habits

Best Money Tips: Life-Changing Habits to Get More Done

Amy Lu — Tue, 20 Mar 2018 09:00:08 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on life-changing habits to get more done, what to pack for a long trip, and how to get rid of old furniture and other large trash items.

10 Reasons to Cut Millennials Some Slack About Their Money

Tim Lemke — Fri, 30 Jun 2017 08:00:08 +0000

Millennials are getting beat up these days for their money habits. According to observers, people between the ages of 18 and 34 are financially irresponsible — one CEO even suggested they are spending too much money on pricey avocados when they should be saving for a home.

But these reports are unfair. There's a lot of evidence to suggest that from a financial standpoint, millennials may be facing unique challenges that older generations simply didn't deal with. (See also: 7 Ways Millennials Are Better With Money Than You Are)

Should we take it easy on millennials when it comes to their money habits? Perhaps, and here's why.

1. College is really expensive

We encourage young people to attend college, but according to Student Loan Hero, the average member of the class of 2016 graduated with more than $37,000 in student loan debt. Borrowers between the age of 20 and 30 spend an average of more than $350 a month to pay off these loans.

This student debt is largely the result of rising college costs: Public school costs have risen 9 percent over the last four years, and private universities have risen 13 percent. A student attending a four-year private school now pays an average of $45,000 each year. While it's true that young adults should be aware of the cost of college when deciding if and where to attend, it's also clear that many are now handcuffed by their student loan burdens. (See also: 7 Unique Ways Millennials Are Dealing With Student Loan Debt)

2. Wages haven't gone up

One of the biggest problems with the current economy is that it's been a long time since wages have gone up in real terms. In fact, there's evidence that wage growth has basically been stagnant since the 1970s, and any wage growth at all has been concentrated to the top earners.

Anyone without a college degree has seen their wages decline, on average, in the last decade. It's easy to accuse millennials of making bad financial choices, but there's very little evidence they are rolling in the dough to begin with.

3. Housing is really costly

In many parts of the country — especially those with good job opportunities for millennials — it's nearly impossible to find an affordable house or apartment. A recent survey of 24,000 renters by ApartmentList.com found that millennials would have to wait more than a decade to save enough for a 20 percent down payment on a home in many markets. In some cities, including San Francisco and Austin, the wait is as much as 19 years.

There are simply not enough affordable, entry-level homes available for millennials to buy, and with interest rates rising, the problem is only going to get worse.

4. Saving for retirement is mostly on them

If you're a baby boomer or even a GenXer, you might have worked for a company that offered generous pensions to its employees. For much of the 20th century, workers could find decent jobs at big companies and know they'd be getting a monthly check even after retirement.

Nowadays, it's up to the individual to save for retirement, using a 401(k) plan (if they have access to one) or individual retirement accounts (IRAs). No doubt, you can generate a lot of wealth this way over time, but most of the savings will have to come from the worker, not the employer. And for many young people, setting money aside for retirement is an afterthought if they are also facing student loan debt and other expenses. (See also: 4 Things Millennials Should Do Today to Prepare for Retirement)

5. They've lived through several market crashes

For millennials, the stock market and economy have done quite well during their time on Earth, but there were several big events that may have left them wary about investing.

The stock market endured three straight years of bad losses from 2000 to 2002, due to the dot com bubble bursting and the terrorist attacks of September 11. The markets tumbled dramatically again in 2008 after the financial crisis. These events may have taken place during a millennials' formative years, and the headlines may have clouded their belief in the power of investing. (See also: 7 Reasons Millennials Should Stop Being Afraid of the Stock Market)

6. Many don't use credit cards at all

We often assume that millennials have a ton of credit cards. But according to one survey, millennials have fewer cards than most Americans. BankRate.com reported last year that only one-third of people under the age of 30 have a credit card. (See also: Best Credit Cards for Millennials)

7. Everybody is marketing to them

It's easy to say that millennials should be more frugal, but that's easier said than done when America's marketing dollars are bombarding that exact generation. Ask any advertiser what their coveted demographic is, and they'll likely tell you they deliberately target people between the ages of 18 and 34.

On one hand, we want young people to be responsible with their money. On the other, we know that consumer spending by that same group is often a big driver of the American economy.

8. They are more generous than you think

It may be frustrating to see millennials with poor personal finance skills. But while they may not necessarily be smart with money, they are not as selfish as you might believe.

Millennials basically invented the concept of crowdfunding, which has led to sites such as GoFundMe and others that have supported nonprofits. One survey from 2014 noted that 84 percent of millennials donated to a charity that year, and that they are more likely to give on their own accord rather than from a top-down, corporate-driven approach.

9. They grew up in a fairly prosperous era

People who grew up during the Great Depression learned the hard way about living frugally and making every penny stretch. Those who grew up during World War II remember making severe sacrifices. Even baby boomers remember the gas shortages and economic stagnancy of the 1970s.

By contrast, millennials have grown up in a time of relative prosperity. Millennials have never been forced to learn how to save and invest as a matter of survival. Is it their fault that they grew up in relative comfort compared to older generations?

10. Luxury items are practically necessities

Older people like to accuse younger generations of spending money needlessly, but think of the expenses they have that did not exist even 20 years ago. Cellphones? Tough to get by without one these days. High-speed internet service? Yeah, that's almost as important as electricity. Millennials have considerable expenses each month that were once considered luxury items, but are now considered vital.

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This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Transform Your Finances With These Simple Habits

Amy Lu — Wed, 14 Jun 2017 08:31:08 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on simple habits that will transform your finances, kitchen cleaning DIYs, and cheap ways to make your house seem fancier.

5 Bedtime Routines of Famous Financial Gurus

Brittany Lyte — Mon, 05 Jun 2017 08:00:09 +0000

Whether you're Joe Schmo or Bill Gates, there are just 24 hours in a day. Of course, not everybody spends them in the same way. Let's face it: Some people are better at managing time than others. And in a world where time equals money, it's often those with the best time management skills who are raking in the dough.

It's not just how we spend our waking hours that counts — our habits pertaining to slumber also affect our income, stamina, success, and productivity.

Read on for our roundup of evening rituals of these famously successful people. Because who wouldn't want to sleep like the fabulously wealthy?

1. Read a book

Bill Gates, who reads around 50 books per year, reserves the last waking hour of his day for reading. Yes, even on the stressful, exhausting days, Gates always makes time before bed for a good book.

If you're wondering why someone like Gates has made this a priority, wonder no more: Not only does reading fuel creativity, it also helps a person de-stress while introducing new perspectives and expanding their knowledge. Hard up for something fresh to read? Here's every book recommendation that Gates, the richest man in the world, has ever shared publicly.

2. Unplug the phone

On the brink of slumber, Facebook COO Sheryl Sandberg checks her email one last time. Then she turns off her cellphone, signaling an end to the day. Unplugging this way can be "painful," Sandberg has admitted, but she conceded that she has found it to be the key to a good night's sleep. If the phone is on, she's said she is much more likely to be disturbed during the night.

This is a smart habit to take up for yourself. Not only can waking up to check your phone in the middle of the night reduce the quality of your sleep, it can also cause anxiety, according to researchers at California State University.

3. Track your sleep

In complete contradiction to Sandberg's routine, business magnate Elon Musk uses his cellphone to track his sleep. His nightly sleep count averages about six hours, he admitted in a 2015 Reddit AMA. In preparation for this shut-eye, Musk, an avid consumer of coffee and Diet Coke, cuts himself off from caffeine six hours before bedtime.

There are a number of smartphone apps that can help you track and understand your sleep cycles. Experts recommend seven to eight hours for most adults, though the true number is individualistic and likely depends on genetics. Getting enough sleep is critical to a satisfying social life and a high performance career. Here are a few top-rated sleep app options: Sleepbot, Sleep Cycle, and MotionX 24/7.

4. Treat yourself to quiet time

Oprah Winfrey designates 20 minutes at the end of her day for meditation and silent reflection. By allowing herself a regularly scheduled window during which she can decompress, Winfrey says she has reaped more benefits than she ever imagined. "The results have been awesome," she said. "Better sleep. Improved relationships with spouses, children, coworkers … Greater productivity and creativity all around."

We all know how to sit quietly, but meditation takes a little bit more know-how and guidance. That's where a meditation aid can be helpful. Try the smartphone apps Sattva or Buddhify. You can also find guided meditations on YouTube.

5. Skip the wine — soak in the tub

Entrepreneur Arianna Huffington's nighttime routine is ceremonious, and it comes in two stages. The first is simple: Skip the nightcap. Booze before bed can certainly help a person fall asleep, but the quality of that sleep will suffer. Instead, Huffington, who says she endeavors to clock seven or eight hours of shut-eye each night, indulges in a candlelit bath with piping hot water and Epsom salts. Then, after she gets under the covers, she takes a moment to count her blessings.

"I pause to think about the things that I'm grateful for in that moment," she wrote for The Telegraph. "That way my blessings, not my worries, get the closing scene of the night."

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This article is from Brittany Lyte of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Reasons You're Still Stuck in a Financial Hole

Sarah Winfrey — Thu, 25 May 2017 08:00:09 +0000

Being broke sucks. There are a million reasons why you might end up in a financial hole, and it always feels awful. The good news is you can often pull yourself out of these bad situations, especially if you make wise decisions with your money.

On the other hand, there are also some really poor money decisions that can set you back even further. Avoid these bad calls when you're broke, and you'll stop digging yourself even deeper into debt.

1. Thinking nothing has to change

The minute you realize you're broke, your mindset has to change. How did you get here? What led to being broke? Think long and hard about these things, and understand that something has to give. Telling yourself you can continue your everyday spending habits as if nothing is wrong is only going to dig yourself deeper into a financial hole. And ignoring the problem altogether certainly won't help, either; it'll just make things much, much worse. As unpleasant as it might be to face reality and change the way you spend, it will be much more unpleasant to stay broke. (See also: 7 Biggest Ways Procrastination Hurts Your Finances)

2. Emptying the emergency fund

Realizing you're broke can lead to feelings of panic — being broke is an emergency, right?! Hold on. The last thing you should be doing is raiding your emergency fund to pay everyday expenses, or to continue funding the frivolous spending that landed you here. The truth is, when you're broke, you need a sound emergency fund more than ever. What happens if you lose your job, or your hot water heater dies? Without that money put away, you'll have nothing to help you get by. So, leave your emergency fund right where it is and make other changes in your budget.

4. Taking out a loan

You don't need the financial burden of new debt when you're already broke. Assuming you get approved for a loan, there's no guarantee that you'll even be able to pay it back. That puts your credit score at risk of a critical hit, and can ruin your chances of getting approved for financing in the future.

In the same vein, never fall for a payday loan, either. Predatory lenders often target people in times of financial trouble, and are experts at marketing an attractive offer that sounds like the answer to your money troubles. In reality, the obscene interest charges and terms and conditions will leave you way worse off. (See also: How to Protect Yourself From Predatory Lending)

5. Getting buried in overdraft fees

When there's less money in your checking account than you're used to, take extra caution to avoid overdrawing. Overdraft fees can quickly multiply, shooting up to hundreds of dollars and putting you in an even worse financial situation. Your bank may be willing to waive some of the fees if you ask, but it's not a guarantee and certainly not a regular courtesy. If you're not sure how much money you have in your account, check it daily. With technology, there is no excuse. You can either log on to your bank's website every morning, or download your bank's app. (See also: 9 Ways to Avoid Overdraft Charges)

6. Lying about your financial state

Don't lie to yourself and don't lie to other people. It's hard to admit when you're in a bad money spot. But the truth is that you are broke, and lying will only cause more problems. Take a deep breath and be honest. Politely turn down your friends' invites to go shopping or out to dinner, and explain that you simply don't have the cash right now. They won't hold it against you. You will respect yourself more for being straightforward, and you might even pave the way for someone else to feel comfortable admitting their hardships, too.

7. Gambling

It's easy to think that one big win could solve all of your financial difficulties. But the fact of the matter is that hitting the jackpot in a casino or by playing the lotto is unlikely — very unlikely. More often than not, people lose tons of money gambling, sometimes in the blink of an eye. This certainly won't make your money troubles any easier. Think of it this way: gambling is for people who can afford to lose money. You can't, so stay away.

8. Refusing to give up luxuries

Maybe you have a maid service clean your house once per week, or you like to have your car professionally detailed. Maybe you love grabbing takeout for lunch, or eating at that great Italian place for dinner every Friday night. Maybe you love your premium cable package, and all your fun monthly subscription boxes.

Guess what? All of these luxuries cost money you don't have, and you can go without. Clean your home and car yourself. Clip coupons and use cash back apps at the grocery store, and meal prep all your food at home. Get rid of monthly subscriptions and memberships you aren't using, and think long and hard about cable — do you really need it?

None of these have to be permanent changes. By giving yourself a financial buffer for even a few months, you'll get back on your feet much faster.

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This article is from Sarah Winfrey of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: 12 Habits That Turn Dreams Into Reality

Amy Lu — Thu, 13 Apr 2017 08:30:15 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on habits that turn dreams into reality, ways to save money on auto maintenance, and 90 strategies to overcome shyness.

5 Things to Remember Every Time You Face a Financial Failure

Emily Guy Birken — Tue, 21 Feb 2017 10:00:22 +0000

Failure is a universal phenomenon, but it's one that makes you feel isolated and alone when it happens to you. When it comes to financial failures — from thwarted entrepreneurial ambitions, to poor investment decisions, to overwhelming debt — the feeling of failure is magnified by the fact that talking about money is taboo in our culture, and there are relatively few safe spaces to discuss your financial problems.

But financial failure is just as common as any other kind of failure, and there is no reason to let it derail your path to success. When you face a financial failure, remembering these key facts can help you pick yourself up, dust yourself off, and keep working toward your financial goals.

1. No One Else Is Keeping Track of Your Failures

Just out of my graduate education program, I applied for a teaching position at every school district within driving distance. I sent out about two dozen applications. I went on about four job interviews. And two weeks before the school year began, I landed an interview and a job at my preferred district.

During that time, I beat myself up for all the districts that weren't calling me and all the interviews that didn't result in a job. But from the outside, my series of failures looked like me landing a job right out of graduate school at the district of my choice.

Facing a series of failures before reaching success is a part of life, but no one other than you sees all of those failures. If you've tried over and over again to get the job you want, or tame your credit card debt, or qualify for a small business loan, no one other than you will be keeping a tally of the times it didn't work. You are the only person tracking your failures.

2. Failure Is Not the End

Life is a little messier than in the movies. Moments of success do not end with a swell of music and rolling credits — and neither do moments of failure. Your life continues after you declare bankruptcy, even if your day-to-day life looks a little different from it did before your bankruptcy.

That means no financial failure is the end of the story — unless you choose to let it be the end. Yes, you made some mistakes in the past that led to a big financial consequence, but you can always choose to get up each day after a bankruptcy, job loss, or disastrous investment, and get to work on rebuilding.

3. Without Failure, It Is Difficult to Recognize Success

If everything you tried came easily to you, then you would never feel anything but neutral about your success. It is failing at something that helps you recognize, enjoy, and be grateful for the success that comes afterward. Failure may feel pretty terrible, but it gives success its sweetness. This is especially true of the kind of behavioral changes you have to make to be financially successful.

For instance, sticking to a budget is a difficult skill, and very few rookie budgeters are going to be good at it right out of the gate. Having several months where you blow your budget might seem like a failure worthy of giving up on budgeting altogether, but such blown budgeting months are part of your learning experience.

If you're willing to learn from those mistakes, you'll get to a place where you know how to handle unexpected expenses, invitations, or financial problems without overspending. And it will feel so much better to succeed at your budgeting after learning from your failures than it would to have budgeting come easily to you.

4. No Failure Defines You

In the midst of a financial failure, it can be very easy to get discouraged and decide that you failed because there is something wrong with you. For instance, you might be furious at yourself for failing yet again to sign up for your company's 401K, or missing another due date for a bill. You might think that you can't do anything right because you've failed to do this task. But such global application of your anger at yourself is counterproductive and completely untrue.

Instead, invest the time to think about the specific reasons why you failed. Do you feel overwhelmed by the decisions you have to make to sign up? Do you have too many bills to keep track of?

Once you have pinpointed the specific reasons behind your failure, you can start to focus on what you need to do to rectify the situation, all while recognizing that you are not defined by your failure.

5. You Are Not in a Competition

Experiencing a job loss or other financial failure can be devastating no matter when it happens, but it is particularly tough when your friends or colleagues are doing well at the same time. Having to move back in with your parents after losing a job can already feel like a type of failure, but it can feel even worse if your best friend receives a major promotion and raise at work at around the same time. You might feel as if you're falling behind while they pull ahead of you.

However, comparing your life to others' lives is a losing proposition, since there will always be someone doing better (and someone doing worse, for that matter) than you. You are not in a race to succeed, and there are no winners and losers — so don't let yourself feel bad because of where you are in relation to others. You are where you are, and you can find success from there.

Don't Let Financial Failure Get the Better of You

We all face financial failure at some point in our lives. Feeling devastated is perfectly normal, but don't let it be your only reaction to such a failure. Instead, remember that failure is just one of the steps on the path to success.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Why You Need to Make Financial Habits, Not Goals

Andrea Cannon — Thu, 02 Feb 2017 10:00:16 +0000

With any luck you're still on track with your financial resolutions and making strides toward your financial goals. While your financial goals may look pretty on paper, they won't mean much until you start building the habits necessary to meet those goals. And if you have already given up on your resolutions, don't fret. Focus on financial habits, instead.

By adopting good financial habits, you are committing yourself to achieving your long-term goals. Once you've begun a habit, it will eventually become second nature, and before you know it, you'll have made real progress toward your goals.

Track Your Progress

In order to ensure you are on the path to meeting your goals, it's essential to track your progress. This means that you need to create habits that allow you to track your progress. In order to develop a habit, there needs to be some form of reward that happens each time you perform the action. After a while, this repetition will form a new habit. This "habit loop" is how automatic behaviors and successful habits are formed.

Recognizing the progress that you've made every week or month by adopting a new habit will motivate you to continue the action. For instance, by skipping your morning cup of coffee, you may be able to save up to $150 per month. Consider placing a reminder of this somewhere you'll see it throughout the day.

How to Form Good Habits

The only way to form habits that stick is through repetition. Forming a healthy habit is great, but the only way that it's going to be effective is if you continually repeat the behavior. In many cases, it can be good to have an accountability partner who can help you meet your goals. In fact, the Dominican University of California found that more than 70% of people who provided a friend with weekly updates on their progress were successful in accomplishing their financial goals.

Develop Habits Early

The earlier you begin developing financial habits, the better chance you'll have of sticking to the habit on a long-term basis.

Setting a goal determines your end target, but it doesn't necessarily set steps to achieve that goal. On the other hand, when you start forming habits, they can create long-term change. Goals can seem like large, looming things at the end of a long tunnel, whereas habits are something that you can begin doing today. By focusing on financial habits, you can form sustainable behaviors that help you meet your goals in less time.

Good Habits to Adopt

There are certain habits that can help you achieve a broad goal. For instance, if your goal is to pay off debt, then you can start by paying more than the minimum on your credit cards every month. By adopting this habit, you can more quickly pay off your credit cards and move on to other forms of debt.

If your goal is to invest more, then you can get into the habit of automatically transferring at least $35 per week into your retirement accounts so that you can become a millionaire by retirement (adjust the numbers for your age and personal retirement goals).

In order to start building healthy habits, you will need to first create a budget to determine how much you can save and how much you can spend on the "needs" and the "wants" in life. Checking your budget every week is a great habit to form. This will help you to determine where you're spending your money and what can be cut from your regular spending.

Automate Your Habits

Saving money can make you happier both in the short and long run, so it's one of the best financial habits to have. However, it can be difficult to save, so it's best to sign up for an automatic savings plan, which can deposit a certain amount into your savings account every month. You can also set your credit card and other bill payments to be paid automatically. By automating your finances, you get a step closer to establishing healthy financial habits.

The Best of Both Worlds

In an ideal situation, you will build financial habits that can improve your financial status for life. You will also focus on your goals and set the achievable steps you'll need to take to reach those goals in less time.

There are a number of evidence-based strategies that show that maintaining your healthy financial habits can help you reach your goals without even thinking about it. Once you have visualized your goals and outcomes, it's important to identify the obstacles standing in your way so that you can create a plan and begin adopting healthy habits that will benefit you for life.

This article is from Andrea Cannon of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Power Habits of Great Leaders & Achievers

Amy Lu — Thu, 26 Jan 2017 10:30:24 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on power habits of great leaders and achievers, how to save time at the gym, and ways to cultivate your passion.

Best Money Tips: Small Habits That Steal Your Happiness

Amy Lu — Mon, 12 Sep 2016 10:00:07 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found articles on small habits that steal your happiness, tips for saving money on groceries, and ways to get cheap or free vet care for your pet.

Best Money Tips: Daily Habits That Help You Look Younger

Amy Lu — Thu, 24 Mar 2016 10:00:05 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found helpful articles on daily habits that help you look younger, products that can save you money over time, and tips for building a capsule wardrobe.

Americans Spend More Than Other Countries On These 10 Things

Brittany Lyte — Tue, 19 Jan 2016 18:00:04 +0000

In America, we're known for our indulgences — home appliances, electronics, vacations, cars. So how does our spending stack up against Europeans, or folks in Asia? Read on for our analysis of the most uniquely American spendings habits out there.

1. The Lottery

Americans spend more money playing the lotto than on books, video games, and movie and sporting event tickets combined. In 2014, lottery spending in the U.S. totaled a whopping $70 billion. (See also: 6 Ways of Improving Your Lottery Odds)

2. Doctors and Dentists

The U.S. spends more public dollars on healthcare than all but two countries. There are a couple of reasons for that. First, healthcare services are notably higher in the U.S. than in most other nations. And secondly, Americans are greater users of expensive medical treatments and technologies, such as MRI machines.

3. Housing

Americans spend more money on housing than people in Canada, the United Kingdom, and Japan. In a 2009 study, Americans funneled an average 26% of their expenditures toward shelter.

4. Taxis, Planes, and Trains

The same study showed Americans also spend more on private transit, other than automobiles, than folks in Canada, the United Kingdom, and Japan.

5. Education

The U.S. spends more on education than any other developed nation, and most of the funding comes from the pockets of parents and private foundations. Total spending per student in the U.S. tops $15,000. For perspective's sake, Switzerland spends nearly $15,000 and Mexico pays about $3,000. Despite big spending, American students still lag behind comparable nations on international tests.

6. Prescription Drugs

Americans spend far more on prescription drugs — almost $1,000 per person per year — than residents of any other country. For some perspective: Americans spend 40% more than the next highest spenders, Canadians.

7. Politics

Americans spend more on political campaigns than any other country. To compare, India spent $5 billion in its last general election. That's one billion dollars less than Americans spent in the 2012 general election.

8. Tourism

When traveling abroad, Americans outspend vacationers from most other countries. In 2014, Americans abroad spent $112 billion — more than Germany, the United Kingdom, and Russia. The big out-spender, however, was China. Chinese abroad spent $165 billion that same year.

9. Christmas

Americans are more likely than residents of any European nation to go into debt to pay for Christmas presents. One in five Americans used credit to cover holiday spending in 2014.

10. Chocolate Bars

The U.S. leads global spending on chocolate bars, topping out at nearly $3 billion per year. That shakes out to an average annual chocolate expenditure of $57 per American.

Do any of these expenditures look familiar to you?

This article is from Brittany Lyte of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Simple Habits That Save Time and Energy

Amy Lu — Mon, 14 Dec 2015 20:01:04 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found simple habits that save time and energy, how to regift appropriately, and tips for setting New Year’s goals.

5 Financial Mistakes You Need to Stop Making by 30

Mikey Rox — Mon, 03 Aug 2015 13:00:09 +0000

Managing money is tricky, especially when you're in your 20s and just starting your adult life. Between low starting pay, student loan debt, and the pressure to keep up with your friends materially, your finances are usually anything but perfect.

As you learn the financial ropes, it's only natural that you'll make some mistakes along the way. I certainly did — because nobody's perfect, and our 20s are a time of self-discovery where we learn the dos and don'ts of money management. Alas, while you can get away with a few financial screw ups as a young adult, your 30s are the time to get serious about your money. You can no longer afford rookie mistakes.

To help you advance to the big league, here's a look at five financial mistakes to stop making by age 30.

1. Not Getting Serious About Budgeting

As a 20-something adult, you might live at home with your parents or share household expenses with a roommate. As a result, maybe you're able to spend money frivolously and you don't have to pinch pennies. If you get into any financial messiness, you can easily dig yourself out of a hole, leaving you feeling like a budget is unnecessary. Except there's one little problem: You'll eventually be on your own.

By age 30, it's time to put impulse buying and bad habits behind you and get serious about managing your money. A budget is one of the best ways to maintain control of your finances. You're able to assess exactly where your money goes, and allocating a certain amount for different spending categories reduces the risk of overspending and ensures there's enough cash for other financial goals (building an emergency fund, saving up to buy a house, paying off debt, etc). You're an adult now, and you need to treat your money like one.

2. Using a Credit Card to Satisfy Your Wants

It's smart to apply for a credit card in your 20s. A credit card jumpstarts your credit history and provides access to funds during an emergency. Unfortunately, some 20-something adults rely too much on credit and accumulate massive debt. (You're not alone; I did it too.) But by the time you hit 30, it's time to give credit cards a rest and live mostly on cash.

Using a credit card to satisfy your wants doesn't end well. The more debt you have, the harder it becomes to save for the future, and high minimum payments make it difficult to afford basic living expenses, like a mortgage or utilities. In your 30s, a credit card should be the exception, not the rule. If you use credit, make sure you're paying off the balance every month.

3. Ignoring Your Retirement Savings

Thinking back to my 20s, saving for retirement was the last thing on my mind. Maybe you feel the same way. In your 30s, you can't afford to put off saving for the future. For every year you delay saving for retirement, that might be an extra year you have to work later in life — and who the heck wants to do that? Talk to your employer about joining the company's 401(k) plan, and consider diversifying your retirement savings with an individual retirement account.

4. Relying Too Much on Your Parents for Support

I know from experience that making it on your own as a 20-something adult can be brutal. Entry-level salaries don't always keep up with the cost of living, and making ends meet might require some financial assistance from your parents. There's no shame in asking for help, but once you're in your 30s, you need to stand on your own two feet.

This doesn't mean you'll never need financial help again, but instead of running to your parents every time you hit a financial roadblock, attempt to solve the problem yourself. What would you do if your parents weren't in a position to help? You could possibly sell items you don't need, ask your employer for overtime work, or downsize if you're living above your means.

5. Skipping Health Insurance and Other Insurance Needs

Some 20-something adults remain on a parent's health insurance plan until age 26. But once they're on their own, some feel they don't need insurance because they're healthy and only visit a doctor once a year for a physical, which is free under the Affordable Care Act. But just because you're healthy today doesn't mean you'll be healthy tomorrow. The older you get, the more likely you'll develop health problems, and it only takes one trip to the emergency room to wipe out your savings account. Even if you can't afford the best health insurance plan, some coverage is better than none.

You also need to stop ignoring other insurance needs, such as disability insurance in the event you're unable to work for more than two weeks due to an injury or illness, and renter's insurance, which covers the replacement cost of your belongings in the event of fire, theft, or other damage to the property. Life often throws us curveballs when we're least expecting, so it's best to be as prepared as possible.

Do you have other financial mistakes to add that we should stop making by age 30? Let me know in the comments below.

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Best Money Tips: Common Habits That Can Shorten Your Life

Amy Lu — Fri, 26 Jun 2015 19:00:12 +0000

Welcome to Wise Bread's Best Money Tips Roundup! Today we found some great articles on common habits that may shorten your life, essentials for a long car ride, and natural methods to keep bugs away.

habits

Best Money Tips: Life-Changing Habits to Get More Done

Top 5 Articles

Other Essential Reading

10 Reasons to Cut Millennials Some Slack About Their Money

1. College is really expensive

2. Wages haven't gone up

3. Housing is really costly

4. Saving for retirement is mostly on them

5. They've lived through several market crashes

6. Many don't use credit cards at all

7. Everybody is marketing to them

8. They are more generous than you think

9. They grew up in a fairly prosperous era

10. Luxury items are practically necessities

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Best Money Tips: Transform Your Finances With These Simple Habits

Top 5 Articles

Other Essential Reading

5 Bedtime Routines of Famous Financial Gurus

1. Read a book

2. Unplug the phone

3. Track your sleep

4. Treat yourself to quiet time

5. Skip the wine — soak in the tub

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8 Reasons You're Still Stuck in a Financial Hole

1. Thinking nothing has to change

2. Emptying the emergency fund

4. Taking out a loan

5. Getting buried in overdraft fees

6. Lying about your financial state

7. Gambling

8. Refusing to give up luxuries

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Best Money Tips: 12 Habits That Turn Dreams Into Reality

Top 5 Articles

Other Essential Reading

5 Things to Remember Every Time You Face a Financial Failure

1. No One Else Is Keeping Track of Your Failures

2. Failure Is Not the End

3. Without Failure, It Is Difficult to Recognize Success

4. No Failure Defines You

5. You Are Not in a Competition

Don't Let Financial Failure Get the Better of You

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Why You Need to Make Financial Habits, Not Goals

Track Your Progress

How to Form Good Habits

Develop Habits Early

Good Habits to Adopt

Automate Your Habits

The Best of Both Worlds

Best Money Tips: Power Habits of Great Leaders & Achievers

Top 5 Articles

Other Essential Reading

Best Money Tips: Small Habits That Steal Your Happiness

Top 5 Articles

Other Essential Reading

Best Money Tips: Daily Habits That Help You Look Younger

Top 5 Articles

Other Essential Reading

Americans Spend More Than Other Countries On These 10 Things

1. The Lottery

2. Doctors and Dentists

3. Housing

4. Taxis, Planes, and Trains

5. Education

6. Prescription Drugs

7. Politics

8. Tourism

9. Christmas

10. Chocolate Bars

Best Money Tips: Simple Habits That Save Time and Energy

Top 5 Articles

Other Essential Reading

5 Financial Mistakes You Need to Stop Making by 30

1. Not Getting Serious About Budgeting

2. Using a Credit Card to Satisfy Your Wants

3. Ignoring Your Retirement Savings