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Personal Growth

  • Personal Growth

    5 Personal Finance Tips For Millennials

    Millennials are finding more and more that their money doesn’t go as far as their parents’ money did. As such, they have to be both more clever, and more determined, to make their money work for them. That isn’t easy in this day and age, but there are a few tips that can give younger people a hand up on getting on top of their finances.


    5 Personal Finance Tips For Millennials

    Tip #1: Pay Yourself First

    With so much money going out the door for food, rent, and Friday night drinks, it’s easy to feel like you’re never going to be able to actually build anything. One thing you should do before you pay anyone else, though, is to pay yourself. What that means is that you need to take a chunk of your check, and put it right into your savings account. And another into a retirement account, if you can afford to.

    It doesn’t matter how much you save, either, as long as you get into the habit of saving. It might just be $5 a check, but that will add up over time. It’s the muscle memory of making sure you put savings away first that you’re trying to build.

    Tip #2: Set An Honest Budget

    We all know the basic idea behind a budget. You take your check, and divide it up so there’s a certain amount of money going to every part of your life. X amount for bills, Y for savings, Z for groceries, etc. However, too often we set unrealistic budgets, or budgets that don’t account for all our needs.

    You’re living your life. No one knows better than you what you need, so you have to be honest with yourself. If you know you go out on your lunch break twice a week, or that you’ll need to get a new pair of work boots at least once a year, include that.

    Tip #3: Cash Over Plastic

    It’s all too easy to lose track of how much you’re spending when you’re using plastic. While it’s true we all have online banking apps these days, so we can always check our balance before we head to the check out, how often do we really do that?

    An easier way to spend less, or at least to think about spending a little harder, is to carry cash instead of a credit card. Cash feels physical, and we can feel how much we’re parting with every time we make a purchase. Psychologically, cash is easier to deal with, because you know you want to hang onto it. Credit is often an out-of-sight-out-of-mind scenario, and that can be a problem.

    Tip #4: Get Tax Smart

    Taxes are something we rarely think about, until it’s time to fill out all our paperwork again. They’re inescapable, though, and it pays to think about them throughout the year.

    For example, did you know that if you donate items to charities like Goodwill or the Salvation Army that you can claim those deductions on your taxes? The same is true of contributions to many retirement savings accounts, like an IRA. If you save your receipts all year long, you might be surprised what it does to how much you have to pay in taxes.

    Tip #5: Don’t Be Afraid To Ask For Help

    Though we live in an age of unprecedented information freedom, getting help on your finances can be hard. Don’t be afraid to ask for help in managing them. Most banks have investment officers, and there are often programs at your local library, government center, and other locations geared toward helping people get their money under control. Friends, family, and even co-workers are also good sources of information. If you’re looking to get on the inside track, then try to follow in the footsteps of those who’ve succeeded before you.


  • Budgeting, Cash Flow, Personal Growth

    6 Tips to Combat Impulse Spending

    Every day our email in boxes are filled with tempting offers from online stores and brick and mortar retailers — bait for the millions of “fish” they hope to land. If the bait works and you bite, guess what? You’re part of the billion dollar catch! There’s a carefully planned strategy behind their actions. The strategy has one aim and one aim only — to convince you that if you don’t buy now, you’ll miss your chance to snag their great deal! That’s why you’ll often see phrases like “last chance!” or “sale ends at midnight!” on so many online solicitations. And so you “bite”, grab the “deal” and feel a mixture of temporary elation mingled with guilt for breaking your budget and spending money you know you shouldn’t spend. The next day, new offers from the same retailers unfailingly appear with phrases like “sale extended for one more day!” or “absolutely your last chance!”.

    Since the whole strategy behind creating a workable budget is careful planning, impulse spending has to be one of the biggest budget “whammies” there is, since by its very nature it’s unplanned. According to Ian Zimmerman, PhD for Psychology Today, impulse buying is related to anxiety and unhappiness. Paradoxically, impulse buying typically results in buyer’s remorse and unhappiness, which should be a convincing argument for finding a way to stop doing it!

    Some of us are more likely to succumb to impulse spending than others. Zimmerman says that’s because some of us have a personality trait called, logically enough, “impulse buying tendency”, meaning that impulse buying isn’t an occasional trap we fall into, but rather a habit that we succumb to regularly. People who possess the trait are more social, more conscious of social status, and concerned with their image. They also tend to experience higher levels of anxiety and have trouble controlling their emotions.

    But whether you’re spending on impulse to look better in the eyes of your peers, or to get yourself out of a bad mood by “buying” a little (short-lived) happiness, there are ways to combat your urges and take control of your finances. Here are 6 tips to help you combat impulse spending once and for all:

    1. Don’t shop when you’re upset.

    It’s too easy to fall into the trap of buying something you don’t really need in the hope that it will make you feel better. (It might — for an hour or a day!)

    2. Stop thinking of the mall or online shopping sites as “entertainment”.

    Real entertainment makes us feel good. Shopping for entertainment tends to do the opposite. We wind up feeling cheated because we can’t afford something we see that we’d like to have, or we buy it and feel guilty for spending impulsively and breaking our budget. It’s a no-win situation! Start by unsubscribing to any physical catalogs or online solicitations you’re regularly receiving. You can use a service like Unroll Me, to unsubscribe from multiple retailers at once, or simply find the “unsubcribe” link usually found at the bottom of a retailer’s email message and click on it.

    3. Go shopping with a list.

    Buy only what’s on the list and get out of the store as fast as you can — no browsing!

    4. Ask yourself questions.

    “Do I really need this?”, or “Will buying this really change my life and make me happier?”. Be honest with yourself! Don’t try to “sell” yourself to justify an impulse buy.

    5. Watch out for the “on sale” trap.

    An astonishing number of us buy things simply because they’re on sale and we “could use it”. Truth is, we could all use the extra money more!

    6. Keep a list of the things you really want/need.

    (That way, if you find one of them on sale and have the cash on hand to buy it, it really will be a good deal!)

    There will always be “stuff” out there that we’d love to have, and there will always be people who have more than we do. Those are things we can’t control. The only thing we can do is learn to control our impulses by stopping, taking a breath, and remembering we can actually find happiness without acting on every impulse!


  • Debt, Personal Growth

    Avoiding the Debt Cycle

    Financially speaking, millennials have it rough. College is more expensive than ever, with college loans taking a chunk out of many millennials’ paychecks long after they graduate. Cost of living is high, while finding an entry-level job that will support a family is next to impossible. When you’re faced with the standards your parents and grandparents lived with–getting married young, easily affording that first home, and handling the cost of having children –it seems impossible to stay out of debt and still have the things you and your family deserve. Avoiding the debt cycle, however, can help you get ahead financially–and stay there.


    Stay off of social media pages that encourage a buyer mentality.

    This is particularly true of pages geared toward new parents. Everyone of them, from the admins to the other moms, seems determined to convince you to buy, buy, buy! The truth is, there’s no need to buy multiples of one item when one will do well enough. If you find that social media pages are encouraging you to make purchases that are rapidly draining your wallet, stop following them! Your finances will thank you.


    Save up and buy quality.

    When you’re stuck in a low-income spot and trying to stay out of debt, it’s tempting to buy a low-quality, low-price item instead of saving up for a higher-quality item. Unfortunately, that means that within a few weeks or months, you’ll find yourself right back in the same position! Instead, find ways to make do short-term in order to save for the higher-quality purchase. From work clothes to appliances, it’s often worth the higher price tag to invest in quality.


    Prepare mentally for bigger payoffs later.

    Early in your career, you may need to work for low pay or embark on expensive training programs in order to move ahead in your field. It’s alright to live frugally.  Don’t be embarrassed about packing a lunch or work.  Remind yourself that there are bigger payouts coming down the road and stick to your guns against debt.  Don’t fall victim to the lifestyle creep (3 Keys to Avoiding Lifestyle Creep). It will make it easier to make it through the tight times.


    Learn to live simply.

    Minimalism is a lifestyle that’s quickly coming back. Instead of an overcrowded house that seems to be exploding at the seams, look for ways to enjoy a minimalist lifestyle. Avoid buying “stuff” just to have it. You don’t have to go full-blown minimalist, living off the grid, with a capsule wardrobe and no knick-knacks to be found anywhere, but avoid buying things you don’t need.


    The trick to staying out of debt as a millennial is to avoid overspending. Avoiding excessive stuff, whether that means embracing minimalism or staying off of sites that encourage you to buy things you don’t really need, can make it easier to stay out of debt. Changing the way you think about your purchasing habits can keep you debt-free and your life moving smoothly.



  • Financial Planning, Investing, Personal Growth

    Financial Freedom: Learning What You Never Learned in School

    “Knowledge is Power.”

    I’m sure you’ve heard that phrase many times in life.

    But is knowledge power or is the right knowledge power?

    I won’t go as far as saying that what you learned in school was wrong or a waste of time, but honestly, school did not prepare us for the “real world,” especially the world of finances.

    That is why Jim Rohn said, “formal education will make you a living, [but] self-education will make you a fortune.”

    So, the question is what type of self-education should one get? What should millennials learn about finances in order to become successful in this area? There are 5 very important areas of finances that should be part of your self-education.

    1. General Personal Finance

    This is an absolute necessity. It is essential that we learn the general financial concepts such as budgeting, money management, debt, credit and savings. These everyday aspects of finances can overwhelm us unless we get the proper foundational education in this area.  Having a good handle on your personal finances (your personal economy) is essential if you want to gain an form of financial success.

    2. Mindset

    One of the most important aspects of our financial success is the way we think, especially with regards to money. Resources that delve into “millionaire minds” and “how the wealthy think” are important to reprogramming our minds for success. Regardless of what we do externally, success will elude us unless we set our internal compasses for success.

    3. Accounting and Financial Statements

    “You have to understand accounting. It’s the language of business. Unless you are willing to put in the effort to learn accounting – how to read and interpret financial statements – you really shouldn’t select stocks yourself.” – Warren Buffet

    1 plus 1 is 3


    Ultimately, you will want to stop having to work for your money and will want your money to work for you. That is investing. However, you have to crawl before you walk. This step is basically a preparatory step for point #5 below. You don’t have to become a CPA, but if you want to eventually become financially fit, it is important to develop a general understanding of accounting and of how financial statements work.

    4. Markets and Economics

    Once you understand accounting, there is still one more preparatory step you will want to take before delving into investing. You will want to develop a solid understanding of how the general market works. You will want to learn economics.

    Again, you don’t have to “master” this and get an MBA or degree in economics.  You need to understand how markets affect investments and what impact certain changes in the market should and should not have on your investment decisions.

    5. Investing

    Now comes the fun part! You’ve laid the foundation and are ready to learn how to make your money work for you. Starting with a few resources that will give you a general understanding of investing as a whole. In other words, some straight-forward materials on stocks, bonds, real estate, etc.

    Now you specialize. Pick the type of investing that best aligns with your goals, style, and preferences. Become a master in that field. Learn whatever you can about your area and begin to prepare for investment success.


    So, is education important? Absolutely. But the education we got in school is not enough. To be financially independent, it is important that millennials learn the areas of finance that will have the biggest impact on their financial futures. Personal finance and mindset education will lay the foundation for general success. Accounting and economics will prepare the way for future planning and investing. Finally, education on investment will help you achieve success in this area and will help to minimize your losses. Overall, education is essential. And the right kind of education is necessary for future financial success.



  • Personal Growth

    How To Build Equity in You – Part 2

    If you read our recent post entitled “How To Build Equity in You – Part 1“, and developed a plan to pay down your consumer debt using the power-payment method, you might be thinking, “OK, I’m paying down my debt. Now what?” Well first, congratulations! You’ve taken an important step toward financial independence. But there’s another element to becoming truly solvent. That’s creating an emergency cash reserve. For the purposes of this discussion, we’ll define emergency cash reserve as:
    enough cash on hand to cover minimum living expenses for at least 6 months.
    Here’s why: If, for some unforeseen reason, you lose the income you’re living on and paying your bills with; it’s critical that you have enough cash on hand to continue having food to eat, a roof over your head, and making minimum payments on your various outstanding obligations (aka. debts). Otherwise, you’ll end up going back even farther than square one.
    Of course, you probably can’t just wave a magic wand and have 6 months worth of cash suddenly appear. And you certainly wouldn’t want to use a credit card to pay for food, etc. So, how do you create an emergency reserve? Simple – You save it. here’s how:

    1. Determine How Much You Need

    You should already have some sort of income and expense sheet. The expense part can tell you at a glance what your monthly expenses are. If you don’t have one, create one. Your monthly expenses will probably consist of the following:
    Housing expenses (including utilities)
    Debt repayment
    Personal expenses (groceries, personal items)
    Total these, and any other monthly expenses not listed here, multiply by 6, and you’ve got the target number for your emergency reserve.

    2. Open a Special Savings Account

    Regardless of how many savings or checking accounts you have, a separate savings (not checking) account used exclusively for your emergency reserve is a must. Otherwise, it’s too easy to dip into the emergency reserve “just this once” to cover some pseudo-emergency like dinner at your favorite expensive restaurant. Simply put, it’s easier to maintain discipline of you create a separate savings account and keep the passbook out of sight somewhere.

    3. Start Accumulating Funds

    You’ve probably heard that saying about how to eat an elephant, right? well, creating an emergency reserve is exactly the same. And the best way to start is just to start – with whatever amount you can. Then commit to putting a certain amount from each paycheck into your emergency reserve account. You’ll be amazed at how quickly that fund will grow.
    Most people seldom, of ever, think about what they would do if they lost their job or were otherwise unable to meet their monthly obligations – until such an emergency strikes. By starting now building your emergency reserve, you’ll be improving your personal equity position.

  • Personal Growth

    How To Build Equity in You – Part 1

    When most people think about the concept of building equity, they think of home equity. But, in the broader financial context, equity means ownership.

    Investopedia defines equity as:
    “The value of an asset less the value of all liabilities on that asset.”

    So what does that mean to someone who doesn’t own anything of real value? Well, that actually depends on how you define real value. If you’re just getting started in the income earning stage of life, you probably don’t have a home, or even a vehicle that’s worth much – most people’s primary sources of equity. If you do possess either, they’re probably heavily leveraged, so you really don’t own them. And you’re probably years away from owning any kind of investment portfolio.
    But what you do have that’s of real value is yourself. More specifically, your capacity to generate income. And the key to building equity in yourself is increasing the gap between how much money you earn and how much you owe. There are two ways to increase that gap, and they really go hand-in-hand.

    1. Generate More Income

    Most people just starting out face significant student loans and credit card debt – the cost of an education and having a little fun along the way. One step toward building equity in yourself is to generate more income. This could come in the form of working as much overtime as possible at your current job, getting a second, part-time job, or starting your own part-time business. Whatever you choose to do, generating more income is an essential first step in building equity.

    2. Pay Down Debt

    A common mistake, especially among people in their twenties and thirties, is increasing their debt-load to match their income. For example, earning an additional $500 a month, then financing a new car to the tune of a $500 per month car payment over 48, 60, or even 72 months. The problem with this approach is you’re not only still in debt, you’re deeper in debt.
    The more profitable approach is to apply at least part of that extra income to paying down existing debt. For example, if you earn an extra $500 a month, you could apply that to one of your loans or credit cards as an extra payment to principal every month. This would result in you paying that debt off much sooner. Then, rather than adding that extra $500 plus the amount of the minimum payment to your monthly disposable income, apply it all to the next debt as an extra payment every month, and so on. You’ll be truly amazed at how quickly you can eliminate your debt using this method. Soon, you’ll have enough disposable income to not only start a good savings plan, but enjoy some of the finer things in life, and pay cash doing it.
    By generating extra income, and applying that income to a debt-elimination strategy, you’ll be building equity in the best asset you’ll ever own – yourself.


    Stay tuned for part 2…

  • Budgeting, Personal Growth

    3 Keys to Avoiding Lifestyle Creep

    There’s nothing wrong with driving a nice car, wearing nice clothes, or living in a nice house. When driving a nice car, wearing nice clothes, and living in a nice home, however, becomes a financial burden, then yes there’s a problem.

    This situation occurs often with individuals–sometimes consciously, but usually subconsciously–trying to keep up with the proverbial Joneses.
    For example, a young doctor is feeling pretty good about himself. After all, he  belongs to a prestigious profession.  With that prestig, he feels entitled to an expensive home and an expensive car. And let’s not forget about the prestigious country club membership, the private chef, and designer clothes.


    All while still paying off student loan debt totaling nearly $150,000.
    Subconsciously, the doctor succumbed to lifestyle creep!

    This isn’t, however, about a young doctor inadvertently buying a lifestyle he or she can’t afford.  It’s about you.


    How do you react when your neighbor gets a brand new car?

    You wouldn’t consciously say something like, “I’m going to buy a nicer car, even though I can’t afford it!” or “Damn, that’s nice. I want one too.”


    Subconsciously, however, you’re feeling a bit envious or perhaps a little insecure. You grumble as you get into your older model vehicle, the one without all the cool gadgets your neighbor’s car has.  You begin to wonder what your neighbor’s doing to afford the fancy things and you’re probably counting their money. 


    Hello, new car! Hello, lifestyle creep!


    Here’s how to avoid this scenario.

    1. Establish long-term goals.  Those who have no goals have no direction. Those who have no direction pay little attention to where their decisions are taking them.  Set short-term and long-term financial goals.  Formulate a plan to achieve those goals.  Follow the plan.  You’ll eventually get what you want without the burden of debt.


    2. Create a budget.  Control where your money goes.  If you have no goals, no purpose, no direction, it’s easy to let pride and jealousy dictate your financial decisions.


    3. Maintain values.  Money is important. It provides freedom. Why would you give up that freedom by going in debt to buy something you don’t really want in order to impress someone you don’t even know? If you value freedom, and keep your goals and values front of mind, you’re less likely to feel the pressure to buy things you can’t afford. 


    Avoid lifestyle creep by remaining vigilant and focused on long-term financial success, and on what matters most.