cash http://www.wisebread.com/taxonomy/term/3963/all en-US How to Budget When You Rely on Cash Tips http://www.wisebread.com/how-to-budget-when-you-rely-on-cash-tips <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-budget-when-you-rely-on-cash-tips" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/waitress_preparing_bill_at_cash_register_in_restaurant.jpg" alt="Waitress Preparing Bill At Cash Register In Restaurant" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you work in the service industry, the majority of your income likely comes from tips &mdash; and that can present difficulty when trying to budget your money responsibly. But just because it's not easy doesn't mean it's impossible. You can keep your cash flow in check if you have the right tools and systems in place.</p> <h2>Track every dollar you make</h2> <p>The first step to getting on track financially &mdash; even when your tips fluctuate from shift to shift &mdash; is to account for all of the cash you make over a period of time. You won't get a good idea of what to expect from month to month from just a couple weeks' worth of income, so it's best to monitor your tips over an extended period, ideally two to three months. This sampling should provide a decent basis on what you can expect to average throughout the year given that your place of employment is relatively consistent in terms of traffic. It may be a better idea to sample a slow period so you have a real bottom line as opposed to an inflated sense of income during a rush like the holidays.</p> <p>Natasha Rachel Smith, personal finance expert at TopCashBack.com, offers a suggestion to put this plan in place.</p> <p>&quot;Write down how much you make in a journal or spreadsheet after every shift for 10 weeks to get an idea of your average weekly income,&quot; she says. &quot;Although that amount will fluctuate depending on the economy, low or high seasons, and service quality, by averaging 10 weeks' worth of pay you can get a fairly reasonable and realistic idea of your typical earnings.&quot;</p> <h2>Create (and stick to) a budget based on goals</h2> <p>Once you have an idea of how much you can expect to bring home on average per month, it's time to budget your income so all your bills are paid on time &mdash; and so you're not stressed out and trying to scrounge up cash for a car payment at the last minute. To do this effectively, says finance expert Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network, create a budget based on goals.</p> <p>&quot;Whether your goal is to save on weekly grocery bills, have time to train for a marathon, save for retirement, or take a vacation to China, write down the goals and build your budget with the goals in mind.&quot;</p> <p>In the budget, be sure to include a line item for savings in the &quot;expenses&quot; area, and treat it as a mandatory item to be paid. But, it can also be a variable expense &mdash; establish a percentage of your take-home pay that you'd like to put toward your goal after every shift.</p> <p>&quot;Ten percent or more is ideal,&quot; Gallegos says, &quot;but if it's less than that, choose the number and stick to it.&quot;</p> <h2>Start a system for envelope budgeting</h2> <p>An easy way to delegate your funds to the bills you need to pay &mdash; especially if you don't want to make daily deposits to your checking account (which I don't recommend anyway because the only agency who will benefit from that paper trail is the IRS) &mdash; is to start a <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-envelope-system?ref=internal" target="_blank">system of envelope budgeting</a>. With this system, you add the regular cash you earn to envelopes designated for specific expenses, like rent, groceries, and student loans. By divvying up your cash after each shift, you can see in real-time how much you've saved and how much you still need to contribute to cover your general life expenses. This is also a good way to cut back on your &quot;extra&quot; expenses because live tracking will keep you informed on whether you can spare the money or not.</p> <h2>Separate your singles if you can afford it</h2> <p>If you can afford it, and provided you aren't only paid in this denomination, tuck away all one-dollar bills into a jar or container instead of spending them.</p> <p>&quot;Dollar bills will accumulate faster than change and it will give you a jar-fund to use when low on money or for the small, fun things in life,&quot; Smith says.</p> <h2>Look for patterns to keep your finances balanced</h2> <p>After a while, you'll be able to observe patterns in your income &mdash; a slump during the winter months or an uptick around a holiday, for instance &mdash; as well as determine a typical monthly minimum income level. By minding these patterns and building your budget around them, your finances should stay fairly balanced throughout the year so you're not stuck in the lurch because you were naive to expectation.</p> <p>Gallegos suggests holding on to receipts and keeping a spending log.</p> <p>&quot;Many people find it eye-opening to see how much they spend each day,&quot; he says. &quot;It's very similar to writing down everything you eat when trying to lose weight. Review carefully on a weekly basis to spot areas where you can cut back, and to become more familiar with your spending patterns.&quot;</p> <h2>Establish a &quot;floating fund&quot;</h2> <p>Another idea of Gallegos' that you may not have heard is the &quot;floating fund,&quot; which establishes an absolute baseline of sufficient savings to cover expenses such as quarterly estimated self-employment taxes and an emergency fund.</p> <p>&quot;Common wisdom suggests keeping six to nine months' living expenses in an emergency fund at all times,&quot; he explains. &quot;This fund then can also serve as a 'floating' fund to pull from during leaner times, for replenishment as income increases. It's key to think of the funds in this way &mdash; not just to pull from, but to replenish.&quot;</p> <p>You will need to train yourself to pull from &mdash; and replenish (the hard part!) &mdash; these funds on a regular basis to make this work.</p> <h2>Send financial windfalls directly to savings</h2> <p>When you earn or receive extra money &mdash; from a large event you work, a gift, or even a yard sale that you host &mdash; get in the habit of saving rather than spending that extra money. If you make this standard protocol whenever you come into unexpected cash, your savings will increase quicker.</p> <h2>Don't make any major financial commitments</h2> <p>The last thing you want to do if your income fluctuates is overextend yourself unnecessarily. Business can decline unexpectedly or you could lose your job altogether. These unfortunate circumstances can put you in a precarious predicament financially &mdash; perhaps even driving you into a deep debt situation that could impair your life for many years into the future.</p> <p>&quot;Stay away from accruing debts or taking out loans if you're living on a tip-based income,&quot; Smith advises. &quot;This is because your earnings are unpredictable and you could find one bad week creates a financial avalanche, simply because you didn't make enough money to cover a car payment or a credit card's minimum repayment.&quot;</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-budget-when-you-rely-on-cash-tips&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%2520to%2520Budget%2520When%2520You%2520Rely%2520on%2520Cash%2520Tips.jpg&amp;description=How%20to%20Budget%20When%20You%20Rely%20on%20Cash%20Tips"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;">&nbsp;<img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/How%20to%20Budget%20When%20You%20Rely%20on%20Cash%20Tips.jpg" alt="How to Budget When You Rely on Cash Tips" width="250" height="374" /></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/how-to-budget-when-you-rely-on-cash-tips">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/managing-your-short-term-money">Managing Your Short-Term 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/everything-you-need-to-know-about-switching-to-the-cash-only-lifestyle">Everything You Need to Know About Switching to the Cash Only Lifestyle</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/this-simple-journal-may-be-the-fix-for-your-finances">This Simple Journal May be the Fix for Your Finances</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-things-every-frugal-person-should-have-in-their-wallet">The 7 Things Every Frugal Person Should Have In Their Wallet</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/is-an-all-cash-diet-right-for-you">Is an All-Cash Diet Right for You?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting cash emergency fund Envelope system expenses floating fund goals paying bills service industry tips windfalls Wed, 13 Sep 2017 08:30:11 +0000 Mikey Rox 2019306 at http://www.wisebread.com 5 Money Moves That Will Ruin Your Mortgage Application http://www.wisebread.com/5-money-moves-that-will-ruin-your-mortgage-application <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-money-moves-that-will-ruin-your-mortgage-application" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/housing_market_risk.jpg" alt="Housing market risk" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When applying for a mortgage, you shouldn't do anything that will cause a bank to question your ability to repay the loan. You don't need perfect finances to get a mortgage, but it's in your best interest to have a basic understanding of loan requirements. The more you know, the less likely you are to make mistakes that can ruin your application. (See also: <a href="http://www.wisebread.com/make-these-5-money-moves-before-applying-for-a-mortgage?ref=seealso" target="_blank">Make These 5 Money Moves Before Applying for a Mortgage</a>)</p> <p>Here are a few missteps to avoid if you're thinking about buying a house.</p> <h2>1. Paying for everything with cash</h2> <p>Using cash for everyday purchases is one way to avoid debt. But just because cash is king in your world doesn't mean you should cast off credit cards.</p> <p>Unless you're fortunate enough to pay cash for a house, you'll need to apply for financing, which requires a credit history. And the only way to build credit is to use credit. Without any type of credit profile, a mortgage underwriter can't assess whether you're capable of responsibly managing a home loan.</p> <p>In the lending world, no credit can be just as damaging as bad credit. So before applying for a home loan, establish credit by getting a credit card or another type of loan. You don't have to drive yourself into debt with it, but you should demonstrate a pattern of timely payments and responsible borrowing. (See also: <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score?ref=seealso" target="_blank">How to Use Credit Cards to Improve Your Credit Score</a>)</p> <h2>2. Carrying too much debt</h2> <p>While it's in your best interest to have a responsible credit profile, if you start spending money on stuff you don't need and get in over your head, you could hurt your chances of a mortgage approval. Maxing out credit cards can raise your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score" target="_blank">credit utilization ratio</a> and lower your credit score. Credit utilization is the percentage of your credit card debt compared to your credit limit.</p> <p>If you go overboard and accumulate too much debt, there's also the risk of falling behind on payments. Late payments are another credit score killer that can destroy any chance of qualifying for a mortgage.</p> <p>To avoid problems with a mortgage approval, get into a habit of paying off credit card balances in full every month. If you carry a balance, keep it small &mdash; ideally below 30 percent of your credit line.</p> <p>If you've already been approved for a mortgage, don't make any major purchases before closing on the home purchase. This includes buying furniture or financing a new car. New debt increases your debt-to-income ratio, which can affect your approval.</p> <p>Since you won't know your actual mortgage costs until a few days before closing, hold off spending money on new furniture or appliances to ensure you have enough cash on hand.</p> <h2>3. Co-signing for someone else</h2> <p>Co-signing a loan for a friend or relative is a noble deed (one that I do not personally recommend), but it's imperative that you're fully aware of the consequences of this decision. Co-signers are not silent partners on loan documents. By signing your name, you become a joint debt holder; as such, a co-signed debt appears on your credit report and counts toward your debt-to-income ratio. This is because you're responsible for the loan if the primary signer stops paying. (And if this happens, you could be in big trouble financially!)</p> <p>Once you are ready to apply for a mortgage, your lender takes a co-signed debt into consideration when calculating your debt-to-income ratio. Unfortunately, with a co-signed debt on your credit file, a lender might say you owe too much to take on additional debt and deny your mortgage application.</p> <h2>4. Not saving enough cash</h2> <p>You need cash for a home purchase &mdash; a <em>lot </em>of cash. Nowadays, many mortgage programs require borrowers to bring cash to the table. This includes a down payment between 3.5 percent to 5 percent or higher, as well as funds for closing (between 2 percent and 5 percent of the sale price). It doesn't matter how much you earn: If you can't show enough assets, you can't get a mortgage. Build up this cushion first before diving into the homebuying process. (See also: <a href="http://www.wisebread.com/4-easy-ways-to-start-saving-for-a-down-payment-on-a-home?ref=seealso" target="_blank">4 Easy Ways to Start Saving for a Down Payment on a Home</a>)</p> <h2>5. Quitting your day job</h2> <p>Don't quit your day job if you're planning to buy in the near future &mdash; at least, not yet.</p> <p>Qualifying for a mortgage involves demonstrating long-term financial stability. This is why lenders require a borrower's most recent paycheck stubs and the previous year's tax returns. Self-employed people can purchase a home like anyone else, but they have to provide one to two years of profitable business tax returns, where their income either increases from year to year or remains roughly the same.</p> <p>It doesn't matter how much you're making today as a self-employed borrower. If a lender has reason to believe that your income isn't consistent or stable, you might not get a loan. So if you're thinking about buying, stick with your job until closing, and then become your own boss. (See also: <a href="http://www.wisebread.com/denied-a-mortgage-heres-how-to-fix-it-fast?ref=seeaslo" target="_blank">Denied a Mortgage? Here's How to Fix It Fast</a>)</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fthe-5-best-travel-adapters&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2F5%2520Money%2520Moves%2520That%2520Will%2520Ruin%2520Your%2520Mortgage%2520Application.jpg&amp;description=5%20Money%20Moves%20That%20Will%20Ruin%20Your%20Mortgage%20Application"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/5%20Money%20Moves%20That%20Will%20Ruin%20Your%20Mortgage%20Application.jpg" alt="5 Money Moves That Will Ruin Your Mortgage Application" width="250" height="374" /></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/5-money-moves-that-will-ruin-your-mortgage-application">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/should-you-pay-your-mortgage-off-early">Should You Pay Your Mortgage Off Early?</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/4-surprising-things-lenders-check-besides-your-credit-score">4 Surprising Things Lenders Check Besides Your Credit Score</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-mortgage-details-you-should-know-before-you-sign">5 Mortgage Details You Should Know Before You Sign</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/4-home-buying-habits-we-can-learn-from-millennials">4 Home-Buying Habits We Can Learn From Millennials</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/5-times-buying-a-home-with-cash-is-bad-for-your-budget">5 Times Buying a Home With Cash Is Bad for Your Budget</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing cash co-signing credit history credit utilization debt debt to income ratio home buying homeownership money mistakes mortgages quitting Wed, 16 Aug 2017 08:30:07 +0000 Mikey Rox 2003615 at http://www.wisebread.com Think Like a Startup to Boost Your Finances http://www.wisebread.com/think-like-a-startup-to-boost-your-finances <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/think-like-a-startup-to-boost-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/confident_in_her_business.jpg" alt="Confident in her business" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>From tech giants like Facebook, Dropbox, and Instagram, to retailers like Harry's, Warby Parker, and CartFresh, companies who found success as startups seem to be all the rage in business news. But don't take startups as a business fad &mdash; there are plenty of personal finances lessons that the average Jane and Joe can learn from them.</p> <h2>1. Focusing on too many things can kill your finances</h2> <p>Spreading your financial goals too thin can often do more harm than good. Successful startup founders often find that a service that does one thing really well works better than a service that tries to do many things.</p> <p>Venture capitalist and PayPal co-founder Peter Thiel advises all budding entrepreneurs to think hard and pursue a single idea that nobody else is doing. In an article for The Wall Street Journal, Thiel asked entrepreneurs, &quot;What valuable company is nobody building?&quot; The answer to this question is harder than it looks.</p> <h3>Personal finance lesson</h3> <p>Keep things simple. Focus on the biggest issue affecting your finances. For example, hone in on paying back a 401(k) loan or eliminating high-interest credit card debt.</p> <h2>2. Forgetting that cash is still king</h2> <p>Startups famously burn through cash for &quot;growth,&quot; believing they will land yet another round of capital the next time around. That plan cannot only backfire, but become the death sentence of some startups. An example of this is server chip designer Calxeda. Despite raising $131 million in four rounds of financing, executives had to shut down operations in 2013 and declared, &quot;We simply ran out of money.&quot;</p> <h3>Personal finance lesson</h3> <p>Plan ahead and be ready for periods in which you won't get a constant paycheck. Even when receiving payment from your employer, sometimes <a href="http://www.wisebread.com/what-to-do-if-your-paycheck-bounces?ref=internal" target="_blank">paychecks can bounce</a>! Pay yourself first out of every paycheck and build an emergency fund to cover your basic expenses for three to six months.</p> <h2>3. Preparing to be wrong</h2> <p>&quot;Pivot&quot; is among the top three terms most used by startup founders. And for good reason: There are countless stories of million-dollar ideas that flopped but were able to turn into much more profitable ones after a well-timed adjustment.</p> <p>Take Payal Kadakia, for example, who first founded Classtivity (a self-described &quot;OpenTable for fitness classes&quot;) with a pay-per-class model. About two years into operations, Kadakia's service wasn't seeing the user traction that she was seeking. So, she pivoted Classtivity into ClassPass, a monthly $99 subscription that lets users go to any class at any participating gym. Once a struggling startup, ClassPass is now a $470 million business.</p> <h3>Personal finance lesson</h3> <p>If the plan isn't working at all, it's time to change the plan. Consider these facts:</p> <ul> <li> <p>50 percent to 70 percent of college students change their majors at least once and most <a href="https://sites.laverne.edu/careers/what-can-i-do-with-my-major/" target="_blank">will change majors</a> at least three times before graduation.</p> </li> <li> <p>American workers stay on the same job for a median of 4.2 years, according to MarketWatch.</p> </li> <li> <p>The average person changes jobs 10 to 15 times (with an average 12 job changes), according to data from the U.S. Bureau of Labor Statistics.</p> </li> </ul> <p>Change is inevitable, so welcome it and make the most out of it. It may very well improve your financial situation.</p> <h2>4. Outsourcing nonessential activities</h2> <p>&quot;Spend your calories on things you do well and the things that make you and your business valuable &mdash; and outsource things that aren't core to that mission,&quot; Jeff Haynie, co-founder and CEO of Appcelerator, wrote for Recode. From accounting to employee meal planning, startups are well known for outsourcing as much as possible to keep overhead costs down.</p> <p>To improve your overall productivity, Matt DeCelles, co-founder of sunglass retailer William Painter, recommends mapping out all tasks and determining which ones may be better completed by another person. By focusing on core operational activities, DeCelles is able to make the most out of his day. (See also: <a href="http://www.wisebread.com/11-time-saving-hacks-from-the-worlds-busiest-people" target="_blank">11 Time Saving Hacks From the World's Busiest People</a>)</p> <h3>Personal finance lesson</h3> <p>Remember complaining about how you never seem to have time to balance your checkbook, organize your tax deductions, or get an additional quote for a home or car loan? Spending money on &quot;help&quot; to complete these tasks can save you a couple hundred dollars in the long run.</p> <p>If you think that you need to be a high roller to hire somebody, think again. Leverage gig economy sites such as Fiverr, Elance, ODesk, Fancy Hands, or Zirtual to post your tasks, find talented freelancers, or hire a virtual assistant for as little as $5 to $10 per hour, depending on the type of task.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fthink-like-a-startup-to-boost-your-finances&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FThink%2520Like%2520a%2520Startup%2520to%2520Boost%2520Your%2520Finances.jpg&amp;description=Think%20Like%20a%20Startup%20to%20Boost%20Your%20Finances"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Think%20Like%20a%20Startup%20to%20Boost%20Your%20Finances.jpg" alt="Think Like a Startup to Boost Your Finances" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/damian-davila">Damian Davila</a> of <a href="http://www.wisebread.com/think-like-a-startup-to-boost-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/9-things-football-teaches-us-about-money">9 Things Football Teaches Us 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/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</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-new-podcasts-thatll-improve-your-money-mindset">10 New Podcasts That&#039;ll Improve Your Money Mindset</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/11-freelance-jobs-that-pay-surprisingly-well">11 Freelance Jobs That Pay Surprisingly Well</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-smart-things-to-do-with-your-settlement-money">8 Smart Things to Do With Your Settlement Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Entrepreneurship advice cash financial lessons gig economy outsourcing planning startups strategies Fri, 28 Jul 2017 09:00:05 +0000 Damian Davila 1989544 at http://www.wisebread.com Cash Might Make You Happier, But Investments Will Make You Richer http://www.wisebread.com/cash-might-make-you-happier-but-investments-will-make-you-richer <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/cash-might-make-you-happier-but-investments-will-make-you-richer" 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_piggybank_125143864.jpg" alt="Woman getting richer with investments" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Having a stash of cash feels great. Liquid wealth makes you feel more secure, because you can predict how you will handle whatever life throws your way. The feeling of satisfaction is real, but ultimately, the rewards of keeping your wealth in your checking or savings account are much less satisfying. If it's long-term wealth you're after, you need to start investing.</p> <h2>You're losing money</h2> <p>In the battle between interest and inflation, inflation wins when you keep your cash in a typical savings or checking account. You'll get very little in interest from a bank account intended for day-to-day use: typically, 0.01 percent to 0.03 percent for a checking account, and up to 1 percent for a savings account. Meanwhile, the average annual inflation rate is 3 percent. So your stash is losing value every year, as inflation climbs faster than interest grows your money.</p> <p>The numbers work out pretty grimly in that scenario. Imagine you put $100,000 in a savings account with a 1 percent interest rate, and add $500 every month. Every year, you'll gain that 1 percent interest but lose 3 percent of the value, due to inflation &mdash; meaning you come out 2 percent <em>behind </em>annually. In 10 years, you'll have $173,522 but it will only be worth $129,117.17.</p> <p>On the other hand, the return on stock and real estate investments is staying stable at 7 percent. That's the real rate of return, meaning it's adjusted for inflation. After 10 years, your $100,000 investment, with the monthly $500 addition, will have an actual value of $267,357.54.</p> <p>Why wouldn't you immediately put your money into a higher-yield investment? For most people, the hesitation comes from fear of taking a big risk with money.</p> <h2>What's the big risk?</h2> <p>Humans tend to be risk averse. This risk aversion has done a lot for us, in an evolutionary sense.</p> <p>Risk aversion is also helpful in finances in many instances. When it comes to getting high-interest return on your savings, however, risk aversion can hinder you. To maximize your savings, you need a high return that will outrun inflation and exponentially add financial value to your nest egg.</p> <p>High-return investments, unfortunately, are also higher risk investments. If you're unfamiliar with the stock market, investment portfolios, and the like, these types of high-return investments can feel terrifying. But you can overcome that fear.</p> <p>First, start a relationship with a financial investment professional. Ask for recommendations from people you know and trust, who are not struggling financially. Second, don't invest all your money in one high-yield investment. Diversify; if one investment doesn't grow as predicted, it won't topple your entire savings plan. Third, you don't have to invest all your money in what feels riskiest. You can <a href="http://www.wisebread.com/the-basics-of-cd-laddering" target="_blank">set up a CD</a>, <a href="http://www.wisebread.com/stabilize-your-portfolio-with-these-5-bond-funds" target="_blank">invest in bonds</a>, or <a href="http://www.wisebread.com/the-only-5-rules-you-need-to-know-about-investing-in-real-estate" target="_blank">invest in real estate</a>. All require some investigation to understand the risk and potential return.</p> <p>Get professional insight on the options that appeal to you and make a well-informed decision. It's never about eliminating risk; that's not quite possible. It is about minimizing risk and maximizing return. You do both by investigating, seeking <a href="http://www.wisebread.com/who-to-hire-a-financial-planner-or-a-financial-adviser" target="_blank">expert insight</a>, and diversifying the way you save your money.</p> <h2>Save yourself from hasty decisions</h2> <p>Keeping your wealth in a less-liquid state helps you financially by delaying your financial decisions. If your main funds are tied up, for example, you can't immediately invest in Cousin Jimmy's startup. Even if you really, really want to.</p> <p>Maybe Cousin Jimmy is a genius, and you do want to invest; still, it's good to have to think and compare numbers. Can an investment in a family business give the same high-interest return on investment? What's the risk, compared with the risk you're already taking? How long before you'll see a return?</p> <p>Having time to think will help you avoid hasty decisions you might regret. Whether it's investing in a family member's venture or purchasing that dilapidated house in an up-and-coming area, time is on your side.</p> <h2>But I still want to feel happy</h2> <p>A recent National Center for Biotechnology Information study shows that higher levels of happiness are linked to <a href="https://www.ncbi.nlm.nih.gov/pubmed/27064287" target="_blank">keeping cash on hand</a>. Happiness is great! We all want more of it. But you can get the happiness that cash brings while also setting yourself up for long-term financial rewards.</p> <p>Having money at the ready contributes to feeling secure. You can get that financial security by <a href="http://www.wisebread.com/6-secrets-to-mastering-the-debt-snowball" target="_blank">reducing high-interest debt</a>&nbsp;and&nbsp;setting up <a href="http://www.wisebread.com/7-easy-ways-to-automate-your-savings" target="_blank">automated savings </a>so that you can&nbsp;keep a reasonable amount of cash at the ready. Experts recommend having three to six months' worth of living expenses; but you can be smart about how you save that cash reserve, as well, by keeping it in an interest-bearing savings account or a short-term CD. When your reserve grows over your emergency-fund amount, invest it rather than hoard it.</p> <p>Remember, you'll want to feel financially secure later in life, too. Smart financial moves now contribute to your happiness in the present and the future.</p> <h2 style="text-align: center;">Like this article? Pin it!</h2> <div align="center"><a data-pin-do="buttonPin" data-pin-count="above" data-pin-tall="true" data-pin-save="true" href="https://www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fcash-might-make-you-happier-but-investments-will-make-you-richer&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FCash%2520Might%2520Make%2520You%2520Happier%252C%2520But%2520Investments%2520Will%2520Make%2520You%2520Richer.jpg&amp;description=Cash%20Might%20Make%20You%20Happier%2C%20But%20Investments%20Will%20Make%20You%20Richer"></a></p> <script async defer src="//assets.pinterest.com/js/pinit.js"></script></div> <p style="text-align: center;"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/u5180/Cash%20Might%20Make%20You%20Happier%2C%20But%20Investments%20Will%20Make%20You%20Richer.jpg" alt="Cash Might Make You Happier, But Investments Will Make You Richer" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/annie-mueller">Annie Mueller</a> of <a href="http://www.wisebread.com/cash-might-make-you-happier-but-investments-will-make-you-richer">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/8-investments-that-may-soar-during-trumps-term">8 Investments That May Soar During Trump&#039;s Term</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/7-reasons-millennials-should-stop-being-afraid-of-the-stock-market">7 Reasons Millennials Should Stop Being Afraid of the Stock Market</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/4-foolproof-ways-to-protect-your-money-from-inflation">4 Foolproof Ways to Protect Your Money From Inflation</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/while-waiting-for-rates-i-bonds">While Waiting for Rates: I-Bonds</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-cool-things-bonds-tell-you-about-the-economy">7 Cool Things Bonds Tell You About the Economy</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment cash inflation interest rates liquid savings money goals returns rich risk aversion wealth building Tue, 18 Jul 2017 08:30:17 +0000 Annie Mueller 1986108 at http://www.wisebread.com Boost Your Savings by Making Your Money Harder to Spend http://www.wisebread.com/boost-your-savings-by-making-your-money-harder-to-spend <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/boost-your-savings-by-making-your-money-harder-to-spend" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/protect_your_saving.jpg" alt="Protect your saving" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When I left for my freshman year of college, I brought the graduation gift money I'd received with me. It was about $1,000, and I was carrying it in cash, intending to open a checking account. The cash never made it to the bank, however.</p> <p>It wasn't stolen, nor did I lose it. In fact, I tucked the envelope of twenties away in a secure location in my dorm room &mdash; but I neglected to protect the money from myself.</p> <p>From trips to the coffee shop to late night pizza delivery, I let that money flow through my fingers without paying any attention to where it was going or how quickly I was spending it. By the time I finally decided to open an account, there was less than $100 left.</p> <p>My experience is hardly unique. Most people have a similar story of squandering money because it was too easy to access the cash.</p> <p>The trick to being more careful with money is finding ways to make it harder to spend. If I had placed that cash in a checking account as soon as I got to campus, I would have had to walk to the ATM to make my unnecessary purchases &mdash; which would have been more than enough to prevent most of my spending.</p> <p>These days, simply depositing cash in the bank is not enough to make money harder to spend. The availability of mobile banking, debit and credit cards, and one-click online shopping makes money even easier to spend than it was when I was a first-year college student. That's why it is so important to productively reduce access to your money. Here are five ways you can protect your money from your own worst spending impulses. (See also: <a href="http://www.wisebread.com/7-bizarre-ways-to-stay-on-budget-that-actually-work?ref=seealso" target="_blank">7 Bizarre Ways to Stay on Budget (That Actually Work)</a>)</p> <h2>1. Stop carrying credit or debit cards</h2> <p>Going out sans credit or debit card can feel weirder than going about your day naked, but it can be a very effective way to curb your spending. On most days, you probably don't actually need to have a card with you &mdash; it's just there in case you need it. Unfortunately, we then often &quot;need&quot; to stop for lunch, or in a favorite store, or meet everyone after work for happy hour rather than save the card for a legitimate need.</p> <p>To make sure you are covered in case you need to fill up your tank on the way to work, or you encounter another true spending need, get in the habit of carrying $20 or so while leaving your plastic at home. This helps limit your ability to buy things while still giving you access to a little money in case you need it.</p> <h2>2. Move your savings to another bank</h2> <p>Trying to build an emergency fund or reach another savings goal can be difficult if access to your money is too easy. Having a savings account linked to your checking account in the same bank can often be too much of a temptation. It's so easy to dip into that savings account whenever your checking account is running dry or there is an incredible sale.</p> <p>For many people, just making it <em>slightly </em>more difficult to access savings can be enough to stop this behavior. For instance, you can move your savings account to a different bank and establish a link between the two banks. While it's possible to move money between accounts in different banks, it generally takes two to three business days for the money to transfer, which can be inconvenient enough to foil your spending impulses.</p> <h2>3. Put your money in a restrictive savings vehicle</h2> <p>For some people, the inconvenience of separate banking institutions is not quite enough to stop them from accessing their savings when they shouldn't. Restrictive savings vehicles &mdash; accounts or assets that penalize you for early access &mdash; can be a great way to protect your money from yourself in that case.</p> <p>Depending on your time frame, there are a couple of different types of savings vehicles you might choose.</p> <h3>Certificate of deposit (CD)</h3> <p>This is a savings vehicle that requires you to commit to keeping your money in the account for a set period of time. If you withdraw the funds earlier, then you will be penalized. You can generally expect to pay three-to-six months' worth of accrued interest if you access the money early, although some CDs also take a percentage of the principal.</p> <h3>Traditional individual retirement accounts (IRAs)</h3> <p>Traditional IRAs offer tax advantages, which means there are penalties for dipping into them before you reach age 59 &frac12;. Specifically, you will have to pay taxes on both the distribution, as well as 10 percent of the amount of the distribution, to Uncle Sam.</p> <h2>4. Enlist an accountability partner</h2> <p>While it's pretty easy to break a promise to yourself, it's harder to break one you have made to another person. One method of making your money harder to spend is to enlist a friend or loved one as your accountability partner, to whom you will set up a credit card or bank statement alert. Many banks offer automated alert systems that will email or text you when your available credit dips below a certain amount or when a large transaction clears.</p> <p>This information is useful to the cardholder, but it can be a great way to keep you from spending money if you send that information to your accountability partner. Knowing that your partner will immediately know that you have broken your promise can be enough to keep you from whipping out your wallet.</p> <h2>5. Remove your payment information from online retailers</h2> <p>It is far too easy to buy something without really thinking about it when online retailers &quot;helpfully&quot; store our credit card or bank information for us. The minor inconvenience of having to get up and find your wallet is generally enough time for you to reconsider your purchase.</p> <p>When you can go from not knowing an item exists, to coveting it, to buying it in under 30 seconds, having just a little bit of time for a gut check on whether or not you need this purchase is crucial. Because if you want to buy something, but getting up to find your wallet doesn't feel worth it, then it's probably not a great use of your money.</p> <h2>Save your money from yourself</h2> <p>You are not the same person at every hour of the day. You contain multitudes, and often your goals and your impulses cause you to contradict yourself. Making your money harder to spend will ensure that the high-roller part of yourself doesn't bankrupt the saver part of yourself. You'll thank yourself later. (See also: <a href="http://www.wisebread.com/9-simple-ways-to-stop-impulse-buying?ref=seealso" target="_blank">9 Simple Ways to Stop Impulse Buying</a>)</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/boost-your-savings-by-making-your-money-harder-to-spend">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/money-a-mess-try-this-personal-finance-starter-kit">Money a Mess? Try This Personal Finance Starter Kit</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/5-types-of-overspenders-which-one-are-you">5 Types of Overspenders — Which One Are You?</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/reach-your-money-goals-faster-with-a-simple-naming-trick">Reach Your Money Goals Faster With a Simple Naming Trick</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-golden-rules-of-personal-finance-everyone-should-know">10 Golden Rules of Personal Finance Everyone Should Know</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/forget-saving25-place-to-look-for-spare-change">Forget Saving...25 Places to Look for Spare Change</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance accountability banking cash impulse buys online shopping overspending protecting money saving money Mon, 19 Jun 2017 08:00:09 +0000 Emily Guy Birken 1965738 at http://www.wisebread.com Does Your Net Worth Even Matter? http://www.wisebread.com/does-your-net-worth-even-matter <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/does-your-net-worth-even-matter" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-672689634.jpg" alt="Woman wondering if her net worth even matters" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Do you know your net worth? That's how much is left after subtracting your liabilities from the total value of your cash and assets.</p> <p>At first glance, figuring out how much you're worth may seem pointless. You're probably not going to bump Warren Buffett or Bill Gates from their spots on any &quot;World's Wealthiest People&quot; list anytime soon. But no matter how much you earn, knowing your net worth is important.</p> <p>Here are three reasons why monitoring your net worth can help you manage money better. (See also: <a href="http://www.wisebread.com/10-ways-to-increase-your-net-worth-this-year?ref=seealso" target="_blank">10 Ways to Increase Your Net Worth This Year</a>)</p> <h2>1. Your net worth doesn't lie</h2> <p>In our culture, it's easy to convince ourselves that we're doing better with money than we actually are. We can finance nice cars, pay for the latest fashions with plastic, and even &quot;buy&quot; a more expensive home than we can realistically afford. But our net worth tells it like it is, and that can be a very helpful financial wake-up call.</p> <p>In the personal finance classic, <a href="http://amzn.to/2qjAM5i" target="_blank">The Millionaire Next Door</a>, authors Thomas Stanley and William Danko draw an important distinction between people who look wealthy but aren't (they call them &quot;Big Hat, No Cattle&quot;), and those who don't look wealthy but are (where the title of their book came from). If you're going to build wealth, it's far better to be in the latter group.</p> <p>The concept of being unassumingly wealthy is also known as &quot;<a href="http://www.wisebread.com/5-reasons-stealth-wealth-is-the-best-wealth" target="_blank">stealth wealth</a>,&quot; and it's a lifestyle worth striving for. People with &quot;stealth wealth&quot; maintain a high net worth by avoiding dumping their cash into shallow, depreciative purchases. Their modest approach to money management allows them to achieve such dreams as early retirement, entrepreneurship, traveling the world, and more.</p> <p>After calculating your net worth, ask yourself: Do I look wealthier than I am, or am I wealthier than I look?</p> <h2>2. Your net worth shows whether you're making progress</h2> <p>To be sure, there are other ways to define your life and determine whether you're moving forward or backward. Tallying your net worth each year, however, and monitoring the trend that develops can be very helpful. If you're going to build a nest egg large enough to support your family in your later years, you need that trend to be moving in an upward direction.</p> <p>Earning more each year and increasing your standard of living may make you feel like you're getting ahead, but an increase in your net worth will show if you actually are.</p> <p>Of course, there will be occasional down years. The recession of 2007 to 2009 erased a lot of wealth, but those who didn't panic eventually recovered &mdash; and then some.</p> <h2>3. Your net worth helps you pinpoint financial issues</h2> <p>Each time you calculate your net worth (a natural time to do so is at the end of each year), don't just retain the bottom line number. Keep the components.</p> <p>On the asset side, track the value of your home (Zillow will give you an estimate), your retirement savings, other savings, the value of your car(s), and other assets. Then look at changes within each asset.</p> <p>With our household's retirement accounts, I don't just record the balance. I also record how much we contributed each year and how much our investments earned. How much we contribute is much more under our control than the returns we earn. I want to at least make sure we're doing our part. The earnings side is important as well. If you see year after year of meager returns, it's probably time to re-evaluate your investing process.</p> <p>On the liabilities side, track how much you owe on your house and other debts, such as vehicle and student loans. This annual exercise will provide a helpful reminder to perhaps put more focus on getting out of debt or make sure you're on track to be mortgage-free at least by the time you retire.</p> <h2>The big picture</h2> <p>To a great degree, net worth is an &quot;internal&quot; metric. It's mostly about how you're doing now compared to how you were doing last year and the year before.</p> <p>If you'd like more context, <em>The Millionaire Next Door</em> has an interesting way of defining &quot;wealthy.&quot; Whereas many people think of someone who has a net worth of $1 million or more as wealthy, Stanley and Danko's definition created more of a level playing field for people across the spectra of age and income: multiply your age times your annual pretax household income, divide by 10, and then subtract any inherited wealth. That, they said, is what your net worth should be.</p> <p>If you have significantly more than that, you have a low-consumption, high-wealth-building lifestyle and you're considered wealthy for someone of your age and income. If your net worth is significantly less than that, you're probably consuming too much of your income and investing too little. (See also: <a href="http://www.wisebread.com/6-money-moves-to-make-if-your-net-worth-is-negative?ref=seealso" target="_blank">6 Money Moves to Make If Your Net Worth Is Negative</a>)</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/matt-bell">Matt Bell</a> of <a href="http://www.wisebread.com/does-your-net-worth-even-matter">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/are-your-assets-costing-you-too-much">Are Your Assets Costing You Too Much?</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/these-13-numbers-are-the-keys-to-understanding-your-finances">These 13 Numbers Are the Keys to Understanding Your Finances</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/how-high-is-your-score-on-the-most-important-measure-of-wealth">How High Is Your Score on the Most Important Measure of Wealth?</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-quiet-millionaire-parts-4-5-building-your-net-worth">The Quiet Millionaire: Parts 4 &amp; 5 - Building Your Net Worth</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-celebrities-with-shockingly-low-net-worths">6 Celebrities With Shockingly Low Net Worths</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance assets cash debts income investments liabilities metric net worth saving money wealth Wed, 17 May 2017 08:00:11 +0000 Matt Bell 1947498 at http://www.wisebread.com Do You Know How Dirty Your Money Is? http://www.wisebread.com/how-dirty-is-your-money-really <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-dirty-is-your-money-really" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-531714398.jpg" alt="Person learning how dirty their money really is" title="" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Cash. We need it to live. But have you ever stopped to think of what it is you're touching when you hold a $20 bill, or a handful of nickels and dimes? Unless they're crisp bills straight from the mint, or freshly unwrapped quarters, the chances are, they've changed hands many, many times. Let's break it down, and discover the filthy truth of what might be lurking on the money in your wallet.</p> <h2>The Lifespan of Bank Notes and Coins</h2> <p>Coins are built to last. Right now you can find coins for sale that date back to the age of Julius Caesar. The average <a href="https://coins.thefuntimesguide.com/coin-lifespan/" target="_blank">lifespan of a coin is around 30 years</a>, but some can still be in circulation after 50 years or more. They change hands thousands of times, and never get cleaned.</p> <p>Conversely, &quot;paper&quot; money is nowhere near as hardy, but as it's <a href="http://www.bep.gov/hmimpaperandink.html" target="_blank">made up of 25% linen and 75% cotton</a>, it's not really paper at all. It's cloth. This makes it resistant to folds (the average bill can be folded back and forth over 4,000 times before tearing), with a humble dollar bill lasting almost five years. However, because the material is also absorbent, it has the chance to pick up a multitude of germs and bacteria.</p> <h2>What's on Your Money?</h2> <p>The Dirty Money Project, in New York, has been studying our money for years. Their findings are not for the faint of heart. Each dollar bill carries roughly 3,000 types of bacteria on its surface. Common microbes found include the ones that cause acne and other skin problems. Anthrax was also detected, but fear not, it was not the weaponized variety.</p> <p>The Southern Medical Journal also did one of many studies conducted on the state of our one-dollar bills. A staggering <a href="https://www.highbeam.com/doc/1G1-98033286.html" target="_blank">94% of the bills they tested contained pathogenic</a>, or potentially pathogenic, organisms. In other words, almost every one-dollar bill you touch contains a bacterium, virus, or microorganism that causes disease. Now, what kind of disease you come into contact with is a matter of blind luck.</p> <p>Furthermore, the very dangerous bacteria MRSA (which can lead to the flesh-eating disease necrotizing fasciitis) was discovered on <a href="https://newsspc.wordpress.com/2012/09/24/cash-credit-cards-spreading-harmful-bacteria-spc-professors-work-shows/" target="_blank">80% of the dollar bills studied in a test</a> by St. Petersburg College professor Shannon McQuaig.</p> <h2>Specifically, What Germs Are on Bank Notes?</h2> <p>Of the many studies done, several of which have been cited in this article, the following dangerous microorganisms were found:</p> <h3>Streptococcus</h3> <p>This isn't too much of a concern. Should you contract this, you will most likely get a sore throat, although it can cause skin infections, urinary tract infections, and even pneumonia.</p> <h3>E. coli</h3> <p>You know this one well, especially after the spread of it last year at several Chipotle locations. Although many types of it are harmless, some can be deadly. E. coli has led to anemia and kidney failure, which can lead to death. Most people who get ill from it suffer stomach cramps, vomiting, and diarrhea.</p> <h3>Salmonella Enterica</h3> <p>A major cause of food poisoning, you will usually get this by eating contaminated food. However, anyone who handles raw food or fecal matter, and then handles money, can be responsible for spreading it.</p> <h3>Staphylococcus Aureus</h3> <p>This causes the staph infections you have probably heard about. Most commonly, this is a skin infection, but it can also lead to pneumonia, food poisoning, and blood poisoning.</p> <h3>MRSA</h3> <p>A type of staphylococcus aureus that is very dangerous, because it is resistant to antibiotics and other drugs in the methicillin class.</p> <h3>Proteus</h3> <p>This is a bacterium found in the intestines of animals, and in the soil. It will most likely cause a urinary tract infection, which is easily treatable.</p> <h2>Your Money Is Downright Disgusting</h2> <p>It's filthy. It's teaming with bacteria. It's infested with germs. And it really can make you sick. If you handle money on a regular basis, it's advisable to wash your hands regularly, and use hand sanitizers as often as you can. Don't lick your fingers to count money, as that can obviously have nasty results. You should also avoid touching money and then eating food with your hands, but as that is something that happens often (restaurants, bars, food carts, football games) you should carry a pocket hand sanitizer and apply that before you eat. Also, don't put money in your mouth, not even for a bet, and don't put your hands near your mouth after touching money.</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/how-dirty-is-your-money-really">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/what-booze-teaches-us-about-money">What Booze Teaches Us 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/when-greed-backfires-an-iphone-story-1">When greed backfires - an iPhone story.</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/germs-dirt-bacteria-infection-immune-system-antibiotics-disease">Are we too clean for our own good?</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/five-calls-you-can-make-now-to-save-hundreds-to-thousands-of-dollars">Five calls you can make now to save hundreds to thousands of dollars</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/in-times-like-these-separate-the-want-from-the-need">In times like these, separate the want from the need.</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living Consumer Affairs bacteria cash cleanliness dirty money germs money Spending Money Fri, 17 Feb 2017 11:00:13 +0000 Paul Michael 1893507 at http://www.wisebread.com How to Get Cash While Traveling Abroad http://www.wisebread.com/how-to-get-cash-while-traveling-abroad <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/how-to-get-cash-while-traveling-abroad" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-522548212.jpg" alt="take out cash while traveling abroad without getting hit with fees" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>When you're on the road, whether it's for a domestic or international trip, a <a href="http://www.wisebread.com/top-5-travel-reward-credit-cards?ref=internal" target="_blank">good travel credit card</a> can usually meet most of your payment needs. But inevitably, you will need cash at some point, too &mdash; for instance, when you want to tip skycaps, bellhops, and other service providers who don't take credit cards. In addition, many retailers in the developing world &mdash; and even advanced nations like Japan &mdash; still don't take credit cards. Finally, there are merchants at flea markets, farmer's markets, and traditional shopping areas where you can drive a harder bargain if you pay in cash.</p> <h2>Don't Use Your Credit Card at an ATM</h2> <p>Credit cards are the worst way to access cash at home or abroad. To do so, you have to take out a cash advance. Most credit cards charge an extremely high interest rate &mdash; often over 25% APR &mdash; for cash advances, even if they offer a competitive rate for purchases. Furthermore, cash advances don't come with a grace period, so those interest charges begin accruing as soon as you make your transaction. Most credit cards also impose a cash advance fee of 5% or $10, whichever is greater. On top of that, you may be charged a foreign transaction fee as well as an ATM fee.</p> <p>If you're thinking it still might be worth taking out a cash advance to earn rewards through your credit card, you should know that cash advances don't earn rewards. Even if they did, the fees would far outweigh the value of any rewards anyway.</p> <h2>Debit Cards Are Better for Accessing Cash<strong> </strong></h2> <p>The key to accessing cash at home or while traveling is to have a debit card linked to your bank account. These cards will never impose interest charges or cash advance fees, which can represent most of the costs associated with using a credit card at an ATM. In addition, most credit cards issued by banks in the United States are part of global networks such as Pulse, Plus, and Interlink, which virtually assure compatibility with ATMs all over the world.</p> <p>Check with your bank about ATMs available in the area you'll be visiting, fees to use out of network ATMs, as well as currency exchange fees. You may want to consider opening an account with a bank that has better rates like fee-free ATM use. Some banks charge you a flat fee each time you use your debit card at an ATM that's outside of their network, and some ATM operators also charge a fee for using an out-of-network card (yes, that's <em>two</em> separate fees). In addition, most banks charge a 3% foreign transaction fee, and even if they don't, the card networks &mdash; Visa and MasterCard &mdash; charge 1% for purchases for withdrawals in a foreign currency.</p> <p>Fortunately, there are some banks that don't charge these fees, and others, such as Schwab Bank, will even reimburse you for any ATM-associated fees. Read the fine print on your agreement before you leave. (See also: <a href="http://www.wisebread.com/5-best-online-checking-accounts?ref=seealso" target="_blank">Best Online Banks for Checking Accounts</a>)</p> <h2>Best Practices for Accessing Cash From ATMs</h2> <p>First, you should contact your bank before you travel to inform it what countries you will be visiting. This will prevent the bank from suspecting fraud and freezing your account. This is also a good time to ask what fees you can expect from your card &mdash; including out-of-network fees and foreign transaction fees.</p> <p>Once you're traveling, look to withdraw money from an ATM that's part of your bank's network, so that you will not be charged any out-of-network fees. And if you are charged fees, you can minimize these flat charges by making fewer, larger withdrawals rather than many smaller ones. Make sure to take extra precaution though, if planning to carry around large sums of cash. (See also: <a href="http://www.wisebread.com/how-to-avoid-theft-while-traveling?ref=seealso" target="_blank">How to Avoid Theft While Traveling</a>)</p> <p>Finally, try to use an ATM from a major bank rather than a standalone machine, especially at an airport. The machines at the large banks are typically the ones used by locals and will likely have lower fees, while standalone machines in tourist areas will often have the highest fees. In addition, there can be more security when you are in the lobby of a bank as opposed to accessing cash from a small machine in a crowded area.</p> <p>By using these tips to access cash, you should have the money you need wherever your travels take you, without paying unnecessary fees.</p> <h2 style="text-align: center;">Like this article? Pin it!&nbsp;</h2> <p>&nbsp;</p> <p style="text-align: center;"><a href="//www.pinterest.com/pin/create/button/?url=http%3A%2F%2Fwww.wisebread.com%2Fhow-to-get-cash-while-traveling-abroad&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FHow%20to%20Get%20Cash%20While%20Traveling%20Abroad.jpg&amp;description=How%20to%20Get%20Cash%20While%20Traveling%20Abroad" 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/How%20to%20Get%20Cash%20While%20Traveling%20Abroad.jpg" alt="How to Get Cash While Traveling Abroad" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/jason-steele">Jason Steele</a> of <a href="http://www.wisebread.com/how-to-get-cash-while-traveling-abroad">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/10-flight-booking-hacks-to-save-you-hundreds">10 Flight Booking Hacks to Save You Hundreds</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/15-airport-hacks-from-professional-travelers">15 Airport Hacks From Professional Travelers</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/carry-some-cash">Carry some cash</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-reasons-why-i-prefer-credit-cards-over-cash">10 Reasons Why I Prefer Credit Cards Over Cash</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/5-affordable-countries-every-outdoor-explorer-can-afford-to-visit">5 Affordable Countries Every Outdoor Explorer Can Afford to Visit</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Travel atms bank transfers cash credit cards traveler's cheques Tue, 14 Feb 2017 10:30:39 +0000 Jason Steele 1892046 at http://www.wisebread.com 11 Good Money Habits That Will Keep You Out of Debt http://www.wisebread.com/11-good-money-habits-that-will-keep-you-out-of-debt <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/11-good-money-habits-that-will-keep-you-out-of-debt" 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_smile_518885222.jpg" alt="Woman with good money habits staying out of debt" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Staying on the straight and narrow, especially when it comes to your finances, can feel like a struggle. Recreational activities, impulse buys, monthly bills, and unexpected expenses lurk around every corner, and if you're not careful, you can slide into debt without really trying.</p> <p>If you practice good money habits as a general life philosophy, however, you're giving yourself the best chance of staying in the black consistently &mdash; and perhaps even making those coveted savings gains. Here's how.</p> <h2>1. Create a Budget Based on Life Goals &mdash; Not Numbers</h2> <p>Every article you read about how to improve your personal finances includes creating and maintaining a budget. That's because actively keeping track of what's coming and going helps you manage your money more responsibly than simply throwing caution (and cash) to the wind. But your budget is only serving a single purpose when it's strictly rooted in numbers opposed to relating to your personal activity and short- and long-term goals &mdash; like an upcoming vacation or contributions to your retirement fund, for instance.</p> <p>As such, instead of living your life around your budget, you'll find much more satisfaction in building your budget around your life. By planning ahead for expenses, even frivolous things, you can identify the areas where your budget is lacking and (hopefully) close those holes by either amending your plans to accommodate your cash flow or increasing your income to afford the things that make you happy.</p> <p>I recommend the latter, of course &mdash; because you only live once.</p> <h2>2. Charge Only What You Can Afford to Pay Off Every Month</h2> <p>Let's get something straight here: Credit is not as dastardly an institution as you've been led to believe. Yes, there are credit cards with astronomical APRs. And, yes, there are credit cards with ridiculous late fees. But at the end of the day, you're responsible for reading the fine print (you know it's there!), and nobody is forcing your hand in accepting an offer.</p> <p>Still, credit is attractive because it allows us the freedom to have more than we can afford. But whose problem is that when you can't pay the bill? All yours. Avoid this downward spiral by making your credit card payments top priority each cycle.</p> <p>&quot;Credit cards are not evil, but they can make a mess of your finances if used unwisely,&quot; says savings expert Kendal Perez. &quot;Ultimately, you should only charge what you can afford to pay off every month. Using your credit card to pay bills is a smart strategy since you have to pay these expenses anyway, and using credit means accruing points, rewards, or travel miles to offset future expenses.&quot;</p> <p>See also: <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=seealso2" target="_blank">12 Habits of Responsible Credit Card Users</a></p> <h2>3. Look for Savings on Everything You Buy</h2> <p>I personally save many thousands of dollars every year by being a smart shopper, because there are few things I buy for which I don't have a coupon or discount. From dining out to going to the movies to the clothes I wear to the gas I put in my vehicle &mdash; everything comes with savings.</p> <p>It's not hard to get into this habit, either. I save by using loyalty cards, clipping coupons, redeeming cash back deals, signing up for promotional emails, waiting for items I want to go on sale, shopping clearance sections, and buying secondhand, among a myriad of other strategies. It's like a game for me, and I hardly ever spend money on something for which there are no savings; I look for a cheaper alternative instead. It's a major reason why I always have enough money in the bank to cover my bills, plus add to savings while still doing the things I like to do every month.</p> <h2>4. Buy Groceries Based on What's on Sale and in Season</h2> <p>Groceries are one of the biggest spending categories for Americans, next to mortgages and insurance. Instead of buying what you're craving, buy groceries based on what's in season and what's on sale. (See also: <a href="http://www.wisebread.com/the-best-5-credit-cards-for-groceries?ref=seealso" target="_blank">The 5 Best Credit Cards for Groceries</a>)</p> <p>&quot;This will require some meal planning, but you can craft similar meals based on what's on sale each week,&quot; explains Perez. &quot;Use a tool like Flipp.com to easily compare grocery sales and deals between stores in your area, and consider looking for grocery coupons for items on your list through CouponSherpa.com.&quot;</p> <p>Another trick I use to cut my grocery bill is to shop the clearance section. Most supermarkets have these sections with drastically reduced prices on damaged or about-to-expire food that's still perfectly good if you get to it in time. Ask your grocer where these items are located in your store.</p> <h2>5. Organize Your Bill Payments to Avoid Lateness</h2> <p>As soon as a bill arrives, I grab my checkbook (yep, I'm old school), write out the check, and prepare the envelope. On the back of the envelope I write the dollar amount that's inside as an at-a-glance reminder, and I organize the bill on my desk according to when it's due. Then I stagger the mailings &mdash; sending each payment out about five days before it's due &mdash; to ensure that I can reconcile all the bills with my bank account.</p> <p>Consumer finance expert Kevin Gallegos offers more tips on how to avoid late payments.</p> <p>&quot;Open all mail &mdash; including bills &mdash; upon receipt, deposit all checks and cash immediately, and set up a system for payment that works for you and that you'll use consistently,&quot; he says. &quot;This might be automatic online payments, a spreadsheet, a reminder on your cell phone, or a list on the refrigerator.&quot;</p> <h2>6. Map Out Your Long-Term Financial Goals</h2> <p>The only way you'll get ahead in your finances is if you know where you're going. Take a look at what's coming up in terms of required expenses and also think about some of the things you'd like to do with your money. Do you want to go back to school, on vacation, or purchase a new car or home? Set these milestones as goals and calculate what it'll take financially to reach them, then start saving in increments along an established timeline.</p> <h2>7. Review Your Finances on a Regular Basis</h2> <p>Reviewing your finances on a &quot;regular basis&quot; is a relative term, but I typically suggest once a month. There's value in doing it more often, however &mdash; like once to twice a week &mdash; according to personal finance expert Larry Jacobson.</p> <p>&quot;You need to set regular intervals to stay on the right path,&quot; he says. &quot;That way, you can course correct, if necessary, before it's too late.&quot;</p> <p>When reviewing your finances, be sure to cover all your bases. Browse your credit score for any errors, review bank and credit card statements for inconsistencies, and make sure all checks have posted. It's also a good idea to call your service providers once a year to inquire about better deals, like cheaper mobile phone or cable plans.</p> <h2>8. Treat Savings Like One of Your Monthly Bills</h2> <p>Instead of regarding contributions to your savings as a chore, start considering it a requirement, says Gallegos. Treat your savings deposits like a monthly bill; find that extra money somewhere in your budget (a reasonable amount that you can handle) and tuck it away as if you'll be penalized if you don't. You may have to make a sacrifice somewhere else, like in your &quot;fun&quot; fund, but, well, that's life.</p> <h2>9. Learn to Live Below Your Means</h2> <p>If you're one of those people who responds well to logic, here's a pro tip on staying debt free: Live below your means.</p> <p>&quot;Know exactly what you have to spend each month &mdash; and spend less,&quot; says Gallegos. &quot;Living beneath your means goes further than living within your means. It means taking responsibility and choosing where your money goes instead of being influenced by whims, advertising, habits, or peer pressure.&quot;</p> <p>If this is a tactic you'd like to try, you'll need to re-evaluate your budget entirely. Find items you can reduce or eliminate altogether to free up funds, like subscriptions and memberships that you aren't using to their full potential, cutting back on dining out, and reducing your monthly fuel bill by carpooling with a coworker or using public transportation more often.</p> <h2>10. Switch to a Cash-Only System</h2> <p>Here's another piece of practical advice that leads your wallet away from debt: Only pay for things in cash.</p> <p>&quot;You can't go into debt if you don't borrow,&quot; says Mike Sullivan, a personal finance consultant with Take Charge America, a nonprofit credit counseling and debt management agency.</p> <p>I recognize, of course, that that's easier said than done, so Sullivan offers a couple more strategies for holding yourself cash-accountable.</p> <p>&quot;Save with direct deposit at out of town banks,&quot; he says. &quot;You don't want your savings available on a whim; Internet banks are a good choice. And don't sign up for overdraft protection. That's agreeing in advance to spending more than you have and paying for the privilege.&quot;</p> <h2>11. Make More Money</h2> <p>One of my own personal money manifestos is to always have at least two sources of income. I'm self-employed, and I consider my media business my main source of income, but I supplement that with several side gigs, like renting out rooms in my homes on Airbnb, watching other people's pets through DogVacay, and driving for Lyft and Uber. That's three extra sources of income right there, but I'm always eager to find more ways to make money.</p> <p>I feel personally satisfied when all my bills are paid on time, money is consistently going to my savings account, and I'm cash-positive enough to enjoy life the way I want to. If you can't seem to get ahead, use your resources and carve out time to make more money. You'll achieve your financial goals and alleviate the burden of debt faster, and that can only lead to good things.</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-good-money-habits-that-will-keep-you-out-of-debt">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-5"> <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/easy-budgeting-for-first-time-singles">Easy Budgeting for First Time Singles</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/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</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/how-to-handle-a-sudden-loss-of-income">How to Handle a Sudden Loss of Income</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/how-to-budget-when-you-rely-on-cash-tips">How to Budget When You Rely on Cash Tips</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/is-six-figures-really-that-much">Is Six Figures Really That Much?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living Budgeting bills cash extra income groceries live below your means money goals payments sales side jobs Tue, 24 Jan 2017 10:00:11 +0000 Mikey Rox 1870058 at http://www.wisebread.com Earn Extra Income With Your Smartphone Camera http://www.wisebread.com/earn-extra-income-with-your-smartphone-camera <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/earn-extra-income-with-your-smartphone-camera" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock-491752390.jpg" alt="use your smartphone to make extra money" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You no longer need to carry around a digital camera to capture in-the-moment photos. Today's smartphones feature fantastic cameras with surprising quality and clarity. For example, the latest iPhone 7 boasts a groundbreaking new camera, including the ability to take RAW photos and capture images in low light.</p> <p>The new camera quality in smartphones means they can be a tool to create a small photography side business. If you love taking photos and have a great eye, you can turn your artistic vision into cash, right from your phone.</p> <p>These three sites will pay cash for your smartphone photos. Here's how to get started.</p> <h2>EyeEm</h2> <p><a href="https://www.eyeem.com/" target="_blank">EyeEm</a> is one of the largest smartphone-picture platforms, with over 18 million creators. Available to both iPhone and Android users, you can sell photos for anywhere from $20 to $250, depending on the license.</p> <p>EyeEm also allows you to upload photos from your computer, so you can edit photos from your smartphone before posting them for sale.</p> <h2>Foap</h2> <p><a href="https://www.foap.com/" target="_blank">Foap</a> is a free app for iPhones that allows you to sell your photos. Once you sign up for an account, you upload your photos. To use any of your photos, a customer must purchase a photo license for $10; Foap keeps $5, and you get $5 as the artist.</p> <p>The great thing about Foap is that you are not limited in how many times you sell a photo. If that one adorable picture of your dog appeals to customers, you can sell it 100 times or more.</p> <h2>Fotolia Instant</h2> <p>With the <a href="https://blog.fotolia.com/us/category/instant/" target="_blank">Fotolia Instant app</a>, you can upload images from your Android or iPhone directly to Fotolia Instant Collection, which is a subset of the site dedicated solely to smartphone images for brands looking for stock images.</p> <p>Fotolia Instant allows you to include a model release, add keyword information, and manage every aspect of the sales process. You get a 33% commission for every photo you sell. Once you reach $50 in sales, you can request your payout via PayPal or Skrill.</p> <h2>Tips for Selling Your Photos</h2> <p>While you can turn your smartphone into a money-earner, the stock photo market can be crowded with other sellers. To increase your chances of customers buying your pictures, try to think from their point of view and what they need. Most shoppers are small business owners and bloggers looking for stock photos.</p> <p>They likely will need your photos for various purposes, so:</p> <ul> <li>Make sure your photos are large enough that they can be resized without getting blurry or grainy. <br /> &nbsp;</li> <li>Take advantage of your location. If your city has well-known landmarks or shopping districts, those areas can translate to very popular photos. <br /> &nbsp;</li> <li>You can also get inspiration by checking out blogs and looking at the stock photos they use for ideas for what shots sell.</li> </ul> <h2>Turning Your Phone Into Cash</h2> <p>Instead of just snapping selfies and paying for an expensive data plan, turn your smartphone camera into a cash-earning machine. If you love taking photos and have a unique point of view, you can turn your camera into a <a href="http://www.wisebread.com/5-unexpected-side-benefits-of-your-side-hustle" target="_blank">decent side hustle</a>. Post photos on various sites to maximize your chances of earning extra money, and keep adding fresh content to keep customers coming back.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kat-tretina">Kat Tretina</a> of <a href="http://www.wisebread.com/earn-extra-income-with-your-smartphone-camera">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-5"> <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/7-tools-and-gadgets-your-smartphone-can-replace">7 Tools and Gadgets Your Smartphone Can Replace</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/prizes-and-freebies-from-coupsmart-for-the-iphone">Prizes and Freebies from CoupSmart for the iPhone</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-5-best-battery-phone-cases">The 5 Best Battery Phone Cases</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-things-you-must-immediately-do-after-losing-your-smartphone">8 Things You Must Immediately Do After Losing Your Smartphone</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/5-social-media-stars-who-earn-way-more-than-you">5 Social Media Stars Who Earn Way More Than You</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Extra Income Technology Android camera cash instagram iPhone photography photos side gig smartphone Tue, 17 Jan 2017 10:30:31 +0000 Kat Tretina 1873579 at http://www.wisebread.com Are Your Assets Costing You Too Much? http://www.wisebread.com/are-your-assets-costing-you-too-much <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/are-your-assets-costing-you-too-much" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_daydreaming_money_481974106.jpg" alt="Woman learning if her assets are costing her too much" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The more assets, the merrier is generally a good philosophy. But there are times when assets can actually be a drain on your financial wellbeing. Some assets cost a lot to possess and don't bring you much in return.</p> <p>Consider whether these common assets are worth their weight.</p> <h2>Your Home</h2> <p>A home can be one of your biggest assets. It can also be one of your biggest financial enemies. Ideally, you are making payments on your home, building equity, and increasing your net worth as you go. But often, homeowners find that their monthly mortgage payments are hindering their ability to make ends meet. To make matters worse, home upkeep and repairs, electricity, and other utilities may be costing you more than you bargained for. Homeownership is a great goal, but don't buy a home if it will make your life more challenging financially.</p> <h2>Your Cash</h2> <p>It may seem crazy to say that good old cash can work against you. But if you have a lot of it and there's inflation, over time it will lose value. It's great to have a healthy dose of cash on hand, but at a certain point it becomes smarter to invest your money in something with a higher rate of return. If you have large quantities of cash in bank accounts that provide a low interest rate, chances are you are making a financial mistake.</p> <h2>Your Car</h2> <p>You can count an automobile toward your net worth, but you can virtually guarantee it's going to decline in value over time. Add in the cost of maintenance, gas, and insurance, and it's likely that a car is a true drain on your finances. But you need a car to get around, so it's best to look at the true cost of ownership before buying. This means taking into account fuel mileage, reliability history, and the cost of parts and labor.</p> <h2>Your Collectible Items</h2> <p>You've got a Van Gogh hanging in your living room. There's a Mickey Mantle rookie card in your man cave. Your jewelry collection would make Elizabeth Taylor envious. All of these valuable items are nice to possess, until you take into account the expense of owning them. From storage to insurance to the cost of restoration, high-end collectibles can be a financial headache. For example, according to a Wall Street Journal report, managing an art collection could cost you between 1% and 5% of the value of the pieces annually. You may cash in big time if you ever sell these items, but the cost of ownership is high and may not be worth it.</p> <h2>Your Investments</h2> <p>It might seem backward to think of your investments as a drain on your finances, but it can happen if you're not investing in the right way. Are you investing in things that will grow in value over time, or in low-risk things that may be outpaced by inflation? Do you own a property that's costing money to maintain but not bringing in revenue? Are you paying a hefty amount in fees and commissions? Are you paying a high-priced broker or accountant to manage things even though you can probably do it on your own?</p> <h2>Your Life Insurance Policies</h2> <p>Many people don't think of life insurance as an asset, but it can be under certain circumstances. Of course, it's only a good asset for you if you believe the eventual benefit will outweigh the cost. Many life insurance policies are simply not very good &mdash; costly premiums, and low payouts.</p> <h2>Your Intangible Assets</h2> <p>Sometimes you have assets that don't really bring you any monetary gain, but may cost you money to obtain or possess. One example of this is a copyright or patent. These are things that may require upfront costs in the form of research and legal assistance, but the financial gain is uncertain. A patent has no real value until you sell it or develop a product based on it. When you acquire these types of assets, it's important to come up with some plan for monetization. Otherwise, they are simply a vehicle for sunk costs.</p> <h2>Your Inventory</h2> <p>If you run a business, any product you've manufactured but have yet to sell is considered an asset. But if you have too much inventory, that could be problematic. Inventory costs money to store. Some items might become obsolete or spoil, and result in no revenue. On the flip side, too little inventory can result in a lost sale. Smart business owners become skilled in inventory management, in which they can properly forecast sales to ensure the proper amount of product on hand.</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/are-your-assets-costing-you-too-much">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-6"> <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/does-your-net-worth-even-matter">Does Your Net Worth Even Matter?</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/big-purchases-you-should-make-by-30-40-and-50">Big Purchases You Should Make by 30, 40, and 50</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-ways-you-can-cut-costs-right-before-you-retire-0">6 Ways You Can Cut Costs Right Before You Retire</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/why-you-need-to-know-the-difference-between-secured-and-unsecured-debts">Why You Need to Know the Difference Between Secured and Unsecured Debts</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/how-to-fix-your-finances-after-missing-a-payment">How to Fix Your Finances After Missing a Payment</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance assets Cars cash collections costs expense fees housing life insurance net worth Fri, 06 Jan 2017 11:00:12 +0000 Tim Lemke 1864688 at http://www.wisebread.com 8 Money Moments That Should Be On Everyone's Bucket List http://www.wisebread.com/8-money-moments-that-should-be-on-everyones-bucket-list <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-money-moments-that-should-be-on-everyones-bucket-list" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/money_happy_woman_161954601.jpg" alt="Woman celebrating money moments on her bucket list" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The big house. The fancy car. The 'round-the-world vacation. When you think of a bucket list, and mention money, it's easy to start daydreaming about things that cost a fortune.</p> <p>However, you don't have to have your head in the clouds to achieve a bucket list of money moments. Here are eight of the big ones. Many of them are already within your reach.</p> <h2>1. Becoming Debt Free</h2> <p>Let's start with the most obvious money moment we should all be striving for &mdash; <a href="http://www.wisebread.com/fastest-way-to-pay-off-10000-in-credit-card-debt?ref=internal">eliminating our debt</a>. It's certainly not easy, and it's not something that can be done quickly. This requires careful planning, a lot of willpower, and the willingness to forgo the little luxuries we all like to have in our daily lives. But, it can be done.</p> <p>One way to do this is by <a href="http://www.wisebread.com/a-comprehensive-guide-to-the-debt-snowball-method-0" target="_blank">snowballing your debt</a>. You take the smallest debt you have, perhaps a store card or a loan, and you figure out a way to pay as much off that balance as you can each month. While you're doing this, you pay the minimum on your other debts. When that small debt has been paid off, you apply that to the next debt on your list, and just keep going. Eventually, you'll have everything paid off, including the car and the mortgage. What does &quot;eventually&quot; actually mean? It might be a few years, but if you stick to it, you'll achieve your goal.&nbsp;</p> <h2>2. Putting Work That You Love Ahead of Salary</h2> <p>All too often, we do work that doesn't really fulfill us, but gives us the money to pay the bills, save for a college fund, and go away on vacation every year. However, as we spend most of our lives working, it makes sense that the job should be one that really brings us happiness.</p> <p>By&nbsp;following some of the advice mentioned earlier, it is possible to put salary and benefits second to job satisfaction. And when you don't need the money, the job market looks very different. Suddenly, your options are wide open. If you love working with animals, you can leave the rat race to care for dogs and cats. If you love working with children, or the elderly, you can find careers in those fields. They don't pay as much, but the rewards to your soul are much greater.</p> <h2>3. Building a Solid Emergency Fund</h2> <p>Some 50 years ago, you could start a job at a company in your youth, and with hard work and dedication, retire from that same company 40 years later. That time has passed. These days, corporations are constantly looking for ways to cut costs and give greater value to their shareholders. That means mergers, streamlining, and of course, layoffs.</p> <p>When the worst happens (and it will probably happen more than once in your lifetime), you need to be adequately prepared. Experts say your emergency fund should have three to six months' living expenses in it. Some say more, especially when the economy tanks and jobs are scarce.</p> <p>How do you do that, especially when you're trying to pay down debt? You need to first set a target &mdash; how much will be in the fund? Then, you need to take advantage of great interest rates, low or no-fee accounts, and apps like <a href="https://www.acorns.com/" target="_blank">Acorns</a> that invest the change from every transaction. Put a dedicated amount to one side each month, and stick to it. If that means no eating out, or no trips to the cinema, so be it. Once your fund is established, you can loosen the reins a little.</p> <h2>4. Creating a Last Will and Testament</h2> <p>Very few people like the idea of creating a will. The whole idea of planning for a life that does not have you in it is morbid to say the least. But, it's essential, especially if you have family and have specific ideas about who gets your possessions.</p> <p>With a will, you can ensure that your last wishes are met. You can name an executor, who will take on the task of wrapping up your affairs. You can be very specific about who gets what, and how it is all divided. You can name a guardian for your children and pets, and a property manager. This is all very important. If you do die without a will in place, it can lead to a lot of infighting and malice. And in some cases, it can split families apart. The state will decide how to distribute your belongings, and it will not be done with the delicacy or care that you would like.</p> <h2>5. Earning Passive Income</h2> <p>Passive income is a way to earn money using little-to-no effort, usually from a business or venture you have set up yourself. Examples of passive income include earnings from rental properties, royalties from intellectual property (books, songs, software, etc.), investment portfolios, renting out tools and equipment, and even interest from lottery winnings. The latter is not something you have much control over, but everything else is achievable.</p> <p>Look for ideas on ways to <a href="http://www.wisebread.com/15-ways-to-make-money-outside-your-day-job" target="_blank">make lucrative money on the side</a> without the need for a lot of regular work. It may take some serious elbow grease on the front end, but once that's established, you can sit back and watch the money come rolling in.</p> <h2>6. Buying Something Big With Cold, Hard Cash</h2> <p>This one is certainly not as important as the money moments preceding it, but it's worth aiming for. When you can buy something big (a car, a house, a boat, an RV) with cash, you have so much more power to negotiate. And you will save a staggering amount of money because you are not paying compound interest.</p> <p>Let's look at a home. Cash buyers usually get a discount, and even if it's only 3%, that can mean $6,000 on a $200,000 home. So let's say the cash price is $194,000, versus the $200,000 mortgage price, and the mortgage buyer puts down 10%. Over 30 years at 4%, that $180,000 loan has become around $310,000! By paying cash up front, you are literally saving the cost of another smaller home. It's not easy, but once you pay off your debts, you can quickly accumulate income. With some savvy investing, you could one day feel the satisfaction of saying &quot;And how much if I pay cash&hellip; right now?&quot;</p> <h2>7. Negotiating a Higher Salary&nbsp;</h2> <p>Some people work hard, put in the hours, and accept the 3% raise they get each year, which&nbsp;barely covers the rising cost of living. Other people grab life by the throat, and get a bump in pay simply by asking for it. Before you do it, you'll need some good data on your side.</p> <p>First, look at the position you are in on Salary.com and Glassdoor. What are people being paid at other companies in your area? Are you earning a competitive salary, or are you underpaid? (If you're overpaid, you may want to hold off on asking for even more&hellip;that could backfire).</p> <p>Next, assemble all the reasons that you believe you are owed more money. Did you save the company a lot of money? Did you bring in new accounts? Did you work 70-hour weeks all year long? Just like buying a car, you want to do your homework. Then, call a meeting with the boss, and lay it all on the line, politely but assertively.</p> <h2>8. No Longer Living Paycheck to Paycheck&nbsp;</h2> <p>The number of people living paycheck-to-paycheck in America may surprise you. It's not one in four, or even half of us. No. Three out of every four Americans are <a href="http://money.cnn.com/2013/06/24/pf/emergency-savings/index.html" target="_blank">struggling to make ends meet</a>.</p> <p>For many, it's a case of not being paid enough, or having crippling debt repayments. For others, it's more about bad budgeting and excessive spending. Whatever the reason, you should have a plan to get beyond living paycheck to paycheck. Have a big enough cushion in the bank to make life more comfortable. And, cut out the expenses that are dragging you down. With dedication, you could be&nbsp;one of those people who&nbsp;doesn't&nbsp;count the days to the next check going in the bank.</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/8-money-moments-that-should-be-on-everyones-bucket-list">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-7"> <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-start-a-family-before-reaching-these-5-money-goals">Don&#039;t Start a Family Before Reaching These 5 Money Goals</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/7-critical-money-mistakes-people-make-in-their-40s">7 Critical Money Mistakes People Make in Their 40s</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/13-financial-gifts-to-give-yourself-this-holiday-season">13 Financial Gifts to Give Yourself This Holiday Season</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-personal-finance-resolutions-anyone-can-master">8 Personal Finance Resolutions Anyone Can Master</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-decisions-youll-never-regret">8 Financial Decisions You&#039;ll Never Regret</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bucket lists cash debt free emergency funds estate planning goals jobs passive income salary saving money Mon, 02 Jan 2017 10:00:07 +0000 Paul Michael 1865345 at http://www.wisebread.com You've Been Saving Money All Wrong. Here's Why http://www.wisebread.com/youve-been-saving-money-all-wrong-heres-why <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/youve-been-saving-money-all-wrong-heres-why" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_holding_cash_514781336.jpg" alt="Woman learning she&#039;s been saving money all wrong" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If your savings account is not as big as you'd like it to be, it turns out that you're not alone. Americans are notoriously bad at saving for retirement &mdash; and one in three have nothing saved for retirement at all.</p> <p>While Social Security may still factor into your savings, it's not enough to cover the cost of retirement, let alone the other expenses you're trying to save for before even reaching retirement.</p> <p>But don't let the statistics get you down. There are some easy ways to change your savings habits. You'll be surprised by how quickly little tweaks can make a big difference in your accounts.</p> <h2>1. Wrong: An All or Nothing Attitude to Saving</h2> <p>When you come up with a savings plan, you may be tempted to cut out <em>all </em>of your discretionary expenditures. On paper, this looks reasonable enough. You can eliminate all of your nonessential costs and put that money right into your savings account. Perfect, right? However, an all or nothing approach is going to set you up for failure down the road.</p> <p>Just as with dieting, if the adjustments you make are not sustainable, you're not going to make real change in the long run. Instead, you're likely to get frustrated and give up altogether. When you deny yourself any and all expenses, whether it's getting a coffee at your favorite cafe or going out for drinks with friends, you're likely to feel deprived. Plus, this mentality doesn't allow for you to slip up or make exceptions.</p> <h3>Right: Be Reasonable</h3> <p>It's better to consistently save a dollar every day and be successful at it than to aim to save $100 a week, realize that's impossible, and then give up. Set a goal that is realistic and stick to it. Write down your plan and check in consistently to see how you are doing.</p> <p>The name of the game is moderation. Your savings isn't all or nothing. Don't get discouraged if you slip up. If you spend more on Wednesday, spend less on Thursday, but keep it realistic. Take another look at your budget and see if you can make up for the slip somewhere else.</p> <h2>2. Wrong: Cutting Out Activities or Socializing</h2> <p>You may think an easy way to save money is by cutting out activities entirely. Since there can be a hefty price tag that comes along with social activities, like going out for drinks or other entertainment, you may conclude that cutting out socializing completely is another way to save. However, these strategies are going to leave you feeling isolated and lacking the supportive environment you need to achieve your savings goals.</p> <p>See also: <a href="http://www.wisebread.com/73-easy-ways-to-save-money-today?ref=seealso">73 Easy Ways to Save Money Today</a></p> <h3>Right: Find Inexpensive Ways to Keep in Touch</h3> <p>Instead of cutting out social activities entirely, why not find free or inexpensive alternatives?</p> <p>Rather than meeting friends at a pricey restaurant, invite them over for a home-cooked meal or a pot luck. Plan a game or movie night, or look up free events in your town to attend together.</p> <p>Exercise is also a great, inexpensive way to spend time with friends. Organize a game of Frisbee or flag football, or go for a run with friends. Do it often enough, and you could save on an expensive gym membership, too.</p> <p>In fact, your friends can be great allies in your fitness and savings endeavors. You don't have to choose between your relationships and your budget. Let your friends and family know what your goals are and ask them to help you stay on track. That way they can be a support system, instead of a roadblock.</p> <h2>3. Wrong: Focusing All of Your Attention on Cutting Costs</h2> <p>It seems foolproof to focus on decreasing your expenses so that you can save more money. But rather than putting all your energy into cutting your expenses to the bone, spend some of that energy <em>earning </em>extra income.</p> <p>If you're spending too much time calculating your budget, you'll end up feeling too limited. Your mindset will always be &quot;I don't have enough.&quot;</p> <p>The budget mindset is restrictive &mdash; and taxing on your stores of energy. Maintaining discipline is hard. Instead, use that energy to help you earn more money to put toward your savings goals.</p> <h3>Right: Work More, Spend Less</h3> <p>Taking on a second job can make a huge difference to your savings account, mostly because you're earning more &mdash; and, hopefully, saving more.</p> <p>Plus, since you're spending more time at work, you'll have less time to spend on frivolous things &mdash; or to worry about sticking to your budget.</p> <p>See also: <a href="http://www.wisebread.com/100-ways-to-make-more-money-this-year?ref=seealso2">100+ Ways to Make More Money This Year</a></p> <h2>4. Wrong: You Never Carry Cash, So You Don't Spend It</h2> <p>You may be under the impression that if you don't have cash with you, you will automatically spend less money. However, if you're mindlessly putting little expenditures on your credit or debit card, you're actually much less likely to be keeping track of how you are spending money.</p> <p>Cash can be your best friend when you're trying to save money, especially for those of us who are a bit less disciplined and aware of our spending habits.</p> <h3>Right: Use Cash and Cards Wisely</h3> <p>Allocate yourself a daily budget and leave home with that amount of cash in your wallet. This makes money feel real in a way that mindlessly swiping your card can't. It can help you to stay accountable to yourself. Once you run out of cash for the day, you are done spending.</p> <p>Of course, using a credit card does still hold advantages for people with more self control. You may want to consider applying for the <a href="http://www.wisebread.com/5-best-cash-back-credit-cards?ref=internal">best rewards credit card</a> for your lifestyle, and then strategically using that card so you can earn points or miles on your purchases. Plus, you'll have a digital record of your expenses to look back on at the end of the month and see how you did. You can set up email or phone alerts, too, to help remind you of just how much you're spending on a daily basis.</p> <h2>5. Wrong: Ignoring Budgeting or Not Making a Budget at All</h2> <p>Unfortunately, saving doesn't just happen without making a real, concerted effort. It is crucial to your success that you have a concrete plan in place to make sure you're spending where you need to and saving where you can. (See also: <a href="http://www.wisebread.com/build-your-first-budget-in-5-easy-steps?ref=seealso">Build Your First Budget in 5 Easy Steps</a>)</p> <h3>Right: Make a Comprehensive Budget</h3> <p>Make a clear and realistic plan. Write it down and revise it every month or so to check if you're staying on track. After paying your expenses for the month, put the rest of your money into savings. It may be a small amount at first, but you can increase it later, once your new habits have settled in.</p> <p>Even if you're just saving a little bit, if you're committed to putting it away every month, it will add up &mdash; and faster than you expect.</p> <h2>6. Wrong: Setting up a Traditional Savings Account at Your Local Bank</h2> <p>Traditional savings accounts do not offer the interest rates they used to. If you're keeping all of your money in a regular savings account, you're basically giving away money that you could be earning in interest.</p> <h3>Right: Open an Online Account</h3> <p>By <a href="http://www.wisebread.com/banks-still-offering-free-checking-and-great-interest-rates?ref=internal">moving your savings to an online account</a>, you can earn 1%&ndash;2%. That's not much, but it's more than a traditional bank and enough to add a few additional dollars a year to your savings, depending on how much money you have in your account. Other options, like CDs, pay a bit more interest, but don't offer easy access to your funds.</p> <p>Decide how much you want to put into your savings account, and set up an automatic transfer so you're committed to saving that money every month.</p> <p>Saving money doesn't have to be a drudge, and the good news is that a few small changes can make a big difference. You may even find that you are quickly becoming the exception to the discouraging savings trends nationwide.</p> <h2 style="text-align: center;">Like this article? 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%2Fyouve-been-saving-money-all-wrong-heres-why&amp;media=http%3A%2F%2Fwww.wisebread.com%2Ffiles%2Ffruganomics%2Fu5180%2FYouve%20Been%20Saving%20Money%20All%20Wrong.%20Heres%20Why.jpg&amp;description=Youve%20Been%20Saving%20Money%20All%20Wrong.%20Heres%20Why" 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/Youve%20Been%20Saving%20Money%20All%20Wrong.%20Heres%20Why.jpg" alt="You've Been Saving Money All Wrong. Here's Why" width="250" height="374" /></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nick-wharton">Nick Wharton</a> of <a href="http://www.wisebread.com/youve-been-saving-money-all-wrong-heres-why">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/how-to-come-up-with-1000-in-the-next-30-days">How to Come Up With $1,000 in the Next 30 Days</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/how-to-find-the-savings-strategy-that-works-for-you">How to Find the Savings Strategy That Works For You</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-ways-you-can-cut-costs-right-before-you-retire-0">6 Ways You Can Cut Costs Right Before You Retire</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/how-to-handle-a-sudden-loss-of-income">How to Handle a Sudden Loss of Income</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/the-financial-basics-every-new-grad-should-know">The Financial Basics Every New Grad Should Know</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance bank accounts budgeting cash cutting costs expenses Mistakes saving money savings accounts Fri, 16 Dec 2016 10:30:28 +0000 Nick Wharton 1853984 at http://www.wisebread.com Is There Such a Thing as a "Safe" Investment? http://www.wisebread.com/is-there-such-a-thing-as-a-safe-investment <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/is-there-such-a-thing-as-a-safe-investment" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_umbrella_coins_516182744_0.jpg" alt="Man learning if there&#039;s such a thing as a safe investment" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Safety. We all look for it in our investments, while also seeking out the highest return. As we get older, safety becomes more important as we get closer to retirement age.</p> <p>Is there such a thing as a truly &quot;safe&quot; investment? The short answer is that no investment is 100% safe. But there are certainly some investments that are better than others at protecting your hard-earned savings.</p> <p>Let's examine some of the most common &quot;safe&quot; investments and learn how good they actually are at shielding you from financial losses.</p> <h2>1. Cash</h2> <p>You may not be able to stomach the ups and downs of the stock market, and don't want your money tied up in bonds or other fixed-income investments. So you just hold on to large quantities of cash in a basic savings account, a money market account, or certificates of deposit.</p> <h3>Why It's Safe</h3> <p>Cash won't dive in value if the stock market crashes. You can get a predictable return from interest by keeping it in a bank account. And you can access it any time you need it.</p> <h3>Why It's Not</h3> <p>If you have a lot of cash, you can actually <em>lose </em>money in the long-term if there is inflation. But most importantly, putting too much of your investment portfolio in cash will make it hard for you to accumulate the kind of wealth you'll need for a comfortable retirement. Cash is also easy to access, which means it's too easy for you to spend.</p> <h2>2. Dividend Stocks</h2> <p>Dividend stocks are generally issued by companies that don't usually see a lot of volatility, but will pay out a healthy percentage of their income back to shareholders. Dividend stocks are often used by older investors or anyone looking to boost income without a lot of risk.</p> <h3>Why It's Safe</h3> <p>Good dividend stocks will pay out a consistent amount to shareholders each quarter, and it's usually a better return than bonds. By nature, dividend stocks won't go way up and down in price like other stocks, so they aren't as vulnerable to big market downturns.</p> <h3>Why It's Not</h3> <p>They are still stocks, and any stock is potentially vulnerable to market swings. Even dividend stocks will lose value in a down market, so it's still possible to lose money. On the flip side, dividend stocks won't rise in value like other investments when the market goes up. Moreover, dividends are never guaranteed; a company can cut its dividend at any time if its revenues drop.</p> <h2>3. Treasury Inflation-Protected Securities (TIPS)</h2> <p>TIPS are popular investments because they allow you to invest in bonds while seeing the value of the investment rise along with the rate of inflation. They are a common part of many retirement portfolios and can be helpful in diversifying holdings.</p> <h3>Why It's Safe</h3> <p>Investing in U.S. treasuries is about as safe a bet as you can get, as the U.S. government has always paid its obligations. And TIPS have the added benefit of rising in value along with consumer prices, so you're never at risk of losing your investment due to inflation. You are protected even if there is deflation, because in that case, the price at maturity will revert to the price at purchase.</p> <h3>Why It's Not</h3> <p>TIPS aren't great investments for building wealth. There are other, better investments that offer a combination of safety and growth. TIPS are also vulnerable to interest rate moves, just like most bonds.</p> <h2>4. Gold</h2> <p>We've seen gold hailed as a &quot;safe&quot; investment because it's considered a hedge against inflation and a protection against a major economic disaster. History has shown that those who held on to gold during times of crisis held onto their wealth.</p> <h3>Why It's Safe</h3> <p>Gold can protect against inflation and historically has been known to retain its value even during disastrous times. That's why gold became a popular investment during the recent debt crisis in Europe, for example.</p> <h3>Why It's Not</h3> <p>Many financial experts note that gold's reputation as a hedge against inflation is often overstated, and gold has been known to lose value. It is also no less volatile than stocks, and generally does not have the same return on investment. In other words, it's not as &quot;safe&quot; as you think, and you won't necessarily get wealthy by holding onto it.</p> <h2>5. REITs</h2> <p>A real estate investment trust (or REIT) allows individual investors to own shares of real estate without the hassle of being a landlord. REITs trade like stocks, and can also be included in mutual funds and exchange-traded funds.</p> <h3>Why It's Safe</h3> <p>REITs are generally pretty stable investments, especially if the company has many long-term leases. REITs also usually pay out a hefty dividend.</p> <h3>Why It's Not</h3> <p>Real estate can still drop in value, especially if the REIT you buy is focused on one sector of real estate. Moreover, because REITs don't have to pay corporate-level income tax, dividends from REITs are taxed at the normal income rate, not the dividend rate paid out by other stocks.</p> <h2>6. Target Date Mutual Funds</h2> <p>Most brokerages offer mutual funds that start off with an aggressive investment mix and then get more conservative as the investor ages. These are a popular &quot;hands off&quot; part of many portfolios.</p> <h3>Why It's Safe</h3> <p>These funds are designed to build value during your younger years and protect your retirement nest egg as you get older. When properly managed, you'll be able to hold onto more of your money when you are close to retirement, even during down markets.</p> <h3>Why It's Not</h3> <p>Generally speaking, targeted mutual funds come with higher fees than many other funds, and that can cut into your overall earnings over time. And while the funds are comprised of more conservative investments as you approach retirement age, they are still prone to the ups and downs of the stock market in the earlier years.</p> <h2>7. Peer-to-Peer Lending</h2> <p>In recent years, companies such as Lending Club and Prosper have allowed individual investors to profit from the debt of other regular people. These platforms match investors up with those looking to borrow money. Individuals can invest based on their own risk tolerance. (See also: <a href="http://www.wisebread.com/how-to-make-money-with-peer-to-peer-lending-service-prosper?ref=seealso">How to Make Money With Prosper</a>)</p> <h3>Why It's Safe</h3> <p>The most popular peer-to-peer lending sites report a fairly low default rate on loans. This means that those who purchase debt are likely to generate a solid return. Lending Club reports that the median adjusted net annual return is 5.1% for those who have purchased at least 100 notes.</p> <h3>Why It's Not</h3> <p>There's always a risk of loans defaulting, especially if you don't buy quality loans. Buying risky loans, or failing to diversify your loan portfolio, can lead to less-than-stellar returns.</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/is-there-such-a-thing-as-a-safe-investment">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-3-rules-every-mediocre-investor-must-know">The 3 Rules Every Mediocre Investor Must Know</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-best-ways-to-invest-50-500-or-5000">The Best Ways to Invest $50, $500, or $5000</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/how-to-build-an-investment-portfolio-for-under-5000">How to Build an Investment Portfolio for Under $5000</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-5-best-reasons-to-start-investing-in-bonds-now">The 5 Best Reasons to Start Investing in Bonds Now</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/11-investment-mistakes-we-all-make">11 Investment Mistakes We All Make</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Investment bonds cash dividend stocks mutual funds peer to peer lending REITs safe investments tips Mon, 12 Dec 2016 11:00:07 +0000 Tim Lemke 1850785 at http://www.wisebread.com Has Cash Become More Trouble Than It's Worth? http://www.wisebread.com/has-cash-become-more-trouble-than-its-worth <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/has-cash-become-more-trouble-than-its-worth" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/cash_money_78583601.jpg" alt="Learning if cash has become more trouble than it&#039;s worth" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You probably know people who have already quit using cash. I do. They pay their bills electronically, and pay for items purchased at stores with debit cards (or <a href="http://www.wisebread.com/prepaid-cards-about-to-get-safer-and-better">prepaid cards</a>, or credit cards, or any number of alternatives like Apple Pay or Google Wallet).</p> <p>Those people are making their choice based on what's best for them, but maybe society would be better off if people didn't have the choice. At least, that's what Kenneth Rogoff thinks. He's sure enough to have gone to the trouble of writing a book called <a href="http://amzn.to/2fyfK9H">The Curse of Cash</a> to lay out why he thinks so, and to suggest a path to a (nearly) cash-free society.</p> <p>Personally, I'm not convinced.</p> <h2>Rogoff's First Problem: Corrupt Transactions</h2> <p>That scale issue is what Rogoff wants to solve. Using $100 bills, you can fit $1 million in a briefcase. (You've no doubt seen the iconic aluminum Zero Halliburton case in movies. Its dimensions allow that much money, in new or used bills, to fit perfectly.) Drug lords, money launderers, human traffickers, gangsters, and corrupt businessmen can make and receive large payments in a form that's hard to detect and hard to track.</p> <p>Rogoff's idea is that getting rid of large bills will make illegal payments much harder. Your average corrupt government official, Rogoff figures, is going to be a little less interested in taking a bribe if he's going to need a dolly to cart off a steamer trunk full of $10 bills. And if he <em>does</em> take the bribe, it's going to be so cumbersome to move, store, and spend the money as to make it a lot easier to catch him.</p> <p>The idea that getting rid of large bills will reduce crime, and make criminals easier to catch, is not new. There were $500 and $1,000 bills in regular circulation in the U.S. until 1969, when President Nixon ordered them withdrawn for just that reason. There are still old bills in those denominations around, but they're mostly in the hands of collectors &mdash; and tend to sell for well over face value. They're still worth face value at a bank, but any that get deposited get sent to the Federal Reserve to be destroyed.</p> <p>(Note that with those pre-1970 large bills, we're talking big money. Adjusted for inflation, a briefcase full of $1,000 bills in 1969 would have been worth the equivalent of well over $65 million in 2016.)</p> <p>Rogoff isn't the only one thinking along these lines. Just a few months ago the European Central Bank announced their decision to get rid of their &euro;500 banknote, on the grounds that it &quot;could facilitate illicit activities.&quot;</p> <p>For most of the past ten years a briefcase full of &euro;500 bills would have been worth at least $6.5 million, although just at the moment it's only worth $5,520,350.</p> <p>Even after phasing out the &euro;500 banknote, Europe will still have a &euro;200 banknote, worth about $220, so the euro will still come out ahead in the &quot;biggest bribe in the smallest case&quot; competition. (Although behind the $1,000 Singapore banknote, worth over $700, and the 1,000 Swiss franc note, worth over $1,000.)</p> <p>Rogoff's plan would see the elimination of both the $100 and the $50 bills, followed eventually by the elimination of the $20. (Still later, he'd like to see the $5 and $10 replaced with coins hefty enough to be very unhandy for anyone carrying around more than $60 or so the average person has in his wallet right now.) These changes would make high-dollar cash payments almost impossible.</p> <p>To enable all this, he'd like to see a few changes, the biggest of which would be the creation of subsidized bank accounts and debit cards that would be free to poor people. (The government has been moving in this direction for a while, with things like the <a href="http://www.wisebread.com/making-direct-deposit-safe-for-the-garnished">Direct Express card</a>. It's only good for receiving payments of federal benefits at the moment, but it &mdash; or the now common prepaid cards &mdash; could work for this purpose with modest tweaks.)</p> <h2>Rogoff's Second Problem: Negative Interest Rates</h2> <p>Rogoff's second reason for getting rid of cash has to do with the way the Federal Reserve operates.</p> <p>The Federal Reserve adjusts interest rates with the goal of keeping prices stable while maximizing employment. They have some rules of thumb to guide them as to what the appropriate interest rate should be. Sometimes &mdash; such as the whole past seven or eight years &mdash; those rules of thumb have suggested that rates should be negative.</p> <p>Negative rates are hard to make stick as long as cash exists. If your bank account would pay a negative interest rate &mdash; in other words, charge you a fee to hold your money &mdash; obviously you're just going to withdraw your money and hold it as cash.</p> <p>Despite that issue, several central banks are experimenting with negative interest rates. So far, it's been working okay. If interest rates are only slightly negative, it's not worth it to go to the hassle of handling the cash, finding secure storage, insuring it, and so on. But what if the rules of thumb say that interest rates should be very negative? It would be worth it to rent a big vault and hire a bunch of armed guards, if the alternative was to pay several percent negative interest on $1 billion.</p> <p>If there were no high-denomination bank notes &mdash; nothing bigger than a $20 &mdash; then pulling your money out of the bank and stashing cash in a vault simply wouldn't be an option. You'd be stuck taking whatever negative rate the central bank decided was appropriate.</p> <p>Rogoff, who spent a good chunk of his career working at the Federal Reserve, thinks that would be great.</p> <h2>Going Cash-Free &mdash; Or Not</h2> <p>Rogoff's book deals pretty well with the practical issues of switching over, although he punts on a few. In particular, he figures that the infrastructure to make person-to-person payments with immediate settlement &mdash; the electronic equivalent to handing someone a $20 bill &mdash; will be created soon enough.</p> <h3>Cash Is Good at What It Does</h3> <p>However, the fact remains that there are plenty of problems cash solves very well. If you want to sell something that I want to buy, and if I have cash on hand to pay for it, we can execute the transaction without any third-party support. We don't need cards or a machine to read them. We don't need power or an Internet connection. We don't need a financial institution. We don't need a procedure to handle failures of any of those things.</p> <p>Large denomination bank notes are quite handy for transactions modestly bigger than what we usually carry in our wallets. My wife and I have twice sold an old car, each time for a few hundred dollars. One buyer showed up with a few $100 bills, which I was able to quickly verify and easily count. The other buyer showed up with a few dozen $20 bills, which made completing the transaction much more of a production. (Just counting a few hundred dollars in $20s is a non-trivial undertaking for people without much experience doing so, let alone verifying that <a href="http://www.wisebread.com/how-to-spot-counterfeit-money">they're not counterfeit</a>.)</p> <p>Most of the other details, where cash seems more convenient than some cash-free alternative, are effectively dealt with in Rogoff's book. It's full of points to flesh out his proposal, even if he fails to acknowledge some of my personal issues, such as the value of bank notes as works of art, and their value as archetypal objects of yearning.</p> <p>Leaving those trivial issues aside, there's still one big issue that keeps me from being on board with his proposal, which is that it traps everyone in a banking system controlled by the government &mdash; a government that is very likely to use the same tools they use currently (such as freezing bank accounts) in ways that will turn out to be vastly more coercive than they are now.</p> <h3>Cash Keeps You Free</h3> <p>Currently, if the government freezes your bank accounts, you lose the use of most of your money. The government isn't supposed to do this in a punitive fashion &mdash; it's just to make sure you don't abscond with the money before things get sorted out. But of course it is terribly punitive, and you're probably going to try pretty hard to sort things out with the government as quickly as possible.</p> <p>Think how much worse things would be if it weren't just your savings that were frozen, but also your ability to make transactions. Right now if your accounts are frozen, you at least have the theoretical option of putting your finances on a cash basis. If there were no cash, you could literally find yourself starving in the dark because you couldn't buy groceries or pay your power bill.</p> <p>Rogoff, I suspect, would wave that problem away as something that could be easily fixed administratively: There would be rules that would keep the government from freezing your bank accounts so severely as that, along the lines of the rules that already exist for garnishing your wages &mdash; transactions under certain amounts or for certain purposes would be allowed.</p> <p>For me though, that's putting a huge amount of faith to put in those rules and the people overseeing them. After all, fundamental rights have been (and are still being) seriously infringed on the grounds that certain people were &quot;suspected terrorists.&quot; Since access to a transaction account isn't currently viewed as a fundamental right, the threshold for limiting such access would be much more easily crossed. Who would object to freezing the accounts of suspected drug lords and suspected human traffickers? But why would it end there? Surely suspected tax cheats are bad people, and suspected deadbeat dads as well. What about people suspected of being behind on their student loans? (The government can seize most of your money for almost any debt you owe the government, but money from Social Security is safe &mdash; unless you're behind on your student loans.)</p> <p>Knowing I have the option to put my finances on a cash basis is a source of considerable comfort to me.</p> <p>Yes, the circumstances that mean I can put my finances on a cash basis if I need to also mean that criminals can put their finances on a cash basis. I'm willing to accept that, even if Rogoff isn't.</p> <p>I like the fact that cash money just works, without depending on any infrastructure. It's one reason I've long suggested that you <a href="http://www.wisebread.com/carry-some-cash">carry some cash</a>.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/philip-brewer">Philip Brewer</a> of <a href="http://www.wisebread.com/has-cash-become-more-trouble-than-its-worth">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-5"> <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/47-simple-ways-to-waste-money">47 Simple Ways To Waste 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/sensible-ways-to-raise-cash-for-a-wedding">Sensible Ways to Raise Cash for a Wedding</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/ow-do-you-deal-with-family-members-who-are-bad-at-managing-money">How Do You Deal With Family Members Who Are Bad At Managing 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/financial-tricks-to-master-for-a-happier-life">Financial Tricks to Master for a Happier Life</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/the-frugal-balance-staying-away-from-financial-extremes">The Frugal Balance: Staying Away from Financial Extremes</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle cash cash is king corruption interest rates kenneth rogoff money management transactions Fri, 11 Nov 2016 10:30:27 +0000 Philip Brewer 1830889 at http://www.wisebread.com