Categories
Budgeting & Saving

How #TheRoad Can Improve Your Financial Wellness

The following blog post is part of the The Road to Financial Wellness Blog Tour. #TheRoad is a 15,000+ miles road trip through 50 states. We’ll be hosting and participating in events all across the country: from The Smile Lifestyle Events, financial wellness seminars, book signings and training. We’re going to break the social taboo about money and empower a generation to live their dreams by understanding financial wellness.

When it comes financial wellness, millennials are one of its most important demographics.

Millennials are struggling with student loans, low salaries and higher costs of living. The only way to combat that? Financial wellness.

Financial Wellness Means Doing More

What is financial wellness? For millennials, it means focusing on what you can do, instead of what you can’t. You can choose to pay off your loans early and save for a down payment. You can decide to get a cheaper apartment and use the savings in your 401k. You can decide to get a part-time job or side hustle to help pay your bills.

Having financial wellness means that you’re aware and active when it comes to your finances. It means that you have a budget, you track your expenses and you plan ahead. You can’t bury your head in the sand and expect to be ok. You have to act.

The Road to Financial Wellness

The road to financial wellness for millennials begins with tackling their loans. Most millennials are paying off their student loans. Many also have car payments and credit card debt on top of that. Before you can think about growing your wealth, you have to erase your debt.

At the same time, you have to take advantage of the one thing that millennials have over other generations: time. When you’re young and not making a lot of money, time is the one thing that can surpass even the most meager of salaries.

If you haven’t started, check into your company’s 401k or start an IRA. Even if you can only afford to put in $25 or $50 a month, start there. It might seem silly to put in so little, but the power of compound interest is mighty.

You don’t have to be a financial genius to put away money for retirement. You don’t even need a six-figure salary. All you need is to care about your future enough to do something about it.

Smart Financial Wellness Habits

Another great habit for millennials is learning how to budget. Budgeting is like meal planning - it helps you to eliminate waste, stay healthy and know what’s going on. If you start budgeting while you’re young and have fewer obligations, you’ll find it easier to do when you’ve got a mortgage, spouse and two kids to manage.

The biggest stop on the road to financial wellness for millennials is creating good habits while you’re young and eliminating the bad ones before you get any older. Now’s the time to cut your expenses, figure out what you really want and learn how to live within your means.

If you learn to save while you’re 25, then you won’t have to worry about retirement when you’re 55. If you learn to avoid debt when you’re 30, then you won’t have an underwater mortgage at 60.

Everything you do now - good and bad - will affect how you treat money in your later years. Don’t think just because you’re young that what you do doesn’t matter. Caring about your finances is not something to do when you’re older - it’s something that starts now.

Get the book! You Only Live Once written by the founder of The Road, Jason Vitug.

Jason is a financial motivator, lifestyle expert, speaker and founder at Phroogal, a financial education startup and lifestyle brand. He is the author of, You Only Live Once: The Roadmap to Financial Wellness and a Purposeful Life.

Originally posted 2016-07-03 08:00:43.

Categories
Budgeting & Saving

How to Budget for Apartment Expenses

Moving? You'll need to figure out your apartment expenses. If you're thinking about moving out and trying to figure out if you can get your own place, then it's time to set up a budget. Your budget changes as you change and it should adjust especially when you make new decisions such as moving into an apartment.

When I decided to get my first apartment, I knew there were a couple of things that I was going to need, namely all the little things that go into an apartment, like furniture, tables and chairs. And then I also wanted plants. There are many things that you need to include in your moving out budget. Here are four steps to help you budget for an apartment, so you will be ready to move out.

Perfect! I found this just in time. Getting ready to move out and I need to know what apartment expenses I should expect. Saving this!

Set a Monthly Apartment Expenses Budget

Set the monthly total that you'd like to pay for rent. If you make $1000 a month and you think you can afford $500 a month, you might need to wait until you earn more money. Your monthly rent expense should be no more than about 23% to 25% of your take home pay. If you bring home $1000 a month, then 23% to 25% is $230 to $250. It seems like a small amount, but you probably need to get a roommate or you probably need to wait until you're really ready to move out.

4 things you should save up for before moving out.

Include a Budget for Utilities

Include a budget of about 10% a month for utilities. Your total housing payment will total about 33% to 35% a month. That's a good place to be when you're thinking about renting a new place or moving out to an apartment. When I got my first job, I had a take home pay of a little over $2,200 per month and my first apartment was $680. I paid about $640 a month in rent, and then about $40 more in utilities. I was spending about $680 to live on my own, and I was able to maintain that payment without stress because I used that percentage rule.

Set a Short Term Moving Budget

Then you should budget for all of those little expenses that tend to come up while moving. Also, you need to set a budget for furniture and groceries. I was on an all cash budget because I was in the process of paying off my credit card debt. I decided to go to IKEA because it was a great place where I could get inexpensive furniture and furnish the apartment. I bought furniture a few pieces at a time. I didn't furnish the entire apartment when I first moved in because that would have increased my monthly expenses. Instead, I set aside a little bit of money each paycheck in each month in order to furnish my apartment.

Set a Budget for Unexpected or Expected Apartment Expenses

Then finally, set aside some cash just for the little stuff, food that you'll eat on move-in day and any other last-minute surprises. For example, I had a gas bill that I had to pay from my previous apartment. I had no idea that I would have to pay that. That was an immediate $47 that came out of pocket. I had to make sure that I had some extra cash saved up in order to take care of those expenses.

Those are my tips on budgeting for an apartment. Now that you live on your own, think of all the fun stuff you get to do. For example, you could start your own YouTube channel.

Here are all of the apartment expenses I had when I moved into my apartment.

If you didn’t know, I am, well, moving out.

I am moving my personal residence. I’ve been living at home and even though I love my family, sometimes it’s time to move on.

 

Actually, on the day that you are reading this, I’m probably in the middle of moving already. But there have been so many different expenses that have been coming up related to moving. Here is what I have so far.

7 Important Apartment Expenses When Moving

1) Security Deposit: $300 This just secures my claim on the apartment and covers any costs that may arise when I move out.
2) Renters Insurance: $279 I decided to pay this month to month instead of upfront to spread out the costs so I will be paying about 24 dollars a month.
3) Electricity: $0 This cost me nothing just to get electricity turned on, but I am not looking forward to seeing my first bill.
4) Natural Gas: $220 I paid a deposit to get my gas turned on and when my first few bills come in, they will pull from this deposit until it is gone and afterwards I will start paying month to month.
5) Internet: $100 This covers the initial 50 dollar device fee and the first month’s payment. Afterwards it will be 50 per month to keep at my blog.
6) Misc Supplies: $180 This covers the basics I will need to move in, toilet paper, towels, spices, cleaning supplies and all of the other little things that add up.
7) Movers/Moving Truck: $0 Since I don’t have that much I’ve decided to move everything with the help of a friend.

On top of all of this, I will also be spending money when I first move in to get my refrigerator stocked. I have a lot of supplies and basics from my old apartment that used to be sitting in my parent’s basement so I will save money moving that.

When you move you have to think about all of the costs before you get started. You should have at least $1000 in the bank for emergency moving expenses. I didn’t know that I would have to pay a deposit to get my gas turned on but because I was ready, it didn’t affect my normal budget. Here are some more expenses that I am considering.

Living Room

TV (I have a small one and I may get a bigger one eventually)
Cable (No cable for me, I will use free Hulu and Crackle and maybe Redbox)
Couch (I have a small couch that I need to move)
Table (I don’t have a coffee table but, hey who needs that anyway?)
Internet (Yes please!)

Kitchen

Dishes (I’m all set here)
Food (This will be at least $200 if I get everything at once)
Cleaning Supplies (I’ve been buying these when they were on sale for the past few months so I should be ok.)

Bedroom

Bed (I will be getting a bigger bed when I move)
Dresser (I need a dresser also)
Curtains (I have these as well)

I think that should be it. Is there anything I’m missing? How did you handle your apartment expenses when you moved out?

Originally posted 2016-06-21 08:00:00.

Categories
Budgeting & Saving

Here’s Your Quarter-Life Crisis Survival Kit

The concept of the mid-life crisis is common. You grow up, work for a bit, get married, and have kids. A decade or two down the road you feel lost, unsatisfied or unexcited with where your life is going.

The concept of a quarter-life crisis is similar. Only you are often younger and may not have much stability in life just yet. Most people in their 20s might joke about the idea of having a quarter-life crisis until it actually happens to them.

If you’re feeling uninspired and unfulfilled with most aspects of your life, whether it’s your job, your finances or your relationships, you may be experiencing a quarter-life crisis. The worst part is having no idea what your next step will be.

If you’re eager to re-evaluate your life, this quarter life crisis survival kit will equip you with the mindset and skills needed to get things rockin' again.

Great post to help me get my life together. Listen Linda! This is exactly what I needed.  I'm hitting my quarter-life crisis now. :/

Realize That It’s Okay to Feel Lost Sometimes

Practically everyone goes through a stage in life where they have to stop and ask themselves what path they really want to take and what will make them happy. If you’ve just reached a major goal like graduating college or landing a new job, things may not actually be what you expected. Or you may just be looking for your next move (literally or figuratively). Stop trying to fit a square puzzle piece in a circle’s spot.

Instead of jumping into the next phase of your life and taking a path that may be unclear, it’s important to stop, revisit your passion and and evaluate how far you’ve come already.

[Tweet "It's okay to feel lost at times."]

Take One Day at a Time

Don’t try to solve every problem and doubt in your life all before sunset. When you slow down and stop focusing so hard on your life path, ideas, people and experiences will come your way daily and offer inspiration and guidance.

For example, you may meet your next business partner in a coffee shop or your friend might tell you about a killer job opening.

These instances happen in during day-to-day occurrences and often can’t be planned for ahead of time.

Stop and Re-Evaluate Your Budget and Spending

Your finances can play a large role in your quarter life crisis. Maybe you feel like you don’t have enough money. Maybe you feel like you waste too much money on unnecessary things. Whatever the case may be, it’s extremely hard to feel like your life is on the right track when your finances are on shaky ground.

Add up all of your monthly income, total up your debt, and start tracking your spending. You can sign up for a free account with Mint.com to connect all your bank, credit, investment, and debt accounts in one place and start setting financial goals.

After you’ve tracked your spending for at least 30 days, recreate a specific budget that is going to allow you to pay off high-interest debt, put money into a savings account, and spend consciously on the things that matter to you and not on impulse purchases.

Find a Mentor and/or Life Coach

If you’re feeling lost in your current career or in need of some guidance, you should talk to a coach or mentor who can help you redefine your purpose and skillset so you can secure a fulfilling job.

Being able to speak to someone about your thoughts, failures, successes and aspirations will help motivate you and restore the drive and determination needed to land a job that makes you happy.

If you are not having career issues, you can always reach out to a life coach to talk to you about more specific and personal topics in order to help get your life back on track.

Stop Comparing Yourself to Others

Comparing yourself to others is the worst thing you can do during a quarter-life crisis. Everyone is on their own life path and dealing with their own personal insecurities. These reasons make it unrealistic to compare where you are in life with anyone else.

Take some time away from social media if you can and focus on yourself.

Start Setting Mini-Goals Each Day or Week

Grab a planner, and start organizing your day and setting small goals that can be achieved. Think about things that need to get done around your house and in your life. Stop procrastinating and start checking those tasks off each day.

If you feel like you never have enough time in the day to accomplish things, getting organized and planning out your day will save time.

If You Can, Create a Rough 3-5 Year Plan

You may not know exactly what you want to do. But imagine what your dream or ideal week would be like. Determine where you will live, what type of work you will be doing, and what you will do for fun or entertainment. Then, you can start establishing smaller goals based on those ideas to help you reach them.

A lot can change over the next few years so it’s best to create a rough plan and be open to change!

Originally posted 2016-06-20 08:00:24.

Categories
Budgeting & Saving

Interview with Zina Kumok Creator of Student Loan Knockout

Zina Kumok is a personal finance freelance writer and blogger at Debt Free After Three. In 2014, she paid off $28,000 worth of student loans in three years. Now, she’s created Student Loan Knockout: A 20-Day Journey to Debt Freedom, a course on how you too can pay off your student loans quickly.

Tell us about your story and why you’ve developed this course.

When I paid off my student loans in three years, friends started asking me how I did it. I knew many of them had been reading my blog, but I realized that there was no concise guide on how millennials can pay off their student loans.

The amount of student debt only gets bigger every year, and I created this course to show millennials that it’s possible for them to become debt free. Millennials on average earn between $30,000 and $35,000 a year. Paying off loans on that salary can seem impossible if you don’t have someone showing you how to do it.

Why is it important for millennials to become debt free?

The sooner you learn how to save, pay off debt and invest, the better off you will be in the long run. Many millennials put off retirement because it seems so far away.

But as you get older, there will be other financial commitments. You might want to buy a house, have a child or move to a new city. Millennials put off becoming financially responsible because they assume an older version of them will be more equipped to handle that, but in reality, putting it off will only make it harder to get on track.

What can people learn from your course?

The course offers specific actions millennials can take to pay off their loans, as well as basic information on topics such as taxes, investing and budgeting. Not only will they learn the difference between a stock and a bond, but they will know how to apply that information to their own lives.

Every step in the course has a targeted action item that users can take, and each step will bring them closer to becoming debt-free.

What else will people get from your course?

They will learn that personal finance is not about being good at math or knowing what an ETF means. It’s about learning how your emotions impact how you spend money and how you can create sustainable habits that will allow you to be financially responsible.

Personal finance is just that - it’s personal. Each person spends money differently, and it’s important to understand how you think about money and how that affects how you spend it.

Readers of YoungFinances can get 15% off the course by using coupon code YOUNGFINANCES. There are three tiers you can purchase - 30-minute a coaching call with me, perfect for those who have more personal questions they want to ask, the basic course and a deluxe package for people who want the course as well as access to me.

Everyone who buys the course will also receive access to a private Facebook group where you can ask questions, share wins and encourage each other.

Originally posted 2016-06-13 12:42:12.

Categories
Budgeting & Saving

How I Paid off $22,000 of Credit Card Debt

This was originally posted on September 22, 2014.

It's done! After 6 years of growing a debt monster, and 3 years of attacking it with payments, I can finally say that I have paid off all of my credit card debt.

Whew!

When I made that first swipe I don't think I knew how much it would affect my life. Living with credit card debt that I could not afford cost me a lot of stress, worry, and unnecessary cash. Yes, it was expensive to be in debt. At one point I had a 24% interest rate on a credit card with a large balance.

I knew that I wanted to not only get rid of the debt, but set myself up for success in the future. I've seen friends eliminate debt and fall into the same habits and patterns that caused the debt in the first place. I knew that if I learned how to use credit wisely that it could become a friend and not a foe.

So with that in mind, here's what I did to tackle $22,000 of credit card debt.

Amazing story! I need to start tackling my debt. This was a good step by step guide.

Setting the Debt Deadline

Firstly, I set a date. I decided that I wanted to pay everything off within three years. That made it easy to figure out how much I wanted to pay towards my debt with each check. I chose to go with a consumer credit counseling service. They negotiated lower interest rates with my creditors so I could pay the balances down immediately instead of wasting money on interest.

However, that meant that I had to close all of my credit cards and not open a new line of credit. Closing credit cards with a large balance can hurt your credit score.

My credit score was already shot so that really did not matter to me. Getting rid of debt mattered more.

But be honest with yourself. By cheating and using your cards while paying them off you are only hurting yourself.

Creating the Cash Budget

Secondly, I committed to using all cash. I knew that I was addicted to using credit and there was no point in trying to get out of debt while I was still using it. I had already gotten rid of all of my credit cards and I created a budget that would allow me to use only cash.

I maxed out my budget categories in saving and left myself with enough cash to cover my essential expenses. That includes housing, food, and clothing.

After shopping for 6 years straight, I'm pretty sure I had all the clothing that I needed.

I also left myself a small cushion of about 50 dollars per paycheck. This money was not for anything specific and it gave me a feeling of space.

Woosah...

Speaking of shopping, I knew that I had to mentally change the way that I handled money, credit, and debt.

Needs vs Wants

During the first few months, I started to teach myself how to distinguish needs versus wants. I prevented myself from impulse shopping with a simple rule. If I wanted to purchase something that was not on my shopping list or was not a part of my intended trip, then I was not allowed to buy it.

Plain and simple.

I defined a need as something that would help me either budget better, save or invest better, or something that I would use each day for a purpose.

Toothbrush? ok.

Fancy 70 dollar electrical toothbrush? Not ok.

By curbing my impulse shopping and learning to use money for needs instead of just wants, I created better balance in my spending.

Building an Emergency Cushion

Finally, I was honest with myself. I didn't try to live super frugal or put all of my extra cash towards my debt. I knew that if I simply stuck with my plan, I would have everything paid off on the date that I self-imposed.

I didn't stress myself.

I still traveled, dined out with friends and put money towards investing and saving.

Yes. I still invested.

This was very important for me. As a person with a financial background, I understand the importance of compounding interest. I used time to my advantage.

Looking back at the returns of the last 3 years, it was the best decision I could have made.

I know you can do it too! I think you find yourself lacking in motivation because you are allowing the debt to take over your fun. Don't restrict yourself to the point where you hate budgeting.

Start with a small 'fun budget' and allow it to grow as you pay down debt.

Are you in the process of paying down debt? What tips would you share with others?

Choosing a Debt Management Plan to Help

Here's how I used a debt management plan to conquer my debt.
How I Dumped Debt with a Debt Management Plan | Young Finances
One of the most important tools in my pay off debt plan was a service that helped me create a three year plan to pay off the debt.

I found the consumer credit counseling service through a friend of mine. She had used the service to pay off her debt and she also improved her credit score in the process.  I decided to check them out and I set up an in person meeting to discuss my debt and plan goals with a counselor.

The counselor also helped me create a budget and managed the details every step of the way.

The service I used subsequently merged into ClearPoint Credit Counseling Solutions and I completed my debt management plan with them. Here's how I paid off $22,000 of credit card debt in three years and how you can do it too using a debt management plan.

 

1) Gather all of your records

The first step in starting a debt management plan involves gathering all of your records. You will need your latest credit card statements, which should include the address to send payments. You will also need to make sure that you include all of your creditors in your debt management plan. I was able to exclude my car loan, but all of my other creditors were included. I had to track down a few statements since some of my credit cards had fallen into collections. Once I had everything, I was ready to start my debt management program.

2) Talk to your creditors and your counselor

If you are getting debt collection calls, don't be afraid to answer them. I simply answered each call and let the creditor know that I was working with a credit counseling service. I also made it a point to contact my counselor about any changes to payment addresses, or other changes. She kept up with everything and that made things really easy on me.

However, they did all of the negotiations for me, getting fee concessions, and negotiating most of my interest rates down to zero.

3) Create your budget

As you are paying off your debt, you may feel tempted to overspend or stop your payments to spend the money elsewhere.

Don't do it!

Trust me, the three years will fly by quickly and you will be so happy to be debt free afterwards. Instead, create a budget along with your counselor to help you stay on track. I used the budget that they provided to help me get started and then as I learned what works best for me, I created my own budget with room for investing in my employer sponsored 401k plan. Doing this allowed me to take advantage of free employer match money and invest in the markets.

The process of paying off debt can be very difficult but with the help of a credit counseling service like ClearPoint, it can be much easier.

How about you? Have you used a debt management plan to pay off debt?

 

This is my personal experience with ClearPoint. ClearPoint is a trusted partner. Please see our disclaimer regarding trusted partners.

Originally posted 2016-06-06 08:00:55.