Recently, my husband had to buy a new bathrobe. The old one, which had completely worn out after a decade of wear, was the exact same ridiculous pastel coffee mug robe that Brad Pitt sported ironically in the movie Fight Club. The coffee mug robe cost $188, and had been a gift from me because my husband simply could not bring himself to spend nearly $200 on something he was going to wear around the house on lazy mornings.
He loved that intentionally ridiculous robe, but despite my urging him to replace it with the same one from the same boutique, he again balked at spending that kind of money on a bathrobe. No matter how often I pointed out that he’d be spending a little less than $19 a year on daily joy (assuming the replacement robe also lasted 10 years), I could not change his mind.This situation got me wondering, though. How do you decide whether it’s worth it to spend $200 on a ridiculous bathrobe, $500 for a phone upgrade, or an additional $5,000 to get the trim package you really want on your new car?
Here’s the thought process you should go through to figure out if a major purchase is worth it.
The big question: Is this an investment or an indulgence?
The basic definition of an investment is something that will appreciate in value over time. Buying a house is a common example of an investment purchase. In addition, upgrading your flight to business class so that you can more easily get work done on the plane may be an investment (if you can truly commit to working in flight) since the cost of the upgrade will be more than covered by the money you make while working.
But what about investments that appreciate in something other than monetary value? For instance, you might spend money on biweekly massages, which do not appreciate in financial value, but they do keep you pain- and stress-free, which might be worth…
We’ve all received unsolicited financial advice, often from well-meaning relatives and friends. In many cases, this advice is useful. But a lot of “classic” personal finance advice simply hasn’t aged well, and is now viewed as flawed. It’s just not applicable anymore in today’s world.
Before you blindly accept any money advice you receive, be sure to do some additional research to find out if the advice is outdated. Here are nine examples of financial tips that may no longer apply.
This doesn’t happen much anymore. Job security is not what it once was. A decline in labor unions means that guaranteed annual pay increases are a thing of the past. And a pension? Forget it.
There’s a lot of evidence now that switching jobs periodically will result in higher pay increases. And with the introduction of 401(k) plans, retirement savings are portable when your employer changes.
“Pay off all of your debt as soon as you can”
This is not so much “bad” advice, it’s just less than ideal. Yes, it’s a fine goal to remain as close to debt-free as possible, but in the current environment, carrying some kinds of low-interest debt may be more beneficial for you in the long run.
Let’s say you have a 30-year fixed-rate mortgage and were fortunate enough to lock in a low 3.5 percent interest rate. Let’s also say stock market returns are averaging 7 percent per year. Over time, you’re going to be better off using any extra money you have to invest in stocks rather than pay off your loan early. Generally speaking, if your investment returns outpace current interest rates, there’s not much incentive to pay off debt early.
“Technology is a fad”
There was a time when some of the most savvy investors dismissed many tech stocks because they didn’t understand them. The bubble collapse of advertising-dependent dot-com companies in the late 1990s didn’t help the image of this sector. But there’s no denying the fact that investing in technology companies with solid business models has been a clear path to wealth in recent years.
All you need to do is look at the incredible returns for companies like Amazon, Apple, Netflix, Facebook, and others. A full 15 percent of companies in the S&P 500 are technology companies, and they comprise most of the companies traded on the NASDAQ.
Tech stocks are still notoriously volatile, but if you ignore the sector completely, you’re ignoring some…
We’ve all been there. You’re between pay checks, running low on cash and then disaster strikes and you need money–now. Or you get paid on Friday and find yourself broke on Monday. You have too much integrity or are too scared to rob a bank…but the thought has crossed your mind.
Don’t fret! I am here to help.
20 safe and legitimate ways to get money fast
Below is a list 20 perfectly legal and legitimate ways to get your hands on some cash in a pinch. Some of the ways are more suitable for some than others but the list will provide you with options and more importantly get you to generate your own creative ideas on how to increase your cash flow.
Keep in mind that these are short term solutions. The real solution to your money problems is proper money management and planning (a.k.a. budgeting). Learning to live below your means, delaying gratification, eliminating debt and reducing your dependency on credit are the keys to financial freedom.
If you need money today…
1. Pawn or sell something
If you’re REALLY in a pinch, you may need to pawn or sell that prized possession you’ve got stashed away. Your desperate situation may call for you to have to part with that old comic book collection, your grandmother’s antique pearls or china or that coin collection you’ve had since childhood. I do advise that you think long and hard before making this decision. Once it’s gone–it will be incredibly difficult to get it back and your desperation will ensure that you probably won’t get what the item is actually worth.
Another option is to dig through your closets, and basement for stuff that may still have some value such as an old DVD or video game collection, your 10-year-old’s baby clothes, a toddler bicycle, that espresso machine ( or juicer) that you only used once.
There are tons of apps1 that let you snap a picture of your stuff and post it online immediately.
2. Sell an old cell phone
Almost everyone has an old smartphone lying around that still works. You decided to upgrade from that perfectly functional phone because it was the chic thing to do. Now the old phone is just laying around collecting dust. Sell it! If you need money today check out the website ecoATM. This site allows you to safely sell and recycle your old phone. They also pay cash for old tablets, iPods and MP3 players.
3. Sell your clothes at a local consignment shop
If you have quality designer clothes or furniture you no longer want or need go ahead and sell it outright to a consignment or thrift shop. A lot of consignment shops will buy your items outright eliminating the consignment fee and the wait for your items to sell. You won’t get top dollar this way but you will walk away with some cash in hand.
4. Borrow from a friend or family member
This is the one method most of us want to avoid. However, you can receive the money the same day using apps such as PayPal. Keep in mind that borrowing from a loved one takes humility and sincerity. Do not, I repeat, DO NOT borrow from friends or family if you have no intentions of repaying the loan or if you know you cannot meet the terms of repayment2. This is the quickest way to ruin a relationship. Proceed with caution.
5. Sell your plasma
You can get paid for your plasma. Most donation centers will pay you anywhere from $25-$50 for it. The best part about selling plasma is that most places will allow you to sell it up two times per week.
**Quick note: There is a difference between selling your plasma and donating blood. You do not get paid for blood donations so make sure you distinguish between the two and are clear with your request.
6. Get A Cash Advance
This is a bad idea! I do not recommend this unless there is a life and death situation and you have a plan for quick repayment. Some credit cards offer the opportunity to take out cash…
This challenge found on Lifehack, is a simplistic way to start or increase your savings. According to the article, you’re able to adapt it to your needs. It goes into detail as to how you go about the program, and with its basic nature, it can be applied at any time. After all, small steps lead to big progression, as stated in the article itself.
Do you find it hard to save money? If so, you’re not alone. A recent survey found that 62% of Americans have under $1000 in savings.1 This can be disconcerting when we think about the future – buying a house, car, or even much-needed holidays – our desire to be successful in saving money is important to our peace of mind and security. But could there be a simple and easy way to encourage our saving habits?
What is the 52-Week Money Challenge?
A new concept has become increasingly popular that does just that – the 52-week money challenge.
The idea is to focus on each week, starting small, and gradually building up the amount of money you save. It’s not only consistent, but it takes away the pressure of taking big chunks of income each month which, let’s face it, never feels great. Intrigued? This is how it works.
You start by saving just $1 in week 1. The next week it’s $2, the third week it’s $3 and so on. The idea is that by week 52 when you’ve saved $52 in that weekly period, you will have amassed $1,378.
What Are the Pros and Cons?
The best thing about this 52-week money challenge is anyone can do it. It’s doable and you can adapt it to your needs.
For example, you can reverse the process by saving $52 in week 1 and working backwards. This is particularly beneficial for people worried about having to put away $52 during the end of the year holidays.
You could even mix the amounts up according to how much or how little you have each week, making smaller contributions when the purse strings are tighter or choose a higher amount when you can afford more. Either way, it’s a solid, simple way to save up a sizeable chunk.
There are potential cons to this challenge. One is that it can…
Passive income is money received on a regular basis that requires little effort to maintain. Sounds great, doesn’t it?
Generating passive income is a great financial goal because it’s a smart way to build wealth. One thing to realize is that creating passive income requires an upfront investment — whether it’s money or time. You’ll need to be committed in order to be successful at creating a passive income stream. Here are three passive ideas and how they work:
Idea #1: Investing
Investing is a tried and true way to make passive income. Of all the passive income ideas, investing is probably one of the most passive. The most significant investment you’ll make is your money upfront. There isn’t much upkeep after that.
Whether you’re starting out with $1, 000 or $100, 000, you can make money in the stock market. The important thing to know is that investing doesn’t come without its risks. The value of your stock portfolio will continue to fluctuate as long as you own it. If you’re in it for the long haul, however, you can ride out those fluctuations and see profits over time.
There are many methods for investing your money in the stock market. One way is to invest in dividend-paying stocks. A dividend is a payout some companies provide to shareholders on a regular basis. Dividend yields vary from company to company, so keep that in mind.
It’s important to not merely go after stocks with the highest dividend yield. Instead, focus on companies that have a proven track record of increasing dividend payouts over the years. You can either receive your dividend payouts as cash or choose to reinvest them in the same stock. The latter is known as DRIP, a dividend reinvestment plan.
One way to invest your money that doesn’t involve the stock market is peer-to-peer lending. Peer-to-peer lending involves funding personal loans to borrowers through an intermediary like Prosper or LendingClub. As a lender, you make money through interest payments on the personal loans.
Although peer-to-peer lending doesn’t have the risk of stock market fluctuation, your money isn’t completely secure. Borrowers have the ability to default on loans. To mitigate this risk, you can diversify your portfolio with multiple personal loans. You can also review personal loan requests and decide which ones you’d like to fund. For example, you can review criteria such as credit worthiness and the reason for the loan.
Life insurance is an incredibly important financial product. Unfortunately, it’s also relatively costly. With that in mind, I thought I’d put together some tips for saving money when you’re in the market for a life insurance policy.
Any insurer worth their salt will require a physical as part of the underwriting process. The good news is that it’s easy — they’ll send someone out to your home or office. Smoking, obesity, high blood pressure, etc. will all result in significantly higher premiums. So, leading a generally healthy lifestyle will save you a lot of money on your life insurance premiums.
Buy it only if you need it
Life insurance makes the most sense for people with significant financial responsibilities. If others depend on you for financial support, then you most likely need it. However, if you’re young, unmarried, and childless, you may be better off skipping it and banking the savings.
Buy term and invest the difference
The simplest and cheapest form of life insurance is a…
If you asked anyone to list their top 5 concerns, I’m confident money or finance would be up there. Salaries, loans, mortgages, debts, stocks, investments, or other financial concerns that you can name are concerns we ponder on a daily basis.
So how can I not think about my financial situation? You might ask. The answer is financial freedom.
So What Is Financial Freedom?
Financial freedom, on paper, means not being tied to burdens or concerns financially. In other words, a financially free person spends their money without worrying when is the next paycheck coming or how to pay off debts and loans.
It does not mean acting cool or boast in front of your friends or proving a point to your family, but rather for you to sleep peacefully at night and wake up with positive thoughts, rather than thoughts: “I am desperately searching for money day 34”.
How We Can Benefit from Having Financial Freedom
Unless you live only in the present day, and don’t think about the near future (which is not the smartest decision nowadays), there are only benefits in being financially free. Firstly, it’s your emotional freedom – your thoughts are not constantly stuck to your bank account and unpaid bills. Secondly, you are aware of your expenses (well the majority of them, because we all have unexpected bills) and profits. You know when you can splurge on something you crave or need and when you need to cut back. Thirdly, it lets you make long-term plans like summer holidays or that yoga retreat you’ve been dreaming about.
Financial Control Is Out of Your Reach? Here’s What To Do
Financial freedom will not happen overnight, and it might require doing some damage control as well. I have described a perfect scenario: you start with a solid base (your family) and go step-by-step. However, a lot of us go through a rocky road and get to the focusing point after a few positive and negative experiences. It is important that you are ready to start the path where you are willing to try hard and gain financial freedom. Let’s look at 5 ways to regain control of your finances:
Turn your back on unnecessary loans
There are people out there who take loans for their wedding party. One day of fun and months of paying…
Readers often e-mail me for tips on how to keep their finances manageable. There are so many options out there that it can be overwhelming. I was speaking with my mom about this some time ago, and she felt the same way.
My mom has been responsible with her money over the years, but she felt that she could be doing better. After chatting with her, we decided that she should switch banks and automate some of her bills. It would free up some of her time and take a few things off of the to-do list… wins all around. I was talking with her the other week, after she had implemented the new system, and she said she’s really happy with her decision. She has saved both time and money with her new bank and online bill pay.
Why do I love automating my finances? Well, why wouldn’t I? Automating your finances can be a wonderful process, if done correctly. For one thing, it puts me in control of my bills without having to deal with paper, stamps, envelopes, and checks. But there are plenty of other reasons to love automating my finances, too. Here are my favorites.
I don’t pay late fees
I used to occasionally lose bills or forgot to send checks whenever I had a very busy week. Late fees definitely add up, and can be as high as $29 to $39 for credit cards! Sometimes I can pay my credit card accounts online for a same-day payment, but if I’m a day late, I may still get a fee imposed.
With online bill pay, you don’t have to worry about late fees because your bills will get paid on time every month, without any added work on your end. We’ll talk more below about different options for setting up automatic bill pay. But for now, just know that in exchange for a little effort up front, you can reap the benefits of avoiding late payments… forever.
Late payments don’t hurt my credit score
Getting rid of late payments isn’t just good for saving money by avoiding late fees. It also helps keep my credit score high. Payment history makes up the lion’s share of most credit scoring algorithms, and even a single late payment can quickly tank an otherwise excellent credit score.
Again, there are several options available for automating payments. But any of these options can keep you from having late payments recorded on your credit file, which helps you build your credit score or keep it high.
In the past, I would save money for a few weeks and then have an emergency. After getting through the trouble, I’d neglect to re-start my savings. This cycle would repeat over and over. I felt like I couldn’t possibly save more money without cutting my budget to the bone.
How did I fix this issue? Automation, of course!
Now, I have a portion of my pay automatically transferred to a high-yield savings account each time my check hits my account. The trick to making this work is to make sure the transfer happens before you can even check your account balance on payday. It’s hard to miss money that you never had a chance to see!
Welcome to Wise Bread’s Best Money Tips Roundup! Today we found articles on foods to avoid if you want to sleep better, ways to get free samples from Walmart, and things that first-time homebuyers need to know.