Tag: Budget

  • 3 Traits of Financially Successful People

    Financial success, in many ways, is a game that everyone is trying to master.

    We did extensive research on how some of the biggest winners at this game play it and concluded that these 3 traits describe financially successful people:

    #1: Financially successful people live below their means.

    This may come as a surprise to some, but not many. I have met a handful of financially successful people in my life and the #1 similarity between these individuals was that all of them had a hard time spending their money. All of them talked about how they stick to a budget, only spend when necessary, and try to put money in their savings or toward their retirement fund. Emergencies come up sometimes, and having funds to take care of those situations is extremely helpful, especially in dire situations.

    #2: Financially successful people always look for a bargain

    Sometimes we assume that financially successful people spend their money on anything they want and don’t check the price tag. Though this may definitely be true for some, I wouldn’t say it is true for all. After doing much research online and reflecting on the financially successful individuals I have encountered myself, I’ve found that these individuals are always looking for the best deal. They don’t settle on the first item they see. Instead, they compare prices online, leave the store, check out another for the same item, and even negotiate. Just because they can afford it, doesn’t mean they are willing to spend all that money on the item(s). Financially successful people stay financially successful because every penny counts.

    #3: Financially successful people have an aversion to debt

    Most financially successful people you meet or read about usually say that they keep their debts to a minimum or pay them off quickly. They typically talk about their debt payoff strategy and target ones that are small and easy. These individuals also make sure that when they do take out any loans, they pay attention to interest rates! This is extremely important when taking out any loan or opening a new credit card. Credit cards, like TomoCredit, offer credit with 0% APR/interest, so it is helpful to those who don’t want to rack up a ton of interest fees when opening a new line of credit.

    In conclusion, we feel that financially successful people have these 3 traits. That’s not to say that all financially successful people do or don’t and that others who are not financially successful yet do or don’t either. But if you do have these traits, you are on your way to financial freedom!

  • 5 Books to Jumpstart Your Personal Finance Journey

    Investing. Budgeting. Debt. For many who have never dabbled in the field of personal finance, these finance phrases can seem intimidating — but fear not! The field of personal finance presents beneficial knowledge in regards to managing an individual’s monetary resources. With summer break upon us, it provides a perfect opportunity for you to learn and work independently. Here are our top 5 personal finance book recommendations that are a great place to start.

    Rich Dad Poor Dad

    This book, written by Robert T. Kiyosaki, explores the author’s learning experiences from two father-figures and their different money-management strategies. It delves into the concepts of smart investing, earning money without necessarily having a high income, and how to maintain long-term acquisition of wealth. No matter what age group, this insightful book offers diverse perspectives on the concept of earning money and is an excellent read for those interested in developing their long-term personal finance skills.

    Broke Millennial

    Geared more towards the younger generation, Broke Millennial: Stop Scraping By and Get Your Financial Life Together by Erin Lowry presents a variety of tips for those who are just beginning their journey towards financial independence. It covers topics such as investing, budgeting, planning, avoiding credit card debt, and much more. If you are a beginner looking to learn about these personal finance concepts, this book is for you!

    I Will Teach You to Be Rich

    I Will Teach You to Be Rich by Ramit Sethi is another resource that is perfect for college students or individuals starting out on their personal finance journey. It provides helpful advice on paying off loans and other debts, how to navigate late fees, and basic investing knowledge. It also gives recommendations on making future large-scale purchases in life such as property and vehicles. Overall, it is an excellent educational read for the younger generation who are beginning to face these real-world financial decisions.

    The Millionaire Next Door

    Thomas J. Stanley’s The Millionaire Next Door: The Surprising Secrets of America’s Wealthy is a helpful book that has had a significant impact on people’s understanding of what it truly means to be “rich” in America. It consolidates research findings revealing traits shared by those who have accumulated notable amounts of wealth, such as their saving practices, financial habits, and more. This book is a great fit for anyone looking to increase their wealth and develop healthy personal finance skills to do so.

    Your Money or Your Life

    Another resource for students in college or beginners to personal finance, Your Money or Your Life, by Vicki Robin and Joe Dominguez, shares nine steps that can be taken to achieve financial independence. It goes into detail about avoiding debt, maintaining living expenses, and keeping in mind the importance of your financial impact on the planet. This book promotes healthy as well as sustainable financial habits and is a great read for those who want to practice effective and responsible lifestyle choices.

  • Simplify Your Finances and Your Life in 5 Easy Steps

    Simplifying your finances can improve your quality of life by decreasing money-related stress and freeing up time to do the things you love. Everyone has to deal with their finances differently, and some are more organized than others. Every individual would benefit from getting a hold of their spending, budget, and personal finances to live a stress-free life. Below are five tips to simplify your finances so that you can start living your best life now.

    1. Consolidate Bank Accounts and Credit Cards. Check the number of credit cards and bank accounts you have accumulated throughout the years. Most people only need one checking and one savings account, allowing you to simplify all of your finances into one account. This will streamline your bank statements and make it easier to plan your budget, evaluate your finances, and stay organized. Reevaluating the number of credit cards in your wallet and the bank accounts attached will also simplify the organization in your wallet and your online bank account. Cutting back on the number of credit cards will simplify your life and your spending. It would, however, be beneficial to keep some credit cards to build credit and reek the benefits. When picking what card is right for you, it is essential to look at each card’s benefits and evaluate which one offers the most valuable rewards. It is important to ensure that your cards are building credit and have cash back options when finalizing your card decision.
    2. Get Rid of Paperwork. As the world is turning digital, you might want to consider doing the same to all of your finances. Bank statements, water bills, energy bills, etc., primarily have included a paperless billing option which will allow you to handle all of your finances online without the hassle of receiving bills through the mail. This leaves your finances at your fingertips and will keep you organized without keeping track of paper within your home. Companies have rolled out perks for signing up for their paperless option to encourage more customers to join while also giving benefits such as a cut on payment and no added fees. A bonus of going paperless is that you are contributing to saving the trees and the environment.
    3. Pay in Cash. Paying for goods and services when outside the house with cash will allow you to easily budget and track your spending. Using money will allow you to map out your purchases, keep you from overspending, and helps stop impulse buys. Using actual cash will simplify your budget and your credit card bill. This is an excellent tactic to have better peace of mind in knowing you spent what your budget was. Understanding how much cash you have can also include reevaluating your cards’ benefits and seeing if there is a cashback option. This feature will allow you to get cashback on your spending and use it towards other purchases.
    4. Cut Services. Check all of your billing statements and the app store’s subscriptions to evaluate what services you are currently paying for. There are many streaming platforms, app subscriptions, and other memberships that you might be paying for monthly without even knowing it. It is very easy to accidentally sign up for a plan and be credited each month without using the service. To avoid this, take time to review your bank statements each month and check to see if you are still using these services. Cutting down on subscriptions and memberships will simplify your financial life and allow you to use that money towards other products or services that will be of greater benefit to you.
    5. Stop Looking at Your Screen. Now that you have simplified your finances, it is essential to go outside and live your life without the stress of being unorganized. The average American spends half of their day staring at a screen, while that number has only increased during COVID-19 lockdowns. With vaccine rollout, the reopening of businesses, and the loosening of restrictions, there are more opportunities to go outside, put down the screen, and start to experience life on a deeper level. Simplified finances will allow you to spend your money and time on things and experiences that bring you joy.

  • Take Control of Impulsive Spending

    Let’s be honest, we have all found ourselves victim to the temptations of impulsive shopping. It’s difficult to resist the calling of a seasonal sale, especially when this offer comes with the promise of an updated summer wardrobe or a new device for your productive home office set-up. However, the shame outweighs the benefits when we find that our email inbox is overflowing with shipping notices for items that we don’t even remember adding to our online cart. Being increasingly connected online also means being constantly bombarded with advertisements in the form of cleverly written articles and discreet social media posts, all of which may contribute to an increase in impulse shopping. One of the smartest ways to care for your financial health is to understand how to identify episodes of impulsive shopping and learn what you can do to avoid this type of unhealthy consumption.

    Understanding temptation

    Getting to the bottom of impulsive spending habits is much easier said than done, but it is a necessity in order to help rewire the financial decision making process. Everyone turns to “retail therapy” for various reasons; most times, these reasons allude to deeper emotional needs. Instant gratification is one common reason that many people turn to impulse spending. This stems from a misconception that material items provide aspirational characteristics. Take a second and understand why that “add to cart” button seems tempting. Step back from the checkout page and consider whether these items are truly necessary or if these purchases are being used to distract from something else.

    Take inventory

    The dangers of overconsumption are very real especially when it comes to items like clothing or cosmetics which can be easy to purchase an excess of, leaving you drowning in backups of backups. Avoid getting into a habit of over-purchasing and stocking up on items especially during sales. If it takes 3 months to get through a bottle of sunscreen, think before buying 4 more bottles during annual cosmetic sales. These items can oftentimes spoil before they fulfill their utility, and you may find that your preferences have changed over time. For clothing, keep a working inventory of your wardrobe in any way that is helpful to you, this can be mentally or written down in your notes app. Know which clothing items you actually wear to avoid buying pieces that seem more aspirational than practical.

    Virtual cleansing

    Email marketing is effective. Your favorite retailers know this, which is why you get weekly emails detailing sales and deals to your inbox. Some of these may be helpful when you are in the market for certain purchases, but most of the time, these emails are constructed to convince you to buy things you wouldn’t have purchased otherwise. Cleanse your inbox regularly by unsubscribing from pesky marketing emails that got your information from previous purchases. This will help by providing an out of sight, out of mind approach.

    Budget for impulse

    Impulse shopping is most unhealthy when this habit interferes with your financial health. Knowing when you can afford to indulge in a little bit of instant gratification makes all the difference from using impulsive spending as a crutch for other issues. Every week or so, put aside a bit of your spending budget so that you can make a guilt-free purchase at the end of the season. Financial health involves mindful habits that allow for both necessities and luxuries without worry.

  • What Goes Into Your Credit Score?

    A good credit score is essential for purchasing a new place, a new car, or taking out a loan with better interest rates — but what factors go into the number?

    No Single Number

    First, there is no definite credit score — there are different credit score models. The credit reporting agencies TransUnion, Experian, and Equifax together give the VantageScore. The FICO score is another well-known and widely accepted model that was introduced in 1989. Creditors use the FICO score to evaluate past credit use for lending decisions.

    Factors of the FICO Score

    According to the FICO website, the score pulls from five different categories: payment history, amounts owed, length of credit history, new credit, and credit mix.

    Payment History (35%)

    This is the most important category — it looks at if you have made your credit payments on time. The score in other words reflects your trustworthiness and timeliness. Repeated late payments will damage your score.

    Amounts Owed (30%)

    This looks at how much of your available credit you are using. By standard, using about 30% is recommended. For example, if you have a $1,000 credit limit, try to use around $300.

    Length of Credit History (15%)

    This factor looks at how long you have held your credit accounts. The longer, the better — but if you have an old credit account that you have made many late payments on, that will not reflect well on your score.

    This category also explains why many people are encouraged to start a credit card as early as possible — especially if you are a college student.

    New Credit (10%)

    When you open a new credit account, it will decrease your score temporarily, for up to six months. Making new credit accounts however is not discouraged. Rather, you should not be opening too many in a short period of time.

    Credit Mix (10%)

    The credit mix looks at the different types of accounts you hold: credit cards, loans, and more. Credit cards are considered revolving accounts, where payments are made monthly and are flexible. Installment accounts like mortgage loans are fixed monthly payments. If you prove your responsibility to manage both, it will reflect well on your overall credit score.

    The biggest takeaway should be that above all, timely payments are significant in increasing your credit score. You can set up autopay functions like many credit card accounts offer, or set monthly reminders on your phone to manually make the payments.

    Although different credit scores have different calculations, these factors overall remain important across the board. Knowing these different factors will help you guide your decisions on credit spending, and opening new accounts.

  • How to Budget and Improve your CashScore: Thanksgiving Edition

    Thanksgiving is right around the corner! Is it your turn to host the Thanksgiving dinner?

    Even though Thanksgiving may look slightly different this year, with smaller gatherings and a tighter budget, don’t let that stop you from having a great Thanksgiving meal with your loved ones.

    Here are 5 tips on how to prepare the perfect Thanksgiving meal on a budget:

    Don’t be a Gordon Ramsay

    An amazing Thanksgiving dinner does not have to be extravagant; you won’t need truffle oil or imported saffron. There are a variety of recipes online for budget friendly side dishes that you can create. Don’t forget to check those out! A key tip is that vegetables also tend to be less expensive.

    Before heading to the grocery store, make sure you plan out all of the components you will be making. Will you be serving mashed potatoes, pumpkin pie or stuffing? Hopefully it was a yes and a yes. Remember to write a grocery list so you don’t forget anything or get distracted by items you don’t need.

    It is crucial to head into shopping season ready to manage spending and your CashScore (CashScore is calculated by your cash inflow and outflow to help you be on top of your hard earned cash!) Here are our tips:

    Don’t be afraid to be an extreme couponer

    Before heading to the grocery store, check if there are coupons on the groceries that you will be purchasing. When you head to the market, don’t forget to also check the store’s daily specials and coupons. Even if the individual coupons only deduct a small portion from the cost, they will add up. Have you watched Extreme Couponing before? Every cent matters!

    Head to the grocery stores early

    Not only will there will there be long lines, but also a limited selection of produce left if you decide to shop the day of Thanksgiving. It is important to avoid peak hours in order to stay safe during COVID-19.

    Shop early, but not too early. During the week of Thanksgiving, there will be deals on certain items such as Turkey, so you don’t want to miss out on those. Before heading to the grocery store, if you are curious about how busy your local grocery store is, check the grocery store’s location on Google Maps. Under Population Times, there is a live feature where you can view how busy your supermarket is.

    Have a Thanksgiving potluck

    Make Thanksgiving a collective effort. Delegate dishes to family members and friends. Why make Thanksgiving a stressful experience for yourself when you can relieve the stress by having everyone bring a dish. Your prep and cooking time will also be decreased. Now, you can focus on perfecting your own dish and in return, everyone will bring their best dishes. A potluck will be less expensive for everyone, and everyone gets to participate in the fun of making something. Maybe even make it a friendly competition! Thinking of doing a Thanksgiving potluck now? If so, get your spreadsheet ready!

    Most important: Remember it’s about family and friends

    Thanksgiving is all about spending time with your loved ones. This year’s Thanksgiving may be especially different, but don’t let that ruin this special time. 2020 has been difficult for many, so remember to cherish this moment with your family and friends.