5 Reasons Not to Use Debit Cards When You Shop Online
.5 Reasons Not to Use Debit Cards When You Shop Online
By Holly Johnson 18 October 2019
Many consumers use their debit cards for everything they buy. Using debit instead of paying with a credit card can help you avoid the potential for debt. The money is taken out of your bank account directly and immediately, so there’s little chance to spend more than you have, unlike using a credit card.
But when shopping online, there are reasons to consider using a credit card instead.
Using a debit card for online purchases can mean enduring greater losses if you're a victim of fraud. Plus, you're giving up valuable consumer protections and rewards each time you make a purchase with debit in a store or online.
Here are all the reasons you may want to stop using debit and use a credit card instead.
1. You May Be Putting Yourself At Risk For Fraud
It's easy to assume you won't be liable for fraudulent purchases made with your debit card or checking account number, but this isn't the case. Where most credit cards come with zero fraud liability thanks to rules enacted in the Fair Credit Billing Act (FCBA), the same protections don't apply to transactions made with a debit card.
In fact, someone who finds your debit card number could wipe out all the money in your accounts. If you don't notice or report it in time, you won't have any way to get your money back.
5 Reasons Not to Use Debit Cards When You Shop Online
By Holly Johnson 18 October 2019
Many consumers use their debit cards for everything they buy. Using debit instead of paying with a credit card can help you avoid the potential for debt. The money is taken out of your bank account directly and immediately, so there’s little chance to spend more than you have, unlike using a credit card.
But when shopping online, there are reasons to consider using a credit card instead.
Using a debit card for online purchases can mean enduring greater losses if you're a victim of fraud. Plus, you're giving up valuable consumer protections and rewards each time you make a purchase with debit in a store or online.
Here are all the reasons you may want to stop using debit and use a credit card instead.
1. You May Be Putting Yourself At Risk For Fraud
It's easy to assume you won't be liable for fraudulent purchases made with your debit card or checking account number, but this isn't the case. Where most credit cards come with zero fraud liability thanks to rules enacted in the Fair Credit Billing Act (FCBA), the same protections don't apply to transactions made with a debit card.
In fact, someone who finds your debit card number could wipe out all the money in your accounts. If you don't notice or report it in time, you won't have any way to get your money back.
According to the Federal Trade Commission (FTC), your level of liability depends on when you notice the fraud and report it. For example, if you report fraud within two business days after it's noticed, you're only liable for up to $50 in losses.
If you report fraud within two to 60 days of your statement being mailed to you, you're only liable for up to $500. If you fail to report fraud once it's been 60 days from the date your statement was mailed to you, the FTC notes that you could lose "all the money taken from your ATM/debit card account, and possibly more; for example, money in accounts linked to your debit account."
2. You're Missing Out On Rewards
In addition to putting yourself at risk for fraud, there are plenty of ways you're missing out when you shop online with a debit card. For example, you could be earning cash back or travel rewards if you made the same purchases with a rewards or travel credit card. These rewards can add up quickly, making it easier to see the world or splurge on merchandise, gift cards, and more.
While you can typically earn 1% to 3% back with a rewards or travel credit card, you can also double up on rewards by shopping through a cash back, travel rewards, or airline portal. You can also shop in portals with a debit card in some cases, but you'll mostly be limited to earning airline miles or cash back. (See also: How to Use Airline Shopping Portals to Cash In On Rewards)
3. You Won't Earn Any Sign-Up Bonuses
To continue reading, please go to the original article here:
https://www.wisebread.com/5-reasons-not-to-use-debit-cards-when-you-shop-online
What a Financial Trainwreck Can Teach Us
.What a Financial Trainwreck Can Teach Us: Six Mistakes to Learn From
By Donna Freedman
Debt Management Family Getting Started
What A Financial Train Wreck Can Teach Us
A married couple recently confessed to some horrifying money blunders in an interview on the WealthSimple website. In their mid-40s and the parents of three kids, the pseudonymous Kate and Tom bring in $160,000 a year through their day jobs in insurance, with additional funds whenever Tom moonlights as a bartender for private parties.
Yet they have always spent more than they earned, and cannot seem to learn from previous mistakes. A few examples:
After wiping out their credit card balances a decade ago, they charged them back up even higher.
They have postponed paying back Kate’s law-school loans, which are now up to either $120,000 or $140,000 (she isn’t sure – and incidentally, she has never practiced law).
They spend “insane amounts” of money on groceries at places like Whole Foods (where one of their kids likes to snack on $15 sushi).
What a Financial Trainwreck Can Teach Us: Six Mistakes to Learn From
By Donna Freedman
Debt Management Family Getting Started
What A Financial Train Wreck Can Teach Us
A married couple recently confessed to some horrifying money blunders in an interview on the WealthSimple website. In their mid-40s and the parents of three kids, the pseudonymous Kate and Tom bring in $160,000 a year through their day jobs in insurance, with additional funds whenever Tom moonlights as a bartender for private parties.
Yet they have always spent more than they earned, and cannot seem to learn from previous mistakes. A few examples:
After wiping out their credit card balances a decade ago, they charged them back up even higher.
They have postponed paying back Kate’s law-school loans, which are now up to either $120,000 or $140,000 (she isn’t sure – and incidentally, she has never practiced law).
They spend “insane amounts” of money on groceries at places like Whole Foods (where one of their kids likes to snack on $15 sushi).
They bought their son a tux at prom time, because they couldn’t afford the rental fee but hadn’t yet maxed out the Nordstrom card.
Clearly this couple is a financial trainwreck. But they have something to teach us, if we’re willing to listen.
It’s easy to scorn the protagonists as entitled or clueless. You’d never be that foolish. You’d never go into debt, get yourself out, and then go back in. You’d never borrow from family members, or cash in a 401(k), or use a credit card to put your kids in private school.
Maybe you wouldn’t. Or maybe scorning other people’s mistakes keeps you from having to look too hard at your own behaviors.
If you’ve absolutely got a lock on your dollars, good for you. But keep in mind that all across the country, otherwise intelligent and rational people are spending more than they earn.
Losing Sight of What Matters
Some debtors have little choice. For example, someone going through a serious health issue or a protracted divorce can’t just check out of the ICU early or stop paying for legal representation.
Others, like Kate and Tom, have simply lost sight of the big picture in favor of short-term gratification: sushi, private school, a big house in a nice neighborhood.
To continue reading, please go to the original article here:
https://www.thesimpledollar.com/what-a-financial-train-wreck-can-teach-us/
5 Money Conversations Every Couple Should Have
.5 Money Conversations Every Couple Should Have
By Ashley Marcin
Did you know that the secret to a healthy relationship maybe hiding in your wallet? No, money can't buy you love, but talking about the dollars you have may make a lot of, well, sense. In a recent study, researchers discovered that lack of communication about money leads younger couples to both arguments and added stress.
Here are some financial discussions worth having, especially if you share the bulk of your expenses. Heck, they may even bring you closer together!
1. Where Is Our Money Going?
Have you sat down with your partner to really dig into your bank accounts lately? It may be a good idea, especially if you hope to spend many Valentine's Days together. A national survey conducted by Money Magazine revealed that 70% of couples fight about money matters more than they do about chores, sex, snoring, and togetherness.
What's high on their hot points? Frivolous spending.
5 Money Conversations Every Couple Should Have
By Ashley Marcin
Did you know that the secret to a healthy relationship maybe hiding in your wallet? No, money can't buy you love, but talking about the dollars you have may make a lot of, well, sense. In a recent study, researchers discovered that lack of communication about money leads younger couples to both arguments and added stress.
Here are some financial discussions worth having, especially if you share the bulk of your expenses. Heck, they may even bring you closer together!
1. Where Is Our Money Going?
Have you sat down with your partner to really dig into your bank accounts lately? It may be a good idea, especially if you hope to spend many Valentine's Days together. A national survey conducted by Money Magazine revealed that 70% of couples fight about money matters more than they do about chores, sex, snoring, and togetherness.
What's high on their hot points? Frivolous spending.
Take some time — over candlelight and wine, perhaps — to delve into your check registers and online accounts. Do you see any patterns? Were you both aware that all that money was going toward the groceries each week? Or what about those online magazine subscriptions? Unused gym memberships? You may be able to quickly spot some areas that need work before they turn into shouting matches.
2. How Do We Each Deal With Money?
Once you know what you're spending your money on, you can move on to what makes your partner tick — financially speaking. Is he a big spender? Is she a penny-pincher? Does he thrive on a cash system? Is she a credit card rewards ninja? Often, these habits are set in family history, internal motivations, or simple habit.
In my marriage, I am the one who loves drafting up budgets, doing taxes, and planning for paying off debt faster. My husband? He gets super stressed doing any of this stuff, even if it's just keeping track of the cable bill. We used to bicker about dividing everything "fairly" between us. In the end, and through many discussions, we decided that my strength with money matters made me a more natural choice for these duties.
What we share is that we are both really bad with credit cards. So, we do cash for more of our variable expenses. The message here is to find your similarities and differences. Discover what makes one person thrive or the other person freak out. Avoid condemning certain behaviors or weak points. Instead, celebrate your differences, split up duties according to your strengths, and find common ground.
3. Should We Bank Together — Or Not?
To continue reading, please go to the original article here:
https://www.wisebread.com/5-money-conversations-every-couple-should-have?ref=seealso
The 10 Most Valuable Financial Lessons I Learned
.The 10 Most Valuable Financial Lessons I Learned in 2018
By Trent Hamm Updated on 01-10-19
Getting Started
Each year, during the period between Christmas and New Year’s, I sit down and look over what happened during the past year, what I can learn from that, and what I can apply from that to the year to come.
I usually come up with a big handful of life lessons during that review, things I learned from situations in my life that didn’t quite go as I liked. What went wrong? Where did I go wrong? What can I do better?
These life lessons spread across all spheres of life and usually number in the dozens. I tend to literally make a list of them as I review the year as a way to figure out how to do better in the coming year.
Among the lessons I learned in the past year were 10 that have real personal finance implications, though some tend to branch over into other spheres of life. I thought it might be valuable to share those lessons, along with what I hope to do differently going forward.
Lesson #1: If the stock market is scaring you in terms of your future, you’re either not invested appropriately or don’t know what you’re invested in.
This is something I did right this year, but the bumps in the stock market reminded me of the panic I felt in 2008 when I watched my retirement balance fall by 40%. I didn’t change anything back then, but I was often sick to my stomach about it and my instinct kept screaming to run away from the risk.
But then… things recovered. Between 2008 and 2018, my retirement accounts tripled in value.
The stock market is swooning again, but this time I don’t have the butterflies. Why?
The 10 Most Valuable Financial Lessons I Learned in 2018
By Trent Hamm Updated on 01-10-19
Getting Started
Each year, during the period between Christmas and New Year’s, I sit down and look over what happened during the past year, what I can learn from that, and what I can apply from that to the year to come.
I usually come up with a big handful of life lessons during that review, things I learned from situations in my life that didn’t quite go as I liked. What went wrong? Where did I go wrong? What can I do better?
These life lessons spread across all spheres of life and usually number in the dozens. I tend to literally make a list of them as I review the year as a way to figure out how to do better in the coming year.
Among the lessons I learned in the past year were 10 that have real personal finance implications, though some tend to branch over into other spheres of life. I thought it might be valuable to share those lessons, along with what I hope to do differently going forward.
Lesson #1: If the stock market is scaring you in terms of your future, you’re either not invested appropriately or don’t know what you’re invested in.
This is something I did right this year, but the bumps in the stock market reminded me of the panic I felt in 2008 when I watched my retirement balance fall by 40%. I didn’t change anything back then, but I was often sick to my stomach about it and my instinct kept screaming to run away from the risk.
But then… things recovered. Between 2008 and 2018, my retirement accounts tripled in value.
The stock market is swooning again, but this time I don’t have the butterflies. Why?
First of all, I recognize that the stock market will rebound. The entirety of the American economy is not going to disappear in a puff of smoke. There are millions of Americans out there every day working hard and innovating, and that’s where the value of the stock market comes from. This is a correction, like every other, not an apocalypse.
Second, I recognize that the stock market is only a place for individual investors to put their money if they have long term goals. If you’re going to use that money within the next ten years, it shouldn’t be in the stock market.
Over a period of more than ten years, it will enjoy several years of growth and multiple corrections, which is enough time for that investment to start to approach the long term average annual return of a stock market investment, somewhere between 7% and 10% depending on how you calculate it. I have nothing in the stock market that I intend to use within the next ten years.
I’ve honestly barely paid any attention to the ongoing correction. It’s just another good sized correction, like 2008, like 2001, like 1992, like 1987, and so on. It’s part of having investments in stocks – every several years, the stock market corrects itself.
If you know this and you still feel the butterflies, one of two things are happening. One, you’ve got too much risk – you have money in stocks that you’re going to need within 10 years. You fix this by moving such money out of stocks.
Two, you’re looking at the trees and can’t see the forest – the success of long-term investments is judged over the long term, not over a few months.
What I’ve learned from this correction is that I’m a lot more confident and sure about my investing plan for an early retirement than I was ten years ago and, because of that, there’s no risk of me making an emotionally driven bad financial decision in the face of a momentary change in the stock market.
Lesson #2: Give yourself plenty of breathing room in terms of both time and money when doing a major home improvement project.
To continue reading, please go to the original article here:
https://www.thesimpledollar.com/the-ten-most-valuable-financial-lessons-i-learned-in-2018/
The 3 Things You Should Do To Build Wealth
.The 3 things you should do to build wealth in 2019 (updated regularly)
by Steve Adcock January 10, 2019
In December, I celebrated my two year anniversary of early retirement from full-time work. In 2016, I quit the rat race at 35 to pursue projects that I actually cared about (imagine that!).
Without the relatively comfortable full-time paycheck.
It’s been an amazing ride. I’ve learned a ton about freedom and what it really means to control every second of your day. Believe it or not, it’s not quite as cut-and-dry as many people believe.
I’ve written about my story a lot, and I’m as transparent as I can possibly be. We’re not your rags to riches story.
Both my wife and I enjoyed a solid upbringing as children. Neither of us struggled through college or to find a job. We both earned highly-marketable degrees and made good money in the technology sector.
In fact, we pulled down a combined $250,000 in our last years working.
We know how to build wealth, and those techniques enabled us to quit full-time work pretty damn early. We’re both in our 30s and we’re proud of what we’ve accomplished.
How did we manage to build so much wealth? It’s simple, though not necessarily easy. And, it generally takes a lot of time. Let me explain.
The 3 things you should do to build wealth in 2019 (updated regularly)
by Steve Adcock January 10, 2019
In December, I celebrated my two year anniversary of early retirement from full-time work. In 2016, I quit the rat race at 35 to pursue projects that I actually cared about (imagine that!).
Without the relatively comfortable full-time paycheck.
It’s been an amazing ride. I’ve learned a ton about freedom and what it really means to control every second of your day. Believe it or not, it’s not quite as cut-and-dry as many people believe.
I’ve written about my story a lot, and I’m as transparent as I can possibly be. We’re not your rags to riches story.
Both my wife and I enjoyed a solid upbringing as children. Neither of us struggled through college or to find a job. We both earned highly-marketable degrees and made good money in the technology sector.
In fact, we pulled down a combined $250,000 in our last years working.
We know how to build wealth, and those techniques enabled us to quit full-time work pretty damn early. We’re both in our 30s and we’re proud of what we’ve accomplished.
How did we manage to build so much wealth? It’s simple, though not necessarily easy. And, it generally takes a lot of time. Let me explain.
How to build huge wealth in 2019 / 2020
First, let’s set the record straight about high incomes.
If you believe that earning a big salary is the only way to build massive wealth, then you’re wrong.
Just. Plain. Wrong.
It makes us feel better to believe that we’ll never be able to retire early without a huge income, but that’s just not true. The truth is a high-income job often comes with a set of assumed requirements that keep high-income earners churning on the hamster wheel for years.
You might be surprised at how many high income earners still live paycheck to paycheck just to maintain their high income job.
The strategies that I’m about to talk about apply to anyone – with any level of income. Big incomes or small, building wealth ultimately comes down to a small set of insanely basic principles.
Principle #1: Invest Your Cash
Nobody ever got rich just by “saving money“. Those articles about how to save money by ordering water instead of a soft drink in restaurants? Yeah, that’s nonsense. That’s not how we build wealth.
Wealthy people build wealth by devoting years of their life to investing their cash in appreciating assets.
Wow. Okay, what does this mean? It means we’re not just putting our money in a bank. That only makes banks rich. Instead, we’re placing additional value on our cash by investing it in assets that gain value over time.
Historically, the stock market builds serious wealth for investors. This chart from Macro Trends shows how the Dow Jones has performed over the years. Over time, Wall Street investors tend to build wealth because their investments appreciate. They go up in value as this chart demonstrates.
Others have chosen real estate investments through house flipping. The idea is investors buy undervalued “fixer-upper” homes that need some love. They fix them up and re-sell them at a profit.
Jeremy Biberdorf from Modest Money says that to be a successful house flipper, get as many properties as you can. Go all in or don’t even start.
Jeremy’s tips include:
Resist a total remodel; instead, look for undervalued properties
Know your budget and stick to it (it’s easy to go overboard)
Understand the neighborhood and its pros and cons
Never say No to an inspection; it might save your butt!
In whatever way you choose to save your money in 2019, investing your cash in appreciating assets builds wealth over time.
How much should you invest? There isn’t a one-size-fits-all approach.
I always encourage new investors to talk to a financial advisor to develop an investment strategy that works best for them. But if you’re looking for high-level advice:
If you don’t have an emergency fund, start one now. The immediate goal is to build up at least three months of living expenses to account for an unexpected job loss or health issue.
Take advantage of company-sponsored 401ks. Many companies match contributions made by their employees. This is free money. And, 401ks reduce your taxable income. Talk to your company about investment opportunities. They might even provide free financial advisor services.
Streamline your expenses. Spend a weekend diving through your expenses. Take a look at your bank and credit card statements and make judgment calls about each and every expense. With every dollar that you’re spending, is it actively contributing to your happiness? Be honest. And, be brutal.
To continue reading, please go to the original article here:
Personal Lessons Learned Since The 2008 Financial Crisis
.Personal Lessons Learned Since The 2008 Financial Crisis
By Financial Samurai
On September 15, 2008, Lehman Brothers went bust. I remember this day clearly because I made a $200 side bet with my friend over the weekend that the US government would bail them out. To my surprise, the US government didn’t rescue Lehman, and the stock cratered that Monday and never recovered.
Despite all the economic devastation, I wish I could rewind time. I’d rather be 31 than 41, simply because I love life and want to live as many years as possible.
The period between 2008 – 2018 was the most exciting 10 years of my life. Here are some of the lessons I have learned since the financial crisis.
Lessons Learned Since The 2008 Financial Crisis
Personal Lessons Learned Since The 2008 Financial Crisis
By Financial Samurai
On September 15, 2008, Lehman Brothers went bust. I remember this day clearly because I made a $200 side bet with my friend over the weekend that the US government would bail them out. To my surprise, the US government didn’t rescue Lehman, and the stock cratered that Monday and never recovered.
Despite all the economic devastation, I wish I could rewind time. I’d rather be 31 than 41, simply because I love life and want to live as many years as possible.
The period between 2008 – 2018 was the most exciting 10 years of my life. Here are some of the lessons I have learned since the financial crisis.
Lessons Learned Since The 2008 Financial Crisis
1) It’s really hard to go all-in, even when you know you should. Despite telling myself over and over again that we were in the buying opportunity of a lifetime, I couldn’t convince myself to invest much more than my usual 401(k) maximum because my world was falling apart.
A couple dozen friends had been laid off, including my best friend at the time, who worked at Lehman. I feared I might be next and would need as much cash as possible to hold me over just in case.
In 2005, I had taken a $1,200,000 mortgage to buy a single family home. I already had around $380,000 in mortgage debt from the first property I bought in 2003. With property prices in San Francisco falling along with the stock market, bankruptcy was a very real possibility if I had lost my job.
Therefore, I built a significant CD portfolio with most of my excess cash instead. The best 5-year and 7-year rates were at 4.25% at the time, so I decided that was where most of my savings went.
The only things I did right were keeping my job and not selling any real estate or stocks in the middle of the downturn.
2) Chaos is a great motivator. I had been putting off starting Financial Samurai since 2006, but once the financial crisis hit, I decided to finally launch in the summer of 2009. If I got laid off, I needed a backup plan.
I also decided it was time to get married. I had known my wife since college, and she would be turning 28 in 2008. For some reason, 28 always stuck in my head as the perfect age for her to get married. Further, I had also wanted to focus on my career until 30 to see how far I could get.
The difficult times of 2008 made me want to hold onto her even more. I could lose everything, but I couldn’t lose her. Relationships were more important than money back then, and they are more important than money today.
3) You gain a tremendous amount of confidence and expertise in 10 years. Previously, I’d always been embarrassed to ever say I was an expert in anything. But once I turned 32, I felt I had developed some expertise in the Asian Equities market. And now that I’m in my 10th year building Financial Samurai, I have no problem believing and saying I have expertise in digital media.
Because of this experience, I also no longer fear financial ruin. If Financial Samurai shuts down and all my passive income goes away, I know I can get a job back in finance, fintech, or online marketing. The base pay would range between $150,000 – $250,000 + stock, and my family would be fine.
Age discrimination is no longer a fear either. Instead, you realize experience makes you incredibly valuable. Once you’ve been able to earn income by yourself for so many years, nothing will stop you from living the life you want.
To continue reading, please go to the original article here:
https://www.financialsamurai.com/personal-lessons-learned-since-the-2008-financial-crisis/
From Debtor To Millionaire: How A Windfall Changed My Life
.From Debtor To Millionaire: How A Windfall Changed My Life
Post From Financial Samurai
This is a guest post from J.D. Roth, who founded the blog Get Rich Slowly in 2006 and is the author of Your Money: The Missing Manual. I first met JD four years ago for lunch up in Portland when I was still working.
By that time, J.D. was already a mini-celebrity in the personal finance world through his story telling abilities and topical focus of paying down debt and living a more frugal lifestyle. We came from opposite ends of the financial and topical spectrum, but as fate would have it, we’re in pretty similar boats now.
I admire J.D. because he is a “blogging purist” – someone who writes for the love of writing first, community second, and income a distant third. Instead of an interview, I asked J.D. to share his story of how he went from debtor living paycheck-to-paycheck to financially free in just a few short years.
His latest project is a year-long course on how to master your money, which explains how to slash costs, properly budget, and boost income so that you can pursue early retirement and other goals. Please enjoy this great post about struggle, loss, change, and love.
From Debtor To Millionaire: How A Windfall Changed My Life
Post From Financial Samurai
This is a guest post from J.D. Roth, who founded the blog Get Rich Slowly in 2006 and is the author of Your Money: The Missing Manual. I first met JD four years ago for lunch up in Portland when I was still working.
By that time, J.D. was already a mini-celebrity in the personal finance world through his story telling abilities and topical focus of paying down debt and living a more frugal lifestyle. We came from opposite ends of the financial and topical spectrum, but as fate would have it, we’re in pretty similar boats now.
I admire J.D. because he is a “blogging purist” – someone who writes for the love of writing first, community second, and income a distant third. Instead of an interview, I asked J.D. to share his story of how he went from debtor living paycheck-to-paycheck to financially free in just a few short years.
His latest project is a year-long course on how to master your money, which explains how to slash costs, properly budget, and boost income so that you can pursue early retirement and other goals. Please enjoy this great post about struggle, loss, change, and love.
In The Beginning
I’m a lucky man, and I know it. But for a long time, it sure didn’t seem that way.
When I was a boy, my family was poor. We lived in a single-wide trailer house in rural Oregon. My father was often out of work. When he was unemployed, things were rough. We never went hungry, but sometimes we came close. More than once, we were bailed out by the kindness of other families in our church.
We didn’t always struggle. Sometimes my parents had money, at least for a little while. You see, my father was a serial entrepreneur. He was always starting businesses. Even when he had a job selling boxes or staplers or candy bars, he had something going on the side. Most of his businesses failed, but some succeeded.
In 1977, my father sold one business for $300,000. He was supposed to receive $5000 per month for fifteen years, which seemed like a lot of money at the time. To celebrate, he went out and bought an airplane, a sailboat, and a Kenwood stereo. Life was good — until the buyer went bankrupt. Because he hadn’t saved anything from the few payments, Dad was broke again. And unemployed. We were right back where we’d started.
This “famine or feast” pattern continued throughout my entire childhood. Most of the time, it was famine — not feast.
In the late 1980s, I went away to college. Because I knew my parents couldn’t help me pay for school, I took care of things myself. I was a good student with a lot of extracurricular activities: president of the computer club, national competitor in Future Business Leaders of America, editor of the school literary magazine, and so on. Plus I had terrific scores on the the PSAT and SAT. As a result, I earned a full-ride scholarship. I worked two or three or five jobs to pay for housing and to earn spending money.
During college, I developed a spending habit. In order to keep up with my friends, many of whom seemed to be rich (as I defined it at the time), I used credit cards. I began to carry debt. At first, I only owed a few hundred dollars, but by the time I graduated with a psychology degree, I had a few thousand dollars in credit-card debt.
After college, my debts continued to mount. I bought a new car. When I had money, I spent it. When I didn’t have money, I still spent it. By the middle of 1995, just four years after I’d graduated, I’d accumulated over $20,000 in credit-card debt. It got worse. In 2004, my consumer debt topped $35,000. I felt like I was drowning. (See: How Many Credit Cards Should I Have Until It’s Too Many?)
Getting Rich Quickly
One night in October 2004, after I’d bounced yet another check and missed yet another payment, I reached rock bottom. I began to wonder why I didn’t use my entrepreneurial skills at home. I was helping to manage the family box factory, and I’d started a computer consulting firm on the side. Both businesses made money, and I made smart decisions with the profit. But at home, my money situation seemed dire.
I asked myself: What if I made decisions in my personal life as if I were making them for a business? What if I installed myself as CFO of JD, Inc? How would I cut costs? How would I increase revenue? Where were the best places for me to direct my cash flow?
That night, I drafted a three-year plan to get out of debt. According to my calculations, I could pay off everything I owed by December 2007 — if I managed my money wisely. I decided to give it a shot.
To continue reading, please go to the original article here:
https://www.financialsamurai.com/from-debtor-to-millionaire-how-a-windfall-changed-my-life/
The 7 Worst Money Mistakes Married People Make
.The 7 Worst Money Mistakes Married People Make
By Sarah Winfrey
Everyone knows that disagreements over money can cause a huge amount of stress in a marriage. However, money may be more important than we think. A recent study out of Utah State University shows that couples who report fighting about money at least once a week are 30% more likely to divorce than those who only argue about it a few times a month.
In addition, the same study says that arguing about money is one of the best predictors of divorce. It correlates better with the divorce rate than arguing about sex, in-laws, and more.
The 7 Worst Money Mistakes Married People Make
By Sarah Winfrey
Everyone knows that disagreements over money can cause a huge amount of stress in a marriage. However, money may be more important than we think. A recent study out of Utah State University shows that couples who report fighting about money at least once a week are 30% more likely to divorce than those who only argue about it a few times a month.
In addition, the same study says that arguing about money is one of the best predictors of divorce. It correlates better with the divorce rate than arguing about sex, in-laws, and more.
So, if you want to stay married, it's clear that it's important to get the money thing right. Below are some of the mistakes likely to make the financial side of your married life much more difficult.
1. Forgetting the "Money Talk"
Couples need to talk about money, starting before they're even married. They need to be upfront about how much they make, what their expenses will be, what their investments look like, and how much debt they have.
It's also helpful to discuss how they see finances working between the two of them. Will they have a joint account? Do they prefer to keep private accounts and each take on a portion of the expenses?
While many couples these days do talk about money before marriage, it's important to continue doing so afterwards. Many of the things that happen in life will change your financial situation, and it's important to keep in communication about those.
Everything from having kids to changing jobs to buying a house can cause major flux in your overall financial position, and communication is the best way to avoid conflict in these areas.
2. Not Figuring Out Your Spending Philosophy
Different people spend differently. Some need to be able to spend so that they feel like they have some freedom. Others don't want to spend because that makes them feel safe. Whatever your point of view on spending, it's almost certain your spouse's will be at least a little different. So talk about these things and come up with a plan you can both agree to. (See also: What's Your Credit Card Spending Style?)
Some couples keep separate "spending" accounts. Others put a cap on spending, saying that no one person will spend more than a certain amount without talking to the other. Do whatever works for you, but do something!
To continue reading, please go to the original article here:
https://www.wisebread.com/the-7-worst-money-mistakes-married-people-make?ref=seealso
5 Money Conversations Every Couple Should Have
.5 Money Conversations Every Couple Should Have
By Ashley Marcin February 2017
Did you know that the secret to a healthy relationship maybe hiding in your wallet? No, money can't buy you love, but talking about the dollars you have may make a lot of, well, sense. In a recent study, researchers discovered that lack of communication about money leads younger couples to both arguments and added stress.
Here are some financial discussions worth having, especially if you share the bulk of your expenses. Heck, they may even bring you closer together!
5 Money Conversations Every Couple Should Have
By Ashley Marcin February 2017
Did you know that the secret to a healthy relationship maybe hiding in your wallet? No, money can't buy you love, but talking about the dollars you have may make a lot of, well, sense. In a recent study, researchers discovered that lack of communication about money leads younger couples to both arguments and added stress.
Here are some financial discussions worth having, especially if you share the bulk of your expenses. Heck, they may even bring you closer together!
1. Where Is Our Money Going?
Have you sat down with your partner to really dig into your bank accounts lately? It may be a good idea, especially if you hope to spend many Valentine's Days together. A national survey conducted by Money Magazine revealed that 70% of couples fight about money matters more than they do about chores, sex, snoring, and togetherness.
What's high on their hot points? Frivolous spending.
Take some time — over candlelight and wine, perhaps — to delve into your check registers and online accounts. Do you see any patterns? Were you both aware that all that money was going toward the groceries each week? Or what about those online magazine subscriptions? Unused gym memberships? You may be able to quickly spot some areas that need work before they turn into shouting matches.
2. How Do We Each Deal With Money?
Once you know what you're spending your money on, you can move on to what makes your partner tick — financially speaking. Is he a big spender? Is she a penny-pincher? Does he thrive on a cash system? Is she a credit card rewards ninja? Often, these habits are set in family history, internal motivations, or simple habit.
In my marriage, I am the one who loves drafting up budgets, doing taxes, and planning for paying off debt faster. My husband? He gets super stressed doing any of this stuff, even if it's just keeping track of the cable bill. We used to bicker about dividing everything "fairly" between us. In the end, and through many discussions, we decided that my strength with money matters made me a more natural choice for these duties.
What we share is that we are both really bad with credit cards. So, we do cash for more of our variable expenses. The message here is to find your similarities and differences. Discover what makes one person thrive or the other person freak out. Avoid condemning certain behaviors or weak points. Instead, celebrate your differences, split up duties according to your strengths, and find common ground.
To continue reading, please go to the original article here:
https://www.wisebread.com/5-money-conversations-every-couple-should-have?ref=seealso
Your Financial Family Tree
.Your Financial Family Tree: What Our Parents Teach Us About Money
By J.D. Roth —19 November 2018
We inherit more than physical features from those who came before us. We also inherit culture and psychology and values. And yes, we inherit financial habits from our parents and grandparents.
Each of us has a financial family tree.
My Financial Family Tree
I write often about our money blueprints, the set of subconscious “scripts” that define our behaviors and attitudes toward money. Society at large — our friends, co-workers, the mass media — plays a role in writing these scripts, but most of our money blueprints are inherited from our family — especially our parents.
In a way, it's as if our money blueprints are a product of our financial family trees. Our grandparents passed their feelings about money to their children, and these children instilled their habits and attitudes into us.
Your Financial Family Tree: What Our Parents Teach Us About Money
By J.D. Roth —19 November 2018
We inherit more than physical features from those who came before us. We also inherit culture and psychology and values. And yes, we inherit financial habits from our parents and grandparents.
Each of us has a financial family tree.
My Financial Family Tree
I write often about our money blueprints, the set of subconscious “scripts” that define our behaviors and attitudes toward money. Society at large — our friends, co-workers, the mass media — plays a role in writing these scripts, but most of our money blueprints are inherited from our family — especially our parents.
In a way, it's as if our money blueprints are a product of our financial family trees. Our grandparents passed their feelings about money to their children, and these children instilled their habits and attitudes into us.
When I look at my own relationship with money, it's easy to see how my present actions and attitudes — even at nearly fifty years old! — were inherited from my parents.
Here are a few examples:
My parents raised three boys in an 800-square-foot trailer house. My parents had 800 square feet for the entire family. The Portland condo that Kim and I sold last year was 1600 square feet.
She and I had 800 square feet per person. But I don't need a big, fancy house. I'd be happy — might be happier, in fact — hunkered down in a single-wide trailer somewhere on a couple of acres.
Likewise, I don't need fancy cars. Growing up, I don't think my parents ever had a new car. We had old beaters that went by names like “Dirty Red” and “Dirty White”. Now, as an adult, I'm perfectly content to drive a 15-year-old Mini Cooper. I rarely feel the urge to own a new vehicle.
I inherited a similar attitude toward clothing. My father dressed like a farmer. My mother did her best to look nice, but on a budget. She bought clothes for us boys off close-out racks and at thrift stores.
Although I do put some thought into quality and style nowadays, for most of my life I've been more interested in function not fashion.
Because of my meager origins, I'm willing to tolerate and accept certain things that others won't. I'm never frightened that I might end up poor because I've already been poor and have survived the experience. In some ways, my financial family tree set me up for success.
That said, my financial family tree also set me up for failure. I inherited some destructive habits.
My father was a master of compulsive spending — especially on big-ticket items that he couldn't truly afford. He bought computers. He bought sailboats. He bought airplanes. He bought stereo equipment.
Some of my fondest memories are hanging out with dad for hours while he shopped for something he shouldn't buy. Unsurprisingly, I've struggled with compulsive spending most of my adult life.
My mother wasn't a compulsive spender in the same way my father was. Instead, she was something of a hoarder. She tended to buy more than we actually needed: more food, more clothes, more household supplies. This tendency became especially pronounced after dad died.
When we moved mom to assisted living in 2011, her house was packed with excess groceries and supplies. From mom, I've inherited a tendency to accumulate too much Stuff.
My parents never saved. They were always living on their last five dollars. If they had money, they spend it. If they'd had credit cards, they would have maxed them out. When I left home, I too lived paycheck to paycheck, no matter how good my salary was. (And I did get into trouble with credit cards.)
Not all of my money habits came from my parents. Many did, it's true, but I've developed new habits of my own. I've also “inherited” habits from my long-term relationships with Kris and Kim. (Kris and Kim have remarkably similar money habits, by the way.)
To continue reading, please go to the original article here:
https://www.getrichslowly.org/financial-family-tree/#more-236756
How Projection Bias Could Be Destroying Your Finances
.How Projection Bias Could Be Destroying Your Finances
By Emily Guy Birken
Have you ever gone grocery shopping on an empty stomach? If you’re like most people, you come home with all kinds of random junk food and disparate ingredients you have no specific plans to use, all because they looked good at the time.
So when you decide to throw some “lightly expired” shrimp, Lonely Gal Margarita Mix for One, and an entire shelf’s worth of tortilla chips into your cart when you only needed a gallon of milk, you are falling victim to a cognitive bias known as the projection bias.
This bias causes you to believe that however you are feeling in the moment is how you will still feel in the future. So when you are feeling rumbly in your tummy while cruising the grocery store, you believe you’ll still want to eat shrimp-covered nachos once you get home — even though your enthusiasm for shrimp that’s gone to the bad place will definitely wane once you’ve had a snack.
How Projection Bias Could Be Destroying Your Finances
By Emily Guy Birken
Have you ever gone grocery shopping on an empty stomach? If you’re like most people, you come home with all kinds of random junk food and disparate ingredients you have no specific plans to use, all because they looked good at the time.
So when you decide to throw some “lightly expired” shrimp, Lonely Gal Margarita Mix for One, and an entire shelf’s worth of tortilla chips into your cart when you only needed a gallon of milk, you are falling victim to a cognitive bias known as the projection bias.
This bias causes you to believe that however you are feeling in the moment is how you will still feel in the future. So when you are feeling rumbly in your tummy while cruising the grocery store, you believe you’ll still want to eat shrimp-covered nachos once you get home — even though your enthusiasm for shrimp that’s gone to the bad place will definitely wane once you’ve had a snack.
Of course, the projection bias does more than just fill your grocery carts with food you’ll never eat. It can also cause you to make even bigger financial mistakes. Here’s how your inability to project your future preferences can ruin your finances. (See also: 5 Mental Biases That Are Keeping You Poor)
Irrational Shopping
Car dealerships have long found that they sell more convertibles in the spring and summer than in the winter. Some of that is perfectly natural. A car buyer is likely to want to purchase a car whose amenities they can take advantage of right away.
But convertible sales also spike during sunny days or warm spells during the winter. In those cases, the irrational convertible owner is projecting that she will want to ride with the top down and the wind in her hair every day, just because that’s what she wants on the unseasonably warm and beautiful day when she buys her new car.
Similarly, when you are in the midst of a new enthusiasm for exercise, it might seem like a great idea to buy a treadmill or elliptical machine. You want to exercise every day right now, so of course you’ll want to continue exercising in the future. There is no possible way that your new BowFlex will collect dust and/or become an impromptu clothes-drying rack within a few weeks of purchase.
One of the best ways of thwarting this expensive projection bias mistake is forcing yourself to take a cooling-off period before making any major purchases. Test driving the convertible BMW may be a blast on that random 70-degree day in late February, but will actually purchasing the car still feel as reasonable a week later when the snow is falling? Forcing yourself to wait a week (or a month) before making any large purchases can help you keep projection bias at bay. (See also: 9 Simple Ways to Stop Impulse Buying)
Not Saving Enough
The closest I have ever come to slapping someone was when a teaching colleague once told me that she didn’t bother saving money for retirement because she wanted to enjoy her money while she was young. This colleague seemed to believe that she would always enjoy good health and stable employment, and that she could just continue to work forever.
This kind of thinking is a common symptom of projection bias. We all tend to assume that the way our lives are now are how they will continue to be in the future. So we don’t bother to save money for a rainy day or for retirement, because we project today’s stability into the future.
To continue reading, please go to the original article here:
https://www.wisebread.com/how-projection-bias-could-be-destroying-your-finances?ref=relatedbox