By: Ann Davis-Rowe
Rent…groceries…student loans…more student loans…it seems there’s always something more greedy for our hard-earned dollars than an actual vacation and time away from the stress of all those things. But you know what? We need vacations. Taking that time away to reset and refocus is priceless.
Well, not literally priceless, sadly. So– how do we pay for the vacation that will pay us back in dividends of rest and relaxation?
For something a bit different, have you considered a volunteer vacation? There are many cons to “voluntourism”, but with some research, you may be able to find an organization that matches your interests and needs your skill set – or lack thereof. GoVoluntouring is one site you may want to look into. If you’re doing a vacation that is also for the good of the planet, you may be able to find some financial support through fundraising.
Just like getting out of debt and saving for retirement, saving for vacation requires planning and sacrifice. But keep your eye on the prize, and you’ll have your toes in the sand in no time.
By: Julia Bellotti
Do you have a credit card? Do you use it? Do you pay it off every month? If so, you may have some hidden rewards in your account that you may not be tracking. The Adult Dish is here to help you figure out if you may have some hidden benefits or rewards, as well as how to use your rewards once you have them.
*Author’s note: There are also many rewards available to business credit card holders, but this article will only cover personal credit cards.
How to Know if Your Credit Card Has Perks
First, look at your credit card. Is there a bank name? Card issuer? A fancy word like “Sapphire,” “Venture,” “it,” or even “Visa”? If so, you likely have rewards available to you. For instance, many people may not realize that their ordinary Visa card has perks like rental car insurance, lost luggage reimbursement, extended warranties on purchased items, access to golf courses, and premium events.
A quick list of some of the most common credit card benefits is below. Keep in mind your card may qualify for multiple of these, such as the Capital One Venture card which is also a Visa Signature card. This list is not exhaustive, so if your card isn’t listed here, a simple online search with the name and “benefits” will provide an answer. I have purposefully not included airline or hotel branded credit cards, as the holders of those cards likely signed up specifically for the benefits.
Once you’ve found your credit card rewards, you’ll need to login to your account and see how many points or rewards you have. You will earn points, cash back, and other rewards at different rates depending on which credit card you have. If you have two credit cards that you use about equally, don’t be surprised if one has significantly more points than the other.
Some of your benefits may not earn you points nor cash back, and that’s ok! You’ll want to keep those in mind as you’re spending in your daily life. Cards can offer price protection, concierge services, airport lounge access, hotel burglary insurance, and more. Those protections can save you significant amounts of money if you use that card to purchase merchandise or travel.
How to Spend Points
Login to your credit card account and find your rewards portal. You’ll likely be looking for a button that says “Redeem.” Once you’ve found it, you may see several options. You could get statement credit, usually at a 1 point = 1 cent rate, you could potentially redeem for travel, or you can get access to special experiences. The type of credit card you have will determine your travel and experience redemption rate. While Capital One offers a 1 point = 1 cent redemption rate on travel, other companies like Chase may offer 1 point = 1.25 or 1.5 cents. Second, refresh your basic math skills; you’ll want to make sure you’re making the best decision when spending your rewards. Do you have 25,000 points? That’s equal to $250 statement credit/cash back.
Very easily, you can see how an entire vacation could be paid for using points. Did your plane ticket and hotel cost $750? If you had used 75,000 points, you could’ve spend $0 out of pocket for those expenses. Personally, I tend to use my points when plane tickets are really expensive (such as around the holidays), or I just need a little extra room in my budget.
Your credit card may also offer experiences you can redeem your points for. This could include golf tournaments, chef tables at certain restaurants, awards shows, sports games, and more. In those situations, you’ll need to provide the name(s) of the person using it, and you’ll be sent the tickets/reservation after you redeem your points for it.
Spending Points: Advanced Level
The real value in points redemption is when you can transfer to specific airline or hotel partners. Airline loyalty programs do not use the 1 point = 1 cent rule; they primarily do it based on the distance of the flight. American Airlines, for example, charges 7,500 points for a MileSAAver (standard economy) ticket that’s under 500 miles in the contiguous 48 U.S. states and Canada. That is true whether that flight costs $50 or $200. You can easily see how your points could suddenly be worth 2, 3, or 6 cents depending on how you redeem them.
To complicate matters further, if you know that American Airlines and British Airways are partners, you could book a 1,000-mile-long American Airlines flight through British Airways for only 7,500 points whereas booking it directly through American would cost 12,500 points.
There is a whole world dedicated to getting the most from your points, and this is why those basic math skills are important! If you’re curious on maximizing your redemptions, check out www.ThePointsGuy.com run by Brian Kelly and his team.
Now, the Number 1 rule of credit card points and rewards is to never carry a balance. The moment you start paying interest is the moment your benefits are negated. Although spending $2,000 on plane tickets with your Chase Sapphire Reserve card will net you 6,000 points which are worth $90 when you redeem through Chase’s portal, the interest you’d pay on that $2,000 (if you only made the minimal payment) is astronomically more than your $90 reward.
Overspending is easy to do with credit card sign-up bonuses. For example, a card may offer 50,000 points if you spend $3,000 over three months. A common solution? Pay for other people’s expenses ONLY if you are 100% confident they will pay you back. Pay for the entire tab on a group dinner and have everyone Venmo you. Pay for your family’s vacation AirBnB and plane tickets. Is a friend furnishing a house? Pay for their new couch and have them pay you back. This is an easy way to get assistance spending the minimum amount required for a large sign-up bonus IF you know you will be paid back by your friends and/or family.
This quick article here is really just the tip of the iceberg. If credit card rewards sound appealing and you want to learn more, I recommend checking out the following:
By: Ann Davis-Rowe
As the old saying goes, there are two certainties in life: death and taxes. But when it comes to taxes, things aren’t always the most consistent. Or transparent. For instance, no one is quite sure how the 2017 tax cuts will actually affect everyone until we all file for 2018 in the spring of 2019. Because taxes can be so capricious, please know that if you are at all confused about filling out your tax forms or filing your taxes, I highly encourage you to speak with a personal tax professional (especially if you are looking into buying a house or marrying your S.O.). Don’t worry – it’s not that hard! Your bank or credit union may be able to help; check out their website or give them a call to see if you can make an appointment. You can also search the IRS database of tax professionals here. Even if you think you don’t have enough money to need a financial professional, they exist for a reason and the more you know, the better!
Now, on to the basics.
What is a W-4?
Anytime you start a new (non-contract) job, you will likely be asked to fill out something called a W-4. This form essentially tells your employer how much federal tax to withhold from your monthly (or bi-monthly) paycheck. The government then takes that cut from your paycheck each pay period to both a) prevent you from having to pay all of your taxes at once when you file and b) give itself money to help it function throughout the year. If you don’t fill out a W-4, the federal government will always withhold at the highest level possible, since it gives them more money in a handy interest-free loan.
Filling out a W-4 is not just for when you start a new job, although that is the most common scenario for doing so. Major life change events, such as marriage, divorce, a new baby, or buying or selling a house, also call for filling out a W-4. Similarly, you could request to fill out a new W-4 after you file your taxes and realize you want it updated – because, for example, you didn’t have enough withheld each paycheck and therefore found out you owed the government way more than expected after filing.
How do I fill out a W-4?
When you receive your W-4, you should also receive a Personal Allowances worksheet (if you didn’t receive one and want one, just ask your HR department). This worksheet will help you estimate how many deductions you should have; the more allowances you claim, the less you have withheld from each paycheck. While that sounds like a win-win, know that if you calculate incorrectly and don’t give them enough of your paycheck throughout the year, you will have to pay more to the government when you file your taxes.
Allowances include children and other dependents; married people may be able to claim a spouse, and there are different calculations if you plan to file your taxes alone or with your spouse. Married couples can choose to file separately if one of them has a significant itemized deduction, like medical expenses, but that is far more complicated and individualized than we can cover here and a subject to be covered one-on-one with a tax professional.
The ultimate goal of filling out a W-4 is to balance your paycheck tax withholding through the year with what you will actually owe for the whole year. Guess under, and you’ll have to pay more when you file your taxes. Guess over and, yeah, you’ll get money back when you file, but you also could have had more money on your paychecks.
For an estimated guess as to how much tax you will owe every year and what allowances you should claim, check out the IRS’s official calculator here. To see an example of the W-4 form and the worksheet, click here.
Am I exempt from income taxes?
Under a (very) few specific circumstances, you may be exempt from federal and state income taxes. Tax exemptions examples include: your income is lower than X amount each year, you have certain ability issues (i.e., you are legally blind), etc. FYI: just because you are a student does not mean that you are tax exempt…but you might be. These are very specific and individualized situations, so please see a tax professional if you think you may have an exemption.
Federal vs. State income taxes
Unless you live in the following states: Alaska, Florida, Nevada, South Dakota, Texas, Washington (the state, not D.C.), or Wyoming, you will also have to fill out a state (or district) income tax withholding form for your employer. New Hampshire and Tennessee also have no state income tax – but they do tax on income from dividends and interest, and if you live there and have enough of those to be concerned, you definitely need more advice than can be found in this article.
Typically, the deductions you claim federally will match what you claim in state withholding. However, because these forms are all so different, if you want to do some research before getting new hire forms from your employer, just Google search “[your state] state income tax form” and you should find an actual copy and the instructions.
I received a W-2 in the mail. What’s that?
Employers are expected to send your W-2 – that is, their record of everything they paid you and how much tax was withheld – by January 31 of the following year. You must then file your taxes by April 15. Like most things in life, procrastination here is not your friend. Just because you can wait until mid-April to file doesn’t mean you should. The sooner it’s done, the sooner you don’t have to think about it. Plus, say you had too little withheld and ended up having to pay hundreds of dollars to make up for it: the sooner you adjust your W-4, the easier it will be when you file next year.
In case I haven’t said it enough, please note that referring to The Adult Dish is not the same as referring to an actual tax professional. If you have more questions, see one of those! But also, don’t worry too much – if all else fails and you had too much or too little withheld for the year, you can always go back to your HR department to fill out a new form and change your withholding rate as you see fit.
By: Marianna Milkis-Edwards
An average American couple spends $33,391 on a wedding. However, considering that between 40-50% of marriages end in divorce, the amount spent on a wedding doesn’t quite determine the level of each couple’s present or future happiness. Still, rehearsal dinners, bachelor and bachelorette parties, party favors, tiered cakes, and The Dress are so deeply rooted in our consciousness that…how else in the world are you supposed to get married?!
Our Elopement Story
My husband and I knew we wanted to get married. We also knew the following three things: One, my family and friends lived between Bulgaria, Israel, and Russia, and his between California, North Dakota, and New York. In other words, getting everyone in one place would be a challenge, and not inviting either side would be plain wrong. Two, we had just sold all our possessions to move cross country in a sedan and were saving up for a house. We weren’t going to empty all of our hard-earned savings on, let’s be honest, a few good pictures, a couple of teary-eyed dances, and lots of drunk relatives. And three, I wanted to get married on a cliff by the ocean at sunset. Which coincidentally kicked the potential cost of a “real wedding” entirely out of the ballpark.
A traditional white wedding had never been on my bucket list. Instead I wanted to start a business, travel to New Zealand and Patagonia, and take a long road trip on a motorcycle (which happened when we got engaged). This doesn’t mean that the “I’m getting married” itch bypassed me — I pinned plenty of princess dresses (hello, Vera Wang!) on Pinterest, googled pastors and photographers in Big Sur (our usual vacation place and home of one of the best cliff-ocean combos in the world), and frantically researched AirBnBs. I figured, if we weren’t spending big on the wedding itself, we could at least splurge on nice digs.
My then future husband seemed to have read my mind when he gifted me 3 nights at an AirBnb in Shell Beach for my birthday. And just like that, our wedding got a date as imminent as the following month. This annulled the possibility of a Pinterest-worthy dress (that would have needed to be custom made since obviously I couldn’t afford a Vera Wang) and made me take a closer look inside my wardrobe. There, I discovered a white silk slip dress that I wore only once or twice. Problem solved.
We both frantically shopped for wedding bands and I managed to order his on Etsy, a tungsten and deer antler style. I tried to book a pastor but the closest I found was in Monterey, and he would only drive as far as the north side of Big Sur where there are no cliffs. I decided that the ocean is a good enough pastor. Finally, perhaps my most daring decision in our age when if it’s not documented, it doesn’t exist, was to forgo a photographer. I couldn’t afford the quality of pictures that I truly wanted and didn’t want to waste money on something that wasn’t up to my standards. I took a bet to rely on my memory for this special moment. Surprisingly, it worked out wonderfully well.
So, there we were, packed for our usual coastal vacation with a light addition of a pair of heels and a dress for me (ok, I did also bring my curling iron) and chinos and a collared shirt for my fiancé. “Should we do it tomorrow?” he asked on our second evening. “Sure,” – I responded, sipping wine. We decided to call up my fiance’s best friend’s parents who live a dozen miles away and invite them to join us.
And join us they did. As soon as we were done hand-writing out oaths and sharing a bottle of champagne graciously gifted to us by the hosts (we hadn't mentioned the wedding, so they must’ve read our minds), our guests picked us up and the four of us drove to the cliff. They handed us a beautiful bouquet and boutonniere that they somehow procured on a super short notice. They also brought amazing and largely underrated Central Coast wine. As the sun was setting over the ocean, painting everything pink, we read our oaths, exchanged the rings, and celebrated with the delicious wine at a wooden picnic table. The five photos that they took of us on an iPhone with the Portrait Mode enabled came out stunningly.
We wrapped up the night with a relaxed dinner for four at a nice local restaurant and a stargazing walk on the ocean floor in the middle of the night during the lowest tide, just the two of us. It couldn’t have been any more perfect.
Since then, I have caught myself encouraging newly engaged people to consider whether elopement could be right for them. If it sounds like something you may be interested in, here are some tips to ensure your elopement is everything you want a wedding to be and more.
Have you ever eloped or considered eloping? Tell us in comments, we can’t wait to hear your story!
Marianna Milkis-Edwards is a co-founder of Maison Me, the brand of custom on-demand clothing that doesn’t compromise. She lives in sunny Arizona with her husband and baby boy and is always looking for unconventional approaches to life. Follow her exploration of simplicity and creative entrepreneurship on Instagram at @maisonmilkis.
BY: MARIANNA MILKIS-EDWARDS
A side hustle is a rite of passage into the adult world. It means that a) you’ve gotten so good at something that is or isn’t related to your day job that someone wants to pay you for it; and b) you’ve gotten such a firm grip of your daytime responsibilities that switching gears for some more work later in the day and on the weekends isn’t a big deal or is worth it because, see a).
No doubt that if you’ve been working, you have considered moonlighting. We probably don’t need to sell you on all the benefits of a side hustle that include but aren’t limited to more cash, more padding on your resume, and more connections. But just in case you’ve only now started contemplating a side gig, here are the 5 reasons you definitely should.
Ok, are you sold? Do I see you frantically retyping your resume, dollar signs in your eyes? That’s the spirit! But before your dive nose-first into the wonderful world of more work, here are the top 5 challenges of the side-hustler life you should be aware of to succeed!
If you’ve been contemplating a side hustle, give it a try! It’s not for everyone but if you are the one up for an extra challenge and all the rewards that come with it, welcome to the grind.
Below are the 3 best tips to (side) hustle like you mean it, including where to find your next gig, from yours truly who has had a side hustle throughout her whole career and became a co-founder of a startup where she moonlighted first.
By: Kaitlyn TarPey
Congratulations- you’re engaged! Now comes the fun/crazy/stressful/amazing part of planning your WEDDING. Woohoo… or wooboo?
The world of wedding planning has become a business, and an expensive one at that. This article is meant to give you some insight and ideas of being fiscally responsible when it comes to planning your wedding day because budgets are LIFE.
Before we get started, something to note. Even if you’re not yet engaged but are talking about taking the next step with your significant other, my advice is to consider saving together in preparation of the day. Whether it is a couple hundred dollars or a couple thousand dollars, it gives you a cushion to start with once that engagement day happens. My fiancé and I opened up a joint online savings account at about…2 years of dating. At that point, we knew the plan was to eventually get married, so it made sense to put a little away as we could (tax returns, bonuses, and some b-day money were divided up as we felt fair). By our engagement we had saved $5,000 for “our special day,” which is a nice chunk if we wanted to get straight to planning (you do need money to place deposits after all…). And in full transparency–we haven’t even dived into the account yet!
Alright, I don’t want to bore you with specifics about me so here’s what I’ve found in general on wedding budgeting.
1) Headcount is either your friend or your enemy. The more people you have, the more expensive it will be. Period. The cost you will never escape is food and beverage, so if your headcount is not able to be finagled with, consider having a cocktail party as opposed to a sit down dinner. Maybe a buffet option is more affordable at the venue you choose. There are a few different options when you’re looking at food and beverage (including open bar vs. cash bar), but ultimately the SIZE of your party will have the greatest influence on your bill. Average cost per my research is around $150/pp., so 100 people = $15,000 for just food and beverage. Yeah, gross.
2) Vendors come in all shapes and sizes. Photographers, videographers, transportation, DJs, Bands, photo booths, hair stylists and makeup artists, etc. To an extent, you get what you pay for, but you should always compare a few vendors before making a decision. Photographers in my area (CT/NYC) range from $2,500 to $10,000+ for the day, but I could probably find an up and coming photographer for less than that if I really searched. You have to make your list of priorities and spend where you want (i.e. I want a videographer more than a photographer, so I’m okay with a junior photographer) and don’t spend where you don’t want (does it really matter if you roll up to the venue in a sparkly white Rolls Royce, or would people driving themselves be fine?) DJs are almost always cheaper than a Band which averages to about $1,000/piece, and some hair salons will offer discounts if you do everything at the salon versus having the stylists travel to you.
3) People won’t remember décor specifics. Pinterest is FULL of options for making your own centerpieces, bouquets, aisle runners, table cards. Be creative–or if you’re not crafty, try out some of those online print retailers to cut cost. This goes for flowers too. if you’re a flower person, I get it (I totally am), but make sure you find a florist that is open to trying different flowers/unique combinations–and be up front about your budget! I’ve seen people alternating center pieces between floral arrangements and candles (cuts half the cost), or even photos of the couple at different ages (free if you have photos lying around at mom & dads)! Also, think of approaching everything with a “less is more” mindset. How gorgeous would one sunflower be on the center of every table? Simple, understated, and a nice pop of color.
4) Having the ceremony at the same place as the reception cuts a few costs: The cost of the church/temple/place of worship, as well as the cost of transportation.
5) Gowns, shoes, earrings, tuxes, and bridesmaid dresses are beginning to have second lives. Check re-sale websites (hello, Poshmark!) to see if you can get lucky. This may take a little effort–but to get a designer piece at half price would make you happy, I’m sure of it! (Also, alterations can be pricey, so be prepared).
6) Some vendors give a discount if you pay in cash versus credit. It’s worth asking if you're able to!
7) Invitations can either be an expensive or a free undertaking. Invitations offer the “first impression” of the party, and some people take that very seriously. But, nowadays there are also options to e-mail invitations for free! At an average of $2/invite (when you think of postage, envelope, invite, RSVP cards, postage of RSVPs and anything extra), you can save a good chunk of savings by taking the environmentally friendly route of e-vites. (This includes Save the Dates too)!
8) The old way of guests gifting “the cost of your plate” seems to be long gone. So, don’t plan the wedding “expecting” to make your money back. Our parents might have expected this, but I hesitate to support that way of thinking anymore, especially after seeing how the word “wedding” tacks on some invisible exponential price increase on everything involved. Therefore, make sure you work with a budget you know you can manage, regardless of whether or not you can pay some of it back with the gifts you receive.
9) Last but certainly not least: Don’t forget about the reason you’re getting married in the first place. Your wedding is for celebrating you and your future life partner. I think nowadays people get so caught up in keeping up with the joneses that they lose track of the important stuff. If all the planning gets you down, remember this: forever is a lot longer than the 8 hours you’re spending in your wedding outfit.
Overall, weddings aren’t cheap, but they can be done in a financially responsible way if you do your research, prioritize, and keep your impulses in check. Hope this gives you some insights and inspiration to be fiscally responsible with your wedding planning! Congratulations and cheers to you!
BY: RACHEL RICHARDS, AUTHOR OF “MONEY HONEY: A SIMPLE 7-STEP GUIDE FOR GETTING YOUR FINANCIAL $HIT TOGETHER.”
Thousands of financial gurus have written articles on how to get out of debt (see Part Two of this series, “5 Simple Steps to Get Out of Credit Card Debt”) but hardly any on how to stay out of debt. So if you’re one of the lucky few who have recently clawed your way out of debt, this article is for you. Because the last thing you want is to go back down that hole, especially after all your hard work.
Without further ado, I present 10 must-know tips for staying out of debt… for good.
1. Keep a journal during your debt pay off journey
Technically, keeping a journal would need to be done as you were paying off debt. If you’re already debt-free, this tip doesn’t apply to you. If you’re in the middle of your journey, however, I highly recommend writing down your feelings about money. Write down the negative and the positive. Think about both progress and setbacks you experience along the way. How does debt make you feel? What does it hold you back from doing with your life? What will paying it off mean for you and your family? How do you feel after hitting another debt pay off milestone? Most importantly, how do you feel once you’ve eliminated all debt? Why don’t you ever want to go back into debt again? Having these thoughts to reference will be extremely important during any future mishaps. This may be the most persuasive thing that your present self can do for your future self to ensure that you stay debt free for good.
2. Cut up your credit cards and/or use only cash
Have a credit card cutting party! This step, while scary, is incredibly freeing. That’s because physically cutting up your cards is the only way to ensure you won’t continue to use them. Yes, this can feel terrifying. The instinct is to cut all of them up except one, to keep for emergencies, you know, just in case. Having that “safety net” can bring a certain peace of mind, but do you really want to open up the possibility of going back into debt? Chances are you’ll find a way to pay for an emergency even if you don’t have that CC tucked away somewhere. So as vulnerable as it may feel, it’s for your own good. Now grab a pair of scissors and get to it! To get even more extreme, don’t even use debit cards anymore. Just stick to cash. Paying with cash is the only way to truly get visibility into how much money you have left. You can’t overspend if you’re using cash. If it’s not there, you can’t buy anything. I highly recommend reading “Total Money Makeover” by Dave Ramsey if you’re serious about transitioning to a cash-only system.
3. Don’t stop monitoring your expenses
Just because you paid off debt doesn’t mean you can start slacking on the budgeting side of things. Often, people feel so relaxed and unworried about their finances after paying off debt that they stop paying attention to their spending altogether. This is a surefire way to slowly creep back into the old habits of overspending. These days, apps like Mint and YNAB make this super easy, but even a good old-fashioned Excel spreadsheet will do the job. Keep careful tabs on both your monthly after-tax income and your monthly expenses so that you keep your spending in order.
4. Adopt a frugal mindset
Getting out of debt doesn’t mean life is now a free-for-all. You must adopt and maintain a frugal mindset and live within your means. You’re not suddenly rich or wealthy just because you don’t have debt. Having no debt does not justify expensive shoes, new SUVs, or fancy dinners. Treat raises the same way: if you get a raise, do not spend more money. I highly recommend reading “The Millionaire Next Door” by Thomas J. Stanley, which will help you understand that even millionaires live frugally. There’s no sense in Keeping Up With The Joneses if the Joneses are up to their eyeballs in debt.
5. Save more money
Following along the lines of monitoring your expenses and living frugally, the best thing you can do to keep from going back into debt is to save more money. Let’s say an emergency car repair comes up. You recently paid off your credit card debt but you have no means to pay for the repair. What will you do? You’ll probably have to charge it to your credit card, since you don’t have any savings cushion. So think about it: having a savings account for emergency expenses will ensure that you never charge to your CC again. Make sure you have enough money set aside so that when, not if, an emergency comes along, you won’t have to use your CC to pay for it. In my book “Money Honey,” I recommend setting aside $1,000 in an emergency savings account first, and then working on saving an additional 3 to 6 months worth of living expenses, which will hold you over in case you lose your job. (You can see a whole excerpt from this chapter of my book here)!
6. Stay insured
Staying insured goes hand in hand with saving more money. The point is to prepare for and eliminate any possibility of an unexpected or emergency expense. Since emergency medical expenses tend to be the most costly type of expense, staying insured is vital. There is no question about it: you should never risk living without insurance. Yes, insurance is expensive. Wanna know what’s more expensive? Not having insurance at all, which could lead to hundreds of thousands of dollars of debt or even bankruptcy. It’s a risk that few can afford to take.
7. Sell assets in a crisis
Let’s say that an emergency does come up, and you’ve done all the right things. You’re insured and you have six months of savings stowed away, but is still isn’t enough. You might feel like resorting to that trusty old CC. Stop. There are still other options. Most people have at least a few assets or valuables to their name: a house, a car, a laptop, a smartphone, an extra fridge in the garage, an engagement ring… you get the picture. The alternative to using a CC is to sell some of these assets. You heard me. Sell them. Sometimes, to preserve your financial integrity, sacrifice is required. The way I see it, if you have only two options to pay for something and they are to 1) use a CC or 2) sell your car, you have a choice to make. Living temporarily without a car will be inconvenient, but isn’t it better than going back into debt? This sounds extreme to some, but the point is to remember that there are almost always other options available to you without going back into debt, you just have to get creative and sacrifice.
8. Maintain additional streams of income outside of your job
If you think about it, having only one source of income is a bit risky… sort of like putting all your eggs in one basket. If you lose that one stream, you have zero income. You can exponentially lower this risk by having multiple streams of income. Income falls into two buckets: earned and unearned. You typically have to trade your time in a full- or part-time job for earned income. Unearned, or passive income, is money you make without working. Think rents, royalties, and interest. You can invest in rental properties or even rent out a room in your house. You can write a book. You can invest money in an interest-bearing account. The possibilities are endless. Even if you only create one additional stream of income, that’s better than nothing.
9. Make things easy for yourself
I have two recommendations here. The first is to set up autopay on everything: your mortgage or rent, utilities, cable, WiFi, and any other bills you have. That way there are no accidental late payments and you never have to think about it. You can relax knowing that you don’t have to lift a finger and everything will be paid (assuming the money is there to pay it, so make sure to monitor your accounts). My second recommendation is to unsubscribe to emails that alert you of sales, i.e. remove all temptation. When you see an email alerting you of a sale, it’s so easy to get caught up in the urgency and buy your favorite item now! 50% off available for 24 hours only! Instead of even having to engage in the mental battle of “to buy or not to buy,” what better way than to simply unsubscribe? As they say, ignorance is bliss.
10. Talk about money
We need to break the stigma of talking about our finances. First of all, let’s be real: everyone struggles with money. Opening up to a friend or family member will often result in a sense of relief from both parties. It’s good to know that you’re not the only one that finds money management difficult at times, and it’s also helpful to vent or seek advice from someone you trust. Having regular conversations about money and knowing how other people manage their money will give you tons of insight on what you are doing well and what you could be doing better. And having regular check-ins or money dialogues will keep you in tune with your goals and your desires so that you can adjust your behaviors accordingly. Talking about money is vital to not only staying out of debt, but to continuing to hit your financial goals in general!
Got questions? I’ve got answers. Contact Rachel at email@example.com and get yourself a copy of “Money Honey” at http://amzn.to/2sdrolF. Be sure to follow Rachel on Facebook at www.facebook.com/moneyhoneyrachel and on Instagram at www.instagram.com/moneyhoneyrachel.
By: Rachel Richards, author of “Money Honey: A Simple 7-Step Guide for Getting Your Financial $hit Together.”
You. Yes, YOU. With the credit card debt. Whether a few hundred dollars or several thousand, that debt is putting a weight on your shoulders that you may not even realize you carry.
Owing money to anyone makes you dependent on and obligated to them. You are not free. As long as you owe money to someone else, any money you might make or have on hand does not belong to you.
That’s true whether you owe money on a mortgage, a car, or the drinks that your friend paid for last night. Credit card debt, though? That’s its own beast. Minimum payments just don’t cut it when the 20% interest rate keeps you from paying down the balance, or worse, keeps your balance climbing ever-higher. Becoming trapped in credit card debt is a lot easier than most people think. Just take a look at how easy it is to justify a credit card purchase in this excerpt from my book, “Money Honey: A Simple 7-Step Guide for Getting Your Financial $hit Together:”
Here’s how credit cards make money from you. You go to the store and see a classy AF $250 trench coat that you must have. But then you cry a little on the inside because you have $11.85 in your checking account. Then you remember that you have a credit card, which means you can buy it right now even though you don’t have $250. So, you do. Then, you make minimum payments of $15 per month until it’s all paid off. Ah, the beauty of credit, amirite? Isn’t $15 per month way better than $250 up front?
NOPE. Let’s say that your credit card charges you 20% interest, which is pretty common. Guess what, Sherlock? It will take you 19 months to pay that bad boy off, and when all is said and done, you will have paid almost $50 in interest, making the total cost of that trench coat $295.37. Are you still happy with your decision? If you answered yes, go and stand in a corner and think about what you did.
Maybe you’ve recently realized how scary and overwhelming your CC debt has become. Maybe you’ve been in denial. Either way, fear has paralyzed you. Where do you begin? You don’t even want to look at the balance anymore. You’re afraid of it, you feel lost, and you feel defeated.
Never fear, my friend. If you’re reading this, it’s because you’ve realized most of what I just stated rings true, and you need help getting out of CC debt, ASAP. Let’s dig in.
Getting out of credit card debt, while not easy, can be summed up in five simple steps.
1. Pay only the minimums on all other debt
First, take a look at any other debts you have and make sure you are only paying the minimums. When a friend did this, she was surprised to find she was paying $100 more towards her mortgage each month than was necessary. She had set up her payments that way a long time ago so that she could pay down her principal faster, which is a smart move. For this exercise, however, I recommended that she temporarily take a break from doing that to free up as much extra money as possible.
So this will be a quick step; just login to your accounts and ensure you are paying only the minimums on any debts you have.
When it comes to any retirement contribution you may be making, I want you to stop doing that, with one exception. If your employer offers a match or contribution of any kind, make sure you are contributing at least enough money to take full advantage of that company match. If you are not offered an employer match or contribution, then temporarily stop contributing to your retirement accounts altogether.
2. Grow your Golden Number
In my book “Money Honey,” I talk about your “Golden Number” which is simply the amount of money you save each month. Your Golden Number equals your monthly after-tax income minus your monthly expenses. The bigger this number is, the more you can put towards saving and/or paying down debt each month.
There are two ways to grow your Golden Number:
Brainstorm a list of as many ideas as possible in each category. Think about renting out a room on AirBNB, starting a side hustle, walking dogs, babysitting, getting a part time job, and anything else that can bring in some extra income. On the expense side, what bills can you call and negotiate down? What subscriptions can you temporarily give up in the name of financial freedom? Where else can you cut back or sacrifice?
Once you have a huge list, focus on the top 2-3 easiest things in each category and implement them right away. This should increase your savings rate instantly so that you can save and pay down debt even faster.
3. Save $1,000
This might sound counter-intuitive, but you must set aside at least $1,000 in a savings account BEFORE tackling the CC. Why? Because you need some money set aside for emergencies and unexpected expenses.
Exhibit A: Jane Doe is killing it. She’s paid off $1,300 in CC debt in just under one month. She’s cut her expenses in every way possible, she’s been scrimping to get by, and every extra dollar she gets goes straight to her CC debt. UNTIL…
Inevitably, one day, Jane’s car breaks down, or her son has to go to the ER, or her dog ate her medication and had to be taken to the vet. And since Jane Doe doesn’t have anything in savings, she has to put that unexpected expense on her CC, wiping out all the progress she’s made.
How discouraging is that? Here’s the thing: there’s nothing wrong with having those unexpected expenses. Things come up; that’s life. But you can and should be prepared for them. You must expect the unexpected. You must have some money set aside so that WHEN, not IF, those emergencies come up, you can pay for them out of your savings instead of putting them on your CC.
Not setting aside money for the unexpected is the most common mistake people make. They start to aggressively pay down their CC, and then five weeks later, an emergency expense comes up and they have no way to pay for it, so it gets charged to the CC. And normally it’s so discouraging that they give up altogether.
Don’t be that person. Use your newly inflated Golden Number to get $1,000 saved as fast as humanly possible.
4. Set your timeline
Now you can get started. Everything is in place and you are ready to go. I recommend doing one last thing, which is taking a look at how long it will take you to pay this bad boy down. Simply take the total balance on the credit card, and divide it by your Golden Number, to calculate the approximate number of months it will take to pay off. (It’s approximate because interest will keep accruing so it will likely be a tiny bit longer.)
For example, let’s say your CC balance is $9,000, and your Golden Number is $500. It will take you $9,000 / $500 = 18 months to pay off.
“18 months?!” you might say, shocked at how long this will take. If that’s how you feel right now, you have exactly one lever you can adjust that will get you there faster: your Golden Number. Feel free to revisit Step 2 and see how else you can increase your income or decrease your expenses. (Most people take another look at that step once they do this calculation).
YOU have the power to speed this journey up. It’s all about how much YOU are willing to sacrifice. You’ll likely have to sacrifice time to increase your income, and quality of life to decrease your expenses. You can be as aggressive as you want to be.
In the example above, if you double your Golden Number to $1,000, then it will only take you 9 months to pay off your CC. Now you know how long you will have to commit in order to achieve this goal and you can mentally prepare. You can even set up milestones along the way or make a fun calendar or countdown to put on your fridge.
Get at it! Take it one day at a time. Feel free to share this exciting journey with your friends or family. Trust me: most of them probably have credit card debt too, and you never know who you could positively impact by sharing your goals. Paying off your CC debt is not something to be ashamed of; it’s something to be proud of. Plus, sharing your goals has two benefits: encouragement and accountability from your peers.
You will hit roadblocks, but don’t let that discourage you. We are all human. We are flawed. There’s no sense in beating yourself up if you get off track one day. Just forgive yourself, get back on track, and vow to be better. I promise you that it will be SO worth it in the end.
Remember your Golden Number? This next point will encourage you: think about what you will do with that money after you get your CC paid off. Maybe you’ll take a month off and splurge on yourself! Maybe you’ll immediately put that towards your student loans or other debt. Maybe you can use it for that trip you’ve always wanted to take. The possibilities are endless!
You can do this. Go get ‘em!
By: John Bellotti
Cryptocurrency is a peer-to-peer electronic cash system intended to be a currency for the people. While the Chinese first used paper money during a surge in financial growth in the Tang Dynasty (A.D. 618-907), the digital age has brought about the next evolution of currency: cryptocurrency. Although there have been recent swings in price, trust, and popularity; crypto is here to stay. It may be a decade before you’ll use it to buy a cup of coffee, but you should start learning how they started, why it matters, and how you’re impacted as a citizen of the world.
The Beginning of Cryptocurrency
Bitcoin was the first basic digital currency born from the failed developments in the late 1990s and early 2000s for a digital money system. Bitcoin is, in essence, code. The original Bitcoin code and whitepaper was created by Satoshi Nakamoto, an unknown author and possible pseudonym. In 2008, Nakamoto released the first open source code of the Bitcoin-client in a whitepaper. Nakamoto then “mined” the first 50 Bitcoins. Mining means that a transaction is confirmed by another user on the blockchain, an online public ledger each transaction is stored on. These confirming users are called miners, who are awarded a piece of a bitcoin every time a transaction is confirmed, or “mined”. Eventually, after more internet users became aware of and started mining and transacting their own Bitcoins, Satoshi passed off the official website (Bitcoin.org) to other moderators, and has not been heard of since. The Bitcoin Foundation was formed in 2012 to usher in the growth of the new digital asset.
How does a transaction work?
How does cryptocurrency have value?
The value of Bitcoin (and cryptocurrencies in general) comes from the value put on it by the users. As more users attach value to each Bitcoin, its valuation grew. If nobody thought Bitcoin was worth anything, then it would be worthless. There is a finite amount of 21 million Bitcoins, which Satoshi Nakamoto decided during the creation, so the currency cannot be inflated. Bitcoin is deflationary by definition because there is a fixed amount of currency. As of today, one Bitcoin is worth $6,700, one Ethereum is worth $480, and one Litecoin is worth $82. The first users of Bitcoin saw value in the unbreakable code and the trust-based system.
Cryptocurrency Pros and Cons
The importance of all the time and effort that has been going into seemingly arbitrary digital money is that there is no third party controlling cryptocurrency. This is crucial because most, if not all, forms of money today are backed and controlled by government. One of the issues cryptocurrency users cite with a government controlled currency is centralization. Every country’s currency is created, distributed, and managed by one governing body. If the government has corrupt individuals or is poorly managed, money can easily become worthless. Citizens of Argentina have been watching their savings turn to dust as the country’s peso is falling in value. Their government has consistently made poor financial decisions, negatively affecting its citizens. Today, one Argentine Peso is worth $0.044 when five years ago it was worth $0.18. That’s inflation of 25%, which is increasing daily. Cryptocurrency solves this problem of centralization with a multi-user trust based system. Therefore, as it becomes easier to communicate with people around all over the globe, international transactions can be taken to the next level by using currency out of reach of any one government.
The issue Bitcoin is having right now is that its value is volatile and is better at being an appreciating asset, rather than a currency. Cryptocurrency has also been given a bad rap because of the exclusive use of Bitcoin on the infamous Silk Road, a now defunct online black-market best known for selling and purchasing drugs on the dark web. In addition, although Bitcoin may seem anonymous, buyers and sellers on the market have been caught because of the digital footprint transactions make on the blockchain. The FBI and other intelligence agencies are keeping up with the technology, while weeding out scammers and criminals trying to take advantage of the rebellious digital money.
Types of Cryptocurrencies
Bitcoin is the most well-known crypto, or cryptocurrency, because it was the first of its kind. Every coin and token today is based on the original source code. After Bitcoin, Ethereum is the next largest crypto, and is used mainly for its smart contracts. Smart contracts are defined as “a computer protocol that facilitates the transfer of digital assets between parties under the agreed-upon stipulations or terms.” These types of transactions are used if there is a specific item that is being purchased.
Litecoin is another notable crytocurency that specializes in speed and cost-effective transactions. Recently, a $99 million transaction took less than 3 minutes and only cost $0.40 to complete. With a traditional bank, it would take days and thousands of dollars in fees to finish. Although this is not your everyday transaction, it shows the extreme speed to which one could move his or her own money.
In the privacy sector, there are coins such as Monero and Zcash to anonymize transactions. These transactions can be useful if one is trying to move their savings outside of a country that has a corrupt government.
What does this mean for me?
Bitcoin and other cryptocurrencies are still in early development and in the beginning stages of actual currency. More governments around the world are letting cryptocurrency grow and work out the obstacles holding it back. You can even put digital assets into your IRA! Accredited investors are adding crypto investment funds to their portfolios. Hundreds of companies are pouring resources into understanding cryptocurrency and how it will affect their business. Many more are creating their own coins and tokens to create new markets (unfortunately many of them won’t be around in a few years). It’s worth learning about a new frontier for currency.
Is cryptocurrency just for people who want to overthrow governments and banks? In my opinion, no. Is Cryptocurrency ready to be used in everyday transactions? No. But is this new technology worth learning? Absolutely.
If you’re interested in learning more about Bitcoin itself, there are trusted sources online to do research. If you want an enriching history of Bitcoin, I’d recommend reading “Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money” by Nathaniel Popper. And if learning about monetary systems and why they are always changing is more your speed, read “Debt: The First 5,000 Years” by David Graeber.
By: Charla Puccino
Have you ever questioned how much you should be tipping someone for a particular service? Many of us have heard the general rule of tipping around 20% at dine-in restaurants, but depending on the service it's hard to know whether or not you're actually tipping the right amount. Therefore, in order to avoid appearing cheap or entitled, check out this guide on how much to tip at different service industries.
As aforementioned, on average wait staff should be tipped 15%-20% of the total bill. For nicer restaurants, you should even consider tipping up to 25%. However the amount of gratuity should be dependent upon the service received. Was your order correct? Did the wait staff continue to acknowledge you after your meals were brought out? Was your overall dining experience pleasant? (Keep in mind the wait staff has no control over the taste of the food).
In some cases an 18% gratuity charge will automatically be added to the bill for a party of six or more. The wait staff will not always disclose this information, so remember to check your bill to avoid double tipping.
When picking up a takeout order, no tip is required but it is very much appreciated. If the packaging of the food looks to have been handled with a little extra effort and care, a few dollars is a nice way to say thank you. If you’re simply picking up a couple of subs you need not feel obligated to tip, but it is good practice to tip at least a buck as servers don't usually make a whole lot of money.
Located on the front counters of many fast food restaurants are tip jars. The money in the tip jar at fast food restaurants is typically divided at the end of each shift between each of the fast food employees. FYI: fast food employees are paid an hourly rate of the minimum wage (if not more), whereas wait staff at sit down restaurants are paid a fraction of the minimum hourly wage rate and instead make a living off of the tips they receive. This is why throwing money into the tip jar is considerate but not necessarily expected.
Tipping the Bartender:
A lot of people think tipping the bartender around one dollar per drink is the way to go, however that's not necessarily always the case. This is an okay practice if you’re in a busy dive bar or hole in the wall casual spot, but according to a 2017 article in vogue.com, if you’re going to a more upscale establishment the tip is stringent upon the type of drink ordered.
If you find yourself waiting at the sticky bar for more than a few minutes without any acknowledgment from the bartender, feel free to pay for your drink without tipping (that is, if you were patient enough to have your order taken in the first place). It is important, however, to not confuse a busy bartender with a bad bartender. Take into consideration the volume of people in the establishment and in the bar area. If the bartender(s) appear to be working feverishly, and grant you a smile or nod as if to say they will get to you as soon as possible, remember that they are only human and are doing the best they can to mix drinks as well as keep every customers glass full.
Other times to tip:
Anyone who has made a living working in the service industry understands how frustrating it can be to witness hard work being unappreciated. It's important to know how much you should tip and where, so hopefully this quick guide will be useful in the future. The most important thing to take away from this, however, is that it's not always the server's fault if service is slow or a mistake is made. If your server seems like they're doing their best, keep their effort in mind when tipping as it's not an easy job.