant, J.D Roth, and more. I couldn’t remember any of them ever suggesting, or even bringing up, annuities.

I actually reread the entire 638 page book (it’s a break from my other favorite bedtime book, The Elegant Universe), and once again attempted to understand Robbins’ take on fixed annuities, but to no avail.

In the back of my mind, I associate annuities with scams. But Tony Robbins was so convincing in his book, even talking about how variable annuities are the actual scams, and fixed annuities are the good ones. So I thought maybe I had missed something. And, in the interest of this blog, and for my own personal pleasure (I have some weird pleasures), I looked everything up, paying special attention to my favorite finance experts and finance news sites, including Forbes and Suze Orman, to see what they had to say.

Basically, without going into the extremely complex and intense detail, my hunch was right. Unbiased (i.e non-commission-based) finance professionals almost never recommend annuities- unless they’re still somehow trying to sell you something…like an annuity. There are very rare circumstances in which SOME annuities would kind of make sense, but those circumstances generally affect people in one of two categories:

  1. If you have an extremely high income and have maxed out both your 401k and IRA and want to try putting tax deferred money elsewhere.
  2. If you are extremely, incredibly risk averse and would rather have complete peace of mind that you will have some money while alive than a good rate of return. Because the odds are against you that you’ll have more money for yourself and for your beneficiaries (spouse, kids, etc) with an annuity than with any other retirement strategies (401ks, IRAs, Roth IRAs, etc).

Otherwise, low cost index funds in IRAs, Roth IRAs, and 401ks are significantly better retirement options, with much better rates of return and way lower fees.

Again, without going into numbingly complex details, the issues with most annuities include:

  • Most people selling them stand to make a major profit off of you, and may not inform you of the other retirement options you have. So there can be quite a bit of shadiness in the annuities business because of the high commissions paid out.
  • Your money is tied up for a very long time, and you will pay major fees if you try to take it out early! These fees can range from 10% up to 20%! So even if you purchase an annuity for $50,000 and in a month you change your mind, you can’t get that money back without getting hit with a ridiculous fee. About $5000 (10%) will already have been removed from your 50k as a commission fee to whoever sold you the annuity! Plus you’ll get hit with that major fee for early withdrawal, so your $50,000 can possibly become only $38,000 in the span of only one month!
  • If you die early, your beneficiaries can get absolutely nothing! The one major benefit of most annuities is a guaranteed monthly income for life, until you die. So if you live a VERY long time, you may somewhat benefit from an annuity. But an annuity is actually a life insurance product, and the companies are banking on you dying earlier rather than later- because if you die early, in most situations, the rest of your payout is their’s to keep! And even if you find an annuity that leaves your money to your beneficiaries (which will of course be pricier to begin with), the beneficiaries will have to pay taxes on all of the interest your money made! So if your original 50K grew to 150K, your beneficiaries will have to pay taxes on the difference- that means paying taxes on the 100K difference!! That’s a huge tax bill!

So, I’m sticking with my classic retirement strategy- the Roth IRA, filled with low cost index funds from Vanguard. I write about Roth IRAs and how to set one up here.  And although I enjoy Tony Robbins’ advice and greatly respect him, I’m not planning on taking any of his advice on annuities.

If you want more information on annuities, here are some of my sources for this article:

The Motley Fool annuity advice

Suze Orman explains annuities

Time Magazine’s advice about annuities

Forbes talks in detail about annuities

Get Rich Slowly shares annuity knowledge

As always, feel free to ask me any questions. I’m just learning about this topic myself, so I’d love to hear your thoughts! Thanks!

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Have We Become the Slash Generation to Compensate for an Economy that’s Failing Us?

Jane wrote an article about the Slash Generation over a year ago- Are We the Slash Generation?– and it’s one of our most read articles. Why? Well, beside’s Jane’s captivating writing skills, I’m convinced this interest in the slash generation prevails because the slash generation is ubiquitous and is already bleeding into future generations.

What is the slash generation? It’s a generation of 20 and 30 somethings that have multiple jobs and even multiple full time careers. For example: Actor/Yoga Teacher/Nutritionist/Graphic Designer, or DJ/Cafe Owner/Artist/programmer. We all have hobbies, such as occasional running or painting, but the slash generation has multiple JOBS. I’m a prime example of slash generation- my job title is presenter/product specialist/ demonstrator/ marketer/ writer/ actor/ director/ producer. I’m probably forgetting something.

Why is the slash generation on the rise? Well, the economic landscape is changing for millennials in their twenties and thirties- and the changes are affecting younger and older generations as well. Jobs that include pensions are now few and far between and companies don’t necessarily encourage employees to stick around. Changing jobs has become as frequent as changing your socks.

And there are good reasons to change jobs: minimum wage salaries don’t nearly keep up with inflation, most employers don’t reward you for sticking around, benefits are few and far between. So instead of sticking with one company, millennials are going wide and both starting their own companies and working with multiple employers on both a freelance and employee basis. Honestly, we sometimes need to do all these things to pay our bills.

The slash generation is a double edged sword: it can be very helpful to have multiple jobs and skills and to ‘go wide’ so that you have security if certain jobs don’t work out. But the slash generation is also sign of unfair economic times in America- where you can work very hard within companies and still not see anywhere near the kind of money you deserve. This is an era where companies can have spectacular financial success with their employees barely seeing a dime of that growth.

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In America, there has been a 72.2% rise in productivity since 1973 and only an 8.7% rise in pay rate

 

 

Should We Care about the Minimum Wage Problems in Our Thirties?

Hopefully, though not necessarily, we’re making more than minimum wage in our thirties. Whether you are or not, though, I hope you’d be interested in the statistic saying that the Federal minimum wage, adjusted for inflation, is worth less than it was 50 years ago. I find that to be an extremely sad statistic.

Someone asked on Quora (my absolute favor online pleasure site where I can get lost in questions and answers for hours) the other day: “How could 1950’s families afford to have only a working father, but a stay at home mother?” A bunch of people provided answers about eating out less and saving more, but one answerer got right to the point: Basically, when there was more productivity at a company in the 1950’s, the workers made more money. When there’s more productivity at a company now, the top 1% keep excess money, and the workers never see it.

In 1950, the average income per year was $3,210. Since the minimum wage was $0.75 an hour (on January 25, 1950), people working the minimum wage the average number of hours a week (43) made $1,677 a year. So, by working the average number of hours and making the federal minimum wage, you could make 52% of the average wage. In 1950, a new house cost $8,450. So, if you never spent a penny of the money you earned, it would take roughly 5 years at the federal minimum wage to save the amount equal to that of a new house.

In 2015, the average income per year was $55,775. Since the minimum wage in 2015 was $7.25 an hour, people working the minimum wage the average number of hours a week (34) made $12,818 a year. So, by working the average number of hours and making the federal minimum wage, you could make 23% of the average wage. The average sale price for a new house in January 2016 was $365,600. So, if you never spent a penny of the money you earned, it would take 29 years at the federal minimum wage to save the amount equal to that of a new house. Do those seem equal to you?

Also, according to the EPI: “Between 1973 and 2014 productivity grew 72.2 percent…while the typical worker’s compensation was nearly stagnant…9.2 percent over the entire 1973–2014 period. This allowed a huge concentration of wealth at the highest 1% of people.”

So what can we do about this? Well, California and New York have increased their minimum wages (with the exclusion of certain small businesses) to $15/hr and that will go into effect by 2022 and 2018, respectively. This is great progress. Because, according to a study by the Center for American Federal minimum wage: “the minimum wage should have hit $21.72 an hour if it kept up with worker productivity.” Even if minimum wage kept up with inflation alone, the study goes on to say, federal minimum wage should at least be $10.52 an hour.

Even if you’re not politically active, and don’t want to get into debates about the minimum wage, you might feel some anger over this the same way I do. People can’t live on the federal minimum wage as it stands…and even if they can live a scraped together life, it doesn’t help the economy anyway that people living on an ‘unlivable’ federal minimum wage have barely any buying power.

What can we do? At the very least, it’s good to be aware of this issue, and spread the word when we can. It’s not true that people in the 1950’s simply “saved more.” I’m a huge fan of saving but don’t let yourself get gaslighted by minimum wage excuses like that one. There are americans who work the maximum number of hours allowed a week, and save as much as they can, who are still simply unable to make enough money to live on. This is a problem for us all.

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What Can I Deduct On My Taxes?

Ah, it’s tax season again! One of my favorite times of the year! Just kidding- I hate tax season. But it definitely helps to know what I’m doing before I file- and I have an accountant. But accountants can only do so much if I’m completely disorganized. So hopefully you have all your w2s/1099s in order and are ready to go. But are you taking the tax deductions you deserve?

Deductions are basically items you’ve paid for that somehow relate to the job you do. So if you’re self-employed and have a modeling business and you’ve bought a bunch of make up and hair products for shoots, those are deductions. But there are countless other deductions for every profession- and you don’t have to be self-employed to take them. Before I list them all,just a quick reminder about the standard deduction- that’s the amount you’ll get to deduct from your income if you don’t itemize deductions separately. So you’ll always get to deduct something.

For example, if you made $40,000 this year and are filing as a single person or are married filing separately, the standard deduction for 2016 is $6,300. So it’s as if you only made $33,700 this year- and will only be taxed on that $33,700. So if you don’t have itemized deductions totaling more than $6,300, then you should take the standard deduction and that’s that. The standard deduction if you’re married and filing jointly is $12,600, and if you’re filing as head of household (meaning you have a dependent), your deduction is $9,300 this year. 

So if you think you can possibly itemize deductions adding up to more than that, here are a few deductions you can try:

-Do you own a home? There are deductions you can take that relate to your home including what you’ve paid in property taxes, interest on a home equity loan, and possibly any home improvements made for medical care.

Were you in school or paying off a student loan in 2016? You can deduct some of your tuition and loan interest!

-Did you have a child in 2016? You’re eligible for tax deductions!

Are you self-employed and have a home office? You can deduct a portion of your rent and utilities! If you’re self-employed you can deduct a lot more though. See Mashable’s article on deductions for the self-employed. I’m too tired to write a whole new article on this, even though I’m self-employed- theirs is quite good.

Did you move for a job? You can potentially write off your moving expenses EVEN IF YOU DON’T ITEMIZE DEDUCTIONS!

Also, if you had large healthcare bills (even dental bills) in 2016, or donated to charity, you can potentially write off a portion of these expenses as well!

So don’t leave money on the table this tax season- no matter how nice you aren’t you don’t need to pay Uncle Sam extra money you don’t actually owe!

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How Much Money Do You Spend Per Day?

According to yesterday’s (2/20/2017) Gallup polls, the average dollar amount Americans report spending or charging on a daily basis (not counting the purchase of a home, motor vehicle, or normal household bills) is $101.

What do you think of that? That number blew me away, primarily because I don’t make nearly enough money to spend that kind of money. I realize though that the number probably reflects people who have children and other dependents.

I used to try to live in about $30 a day. Which seems like a lot of money, but in actuality, isn’t at all. If you want to go out to dinner with friends, you may be spending $50 or above for drinks and dinner. Before I let go of the $30 per day thing, the $30 balanced out in my mind – because some nights I’d stay in and cook, and be spending only $10 a day, and then other nights I’d use the leftover money to pay for the dinners and nights out. But then I started spending more nights out and treating myself to self-care things like massages and the occasional self-help book on Amazon and I couldn’t keep myself within that $30 per day rule. And then I’d feel bad about myself.

So, I try not to think about how much money I’m spending each day. That’s probably not the best approach, but for now, it’s the best thing for my mental health. I try to be conservative obviously but I don’t want to be limited everyday to a strict amount.

Do you count how much money you spend every day? Laura, my fellow blogger and bestie, told me she uses an app to track her spending everyday. But it seems like too much work for me at the moment, even though she’s assured me it’s easy to use.

If you’re interested in seeing more data of how the average American spends their money and their overall job satisfaction, I highly recommend the Gallup site:

http://www.gallup.com/poll/112723/Gallup-Daily-US-Consumer-Spending.aspx

Can I Put All My Debt on a Zero Interest Credit Card?

The other day a friend of mine was inquiring about paying off credit card debt using a zero interest credit card.

She had moved all of her debt from a high interest credit card to a zero interest credit card and had completely paid off that debt very quickly, which was awesome.  She had two other high interest cards and asked me if she should move the debt from those over to the same zero interest card or if she should open a new zero interest credit card. I had to pause a bit before I considered the answer.

First things first.

A zero interest credit card is a credit card that has zero interest for a certain amount of time, after which the interest rate spikes up, usually higher than a ‘regular’ credit card. If you’re really diligent about paying off a zero interest credit card quickly, you can pay it off before the high interest rate kicks in.

I wrote about these types of cards before in my post: Is a 0% Interest Credit Card Just a Blatant Lie In a Pretty Package?

Zero interest credit cards have their pros and cons, and both are pretty simple. In a nutshell:

Pro: You can pay off debt quicker when you have no interest gathering on the debt while it’s on a zero percent interest credit card.

Con: If you don’t pay off your debt fast enough on aforementioned card, you’ll have a hell of a LOT of interest gathering on that debt. 

So, let’s back to my friend’s question about whether or not she should move multiple balances to the same zero interest card. Here are the facts:

  1. My friend had 3 high interest cards she needed to pay off
  2. She had one zero interest credit card
  3. She had already moved two high interest cards onto the zero interest card and had paid off one card’s debt already. 
  4. In May, the zero interest would turn to VERY HIGH interest, probably around 20+ percent, which is awful. 
  5. She still hadn’t moved the third debt and was wondering if she should move it to the zero percent card or open up a new zero percent card for that last debt.

Here’s my answer, with additional questions, in 3 parts:

  1. Can you beat the balance transfer fee? Some zero percent interest cards have a 3 percent balance transfer fee. If your zero interest card has this fee, you have to calculate whether that 3% is less or more than the interest you will end up paying on the original card before your debt is paid off. For example, if you have $1000 in debt on a card and move it to a zero percent interest card with a 3% balance transfer fee, you’d have to pay $30 to transfer the debt. If you would end up paying less than $30 in interest on the original card before you paid off the $1000, it wouldn’t be worth it. If you had a zero percent interest card with no transfer fee (they do exist), you’re fine and wouldn’t have to make this calculation. If
  2. Can you pay off the second AND third debt by the time the zero percent interest expires? In this case, if she could pay off all debts before May, her interest rate would stay at zero percent and she would get all the pros out of the card with none of the cons.
  3. Can you put all the debt from various, different cards, on one zero percent card?  This was a question I had to ask myself, and then had to google. I wasn’t sure how things worked with putting multiple debts on one zero percent card. Turns out it’s fine. It’s equally fine to put the debts on different zero percent credit cards (you can open multiple at the same time, depending on your credit score and approval, of course.)

One last MAJOR note: Don’t close the original card after the transfer, unless it has an annual fee that you don’t want to pay. Closing older credit cards hurts your credit score. 

So my friend was able to get all her debt from 3 cards on one zero percent credit card, and is on track to pay everything of by May before the interest goes up. This will save her tons of money in interest in the long run.

Hope this helps you guys understand zero percent credit cards a little better, and wasn’t too complicated. If used wisely, AND QUICKLY, zero percent interest cards can be a great tool to help get you out of debt.

 

 

How Do I Get Renters Insurance For My Apartment in my Thirties?

Today I stared at a to do list item that has been on my list for many years, but has never before been checked off. That item is: Get Renters Insurance. And believe it or not, you guys, after all these years, I am now the proud owner of a year-long renters insurance policy!

Here’s why this achievement is important to me: this is the first time I’ve had a full apartment to call my own. I now live in a studio in queens. It’s nothing fancy, but I’m super happy with it and I love it very much. If something were to happen to it such as a fire or burglary, I’d be extremely upset. But I’d be even more upset if I then went into crazy bankrupting debt re-buying all my possessions, such as my bed and my couch and my desk and my computer and my clothing. I have more stuff than I think I have- a lesson I always learn again each time I move.

Getting renters insurance was both easier and harder than I thought. The hard part was that I had no idea where to start. I didn’t have a clue what company to go with, or even what companies were out there. I had no idea how much I should be paying per month nor how much I should be insured for nor what my deductible should be.

So I did what I always do when I’m not sure which direction to go: I googled. At first I just googled ‘get renters insurance’ but I just came up with a list of insurance companies touting how great they are, so I moved on to adding my favorite (mostly financial) bloggers to the keywords to see if they had any articles on the best of renters insurance, such as ‘best renters insurance ramit sethi’ or best renters insurance paula pant.’ Finally I tried ‘best renters insurance NYC’ and that brought up some good articles from websites I knew such as The Simple Dollar and Nerdwallet.

From these articles I got an idea of how much renters insurance should cost a month – IT’S USUALLY ONLY $12-$15 DOLLARS A MONTH! Not bad at all 

I also got an idea of about how much I should be insured for – around $25,000. That may sound high, but when you tally everything you own (bed, couch, desk, dresser, other furniture, tv, kitchen items, clothing, electronics, etc) plus possible cost of moving (yep, there’s all types of insurance and some even cover temporary stays if something happens to your permanent home), $25,000 is the recommended amount on average.

Then I got an idea of how high my deducible should be to keep my premiums low- the recommended amount is $500-$1000. I picked $1000.

Then I found a few websites that listed the best companies of 2016 for renters insurance- they all recommended different ones, but I looked up the companies that kept repeating on various websites: Allstate, State Farm, and Nationwide. I also checked Gotham Brokerage, specific to NYC.

Then I went to all four of those companies’ websites, and got quotes from all of them. I ultimately picked State Farm, which gives me the most coverage with the lowest premium, and I paid for it then and there- a grand total of $11 a month for $25,000 worth of coverage. This is not an advertisement for state farm though, or any of the above companies- I think rates and coverage are different for everybody.

But a major item on my to do list that has hung over my head for years was accomplished in about 40 minutes, including all the research and quotes and payment. Now imagine if I’d put renters insurance off longer and something had happened? I would’ve been pretty angry at myself.

So if you’re putting off getting renters insurance, I’d highly recommend going for it! It won’t take long and it’s cheap and will put your mind at ease. Here are some sites to get you started:

http://www.reviews.com/homeowners-insurance/renters/

http://www.thesimpledollar.com/best-renters-insurance/

https://www.nerdwallet.com/blog/insurance/find-best-renters-insurance/

http://www.toptenreviews.com/services/insurance/best-renters-insurance/

https://www.creditsesame.com/blog/insurance/best-renters-insurance/

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Some Awesome New Finance Experts I’ve Been Following

After Suze Orman ended her amazing finance show (which I always listened to as a podcast) about a year and a half ago, I realized that almost everything I knew about finance I’d learned from Suze Orman. And I didn’t know what to do without her.

I still had Dave Ramsey’s podcast, which always amused and humbled me (he sometimes speaks to really down and out (aka completely broke) people who call in…and he always has pretty sound advice, even when I don’t consistently completely agree with him (he can get very religious). However, one of his best quotes is “you can’t fix stupid,” which I absolutely agree with). Another podcast I listened to was (and is) NPR’s Planet Money– which is a great podcast about money topics- but is more an exploration of economics in our lives than a ‘money advice’ show the way Suze Orman’s was.

In the past few months I’ve discovered some cool new finance advice podcasts (as well as bloggers…many of the podcasts are from bloggers that have decided to start podcasts). Nothing replaces Suze Orman, who had a distinct voice, but a lot of these are very good. If anyone wants some good and relatable finance podcasts and blogs for complete novices, here are some awesome recommendations:

http://www.budgetsaresexy.com –  J.Money’s refreshingly honest and totally down to earth financial blog. I’ve never read a finance blog that’s as open and genuine- J. Money tracks every dollars he has and he will give you exact numbers including his net worth, his retirement savings, his mortgage paid, and much more. He writes articles with titles like ‘What I’d Like to Teach My Dumb-Ass Tenants About Money.’ This blog is fantastic for anyone who doesn’t come from a finance background and just wants to understand all the basics a more, from someone who’s ‘just like you.’

http://affordanything.com/  – The Afford Anything podcast (which used to be called the Money Podcast) got me turned on to budgetsaresexy.com because J.Money (of budgetsaresexy) used to be the co-podcaster. However, he has since left the podcast, and his co-podcaster Paula Pant has renamed the show after her website: affordanything.com. Both the podcast and the website are really inspiring and useful – Paula Pant is in her early thirties and is completely financially independent and never really has to work again. She still works, though, and explains why in both her podcast and on the blog. Listen to the podcast from the beginning to listen to her and J.Money co-host together. They’re a great pair. Paula talks a lot about real estate and has made her fortune from it, so if that interests you, this is an extra good one (but it’s a good podcast even if you’re not into real estate- I’m not.)

Optimal Finance Daily – This is a cool podcast because each episode is a part of a different well known finance blogger’s blog- read aloud by the podcaster Dan Warren. It’s a great way to get familiar with lots of different finance bloggers – plus each episode is only around 8 minutes- so super easy to listen to!

So Money with Farnoosh Torabi – Farnoosh’s podcast is superbly edited and makes the listener feel taken care of (the way Suze Orman’s show always was). Farnoosh’s podcast is great to listen to because she’s a money expert interviewing other money experts! Super clear financial advice, and a very inspiring show as well.

Hope you enjoy some of these. As always, let me know what you think!

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The Connection Between Scary Movies and Credit Cards

Let me just start by saying that I actually really like credit cards and that they don’t scare me. But horror movies do- and even scary, or semi-scary, TV shows can keep me up at night. Hell, just a trailer for a scary movie makes me immediately plug my ears and avert my eyes.

People may laugh at me when I scream in fear during the first episode of Stranger Things, or The Walking Dead, and turn away from the shows for good, deciding to probably never watch them again. But I know myself. I know how scary movies and books and TV shows might seem fun to me at first but can give me terrible nightmares, especially when I’m alone at an old hotel in the middle of Oklahoma City.

And since I know myself, I also know that I’m as good with money as I am bad with horror films. I was that kid who would look for money hidden in the coin returns at arcades and collect it, as opposed to using the coins to actually play the games. I know that credit cards will never tempt me into spending more than I have because I’m just a cautious type of person.

 

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Yikes!

However this isn’t true for lots of people- and if you’re one of them, don’t be ashamed. Be glad that you know yourself. The amazing finance blogger J. Money, on his fantastic blog Budgets Are Sexy (I only very recently discovered this extremely relatable and super fun-to-read blog, and I highly recommend it), writes about how he was solicited by TD Bank to create a credit card article targeted to millennials. Instead he describes how millennials are actually doing great things for themselves by avoiding getting into credit card debt. The reason TD Bank, and many other banks, are especially targeting millennials for credit cards is because millennials have been shying away from the cards due to worries about ending up in debt. According to the Budgets are Sexy article, almost half of all millenials- 44% – aren’t using credit cards at all. After all, many millennials-including myself- grew up and/or spent their early twenties during the recession of 2008 and are already saddled with insanely high student loan debt and a degree of worry about incurring any more bills.

TD Bank was trying to get Budgets Are Sexy to write about the benefits of credit cards and how millennials should establish credit so that they could borrow money later to acquire a car or a house. Yet J. Money, although he likes credit cards for their various perks and benefits, thinks that avoiding debt is way more important than your credit score. And I completely agree. Although I love credit cards personally because they’ve enabled me to take many a free flight somewhere, and to pass the credit check to rent my apartment, I disagree with telling millennials they should establish credit in order to take on lots of debt down the line… especially when millenials are already worried they’ll take advantage of “free money” credit cards and take on debt from unnecessary things!

I think it’s important to know yourself, and if you know you can’t handle the temptation of credit cards, stay away from them! I’ve cut scary movies out of my life because I know I can’t handle them, and I’ll never look back!

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This creepy image scares me a lot. It’s actually from a protest against credit card debt, that I found in a How Stuff Works article

If You Make A Lot of Money In Your Thirties, You Don’t Have to Spend it All (or, Did You Hear How Much Mila Kunis and Ashton Kutchers’s Wedding Bands Cost??)

Now that you’re in your thirties, it’s possible that you’re making more money than you used to. Maybe you’re making a lot more money, or maybe just a bit, but hopefully you’re getting to enjoy that difference in pay.

When I used to listen to Suze Orman’s podcasts- alas, she sadly retired from the podcast/TV scene recently- there was a segment called “Can I Afford It?”. In this segment, people would call in and tell Suze about something they wanted to buy. Then they would ask her if they had the money to afford the item. Suze asked them all the same basic questions about their financial situation, the most important ones being what their monthly income and their monthly expenses were.

The answers people gave to these income versus expenses questions were always enlightening. Sometimes people would call in with an income of $11,000 a month, but had monthly expenses hovering around $10,950 a month! And then there were people who would report an income around $3000 a month, but their expenses averaged  only $2,000 a month. Who do you think was better able to afford what they wanted to buy? It was weird to see the juxtaposition between the two.

Of course, it’s not always like this. Sometimes you can make a lot of money or a good amount of money, and simply not spend it all. I read an article today about Mila Kunis and Ashton Kutcher’s wedding bands. In an interview with Conan O’Brien, Mila was talking about how she saw that the wedding bands at Tiffany’s were ridiculously expensive. So she went on Etsy and found a nice wedding band for $90 and bought it for herself. Then she found Ashton’s wedding band for $100. So their grand total wedding band expense was $190! I’d imagine that’s a huge savings from the average cost of wedding bands today! And this wedding band was for one of the top paid actresses in Hollywood, who can absolutely afford one that was way more expensive!

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But a more expensive wedding band wasn’t worth it to her. This is an extreme example of how just because you make money doesn’t mean you have to spend it all. It’s also an example of how people cut costs on their wedding when they didn’t even have to, simply because some of the costs weren’t worth it to them. Of course, you don’t have to be cheap and hoard all your money either- being insanely cheap isn’t fun, and Suze Orman approves lots of purchases. After all, life is to be enjoyed! However, you can pick and choose which items and experiences are really worth spending your hard earned money on. And when you only purchase things that are worth it to you, you’ll end up making your purchases more special and exciting- even the little ones!

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 Click here to see the Mila Kunis interview about her Etsy wedding bands

 

The Anti-Budget Budget In Your Thirties

Although Jane and I both very recently wrote articles about how we’ve been tracking every dollar we spend lately, (check out Jane’s Budgeting article Saving Money Like You’re In the Depression Era and my budgeting article How Tracking Money is Like Weighing Yourself), I want to write here about a way to possibly not track your money at all.

This is kind of the method I was unofficially using before I started tracking every dollar this past month using the Goodbudget app. The method involves taking a savings percentage off the top of your income before you spend any of your money on anything else. The word “savings” is general and can include any of the below:

Contributions to an Emergency Fund

-Contributions to any savings account

-Contributions to a retirement account – such as a 401K, an IRA, or a Roth IRA.

-Paying down any debt- such as a student loan, a credit card, or accelerating your mortgage payments.

-Contributions to your child’s college fund- such as a 529 Plan.

So here’s how to live the anti-budget life:

  1. The second you get paid, decide on a percentage of your income to contribute towards savings.

2. If you never save anything, you can start with as little as 1% to save. The way to figure this out is to simply knock 2 zeros off the amount. So if you get paid $2000 biweekly, contribute $20 every time you get paid. Make $1000 biweekly, contribute $10 every time you get paid.

3. If you’ve been saving already, for retirement, for a house, to pay down credit card debt, to have a good emergency fund- saving for anything really- then you can easily incorporate this tactic to make saving money even easier. Whenever you make any money, save a certain percentage towards any and all of your goals. I usually do it this way- the second I get paid, I put 10 percent towards my emergency fund, 10 percent towards retirement, and 10 percent towards throwing extra money at my student loans.

With this tactic, you can then try not budgeting the rest but instead spend it comfortably knowing that you’ve already saved what you needed to.

Of course, you’ll need to make sure your bills, like rent and utilities, are paid before you spend the rest freely, but you will still be able to spend without budgeting every  dollar.

Check out another anti-budget budget article by the awesome finance blogger and podcaster Paula Pant of Afford Anything- she lives by this strategy and goes into immense detail about it in The Easiest Budget to Follow- Shockingly Simple.

Give this strategy a try, especially if you hate budgets, and let us know how it works for you! It’s nice and simple!

 

How Tracking Money Is Like Weighing Yourself

Recently, I’ve gotten in the habit of tracking every single dollar I spend. Jane, in her last money post, Saving Money Like You’re In the Depression Era, just wrote about tracking all of her money, bit by bit. As we’ve always suspected, Jane and I must have a psychic connection because I had just started doing the same thing with my money.

The reason it’s amazing that we both started tracking money at the same time is because we have been adamant about NOT tracking money in the past. It made both of us extremely nervous to track money- we always felt like we were frugal enough and that tracking every dollar stopped us from enjoying the tiny indulgences in life.

I began tracking money because I realized that my dollars were disappearing faster than I’d like. I’m an extremely frugal person, so money mysteriously disappearing irritated me greatly. Since I don’t make a budget from month to month, I rely on my frugality alone to keep me in check. Since that didn’t seem to be working anymore, I went over my credit card statements and was amazed to see that so many little tiny $4.00 or $6.00 purchases had added up. In some cases tiny purchases had added up to hundreds of dollars!

I had attempted to track my spending a few times in the past (giving up after maybe 2 days) and those times I’d used pen and paper to write down whenever I bought something. That wasn’t the best option for me because I’d lose the paper I wrote the expenditures on, so this time I downloaded two money tracking apps- things are easier to keep control of electronically. After playing with both apps, I really started using and enjoying this one called Goodbudget. It’s free in the App Store (and probably the Android Google Play store too). The app is great because it’s simple and it allows me to make categories of spending so I can see where I’m spending the bulk of my money. Whenever I buy something that doesn’t fit into my previous categories, I simply add a new category.

With my trusty new money tracking app, Goodbudget, I’ve succeeded in tracking every dollar of my money for a few weeks now. That’s a record for me! And what’s really interesting is that I spend less money because I’m more aware of my money being spent..and it kind of bothers me to see the amount of money I’m spending go up uncomfortably high right in front of my face. So I question some tiny purchases (a latte here or there, a new shirt, however affordable), that I would’ve otherwise barely thought twice about if I hadn’t been keeping my monthly expenditure right in front of me. Now I know how quickly small costs can add up.

I always hated weighing myself too, because the scale made me nervous and anxious in the past, but I’ve found that it really does help me to have a number in front of my face to keep me accountable.

If you haven’t tried budgeting apps- even if just to write down all your purchases the way I have- I recommend giving one of them (such as Goodbudget) a try. Even if you’re frugal, you may be spending more money than you realize. And when you stop spending money mindlessly on things, you’ll have more of it to spend on the tiny luxuries you actually love.

 

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