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Fuck, Marry, Kill: Capital One Venture Card vs Amex Blue Cash Preferred vs Chase Freedom Credit Card

capital one venture card vs amex blue cash preferred vs chase freedom credit card

As the saying goes, there are plenty of fish in the sea. This expression isn’t only true of romantic partners but also of credit cards. The options are endless, they all have different qualities, and you aren’t sure if they have your best intentions at heart when you first meet. 

In the endless sea of credit card choices, I’ve ended up dating these 3: the Capital One Venture Card, Amex Blue Cash Preferred, and the Chase Freedom Credit Card. Like my romantic partners, each one of these credit cards has served a different purpose in my life. They all had some wonderful qualities, other not-so-great ones, and out of all of them, there’s one that stands out far above the rest. 

If you’re looking to start a relationship with a new credit card and are finding it hard to navigate the sea of possibilities, this article will help narrow your focus. In it, I’m going to tell you why I got into a relationship with each card, the pros and cons I experienced during each of these relationships, and rank each card by which I would fuck, marry, and kill.

Capital One Venture Card

You know that electrifying feeling you get when you walk into a room and see a smokin’ hot person across it? How you try to focus on everything else but can’t fight the urge to look over in their direction every 30 seconds, even though they’ve already caught you staring several times? That’s what finding the Capital One Venture Card was like for me. Only in this case, it wasn’t the good looks that got me, it was the sign-up bonus. 60,000 points right off the bat! I was smitten at first glance.

I kept toying with the idea of whether or not I should go up to the Venture Card and get to know it better. I was nervous about starting a relationship with another credit card and wasn’t sure if he would like my credit score. It was above average, but so are lots of other people’s. But I just couldn’t stop staring, so I got up the courage and went over to him. 

That’s when I found out how easy going he was. With him, I would get 2 points for every dollar I spent, no matter what I bought. There were no special categories to remember or extra savings to activate each month. My ex (more on him later) used to make me sign up to get extra cashback in certain spending categories and only offered 1 point for every dollar I spent on items outside of those “special” categories. The thought of earning more points with less effort gave me butterflies.

The only downside to the Capital One Venture Card was the $95 annual fee. I wasn’t excited at all about the prospect of paying for some parts of our relationship. But being the understanding and easy going guy that the Venture Card is, he decided to waive my annual fee for the first year. After he did that, I decided to sign up.

It’s been over 5 years, and I’m happy to report that we’re still going strong! I gladly pay the $95 annual fee these days because the benefits I’ve experienced being in a relationship with this card far outweigh the cost. 

Pre Covid, this card and I traveled the world together. The best part about having him as my travel companion was that he never made me pay any foreign transaction fees. This saved me loads of money. He also fully reimbursed me for getting my Global Entry Pass, so now I get special TSA and customs treatment when we travel. 

I can say without a doubt that the Capital One Venture Card is definitely the best credit card to ever happen to me. My Prince Charming. To summarize why it’s so great, here are its best qualities.

  • It’s super easy to use because you don’t have to monitor deals and “special” spending categories
  • You get 2 points for every dollar you spend
  • There are no foreign transaction fees
  • It offers periodic additional perks like reimbursing for Global Entry Passes
  • It has a low annual fee of $95

Verdict: Marry

Amex Blue Cash Preferred

While the Capital One Venture Card and I have had a strong relationship from the start, I did get a wandering eye a couple of years ago. That’s when I met the American Express Blue Cash Preferred Credit Card.

He was nothing like my Capital One Card. He had a long list of spending categories with different earnings for each of them and a low sign-on bonus. He was complicated and kind of stingy, but as soon as I saw that he offered 6% cash back at supermarkets, I lusted after him. 

I spent a lot of time calculating whether it was worth having an affair with the Amex Blue Cash Preferred Card. He offered more than 2 points in 4 spending categories: supermarkets, streaming subscriptions, transportation, and gas, but he would definitely complicate my life. I couldn’t stop fantasizing about him, though. These are all categories that I have a relatively high amount of spending in, so even though it complicated things, I started having the affair.

I now use my Amex Blue Cash Preferred Card in these four spending categories and use my Capital One Card on all other purchases. The additional savings I get by using my Amex only amount to several hundred dollars a year after factoring in the $95 annual fee, but I think it’s worth it.

Like is often the case with affairs, the complication of having one pales in comparison to the excitement. Having to remember to use my Amex instead of my Capital One Card is of little consequence compared to the exhilaration of saving even more money. So while my Amex definitely isn’t as amazing a credit card as my Venture Card is, I’m not planning on ending our relationship any time soon.

Verdict: Fuck

Chase Freedom Credit Card

The Chase Freedom Card is the one that took my credit card virginity. We never really had that great of a relationship because I didn’t really know what I was doing, and he never had the best intentions. Nonetheless, he was still a significant part of my life. 

The first thing I noticed about him was his $0 annual fee. Talk about sexy! But it didn’t take me long to get annoyed with some of his other qualities. He only offered me 1 point for every dollar I spent and would make me chase after his savings by requiring the 5% cashback categories to be manually activated every quarter. 

Despite all of the negatives, I was in love, so I let him sneak into my parent’s basement one night and take my V-card. While this experience wasn’t the romantic encounter I envisioned, I continued our complicated relationship for several more years until I met the Capital One Venture Card

I don’t ever use my Freedom Card anymore, but I do still keep the account open. The length of your credit history is considered when your credit score is calculated and the longer your history is, the better. Since he was my first, my Freedom Card gets to stay open. 

Even though we’ve gone our separate ways, I totally understand why this is one of the most popular credit cards and think it’s a great entry-level one. It gave me a couple hundred dollar sign-up bonus, a limited balance so I couldn’t get myself into too much trouble, and taught me A LOT about how important it is to build a healthy relationship with credit. So while the Chase Freedom Credit Card and I are not together anymore, I wish him all the best.

Verdict: Kill

While I 100% recommend the Venture Card for pretty much everyone because of its ease of use, low annual fee, and great rewards program, you may not be ready to swipe right on that card just yet. If you’re looking to compare cards, NerdWallet is like Tinder for credit cards. You can take quizzes to help NerdWallet figure out what you’re looking for, and they’ll come back with the profiles for your potential matches. 

If you decide to swipe right and start dating one of them, it’s important to take steps to keep your relationship from becoming toxic. It’s great if your card trusts you enough to give you a credit limit well above your spending, but only if you pay your balance off in full every month. If you don’t, your credit card company will charge you an astronomical rate of interest. All credit card companies turn into fuck boys the moment you don’t pay your balance off in full, and fuck boys should be avoided at all costs.

As long as you’re paying your card off in full and getting great rewards, you’ll have a healthy relationship with whatever credit card you choose. It’s true that there are plenty of fish in the sea, but by narrowing your search using my recommendations and apps like NerdWallet, you’ll be able to find one that makes your life easier and you can’t live without. You may even decide you like it so much you want to marry it. 

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Passive Income Ideas to Make Money like Taylor Swift

Taylor Swift has made an absolute killing since the pandemic started. She released not 1, but 2 entire albums while many of us were struggling to get through our days. But it’s 2021 now and the vaccine has shown us the light shining at the end of the quarantine tunnel. There’s finally some hope that 2021 could be a great year.

With our renewed optimism, many of us have set goals that include increasing our income in 2021. Even if you didn’t explicitly set a goal to make more money this year, I’m sure you’d be totally cool with doing it. To help you out, I’m going to tell you how you can use Taylor Swift’s 2020 revenue strategy to start making more money for yourself.

And don’t worry, I’m not going to tell you to work harder or be more productive. Quite the opposite, actually. I think we could all use a little less stress right now, so I’m going to tell you how to apply what Taylor did in quarantine to make more money with less effort in 2021. AKA some great ways to generate passive income. 

What is Passive Income?

First, let’s define what passive income is. Passive income is income that requires little to no effort to earn and maintain. This blog post is a great example of how passive income works. I take time to research a topic, write a post about it, edit it, make the graphics, and then post it. After that, I just let it hang out on the internet and hope people (like you) read it and enjoy it. If enough of you do, I can make money through ad revenue, affiliate links (some of which are included in this post FYI), and by getting people to sign up for my courses. After doing the work on the front end, this post can continue to generate income for me for years to come with minimal work to maintain it in the future. That’s how you make passive income. Work on the front end, then income generation on the back end.

Passive Income Ideas

Now that you know what passive income is, here are some easy ways to start making it using examples from Taylor Swift’s quarantine experience.

Monetize Your Talents

Taylor’s Example

Covid screwed up Taylor’s plans for 2020 just like it did for the rest of us. She had to postpone her Lover tour, which probably would have made up a significant portion of her earnings in 2020. Many musicians make the bulk of their earnings from touring, so I’m sure this dealt quite a blow to Taylor’s income projections. This didn’t stop her from making a killing last year though. She found a way to use her talents in quarantine to maximize her profits.

I’m not a die-hard fan of Taylor’s music, but she is an incredible businesswoman. Her ability to seize an opportunity and capitalize on her talents is unparalleled. Like I mentioned earlier, Taylor released not 1, but 2 albums in 2020 after her tour was canceled. The first of these albums, Folklore, became the first album to sell over one million copies in the US last year. In fact, it was the only album to do that in 2020. 

Even though Taylor’s tour was canceled, she leveraged her talents to still achieve incredible success. She has always been heavily involved in the production of her music, so instead of calling the tour cancelation a loss, she went full force with her talents and produced and sold a ton of music during quarantine. 

How to Apply It

We all have talents that we can share with the world, and get paid for. If you can’t come up with one of your talents off the top of your head, take a second to think about what people are always complimenting you on, or asking you for advice with. Is it your outfits? Cooking? Professional advice? Whatever it is, you’re probably the go-to person in your friend group for at least one thing. That thing could be your moneymaker!

If you’re an incredible cook, maybe you start a blog and post your favorite recipes, or offer a cooking class on a site like Teachable. If you’re dominating the corporate world, you could start a blog or YouTube Channel with tips on interviewing, meeting techniques, and how to set yourself up for advancement opportunities or negotiate raises. The list of possibilities is endless.

Once you have a website, course, blog, or YouTube channel set up, there are lots of different ways you can make money with your content. You can run ads, do affiliate marketing, and create and sell your own products. All of these allow you to do some heavy lifting on the front end by writing posts or creating courses and then sit back while the money flows in.

Don’t forget the key to this is to start generating passive income though. If you’re a great artist, you may be thinking, YES! I’m finally going to start offering custom art on Etsy! But slow down. Offering custom art means that you have to actively make a new piece of art for every customer. This will generate additional income for you, but it will be active income because you have to do a lot of work to maintain your revenues. Instead of offering custom artwork, you could offer prints of some of your favorite pieces. This way, you can spend time creating one piece of art, and rather than selling it once, you can continue generating revenue on it by selling additional prints. That’s how you turn your talent from active income to passive income.

House Hack

Taylor’s Example

Sorry to burst your bubble, but Taylor isn’t listing any of the extra rooms in her mansion on Airbnb. What she is doing though, is using what she already has (her house) to make more money (hacking).

If you’re not already impressed enough with Taylor’s album Folklore’s success, here’s another reason you should be. Taylor didn’t just release her album normally. She took that shit to the next level. She released Folklore to streaming services, and as a CD, vinyl record, and cassette tape. And that’s not all. She released her CDs and vinyls with 8 different covers. Some fans literally bought 8 of her CDs or vinyl records so they could get every cover. There are no bonus tracks, or extras on the albums either. They all have the exact same songs on them. Mind. Blown. If that’s not incredible consumer hacking, I don’t know what is. 

How to Apply It

Taylor took something she already had, her album, and got fans to buy the same album 8 times. One thing you already have that you can use to make more money is your house. 

Many of us have extra bedrooms in our houses. Maybe we have a guest room for when friends and family come to visit, a future kid’s room, an extra office, or a basement with a separate entrance. Most of the time these rooms are sitting empty, so why not put them to good use?! List them on Airbnb or VRBO and turn them into money-making machines. (If you don’t own your home, check with your landlord about this first.) 

Most of your work will be done on the front end when setting up your listing. Then you just need to manage the bookings and watch the money roll in. If you want to do even less work, you can hire someone else to do all of the room cleaning for you or even to manage the entire process if you want to be totally hands-free.

If you really want to increase your passive income from there, you can consider buying an investment property. The hardest part about buying your first investment property is that you must put down 20% unless you live in one of the units for at least a year. House hacking by living on your property for a year makes it an owner-occupied property, so you can put down less than 20%. The ability to put down less money upfront can get you started with your first investment property much more quickly.

One of my goals for 2021 is to buy my first investment property, and the book Hold has been absolutely phenomenal in helping me understand how to get started. It takes you step-by-step through how to build your team (accountants, realtors, etc.), narrow your search area, and determine if a property will provide you with a positive return on day 1. If you’re interested in making passive income by buying an investment property, I can’t recommend this book enough.

Passive Income Ideas to Avoid

Now that we’ve discussed some ways to make passive income, here are some popular passive income ideas out on the internet, and why you should avoid them.

Investing in Dividend Stocks

Unless you have a shit load of money to invest, you’re not going to make much from dividends. Technically yes, dividends do provide passive income, but with an average dividend payout of around 2.5%, you’re not going to make much unless you have a lot of money invested. For reference, if you have $100,000 invested, you’ll only make $2,500 a year with a dividend yield of 2.5%. That’s not much.

On top of only making small potatoes in passive income from dividend stocks, using your dividend payments as passive income will significantly reduce your future returns. Dividend stocks tend to increase in price less than growth stocks, but the best way to see significant growth in your dividend stocks is to reinvest your dividends. If you’re using your dividend payouts as income, you’ll be stuck with the limited growth dividend stocks typically provide.

Getting Cash Back and Points On Purchases

Let’s just get this out of the way. Saving money on purchases is NOT passive income. I see this advice on so many passive income suggestion lists and it’s absolutely ridiculous. 

It’s a great idea to earn points by using credit cards or to get cash back on purchases by using Rakuten, but these are ways you can save money, not make more of it. Have you ever gone to the grocery store and thought, “OMG these beans are $1 off! I just made passive income!”?

I doubt it. Because you didn’t. You saved $1. Credit card points and Rakuten do the same thing. They’re great ways to easily save a few bucks, but don’t let the internet fool you into thinking you’re making passive income. When you use your credit card or Rakuten your income stays the same, you just spend less.

Finding ways to make passive income is one of the best ways to level up financially. The most amazing part about passive income is that you already have a lot of what you need to make it. The 2010’s Artist of the Decade, T Swift, has this concept down. By monetizing your talents and hacking what you already have, you can quickly and easily start generating passive income. Just remember, if it requires you to put in consistent effort it’s not passive income it’s active income, dividend payments are tiny, and saving money isn’t the same as making money. Oh, and never buy 8 of the same album in different colors.

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The Regifting Bible: Budget Friendly Christmas Gift Ideas

woman coming up with christmas regifting ideas after she opens a gift she hates

Picture this. You’re at another gift exchange and unwrapping the box you’ve chosen in front of a large circle of people. You really hope the box is from someone with who comes up with dope Christmas gift ideas, but disappointment sets in when the box’s contents are revealed. It’s another thing you’ll never use.

This is the feeling I used to get every time I sat through a gift exchange. Now don’t get me wrong, I love the fact that I only need to buy one $20 gift instead of spending 10x that to get something for everyone. The problem with the proliferation of exchanges is that you usually end up getting something you don’t want because the people participating have different tastes, and let’s be honest, it’s hard to come up with good Christmas gift ideas that are gender-neutral and universally pleasing for only $20. 

Gift exchanges aren’t the only way we end up accumulating a bunch of useless junk over the holidays though. Maybe your mother-in-law gets you something for the house every year that you would never ever display, or your grandma always buys you jewelry that’s not your style. The common thread in all of these scenarios is you ending up with a gift that you feel bad throwing away but will never use.

Getting all of these useless gifts over the years was super frustrating until I realized I could save them and regift them later! This was one of the best Christmas gift ideas I’ve ever had because regifting your unwanted holiday presents has numerous benefits. It saves you money on future gifts, it’s environmentally friendly, and it saves you shopping time. Not to mention that you can put together the most adorable gifts for any exchange because a $20 limit doesn’t matter when you don’t have to buy anything!

To help you save money and actually enjoy getting gifts you don’t want this holiday season, I’m breaking down my regifting process so you can use your unwanted items to put together the perfect gift for any occasion and avoid making regifting faux pas.

How to Regift Like a Pro

Build Your Inventory

Step one is to start accumulating items to regift. The most lucrative time for this will be around the holidays, but don’t limit yourself to collecting only at the end of the year! We get gifts on lots of other occasions like our birthdays and at showers too. These are all great opportunities to add items to your gift arsenal. 

Some of your most fruitful regifting inventory hauls will come from gift baskets. A lot of these have a combination of items you like and others that you don’t. Don’t be afraid to open those suckers up and take what you want out of them and save the rest! Let’s say you get a coffee mug with a cute saying on it and some coffee beans to go along with it. You don’t need another coffee mug, but you want to keep the beans. Open up the package, take the beans, and add the mug to your regifting inventory.

Some great items to pull from gift baskets are

  • Barware 
  • Candles you don’t like the scent of
  • Lotions and soaps you won’t use
  • Liquor/wine you won’t drink
  • Servingware like cutting boards, coasters, spreaders
  • Knick knacks and household items you won’t display
  • Jewelry that isn’t your style
  • Kitchen gadgets

Some of the gifts you’ll get will be downright terrible though. I mean, what are you supposed to do with a shake weight or a burrito blanket? Save these wacky gifts too! You’ll probably find yourself in a gift exchange with some goofballs at some point, and these make hilarious gifts. (Pro tip: Elaborately wrap your gag gifts so they look beautiful and expensive. People will get super excited to unwrap the nicest looking box, and then be extra surprised when they find a gag gift inside. The look on their face is always priceless! Just like your gift. See what I did there.)

For ease, I also suggest keeping all of your inventory in the same place. If you keep your unwanted items where they “belong”, like kitchen items in the kitchen or toiletries in the bathroom, you’ll forget what goodies you have. That will leave you holding on to your unwanted items for longer than necessary, and make it harder to mix and match them to put together amazing gift baskets! This brings me to the second step in regifting.

Make Christmas Gift Baskets

Gift baskets are my favorite way to regift because they’re super easy and make great presents for any gift exchange. 

To make your basket, pull together several items from your inventory. Remember that mug you didn’t want? Pair that with some tea and other kitchen items to bring to an ugly sweater party. Headed to a bachelorette party? Mix it with some toiletries and a candle to create a marriage relaxation spa package. 

The first time I put together a fully regifted Christmas gift basket was a couple of years ago. I took several items from my inventory, which included a drink shaker set, candles I didn’t like the smell of, a mini cheese board, and several other things, and put them all into a gift bag to take to my work Christmas party the next day. Boy was my gift a hit! The gift basket I put together using my unwanted items ended up being one of the most stolen gifts of the entire exchange! It was amazing to be able to spend zero dollars, and still put together one of the most sought after gifts that year.

Christmas isn’t the only occasion you can build great gift baskets for though. Other prime regifting opportunities are

  • Bachelorette parties
  • Baby showers
  • Birthdays
  • Galentine’s Day
  • Hostess gifts for other holidays

Regift Randomly to Your Family and Friends

What’s even more awesome than getting gifts on Christmas or your birthday? Getting random gifts!

Regifting isn’t just one of the best gift ideas for Christmas and other holidays, but an excellent strategy to use to celebrate our other accomplishments as well. Did your friend just buy a house? Regift them that candle and cheese board as a random house warming gift! Not only do you get to recycle those unwanted gifts, but you also get to support your friend’s latest milestone.

Random regifting is great for the not so celebrated milestones in life like these:

  • Buying a house
  • Graduating
  • Getting promoted
  • Starting a new job
  • Opening a business
  • Paying off debt

Regifting Mistakes to Avoid

While regifting is a great money saver and waste reducer, it can be problematic if you don’t take the proper precautions. These are the two biggest regifting mistakes you can make and how to avoid them.

Regifting to the Original Gifter

I literally can’t think of anything worse than this. By far, the biggest mistake you can make when regifting is to accidentally regift something to the person who originally gifted it to you! The second biggest mistake is to regift it to someone else in the same circle. You do not want to be in the middle of an exchange and hear, “isn’t that my gift from last year,” when your gift is opened.

To avoid making this mistake, label every gift in your regifting inventory with who the original giver was and the occasion at which you received it. This way, you can give gifts from friends to family and vice versa, nobody gets their feelings hurt, and your regifting remains a secret.

Leaving Evidence that Your Item is Regifted

Nobody wants your old stuff as a gift. The trick to expert regifting is to make sure that the receiver doesn’t know you’re doing it. Remove all remaining evidence from the original gift exchange. This includes bits of wrapping paper or tape, tags with your name on them, and other notes from the original giver.

Another dead giveaway that’s usually an afterthought is the list of items in a gift set. If you remove some items from a gift basket like in the earlier coffee mug example, make sure to remove any lists of the kit’s contents. These lists are usually found on the external packaging or on a paper insert. If some of the list’s items are missing from your gift, that’s a dead give away that you’ve snatched them up!

Regifting gets a bad rep, but it’s one of the best budget friendly Christmas gift ideas because it gets already purchased items into the hands of someone who will actually use them. By strategically building your inventory, you’ll be able to give gifts that are sure to wow, and avoid getting outed as a regifter. That makes regifting a win for your wallet, the future recipient, and the environment! Now go clear out a space to stash all of your regifting inventory!

To get my FREE 3 Step Guide to Mastering Your Finances click here.

*Disclosure: I get commissions for purchases made through some links in this post.

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3 Personal Development Books that Will Transform Your Fucked Up Views on Money

girl reading personal development books

How do you feel when you think about your money? 

Confident, secure, and happy? Or anxious, insecure, and worried? 

I’m guessing the latter because a staggering 77% of Americans feel anxious about their financial situations. For something that affects every single aspect of our lives, we sure do have some serious issues with it. But what if it didn’t have to be this way?

I mean, even I have negative feelings about my money sometimes, and I’m a finance expert. On paper, I should be super confident about money. I have a Bachelor of Science in Finance, an MBA, and a fascination for money and economics that has enabled me to sit through pretty much every documentary on money ever made. Some more than once. But what my financial resume doesn’t tell you is that I’ve spent the last 12 years fascinated by money because of my fucked up views about it.

A few years ago, I recognized that I was obsessed with learning about money because I was absolutely terrified that I’d be plagued by struggles with it. Coming to this realization wasn’t a light bulb moment for me. I didn’t have some great epiphany in a therapy session or anything. It was a gradual awareness I came to when I began fully supporting myself after college. I had started my first “real” job, was being paid a salary, and could finally grasp the gravity of the financial struggles my parents had gone through during my childhood. I had come to the realization that I was obsessed with money because I would do whatever it took to avoid those same struggles in my adult life. 

Three personal development books, in particular, helped me completely shift my mindset on money. The principles they teach built my confidence so I could double my net worth in under two years and get on track to becoming a millionaire by 40. But it was a long road to get there.

The Origin of My Limiting Beliefs

Just to clear the air, I’m not including this section to host my own pity party. I decided to tell you the fucked up money stories of my childhood to help others overcome their anxiety about money. No matter what you’ve faced in the past you can change your future. We all have strong feelings about our money, and these usually stem from our childhood, so I’m telling you about mine. If you DGAF about my life, skip to the numbered headings to read about the books I recommend. If you want to learn about the catalyst for my mindset transformation, here goes.

I was born in Kentucky, and my parents moved to Los Angeles, California when I was 1. The first 6ish years we lived there were pretty stable. The next 4 were a rollercoaster. We moved into 3 different houses, lived with a relative twice, and lived in a hotel. I distinctly remember my friends and I playing on a dusty hill behind the hotel parking lot because there was nowhere else for us to play.

While we were fortunate enough to never have to sleep on the street or in a homeless shelter, we were existing in a category called hidden homelessness. This is when you don’t have a home but aren’t counted in the homeless statistics because you stay on the couches of friends and family or in unstable dwellings like hotels. After several years of living as a hidden homeless family, we moved back to Kentucky. 

When we got to Kentucky, we again lived with a relative until we could afford our own place. After that, we moved into our own apartment and finally into our own house, where we lived until I graduated high school.

The really wild part about my childhood struggles is that while all of the chaos was happening, we pretended as though none of it was going on. The relatives we stayed with in LA lived in a house that was probably worth over a million dollars. I attended catered parties at family friend’s multi-million dollar houses that overlooked the ocean. And when we moved to Kentucky, we lived in an affluent neighborhood, where I went to school with the children of NFL players. It was a total mind fuck.

So when I graduated high school, went off to college, and figured out that I could study how to make money, I was hooked. At the time, I was only 19 and hadn’t connected the dots about why I was so intrigued by money, but my personal money issues surfaced later when I started saving and investing on my own. 

I became obsessed with saving every penny I could and felt guilty buying anything that wasn’t “necessary”. This is what’s called a scarcity mindset. When you think there are limited resources, in this case, money, so you need to do everything you can to avoid losing the money you have.

After telling you about my childhood, it’s no wonder I had this mindset. The problem with this thinking is that you can only save so much money. You can cancel all of your subscriptions, live in a shoebox, and only buy things on sale so you can save every penny possible, but do you know what that causes? Stress and anxiety. Not happiness. Not security. Just misery.

I’m sure a lot of you can relate to this. I see finance “advice” that perpetuates this guilt around money EVERYWHERE. No spend days. Shows on extreme couponing. Black Friday frenzies. Stop buying lattes. Pay off all of your debt before investing. This is all terrible advice that perpetuates the guilt and burden of a scarcity mindset.

You know who doesn’t think this way? Wealthy people. They have an abundance mindset. They think that there is a lot of money out in the world, and they need to find ways to bring more of it to themselves. That is the mindset I actively work to have and now preach. To cultivate this mindset, I was guided by the principles in following three personal development books, and it absolutely changed my life. These three books allowed me to double my net worth in under 2 years, got me on track to become a millionaire by 40, and I was able to do all of that without sacrificing the things that I love. If you want to start feeling confident about money, stop feeling miserable when you spend money on things you enjoy, and start earning more money, these three personal development books will help you do it!

Step 1 – Get Honest With Yourself About Your Money Goals

The first mindset shift I made was getting honest with myself about my money goals. I want to be able to spend hundreds of dollars in one night on dinner and feel zero guilt. Not worry about spend $10,000 traveling around Europe for 2 weeks. I want vacation homes. I want to be a millionaire! The trouble I used to have was actually admitting this to myself.

Steven Pressfield’s book, The War of Art helped me overcome this. The book focuses on creative endeavors, but its principles can be applied in all areas of life. It discusses the differences between the life we see in our heads vs the life we live. We often have daydream about what our life would be like if we had a million dollars, a higher salary, or a bigger house. Where we often fail is in trying to realize those dreams that are in our heads. The fear of what we need to do or give up to achieve our goal keeps us from living the life we truly want. The War of Art discusses how to break down the barrier between the life in your head and your real life.

After reading the book, I admitted to myself that I wanted to be rich. I stopped feeling like I shouldn’t be so focused on money as a woman. I realized I wasn’t greedy or unsympathetic because I aspired to get rich even though there are people who are less fortunate than me. Wanting more money no longer made me feel like I wasn’t grateful for what I had.

This belief that if we strive for more it means we’re ungrateful and taking from those less fortunate is bullshit. Money is power and women don’t have enough of it. The more money I make, the more I can help other women make more money too. So stop feeling guilty for wanting to make more money, start admitting how much money you want, and don’t apologize for it.

Step 2 – Find Your Money Making Method

Once I had admitted to myself that I wanted to be rich, I had to figure out how to do it. Quite shockingly, my finance degree didn’t prepare me well to make more money for myself. It mostly taught me how to make money for corporations. 

To make up for my knowledge gap, I started reading personal finance books like crazy. The problem was that they all focused on pinching pennies until eventually, you become a millionaire. A quarter of the way through my first few books, I knew I would never stick to what they were telling me to do, so I stopped reading.

Then I found the book, I Will Teach You to be Rich by Ramit Sethi. This book changed my life completely. Ramit’s method tells you to prioritize spending on the things you love and to spend extravagantly on those things. Then cut your expenses down as much as humanly possible in all other areas. This method was something I could get down with!

Once you know what your money goals are, step two is to find someone with a method that will help you get there. Ramit’s book, I Will Teach You to be Rich was my method. I knew that what worked for him would also work for me. Finding a plan that I could stick with to achieve my goals was a complete game-changer. 

While I hope Ramit’s method will resonate with you too, the reality is that it might not. Maybe real estate investing is more your thing than stock market investing. That’s cool too. To find the method that works best for you, read books, listen to podcasts, follow blogs and money influencers on Instagram and YouTube, whatever you have to do. When you’re going through their material it should inspire you to take action. If instead, you’re thinking ‘that’ll never work’, or ‘how dumb is that’, then their method is not your method. Achieving your money goals is a lot like achieving your fitness goals. You’ll never get your dream body by trying to stick to a plan you hate because you’ll end up quitting. The same goes for your finances.

Step 3 – Motion vs Action

Once you find your method for reaching your goals, you’re going to feel inspired! You will finally see the light at the end of the tunnel. You’ll probably start consuming more material on the subjects you’re interested in, and feel like you’re becoming an expert on the subject. You’ll think you’re finally beginning to achieve your goal.

Only you’re not. Being a money expert doesn’t make you rich. Seeing the light at the end of the tunnel is just the first part of your journey. Now you actually have to make the climb to get to the light. 

I learned about this dichotomy of feeling like you’re achieving something but not actually achieving anything in the book Atomic Habits by James Clear. He calls this concept motion vs action. This concept is what motivated me to start taking action on all of the lessons I learned in Ramit’s book. 

Becoming more knowledgeable about personal finance and the things you can do to change your situation is going to make you feel empowered and like you’re one step away from achieving financial freedom. But this could not be further from the truth. To actually achieve your dream life, you’re going to need to implement the principles you’re learning consistently and probably for a very long time. 

It can be disheartening to learn that you won’t achieve your goal for 10, 20, or 30 years. But you can give up and never get rich, or you can start taking baby steps toward achieving your goal so one day you will actually be rich. Atomic Habits will get you psyched about taking these tiny baby steps and will paint a picture for you about how those minuscule changes will lead to astronomical results.

These three personal development books absolutely changed my outlook on life and what is possible for me. They gave me the confidence, a method, and the drive to start working toward achieving my money goals. After implementing the principles I learned in these books, I doubled my net worth in less than 2 years, will become a millionaire by 40, and I’m able to do all of this without sacrificing the things I love. No matter what your current limiting beliefs are or where they came from, these books can help you make dramatic shifts in your life and put you in the fast lane on the path to becoming a rich bitch.

To get my FREE 3 Step Guide to Mastering Your Finances click here.

*Disclosure: I get commissions for purchases made through some links in this post.

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What to Buy on Black Friday 2020

woman with shopping bags gasping about Black Friday shopping

Whether you’re a Black Friday lover or hater, there’s no doubt that the temptation of a good sale is always strong. You’re probably already being bombarded with sale emails, discount ads, and your fav influencers ‘top Black Friday picks’. If you’ve been great at avoiding the Black Friday rush by staying home in the past, the internet and Covid will make it increasingly hard to combat your spending urges this year. So I say, give in to temptation!

Unlike other personal finance bloggers, I’m not going to tell you not to shop on Black Friday or that you should feel guilty if you do. Instead, I’m going to give you 5 tips on what to buy on Black Friday so you can actually save money and how to avoid impulse buying.

What to Buy

Christmas Gifts

Black Friday shopping is a fantastic opportunity to save money on your Christmas, Hanukah, or other holiday gifts. You’re going to have to buy the gifts anyway, so you might as well save money on them!

To make sure you get the best bang for your buck this holiday season, make a list of everyone you’re buying for. This includes family, friends, and any other exchanges you’ll be participating in like at work. Next, list out several gift options or ideas for each person. If you only list one option for everyone, you may get frustrated or anxious if you can’t find that option on sale. Listing a few allows you to avoid this conundrum. Once you have a few ideas written down, list some competitor stores where you’ll be able to shop around for the best deal on Black Friday.

Appliances and Tech That Needs to be Replaced

My microwave has been on the fritz for the last 6 months. No, it hasn’t totally quit on me yet, but sometimes it takes me 5 minutes on full power to heat up a normal plate of food. And I’m tired of it. So on Black Friday, I’ll be shopping for its replacement.

If you have a similar story with something around your house, Black Friday is the perfect time to find a great deal and replace your worn out items. Appliances and tech are two of the most heavily discounted categories on Black Friday, so you should be able to find some seriously amazing discounts. Many items in these categories will be 40-50% off! That’s a steal!

These steep discounts will put some of the top of the line brands and models that you wouldn’t normally fork the money over for within your price range. That means that you will not only be able to replace the item, but also upgrade to one of better quality. To make sure you can get the highest quality at the lowest price, compare prices and discounts at multiple stores before deciding to buy.  

Some stores to check for appliance and tech deals include:

  • Best Buy
  • Home Depot/Lowes
  • Target
  • Walmart
  • Macy’s
  • Sears
  • Bed Bath & Beyond
  • Wayfair
  • And obviously Amazon

Shop Small Business Saturday

I’m a HUGE proponent of buying as many items as you can from small businesses. If you like to give unique holiday gifts, don’t miss out on Small Business Saturday deals. You probably won’t find the huge 50% off savings that the big box retailers give, but 10-20% off of unique, handcrafted items will help you save some money, and give unexpected and super cool gifts to the ones you love.

If you’re into art, vintage, and handcrafted items, these sites will help you find just what you’re looking for.

  • Etsy – if you’re not set on a specific item, Etsy can help you find exactly what you’re looking for from a small biz
  • Pinterest – Since Pinterest images link directly to websites, you can often get right to the purchase page for the item you’re interested in, in just one click

Avoid Impulse Buying

While it’s great to have a plan for Black Friday, the deals you’re being bombarded with can get harder and harder to pass up, especially once you start shopping. These tips will help you avoid spending extra money and falling victim to the big box retailers marketing traps.

Unsubscribe from Marketing Emails

It’s tempting to keep getting marketing emails from your favorite stores so you never miss a deal, but this can have disastrous consequences on Black Friday!  

While it is super enticing to stay up to date with your fav stores, buying things you don’t need just because they’re on sale doesn’t save you money. It can make you feel like you saved money, but if you weren’t going to buy the item before you saw that it was on sale in an email, you fell victim to a marketing trap.

Since these emails are going to be flowing at astonishing rates into your inbox before and during Black Friday, do yourself a favor and make it easier to avoid the massive temptation to shop ‘til you drop by unsubscribing from them. These retailers are smart. If the emails didn’t get people to spend money, they wouldn’t be sending them. Don’t fall victim to their marketing tactics and blow your budget on something you weren’t even considering buying in the first place.

Delete Shopping Apps

Unsubscribing from emails is a crucial first step to avoiding overspending on Black Friday, but once the day actually arrives, you’re probably going to be tempted to “check up on” the deals being offered from your fav stores and brands. To avoid FOMO when it comes to super amazing deals, delete the shopping apps on your phone. Instead of being able to see what deals are being offered in just one tap, you’ll have to physically type the retailer’s website into your browser and search for it. Creating this “hassle” for yourself will help you avoid repeatedly checking on deals that could lead to unnecessary purchases, and may even make you forget about checking altogether. Out of sight, out of mind.

By setting up a plan for yourself and eliminating the temptation to spend, you can make the savings and deals retailers are offering work for you instead of against you. Black Friday shopping can be a great way to stay on budget, or an impulse buying extravaganza that makes you go over budget. It’s all about how you tackle it, knowing what triggers you to spend, and avoiding that at all costs. Now go prep so you can make this Black Friday your bitch!

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How Tax Brackets Actually Work

pink laptop open on a desk with how taxes actually work text on screen

There are 2 types of people. The ones who think of income taxes like brackets, and others who think of them like champagne towers. Since they’re called “tax brackets”, most people think their taxes are determined by finding their income bracket and multiplying by the tax rate that goes along with it. If this is how you think tax brackets work, I hate to break this news to you, but nothing about taxes will ever be that simple.

How Taxes are Actually Calculated

Tax brackets are actually more complicated and sophisticated, like champagne towers. Thinking of them like brackets makes it seem like each income range has an assigned tax rate and whichever one your income falls into dictates the amount you pay. This super simplified (and wrong) version of how tax brackets work is what causes most people (maybe you) to think that if you make $50k/year, which lands in the 22% tax bracket, you’ll pay $11k in taxes. But that’s not at all how tax brackets work.

Instead, they work more like champagne spilling down a tower. First, your income fills up the first cup, then spills into the second level of cups, then the third, and so on. The amount of income that’s poured into each level is then taxed at the rate designated for that level. This results in you paying wayyyy less in taxes than bracket thinking predicts. Here is an example for some more clarity.

pink tax bracket table with 2021 tax rates for single filings and married filing jointly.
2021 Tax Rates

If someone is making $50k/year, the first level our example person, let’s call her Thelma, will fill up is the standard deduction bucket. A standard deduction is an amount that someone who doesn’t itemize their taxes can deduct from their taxable income. It is essentially your tax-free income amount.

Thelma is single, so we will use the tax rates indicated in the single column from our table above. If you’re married and file your taxes jointly, you would use the rates in the “Married Filing Jointly” column. (There are also other tax filing types, but these two seem to be the most popular. For more tax filing options you can visit IRS.gov.)

The first cup Thelma is going to fill up is the standard deduction cup, and it gets $12,550. After filling that tax-free cup, she has $37,450 in taxable income leftover. Level 2 has the 10% tax cups and can hold up to $9,950. Thelma fills the cups on the second level and has a balance of $27,500 left to keep pouring. The third level holds up to $30,575 ($40,525-$9,950), so all of Thelma’s remaining salary will go into those cups, leaving her with an empty champagne bottle.

Here is a graphic for visual people like me.

champagne tower showing how tax brackets work

Based on bracket thinking, Thelma would have fallen into the 22% tax bracket and paid $11k in taxes. After pouring her salary into the champagne tower, you can see that Thelma doesn’t even have enough champagne to make it to the 22% level, so she definitely won’t pay $11k in taxes.

Here is what she’ll actually pay. The standard deduction cup is tax-free, so she pays $0 in taxes for the champagne at the top level. The second level holds $9,950 and is taxed at 10%, so Thelma pays $995 in taxes for level 2 of the tower. The third level of cups didn’t quite fill to the brim and only contains $27,500 at a tax rate of 12%. Total taxes owed for level 3 are $3,300. So Thelma’s total tax bill is only $4,295! That’s a whopping $6,705 less than the total assumed using bracket thinking. So while the champagne tower method of taxation is more complicated, it also ends up being way friendlier on your wallet.

What Happens to Your Taxes When You Get a Raise

The formal term for champagne tower tax thinking is marginal tax rates, and now that you understand how they work, if you ever hear someone say they don’t want to take a raise because it will put them in the next tax bracket, please do your best not to call them an idiot while also educating them on how dumb that thought is.

Since you’ve now learned how marginal tax rates work, you know that the only money from the raise that will be taxed at a higher rate is what overflows into the next level of champagne glasses.

Let’s say our girl Thelma gets a raise (go Thelma!) and her new salary is now $60k/year. This will give her the new tax breakdown below.

champagne tower showing how tax brackets work

So now she’ll pay $0 in taxes for level 1, $995 for level 2, $3,669 for level 3 (remember she didn’t fill the level 3 cups up before her raise), and $1,524 for level 4. Her new total tax bill will be $6,188.

While that is almost $2,000 higher than she was paying before, it is only a small portion of her $10,000 raise, and $7,200 less than the $13,200 tax bill that bracket thinking would have predicted ($60k x 22%). Even with the increased tax bill, she will still have $8k more in after-tax earnings. So the next round of champagne is on Thelma!

The idea that your tax bill is simply determined by which tax bracket you fall into, or that you’ll lose money by entering into a new tax bracket is ludicrous. Next time you get into a debate about tax policy or hear someone say they don’t want to take a raise to avoid paying higher taxes, go grab a glass of champagne with them and give them a lesson on how marginal tax rates actually work.

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3 Terrible Middle-Class Money Habits and How to Break Them

watering can watering money trees

Even if you’re considered middle-class there’s still a good chance you’re living paycheck to paycheck. A whopping 47% of Americans say they would have to sell something or take on debt to cover an unexpected $400 purchase. FORTY. SEVEN. PERCENT. That means almost half of all Americans are living paycheck to paycheck, and many of them are millennials. In fact, almost two-thirds of millennials say they don’t feel financially secure and are living paycheck-to-paycheck.

A quick scroll through Instagram will show you a far different economic landscape though. Young people are taking vacations, buying houses and new cars, doing try-on hauls of all of the new merch they just bought, and photographing all of it on the latest iPhone. Alongside these lavish lifestyle posts are other “activism” posts about crushing student loan debt, and how evil corporate America is.

While there is massive room for improvement on many fronts when it comes to economic equality, the inability for middle-class Americans to look inward at how they are contributing to their own financial situations also has room for improvement. It’s easy to blame others (like corporations) for their irresponsible spending when times are tough, but how responsible was your spending before the pandemic? If you’re mad about the airlines getting a second bailout after squandering their profits over the last 10 years, but you bought a new car, found a chic new apartment, and have been getting your nails done weekly while neglecting to contribute to an emergency fund, I hate to break it to you but you have the same terrible money habits as the airlines.

The mental anguish that comes from wondering if you’ll have enough money to pay your bills can’t be minimized, but much of middle-class America would be able to break themselves out of the paycheck to paycheck cycle if they got honest with themselves about their terrible money habits. These are 3 of the worst money habits of the middle-class and how you can change them to break out of living the paycheck to paycheck lifestyle and start living your dream life.

1. You Don’t Know Where Your Paycheck is Going

Your Terrible Money Habit

Many middle-class Americans are spending plenty of money but have no idea what they’re actually spending their money on. Being comfortably in the middle-class affords someone the benefit of being able to pay their expenses, and have some extra money leftover. The problem is where that extra money goes. $100 gets spent on a night out. Your coworkers went out for lunch so you joined them. Your friend is getting married, so you “need” a new outfit for her wedding. And before you know it, all of your money is spent and you’re waiting on your next paycheck to get deposited so you can pay your rent.

Your New Money Habit

You can’t fix what you don’t know. If you want to fix your problem of living paycheck to paycheck, you need to get clear about where that paycheck is going. The truth is that money is simple. It is all about the money you have coming in vs the money you have going out. The key is to have more money coming in. Wealthy people know this so they spend less than they earn, and then invest their extra earnings so they can make even more money.

To make sure you have more money coming in so you can start making your money work for you like the wealthy do, you should know how much of your paycheck is used to pay for your necessities like rent, electricity, food, etc., and how much is left over after all of that is paid. You have two options when it comes to what to do with what’s leftover. You can spend it on unnecessary items, or use it to build your savings and investments. How you choose to deploy your leftover earnings will determine if you’re able to break the cycle of living paycheck to paycheck or not.

2. You Spend Money You Don’t Have

Your Terrible Money Habit

If you’re fake rich now, you’ll be real poor later. Buying stuff to look like you have it financially together and are already in the income bracket you aspire to be in is exactly how you got yourself into this mess. How many times did you really “need” to add that extra pair of shoes to your Amazon purchase, or buy the latest Urban Decay Naked pallet?

While it is super fun to treat yo’ self, if you’re using debt to fund your excessive lifestyle you’re only making your problem worse. Racking up credit card balances to buy things you don’t need and can’t pay off that month can get really expensive really fast. Credit cards have some of the highest interest rates of any form of debt, so maxing them out could leave you paying tens of thousands of dollars in interest. Adding on multiple car loans, and an expensive mortgage to that makes it even harder to break yourself out of living the paycheck to paycheck lifestyle.

Your New Money Habit

Debt should never be used to buy things that won’t appreciate in value. Bad uses of debt include excessive spending on your credit card to the point that you can’t pay your balance off in full every month, taking out car loans, or using a personal loan to pay for your wedding. All of these types of debt just leave you paying more for the items you’re purchasing.

Instead of using debt to fund a lifestyle you can’t afford, start using it to make your money work for you. Only spend the amount you’re able to pay off every month on your credit card. This allows you to avoid excessive interest charges, build great credit, and on top of that, your credit card usually offers extra perks like the ability to accumulate points for your purchases that you can use later to buy other things.  

Using a mortgage to buy an income property, or a home within your budget are also good uses of debt. Taking out a personal loan to refinance high-interest debt like credit card debt is another great way to use debt to make your money work for you. By reworking your relationship with debt and using it to build wealth instead of fund a lifestyle you can’t afford, you’ll be able to make your money work for you instead of against you.

3. You Succumb to Lifestyle Inflation

Your Terrible Money Habit

Every time you get a raise or a new job that pays you more, does your extra money somehow find a way to disappear? That is lifestyle inflation. When you increase your expenses as your income increases. Maybe you find a cooler apartment that’s a few hundred dollars more a month or buy a new car or start going out for drinks more with friends. Whatever it is you enjoy, you just start to do more of it with your extra income and continue the paycheck to paycheck lifestyle.

Your New Money Habit

Start paying yourself first. This means that you take a portion of your income and use it to create financial stability (saving) and generate wealth (investing) for your future self. By paying into your own accounts first, you are setting up future you to be able to live the lifestyle you aspire to have and are currently faking.

Saving 3-6 months of expenses and starting to invest can seem daunting, but the easiest way to do it is to automate the process. To do this, you just need to set up automatic contributions to your emergency fund and investment accounts that get deposited each time you get paid. This prioritizes saving and investing in a way that doesn’t take up any of your time, and requires almost no effort!  

This step is absolutely pivotal in whether you will be able to break the cycle of living paycheck to paycheck or not. Having a savings that you can rely on for unexpected expenses, or if you lose your job gives you financial stability, and investing sets future you up to be able to comfortably live the lifestyle you’re trying so hard to right now.

Fake it ‘til you make it just doesn’t work when it comes to money. If you’re living paycheck to paycheck, at best you’re spending all of the money you’re currently making, and at worst, you’re going into debt to pay for the things you can’t afford. Learning what you spend your money on, how to use debt to build wealth, and how to prioritize saving and investing will move you from living the paycheck to paycheck lifestyle to living your dream life.

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Creating a Bulletproof Financial Plan for a Recession

As a millennial, I always feel the impending doom of a recession looming in the back of my mind. I turned 18 in 2008, so for the first years of my adulthood, I was away at college studying finance while witnessing the utter devastation that recessions cause families. Fast-forward to January 2020, and I would have told you that I expected another mild recession just like everyone else that follows the economy, but I never expected anything like this.

After years of comparing the economic conditions of the Great Recession to the Great Depression, it was comforting to think that we probably had a long time to wait until we saw another catastrophic jolt to the economy. Sure there would be ups and downs, but nothing like the Great Recession, right?

Well, coronavirus had other plans, and just like that all of the trauma we millennials experienced in 2008 has risen to the surface again. The thought of going through this every decade is anxiety-inducing, to say the least, but if it’s taught us anything it’s how incredibly important it is to build healthy finances so you aren’t devastated every time one of these ‘Great Recessions’ pops up.

If you’re looking to create a financial plan before the next recession, you aren’t alone. These are the 3 steps you should take to make a good financial plan for a recession so you don’t lose all of your money, and can even come out ahead.

1. Build an Emergency Savings

I seriously can’t stress the importance of this enough. It’s probably the least “sexy” thing you can do with your money, but the most critical one if you want to adequately plan for a recession. That’s because recessions = job losses. Maybe your job wasn’t affected this time, but that doesn’t mean you’ll be spared during the next recession.

In 2008, the high rate of mortgage defaults caused jobs at banks and insurance companies to be severely affected. In 2020, social distancing has caused the airline, hospitality, and service industries to be hit hardest. What causes the recession affects which jobs are the first to go, and next time, it could be yours.

If this happens to you, your emergency savings will be a Godsend. It’ll allow you to pay all of your bills, put food on the table, and keep your sanity and Netflix subscription. If you want to focus on getting a new job and getting back on your feet as fast as possible, you can’t be spending all of your time trying to make ends meet. Instead, you’ll need to be focusing on what your next move is and how you can land a new job. Your emergency savings gives you the stability needed to shift your focus from what’s happening right now, to what you can do to build your future.  

As a good rule of thumb, you should have 3-6 months of expenses saved in your emergency savings and keep it in a high-yield savings account. The more responsibilities you have like loans, kids, or a mortgage, the closer you should be to 6 months of savings. A high-yield savings account is the best place to keep your money because they pay you about 20 times more than traditional savings accounts just for keeping your money in them. Who doesn’t want more money for doing the same thing?! If you need more guidance on how to set up your emergency savings, this post has all of the info you’ll need.

2. Invest in the Stock Market

The second step to building a solid financial plan for the next recession is to start investing. The S&P 500 is widely regarded as the best indicator of how the overall stock market is doing. In 2008, the S&P 500 entered a bear market, which means that stock prices were declining. After prices began to fall, it took 5 years for the S&P 500 to reach its pre-recession price of around $1,500 per share.

Since then, the share price for the S&P 500 index has more than doubled. So even if you lost money in the 2008 crash, as long as you held your investments, you made it all back in 5 years and have more than doubled your money since.

The bear market for the Coronavirus Crash began in early March and was the fastest fall of global stock markets in financial history. It was short-lived though, and the drop ended in April. Since then, stock prices have risen to above pre-Coronavirus Crash levels, and investors have made money.

So while crashes are scary and make it seem like you should sell all of your investments, that is the exact opposite of what you should do when we enter a bear market. When prices fall, the value of your investments goes down on paper, but you don’t actually lose money until you cash out your investments at a loss. This is the difference between taking a paper loss (you see the price is lower), and a real loss (selling your investments at a lower price). Unless you absolutely need to use the money you have invested to pay your bills right now, you should ride out the bear market, because as history has shown, the market will rebound. A bull market awaits you just over the horizon and you stand to make even more money if you can be patient.

And that brings up another point about your investments. They can provide additional passive income during tough times. If you invest in a diversified portfolio of stocks, like the S&P 500, a portion of these stocks probably pay dividends. A dividend is a share of a company’s profits that it pays out to its shareholders. When you’re trying to grow your wealth, you usually reinvest all of your dividend payments, but if you find yourself in a financial bind, you can skip reinvesting your dividend payments and instead use them as a passive income source to cover some of your expenses during a tough time. Again, this only works if you remain invested through the lows of the recession, so try to avoid selling your investments in a bear market if possible.

3. Keep Investing When You Get Scared

Market crashes aren’t great for the money you already have invested, but they are fabulous opportunities to make more.

When prices drop and the market crashes, stocks are essentially on sale. It’s like if you bought a dress for $100 full price, and the next day it gets marked down to 50% off. Same dress, half the price. Buying a diversified set of investments like the S&P 500 index when prices drop is basically like getting them at a bargain rate.

Let’s assume you were an investor in 2008. If you had continued investing through the 2008 recession, you would’ve made a lot more money than if you’d gotten cold feet and stopped investing. Before the market crash, S&P 500 shares were trading for around $1,500/share. At their lowest point, these same shares were trading for less than half that price at around $700/share. If you continued investing through the recession and purchased shares at their lowest price, your investments today are worth 5X more than they were when you bought them in 2008! In comparison, all of the shares you had purchased before the 2008 recession have only increased in value by 2.3Xs. While doubling your money is great, quintupling it is even better. By continuing to invest through a recession you can offset your losses on the money you already have invested and make huge gains.

Since recessions affect different companies in different ways, this strategy only works when you invest in diversified instruments like index funds or ETFs. Some companies are bound to fail during the recession, so hand-selecting companies to invest in increases the likelihood that you’ll lose a significant amount of money if one of them goes under. To avoid this, stick to investing in index funds and ETFs during a recession unless you’re willing to lose everything.

The easiest way to stick out your investing strategy through a downturn is to use a method called dollar-cost averaging. This is just a fancy way of saying ‘invest at regular intervals’. The first benefit of using this method is that you’ll be able to buy when prices drop because you’re consistently investing. The second advantage is that you can automate your contributions so you never have to think about making them. Making more money without having to lift a finger sounds like a huge win to me. Whatever type of investment account you’re currently using, it’s a good idea to automate your contributions now because you’ll be more reluctant to do it during the next recession when the market is volatile or you’re struggling financially.

Since many people only invest through their 401K, if you lose your job and therefore your 401K contributions, you’ll need to take some extra steps to keep investing. Opening a Roth IRA is a great option because all of your contributions grow tax-free forever. If you lose your job and have enough financial stability to keep investing, open a Roth IRA and begin making automatic contributions to that.

By taking these 3 steps, you can create a financial plan that will significantly minimize the effect the next recession will have on your finances and avoid losing all of your money. Your emergency savings can save you from financial devastation if you lose your job, your investments can offer a source of passive income, and if you’re able to continue investing you can make significantly higher returns. Taking these steps to create a financial plan for a recession will not only allow you to coast through the next one, but will also help you come out ahead in the long run. Trust me, your future self is going to thank you.

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How to Talk to Your Partner About Finances

It’s no secret, or surprise that one of the top reasons for divorce is finances. Like religion and politics, money is a taboo subject, but unlike religion and politics, many people don’t have in-depth discussions about money until after they’re married. Since each of you has separate bank accounts, separate credit cards, and no need to show each other your loan statements before the wedding, many people don’t find out about their partner’s massive student loan or credit card debt until after they say, “I do.” Coming to the realization that your financial future isn’t what you envisioned right after you make the biggest commitment of your life can put stress on your marriage from the very start.

Since money touches all areas of our lives, the problems couples face regarding their finances are wide-ranging. They could have opposite spending habits. One person may have a significant amount of debt that causes the other person stress. Maybe both people aren’t on the same page about what their financial future looks like, or one person has been saving and investing and is bringing a lot more money into the partnership from day one. Whatever the case, it’s important to get comfortable talking to your partner about finances, especially with the person you’re planning on sharing a bank account with and designating as your beneficiary. Here are my tips for how to talk to your partner about finances before (of after) the nuptials.

1. Be Thoughtful in Your Approach  

The mindset that you have when approaching this subject will determine the outcome of the conversation. It is that simple. If you are the initiator of the money conversations, there’s a good chance you’ve been thinking about your financial future and goals independently for a while. If that’s the case, during your first conversation you may get lucky and realize that your partner has been doing the same, but you may also find that they haven’t.

The latter is what happened to me. I had more finance knowledge and had been thinking about my financial goals for years, so after my now husband and I got engaged I brought up finances.

IT.

WENT.

TERRIBLY.

Every time we talked about our finances, we ended up in a fight. I admit that this was mostly my fault. I was frustrated with his lack of knowledge and that he hadn’t put as much thought into our finances as I had. Mind you, I have a degree in finance. If you had to discuss engineering and physics in a marriage, the tables would have been turned. Since I was more knowledgeable and had been focusing on my financial future for years, when I found out that his finances would create some roadblocks for how and when I could reach my financial goals, I got frustrated. Not surprisingly, reacting this way made my husband (then fiancé) feel judged, so he would shut down and the conversation would end.

With my approach proving to be unsuccessful, I decided to change course. I realized that if I wanted this to work, I needed to figure out how I could communicate with my husband in a way that would make him feel confident about opening up and contributing. Talking to your partner about finances puts them in a vulnerable spot. Nobody wants to learn that they’re the one bringing financial baggage into a relationship. Opening up about your finances may reveal things that change your financial path, but if you work as a team you can still reach your goals. With this in mind, I took the lead in managing our finances and began to educate him on the finance principles I had learned and how we could apply them in our lives to create financial stability and wealth.

If you’re on the flip side of this (my husband in the equation) these conversations will be equally frustrating for you. The frustration on your end will come from a place of feeling vulnerable and attacked. While it may not seem like it, it is important to realize that your partner isn’t trying to attack you by having these conversations, but rather that they’re trying to get you both working as a team. It may help to try to find out why these discussions are important to them, and show them that you’re willing to learn.

As the initiator in my relationship, I had to communicate that money was my main source of trust issues. I had experienced money problems my entire childhood, and the habits that my parents had with money created mistrust. It was important to me to be as open as possible about money in my marriage to avoid falling into the same traps my parents had. After sharing this, my husband could better understand where I was coming from and that I was also willing to be vulnerable in our discussions. Showing that you’re both willing to be vulnerable and that you want to learn and work as a team to reach your financial goals will allow you to have much more productive conversations about your money.

2. Lay Out Your Current Situation

If you want to be able to formulate a plan that will help you reach your future goals, you have to first understand where you are now. That means getting the full picture of what financial assets and liabilities each person is bringing into the relationship. If you’re the initiator of the money convos, opening up about your current financial situation first will help your partner feel like you’re willing to be vulnerable and approach this as a team. If you start by asking them to divulge their finances first, they may feel attacked and start to shut down.

These questions can help you develop a good understanding of your current financial situation, and what financial assets and liabilities each person is bringing to the relationship.

  • What are both of your salaries?
  • Do you have debt and how much does each of you have? What are your monthly payments?
  • Do either of you have investment accounts (401K, IRA, brokerage), and what are the current balances. If you are making regular contributions, how much are you contributing?

You can list each of your answers to these out in the way that is easiest for you to track. Excel, Word, or an old fashioned notebook are all great options.

3. Figure Out What Brings You Joy?

If you’re planning on getting joint accounts, this is critical. Joining accounts will bring your spending habits front and center. If you’ve been bringing your lunch to work to cut back on spending, realizing that your partner is spending $100/week eating out for lunch every day can be shocking. On the other end, maybe you spend $100 every couple of weeks getting your nails done, and when your partner sees how much you spend on this, they’re frustrated and think it’s a huge waste of money. In any relationship, I can almost guarantee that there is at least one thing each person spends money on that the other person thinks is a complete waste. To avoid getting frustrated every time one of these “frivolous” purchases comes up, it is important to understand what purchases really bring you and your partner joy (cue Marie Kondo), and which ones you can go without.

Start by listing out the purchases you make together that bring both of you the most joy. Maybe you take a trip together every year and want to make sure you keep doing that. If you’re both foodies and love trying new restaurants, maybe you want to be able to go out to eat to a nice dinner at least once a week. Maybe you love camping together and want to go camping once a month and buy the coolest camping gear. Whatever it is you like to do together, make that a top priority for your spending, and if you have to, you can cut back in other areas.

Next, find out what each person likes to spend money on for themselves. Is it getting your nails done, or getting a massage once a month? Do you love to buy new shoes, or get your hands on the latest cooking gadget? Maybe you want to buy car parts or golf equipment, or splurge on a gym membership at a luxury gym. Each person probably has something that they are willing to pay top dollar for that the other person finds insane. Spending on these things may not be a problem at first because you’ll probably be living a similar lifestyle to the one you were living before you got married, but as your lifestyle changes not being on the same pages about where and when you splurge can become a problem.

As you start to plan for your future and need to change your spending habits to reach your goals, “frivolous” spending can become a heated topic. If you decide to start saving for a down payment on a house and need to cut spending, your partner may say, “ok well stop getting your nails done and we will have an extra $200 each month to save.” That may sound easy and minor to them, but maybe you LOVE getting your nails done and think they should get a gym membership that’s half the price instead. Hashing out what each person absolutely loves spending money on, and the areas where each of you is willing to sacrifice will allow both sides to spend on the things they love and cut back on the things that are less important.

4. Determine your Future Goals and Track Your Progress

Now that you’ve covered your current state, and how you want to spend your money together and individually, you can start planning for your future!

Here are some questions you can use to start figuring out what each of you envisions for your future, and how much money you’ll need to get there.

  • Do you need to buy a new car soon? If so, have you started saving for it?
  • If you have debt, how long will it take you to pay it off?
  • How will you pay for your wedding? Are your parents going to help?
  • Do you plan on having kids and how many?
  • Do you want to own your own home or rent? If you want to buy, when? How much will you need to save for a 20% down payment?
  • If you have kids, will you be paying for them to go to college or will they need to pay for it themselves?
  • Do you know your parents’ financial situations? What will they expect of you in terms of care as they age? What is the likelihood that you’ll need to financially support them at some point?
  • How do you envision retirement? Do you want to live lavishly, or more modestly? How much money will you need to live that lifestyle?

We discuss many of life’s milestones with our partner before marriage, but we don’t often talk to them about the monetary side of reaching those milestones. Kids are expensive. If you’ve always dreamed of having 5 kids, but you have a combined salary of $60,000/year, how are you going to make that work? If you need a new car soon, are you saving for it to avoid taking out a loan on a depreciating asset? Want to buy a house in the next few years? How will you save enough for the 20% down payment? Want to travel the world for retirement? How much will that cost and are you investing enough to get there?

Once you’re on the same page about which life milestones you want to achieve, you can start putting an action plan together to make sure you are able to hit them. If you want to save for a house, determine how much you need to save monthly to reach your goal of a 20% down payment by the date you want to purchase your home. If you want to live lavishly for retirement, calculate how much you will need to have invested to do that and make sure your monthly investment contributions are in line with your retirement plan. Once you have an action plan in place, start tracking your progress to your milestones. This will keep you focused and on the same page about where you are on your journey, and when you will be able to celebrate reaching your milestone!

5. Designate Your Money Duties

My husband is the spender and I’m the saver in our relationship. Our differing views on money make each of us better equipped to handle different areas of our finances. Since he likes the immediate gratification that comes with spending money, asking him to take charge of setting and tracking our long-term goals wouldn’t work out very well. On the other hand, I’m more willing to sacrifice my spending in the short-term to see long-term progress, so it is my job to update our financial tracker quarterly and make sure we are taking the necessary steps to reach our future goals.

While I’m focused on the long-term, my husband focuses on the short-term. To make sure we have the most money to work within the short-term, my husband takes care of negotiating all of our bills. Seeing our payment drop immediately after he gets off the phone with a company gives him the immediate gratification he craves. Trying to get my husband to plan out the sacrifices that need to be made so we can reach our future goals would be torture. On the other hand, I hate calling to negotiate and lower our rates. Individually, each of us would slack off in the area that isn’t our favorite, but by keeping our financial duties in line with our personalities we are able to tackle both.

To figure out which duties each of you will be better at, look at what each of you is already doing individually. Is one of you already tracking your finances? Great! Then you should probably continue to have that job going forward. Is one of you great at saving and the other one more knowledgeable about investing? Great! Each of you can choose to handle the aspect you’re good at. Choosing financial duties that each person likes to do will increase the likelihood that both of you will stick to it, and give you better results.

It is impossible to avoid talking to your partner about finances in a marriage because money touches all aspects of our lives. Being able to have an open and honest dialogue with your partner allows you to have productive conversations about your finances instead of arguments about them. While both of you will enter the marriage with different views and habits around money, the great thing about finding a life partner is that if you work as a team, you’re better equipped to reach your goals than if you had to do it alone. Realizing that your partner is not your enemy, but rather your ally, is the key to reducing the stress of discussing your finances with them, and once you get good at it, you may even find it fun!

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How to Stop Budgeting and Still Save Money

Have you ever gotten really excited about all of the money you were going to save by making a budget and finally taking control of your spending? Maybe you flirted with the idea of budgeting before, but this time you’re determined to stick to it! The first time you go to the grocery with your new budget in mind, you spend 5 minutes deciding whether or not you should spend the extra $.50 on your favorite brand or buy the cheaper generic. You end up making the choice the old you would and buy your favorite brand, and then spend the rest of the day beating yourself up about how the new you should have saved $.50 and bought the generic. You’ll do better next time.

For the rest of the month, you save $.50 every time you’re at the grocery by buying the generic brand. It doesn’t taste as good, but that’s the price you pay for saving money, right?! Then at the end of the month, you’re so excited to see how much money you saved by torturing yourself and buying all generic brands that month. After adding everything up the disappointment sets in when you find out that you barely saved any money. I mean you tortured yourself and thought endlessly about every purchase you made! How could this be possible?!

Have you been this person? Yea, me too.

Instead of focusing a ton of your time and energy on budgeting and barely saving any money each month, I’m going to let you in on a money-saving trick I just discovered. It’s a lot easier, takes a lot less time, and will save you a lot more money.

The Discovery

Last month, my husband noticed some problems with my mom’s internet speed so he logged into her account to see if he could figure out what was going on. Before he could locate the problem, he got distracted by how expensive her internet and cable bill was. To figure out why on earth she was paying so much for such spotty service, he started digging into all of the charges on her bill. The first thing he noticed was that she had been paying for a landline since she moved into her house 10 years ago, even though she’s NEVER had one. On top of that finding, there were also other services she had been paying for but wasn’t using. She was obviously in desperate need of a plan revision, so he called up her internet provider and updated her plan.

His efforts resulted in her saving $200/month just on cable and internet! The reason she had been paying so much was because she was grandfathered in on a plan that was more expensive but provided shoddier service. This got my husband and I thinking about all of the plans we had, like internet, phone, cable, insurance, etc. that we had never updated. How much money were we losing by just continuing our plans instead of regularly updating them?

The answer was, $240/month! We had been paying over $200 every month for services we didn’t need, and for plans that we’re outdated. That adds up to a savings of almost $3,000 a year, and will last us the next 12 months! The best part is that getting these savings only took us a few hours over one weekend. That’s a lot less time and stress than budgeting, and in most cases, a lot more effective. Below is a list of everything that we were able to save on, and how much we saved.

  • Car insurance – $130
  • Cable streaming – $30
  • Internet – $30
  • Phone – $30
  • XM radio – $20

Total savings – $240/month

If you went through our list and realized that you also need to update your plans, to make this as easy as possible for you I’ve outlined the process we used to get our savings below.

Our Process

We found that to get the best rates, you need to regularly negotiate with your providers for pretty much all of your services. Your providers are busy updating their offerings all of the time, and if you aren’t trying to keep up, you’re going to miss out. I know negotiating seems scary, but the process we used was a lot easier than budgeting and took a lot less time. Here is exactly what we did to reduce our rates and save hundreds of dollars every month.

1. Know what you will and won’t accept before going in.

The first thing you need to do is familiarize yourself with the plan you have, what parts of the plan you want to keep, and any parts you’re willing to give up. For example, my husband knew he didn’t want to reduce our internet speed just to save money, so when they offered him that option, he didn’t take it. If you’re happy with the service you currently have, you don’t want to compromise that just to save a few dollars. The point of this isn’t to make yourself miserable with the cheapest possible service, it’s to get the best deal for the services you want and actually use.

Once you’ve familiarized yourself with your current plan and provider, you should get to know the competition. If another company can offer you the services you want at a lower price, you will have the upper hand when you negotiate with your current provider. If they can’t match the competition, you can take your business elsewhere.

Cable/TV, and internet are areas where you definitely need to do this. We canceled our cable a few years ago and went with a cable streaming service instead. This saved us a lot of money at the time, but we had no idea how much our new streaming provider had increased prices over the competition in the last few years. We ended up finding two other providers that were half as expensive and started a free trial with both. After a couple of days of trying the new providers out, we picked our favorite one and immediately cut our “cable” bill in half. If you’re lucky enough to have multiple internet or cable providers in your area, make sure to compare the deals offered by each company and use them during your negotiations. This is also a great strategy to use with insurance providers.

2. Tell them you don’t want to pay that much.

I’m serious. It’s that easy. We literally said on the phone (or sometimes in the live chat box), ”I don’t want to pay as much as I’m paying right now.” The best thing about approaching the negotiations this way is that you don’t have to come into the conversation knowing exactly what plan you want. Instead, your provider will look at your plan and come back to you with all of the options they have to help you save money.

One way they find you savings is if they notice that you are paying for services that you aren’t using (like a landline in my mom’s case) and offer you a plan that is cheaper and doesn’t include that service. This is great because you’ll still have all of the services you were using before while saving money by canceling the ones you weren’t.

Another way they may find you savings is if they’ve updated their plans and promotions since the last time you contacted them. Often times when you sign up for a plan you’re given a promotional rate. After a year or so, the promotional rate expires, and you’re moved to the normal rate. Many companies will offer you the promotional rate again if you call to reduce your bill even though you aren’t a new customer. If you don’t call annually to do this, you may be grandfathered into an outdated and expensive plan like my mom was. Having them update you to their new plan options and/or give you a promotional rate allows you to maintain the same level of service while paying less.

3. Cancel any plans you aren’t using.

If you decided to switch providers or signed up for free trials in step 1, make sure to cancel all of the plans you won’t be using going forward. This entire process should only take you a couple of days, so take note of anything you need to cancel as you’re going through the process and make sure it actually gets canceled before you celebrate your savings! This sounds like a no brainer, but we’ve all signed up for free trials and then forgotten to cancel the subscriptions before we got charged.

And that’s it! It’s really that simple! In one weekend you can find hundreds of dollars in savings that will last you an entire year, and you won’t have to feel stressed and anxious about every purchase you make. Now set up your reminder for 1 year from now so you don’t forget to negotiate all of your savings again next year!

*I want to give a huge shout out and thank you to my husband since he was the one who actually did the work on this for us! You’re the best!