So I Paid Off My Student Loans- Part 1

If you’ve been following this blog for the past few years, you may know that I’ve been on a quest to pay off my student loans since… basically forever. Actually, for the first few years after I graduated, as my debt amount surged while interest piled up, I simply lived in hopeless despair. I wondered what magical miracle would occur that would enable me to pay off more than $100,000 (yes that 6th zero belongs) worth of debt – and for undergrad only! I’m not even a doctor or a lawyer or even a prosperous business person- I have a DRAMA degree, for god’s sake! And that $100,000 total is with ONE YEAR PAID OFF ALREADY by mom and grandma! So even with a whole year of school paid off, plus some financial aid, my loans were STILL that much!

And the loan kept growing, even after college ended, because in the first few years after graduation I’d decided that since my interest was high on the smaller of the two loans (one was for around $86,000 and the other was $14,000), I’d put the smaller loan on forbearance (effectively deferring it) and not pay it for awhile.

I know now that this is BACKWARDS thinking- it’s a really bad idea to put loans on forbearance unless you’re absolutely desperate and have no other choice. To be fair, most people put loans on forbearance because they have no other choice- I myself was the definition of desperate- so the warning is probably unnecessary. But forbearance is a horrible sneaky trap that only punishes your future self while your current self breathes a very temporary sigh of relief. I got the 14k loan down to 11k with a lot of blood sweat and tears, and then put that loan on forbearance for a year. When I started paying it again, after only one year of deferment, the loan had GONE BACK UP to 14K! As if I had never made a dent! The experience was both sickening and horrifying.

NYU is even more expensive now- disgustingly expensive. Somewhere around 70K a year expensive. It’s wayyyy overpriced, and pricing seems to only be only going up. The thing is, many colleges are following that same path of being completely out of line overpriced- the problem is not just NYU. To be fair, I really enjoyed my NYU program- I had private conservatory training in all aspects of acting, directing, and theater, and the 4 years were pretty amazing. It’s not a bad school. But the loans afterwards all but buried me- and I don’t recommend anyone ever taking on that kind of student loan debt. Ever. Even if  you’re going to medical school or something that should fast track to a lucrative career, I’d still advise you to think your finances through very carefully.

In a blaze of glory I finally completed my last student loan payment this February, 2018. I still can’t believe it. I remember the day I hit ‘send’ on that last payment- I cried. My body shook in front of my computer and nothing made sense. The student debt that had hung over my head for so many years of my early adult life was finally gone. It felt like a miracle- but it wasn’t. It was the result of an incredible amount of work and very carefully calculated planning. Even making very little money per year, I finally did it. I did it.

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I did it! In the next post I’ll tell you how…

 

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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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Expensive Things Can Be Bought Cheaply in Your Thirties

I was laying on a loungechair at an Onsen in Japan the other day- an Onsen is a Japanese hotspring. It was a beautiful day out and I’d just come out of the Himalayan salt sauna next to me. I could feel the salt between my toes and the sun on my skin. My breathing came easily and deeply. I was about to jump into the open air hotspring in front of me. And I felt rich. And I thought “this is an amazingly expensive experience.” It was a funny thought to have because this particular beautiful onsen experience had cost me a grand total of 7 whole dollars.

Yep, the Onsen entry fee was a paltry 700 yen, which actually equates to a little less than 7 US dollars. And as I was laying there in the sun and basking in the spa-like experience, I kept thinking about how people want to have tons of money so that they could have experiences such as this, but this had cost me nearly nothing.

And this happens all the time. I sometimes have an amazing, brilliant meal somewhere that blows me away, and the whole thing has cost me a grand total of 10 dollars.

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Or I’m at a beautiful lake somewhere and the whole experience costs me a grand total of zero dollars plus $2.50 train fare.

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This isn’t just a Japan thing. Sometimes in America I’ll have a great super filling brunch for less than $15 complete with Bloody Mary and coffee.

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Sometimes I’ll be at an amazing five dollar yoga class in Bryant Park, or I’ll get a cheap massage in Queens that’s less than forty dollars for a whole hour- not hundreds.

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I’m not saying that having money isn’t important and that you don’t need a comfortable degree of money to live a happy life. Being worried about money is terrible- I know firsthand what that feels like and the stress that causes.

However, I don’t think you need to have tons of money to live the rich life you’d live if you did have tons of money. You can live it anyway at any income level- don’t equate expensive with value. Many things you’re waiting for the money to do aren’t as expensive as you think. The saying isn’t true- lots of things in life are free! Or at least pretty cheap. And they’re all around- just look for them.

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Ambition in Your Thirties

Do you think your career ambition has declined in your 30s? According to a study by the Families and Work Institute, which this article Why You’re Losing Ambition As You Age elaborated on, workers begin losing their ambition to get promoted or seek out more responsibilities around age 35. The researchers attributed this decline to people having children.

It makes sense – having children is like having a second job. Duh. Your time and energy is devoted to raising this small person (or people).

But what if you don’t get married or have children? Does your career ambition also decline in your mid-30s?

Though I’m not yet 35, I’m pretty close, and while I don’t think my ambition has declined, it has changed. It’s morphed from me seeking external measures of success to me seeking a deep desire to be fulfilled in my work. Since I’m a writer, that means pursuing interesting ideas and projects for stories and working with people who share a similar vision. Making six figures and owning a home is still exciting to me, but I see those things as secondary benefits to doing something in my life that feels uniquely suited to me and that benefits people.

I’ve also seen this shift in many of my 30-something friends. I have friends in corporate jobs who are considering opening up their own businesses, presumably more fulfilling, but initially less lucrative. I also have friends who have decided to only work part-time as they raise their children.

So what do you think? Has your ambition for wealth, power, career success lessened in your 30s?

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Should I Play the Lottery In My Thirties?

Last week the Powerball jackpot was 1.5 billion dollars. A bunch of my friends bought tickets and a few of them even won…four whole dollars.

When one of my friends first told me he went and bought a bunch of tickets, I’ll be honest, I was little upset with the idea. He asked me if I was going to buy any myself, and I replied with a haughty, ‘no, I think I’m going to invest my money and save it, thank you very much.’

I kinda felt amazingly proud of myself- the lottery (and gambling in general) are things that I can easily control my response to and I value that about myself. I have insane self-control when it comes to spending money on things that I consider wasteful. I don’t know if I’ve ever purchased a lottery ticket- maybe I bought some for an ex many years ago.

However, something about my own response bugged me- was it really so bad to buy lotto tickets? That same week, I received an email newsletter from a writer I love, Ramit Sethi. He was talking about how silly it is to discourage people from buying lotto tickets, because, in a way, you’re discouraging them from dreaming. Ironically, he was actually writing in response to bloggers who scoffed at people who bought lotto tickets. He said:

Their articles [finance bloggers] reflect a total lack of understanding about WHY people buy lottery tickets. Hint: People who buy lottery tickets don’t really expect to win. People know the odds are astronomically, cosmically against them. So why would they do it?

The answer: They’re buying permission to dream about winning it.

If you think about it, $2 for a dream is well worth it. If you live a life where you’re counting pennies, isn’t it worth paying $2 for the dream of becoming fabulously wealthy — even if just for an hour? Hell, if you live a humdrum life of $60,000/year with 2% annual raises and one 2-day vacation a year, you can see why people would crave an escape.

By the way, there are a LOT of other ways we pay for an escape: Movies, fancy clothes, and so many more things. Isn’t it funny how lottery tickets cost less, but incur more wrath from judgmental people? It’s fun. It makes you feel good, and that’s a great reason to spend $2. OF COURSE lottery tickets are mathematically stupid. So is going to a bar to meet someone…but we do it anyway.

I never really thought about lotto tickets that way, but they’re a tiny price to pay to dream about something way bigger and more exciting in your life. Sure, we can all visualize and meditate and dream for free, but any tool that helps you feel happier and more passionate about life, is harmless, and only costs a couple of dollars, is absolutely, totally worth it. Use the tools that you discover- little indulgences here and there can help you feel better and dream exponentially bigger. Make the ‘silly’ choice sometimes.

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What About Those Creative Projects In Your Thirties?

When I just got out of college, straight out of the drama program, I was hungry for creative work.

I had just gotten out of the directing/acting program at NYU and I wanted to work on plays- I didn’t feel like there was any other choice. I was buzzing with musical moments- I was inspired. I yearned to put my excited thoughts to work. Whenever a possible project came up, I jumped at the opportunity. The projects always felt like opportunities- maybe scary or difficult ones sometimes, but never a drag. I was reading plays all the time and in and out of long rehearsal processes- all of this felt like a hardcore part of my career.

Of course, there were bad moments where I felt like rehearsal processes took up all of my time- and would occasionally cause fights with my ex-boyfriend when he claimed every spare moment of my time was taken up by theater work- with not a second left for him. And that was a problem, but I kept working on theater projects anyway- they were just constantly popping up because I was surrounded by people in the industry, and connected to a lot of theater groups. I tried to find some balance, and I would apologize to my ex and to friends profusely when I was in tech week (AKA Hell Week, when your life is completely claimed by the theater and you eat, sleep, and breath a play yet still never have enough time before opening night).

Through it all, I felt like theater projects were extremely important. I didn’t question why. They just were.

Then, maybe four years ago, another ex-boyfriend of mine changed the way I felt about theater. He never understood my love of theater, and was never into the fact that I loved it. He didn’t come to some of my biggest and proudest productions, always claiming some excuse or another. When he did come to the plays, he always seemed upset for whatever reason and made me nervous.

He reminded me again and again that the audiences of most of my plays consisted solely of friends and families of the cast and of myself. This was basically true. It’s rare that strangers decide suddenly to attend an off-Broadway play unless there’s a celebrity in the cast. He said I wasn’t reaching the people I’d hoped to reach anyway. This was possibly also true. I was hoping to reach many people- and if the audiences only consisted of the same people who always got ‘dragged out’ to support me or my cast, then what was the point? I was making theater in a vacuum.

Even worse, once I believed that I was making theater in a vacuum, for no one, I couldn’t stomach the fact that I did it for almost no money. Most of my theater projects have been a labor of love, with minor stipends paid to me at the end, if that. Yet, as I said before, I still felt like the theater projects were very important, and still worth working on.

Once I felt like theater projects weren’t worth my time anymore, I went on an official ‘hiatus’ from theater. I stated that I had to pay off my student loan before I ever could do a full rehearsal process again. I haven’t yet finished paying my student loan, but that wasn’t the real reason I stopped working on theater- honestly, I felt artistically defeated. I felt cheated- like theater had lied to me. I wasn’t really helping anyone. I was giving my time away for free. Theater is one of the only industries where people are expected to give their time away for nothing- and even compete to be able to do so.

Instead of the theater defeat wearing off once my former boyfriend and I broke up, it grew stronger. I still didn’t want to work on a full rehearsal process- I couldn’t shake the ‘what’s the point of it all if there’s no money in it’ feeling.’ I blamed my ex. But then I blamed myself. How could I lose such an integral part of myself? How do I get it back? What do I do if I still kinda believe that I’m not reaching people with this medium, or that theater is a dying art form that barely pays and is only attended by foreign tourists and the friends and family of the production team?

I still don’t know exactly what to do with these beliefs that continue to cling on. I wish I could press a button and feel like theater is important and worth it again.

Two summers ago, right after the breakup with that same ex, half in protest towards my ex’s dislike of theater, I’d started writing a play. For a moment, in my thoughts of protest towards his beliefs that summer, the passion returned. My anger fueled me and a character came out onto paper. Musical thoughts started to flow through my fingers. The eager audience in my head returned to cheer me on. I felt a bit crazy- a bit wild. Then life got in the way. I slowed down on the script and my project screeched to a halt. The passion was gone.

The other day, when I was feeling empty, I randomly took out the script again for the first time in over a year. It felt distant and removed from my life now, hard to relate to, which cause me some stress.

Would I ever get those passionate, wild theatrical feelings back? I started reconfiguring the script, rewriting and reworking. I manually stuck with it for awhile. Some ideas came to my head- they were shadowy and new, but for a second they felt musical and raw and wild.

And you know what, who cares if no one sees my creative projects but maybe friends and family? Who cares if my creative side work will never make me any money? This kind of work has made me feel more alive than I’ve ever felt without it. So maybe there’s something to it after all.

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Budgeting in Your 30’s When You Hate Budgeting

For all the writing I do about finance and money goals, I really hate to budget. I just can’t stand it.

Perhaps this is because I’m already a big saver, so when I want something, I usually REALLY want it, and not much is going to stand in my way. I hate not listening to my own written budget, but I wouldn’t listen if I really wanted something badly, so I feel like I’d probably go over budget lot of the time, and then I’d kick myself. Ok, so this is actually a self-control issue. :/

I walked around forever with budget hatred burning a hole in the pit of my stomach until recently, when I read an article and realized I’d been kind of following an unofficial budget strategy all along. I googled the info in that article and came upon even more articles that outlined alternative budgeting strategies. Turns out, I naturally follow a common budget strategy called the 80/20 budget, though my version is actually a 70/30 budget.

The 80/20 budget is basically the simplest and least detailed way to budget ever. And I love it, because the details of budgeting make me nuts. Here’s how it works: when you get a paycheck, 20 percent goes to savings. The rest is fair game to divide between needs and wants. That’s it.

This is kind of amazing if you’re never sure how much you’re going to spend in any given month- no matter what, you’ll still be saving. I do a 70/30 budget, or actually a 70/10/10/10 budget, which is only slightly different than the 80/20. The way it works is:

  1. I get a paycheck
  2. I put 10 percent in my retirement account immediately
  3. I put 10 percent in my savings account immediately
  4. I put 10 percent towards my student loan immediately (this is always in addition to the minimum monthly fee I pay)
  5. Then the other 70 percent is divided as best I can among EVERYTHING else without making a budget.
  6. Within the 70 percent, my NEEDS include: Rent, utilities, and student loan minimums (definite needs), as well as food, metrocards (transit), laundry money, and toiletries.
  7. Also within the 70 percent are WANTS including: eating out and or/drinking with friends, food and coffee and green juice splurges, new shoes or clothes, tickets to theater, subscriptions to Spotify and Hulu.

Don’t get me wrong- it’s probably best to actually budget everything out little by little with a food budget, a clothing budget, and an eating out with friends budget. But I’ve never done this, and I don’t know if I’d stick to it if I did. So I think it’s better to at least have SOME sort of budget! And with the 80/20 (or 70/30, or even 60/40) budget, you’re at least still saving. If you don’t have students loans, I’d recommend putting at least 10-15 percent of your paycheck immediately into your retirement account, and then 10-15 percent immediately into a savings account.

What’s funny about taking a certain percentage out of your paycheck right away and paying down a debt and/or putting it into savings is how little you notice that the money is gone. It’s a strange phenomenon! Try it if you don’t believe me. Take 10 percent out of your paycheck immediately each month and put it into savings…you probably won’t even miss it! And if you do, you can always take it back. I wouldn’t recommend it…but the whole point is that your savings account belongs to you! 🙂

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What’s a “Real” Job In Your Thirties?

Continuing along Jane’s career topic from the last post, I have a “what the heck is a “real” job anyway?” story from this weekend.

So I was working in Vegas for the past few days- doing my “real job” of being a self-employed presenter and product specialist at tradeshows, conventions, events and autoshows. For the past three years or so, I’ve thought of this as my ‘real job.’ There are three reasons for this:

  1. I do this job full time.
  2. I enjoy doing this job
  3. I make money from doing this job- in fact, I make just about all of my full time income from this job.

The reason I’ve only considered this my real job prior to the last 3 years, even though I’ve been doing the same thing for more than 9 years, is because I used to consider my real job:

1.PASSIONATE THEATRE DIRECTOR EXTRAORDINAIRE. OCCASIONAL VERY PASSIONATE ACTOR EXTRAORDINAIRE.

I stopped considering theater jobs as my “real job” for one very simple reason:

  1. I don’t make money from doing those jobs.

*At least not close to enough money to support myself and my formerly six figure student loan (now down to an impressive 5 figures! Woot!)

However, while working the convention this weekend, an attendee said to me in a confidential whisper, “so, what’s your ‘real’ job?

I informed him that this was, in fact, my real job. That I do this full time in differing aspects.

He wouldn’t accept my answer. He kept pushing for what my ‘real job’ really was. I attempted to explain to him that I’m building up my current job to do even more in the field of presenting. He wasn’t satisfied. He didn’t believe me. He was sure I was holding back.

I mentioned that I’m entrepreneurial and have multiple side projects, some of which are online. I even attempted to explain some of the side projects. None of this information satisfied him.

Now, at this point, I was looking for an escape route, or at least a way to get back to work and end the conversation.

Finally, I said, “Ok, I direct theater. I’m an actor. I have a theater company”

THIS answer he accepted. “I ‘KNEW IT!” he shouted. “You have a real job after all!”

And after talking my ear off for a few more minutes, and attempting to get my card, he finally went on his merry way, leaving me slightly more annoyed than before he arrived.

I guess some people just have an idea in their head of what a ‘real’ job is.  Being an ‘Actor,’ whether it makes you any money or not, is a ‘job’ that people understand. I always thought acting was the thing people kind of made fun of because a lot of the time ‘actors ‘ end up serving you in restaurants. But I guess the “real job” title of “Actor” is glamorous in it’s own way, even when it’s not.

I could’ve said “pursuing acting left me in abject poverty. Directing theater took up so much of my time that I couldn’t make money working other jobs that actually paid. I made such little money as a theater director that there was no way I could buy a weekly Metrocard, never mind pay my rent from the sad stipends I received. This “real job” that you don’t consider a real job saved my financial life.”

But I feel like he would’ve just said some platitude like, “Keep smiling, kid. Live your dreams. ”

So I simply let him walk away in ignorant bliss. Sometimes it’s just not worth it.

The Joyful Paradox of Saving and Spending In Your Thirties

Today, I was at the airport, sitting next to a woman who was having an extremely loud phone conversation. She had a strong Irish accent and was discussing hotels with her friend/relative on the other end of the line.

“But is it a 4 and a half star?” she exclaimed,  “I don’t want to be in another one of those low category hotels like before.” Her companion apparently told her something disagreeable…not about stars, but about price. “It’s $1500 now? Last time it was $1000. It’s going up!”

It’s possible that this woman was referencing a total cost of stay for a weeklong trip. Who knows? But in my head I thought she was referencing a daily rate.

And hotels really can run into the thousands for daily rates! They can actually get much pricier, especially when suites are involved! Those kinds of crazy high hotel prices don’t even require that great a stretch of the imagination! A friend of mine works at a hotel and she’s seen rooms multiple times that price.

How dare hotels charge those kinds of wild rates? That’s easy- because people will pay them.

Cost is relative. The woman on the phone at the airport seemed okay paying $1000 as long as the hotel was 4.5 stars or higher. Since the hotel had gone up to $1500, the woman was put off, but she didn’t seem totally averse to the new exorbitant price..because she cared more about the quality of the hotel than about the price.

And so it is with saving and spending…and a lot of life. Pick your battles.

There’s a great quote from the CEO and founder of the amazing home website, Apartment Therapy, Maxwell Ryan: ‘Save more than you spend in a way that keeps you happy and comfortable. You can be comfortable or uncomfortable on any level.’

Yesssss!! Even if you made 500K a year and furnished your Park Avenue mansion with the finest handmade furniture imported direct from Italy, you can easily find a way to want more and more… and still be uncomfortable. And if you made 30K a year and live with 4 roommates in a house in the far out suburbs with no car, you can still find ways to be extremely comfortable (well, you can try your darndest). The key to spending/saving comfort takes both knowing yourself and carefully planning.

As you go through life, you become more familiar with your wants and needs. What’s important enough to you that you’ll budget more money to get it? What can you forsake in order to save? Can you live without staying in a 4.5 star hotel? Are you more into spending most of your budget on dinners with friends? Do you want to shop only organic? Is living in the most popular, convenient (and expensive) neighborhood important to you? Do you value fancy cars? Once again- pick your battles. And sometimes it helps to throw money at problems you’d rather not deal with…

In planning your budget, and saving money, it really helps to know the difference between what you care about, and what you only think you care about. In this way, you won’t be a miserable wreck while saving. Don’t deny yourself your absolute very favorite things! Just find the things you can live without and go without them for awhile as you save. You can do it!

Yep, this is a real underwater hotel in  Pemba Island, Zanzibar. It's called the Manta Resort. And for a cool $1,500 a night, it can be yours!

Yep, this is a real underwater hotel in Pemba Island, Zanzibar. It’s called the Manta Resort. And for a cool $1,500 a night, it can be yours!

Should You Have Lots of Credit Cards In Your Thirties?

You know it’s true: You’ve been tempted by credit card sign up bonuses in the past. And you’ve maybe even signed up for a credit card solely for the sign up bonus… and then canceled it? Or have you been scared that opening up or canceling lots of credit cards in your thirties could hurt your credit score?

There’s a lot of mixed information in this area that might leave you puzzled. Here’s the deal: credit cards can be really helpful and pretty benevolent unless you can’t use them wisely. It’s like anything: if you develop an unhealthy (overspending) addiction, you need to stay away. Otherwise, proceed wisely and happily. There are lots of benefits to having multiple credit cards.

Here are some tips for having various credit cards in your thirties:

  1. Pay your credit cards off in full every month

This is pretty self-explanatory, but the real trick to benefiting from credit cards, and especially from having multiple credit cards, is to make sure you pay the full balance off every month, not just the minimum. If you can’t pay the full balance off every month, stay with fewer credit cards until you can. Sign up bonuses and points aren’t worth the crazy expensive interest charges you’ll have to pay if you rack up debt.

2.  Don’t cancel the random credit cards you opened in your early twenties

Part of your credit score is calculated based on length of credit history. If you cancel the first card you ever opened, you’re shortening your credit history, and this will hurt your credit score. Unless a card has a high annual fee that you don’t want to pay, there’s no reason to cancel. If you don’t want to use the card anymore, pay it off and cut it up.

3. If you’re opening multiple cards for a point bonus, make sure you can meet the minimum spend in the correct amount of time

If there’s an American Airlines card that will give you 50,000 miles when you spend $3,000 in 3 months, make sure, if you get the card, that you’re gonna spend the $3000 in 3 months. I’ve screwed this one up before and have actually forgotten to meet the minimum. Put all your other cards away and solely use that one for awhile. If you can pay major bills, like your rent, on your credit card, you should be able to easily meet the minimum. There are actually services that can help you do this –this one is called Plastiq. Though Plastiq charges a 2.5% service fee, it can be helpful if you need to meet a minimum.

4. If you can meet multiple minimums at once, it’s best to open more than one card on the same day

Even if you have great credit, you’re more likely to get denied for a card if you open a new card every few weeks. I’ve actually opened and been approved for three cards in one day (I’m really good with credit cards and pay them off in full every month). If I’d opened one card and then waited a week to apply for the next card, I would have probably gotten denied. Wait at least 90 days to apply for the next credit card(s).

5. You won’t ruin your credit from having multiple cards

In fact, the opposite is true. Your credit score is partially calculated from something called a debt-to-credit ratio. If you have more credit available, you’ll have a better ratio.

6. You won’t ruin your credit from canceling a card

If a card has a high annual fee and it’s not worth keeping, go ahead and cancel it. Your score will only drop a tiny bit from your lowered debt to credit ratio. And it will come back up again as you continue using your remaining cards wisely. The annual fees aren’t always worth keeping the card. The only exception to this rule is if you cancel your oldest card- that will definitely lower your score more than the others because it will change your length of credit history… as I mentioned above.

There’s a lot more tips for enjoying multiple credit cards safely, but I hope this is helpful! As always, please comment below with any questions you may have! Thanks for reading!

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Is a 0% Interest Credit Card Just a Blatant Lie In a Pretty Package?

Oh my god!! A zero percent interest credit card?? Does that mean I will have unlimited money and can buy whatever I want forever in my thirties? And then I can simply pay money back super slowly until I die…. interest free?

Short answer: no.

Long answer: no.

I mean, come on.

I was listening to reruns of The Suze Orman show podcast the other day (it has sadly gone off the podcast air this summer) and a few people mentioned using a zero interest credit card and asked Suze for her advice.

I remember the first time I heard about zero interest credit cards. I thought to myself “what the heck is a zero interest credit card? Why would card issuers would give someone money interest free? In what way would credit card companies benefit from this?”

Here’s a simple answer: zero interest offers always expire. And card issuers almost always benefit.

Here’s another simple answer: zero interest credit cards are usually a bad idea for the consumer. And then card issuers benefit.

Here’s why:

Let’s start with the way zero interest credit cards work:

  1. There are two different kinds of zero interest credit cards: deferred interest and waived interest.
  2. For both types of 0% interest cards, the 0% interest rate only occurs for a certain period of time (say, 6 months) and then expires.
  3. For both deferred and waived interest cards, after the 0% interest rate expires, the new interest rate is EXORBITANT- more than almost any other type of credit card. It could be as high as 26%, which is basically highway robbery.
  4. A deferred interest card is VERY bad, and a waived interest card is not much better. Here are the differences between the two:

a) For a DEFERRED INTEREST 0% interest card, interest is actually accruing during the special 0% promotion period (that certain amount of time I mentioned above when the card is still zero percent), but it’s being deferred. So if you buy something on a 0% credit card that’s 0% for 12 months, interest occurs during those 12 months. but you won’t have to pay it until month 13. If you pay off your original purchase by month 12, you never have to pay that interest. But if you haven’t fully paid off your purchase by month 12, you get hit with THE FULL YEAR OF INTEREST CHARGES!!!

So lets say you bought a $1000 bed on a 0% interest credit card that is deferred for 12 months. Let’s say that card has a deferred 23% interest rate. This means that about $20 in interest is adding up on your card every month. You won’t have to pay any of that interest for those first 12 months, but the card company has a record of it. If you pay off that bed within 12 months, you’ll never have to pay the interest. But if you just pay the minimum every month, the SECOND those 12 months are up you’ll be hit with a $240 deferred interest bill PLUS interest will continue accruing on anything you didn’t already pay off!! At a whopping 22% a month interest rate! This is terrible.

b) For a WAIVED 0% interest rate, lets say you bought that same $1000 bed on a 0% interest credit card that is waived for 12 months. Let’s say that card also has a waived 23% interest rate. This means that for 12 months no interest is accruing on your card. If you pay off that bed within 12 months, you’ll never have to pay any interest. But if you don’t finish paying the bed off, the SECOND those 12 months are up you’ll be hit with a 22% a month interest rate! This is pretty bad, though not as bad as the deferred card.

Credit card issuers count on you being dazzled by the zero percent interest rate and simply impulse grabbing one of their credit cards to make a big purchase. Don’t fall for it!! You’ll likely end up paying way more in the long run!

And if this hasn’t yet convinced you not to get a zero percent interest card, here are two more evil tricks 0% interest card issuers may be playing on you:

  1. For some 0% interest cards, if you’re late to pay or miss even one payment, the 0% interest offer is negated, and you’ll end up having to pay interest right away- before the 0% promotional period is even up! And it’ll be higher than other credit cards!
  2. Also, on some 0% interest credit cards, the 0% offer is only good for the first major purchase, and not the purchases thereafter. So if you continue using that 0% card, it won’t be zero interest anymore for anything other than your first purchase!

Read the fine print on 0% cards. And of course, if you can, avoid purchasing things that you couldn’t afford without a credit card anyway. A lot of times when it comes to interest rates, credit card companies are selling you very blatant lies wrapped in very pretty packages.

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