overspending http://www.wisebread.com/taxonomy/term/196/all en-US The Personal Finance Letter I'd Write to My Younger Self http://www.wisebread.com/the-personal-finance-letter-id-write-to-my-younger-self <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-personal-finance-letter-id-write-to-my-younger-self" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_letter_mail_78316923.jpg" alt="Woman writing personal finance letter to her younger self" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Dear Sweet, Naive, Handsome Mikey:</p> <p>You're going to be a real idiot with your money in your 20s.</p> <p>So many people will tell you how to handle your finances better &mdash; more responsibly, even &mdash; but you won't care. Because you think you know everything. You think that because you're only 20-something, you don't have to worry about how much you're spending or how much you're <em>not</em> saving. But trust me, your reckless financial abandonment will catch up with you, and you'll want to crawl under a rock and disappear when it does.</p> <p>Alas, the debt you'll rack up won't just disappear because you want it to. It's going to follow you around like a black cloud for <em>years</em>. Everywhere you go. Everywhere! You can lessen some of this unnecessary stress, however, if you avoid these five missteps (even though I know you're going to do them anyway because you won't listen to anybody, not even yourself.)</p> <h2>1. Do <em>Not </em>Accept Those Credit Card Offers Straight Out of High School</h2> <p>Heads up. As soon as you turn 18, credit card companies will call you and address you like you're somebody important. They'll tell you that you can have free money to take your friends out to dinner, take your boyfriend to the movies, and to go shopping. And we both know how much you love to go shopping. But as appealing as this sounds, buddy, be strong and just say no &mdash; because it's a trap &mdash; a <a href="http://www.wisebread.com/everything-you-didn-t-understand-about-credit-card-interest-grace-periods-and-penalty-aprs?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">23%-interest trap</a>.</p> <p>You're going to <a href="http://www.wisebread.com/oops-i-maxed-out-my-credit-cards-now-what?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">max those cards</a> out in six months, but it's going to take you six <em>years</em> to pay them off. In fact, you're going to pay more in late fees and interest than the actual amount you spent. As a result, your credit will be jacked up for most of your 20s. It'll be difficult to rent an apartment and buy a car, milestones that other people your age are having an easier time with because they didn't treat their credit cards like they just won the Mega Millions jackpot.</p> <p>It'll help if you think of your credit cards this way: You were broke before them, and when you get them, you're still broke. <em>Because you don't have the money to pay for them!</em> You're virtually penniless, young, handsome Mikey. Street-corner vagabonds shaking change cups have more money to their name that you do. The net worth of your eight-year-old neighbor who just celebrated a birthday is higher than yours. Finding a shiny quarter on the ground will make you 25% richer than you were before.</p> <p>Get what I'm saying?</p> <h2>2. Stop Spending Money Within Cents of Overdrafting Your Account</h2> <p>A zero balance in your bank account isn't the amount you're striving to reach. It's not a goal or a &quot;caution&quot; amount. A zero balance means you're Oliver Twist poor, teetering on the brink of begging for scraps outside a California Pizza Kitchen just to stay fed. Frankly, it's a good thing you have room and board at college, thanks in part to the United States government. But the joke's on you. Because while you're spending every dollar you earn working semi-part time, and then money that you don't even have, the government is laughing all the way to the bank because it knows it's got you on the hook for the next 20 years.</p> <p>Rein it in.</p> <h2>3. Put More Emphasis on Saving So Your Grandma Doesn't Have to Win You Money at the Casino</h2> <p>Yeah, Mom-Mom likes to go to Atlantic City, but that doesn't mean she wants to hand over all her winnings to help you fix your car because you have a minus sign in front of your entire life. Shop less, eat more at home, and pick up another job so you can be an adult for once and pay for your own mistakes. Seriously, dude &mdash; who wants to be 25 years old calling up Granny for cash because they're acting a fool? You're better than that. Hopefully.</p> <h2>4. For the Love of God, Quit Drinking Away Your Paycheck</h2> <p>You like to have fun &mdash; I get it. But at what price? Spending half your salary on booze (which, by the way, at age 27 is a <em>very</em> good salary by any estimation; count your blessings) is not only irresponsible, it will lead to other problems in the near future. Lack of savings or anything of substance of which to be proud notwithstanding, you're in danger of developing a real drinking problem. You can avoid the severe pain that this will cause you and your family and friends for years to come if you can learn to stay out of the bar on Friday and Saturday nights.</p> <p>You don't enjoy waking up every Sunday with a massive hangover. I should know. I did it for a long time. But you don't have to if you heed this advice as a serious health warning that could have life-or-death consequences.</p> <h2>5. Steer Clear of the Beaten Path and Everything Will Be Okay</h2> <p>At some point, everyone you care about will have an opinion about your future. You can't be mad about that though, because you created a situation where people became concerned. As much as they mean well, however, don't always listen to them. You will make lots of mistakes, but one of your strong suits is following your instincts. Your intuition, work ethic, entrepreneurial spirit, and built-in business acumen will serve you well once you get all this adolescent immaturity out of your system.</p> <p>You'll go farther faster if you cut all this crap out earlier, which I implore you to do, because who knows &mdash; I could be writing this letter from a corner office in Manhattan right now or on a bright, sunny beach on a weekday. But you'll only live up to your potential if you allow yourself to make your mistakes, learn and grow from them, and press on ever determined. What will happen when you're young will happen, but your future is still being written. Be bold, take risks, and get your financial self back on track sooner than later and you'll be pleasantly surprised with the outcome.</p> <p>Good luck, pal, and Godspeed,</p> <p>The Better and Even Handsomer You</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/the-personal-finance-letter-id-write-to-my-younger-self">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">The 10 Biggest Lies We Tell Ourselves About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/i-am-doing-well-financially-now-what">I Am Doing Well Financially. Now What?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-credit-card-truths-you-wish-you-could-tell-your-younger-self">10 Credit Card Truths You Wish You Could Tell Your Younger Self</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-moves-to-make-before-the-leaves-change">10 Money Moves to Make Before the Leaves Change</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-wake-up-calls-and-how-to-deal-with-them">8 Financial Wake Up Calls — And How to Deal With Them</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance advice debt money management money matters overspending saving younger self Wed, 24 Aug 2016 09:00:06 +0000 Mikey Rox 1778481 at http://www.wisebread.com My 2016 Budget Challenge: How to Lose Weight Without Counting Calories http://www.wisebread.com/my-2016-budget-challenge-how-to-lose-weight-without-counting-calories <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/my-2016-budget-challenge-how-to-lose-weight-without-counting-calories" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_eating_food_72063475.jpg" alt="Woman learning how to lose weight without counting calories" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p><em>[Editor's Note: This is the another episode in Max Wong's journey to find an extra $31,000 this year. Read the whole series </em><a href="http://www.wisebread.com/topic/max-wongs-budget-0"><em>here</em></a><em>.]</em></p> <p>One yucky, unintended side effect of my 2016 Budget Challenge is that both Mr. Spendypants and I have chubbed out in the last six months. Since most of our methods of saving and earning extra money this year involve sitting down, we aren't burning our usual number of calories to balance our power snacking. So now, in addition to finding an extra $31,000 by December 31st, we've added Lose 10 Pounds to our To Do list. Boo.</p> <p>There's a reason why Asians dominate at eating competitions. Asian metabolism is real. The biblical plague of locusts looks positively junior varsity when compared to my Chinese family nibbling its way through the Beef Jerky Store in Las Vegas. In my family, eating through the pain is a mark of character. And don't even think about skipping Second Breakfast. Didn't your mother tell you that Second Breakfast in one of the eight most important meals of the day? No?</p> <p>I'm just going to blame my poor food habits on my cultural norms.</p> <h2>What Is Hara Hachi Bun Me?</h2> <p>Luckily food sport isn't the only famous Asian eating habit. <a href="http://okinawa-diet.com/okinawa_diet/hara_hachi_bu.html">Hara hachi bun me</a>, which translates roughly as &quot;belly 80% full,&quot; is the Confucian practice of purposeful eating. The hara hachi bun me eating practice is based on a very simple idea: Stop eating when you are 80% full. Since it takes about 20 minutes for the stretch receptors in your stomach to tell your brain that your gut is at capacity, it's easy to overeat. So, if you put down your chopsticks while you still feel a little hungry, chances are that 20 minutes later you will actually feel full.</p> <h2>Why Did We Choose Hara Hachi Bun Me Over Other Diets?</h2> <p>Mr. Spendypants and I decided to try this method of weight loss for several reasons.</p> <h3>Budgeting Is No Fun</h3> <p>Counting calories is basically making a budget about food. What an unappetizing thought. With hara hachi bun me, we don't have to do any math. We just have to stop eating the moment we stop feeling hungry instead of the moment we start feeling full. It's super easy.</p> <h3>You Don't Need Special Equipment</h3> <p>Although I am sure hara hachi bun me tools exist, practicing hara hachi bun me does not require special equipment. We don't have to download an app, pulverize our food in a $700 Veggisaurus Rex blender, or <a href="https://community.myfitnesspal.com/en/discussion/1236978/breathalyzer-for-ketosis-check">use a Breathalyzer</a> to tell us that our diet is working. (I know that my diet is working because my favorite dress no longer fits me like a sausage casing).</p> <h3>You Don't Need Special Food</h3> <p>We don't have to buy special food, either. We don't have to live for weeks on <a href="http://themastercleanse.org/">maple syrup and laxatives</a> harvested by endangered Canadian squirrels. We don't have to ingest a choco-malt meal replacement &mdash; that smells like burned rubber and tastes like sadness &mdash; twice a day, along with a sensible dinner.</p> <h3>You Won't Become a Diet Humblebragger</h3> <p>Lastly, our friends won't hate us. Okay, let me elaborate about how not to lose friends when you lose weight.</p> <p>Since I live in Los Angeles, the epicenter of every food-denying trend, I don't want to hear your opinion on what I should stop eating. I follow you on Instagram and already know about the unsweetened twigs you ate for breakfast today. People who tell me about their juice fasts are the worst. Really, stop talking about your diarrhea. Also, if you are a vegan who does CrossFit, how do you decide which lifestyle to talk about first? (Answer: neither). Because hara hachi bun me is based on portion control, we can eat out with friends, anywhere, without making the meal all about us.</p> <h2>So How Does This Save Money?</h2> <p>We went out to lunch with friends last weekend and split two entrees, two large salads, and two appetizers between five people, and we still had food left over. American restaurant portions are huge. So, when we go out to eat, we save around 40% by splitting meals. At home we immediately cut 20% off our grocery budget by eating 20% less food at every meal.</p> <h2>Progress Report</h2> <p>July was fun, but fun costs money. We just spent the weekend in Napa Valley commemorating my in-laws' 60th wedding anniversary. Although their six-decade marriage is a marvelous achievement, the dress code for the family portrait was not. &quot;The color palette for the reunion photograph is gold, navy, and white, with touches of red,&quot; read the email from a relative who will go unnamed. Because I apparently don't know how to dress appropriately for important family events, a helpful reference photograph &mdash; of Mitt Romney's family &mdash; was included.</p> <p>Since my closet is tiny, pretty much everything I wear is black, so I was forced to find something suitably Ann Romney meets the Naval Academy for the picture. I resigned myself to doing a little <a href="http://www.wisebread.com/10-smart-ways-to-keep-your-clothes-looking-new">catch and release shopping</a>. I went to the nearest consignment store to buy the first navy blue dress that fit me and looked moderately Republican. My plan was to wear the dress for the portrait and then sell the dress back to the store the following week to recoup 40% of the cost. As luck would have it, I found a brand-new, super cute (as in <a href="http://wwzdw.com/z/2545/">Zooey Deschanel owns this</a>) dress for $28. Shockingly, the dress fits me so perfectly that I'm going to use it as a sewing pattern for future dresses. It's a keeper, but I'm out $28.</p> <p>We also spent a few days at the beginning of the month in San Francisco for the baptism of Mr. Spendypants' godson. Luckily, we didn't have to purchase Catholic apparel for that event.</p> <p>Although we lucked out with free housing from family and friends, the cost of everything from haircuts to food to airfare for those two trips cost $1500. When Mr. Spendypants finally got a chance to balance his books we discovered that we had a whopping $8 to add to the savings challenge. Uhn. At least we didn't have to dip into savings to pay for anything.</p> <p>Better luck in August, maybe?</p> <p><strong>Goal: </strong>$31,000</p> <p><strong>Amount Raised</strong>: $21,506.41</p> <p><strong>Amount Spent:</strong> $12,153.66</p> <p><strong>Amount Left to Go:</strong> $21,647.25</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/max-wong">Max Wong</a> of <a href="http://www.wisebread.com/my-2016-budget-challenge-how-to-lose-weight-without-counting-calories">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/my-2016-budget-challenge-finding-food">My 2016 Budget Challenge: Finding Food</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/need-to-lose-some-weight-put-some-money-on-it">Need To Lose Some Weight? Put Some Money On It!</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/imagine-eating-to-lose-weight-and-save-money">Imagine Eating to Lose Weight (and Save Money)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-7-most-calorie-burning-breakfasts">The 7 Most Calorie-Burning Breakfasts</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/making-a-good-and-memorable-first-impression">Making a good and memorable first impression.</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Food and Drink Lifestyle budget challenge dieting eating food costs hara hachi bun me losing weight max wongs budget overspending Fri, 12 Aug 2016 10:00:08 +0000 Max Wong 1770722 at http://www.wisebread.com 10 Ways You Disrespect Your Money http://www.wisebread.com/10-ways-you-disrespect-your-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-ways-you-disrespect-your-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/cash_trash_can_47150330.jpg" alt="Learning ways you disrespect your money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you look after your money, it will look after you. It's something that financial experts, parents, and countless advice columnists will tell you, and with good reason. Ignore your money, and disrespect your finances, and you will come off worse for wear. But treat your finances with the respect they deserve, and you can look forward to stability, growth, and freedom. So, if you're disrespecting your finances in any of these 10 ways, it's time to put a stop to the behavior, or face the consequences.</p> <h2>1. You Don't Have a Budget</h2> <p>Whether you're flush with money at the end of every month, or you are always scraping to get by, there is no excuse for not having a set budget. You owe it to yourself to know exactly how much money is coming in each month; what the bills are, how much you should be setting aside for retirement and an emergency fund, and what you should be spending on things like food, entertainment, clothing, and so on. Without this budget, you are playing fast and loose with your money, and it can result in some financial hardships that can be avoided. You can also see just where you are spending, and wasting, your hard-earned money.</p> <h2>2. You Don't Store Receipts in an Organized Fashion</h2> <p>It's all well and good to keep every receipt, but if they are all over the house and garage, stuffed into junk drawers and nightstands, they aren't much good when you actually need them. It does not take a lot of work to have an organized receipt folder. Just purchase an alphabetized concertina folder, and place your receipts in the appropriate section each time you get home. Go through it every few months to remove receipts that are no longer needed (although if they are for tax reasons, keep them&hellip;for years). You can also scan your receipts and save them digitally. This saves room and makes them even easier to organize and reference.</p> <h2>3. You Max Out Your Credit Cards</h2> <p>Some people will tell you credit cards are just free money. These people have no respect for credit, and how it should be used. Credit cards, when used responsibly, are a fabulous way to securely pay for goods and services, giving you <a href="http://www.wisebread.com/10-awesome-credit-card-perks-you-didnt-know-about?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">purchase insurance</a>, fraud protection, and <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">cash back</a> or <a href="http://www.wisebread.com/top-5-travel-reward-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">travel rewards</a>. But if you don't use them correctly, you will pay the price.</p> <p>By <a href="http://www.wisebread.com/oops-i-maxed-out-my-credit-cards-now-what?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">maxing out a credit card</a> (or many cards) you are damaging your credit, and you are running up huge interest charges. Some people can only afford to pay the minimum, and when that happens, it can take years (or even decades) to <a href="http://www.wisebread.com/5-day-debt-reduction-plan-pay-it-off?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=article">pay the balance off</a>. Use credit cards as a tool, but make sure you pay as much off as possible (ideally, bring the balance to $0 with each payment) to reap the rewards.</p> <h2>4. You Keep Spending the Equity in Your Home</h2> <p>Right now, the housing market is in pretty good shape. That means many of us owe considerably less on our mortgage than the home is worth, and that means equity. Lovely, lovely equity. Hey, it means the investment paid off, and you can take out a home-equity loan to pay off debt, make home improvements, or go on lavish vacations. Well, not so fast. A lot of people made that mistake the last time the housing market flourished, only to see house prices crash, and ended up with a mortgage that cost more than the home was worth. Your house should not be a piggy bank. If it's an emergency, and there is plenty of equity, it's certainly an option to take a little out to pay for something you need. But dipping into that equity too often, or spending it all, can lead to financial heartache.</p> <h2>5. You Live a Champagne Lifestyle on a Beer Budget</h2> <p>No matter how much money you have coming in each month, if you are spending more than you earn, this applies to you. Sure, you like the name-brand goods and fashions, and you must have your Starbucks every morning. But if your budget does not support that kind of spending, you are racking up debt that will have to be paid back sooner or later. It's possible you once had that bigger budget, but now have less due to a major life event (getting divorced, for instance). Sadly, you have to adjust. No more expensive pedicures and massages. No more fancy dinners that cost a small fortune. Your budget will dictate where you can go, how often you go, and how much you can spend. Listen to it. Ignore it, and you'll be in real trouble.</p> <h2>6. You Are Not Saving Regularly</h2> <p>This is not about saving money on deals and bargains, but rather, putting money away for the future. Every financial planner will tell you to pay yourself first, and it's good advice. Whether it's a 401K, an IRA, a savings account, an emergency fund, or ideally, all of them, you need to get into the habit now of squirreling away your money. Right now, time is your friend. The longer you have to go to retirement, the more money you can accumulate through compound interest. What's more, if anything bad were to happen that required access to quick cash, that emergency fund or savings account will be invaluable. Of course, it's easier said than done. Many Americans simply cannot afford to put money away each month, and something like an unexpected bill for $400 can put so many people in real trouble. Analyze your finances. Look at every cent coming in, and going out. Where can you cut back, to save money for tomorrow?</p> <h2>7. You Don't Have a Calendar of Bills and Payments</h2> <p>Many of us do the old &quot;set it and forget it.&quot; Basically, we set up automatic bill payments, linked to a checking account or credit card, and let the automated system do the rest. This is great for avoiding late fees, but it can also be hazardous if you don't have a clear picture of your finances. If you set up a spreadsheet or simple Word doc, outlining all of the bills you have to pay each month, cross-referenced with when you get paid, you will see any potential issues that could arise. Can you schedule some of the payments to fall a day or two after you get paid, rather than a week before? Do you have a lot of bills coming out on one day? Are you cutting it a little too close with the mortgage, or paying late fees? This will all become clear on a financial calendar.</p> <h2>8. You Don't Check Your Accounts Daily</h2> <p>Checking accounts, credit card accounts, and all other sources of money should be checked at least once a day. This takes just a few minutes, but it can make all the difference. You may have several auto-debits come out at once, leaving your balance precariously low. You may be the victim of credit card fraud, which if left unchecked can spiral out of control. From spotting suspicious activity, to simply monitoring the credits and debits on each account, get into the habit of checking your accounts every day.</p> <h2>9. You Ignore Your Debt</h2> <p>Most of us have debt. Let's face it, who can afford to put down $400,000 in cash on a new home, or $45,000 on a new car? However, if it's all kept under control, and there is a plan in place to pay everything off, you're good to go. Problems arise when people accumulate a lot of debt from many different sources, and then choose the &quot;head in the sand&quot; approach. It's scary to acknowledge a lot of debt, and even scarier to figure out how to pay it off. So, why not just ignore it, pay the minimums, and smile? Well, ignoring debt is like ignoring the hungry wolf that is sat in the corner of the room with you. At some point, it will attack you, so you better have a plan on how to deal with it before that happens.</p> <h2>10. You Don't Check You Credit Score and Reports</h2> <p>In America, your credit score can be life altering. If it's high, especially in the 800s, you get amazing offers, low APRs, and a whole world of options. If it's low, you can be denied even the most basic offers, and may not be able to live with things many of us take for granted. Checking your credit reports is free, and should be done regularly to ensure you spot inaccuracies. Go to <a href="https://www.annualcreditreport.com/index.action">AnnualCreditReport.com</a> and request yours (not freecreditreport.com, which is NOT actually free). You should also know what your specific credit score is, and this can be found via <a href="https://www.creditkarma.com">CreditKarma.com</a> (again, totally free). Also, the three different credit-reporting agencies &mdash; Equifax, TransUnion, and Experian &mdash; should also be able to supply this to you.</p> <p><em>In what ways do you respect your money?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/10-ways-you-disrespect-your-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-wake-up-calls-and-how-to-deal-with-them">8 Financial Wake Up Calls — And How to Deal With Them</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-moves-to-make-before-the-leaves-change">10 Money Moves to Make Before the Leaves Change</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-personal-finance-letter-id-write-to-my-younger-self">The Personal Finance Letter I&#039;d Write to My Younger Self</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-terrible-money-situations-you-need-to-stop-getting-yourself-into">6 Terrible Money Situations You Need to Stop Getting Yourself Into</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-youre-bad-at-money-and-how-to-fix-it-asap">8 Reasons You&#039;re Bad at Money — And How to Fix It ASAP</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bills budgeting debt disrespectful going broke living beyond means money overspending receipts respect Mon, 08 Aug 2016 09:00:09 +0000 Paul Michael 1767032 at http://www.wisebread.com 8 Financial Wake Up Calls — And How to Deal With Them http://www.wisebread.com/8-financial-wake-up-calls-and-how-to-deal-with-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-financial-wake-up-calls-and-how-to-deal-with-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_glasses_gasp_84119999.jpg" alt="Woman learning her own financial wake up calls" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Can't seem to get a handle on your finances? That in itself is a wake up call that you need to be doing things differently. Here are eight more.</p> <h2>1. You Use Personal Credit Cards for More Than One-Off Expenses</h2> <p>Some personal finance experts recommend automated billing for recurring expenses, but I don't usually suggest it since I like to be in control of when and where my money goes. But <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score" target="_blank">charging expenses to your credit card</a> on a regular basis is a different story. Credit cards should be used for one-off expenses that you'll pay off quickly, not month-to-month bills that can rapidly pile up without being paid.</p> <p>&quot;Credit card companies work hard to make their cards not feel like a personal loan with an abhorrent interest rate, but that's what they are for a lot of people,&quot; says money-saving expert Mike Catania. &quot;Once regular consumers start putting recurring expenses onto the cards and not paying them off fully on the due date, it's time to re-evaluate the financial picture.&quot;</p> <p>If this is something you do or have done in the past, switch to automated billing linked to your debit card. You'll need to commit to being financially responsible &mdash; like, all the time &mdash; to ensure that you can cover the funds during the fund extraction period. It'll require a change on your part, but it's not the worst habit you can pick up.</p> <h2>2. You're Constantly Complaining That You Never Have Enough Money</h2> <p>I know way too many people who complain that they're always broke, and my first question is, &quot;Why?&quot; If this sounds familiar, it's time to ask yourself that question &mdash; seriously. In most cases, there are two common answers: One, you're spending too much money on frivolous things, and two, you're not making enough money because you're spending too much time spending money on frivolous things.</p> <p>Follow me?</p> <p>To change that scenario, curb your spending. You don't need all those new things, and you shouldn't be in bars and restaurants every night of the week. Also, consider getting a second job. I recently started driving with Lyft to help curb my own Friday and Saturday night habit of going out with my friends and spending dough. So I'm not just sitting at home bored, I thought it would be helpful to find something fun to do that also will pay me &mdash; because I like money way more than the feeling of not having enough of it.</p> <h2>3. You've Been Drowning in Debt for Most of Your Adult Life</h2> <p>Nobody is going to shake a finger at you because you made a few (or more than a few) financial missteps in your 20s. We've all been there, and we've all racked up debt. But if that black cloud has followed you into your 30s or even 40s, you need to re-evaluate your entire life philosophy.</p> <p>Some debt is unavoidable, of course. I consider school loans and home mortgages &quot;good&quot; debt because they're investments, but if you've got credit card bills coming out the wazoo because you like to spend money, it's time to forget the Joneses and get back to reality. You may need an additional source of income to address the debt &mdash; which I'll cover below &mdash; but you need to do whatever's necessary to get out of the hole you dug, stat.</p> <h2>4. You're Well Into Your 30s And You Haven't Started Saving for Retirement</h2> <p>Times aren't like they used to be, and many young professionals don't have the extra money to start building their retirement funds. But, I must advise you to find that extra few bucks a month to put toward a 401K or other retirement-savings account, and take advantage of matching dollars from your employer if they're available. You may not be able to max out contributions right away, but that's okay &mdash; you've got to start somewhere. If you don't, you'll be middle-aged before you know it and fretting that you won't be able to survive retirement &mdash; or worse, not able to retire at all.</p> <h2>5. You Skip Contributions to Your Savings Accounts for Months in a Row</h2> <p>If you haven't made contributions to your savings account for several months in a row, something's wrong. Maybe you've had unexpected expenses pop up, or maybe you just haven't been as responsible with your money as you're supposed to be. Whatever the case, the fun's over; it's time to get back on track. Take a deeper look at where your money is going and see what you can pull from to put a little back in your savings account. Maybe it's canceling an entertainment service or it could be skipping the coffee house or lunches out during the week. Whatever you would've spent on those little luxuries, send that amount to your savings account to start building it back up dollar by dollar.</p> <h2>6. You Only Have One Source of Income</h2> <p>I touched on this point earlier, so let's get down to it.</p> <p>One of my financial life philosophies is to always have more than one source of income. Personally, I have about four income sources &mdash; some bring in more than others, but they all contribute to the &quot;pot.&quot; I don't need all of these revenue streams to survive, I could live without one or two of them, but I don't want to. I don't want to, because that extra one or two help me add to my savings, pay for life's little luxuries and experiences, and cover unexpected expenses when they arise. Without them, I would have to dip into my regular income, which would then take away from my savings and other running funds I keep, which in turn could lead to a dangerous debt situation if I'm not careful.</p> <p>There are absolutely no downsides to having two sources of income or more, and not a single person has ever said how frustrated or stressed they are because all their bills are paid with money to spare. No one. Ever.</p> <h2>7. You Keep Track of Expenses by Browsing Your Checking Account Online</h2> <p>I see this way too much with 20 and even 30-somethings who monitor and manage their finances by simply browsing their online checking and savings accounts. Sure, peeking at your accounts on a regular basis is good practice, <em>but that's not enough</em>. You really ought to have a formal budget established (a spreadsheet is an ideal solution for this) that details your monthly expenses and what's coming in and going out. Yeeees, it requires some effort on your part &mdash; at least more than logging into your banking app with Touch ID &mdash; but it's well worth it to avoid teetering on the edge of overdraft all the time.</p> <h2>8. You Spend Until There's Just Enough Left to Avoid Overdrafting</h2> <p>Speaking of teetering on the edge of overdraft, stop doing it! There's no reasonable explanation that you're spending money until you're within a few dollars or cents of being slapped with an overdraft fee.</p> <p>You know why? Because you can't afford it! You have zero dollars in your account at that point, which means you messed up somewhere. If you couldn't afford whatever sent you over the edge, you can't afford the hefty overdraft fees, either.</p> <p>To avoid this situation, here are my tips: When you see that thing at the store that you <em>have</em> to have, walk away. When you want to order that pizza because you're hung over or too lazy to cook dinner, get up off your butt and recognize that this exact scenario might be why you're broke in the first place. When your friends ask if you want to go out and you see that you only have $20 left in your account, just&hellip;say&hellip;no! You're allowed to do that, ya know, and nobody will stop being buddies with you and the world won't end. I promise. Instead, spend that time to reflect on why you have $20 to your name (seriously, think about that long and hard) and how you can change that. I've offered a few tips here already. The time is now.</p> <p><em>Are you avoiding any of these &mdash; or other &mdash; financial wake-up calls?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/8-financial-wake-up-calls-and-how-to-deal-with-them">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-you-disrespect-your-money">10 Ways You Disrespect Your Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-personal-finance-letter-id-write-to-my-younger-self">The Personal Finance Letter I&#039;d Write to My Younger Self</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-terrible-money-situations-you-need-to-stop-getting-yourself-into">6 Terrible Money Situations You Need to Stop Getting Yourself Into</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">The 10 Biggest Lies We Tell Ourselves About Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-pay-your-bills-on-time">Here&#039;s What to Do If You Can&#039;t Pay Your Bills On Time</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt going broke overdraft fees overspending paycheck to paycheck retirement accounts second jobs spending habits wake up calls Thu, 04 Aug 2016 09:00:08 +0000 Mikey Rox 1764991 at http://www.wisebread.com 6 Terrible Money Situations You Need to Stop Getting Yourself Into http://www.wisebread.com/6-terrible-money-situations-you-need-to-stop-getting-yourself-into <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-terrible-money-situations-you-need-to-stop-getting-yourself-into" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_money_wallet_87621441.jpg" alt="Woman getting herself into terrible money situations" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When it comes to money, I know I can be my own best friend and my own worst enemy. Most of the time, I'm frugal, intentional, careful, and deliberate with my money. But, every once in awhile, it's like I forget all of those principles. Maybe I want something badly, even though I can't afford it. Or I am tired and it's easier to spend than to think first.</p> <p>Now, I've never gone totally off the rails financially. But I can see where these acts of &mdash; let's call them what they really are &mdash; self-sabotage &mdash; undermine the principles I desire to live by.</p> <p>As I've gotten older, I've gotten better at staying out of these situations, and I know you can do the same. Here are some of the places where I've gotten into trouble in the past.</p> <h2>1. Overspending</h2> <p>It's hard to live within your means. It just is. There's so much that you want, and that doesn't even take into account what you need. But overspending &mdash; spending more than you make &mdash; is a sure way to get into deep financial trouble.</p> <p>Even if you don't get into debt, and some overspenders don't, you'll end up living paycheck to paycheck, juggling which bills need to be paid so that nothing gets turned off this month. That life isn't any fun at all, even though spending the money might be a blast. Besides, eventually some large expense will come up, and you'll end up in debt because you won't have the money saved to cover it.</p> <h2>2. Credit Card Debt</h2> <p>This usually comes as a result of overspending for a period of time. When you get used to spending, it starts to feel natural to just put something on your card. Do this enough times, and you'll find yourself with a bill you can't cover at the end of the month.</p> <p>The problem with credit card debt is that it feels deceptive. Sure, there's interest to pay, but the minimum payment looks so small. It might take you a while, but paying it off feels entirely doable.</p> <p>However, you'll end up paying forever and paying a lot in interest. And even those minimum payments can add up. Maybe you can handle one or two of them, but get three or four (or 10), and making the payments becomes a lot more financial stress than you need.</p> <p>See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?utm_source=wisebread&amp;utm_medium=seealso2&amp;utm_campaign=article">The Fastest Way to Pay Off Credit Card Debt</a></p> <h2>3. Not Saving for Retirement</h2> <p>It's easy to prioritize everything else over retirement. When you're young, retiring feels like such a long way off that it's easy to wait too long to get started. And when you're older, it's easy to spend or save for your kids rather than for yourself. Many parents panic about paying for college and end up putting their savings there rather than into their retirement accounts.</p> <p>Most &quot;real&quot; jobs come with some sort of retirement account and, often, with a matching plan from the employer. Take full advantage of this as soon as you are eligible. If possible, have the money deducted from your paycheck automatically, so you don't even have a choice in where it goes each month.</p> <h2>4. Buying Too Many Toys</h2> <p>This probably comes with the territory of overspending, but it seems like a specific trap that you can fall into. Many people (myself included) tend to live pretty frugally most of the time, but are willing to spend quite a bit of money on a toy. This can be something like sports equipment, a designer purse, a new car, technology, and other splurges.</p> <p>I think that a lot of us live such stressful lives that we feel like we deserve something that will help us rest or, at least, make us feel better about ourselves. So we spend a lot on an item based on the idea that it will improve our lives. Even if it does actually help us de-stress, the financial impact can cause as much or more stress in the long run.</p> <p>It's much better to save up for a toy, or rent one, or ask friends and family to contribute to a fund toward it for your birthday or another holiday. That way you will actually lower your overall stress levels, rather than adding to them.</p> <h2>5. Going Out Too Much</h2> <p>Sure, it's fun to get dinner and drinks with your friends. And it's probably a good idea to go to happy hour with the coworkers here and there, to forge connections and get to know people. But when you're doing it every night, those bills are going to add up.</p> <p>You don't need to deprive yourself to make good decisions about when and where you spend when it comes to eating (and drinking) out. Lowering your spending can be as simple as ordering an appetizer and a beer instead of a meal and a cocktail. You can get creative, too. Some of my friends and I take turns hosting a meal along with one or two signature drinks and the overall cost is much lower than what we'd spend if we met at restaurants.</p> <h2>6. Spending to Save</h2> <p>Sure, there are times when it's worthwhile to spend a bit more on a quality product so that you don't have to buy another one anytime soon. But I've also seen this as an excuse to spend way too much. Not sure how this might apply to you?</p> <p><span style="font-size: 13px; line-height: 1.7em;">What about when your car dies? Y</span><span style="font-size: 13px; line-height: 1.7em;">ou might legitimately need a new one. But it's a trap to believe the voices that say, &quot;Buy a brand-new car. That way you will save, in the long run, on maintenance costs.&quot; Instead, you can buy a car off a two or three -year lease. You still get the benefits of low maintenance, but you save a lot off the initial price.</span></p> <p>Or, maybe, you see a pair of nice new boots in the store. They're high quality, and you think to yourself, &quot;Sure, that's a lot of money. But if I buy those, I won't have to buy boots for several years.&quot; That might be true, but before you purchase, think about how many pairs of boots you already have sitting in your closet.</p> <p>Sometimes, buying quality is the way to go. But other times, it's an excuse we use to let ourselves spend more than we should.</p> <p><em>What financial traps do you tend to fall into? How do you keep yourself from jumping into them with both feet?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/6-terrible-money-situations-you-need-to-stop-getting-yourself-into">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-personal-finance-letter-id-write-to-my-younger-self">The Personal Finance Letter I&#039;d Write to My Younger Self</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-wake-up-calls-and-how-to-deal-with-them">8 Financial Wake Up Calls — And How to Deal With Them</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-you-disrespect-your-money">10 Ways You Disrespect Your Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">The 10 Biggest Lies We Tell Ourselves About Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-moves-to-make-before-the-leaves-change">10 Money Moves to Make Before the Leaves Change</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Shopping debt going out money traps overspending retail therapy retirement savings stress shopping Tue, 02 Aug 2016 09:00:11 +0000 Sarah Winfrey 1763991 at http://www.wisebread.com Don't Let "Lizard Brain" Derail Your Finances http://www.wisebread.com/dont-let-lizard-brain-derail-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/dont-let-lizard-brain-derail-your-finances" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/green_lizard_grass_19865568.jpg" alt="Preventing lizard brain from derailing your finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When it comes to your personal finances, you're in the driver's seat, right?</p> <p>So how come &mdash; sometimes &mdash; that &quot;quick trip&quot; to the mall can end up a daylong spending extravaganza? Why is it that occasionally, the tiny tingle of desire becomes a thunderous nagging, and you're suddenly the proud owner of some shoes (or a car, or a state of the art bit of tech) that you can't really afford? Or why, when the market wobbles, do you cash in your investment chips &mdash; even though you signed up for the long term?</p> <p>Meet your lizard brain.</p> <h2>What Is the Lizard Brain?</h2> <p>The <a href="http://www.crystalinks.com/reptilianbrain.html">lizard brain</a> &mdash; which is also known as our reptilian brain or chimp brain &mdash; is the oldest and least evolved part of our human brain. Sitting near the spinal cord, this tiny clump of cells is similar to what you might find between the ears of a lizard (or a fish, for that matter). While the rest of the human brain moved on, this crucial little powerhouse drives our most basic (and primitive) needs. It is what we have to thank for our desires to survive, reproduce, hoard, and dominate.</p> <p>And if it sounds like we don't have a need for such base motivations these days, then think again. The lizard brain is what drives fight or flight &mdash; a crucial physical mechanism at times even today.</p> <p>The problem, really, is that the lizard brain struggles with identifying some of our more modern struggles. And because it developed to save our lives, it is also able to override the more rational and logical areas of the mind. It is hard wired to take control, especially when we feel under pressure, stressed, or emotional.</p> <h2>Feel Compelled to Eat That Pint of Ice Cream? Blame Your Lizard Brain</h2> <p>You might recognize the interventions of the lizard brain in yourself. Think of the times that you are seized by an overwhelming impulse to do something, and it happens so quickly your logical head has not processed the decision. That &quot;heart over head&quot; type of brain hijack is initiated by the lizard brain. Maybe you feel a compulsion to eat the contents of the snack cupboard, have another sneaky drink, spill your juicy gossip, or splurge on something out of your budget. If you know you shouldn't do it, but go ahead anyway (and perhaps later regret it), then that's the lizard brain.</p> <p>The lizard brain is not fundamentally bad. In fact, for millions of years it has done a great job of keeping us alive and out of trouble. But when it comes to your cash, it can be the personal finance saboteur sat right in your own mind.</p> <h2>Personal Finance and the Lizard Brain</h2> <p>There are some ways that your <a href="http://www.wisebread.com/4-ways-your-mind-can-make-you-rich?ref=internal">mind can make you rich</a>. And then there are some that can make you substantially poorer.</p> <p>Even those most sophisticated of money minds can suffer. The last economic crises have proved rich fodder for psychologists watching the way the human brains of traders and investors react to sudden changes in the market. Overall, the answer seems to be that they <a href="http://www.ft.com/intl/cms/s/2/5c528240-c3a7-11e0-8d51-00144feabdc0.html">do not act rationally</a>, preferring short term horizons and certainty, despite investing being a long term game.</p> <p>One reason for this is the pleasure/pain principle. We tend to worry more about the pain of losing money, than we celebrate the success of winning an equivalent amount of money. Therefore stress kicks in at the prospect of losing out, and we allow the lizard brain to take over. A series of knee jerk reactions kicks in, and before you know it, your rational decision making is out of the window.</p> <p>On a more individual level, the lizard brain can cause us to act on impulses without the calming influence of rational thought. So if you have a compulsive spending problem, or get swept along by the moment and find yourself picking up far more at the mall than you intended, then the lizard brain might be to blame.</p> <h2>Reining In Your Lizard Brain</h2> <p>Your lizard brain might not always be your best friend, but it is one of the things that is keeping us alive. Even if we no longer have to dodge passing saber tooth tigers, or high-tail it away from a rampaging mammoth, that fight or flight mechanism gets us out of trouble today, too.</p> <p>But stopping the lizard brain from accidentally getting us into trouble is an ongoing process. Understanding the situations in which we make impulsive financial decisions is a starting point. Simply by noticing the impulse, you have the time to more rationally assess the decision you're about to make. And stopping just a moment &mdash; however brief &mdash; to understand your basic impulses might be enough to prevent you from making a poor decision.</p> <p>You can't live without your lizard brain, so better to start making friends with it. Acknowledging the tendency to act on impulse might be enough to bring it in line and make sure you're not being hijacked by your own little personal finance saboteur.</p> <p><em>What do you think? Does stress cause you to make financial decisions driven by impulse rather than logical assessment? How do you keep your lizard brain in check?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/claire-millard">Claire Millard</a> of <a href="http://www.wisebread.com/dont-let-lizard-brain-derail-your-finances">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">The 10 Biggest Lies We Tell Ourselves About Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-personal-finance-letter-id-write-to-my-younger-self">The Personal Finance Letter I&#039;d Write to My Younger Self</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-wake-up-calls-and-how-to-deal-with-them">8 Financial Wake Up Calls — And How to Deal With Them</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-avoid-buyers-remorse">6 Ways to Avoid Buyer&#039;s Remorse</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-you-disrespect-your-money">10 Ways You Disrespect Your Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance fight or flight impulse buys lizard brain overspending psychology self control Splurging Thu, 07 Jul 2016 09:01:03 +0000 Claire Millard 1746054 at http://www.wisebread.com Why Do We Feel Buyer’s Remorse, Anyway? http://www.wisebread.com/why-do-we-feel-buyer-s-remorse-anyway <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-do-we-feel-buyer-s-remorse-anyway" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_credit_card_19096631.jpg" alt="Woman feeling buyer&#039;s remorse and wondering why" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Jackie Lam does just about everything she can to avoid buyer's remorse &mdash; the sinking feeling you sometimes get after making a large purchase, like you've just made a big financial mistake.</p> <p>Lam, the head writer and founder of the frugal living blog Cheapsters.org, calls herself a big fan of taking her time when buying big-ticket items. As she says, &quot;I create as much friction as possible, or barriers to making that purchase, so I can really mull over my decision to make sure it's the right one for me.&quot;</p> <p>But even Lam admits to feeling the occasional twinge of buyer's remorse.</p> <p>The truth is, buyer's remorse might be inevitable. There's an actual science behind it.</p> <h2>Avoidance vs. Approach Motivations</h2> <p>The WhoWhatWear blog last year ran an <a href="http://www.whowhatwear.com/why-we-get-buyers-remorse">interview with Art Markman</a>, a professor of Psychology and Marketing at the University of Texas at Austin. He told the site that something called the <em>avoidance motivational system</em> is the tool that helps consumers avoid negative consequences such as accumulating large amounts of credit card debt. Say you see a computer that you really want. Your avoidance motivational system might kick in and prevent you from making that purchase if doing so would result in huge charge on your credit card bill that you can't pay off.</p> <p>Ideally, the avoidance motivational system would encourage you to, say, save up enough money so that you could pay off that credit card charge in full at the end of the month.</p> <p>Markman, though, told WhoWhatWear that there are times when the avoidance motivational system is overwhelmed by a second motivational system, the <em>approach system</em>. This system encourages you to get whatever you think will make you happy at a given moment.</p> <p>When you're out shopping, whether you're looking at big-ticket items such as cars or homes, or smaller items such as clothing or perfume, the approach motivational system will override the avoidance system, causing you to make purchases that maybe don't make financial sense.</p> <p>Then, when you get home with that new laptop or flat-screen TV, you'll start to feel guilty about spending your money. That's because the approach motivational system loses its power after you've made a buy, letting the avoidance motivational system kick back in, stronger than ever. This leads to that awful feeling of buyer's remorse.</p> <p>Linda Jones, chief executive officer of Be Wealthy &amp; Smart, an online business and wealth mentoring company, sums it up this way: &quot;Buyer's remorse is a physical reaction to chemical endorphins released in our body. Studies have shown that shopping gives us a rush in our brain, a high. But it only lasts a short time.&quot;</p> <p>And when that rush disappears? Regret over an unnecessary purchase often kicks in.</p> <p>Jones points to research by Brunel University in the UK saying that shopping is associated with increased activity in the left prefrontal cortex, a part of the brain that is linked to positive thinking and pleasure. The report found that levels of dopamine can rise significantly even if you're just window shopping without planning to buy anything.</p> <h2>Beating Buyer&rsquo;s Remorse</h2> <p>Jones said that the best way to avoid buyer's remorse is to understand this science and to take the steps necessary to beat it. This means making a list of your spending priorities and following it, even when your brain is telling you to overspend on that new outfit.</p> <p>For instance, you might decide that your first priority is to spend on your home, your second on food for the week, and your third for any school supplies or clothing that your kids might need. By keeping these priorities at the top of your spending list, you'll increase your odds of resisting that urge to splurge on a sports car that could bust your budget, Jones said.</p> <p>Others avoid buyer's remorse by going on what Elle Kaplan, founder and chief executive officer of LeXION Capital, calls the all-cash diet: You carry around the amount of cash you've budgeted for the entire week while leaving your credit card at home. This way, even if the chemicals in your brain are telling to you buy something extra, the money in your pocket won't let you.</p> <p>&quot;Buyer's remorse can leave you with more than a regrettable purchase; it can also lead to spiraling debt and bankruptcy,&quot; Kaplan said. &quot;It can be easy to get swept up in the moment and buy that 'must have' big-ticket item while ignoring future consequences.&quot;</p> <p><em>How do you stave off buyer's remorse?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/why-do-we-feel-buyer-s-remorse-anyway">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-ways-your-brain-tricks-you-into-spending">4 Ways Your Brain Tricks You Into Spending</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-its-hard-to-be-frugal-and-how-to-talk-yourself-into-it-anyway">When it&#039;s hard to be frugal (and how to talk yourself into it anyway)</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-terrible-money-situations-you-need-to-stop-getting-yourself-into">6 Terrible Money Situations You Need to Stop Getting Yourself Into</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-stop-your-mindless-spending">5 Ways to Stop Your Mindless Spending</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping buyer’s remorse cash must-haves overspending psychology regret Spending Money Wed, 22 Jun 2016 09:30:21 +0000 Dan Rafter 1736374 at http://www.wisebread.com 7 Signs It's Time to Break Up With Your Credit Cards http://www.wisebread.com/7-signs-its-time-to-break-up-with-your-credit-cards <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-signs-its-time-to-break-up-with-your-credit-cards" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/credit_card_dollar_000079523783.jpg" alt="Man learning signs it&#039;s time to break up with his credit cards" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Just as unresolved conflicts can lead to a breakup in a relationship, there are signs of credit card misuse that should signal it's time to break up with your credit cards &mdash; at least for awhile.</p> <p>Here are seven signs to look out for.</p> <h2>1. You Can Only Afford the Minimum Payment</h2> <p>Prioritizing bills isn't easy. After paying the rent, grocery, water and electricity bills, and other basic necessities of life, it can be difficult to pay off a credit card bill, too. If you can only afford the minimum payment on the credit card, then you probably have some spending problems.</p> <p>Making only the minimum payment on a credit card will keep your account up to date and in good standing, and that's a good start. But it will take years to knock down the balance, and even longer if you continue charging purchases on the card.</p> <p>Here's an example: If you owe $5,000 on a credit card at 18% interest, paying the minimum amount due each month (assuming 3% of balance) will take you <strong>over 16 years</strong> to pay it off. Along with paying the $5,000 principal, you'll have paid $4,698.46 in interest. (See also: <a href="http://www.wisebread.com/the-best-low-interest-rate-credit-cards?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=cc_article">Best Credit Cards with Low Interest Rates</a>)</p> <p>If instead you pay $200 each month, that will cut down the repayment time to under 3 years, at which point you&rsquo;d have paid $1,313.96 in interest.</p> <h2>2. You Play the Transfer Balance Shell Game</h2> <p>One way to get out of paying interest on a credit card balance is to <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">transfer it to a 0% APR balance transfer card</a>. You can save thousands of dollars in interest, but usually only for one year during the introductory period. After that, you're back to paying interest again.</p> <p>If you're constantly moving credit card balances to <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">0% APR cards</a> so you can avoid paying interest, it's a sign your credit card spending is out of control.</p> <p>It's one thing if you're using that year of no interest payments to pay off a credit card. But if you're still running up the balance, you're getting nowhere in paying off the debt. (See also: <a href="http://www.wisebread.com/what-you-must-know-before-transferring-credit-card-balances?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=cc_article">What You Must Know Before Making a Balance Transfer</a>)</p> <h2>3. You're Maxed Out</h2> <p>Your credit cards have credit limits, and if you're close to those limits it can be difficult to extend more credit when you really need it &mdash; such as in an emergency.</p> <p>Maxing out your credit cards can also hurt your credit score because your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score?utm_source=wisebread&amp;utm_medium=internal&amp;utm_campaign=cc_article">credit utilization ratio</a> &mdash; the percentage of available credit being used &mdash; should be under 30% for a top credit score.</p> <h2>4. You Make Impulse Buys on Credit</h2> <p>Credit cards are easy to pull out of a wallet or purse to pay for anything, from a candy bar or drink to a down payment on a new car. If you're using credit cards to buy anything you want whenever you see it, such as a sweater you see in a store window or an ice cream cone on a hot day out, then you're more likely to rack up debt faster without realizing it.</p> <p>Paying cash for such purchases can help you control spending. If you don't have the cash on you, then you won't be able to make the impulse buy when it pops up.</p> <h2>5. You Buy Things You Can't Afford</h2> <p>Along with impulse buys, credit card users can get in over their heads in debt by charging every expense &mdash; including ones they can't really afford.</p> <p>If you're using cash to buy groceries, for example, you're less likely to get that extra box of cookies if you don't have enough money with you. But with a credit card, the sky's the limit. (See also: <a href="http://www.wisebread.com/the-best-5-credit-cards-for-groceries?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=cc_article">Credit Cards That Offer Cash Back for Groceries</a>)</p> <h2>6. You Hide Debt From Your Spouse</h2> <p>If getting the mail makes you anxious because your spouse may see your credit card bill, you have a debt problem and need to tackle it <em>together</em>.</p> <p>Hiding debt from your spouse can also hurt your relationship, so working together on this can solve two problems simultaneously.</p> <h2>7. You Have Credit Cards From Every Store</h2> <p>Store-branded credit cards can be enticing at the checkout counter. They often offer discounts of 20% or more on purchases that day, and approval is almost automatic.</p> <p>But they also have high interest rates of up to 29%, setting you up for more interest payments if you don't pay the balance in full each month. Store credit cards also offer an easy excuse to go shopping. (See also: <a href="http://www.wisebread.com/store-credit-cards-that-dont-suck?utm_source=wisebread&amp;utm_medium=seealso&amp;utm_campaign=cc_article">Store Credit Cards That Don&rsquo;t Suck</a>)</p> <p>And since a store's credit card can only be used at the issuing business &mdash; you can only use a Nordstrom card at Nordstrom stores, for example &mdash; you'll need credit cards from every store you shop at if you want to take advantage of the deals they offer.</p> <h2>What to Do</h2> <p>There are things you can do if you spot any of the above signs in your financial life. To recap, here are a few things to try before using your credit cards again:</p> <ul> <li>Seek credit counseling. The Federal Trade Commission offers advice on how to find a <a href="https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor">reputable credit counseling agency</a>.<br /> &nbsp;</li> <li>Put your credit cards away and pay with cash only.<br /> &nbsp;</li> <li>Pay more than the minimum on your credit cards and tackle the debt.<br /> &nbsp;</li> <li>Ask your credit card company for a lower rate.<br /> &nbsp;</li> <li>Transfer balances to a 0% APR card and work on paying off the principal within a year.</li> </ul> <p><em>Have you ever broken up with your credit cards? How long was the split?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/aaron-crowe">Aaron Crowe</a> of <a href="http://www.wisebread.com/7-signs-its-time-to-break-up-with-your-credit-cards">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-moves-to-make-before-cutting-up-your-credit-card">6 Moves to Make Before Cutting Up Your Credit Card</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/i-dont-love-capital-one-how-to-get-a-lower-apr-or-possibly-not">How to Get a Lower APR, or Possibly Not</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/is-a-balance-transfer-offer-a-good-deal">Is a Balance Transfer Offer a Good Deal?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-questions-to-ask-before-accepting-a-credit-card-offer">10 Questions to Ask Before Accepting a Credit Card Offer</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards APR balance transfers debt high interest rates minimum monthly payments overspending paying cash Fri, 20 May 2016 10:30:08 +0000 Aaron Crowe 1713706 at http://www.wisebread.com 5 Ways to Stop Your Mindless Spending http://www.wisebread.com/5-ways-to-stop-your-mindless-spending <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-ways-to-stop-your-mindless-spending" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_shopping_shoes_000072990333.jpg" alt="Woman finding ways to stop her mindless spending" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The other night, as I was searching through new titles on my Kindle, I saw that Charles Duhigg, one of my favorite nonfiction authors, had published a new book that I could buy and download with a single click.</p> <p>Despite the fact that Duhigg's research focuses on breaking bad habits and setting up good ones, I wasted no time in committing a wanton act of one-click buying.</p> <p>This kind of <a href="http://www.wisebread.com/save-more-and-spend-less-by-increasing-your-mental-transaction-costs" target="_blank">spending without thought</a> is remarkably easy these days. Nearly every device we touch gives us an opportunity to spend money, even if we never set foot in a brick-and-mortar store. But it is possible to make spending mindful again, without feeling overwhelmed or deprived.</p> <p>Here are five ways to put an end to mindless spending for good.</p> <h2>1. Use Gift Cards for Online Purchases</h2> <p>My big mistake with my Kindle was allowing my credit card information to be synced for one-click ordering. Putting an additional layer of work between wanting a title and buying it can be enough to keep me from spending mindlessly.</p> <p>That's why I've removed my credit card information from my Amazon account, and I have committed to using gift cards for my purchases. When I find something I want on Amazon (or another e-tailer), I purchase an electronic gift card through a third party site that benefits local charities. The extra effort required to get the gift card is enough of an annoyance that I know for sure whether or not the purchase is worthwhile, and it makes me feel good to know that institutions I care about will benefit when I do decide to buy.</p> <p>More importantly, using gift cards removes the one-click purchase temptations, which have gotten me into trouble on more than one occasion.</p> <h2>2. Record All of Your Purchases</h2> <p>Writing down every single penny that you spend can be an eye-opening experience. Not only is this a good way to find the leaks in your budget, but it can also help disrupt your habit of mindless spending. Since you must take the time to write down the $0.99 for a new song on iTunes here and the $4.78 for a gourmet cupcake there, you will create enough space for yourself to think through each purchase and decide whether it is something you really want.</p> <p>Additionally, many times you might find yourself thinking you really don't want to write down a particular purchase. If seeing the reality of what you have spent in black-and-white does not appeal, then you probably don't really want to spend the money and would be happier keeping it in your wallet.</p> <h2>3. Pay Attention to Context</h2> <p>Every habit you have depends upon a context. The environment is often the context or cue for you to engage in a particular habit.</p> <p>For instance, when my mother was working to quit smoking over 30 years ago, she realized that she lit a cigarette every day in the car upon passing a certain landmark in her morning commute. During the first few weeks after she quit, she took an alternate route to work, making it easier to forgo that particular cigarette of the day.</p> <p>Researchers have found that Mom's strategy works for any kind of habit. When movie-goers were given free popcorn (that happened to be stale) in a movie theater environment, those who habitually ate popcorn at the multiplex <a href="https://www.psychologytoday.com/blog/the-science-success/201110/the-2-simple-ways-stop-your-mindless-bad-habits">ate the same amount</a> of the stale stuff as they would have eaten of a fresh batch. But put those habitual popcorn eaters in a conference room to watch a film with a free bag of stale popcorn, and they stopped eating the stuff &mdash; since the context did not activate their habit.</p> <p>If you have a tendency to spend mindlessly in particular situations, such as when you go to happy hour with friends, find a way to change the context. For example, just shaking up which bar or what type of establishment you go to can be enough to stall your mindless spending habit. According to Psychology Today, <em>any</em> alternate activity is less likely to trigger your mindless habit.</p> <h2>4. Give Every Dollar a Home</h2> <p>My husband is paid on a monthly schedule, which means we feel remarkably flush on the first of every month. To keep ourselves from mindlessly getting takeout or wasting money on Pay-Per-View movies, we don't just let his paycheck sit in our checking account. Instead, we automatically transfer money to various savings accounts as soon as his salary hits the bank, leaving just enough to cover our monthly bills (with a cushion).</p> <p>Knowing that every dollar that comes in has a specific purpose does a great deal to curb our mindless spending, since we would have to access savings in order to spend outside of our monthly budget.</p> <h2>5. Keep a Running List of Things You Need</h2> <p>We take convenience for granted these days. Many stores are open 24 hours, and something you order online can be on your doorstep the very next day. But many of the things that you need are not time sensitive &mdash; and waiting to make purchases can help you stop spending on unnecessary impulse items.</p> <p>This is why it's a good idea to keep a list of needed items, rather than running out to the store or logging onto Amazon as soon as you realize what you are lacking. With a specific list in hand at a brick-and-mortar store, you are less likely to &quot;browse&quot; and find something that you think you can't live without.</p> <p>In addition, keeping a list of needed items can help you overcome the &quot;free shipping&quot; trap of online purchases. If you wait to make orders online until you have enough items to qualify for free shipping, you don't end up buying things you don't really want just to get some of that sweet free shipping action.</p> <h2>Breaking Bad Habits</h2> <p>Spending your money without thinking about it is nothing more than a habit, and habits can be broken and changed. You do not have to give up the things you really want as long as you are mindful of what you are spending your money on.</p> <p><em>What are you doing to curb mindless spending?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/5-ways-to-stop-your-mindless-spending">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-make-retail-therapy-good-for-you">5 Ways to Make Retail Therapy Good for You</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-terrible-money-situations-you-need-to-stop-getting-yourself-into">6 Terrible Money Situations You Need to Stop Getting Yourself Into</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-you-disrespect-your-money">10 Ways You Disrespect Your Money</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-improve-yourself-for-100-or-less">10 Ways to Improve Yourself for $100 or Less</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/flashback-friday-47-best-back-to-school-shopping-hacks-ever">Flashback Friday: 47 Best Back-to-School Shopping Hacks Ever</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping bad habits budgeting mindless spending overspending shopaholic Tue, 12 Apr 2016 10:30:05 +0000 Emily Guy Birken 1687115 at http://www.wisebread.com 10 Credit Card Truths You Wish You Could Tell Your Younger Self http://www.wisebread.com/10-credit-card-truths-you-wish-you-could-tell-your-younger-self <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-credit-card-truths-you-wish-you-could-tell-your-younger-self" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_credit_card_000043691962.jpg" alt="Woman wishing she could tell her younger self credit card tips" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>As a teenager, I associated credit cards with adulthood, so naturally I couldn't wait to get my first one. But like so many young adults, I didn't know much about credit management, and I made several costly mistakes in the beginning. The good news is that I woke up and saw the error of my ways before completely ruining my finances, although I didn't come out the other side completely unscathed. Looking back on my early credit years now, however, I know exactly what I did wrong &mdash; and here's what I would tell my younger self about credit cards.</p> <h2>1. Don't Apply for Too Many Cards at Once</h2> <p>It wasn't long after my 18th birthday &mdash; literally, like days &mdash; that credit companies were calling me with the great news that I qualified for their cards. I worked part-time (as much as someone still in high school could), yet every student credit card issuer was eager to give me plastic. So I took the bait, and I applied for one credit card after another, not realizing the danger of applying for too many credit cards. Being young, I didn't know that each inquiry lowered my credit score by a few points, which, if I'm honest here, didn't mean jack to me at the time. I was approved for most of the cards I applied for, which ultimately led to another problem &mdash; the temptation to spend. Cause and effect should help you deduce that I learned from an early age that the more available credit you have, the easier it is to get into debt.</p> <h2>2. Only Charge What You Can Afford</h2> <p>As a young adult, I didn't always have money to hang out with my friends or go on group trips. I didn't want to feel left out, so I began using credit as an extension of my income. <em>Biiiig </em>mistake. I think a credit card is an excellent way to build credit as a young adult, but I would definitely advise my younger self to set a budget. I'd take a look at my finances and determine what I could realistically afford to spend each month, and then stick with this limit. I could have saved myself a lot of financial heartache had I been as wise back then.</p> <h2>3. Pay Off Balances in Full</h2> <p>If I could rewind time, I would definitely pay off balances in full every month, which also goes hand-in-hand with only charging what I could afford. Now that I'm older, I realize that paying off balances is a surefire way to never get into deep credit card trouble. It's easy to accumulate credit card debt, but not as easy to pay it off.</p> <p>Of course, even if we pay off a card in full, a large unexpected expense might result in carrying a balance. There were times when I had to use a credit card for an emergency car repair and then carry the balance from month to month. Another mistake I made was only paying my minimums, even at times when I could afford to pay more. I recall spending $500 for new brakes and rotors for my car, yet it took more than two years to pay off the balance because I was only making $20 minimum payments. (See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=seealso">How a Smart Balance Transfer Will Help Pay Off Your Debt</a>)</p> <h2>4. Never Pay Late</h2> <p>Early on, I was more than just late on payments &mdash; I ignored them altogether because I was young, dumb, and incredibly broke. In hindsight, I would tell my younger self to track down due dates, or better yet, pay credit card statements as soon as they come in the mail to avoid a late arrival, which is what I do today. A $35 late fee increases the amount owed and results in additional interest. To put this in perspective, 10 late fees a year equals an extra $350 in credit card fees.</p> <h2>5. Avoid Cash Advances</h2> <p>I relied heavily on cash advances from my credit cards as a college student, especially during my freshman year. I didn't go crazy or borrow thousands of dollars, but I would take $20 or $50 here and there to tide me over until payday. I didn't realize until later that I paid a cash advance fee each time I tapped the ATM. It was also a shock to learn that cash advances carried a higher interest rate than standard purchases. Between the fee and the higher interest rate, it took longer to pay off the card.</p> <h2>6. Don't Let Friends Borrow Your Credit Card</h2> <p>I made the mistake of lending my credit card to a friend. He had permission to purchase one item, but used the card for much more. The card was in his possession for less than a week, yet there were charges for restaurants, movies, fuel &mdash; he even had the audacity to purchase a video game in my name. He eventually paid me back, even though it took nearly two months.</p> <h2>7. Don't Exceed Your Credit Limit</h2> <p>Because of new credit card rules, a credit card issuer can only charge an over-the-limit fee if you opt-in for this fee. If you don't opt-in, any transaction over your limit will be declined. Unfortunately, this wasn't the case in the late '90s when I applied for my first credit card. If I could go back in time, I would tell my younger self to carefully monitor spending and don't go over a credit card's limit. I made this mistake and was hit with an over-the-limit fee plus additional interest. I exceeded the limit by more than $100, and because I didn't have extra money to bring my balance below the limit, I paid the over-the-limit fee for three months.</p> <h2>8. Know What You're Paying</h2> <p>Using a credit card can be expensive if you choose a random card and you don't know what you're paying. Before applying for any credit card, I wish I would have compared interest rates, annual fees, cash advance fees, late fees, etc. Credit card fees add up quickly and increase the cost of using credit.</p> <h2>9. Check Your Credit Score</h2> <p>I didn't get serious about credit monitoring until my mid-20s. When I finally checked my credit report for the first time, there were a couple of mistakes. Mostly minor, but there was one major error dragging down my credit score. Knowing what I know now, I would make a point to check my credit report at least once a year and not rely on my credit card companies to detect fraudulent activity. (See also: <a href="http://www.wisebread.com/the-5-best-credit-cards-that-offer-free-credit-scores?ref=seealso">Credit Cards that Offer Free Credit Scores</a>)</p> <h2>10. Make Sure the Bank Reports to the Bureaus</h2> <p>Despite the mistakes I've made, I'm happy that I established credit in my late teens. I was able to learn from my mistakes and repair my credit before financing a car or buying a house. But with regard to applying for credit, I'd also encourage my younger self to get a credit card from a bank that regularly reports activity to the bureaus. One of my earlier cards didn't report my credit activity, which meant that my history of timely payments didn't show up on my credit file, nor help my credit score.</p> <p><em>We all have credit card horror stories. What are some of yours? What can you tell your younger self about credit cards now that you're an adult?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/10-credit-card-truths-you-wish-you-could-tell-your-younger-self">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-personal-finance-letter-id-write-to-my-younger-self">The Personal Finance Letter I&#039;d Write to My Younger Self</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-5-common-mistakes-while-rebuilding-your-credit">Avoid These 5 Common Mistakes While Rebuilding Your Credit</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-money-moves-to-make-before-the-leaves-change">10 Money Moves to Make Before the Leaves Change</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-moves-to-make-before-cutting-up-your-credit-card">6 Moves to Make Before Cutting Up Your Credit Card</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-signs-its-time-to-break-up-with-your-credit-cards">7 Signs It&#039;s Time to Break Up With Your Credit Cards</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards advice credit score debt overspending paying bills teens younger self Fri, 08 Apr 2016 10:30:08 +0000 Mikey Rox 1683694 at http://www.wisebread.com 6 Moves to Make in Your First Month of Debt Repayment http://www.wisebread.com/6-moves-to-make-in-your-first-month-of-debt-repayment <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/6-moves-to-make-in-your-first-month-of-debt-repayment" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_career_confidence_000051439618.jpg" alt="Woman making moves in the first money of debt repayment" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>So, it's time, is it? Time to get serious about paying off your debt?</p> <p>Congratulations!</p> <p>If you've made the decision to begin repaying your debt instead of generating more, that is huge! Repaying debt can feel so daunting that people avoid it, making minimum payments until their dying day. But facing your problems is always better than running away from them, and, in deciding to do that, you have taken a giant step forward.</p> <p>Still, it's easy to feel overwhelmed when you're just starting to repay debt. If you're not sure where to start, here are some thoughts for you.</p> <h2>1. Stop Overspending</h2> <p>It might seem obvious, but this is the very first step to take when you want to begin digging yourself out of a financial hole. Stop making more debt!</p> <p>Start by analyzing where you're spending. Is all of your spending necessary? Are there areas &mdash; like eating out, buying clothes, or going to happy hour &mdash; where you're spending a lot more than you thought you were? (See also: <a href="http://www.wisebread.com/start-saving-more-with-this-one-simple-tool?ref=seealso">Start Saving With This One Simple Tool</a>)</p> <p>Looking at this takes some courage, as it can be hard to actually see just how much money you're putting towards things that don't matter. However, the only way out is through, at least in this case, and once you know where you're spending too much, it's easier to make better choices.</p> <p>All of this assumes that you are not overspending simply because you don't have enough money. If that is the case, then your first step is to figure out how to make more or lower your expenses. There are always options, but they will differ depending on your situation. The point is, you won't know where to start cutting until you know where you stand with spending.</p> <h2>2. Add It Up</h2> <p>When you have a spending plan in place, add up all of your debt. List each debt source, including total amount owed, monthly minimum payment, and interest rate.</p> <p>This step tends to stop people in their tracks. However, it's essential to know the total amount of damage before you can take steps toward eliminating it. And, sometimes, seeing exactly how much you owe, all in one place, is just what you need to feel motivated to make significant changes in your life.</p> <h2>3. Prioritize Your Debt</h2> <p>There are a lot of different ways to decide which debt to focus on first. Obviously, you need to make at least minimum payments on all of your accounts. But after that, you need to decide which debt will receive higher payments until it's paid off. Then, you can move on to a different account.</p> <p>Some people swear by Dave Ramsey's <a href="http://www.wisebread.com/snowballs-or-avalanches-which-debt-reduction-strategy-is-best-for-you">debt snowball method</a>. Others say that you should focus on the debt with the highest interest rate first, and still others think you should choose the one that causes you the most stress for your primary repayment efforts. Honestly, and especially when you're just getting started, the most important thing is that you choose a method that appeals to you and that motivates you to keep moving forward with your debt repayment.</p> <h2>4. Set Repayment Goals</h2> <p>Look realistically at your finances, at how you're planning to change your spending patterns, and decide when you think you can pay off your first debt. Set that date as a goal. Circle it in all of your calendars. Set an alarm for it on your phone. Do whatever you have to do to get that date in your head.</p> <p>Having a goal will help you feel motivated, and it will also give you some sense of progress as you move forward. For instance, if you decide it will probably take you six months to pay off your first debt, you'll know after three months that you're about halfway there. That can be satisfying in and of itself.</p> <p>Set these goals knowing that you can always change them. If your financial situation changes, you can always change your goal, too, moving it forward or backward as circumstances dictate.</p> <h2>5. Generate More Income</h2> <p>If you want to pay off your debt as quickly as possible, think about ways to generate more income. This will not only make your repayment move faster, but it will make it so the process isn't just about cutting back all the time, which can feel demotivating after a while.</p> <p>For some people, making more money is as easy as working overtime. Others have to be more creative. Think about taking on freelance projects, turning a hobby into an entrepreneurial enterprise, or selling things that you find around your house on eBay or Craigslist. Depending on your skill set and how much time you have, the possibilities are truly endless. (See also: <a href="http://www.wisebread.com/15-ways-to-make-money-outside-your-day-job?ref=seealso">15 Ways to Make Money Outside Your Day Job</a>)</p> <h2>6. Reward Yourself</h2> <p>It's important that you realize just how significant of a choice you've made to reduce debt. You can mark a time as important by celebrating it. Just do this in a way that doesn't mean spending a lot of money. Buy the special coffee, learn a new recipe, or treat yourself to an extra dessert. Sure, these things cost a little bit, but they aren't a shopping spree at the mall.</p> <p>Make sure you build rewards into your whole system. You can buy yourself a coffee every time you pay X amount off, or reward yourself with something small every month that you follow through with your budget. It's important to stay motivated and to reprogram your brain to actually enjoy this repayment process.</p> <p>Plan a big reward for the day when your debt is all paid off. Maybe that's the day you can start saving for your dream vacation, or maybe you can talk a friend into taking you out for the evening. Plan a big party at your house, spend a weekend in the mountains, or do whatever it is that feels right. Knowing this is coming will help keep up your motivation through the hard days.</p> <p><em>What is your experience of debt repayment? How did you start on that journey?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/sarah-winfrey">Sarah Winfrey</a> of <a href="http://www.wisebread.com/6-moves-to-make-in-your-first-month-of-debt-repayment">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/dont-ignore-these-4-things-before-refinancing-your-student-loans">Don&#039;t Ignore These 4 Things Before Refinancing Your Student Loans</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-use-peer-to-peer-lending-to-pay-down-credit-card-debt">Should You Use Peer-to-Peer Lending to Pay Down Credit Card Debt?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-sobering-facts-about-student-loan-debt">5 Sobering Facts About Student Loan Debt</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-day-debt-reduction-plan-add-it-up">5-Day Debt Reduction Plan: Add It Up</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-common-debt-reduction-roadblocks-and-how-to-beat-them">6 Common Debt Reduction Roadblocks — And How to Beat Them</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management goals money habits overspending repayment reward yourself Mon, 04 Apr 2016 10:00:08 +0000 Sarah Winfrey 1682375 at http://www.wisebread.com 9 Ways Being Too Responsible Can Cost You http://www.wisebread.com/9-ways-being-too-responsible-can-cost-you <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/9-ways-being-too-responsible-can-cost-you" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_stressed_overworked_000086169843.jpg" alt="Woman learning how being too responsible can cost her" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You go through life looking to avoid risk. You look to save a dollar whenever you can. You're smart. Sensible. Responsible.</p> <p>But is this approach to life really the best thing for your finances? There may be times when a <em>little bit of risk</em> is better for you long term, or you may be so focused on one financial goal while you are neglecting another.</p> <p>Here are some examples of when being responsible has a financial downside.</p> <h2>1. You Have Too Much Liquid Savings</h2> <p>It always makes sense to have a sizable emergency fund to help cover unexpected costs, like a major car repair or medical emergency. But it doesn't make sense to carry massive amounts in a low-interest savings account to prepare for every conceivable disaster. Every excess dollar you keep in a basic savings account is a dollar that could be invested elsewhere, generating a bigger return and helping you build toward retirement. Opinions vary on how big your emergency fund should be, but few financial advisers recommend saving more than nine months of expenses. Don't steal from your future self by being too concerned about possible disasters now.</p> <h2>2. You're Too Focused on Saving for College</h2> <p>You're a responsible parent, and you want to help your kids pay for their college education. So you open a <a href="http://www.wisebread.com/the-9-best-state-529-college-savings-plans?ref=seealso">529 college savings plan</a> and pump money into it. That's great, but are you costing yourself future retirement funds in the process? In an ideal world, you can save plenty for both retirement and college costs, but it's important not to divert too much away from retirement. When it comes to saving, retirement should be your first focus. Your kids can always borrow for college, but you can't borrow money to retire.</p> <h2>3. You Always Buy the Cheapest Thing</h2> <p>Being frugal is usually a good thing. But there is some truth to the adage that you get what you pay for. If you consistently look to purchase the lowest-end version of a product just to save a few dollars, you may cost yourself in the long run. Sometimes things are inexpensive because they are low quality. And if something is cheaply made, you may end up replacing it sooner and costing yourself more in the long run. This is especially true for bigger ticket items like appliances. The best path financially is to search for value, not simply low cost, when shopping.</p> <h2>4. You Always Buy the Most Expensive Thing</h2> <p>Just like it's not necessarily best to buy the cheapest version of an item, you shouldn't reflexively go high-end all the time, either. It's a fine idea to pay more for quality and longevity in a product, but sometimes things are expensive due to unneeded bells and whistles, or because a manufacturer wants you to believe they have a premium product. Again, it's important to do your homework and find the correct balance between quality and price.</p> <h2>5. You're Too Helpful Sometimes</h2> <p>I would never advise against helping others. But there are some cases when you are putting your financial health at risk by lending others a hand. For instance, you may cosign a loan for your daughter so she can get a new car, but your credit could be ruined if she fails to make payments. You might &quot;lend&quot; money to your brother-in-law to start a business, even though you're fully aware he'll never pay you back. Generosity is okay, but it's best not to be too cavalier about lending or giving money to everyone that asks.</p> <h2>6. Your Investment Portfolio Is Too Conservative</h2> <p>You want to make sure that your retirement portfolio is protected from a stock market crash. So you invest heavily in stable investments like dividend stocks, bonds, and cash. This is fine if you are approaching retirement age. But if you're decades away from retirement, it pays to be far more aggressive. Sure, there will be times when your portfolio will take a big hit. But it will most likely go up over time, and you don't want to miss out on the years when there are big stock market gains. If you want to build the biggest retirement nest egg possible, it's best to shed your fear and invest heavily &mdash; perhaps even exclusively &mdash; in stocks when you are young.</p> <h2>7. You're Staying in the Same Job</h2> <p>So you like your job because it's got a steady paycheck and decent benefits. Staying put seems like the responsible thing to do. But there's some evidence to suggest that people who job hop can end up earning more. According to Forbes, employees who stay in a job longer than two years will end up earning 50% less in their lifetimes than if they switched jobs more often. Consider that the average raise these days is about 3%. Do you think you could command a bigger bump by looking elsewhere? If so, consider going for it. And don't worry about a short job stint hurting your resumé. Harvard Business review reported last year that there's <a href="https://hbr.org/2015/07/setting-the-record-straight-on-switching-jobs">no longer a stigma</a> against staying at a position for a short period of time.</p> <h2>8. You Paid Off Your House Early</h2> <p>There's always a desire to pay off that mortgage as soon as possible. If anything, it's a massive psychological boost to know you own your house free and clear. But there is a financial downside to paying your house off early, especially when interest rates are low like they are now. Let's say you have a 3.65% interest rate on a 30-year mortgage. But let's say you could earn a 7% annual return by putting money in the stock market. Where's a better place for your money? When investment returns are higher than your interest rates, there's no real compelling financial reason to pay off a loan early.</p> <h2>9. You Want to Fix Everything Yourself</h2> <p>You can definitely save money if you're handy. From plumbing repairs to changing your own oil in your car, it's often silly to pay someone to take on things you can do on your own. But do you know your own limitations? There are many instances when an attempt to fix something on your own can make a problem worse. (I know this from personal experience.) By hiring a professional to handle some repairs, you may have a better chance of ensuring things are done properly and constructed to last. This will save you money in the long run.</p> <p><em>Any other ways being too responsible costs us? Do the right thing and let us know in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/9-ways-being-too-responsible-can-cost-you">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/my-2016-budget-challenge-how-to-lose-weight-without-counting-calories">My 2016 Budget Challenge: How to Lose Weight Without Counting Calories</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/can-i-conquer-my-vanity-for-the-sake-of-my-sanity">Can I Conquer My Vanity for the Sake of My Sanity?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-seven-deadly-sins-of-consumerism-and-the-frugal-redemption">The seven deadly sins of consumerism (and the frugal redemption).</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/its-natural-for-me-to-spend-as-i-do-0">It&#039;s NATURAL for me to spend as I do!</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-frugal-promises-i-have-not-kept">6 Frugal Promises I Have Not Kept</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle being too responsible costing you mortgage overspending saving too much Fri, 25 Mar 2016 10:30:04 +0000 Tim Lemke 1678302 at http://www.wisebread.com 11 Spring Break Budget Busters to Avoid http://www.wisebread.com/11-spring-break-budget-busters-to-avoid <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-spring-break-budget-busters-to-avoid" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/friends_on_vacation_000069738815.jpg" alt="Friends finding spring break budget busters to avoid" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Planning to whoop it up on spring break? Let your fun flag fly without obliterating your bank account by avoiding these getaway budget busters.</p> <h2>1. Lodging</h2> <p>Even now that I'm in my mid-30s (that's the first time I've written that &mdash; gimme a minute), I still prefer inexpensive lodging to high-end hotels when I travel, at least when it's on my own dime. As an alternative, I opt for short-term apartment rentals (like Airbnb or VRBO) or even crash with friends to help save a ton of money that, when you think about it, I'm just sleeping away.</p> <p>Anita Covic, destination specialist TripTogether, a travel site that helps travelers meet other travelers, also thinks this route is the way to go.</p> <p>&quot;Cutting costs doesn't have to be stressful, and one of the biggest costs that can be cut is lodging,&quot; she says. &quot;Personally, I think hostels are a great alternative to expensive hotels. Airbnb is a great option for a large group of people. Eating out can add up as well. Try booking a hostel or Airbnb [rental] with a kitchen and stock up on groceries that can be easily converted to quick breakfasts and lunches.&quot;</p> <h2>2. Airfare</h2> <p>Save on airfare by knowing when to shop for plane tickets, and use a multifaceted approach by consulting discount sites and the airlines proper to see who offers the best price. You also can avoid spending full price for airfare by setting alerts for deals. If you happen to earn frequent flyer miles, check out the new award travel search engine <a href="http://pexportal.com">PEX+</a> to find the best price on an award ticket.</p> <h2>3. Eating Out</h2> <p>When you're on vacay, it's easy to get lax on your waistline and your wallet. Keep both of these areas in check by curbing your cravings for junk food (which might go hand in hand with those hangovers, by the way) while trying to make more of your meals wherever you're staying (made easier with a kitchen). Find ways to munch for free instead of popping into a restaurant, café, or fast-food joint for every meal.</p> <p>&quot;Dining out at new restaurants is one of the best parts of traveling, but there's no need to eat out three meals a day,&quot; reminds saving expert Andrea Woroch. &quot;Many hotels and hostels offer some sort of free breakfast, typically consisting of fruit, cereal, and pastries, which is plenty to start your day. Sandwiches are an easy meal to prepare in-room, which you can then pack as lunch for a day exploring the city. When looking for a spot to eat, use apps to track down coupons for nearby restaurants and search for daily dining deals via Groupon Now.&quot;</p> <h2>4. Alcohol</h2> <p>Oh, alcohol. It's the stuff that many great spring break memories are made of &mdash; but it can quickly take your budget from hero to zero if you're not careful. To reduce how much you're spending on booze, remember one word: pregame.</p> <p>&quot;Drinks at bars and restaurants are very expensive, so if you're planning to do some drinking, try to plan a get-together somewhere where you can bring your own alcohol &mdash; like someone's hotel room &mdash; before you go out,&quot; advises The Stave Diaries travel blogger Stefanie Parks. &quot;This way you can get your alcohol from a grocery or convenience store and won't have to splurge for more expensive drinks while you're out.&quot;</p> <h2>5. Entertainment and Activities</h2> <p>When you're traveling, you want to see and do as much as possible within your destination. However, an action-packed schedule comes with a cost. Before you embark, take time to review entertainment and activity options and identify those that are most important and affordable to you.</p> <p>&quot;There are plenty of free things you can do on your trip, like a day at the beach, viewing art galleries, or simply exploring city streets,&quot; Woroch says. &quot;You can even skip the pricey guided tours and take a self-guided walking tour for free. Print city guides from resources like <a href="http://citywalkingguide.com/">City Walking Guide</a> or download a walking tour guide on your mobile device using apps like <a href="https://www.ricksteves.com/watch-read-listen/audio/audio-europe">Rick Steves Europe Travel</a> and <a href="https://itunes.apple.com/us/app/city-maps-walks-470+-cities/id417207307?mt=8">City Maps and Walks</a>.&quot;</p> <h2>6. Hidden Fees</h2> <p>The money trap is right there in the name &mdash; hidden fees &mdash; and these can add up to a substantial amount when all is said and done, slowly chipping away at your budget along the way.</p> <p>Saveful.com's Louis DeNicola details some of the more common offenders.</p> <p>&quot;Rental car companies can charge around $10/day for a collision damage waiver, but many credit cards include that coverage free of charge,&quot; he points out. (See also: <a href="http://www.wisebread.com/what-does-car-rental-insurance-really-cover-on-your-credit-card?ref=seealso">What Does Car Rental Insurance Really Cover On Your Credit Card?</a>)</p> <p>Travelers should also look for hidden hotel-related fees. Some hotels in popular tourist destinations charge a resort fee on top of the standard room rate. Hotels may offer extra perks, such as free Wi-Fi, to members of their loyalty program &mdash; even brand new members.</p> <p>&quot;Some hotels' minibars have weight sensors and you might get charged even if you didn't drink or eat anything,&quot; DeNicola adds. &quot;Review your bill before leaving the hotel.&quot;</p> <h2>7. Convenience-Store Goodies</h2> <p>When you have a packed spring break schedule of exciting activities, it's not only easy to eat out more than you normally would, but popping into convenience stores for quick snacking items also is more prevalent. Two dollars here and there for bottles of water, coffee, candy, and chips may seem like insignificant expenses, but if you're doing it every day, you'll find that you're wasting a decent chunk of change.</p> <p>&quot;Limit the excess you spend on drinks and snacks by packing fruit or granola bars and a refillable water bottle to stay fueled and hydrated during a long day of exploring,&quot; Woroch suggests.</p> <h2>8. Mobile Data</h2> <p>I recently traveled to Montreal for the New Year's holiday and I was conscious to turn off my mobile roaming and data as soon as we crossed the border from the United States into Canada. But would you believe that when I received my bill for that period there was $20 of international charges on it? Apparently I wasn't fast enough, or the networks got crossed as I approached the border, and I incurred the fees I was trying to avoid. And that was within seconds to minutes. Can you imagine what I would have been charged had I left it one for a few hours or days?</p> <p>Woroch warns against a similar situation.</p> <p>&quot;To avoid pricey data-overage fees, turn off pop-up notifications and use a <a href="https://itunes.apple.com/us/app/free-wifi-finder/id411134124?mt=8">Free Wi-Fi Finder</a> app to track down local hotspots. Otherwise, turn on your phone's Wi-Fi locator to find a free Internet connection wherever you are and take this time to post pictures and reply to emails.&quot;</p> <p>She also recommends downloading any maps you may need ahead of time.</p> <p>As an extra tip, if you have an experience like I did during my Montreal trip, be sure to give your wireless carrier a call to explain the situation. If you're a loyal customer, they may waive those minor, erroneous fees like they did for me, but you won't know unless you pick up the phone to fight it.</p> <h2>9. Photo Memories From Secondary Sources</h2> <p>Photo ops are everywhere these days, and there are plenty of companies that are cashing in on them, like pictures you get at the beach and those funny snapshots at the end of a thrill ride. Don't fall for it. You and every single person you know is armed with a phone at their fingertips. Set up backgrounds and strike your own poses to enjoy free shots that you can post to social media immediately or print when you get home.</p> <h2>10. Souvenirs</h2> <p>I have a rule at my house than nothing comes home from vacation that isn't either some form of art or a useful object &mdash; which means to say that no junk souvenirs, like spoons, shot glasses, and other bric-a-brac, are welcome. My photos are good enough memories of my time on vacation, and they help me save money, space in my luggage, and a backache from having to carry otherwise heavy objects.</p> <p>Blogger Barb Webb provides other easy ways to cut back on souvenir spending.</p> <p>&quot;Theme parks, hotels, and restaurants often have buttons, stickers, postcards, and other trinkets they gift for free to patrons,&quot; she says. &quot;Stop by the local tourism office and you'll find everything from free coloring books to posters and key chains to add to your souvenir collection. Also look for local extension agencies that will have free treasures like recipe cards, calendars, and other small items.&quot;</p> <p>To turn photos into more organized memories like I do, Woroch suggests using the <a href="https://itunes.apple.com/us/app/keepsayk-photo-books-instant/id884920246?mt=8">Keepsayk app</a> to organize pictures and create a photo book, or use deal sites like Coupon Sherpa to find coupon codes from photo book makers like Snapfish, which usually offers steep discounts.</p> <h2>11. Gas</h2> <p>Gas is affordable now, but we don't know where it will be in a few weeks or months when we're more on the go. Even while it's inexpensive, you still want to score the best deals possible.</p> <p>&quot;There are a few ways to reduce your fuel costs, including using the <a href="http://www.gasbuddy.com/App">GasBuddy</a> app to find the cheapest gas nearby; paying with cash to avoid the extra 10 cents for credit card charges; and using your warehouse club membership to save up to 30 cents per gallon at their fuel pumps,&quot; Woroch says.</p> <p>On a personal note, I've been visiting BP stations almost exclusively to fill up at the pump for a few months, and I use its loyalty card to rack up points. Just the other day, I received a generous kickback of $.63 per gallon &mdash; yes, you read that correctly &mdash; which resulted in a total savings of about $10 for a complete fill-up. My total cost was $18 and change for a full tank of premium gas, all because I swiped my loyalty card consistently. Totally worth the two seconds it takes.</p> <p><em>Are you headed away for spring break? How do you plan to save? Where will you splurge? I'd love to hear about your vacation plans in the comments below.</em></p> <h2 style="text-align: center;">Like this post? Pin it!</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2F11-spring-break-budget-busters-to-avoid&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F11%20Spring%20Break%20Budget%20Busters%20to%20Avoid.jpg&amp;description=11%20Spring%20Break%20Budget%20Busters%20to%20Avoid" data-pin-do="buttonPin" data-pin-config="above" data-pin-color="red" data-pin-height="28"><img src="//assets.pinterest.com/images/pidgets/pinit_fg_en_rect_red_28.png" alt="" /></a> </p> <!-- Please call pinit.js only once per page --><!-- Please call pinit.js only once per page --><script type="text/javascript" async defer src="//assets.pinterest.com/js/pinit.js"></script></p> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/11%20Spring%20Break%20Budget%20Busters%20to%20Avoid.jpg" width="250" height="374" alt="" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/11-spring-break-budget-busters-to-avoid">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-little-known-ways-to-save-when-booking-spring-travel">6 Little-Known Ways to Save When Booking Spring Travel</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-sneaky-vacation-costs-that-add-up-quickly">10 Sneaky Vacation Costs That Add Up Quickly</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/20-secrets-of-last-minute-travel">20 Secrets of Last-Minute Travel</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-6-best-vacation-deal-websites">The 6 Best Vacation Deal Websites</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-things-to-leave-behind-during-your-midsummer-trip">10 Things to Leave Behind During Your Midsummer Trip</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Travel Airfare alcohol budget busters food costs hotels overspending spring break trips vacation Thu, 24 Mar 2016 09:00:11 +0000 Mikey Rox 1678011 at http://www.wisebread.com The 10 Biggest Lies We Tell Ourselves About Money http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-10-biggest-lies-we-tell-ourselves-about-money" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_cash_mouth_000051776556.jpg" alt="Man telling biggest lies to himself about money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When it comes to personal finance, honesty is the best policy. Be honest with banks, be honest with your family, but most of all, be honest with yourself.</p> <p>It's a frequent occurrence that people find themselves in financial trouble because they weren't honest about their money situation. But recognizing the most common lies is one key to moving toward a more honest &mdash; and profitable &mdash; future.</p> <p>Here are some of the biggest money lies we tell ourselves.</p> <h2>1. &quot;It's Good Debt&quot;</h2> <p>It's often said that there's such a thing as &quot;good debt&quot; and &quot;bad debt.&quot; The so-called &quot;good debt&quot; may stem from student loans or your mortgage, which can play a role in building long-term wealth. &quot;Bad debt,&quot; on the other hand, is most commonly from credit cards with high interest rates. But by separating debt in this way, it's easy to rationalize having debt in the first place. It's true that some kinds of debt are worse than others, but it's wisest to try to avoid debt altogether. Only by having an &quot;all debt is bad&quot; attitude will you aggressively try to rid yourself of of it.</p> <h2>2. &quot;I'm Earning a Return of X%&quot;</h2> <p>When we place money in the stock market, we often assume it's generating a certain amount of return, based on historical averages. It's good to be aware of these historical returns in order to understand the potential of stock market investing, but you must remember that past performance does not guarantee future results. It's also important to have a true understanding of how well your investments are doing. Thornburg Investments issued a report in 2014 outlining how the S&amp;P 500 Index earned an <a href="http://www.thornburginvestments.com/pdfs/th1401.pdf">11% annualized nominal return</a> over 30 years, but that return was actually 6% annually once taxes, fees, and inflation were factored in.</p> <h2>3. &quot;I'll Start Saving Later&quot;</h2> <p>Retirement always seems like such a long way off. We tell ourselves that we have plenty of time, and many years ahead before we need to start putting money away. But before we know it, retirement age is on our doorstep and we've hardly saved at all. And because we waited, we missed out on the power of compounding returns. It's easy to come up with reasons not to save money, but very few of them are valid. Consider your retirement fund to be the first bill you need to pay each month. You won't miss the money now, but you'll be happy to have it down the road when you stop working.</p> <h2>4. &quot;I'll Be Earning More in the Future&quot;</h2> <p>When planning our future, we often do a good job of predicting expenses, but operate under the faulty assumption that our incomes will increase. I know people who have purchased larger homes than they can truly afford, justifying the expense by arguing that they'll be getting pay raises down the road. We all want to assume we'll be earning more as time goes on, but there are no guarantees. Your company may freeze wages, or even lay off workers. You may decide to stop working to raise your family. To achieve financial freedom, work to ensure your spending is less than your actual current income. This way, any pay increases you receive are like bonuses.</p> <h2>5. &quot;I Don't Have Enough to Invest&quot;</h2> <p>If you have money for that morning trip to Starbucks, then you have money to invest. If you have money for Netflix, or those pricey new shoes, or that bottle of wine, you have money to invest. The key to financial freedom is ultimately about what we choose to spend our money on. And if you prioritize long-term saving over buying non-essential material goods, you'll find that you have much more money to invest than you think.</p> <h2>6. &quot;I Deserve This&quot;</h2> <p>One common way people end up overspending is that they rationalize the purchase of things they don't need. Splurging on things like an expensive dinner or even a pricey Caribbean vacation is followed by an explanation like &quot;I've worked hard this year,&quot; or &quot;I need a treat.&quot; This is not to say that you should never splurge or celebrate, but when this type of spending becomes routine, it can really put a dent in your savings. If you change your thinking and instead give yourself a pat on the back for avoiding an impulse purchase, you'll be better off financially.</p> <h2>7. &quot;I Saved Money on This Purchase&quot;</h2> <p>It's impossible to save money if you are spending it. If you rationalize a purchase by pointing out that it was on sale, or that you used a coupon, you are ignoring the fact that money still exited your wallet. Remember that retailers roll out coupons and sales to encourage people to spend money. The only way to determine if you truly &quot;saved&quot; money on an item is if it was something you were planning to purchase anyway.</p> <h2>8. &quot;I Got Approved for This Credit Card, So My Debt Can't Be Too Bad&quot;</h2> <p>If a credit card company is sending you an application for a new card, they must think you're financially responsible, right? Wrong. Even people with horrendous credit can get approved for cards. And if you already have credit card debt, the last thing you want to do is open a new card that will allow you to rack up even more. While it's true that credit card companies would prefer that you not go bankrupt, they're more than happy to keep accepting your payments with high interest rates.</p> <h2>9. &quot;I'm Young, I Don't Need Health Insurance&quot;</h2> <p>If you're in your 20s and rarely get sick, it may seem like health insurance is an expense you don't need to bother with. But tell that to the guy who got into a car accident or who tore his ACL in the pickup soccer game. Without health insurance, you're exposing yourself to potentially catastrophic medical expenses if something bad occurs. Make sure to sign up for insurance through your employer or search for low-cost plans on HealthCare.gov.</p> <h2>10. &quot;I Get Paid Well, So This Crappy Job Is Worth It&quot;</h2> <p>Stories abound of people who stayed in jobs they hated, simply because it offered financial security. Don't get us wrong &mdash; financial security is huge , and it's not necessarily smarter to take a job you love if you can't pay your bills. But if you live sensibly and spend wisely, you may be able to find a middle ground where bills get paid and you're also happy in your work. Remember, too, that well-paying jobs can sometimes lead to lifestyle inflation, where you buy larger and more expensive things just because you can.</p> <p><em>How many of these lies have you told yourself? How many others we haven't included?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tim-lemke">Tim Lemke</a> of <a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-personal-finance-letter-id-write-to-my-younger-self">The Personal Finance Letter I&#039;d Write to My Younger Self</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-ways-siri-can-be-your-personal-finance-assistant">9 Ways Siri Can Be Your Personal Finance Assistant</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-wake-up-calls-and-how-to-deal-with-them">8 Financial Wake Up Calls — And How to Deal With Them</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-money-moves-to-make-the-moment-you-get-a-promotion">8 Money Moves to Make the Moment You Get a Promotion</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-you-disrespect-your-money">10 Ways You Disrespect Your Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt investing lies we tell ourselves myths overspending saving Splurging Tue, 15 Mar 2016 11:30:05 +0000 Tim Lemke 1670512 at http://www.wisebread.com Save More and Spend Less by Increasing Your "Mental Transaction Costs" http://www.wisebread.com/save-more-and-spend-less-by-increasing-your-mental-transaction-costs <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/save-more-and-spend-less-by-increasing-your-mental-transaction-costs" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_thinking_money_000059288966.jpg" alt="Man saving more by increasing mental transaction costs" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You like to start each morning with a fresh latte from your local coffee shop. It's your daily indulgence, and you're more than happy to spend $4 a day for this little ritual.</p> <p>But then each autumn, everyone and her Aunt Marge suddenly goes crazy for that seasonal Gourd Spice Latte. Instead of zooming in and out with your morning cuppa like you do the rest of the year, you are stuck waiting in a long line of GSL enthusiasts. So, every fall when GSL fever takes over your neighborhood, you skip your morning latte and make do with the stale coffee in the breakroom at work.</p> <p>Your annual avoidance of your favorite coffee shop is the effect of mental transaction costs on consumer behavior.</p> <h2>What Are &quot;Transaction Costs?&quot;</h2> <p>According to economic theory, <em>transaction costs</em> are the various costs associated with making a purchase. We tend to only think of cost in terms of money, like the $4 you shell out for that latte each morning. But there are additional mental transaction costs that we often forget to account for, such as:</p> <ul> <li>Time Costs: The coffee lover who is unwilling to stand and wait in a long line.<br /> &nbsp;</li> <li>Search and Information Costs: The work you do shopping around for the best price, or determining the best product to suit your needs.<br /> &nbsp;</li> <li>Bargaining Costs: The effort to come to an agreement, as home and car buyers often have to do.<br /> &nbsp;</li> <li>Policing and Enforcement Costs: Making certain the other party adheres to the terms of your contract. (Anyone who has ever bought a lemon has experienced these costs.)</li> </ul> <p>Retailers and marketers are well aware of these mental transaction costs and they work hard to remove them from your shopping experience. Within the industry, removing these inconveniences is referred to as &quot;reducing friction.&quot;</p> <p>However, mental transaction costs are a good thing for frugal consumers. The more friction you experience, the less likely you are to buy. Since retailers are always looking for new and inventive ways of reducing friction, it is up to you to increase mental transaction costs for yourself so that you do not find yourself making impulse purchases. Here's how.</p> <h2>1. Carry Cash</h2> <p>There is an excellent reason why so many personal finance experts (including yours truly) <a href="http://www.wisebread.com/why-we-spend-more-when-we-pay-with-credit-cards">recommend that you carry cash</a> rather than rely on plastic for purchases. Credit card purchases have very little &quot;friction,&quot; since you do not have to feel the pain of actual money leaving your wallet. Even the act of having to double-check that you have enough cash on hand to pay can be a sufficient transaction cost. It's a bit of a hassle to count out the bills and empty your pockets for change. It can seem easier to just go without whatever you were thinking of buying. (See also: <a href="http://www.wisebread.com/12-habits-of-highly-responsible-credit-card-users?ref=seealso">12 Habits of Highly Responsible Credit Card Users</a>)</p> <h2>2. Make It a Pain to Get Out Your Credit Card</h2> <p>You have probably heard the old-fashioned advice to freeze your credit card in a block of ice in order to make it impossible to make an impulse purchase. This is actually an astute (if extreme) method of increasing your transaction costs. If you realize you have get out a hair dryer to access your credit card, you will probably decide to forgo the purchase.</p> <p>A less radical way of achieving the same results would be to keep your cards in your wallet, but use a rubber band to wrap a folded piece of paper around them on which you write the following questions:</p> <ul> <li>Do I need to buy this?</li> <li>Do I need to buy it now?</li> <li>Will purchasing this item help me reach my goals?</li> <li>What else could I do with the money I spend?</li> </ul> <p>Not only will these questions help you think through each purchase, but the simple transaction cost of unfolding the paper from around your cards can be enough of a pain in the neck to keep your buying in check.</p> <h2>3. Turn Off One-Click Purchasing</h2> <p>One of the biggest recent innovations in reducing friction was the creation of &quot;one-click&quot; purchasing. You are bound to overspend when you can go from coveting an item to purchasing it with a single click. Having to get up to get your wallet and enter in your credit card information can provide you with enough of a mental transaction cost to keep you on the straight and narrow.</p> <p>Additionally, you might consider deleting your account information on any shopping sites. Typing in your mailing address every single time you are on your favorite Internet retail site sounds like <em>no fun</em> (for good reason) &mdash; but shouldn't spending money you can't afford be something less than fun?</p> <h2>4. Say No to e-Tailer Memberships</h2> <p>Retailers know that the word &quot;free&quot; breaks our brains. That's because we tend to ignore all other transaction costs when something costs us nothing. This explains the free shipping trap, which causes normally rational human beings to spend more on items they don't want in order to avoid paying for a shipping fee on the only items they do want.</p> <p>The &quot;easy&quot; way to avoid that trap is to upgrade your membership (for a fee), and avoid all shipping costs. Except that spending $99 per year for Amazon Prime (for instance) means the retailer not only gets your membership fee (which costs them nothing to receive, since there is no merchandise or shipping involved), but you also lose the shipping deterrent that often keeps you from making unnecessary purchases. You also lose the motivation to comparison shop, since you have already sunk money into the Amazon membership.</p> <p>It's a better idea to skip memberships altogether to increase your mental transaction costs. That will force you to consider each purchase on its own merits. And considering the fact that Amazon has just raised its <a href="http://techcrunch.com/2016/02/22/amazon-raises-its-free-shipping-minimum-to-49-for-non-prime-members/">free shipping minimum purchase to $49</a> for non-Prime members, it's that much more likely that you will either plan purchases more carefully, or skip things that are non-essential.</p> <h2>5. Enlist an Accountability Buddy</h2> <p>Another classic piece of personal finance advice is to discuss any purchase over a certain dollar amount with your spouse. This allows for both transparency and compromise in a marriage &mdash; but it also seriously increases mental transaction costs.</p> <p>For instance, when the Girl Scouts come knocking and I am the only one home, I would be sorely tempted to hand over $100 in exchange for <em>all</em> the Samoas and Thin Mints. But if my husband and I had previously agreed to discuss all purchases ahead of time, then I would be facing mental transaction costs &mdash; either call him at work, which he would probably not appreciate, or own up to the illicit purchase after the fact, which he would also probably not appreciate. That would put a serious damper on my cookie enthusiasm.</p> <p>Making an agreement with your spouse or a friend that you will each discuss purchases ahead of time will provide you with a layer of hassle that will make impulse purchases seem much less alluring.</p> <p><em>Do you use any of these or other mental transaction costs to help you live frugally?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/save-more-and-spend-less-by-increasing-your-mental-transaction-costs">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-to-avoid-buyers-remorse">6 Ways to Avoid Buyer&#039;s Remorse</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-5-common-holiday-budget-pitfalls">Avoid These 5 Common Holiday Budget Pitfalls</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-brands-with-the-best-warranties">6 Brands With the Best Warranties</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-simple-ways-to-stop-impulse-buying">9 Simple Ways to Stop Impulse Buying</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/debit-or-credit-which-one-should-you-choose-at-the-checkout">Debit Or Credit? Which One Should You Choose At The Checkout?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Shopping buying power impulse buys mental hacks overspending retailers transaction costs Tue, 15 Mar 2016 10:00:25 +0000 Emily Guy Birken 1668456 at http://www.wisebread.com