Tag Archives: Money

Stop Freaking Out About Your Future Finances

It’s almost the end of February so if you’re a responsible adult, you’ve filed your taxes. Now you’re waiting for that highly anticipated tax refund check. It’s probably one of the few times a year all of the 20-somethings in the world feel financially stable and like they rule the world.

Why limit that feeling to only one time a year? Your personal finances should not freak you out. If you have a good job with a respectable income, then money should not cause you anxiety. I’ll admit for a while money, credit cards, investing and budgeting were all things that stressed me out. I was paranoid that the money I saved would magically disappear. Guess what, there is not a money stealing fairy that takes all of your money in the middle of the night. You just have to be smart about saving for the future.

A budget spreadsheet should be your best friend. It’s a really simple way to track your spending. There are different apps out there that can do the same. Knowing where you money goes is the only way to reduce expenses and save more. Now how do you take your finances to the next level?

Investing. Yes, that big scary word that doesn’t really make scene to a lot of people. I am of the Carrie Bradshaw mindset: “I like my money where I can see it…hanging in my closet.” Fair point because at least Carrie (and others) know where their money is going. With investing, it’s a bit more ambiguous. You know what you’re investing in but aren’t sure how your money will fare in the market.

There are lots of resources that can help you figure out how to invest your money. One example Quandl, a centralized website that pulls financial and economic data together as a tool for people to use when investing. Their futures page show over 100 options for investing and provides data on each over a period of time. So before you put your money anywhere, you’d want to check out trends and historical data to make an educated decision.

Managing your money boils down to needs versus wants. As long as you maintain a balance between the two while planning for the future, you’ll be set. Add in some smart investments and you’re in a good place. I know it might not be as easy as it sound in this post. But if you remove some of the fear you might have about finances, it does make the process less painful.

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Financially Fearless: A Levo League Event Recap

This past week, I finally attended a Levo League event. Levo is a community of passion women working to help one another. They sponsor all types of events across the country to better professional women. Tuesday night I attended one such event called Financially Fearless, which was led by Alexa Von Tobel, the CEO of Learnvest, a company centered around affordable financial planning. What a great night discussing an important topic!

First, it was great to network with the Levo ladies. All poised and energetic, they were so welcoming and happy to hear my story. After some chatting, Alexa began her talk, centered around the her, Financially Fearless that ties to her company. In short, Learnvest is a budgeting tool with help from a certified financial planner. The book (and the Learnvest plan) provides simple but effective tools to help you manage your money. Alexis broke down each step, with charismatic humor and true passion.

Alexa sharing great tips at the event hosted by Levo League

Alexa sharing great tips at the event hosted by Levo League

Step 1: Focus – You need to sit down and figure out where your money is going. Track all of your spending (the Learnvest app can help). You should look at your credit cards and how often you use them as well as your 401K plan and credit score. My personal favorite points from Alexa on this topic included setting up a separate email account for all your bills and for having calendar alerts for all payments.

Step 2: Focus – Know your after taxes income and your expenses. Remember there should be money left after paying your bills. Another great point: Just because you make more money doesn’t mean you’ll save more. If your pay and spending both continue to increase, that won’t solve any financial problems.

Step 3: Plan – Make sure you have an emergency savings account that you do not touch. This should be for true emergencies, not needing a new dress for an upcoming event. The goal should be to constant financial stability.

Step 4: Build – Alexa described this as the dream phase. Set financial goals for the future and plan out all of those crazy things you want to go and do later on in life.

Step 5: Protect – Alexa emphasized that this probably the most important phase. Look at all of your insurance policies (home, health, car, etc) and make sure you are getting all benefits of the policy. Once you have a full-time job, health insurance is a must and so is renter’s insurance if you rent. Favorite quote here? “Unused credit cards are a hacker’s dream.” Amen!

Step 6: Maximize – This part was all about investing, which honestly gives me some anxiety as I don’t fully understand every piece of it. The most important concept here is to invest money in a variety of assets but only do it if you can afford to leave it in the market for a five-year minimum. This way, you’ll have a shot of investments turning a profit.

Alexa's best selling book!

Alexa’s best selling book!

Step 7: Achieve – The final phase is about being prepared even if life changes. Alexa gave a great analogy: The way you manage your health meaning going to the doctor, taking vitamins, etc., should be the same way you approach being financially responsible. You need to pay attention to it!

Alexa’s 45 minute chat was jammed packed with information, realistic examples and helpful tips. Her passion for making financial planning affordable is clearly apparent. I can’t wait to read her book and start using the LearnVest app. Expect an update once I do!

The Credit-Free Summer

At the beginning of the summer, I made a promise to myself to not use my credit cards for the next three months. Yes, the joke is on me. However, I’ve limited my use and figured out how to better budget for the lifestyle I want.

I only have two credit cards but it’s amazing how quickly each swipe adds up. I was casually using my card all of the time, not realizing how much I was spending. Now that moving out is becoming a real possibility, this summer was the opportune time to start the proper savings plan.

So for the last couple of weeks, while it’s been somewhat challenging, I’ve figured a couple of tricks that have helped increased my savings and not my spending.

dollar sign

  • I made an actual budget spreadsheet that was divided into categories like transportation, fitness, food, etc.  Then I decided on a set amount for each of those categories as well as an amount to put into my savings at each pay check. I suggest using automatic online banking so the money is pulled right as you get paid. If you don’t see all the money, it feels like it wasn’t there!
  • I’ve tried to limit eating out to once a week especially in New York City. When lunch is ten dollars a day, it quickly adds up. It’s more economical to buy food in bulk or head to your local farmer’s market and make meals at home.
  • Gas continues to climb so be strategic about where you’re driving. Carpool if you can and have adult sleepovers if it’s more convenient! Your wallet will thank you.
  • When you do get a credit card, find one that has a rewards program. My American Express card has a great program specifically if you use your card for gas or at department stores. Some programs will let you use these rewards dollars towards your bill or you can purchase something from their rewards store. Usually, there’s a lot to choose from.
  • I leave at least one of the credit cards home every day. See no evil, can’t use the evil, it’s as simple as that.
  • You are allowed to SPLURGE, you’ve earned it! Just be smart about when and what you’re spending your money on. Also, websites like Groupon and Living Social typically have great deals on more expensive items or experiences like massages or fitness classes.

While it hasn’t been the easiest to limit my credit card use, it has certainly been worth it! The summer isn’t even over yet and my savings has increased. Feel free to share any other budget tips with my in the comments section!

 

The Living At Home Conundrum

Exploring all the aspects of the young professional’s new life has made me realize how many different pieces of the puzzle there are to consider. It’s a big adjustment in more ways than one, regardless of what anyone says.

I’ve found the biggest adjustment to be moving back in with my parents. Let me start with a disclaimer: this post is not a reflection of solely my situation and is not intended to bash my parents or anyone else’s. Like with similar posts, it is an area of discussion among new, young professionals.

When you graduate college, a job is not a guarantee like it used to be. Neither is the financial stability to move out on your own. More than likely, after you graduate, you will be moving back in with your parents. Within my circle of friends who have graduated, all but one have moved back in with their parents or relatives. As of June 2012, 53 percent of 18 to 24 year-olds said they moved back in with their parents after college because of the economy. That’s more than half of the college graduates.

welcome backIf you ask a college graduate if they wanted to move back in with their parents, I’d bet you an overwhelming majority would say absolutely not. It’s not that we hate our parents but that we’ve been independent for the last four years; no one wants to give that up. I certainly didn’t and now have the ‘move-out’ inch.

There are obviously pros and cons to living at home. For those who have forgotten, let’s give you a refresher:

Pros: 

1. Money Earned, Money Saved: Most parents I know are not charging their recent college grads rent. This means you are immediately saving more money than you would be living on your own. Even if you pay something, it’s absolutely less than normal rent. Saving money also means you can spend it on other fun things like concerts or vacations. Expendable income is higher while living at home.

2. Support System: Your family has been your support system for the last 20 or so years. You are comfortable with them and they are right there when you need something. They are also supportive in ways you never thought of. Like when the heat breaks, you don’t have to call your landlord and pay to get it fixed. Either Dad walks down the stairs to fix it or Mom calls the repairman and pays for it.

3. Space: More than likely, your parents live in a house, with space to move around, hide or even entertain friends. Your apartment doesn’t have that basement to store your sports trophies or the backyard with the pool.

Cons:

1. It’s Not Yours: There’s something to be said for being able to call a place your own. It’s yours to decorate, to mess up, to have a puppy in. It means your friends or significant other can come and go as they please. When you live at home, it is only fair that you need to ask if people can come over or crash.   It’s not your house so you have to be respectful of when you’re bringing people in it.

2. Privacy: I have three siblings, three parents and there’s usually a continuous flow of people in and out of both my houses. I love these people to death but sometimes a moment of peace and quiet would be nice. Sometimes I’d like to hide and cry into a pillow or scream. When you’re living at home, someone’s bound to find you. Try having a phone conversation. Someone will know how much those concert tickets cost.

onyourown

3. Independence:  In college, you came and went when you pleased. Coming home at 4am on a Tuesday? No problem! I don’t care how lenient your parents are, they want to know where you are. That doesn’t mean they won’t let you go. But it does mean you are responsible for keeping them updated on your location.

Recent college grads are very lucky to have parents that will take them back in and let them live rent-free. Sometimes it’s hard to remember that and that it’s only temporary. Do you struggle with living at home? Share your challenges!

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