spending habits http://www.wisebread.com/taxonomy/term/4144/all en-US 8 Financial Wake Up Calls — And How to Deal With Them http://www.wisebread.com/8-financial-wake-up-calls-and-how-to-deal-with-them <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/8-financial-wake-up-calls-and-how-to-deal-with-them" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_glasses_gasp_84119999.jpg" alt="Woman learning her own financial wake up calls" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Can't seem to get a handle on your finances? That in itself is a wake up call that you need to be doing things differently. Here are eight more.</p> <h2>1. You Use Personal Credit Cards for More Than One-Off Expenses</h2> <p>Some personal finance experts recommend automated billing for recurring expenses, but I don't usually suggest it since I like to be in control of when and where my money goes. But <a href="http://www.wisebread.com/how-to-use-credit-cards-to-improve-your-credit-score" target="_blank">charging expenses to your credit card</a> on a regular basis is a different story. Credit cards should be used for one-off expenses that you'll pay off quickly, not month-to-month bills that can rapidly pile up without being paid.</p> <p>&quot;Credit card companies work hard to make their cards not feel like a personal loan with an abhorrent interest rate, but that's what they are for a lot of people,&quot; says money-saving expert Mike Catania. &quot;Once regular consumers start putting recurring expenses onto the cards and not paying them off fully on the due date, it's time to re-evaluate the financial picture.&quot;</p> <p>If this is something you do or have done in the past, switch to automated billing linked to your debit card. You'll need to commit to being financially responsible &mdash; like, all the time &mdash; to ensure that you can cover the funds during the fund extraction period. It'll require a change on your part, but it's not the worst habit you can pick up.</p> <h2>2. You're Constantly Complaining That You Never Have Enough Money</h2> <p>I know way too many people who complain that they're always broke, and my first question is, &quot;Why?&quot; If this sounds familiar, it's time to ask yourself that question &mdash; seriously. In most cases, there are two common answers: One, you're spending too much money on frivolous things, and two, you're not making enough money because you're spending too much time spending money on frivolous things.</p> <p>Follow me?</p> <p>To change that scenario, curb your spending. You don't need all those new things, and you shouldn't be in bars and restaurants every night of the week. Also, consider getting a second job. I recently started driving with Lyft to help curb my own Friday and Saturday night habit of going out with my friends and spending dough. So I'm not just sitting at home bored, I thought it would be helpful to find something fun to do that also will pay me &mdash; because I like money way more than the feeling of not having enough of it.</p> <h2>3. You've Been Drowning in Debt for Most of Your Adult Life</h2> <p>Nobody is going to shake a finger at you because you made a few (or more than a few) financial missteps in your 20s. We've all been there, and we've all racked up debt. But if that black cloud has followed you into your 30s or even 40s, you need to re-evaluate your entire life philosophy.</p> <p>Some debt is unavoidable, of course. I consider school loans and home mortgages &quot;good&quot; debt because they're investments, but if you've got credit card bills coming out the wazoo because you like to spend money, it's time to forget the Joneses and get back to reality. You may need an additional source of income to address the debt &mdash; which I'll cover below &mdash; but you need to do whatever's necessary to get out of the hole you dug, stat.</p> <h2>4. You're Well Into Your 30s And You Haven't Started Saving for Retirement</h2> <p>Times aren't like they used to be, and many young professionals don't have the extra money to start building their retirement funds. But, I must advise you to find that extra few bucks a month to put toward a 401K or other retirement-savings account, and take advantage of matching dollars from your employer if they're available. You may not be able to max out contributions right away, but that's okay &mdash; you've got to start somewhere. If you don't, you'll be middle-aged before you know it and fretting that you won't be able to survive retirement &mdash; or worse, not able to retire at all.</p> <h2>5. You Skip Contributions to Your Savings Accounts for Months in a Row</h2> <p>If you haven't made contributions to your savings account for several months in a row, something's wrong. Maybe you've had unexpected expenses pop up, or maybe you just haven't been as responsible with your money as you're supposed to be. Whatever the case, the fun's over; it's time to get back on track. Take a deeper look at where your money is going and see what you can pull from to put a little back in your savings account. Maybe it's canceling an entertainment service or it could be skipping the coffee house or lunches out during the week. Whatever you would've spent on those little luxuries, send that amount to your savings account to start building it back up dollar by dollar.</p> <h2>6. You Only Have One Source of Income</h2> <p>I touched on this point earlier, so let's get down to it.</p> <p>One of my financial life philosophies is to always have more than one source of income. Personally, I have about four income sources &mdash; some bring in more than others, but they all contribute to the &quot;pot.&quot; I don't need all of these revenue streams to survive, I could live without one or two of them, but I don't want to. I don't want to, because that extra one or two help me add to my savings, pay for life's little luxuries and experiences, and cover unexpected expenses when they arise. Without them, I would have to dip into my regular income, which would then take away from my savings and other running funds I keep, which in turn could lead to a dangerous debt situation if I'm not careful.</p> <p>There are absolutely no downsides to having two sources of income or more, and not a single person has ever said how frustrated or stressed they are because all their bills are paid with money to spare. No one. Ever.</p> <h2>7. You Keep Track of Expenses by Browsing Your Checking Account Online</h2> <p>I see this way too much with 20 and even 30-somethings who monitor and manage their finances by simply browsing their online checking and savings accounts. Sure, peeking at your accounts on a regular basis is good practice, <em>but that's not enough</em>. You really ought to have a formal budget established (a spreadsheet is an ideal solution for this) that details your monthly expenses and what's coming in and going out. Yeeees, it requires some effort on your part &mdash; at least more than logging into your banking app with Touch ID &mdash; but it's well worth it to avoid teetering on the edge of overdraft all the time.</p> <h2>8. You Spend Until There's Just Enough Left to Avoid Overdrafting</h2> <p>Speaking of teetering on the edge of overdraft, stop doing it! There's no reasonable explanation that you're spending money until you're within a few dollars or cents of being slapped with an overdraft fee.</p> <p>You know why? Because you can't afford it! You have zero dollars in your account at that point, which means you messed up somewhere. If you couldn't afford whatever sent you over the edge, you can't afford the hefty overdraft fees, either.</p> <p>To avoid this situation, here are my tips: When you see that thing at the store that you <em>have</em> to have, walk away. When you want to order that pizza because you're hung over or too lazy to cook dinner, get up off your butt and recognize that this exact scenario might be why you're broke in the first place. When your friends ask if you want to go out and you see that you only have $20 left in your account, just&hellip;say&hellip;no! You're allowed to do that, ya know, and nobody will stop being buddies with you and the world won't end. I promise. Instead, spend that time to reflect on why you have $20 to your name (seriously, think about that long and hard) and how you can change that. I've offered a few tips here already. The time is now.</p> <p><em>Are you avoiding any of these &mdash; or other &mdash; financial wake-up calls?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/8-financial-wake-up-calls-and-how-to-deal-with-them">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/10-ways-you-disrespect-your-money">10 Ways You Disrespect Your Money</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-terrible-money-situations-you-need-to-stop-getting-yourself-into">6 Terrible Money Situations You Need to Stop Getting Yourself Into</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/heres-what-to-do-if-you-cant-pay-your-bills-on-time">Here&#039;s What to Do If You Can&#039;t Pay Your Bills On Time</a></span> </div> </li> <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-seven-deadly-sins-of-consumerism-and-the-frugal-redemption">The seven deadly sins of consumerism (and the frugal redemption).</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-10-biggest-lies-we-tell-ourselves-about-money">The 10 Biggest Lies We Tell Ourselves About Money</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance debt going broke overdraft fees overspending paycheck to paycheck retirement accounts second jobs spending habits wake up calls Thu, 04 Aug 2016 09:00:08 +0000 Mikey Rox 1764991 at http://www.wisebread.com Can Saying Thanks More Make You Rich? http://www.wisebread.com/can-saying-thanks-more-make-you-rich <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/can-saying-thanks-more-make-you-rich" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/thank_you_note_000058962422.jpg" alt="Learning how saying thanks can make you rich" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>If you're even a little bit cynical, you might be expecting a resounding, one-word answer to this question. I mean, since when did being nice ever get you rich?</p> <p>But there is good news out there for those of us who still like to see the nice guy win once in-awhile. In fact, gratitude has a number of direct impacts on financial well being.</p> <h2>Gratitude Makes You Happy</h2> <p>Gratitude has been shown to <a href="https://www.uthealthleader.org/story/grateful-ology">make people happier</a> &mdash; and happiness is known to have a positive impact on earnings.</p> <p>In research, groups were asked to keep journals over an extended period, either simply writing down neutrally what had happened to them, or trying to find the positives to be grateful for. At the end of the study, the gratitude group were 25% happier than the neutral group, and reported fewer physical illnesses over the period.</p> <p>A different study links <a href="http://www.wisebread.com/9-ways-money-does-buy-happiness" target="_blank">happiness and earnings</a>, with research which shows that adolescents who report higher levels of happiness go on to <a href="http://www.pnas.org/content/109/49/19953.abstract">earn more as adults</a>. There are probably a wide range of reasons for this &mdash; happier people take fewer sick days, build more positive relationships, and are able to focus more on the things that matter to them.</p> <h2>Gratitude Stops Spending</h2> <p>If excessive consumption is your downfall, then try practicing a little gratitude to get back on track.</p> <p>Instead of lusting after another gadget or handbag, make a conscious effort to appreciate what you have &mdash; not only will you rediscover old pleasures, it will most likely slow your urge to spend.</p> <p>Often the desire to shop comes about because of something known as <em>hedonic adaptation</em>, or the hedonic treadmill. This is the tendency humans have to slip back to an average level of satisfaction very shortly after large improvements or positive life events. So even though you get a massive pay raise, the enjoyment is short-lived, and you soon come to expect the extra salary. Similarly, the new phone you were yearning for is only truly impressive for a few weeks before you forget the novelty and start to think about your next purchase.</p> <p>Gratitude can help overcome this tendency because it slows down the pace at which we get complacent about what we have &mdash; and by cutting out the excesses of spending, our financial wellness gets an immediate boost.</p> <h2>Gratitude Promotes Great Relationships</h2> <p>Relationships flourish with gratitude, and relationships are how business happens. So exercising a bit of gratitude can be a boon to your personal and professional relationships alike, making you happier and wealthier at the same time.</p> <p>This dynamic in professional environments has already received much scientific and psychological attention. Studies dating back decades have shown that customers come back and tip more if they are thanked for their generosity. In one wonderful example (which I really wish I had come up with myself), restaurant servers handed over the check to diners &mdash; either blank, or with a handwritten note saying thank you, including a smiley face. This research showed that those who had written &quot;thank you&quot; on their checks <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1559-1816.1996.tb01847.x/abstract">received higher tips</a>.</p> <p>Because gratitude forges an immediate personal connection, it's a great way of opening the door to a developing relationship. In a work environment, that might be as simple as getting an extra few dollars tip, or it could be the start of something beautiful. You never know.</p> <h2>Gratitude Keeps You Healthy</h2> <p>Science shows you can cut down your medical bills by saying thanks. Seriously.</p> <p>Don't take my word for it. Professor Robert A. Emmons is the author of a report on the <a href="http://www.ucdmc.ucdavis.edu/welcome/features/2015-2016/11/20151125_gratitude.html">impact of gratitude on health</a>. He says gratitude &quot;can lower blood pressure, improve immune function, and facilitate more efficient sleep. Gratitude reduces lifetime risk for depression, anxiety, and substance abuse disorders, and is a key resiliency factor in the prevention of suicide.&quot;</p> <p>Not only all that, but those who are grateful also report having a stronger social network that can support them when they need help, as well as improving blood pressure, cholesterol and heart health.</p> <p>Gratitude's impact on financial wellness is based on elements of scientific and psychological fact. It may sound far fetched at first, but saying thank you to others, and remembering to be grateful for what you have &mdash; rather than yearning for more &mdash; could really be the secret to unlocking greater emotional and financial well being.</p> <p><em>What do you think? Crazy theories or common sense? How do you practice gratitude in everyday life?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/claire-millard">Claire Millard</a> of <a href="http://www.wisebread.com/can-saying-thanks-more-make-you-rich">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/7-reasons-you-are-more-than-your-credit-score">7 Reasons You Are More Than Your Credit Score</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-put-your-spouse-on-a-budget-without-ruining-your-marriage">How to Put Your Spouse on a Budget Without Ruining Your Marriage</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/why-opportunity-funds-are-the-new-emergency-funds">Why &quot;Opportunity&quot; Funds Are the New Emergency Funds</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-financial-wake-up-calls-and-how-to-deal-with-them">8 Financial Wake Up Calls — And How to Deal With Them</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-things-i-learned-about-money-after-getting-married">8 Things I Learned About Money After Getting Married</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance appreciation gratitude happiness healthy higher salary mindset relationships spending habits Thu, 26 May 2016 09:30:18 +0000 Claire Millard 1717156 at http://www.wisebread.com Why "Opportunity" Funds Are the New Emergency Funds http://www.wisebread.com/why-opportunity-funds-are-the-new-emergency-funds <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-opportunity-funds-are-the-new-emergency-funds" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/women_piggy_bank_000091361933.jpg" alt="Women learning how opportunity funds are the new emergency funds" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You know your emergency fund is important to your financial well-being. In fact, it's a bit like flossing is to dental health. We know it's important. In fact, we know it is hugely beneficial. But do we do it? Well, no &mdash; or at least not like we should.</p> <p>The emergency fund is a classic example of what has become known as the &quot;<a href="http://www.wenell.se/wp-content/uploads/2014/01/thinking_knowing.pdf">knowing-doing gap</a>.&quot; These are cases where know we should take action, yet we don't. That's because abstract thoughts about future emergencies &mdash; auto repairs or a leaking roof &mdash; are hardly compelling. An emergency fund, as vital as it may be, just isn't sexy.</p> <p>If it's time for you to bridge the knowing-doing gap, and start future-proofing your finances, here's a smart trick to try.</p> <h2>Bridging the Gap</h2> <p>When it comes to an emergency fund, <a href="http://www.wisebread.com/6-emergency-fund-myths-you-should-stop-believing">size matters less than habit</a>. If you think that it's not worth starting because you can only spare a small amount, then you're kidding yourself. Small amounts regularly saved do mount up.</p> <p>In reality, what prevents many people from saving is not a shortage of spare cash, but a lacking desire to build an emergency fund in the first place. After all, if you were really committed to saving, and prepared to fully audit your budget, you could probably find ways to trim your expenses a few dollars a week, or <a href="http://www.wisebread.com/making-extra-cash">bring in some extra cash</a> on the side.</p> <p>But saving for an emergency fund is an inherently pessimistic and abstract thing. There is no conclusive rule to tell you how much you should have. You're saving for things that might never happen, and anyway, isn't just thinking about emergencies a little like tempting fate?</p> <h2>Opportunity Fund</h2> <p>The real barrier to saving an emergency fund, often, is in the mind. So instead of saving for an emergency fund, why not shift your thinking into a more positive groove? Decide instead to save an <em>opportunity fund</em>, so that you never need to fear missing an opportunity for want of cash.</p> <p>How much more would you be motivated to save for some unknown opportunity that might present itself in future? Instead of saving as insurance <em>against </em>the stuff of nightmares, think about saving so you can grab an opportunity when it arises.</p> <p>It is a whole lot easier (and more pleasant) to think about the opportunities that might come up in the future than it is to speculate about the disasters that might befall us. Imagine these scenarios, both with and without the financial cushion provided by your opportunity fund:</p> <ul> <li>Your dream job comes up, but the salary doesn't stack up. What do you do? Your savings give you choices.<br /> &nbsp;</li> <li>You have the opportunity to start your own business in an area you're passionate about, but starting out means living on less to begin with. Now you can weigh your options.<br /> &nbsp;</li> <li>You decide to study again, and need to flex your finances.<br /> &nbsp;</li> <li>Your best friend is about to embark on some pretty major travel plans, and you really want to join. Guess what? Now you can.<br /> &nbsp;</li> <li>You choose to drop hours at work to care for family, to travel, or to focus on a hobby. Having an opportunity fund means that you can consider different routes.<br /> &nbsp;</li> <li>You need (or want) to relocate suddenly. This could be for a good reason like a new job, love, or family. Don't feel stuck &mdash; your opportunity fund gives you the control you need to make the decisions that matter.</li> </ul> <p>While an emergency fund feels like an exercise in damage limitation, your opportunity fund will feel like control, flexibility, and financial confidence. With those motivating factors on side, you are far more likely to make a savings plan and stick to it &mdash; even if it means trimming the spend a little elsewhere.</p> <p>Naturally, once you have saved your financial cushion, it is there for you if an emergency should ever arise. But more importantly it's there as a comfort, an assurance that money worries do not need to be a reason to walk away from a great idea or opportunity. Doesn't that sound better?</p> <p><em>What do you think? Do you have an emergency fund? Would you consider using it for a great opportunity instead?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/claire-millard">Claire Millard</a> of <a href="http://www.wisebread.com/why-opportunity-funds-are-the-new-emergency-funds">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-emergency-fund-myths-you-should-stop-believing">6 Emergency Fund Myths You Should Stop Believing</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/using-your-roth-ira-as-an-emergency-fund-ever-a-good-idea">Using Your Roth IRA as an Emergency Fund — Ever a Good Idea?</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/where-to-turn-for-help-when-you-dont-have-an-emergency-fund">Where to Turn for Help When You Don&#039;t Have an Emergency Fund</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/cash-is-king-now-what-should-i-do-with-it">Cash Is King: Now What Should I Do With It?</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-your-emergency-fund-big-enough-to-keep-you-afloat">Is Your Emergency Fund Big Enough to Keep You Afloat?</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance emergency funds fun money opportunity funds savings spending habits traveling Fri, 29 Apr 2016 10:30:04 +0000 Claire Millard 1699422 at http://www.wisebread.com 5 Shopping Habits to Nix Before You Turn 30 http://www.wisebread.com/5-shopping-habits-to-nix-before-you-turn-30 <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/5-shopping-habits-to-nix-before-you-turn-30" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_shopping_bags_000051645128.jpg" alt="Woman learning shopping habits to nix before turning 30" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Once you're in your 30s, people will expect you to have smarter shopping habits. Not only is it wiser to spend your money responsibly, but once you hit the big three-oh, you will need to focus your savings efforts towards retirement and buying a home.</p> <p>Ditch these five bad shopping habits before you leave your 20s, and you will find that it is much easier to save money and hit your financial goals later in life.</p> <h2>1. You Buy What You Want</h2> <p>As an adult, it is time to realize that there are going to be many things that you <em>want </em>to buy. However, it is important to buy things you truly <em>need </em>rather than everything on your wish list. For example, you need groceries &mdash; but you do not need that tray of sushi or bottle of cold-pressed juice. Cutting out frivolous spending on whims and splurges will drastically change your finances.</p> <p>This is not to say there is never room for splurges. Instead, budget a set amount of money each month that can be spent however you wish.</p> <h2>2. You Use Credit Cards Wrong</h2> <p>Credit cards can be helpful in your finances. However, if you are just pulling out your credit card every time you make a purchase, you are more likely to overspend and put yourself in a situation where you're living paycheck to paycheck. Using credit cards wisely is the key.</p> <p>A smart way to use your credit card is to write down all of your purchases as if you were balancing a checkbook. For example, if you want to use your credit card for groceries, utilities, gas, and dining out, then set a budget for each one. Then you add all those budgets together, and every time you swipe your card, you deduct the cost from your total budget &mdash; either in a small notebook or on your phone's notepad. It might look like this:</p> <p>$850</p> <p>-$75 for electric bill (2/19)</p> <p>__________________</p> <p>$625</p> <p>-$5.50 for fast food (2/23)</p> <p>__________________</p> <p>$619.50</p> <p>Once you reach $0, stop using your credit card and pay off your balance. This allows you to benefit from the convenience of a credit card, without going into debt.</p> <p>Also if you plan on using a credit card for majority of your spending, then you need to get a card that will give you a decent amount of return. Consider using a credit card that comes with an annual fee, because those cards <a href="http://www.wisebread.com/the-5-best-credit-cards-with-annual-fees">usually come with better rewards</a>.</p> <h2>3. You Don't Pay Attention to Your Budget</h2> <p>Financial experts are quick to push the idea of budgeting on others as a simple way to be in control of your finances. The truth is that budgeting is harder to stick with than it sounds. To stay committed to your budget, try establishing budget ranges rather than a set number. For example, budgeting $350&ndash;$425 per month on groceries allows for natural fluctuations, such as a good sale or having guests over for dinner.</p> <h2>4. You Emotional Shop</h2> <p>Feeling sad? Go shopping. Excited about a new job offer? Go shopping. Have nothing else to do on a Saturday? That's right, go shopping. As silly as this sounds, many people allow their feelings and mood to dictate when they go shopping. Shopping when you are stressed, bored, excited, or depressed are all easy ways to overspend and buy items you do not need and will not use.</p> <p>This is where it is important to stick with a budget, and to evaluate what you are buying. Perhaps you are in Target, and you see a really cute dress. Before putting it in your cart, ask yourself if it is in your budget. Do you really need it? Do you have anything else like it at home? Realize when emotions are dictating your shopping habits and overrule them with logic. The best trick to try is walking away from a purchase for a day or two. If you still want the item later and it fits in your budget and needs, then go buy it.</p> <h2>5. You Don't Shop With the Future in Mind</h2> <p>As you enter your 30s, you should consider the future for each major purchase. For example, if you are planning on having children in the next two to three years, perhaps a small car is not the wisest decision. The same principle goes for buying houses, furniture, and more.</p> <p>You should even consider the future with minor purchases. It can be as simple as paper towels going on a sale. Since it is predictable that you will use paper towels in the near and distant future, you should buy several months' worth rather than just one package. Remember to exercise balance when it comes to bulk buying, though. You will need paper towels for the rest of your life, but that does not mean you should buy a whole a year's worth!</p> <p><em>Which shopping habit do you think is the most important to leave behind once you hit your 30s?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/5-shopping-habits-to-nix-before-you-turn-30">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/5-things-millennials-can-learn-about-saving-money-from-gen-x">5 Things Millennials Can Learn About Saving Money From Gen-X</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-life-mistakes-you-need-to-stop-making-by-30">5 Life Mistakes You Need to Stop Making by 30</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-awesome-reasons-to-shop-at-aldi">6 Awesome Reasons to Shop at Aldi</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-smart-shopping-reminders-that-will-save-you-big">6 Smart Shopping Reminders That Will Save You Big</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-ways-to-avoid-buyers-remorse">6 Ways to Avoid Buyer&#039;s Remorse</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping 20s 30s budgets emotional spending impulse buys millennials spending habits Tue, 22 Mar 2016 10:30:07 +0000 Ashley Eneriz 1672234 at http://www.wisebread.com Americans Spend Less Than Other Countries on These 9 Items http://www.wisebread.com/americans-spend-less-than-other-countries-on-these-9-items <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/americans-spend-less-than-other-countries-on-these-9-items" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/friends_eating_out_000078199745.jpg" alt="Americans spending less than other countries on these items" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The U.S. has the largest consumer market with a GDP nearly one-third the size of the entire world's consumer market. And we <a href="http://www.wisebread.com/americans-spend-more-than-other-countries-on-these-10-things">spend more on certain items</a> than most other countries. For instance, we pay much more than other nations for housing, medical costs, and education. But, it may surprise you to learn that because we are such a large consumer market, we actually spend less than other nations on these nine things.</p> <h2>1. Clothing</h2> <p>In a Bureau of Labor Statistics (BLS) comparative study of four developed nations including the United States, it was discovered that Americans spend 2% less than Canadians and 1.5% less than the UK on clothing. And of the four nations the U.S. ranked lowest for <a href="http://www.bls.gov/opub/focus/volume2_number16/cex_2_16.htm">total clothing expenditures</a> &mdash; at 4%.</p> <h2>2. Food</h2> <p>The same study also revealed that Americans spend less on food &mdash; just 14.6% &mdash; while Japanese citizens spend 21.8% of their total income on food. Canada scored second (15.3%), and the UK ranked third at 19.9%.</p> <h2>3. Electronics</h2> <p>The U.S. has the largest market for consumer electronics. And like the rules of supply and demand tell us, manufacturers are eager to supply to large markets such as ours, which helps control prices. Therefore, Americans who love their electronics and gadgets actually spend less on electronics than other nations.</p> <h2>4. Public Transportation</h2> <p>Again, according to the BLS report, we spend the least to get around (1.1%). Meanwhile, the UK spends 2.5%, Japan spends 2.3%, and Canada spends 2.0%.</p> <h2>5. Appliances</h2> <p>Many of the top appliance manufacturers like General Electric (GE) and Whirlpool are based in the U.S., which creates another situation where Americans get to reap the price rewards of purchasing domestic products for less.</p> <h2>6. Automobiles</h2> <p>Americans love their cars, and we spend 6.1% of our expenditures on automobiles. That&rsquo;s more than the UK and Japan, but that's the percentage of our household income. In terms of car prices per unit, we spend less than other countries.</p> <h2>7. Culture, Entertainment, and Recreation</h2> <p>Statistics about the types of culture, entertainment, and recreation are unknown, so it's unclear what specific things were included in total expenditures. But, apparently the U.S. spends significantly less on this category (6.5%) than other countries. The UK spends 15.1%, Japan 11.2%, and Canada 8.6%.</p> <h2>8. Alcoholic Beverages and Tobacco Products</h2> <p>Surprisingly, Americans spend less than the UK and Canada on alcohol and tobacco products &mdash; 1.9%. This is perhaps because many of the liquor and tobacco producers and distributors are located right here in the U.S. or in nearby Latin America.</p> <h2>9. Firearms</h2> <p>Americans love firearms probably as much as they love automobiles. Guns in America are readily available and cheap. However, they cost in more ways than people realize. An insightful Mother Jones article points to how gun violence <a href="http://www.motherjones.com/politics/2015/04/true-cost-of-gun-violence-in-america">costs American taxpayers millions</a> of dollars every day.</p> <p><em>Do your expenditures match the averages listed here?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/qiana-chavaia">Qiana Chavaia</a> of <a href="http://www.wisebread.com/americans-spend-less-than-other-countries-on-these-9-items">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/americans-spend-more-than-other-countries-on-these-10-things">Americans Spend More Than Other Countries On These 10 Things</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/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</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-exercise-mats">The 5 Best Exercise Mats</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-improve-yourself-for-100-or-less">10 Ways to Improve Yourself for $100 or Less</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-resistance-bands">The 5 Best Resistance Bands</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle Shopping americans countries money habits spending habits united states Wed, 16 Mar 2016 11:30:05 +0000 Qiana Chavaia 1670513 at http://www.wisebread.com The Surprising Way Birth Order Decides Your Money Habits http://www.wisebread.com/the-surprising-way-birth-order-decides-your-money-habits <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-surprising-way-birth-order-decides-your-money-habits" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000087462289_Large.jpg" alt="wondering how her birth order determines spending habits" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>The order in which you were born can say a lot about you. There have been many studies done that suggest your <a href="http://familyservices.us.com/pdf/A%20Review%20of%20200%20Birth-Order%20Studies-Lifestyle%20Characteristics.pdf">birth order is directly connected</a> with your personality, achievements, and even who you marry. Your birth order might even give some significant insight in how you save and spend money.</p> <h2>Oldest Child</h2> <p>Being the eldest of the family usually means you are <a href="http://www.uclouvain.be/cps/ucl/doc/psyreli/documents/2003.BirthOrder.pdf?spnCategory=525&amp;spnDomain=17&amp;spnContent=23&amp;spnContent=28&amp;spnID=41021">more responsible and driven</a>. Firstborns tend to be more organized and punctual, too. You have probably been in charge of your younger siblings on multiple occasions. And there were also many times when your parents depended on you.</p> <p>All of these personality traits translate to healthy financial habits. Firstborns are more likely to pay bills on time, spend responsibly, and calculate financial risks thoroughly. Their driven behavior might be why many firstborns also make more money or have prestigious careers, such as a profession in the medical or law field.</p> <p>Firstborns can also come with flaws. Their perfectionist nature can drive them too far. Firstborns are more likely to suffer burnout and mid-life crises. Your finances will suffer if you reach burnout and give up on your career or savings goals. (See also: <a href="http://www.wisebread.com/are-you-smarter-than-your-sibling-your-birth-order-might-provide-the-answer?ref=seealso">Are You Smarter Than Your Sibling?</a>)</p> <h2>Middle Child</h2> <p>Middle children tend to be the <a href="http://familyservices.us.com/pdf/A%20Review%20of%20200%20Birth-Order%20Studies-Lifestyle%20Characteristics.pdf">family's peacemaker</a>. They are good at solving problems and coming up with inventive solutions to conflict and issues. Middle children can fall into the trap of not wanting to look upstaged by their older sibling. Middle children are more likely to hide their true financial situation, so that parents and siblings will think the middle child is responsible and successful.</p> <p>Middle children will benefit the most financially by being honest with themselves and others about money. You will only put your budget in trouble if you pretend that you can afford everything your older sibling can. While the pressure to compete might have you embellishing how much is in your savings account, don't let your pride cause you to overspend or forgo asking for help when you are in financial hot water.</p> <p>As an inventive problem solver, middle children can tend to deal with financial problems in a creative, but unhelpful way. Shuffling debt around to new <a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">0% APR credit cards</a> might seem smart, but it does not address the root issue &mdash; debt.</p> <h2>Youngest Child</h2> <p>As the baby of the family, you are used to being in the spotlight. Family members are more likely to dote on the youngest and provide extra leniency as far as responsibility goes. The youngest tend to be more social and fun-loving, too.</p> <p>All of these traits can lead to <a href="http://www.wisebread.com/5-habits-that-kill-your-buying-power">poor money habits</a>. The youngest child might rely on their parents for financial support much longer than their other siblings and have a hard time developing financial responsibility. They can tend to blame bad financial consequences on others instead of owning up to mistakes. For example, a late bill is not their fault since the company forgot to send the bill or they were working too many hours to have time to pay it.</p> <p>The youngest children can tend spend their money carelessly, especially in social and fun settings. They might complain about not having enough money to fix their car or pay rent, but they always seem to have money for a dinner out with friends or a Starbucks latte.</p> <p>Don't let your youngest-child status ruin your finances though. You can still enjoy fun, social nights out, but learn to budget for it and find creative and more affordable solutions. A potluck with friends can be just as fun &mdash; and much less expensive &mdash; than going out for a dinner and a movie.</p> <h2>Only Child</h2> <p>Only children share many of the great financial habits of firstborns. They tend to have <a href="http://www.wisebread.com/what-does-your-credit-score-mean-good-bad-or-excellent">great credit scores</a> and be driven to make more money. Since only children have spent most of their lives around adults, they also tend to be more mature. However, only children can also feel more inclined to impress others and take risks. They might overspend and live above their means to impress others and to fit in.</p> <p>Only children might also take riskier financial moves, such as putting their money in a new startup or risky investment. Their higher level of risk can either work for them, or against them. Some risks will pay off in big ways, while others will drain their bank accounts.</p> <p>It is important to remember that birth order is a theory and not a law. While your birth order <em>might </em>mean you have natural inclinations to certain personality quirks and spending habits, it should by no means be what defines you. Don't write off your bad money habits just because you are the youngest child. Instead, learn what your natural inclinations are and work against them to create healthy money habits.</p> <p><em>Did we nail your money habits right on the head or were we completely wrong? Share your how your birth order affects your money management. </em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ashley-eneriz">Ashley Eneriz</a> of <a href="http://www.wisebread.com/the-surprising-way-birth-order-decides-your-money-habits">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-s-your-budget-personality">What’s Your Budget Personality?</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-put-your-spouse-on-a-budget-without-ruining-your-marriage">How to Put Your Spouse on a Budget Without Ruining Your Marriage</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-things-yoga-can-teach-you-about-money">5 Things Yoga Can Teach You About 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/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-money-lessons-to-take-from-the-great-depression">9 Money Lessons to Take From the Great Depression</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Budgeting Family birth order budgeting money habits money personality only child spending habits Wed, 16 Mar 2016 10:00:06 +0000 Ashley Eneriz 1673866 at http://www.wisebread.com Stop! Don't Cut Up Your Credit Cards http://www.wisebread.com/stop-dont-cut-up-your-credit-cards <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/stop-dont-cut-up-your-credit-cards" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_cutting_card_000037695864.jpg" alt="Woman deciding not to cut up credit cards" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>It's a dramatic statement: You've vowed to finally pay off your credit card debt. To prove your point, you grab those scissors and cut your plastic into tiny pieces.</p> <p>That probably feels good, but it's really not a smart move. And going one step further and canceling those credit cards once you do pay off your debts is an even worse move. Why? If you never use your credit cards, the financial institutions behind them will eventually consider them inactive. They will then close those accounts. When banks close your credit card accounts, your FICO credit score will fall.</p> <p>&quot;We live in a world in which using credit cards is actually important,&quot; said Dolph Janis, founder and owner of Clear Income Strategies Group in Charlotte, North Carolina. &quot;If someone has given you credit to use, you might not need it today. You might not need it tomorrow. But you might need it one day.&quot;</p> <h2>Credit-Utilization Ratio</h2> <p>Lenders today rely on your FICO credit score to determine if you qualify for loans and to decide the interest rates you'll pay on them. A high credit score will result in lower interest rates, with a FICO score of 740 or higher yielding the best results.</p> <p>Your score will fall if you pay certain bills late, miss certain payments, or run up too much credit card debt. But many consumers don't know that their score will fall, too, if they or their banks close unused credit card accounts.</p> <p>This is because of something called your <a href="http://www.wisebread.com/this-one-ratio-is-the-key-to-a-good-credit-score">credit-utilization ratio</a>. Your credit score will be higher if you use less of your available credit. Say you have four credit cards with a total credit limit of $10,000, and you have $3,000 in credit card debt. If you close one of your accounts or your bank closes an inactive credit card with a credit limit of $3,000, you will suddenly have that same $3,000 worth of credit card debt on a total credit limit that has fallen to $7,000.</p> <p>This means you are using more of your available credit, and that your credit-utilization ratio is worse &mdash; all without you making a single new credit card charge.</p> <h2>Keeping Your Cards Active</h2> <p>To prevent a closure of your card, Janis recommends that you use each of your credit cards at least once a month.</p> <p>But don't carry a balance on these cards. Instead, charge items that you know you can pay off at the end of the month. Then pay your card balance in full by its due date. This way, you keep your credit cards active without suffering the pain of traditionally high credit card interest rates. Of course, you can't follow Janis' plan if you've already cut up your credit cards.</p> <h2>Look at Your Spending Habits</h2> <p>There's another flaw with the cut-the-cards strategy. It doesn't really change your spending habits.</p> <p>Sure, cutting up your credit cards might feel good. But if you don't determine why you've run up your debt, the odds are that this will only be a temporary solution. Once you get the urge to use your plastic again, you'll simply call your bank and ask for a replacement card.</p> <p>A better approach is to figure out what causes you to overspend and then resolve whatever those issues might be.</p> <p>If you are battling credit card debt, know that you are not alone. Many consumers struggle with credit card debt. The Federal Reserve Board in May of last year said that total credit card debt in the United States hit $901 billion. That was up 3.19% from a year earlier. A study by NerdWallet found that as of July of last year, households with credit card debt carried an average of $15,863 on their cards.</p> <p>If you, too, have thousands of dollars of credit card debt, you'll have to do more than just cut those cards. You'll have to do the hard work of changing your spending habits and learning how to use your credit wisely. (See also: <a href="http://www.wisebread.com/when-to-do-a-balance-transfer-to-pay-off-credit-card-debt?ref=seealso">How to Pay Off Credit Card Debt with a Balance Transfer</a>)</p> <p><em>Have you you ever chopped up your credit cards in order to cut your spending?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/stop-dont-cut-up-your-credit-cards">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-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/avoid-these-5-common-mistakes-while-rebuilding-your-credit">Avoid These 5 Common Mistakes While Rebuilding Your Credit</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-fastest-method-to-eliminate-credit-card-debt">The Fastest Method to Eliminate Credit Card Debt</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-dirty-secrets-of-credit-cards">The Dirty Secrets of Credit Cards</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-people-with-good-credit-never-do">8 Things People With Good Credit Never Do</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-financial-wake-up-calls-and-how-to-deal-with-them">8 Financial Wake Up Calls — And How to Deal With Them</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Credit Cards credit reports credit utilization ratio debt spending habits Thu, 10 Mar 2016 10:00:12 +0000 Dan Rafter 1670332 at http://www.wisebread.com Beware of These Common Debt Consolidation Traps http://www.wisebread.com/beware-of-these-common-debt-consolidation-traps <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/beware-of-these-common-debt-consolidation-traps" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_concerned_paperwork_000082590043.jpg" alt="Man learning to beware of common debt consolidation traps" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>You've vowed to eliminate your credit card debt, but your bills are too overwhelming. You're ready to consider a final option: debt consolidation.</p> <p>It's true that consolidating your debts can make it easier to eliminate them. But debt consolidation can come with its own financial traps. Because of these potential pitfalls, consumers should be wary before signing up for debt consolidation. Bruce McClary, vice president of external affairs and public relations for the Washington D.C.-based National Foundation for Credit Counseling, says that sometimes, it makes more sense to consider other options.</p> <p>&quot;Debt consolidation is not always the right choice,&quot; McClary explains. &quot;It is not a free service. And often, you can take care of your debt on your own, if you change your spending habits and take a more disciplined approach to paying off your existing debt.&quot; (See also:&nbsp;<a href="http://www.wisebread.com/5-tricks-to-consolidating-your-debt-and-saving-money">5 Tricks to Consolidating Your Debt and Saving Money</a>)</p> <p>Here are the most common debt consolidation traps to avoid.</p> <h2>1. A Sky-High Interest Rate</h2> <p>In debt consolidation, a company will combine your debts into one single monthly payment that you can afford. In theory, it's a low-stress way to tackle what would otherwise be overwhelming.</p> <p>But even if your monthly payment is lower, this doesn't mean that you won't be spending too much. Some debt consolidation companies charge high interest rates to go along with the new monthly payment plans they set up for their clients. Make sure you ask your debt consolidation company what interest rate they'll charge you. If it seems too high, look elsewhere.</p> <h2>2. High Fees</h2> <p>Debt consolidation isn't free. But some debt consolidation firms soak their clients with especially high fees, either in the form of monthly or upfront charges.</p> <p>Again, make sure you know exactly what fees your debt consolidation company plans to charge you. Request a list of these fees in writing so that there's no confusion. If the firm won't provide this information to you, don't work with it. You want to work with a company that is clear about how much it charges.</p> <h2>3. Consolidating the Wrong Debt</h2> <p>Some forms of debt are worse than others. Credit card debt with high interest rates, for instance, is the bad kind of debt. But debts with low interest rates, such as auto loans or student loans, are generally considered good debt.</p> <p>You might be tempted to consolidate all of your debts into a single monthly payment. But rolling low-interest-rate debts into your monthly payment might be a poor financial decision depending on the interest rate of your new debt consolidation loan.</p> <p>When taking out a debt consolidation loan, focus on your debts with the highest interest rates. Pay off your low-interest-rate debt on your own.</p> <h2>4. Running Up Your Debt Again</h2> <p>Taking out one debt consolidation loan is bad enough. But if you don't change your spending habits, you might find yourself facing overwhelming debt again, even after paying off a debt consolidation loan.</p> <p>Consolidating your debt is treating the results of your bad spending habits. This isn't the same as treating the reasons for your bad spending.</p> <p>Once you've entered debt consolidation, it's time to determine why you ran up your debt in the first place. Maybe you spend when you are anxious. Maybe you overspend in an effort to keep up with your neighbors. Maybe you've never learned how to make and stick to a budget. If you don't address the reasons behind your overspending, you run the real risk of piling up debt yet again.</p> <p><em>Have you tried debt consolidation to eliminate debt? Did it work?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/dan-rafter">Dan Rafter</a> of <a href="http://www.wisebread.com/beware-of-these-common-debt-consolidation-traps">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/is-a-balance-transfer-offer-a-good-deal">Is a Balance Transfer Offer a Good Deal?</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-0-balance-transfer-credit-cards">The 5 Best 0% Balance Transfer Credit Cards</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/dont-ignore-these-4-things-before-refinancing-your-student-loans">Don&#039;t Ignore These 4 Things Before Refinancing Your Student Loans</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-ways-to-prevent-a-debt-spiral">5 Ways to Prevent a Debt Spiral</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/all-the-ways-minimum-payments-are-evil">All the Ways Minimum Payments Are Evil</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management consolidation fees interest rates spending habits traps Wed, 20 Jan 2016 14:00:03 +0000 Dan Rafter 1638728 at http://www.wisebread.com This Is How Americans Spent Their Money in the 1950s http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/this-is-how-americans-spent-their-money-in-the-1950s" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_classic_car_000028718312.jpg" alt="Woman in America spending her money in the 1950s" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Americans tend to think of the 1950s as an idyllic time when the babies were booming, the jobs were plentiful, and the country was flourishing.</p> <p>Our parents and grandparents had good reason to feel prosperous. The average yearly income rose from <a href="http://www.thepeoplehistory.com/1950.html">$3,210 in 1950</a> to <a href="http://www.thepeoplehistory.com/1959.html">$5,010 in 1959</a>, and post-war Americans were enjoying access to products and services that were scarce during World War II. Finding good uses for disposable income in the 1950s began the American love affair with consumerism. That love affair that continues to this day &mdash; although our spending priorities may have changed somewhat over the years.</p> <p>Here's how Americans spent their money in the post-war 1950s, and how their spending habits compare to ours in the 2010s.</p> <h2>White Picket Fences</h2> <p>The American dream of owning a home has deep roots the 1950s. Not only were many of the 16 million returning WWII veterans looking to buy homes, but the GI Bill offered them liberal home loans, and the end of the war saw the beginning of the baby boom, all of which drove demand for affordable houses.</p> <p>Large homebuilders met that demand. They began applying assembly-line methodology to home building &mdash; by using panelized construction and drywall rather than wet plaster &mdash; which allowed them to create &quot;cookie cutter&quot; tract housing, giving birth to the modern suburb. An amazing &quot;<a href="http://www.achrnews.com/articles/87033-the-1950s-pursuing-the-american-dream">three out of five families</a> became homeowners, and suburban living became a national phenomenon.&quot;</p> <p>There was a dark side to this housing boom, however. While favorable loans and newly built homes in suburbia were available to white veterans and families, African Americans and other minorities were actively excluded from communities, such as Levittown, and from access to home loans. These entrenched patterns of racial discrimination in housing continue to affect housing and home buying to this day.</p> <p>For those who could access the American Dream in the 1950s, homeownership looked very different from today. To start, the average size of a new single-family home in 1950 was a mere 983 square feet, whereas the average new home built in 2004 boasted 2,349 square feet. According to Margot Adler of NPR, &quot;Back in the 1950s and '60s, people thought it was normal for a <a href="http://www.npr.org/templates/story/story.php?storyId=5525283">family to have one bathroom</a>, or for two or three growing [kids] to share a bedroom.&quot;</p> <p>In addition, the time frame for purchasing a house has changed since the 1950s. Modern young adults consider buying a home an important step before having kids. According to Casey Shipley, a mortgage loan originator from Lafayette, Indiana, families in the 1950s saw home ownership as &quot;something you did when you were settled and done with babies. Most families had children in their early 20s, so looking for a home was something you did after that first big promotion, maybe when you were in your 30s.&quot;</p> <p>Part of that wait-to-buy-until-we're-settled mindset came from the fact that most families lived their entire lives in one home. Financing such a once-in-a-lifetime purchase with a 30-year mortgage allowed a family to have their home paid off by the time the breadwinner was ready to retire in his 60s.</p> <p>The median home price in the United States in 1950 was $7,354 (which is equivalent to $71,360 in today's dollars), rising to a median of $11,900 in 1960 ($93,830 in today's dollars), and housing represented about 22% of a 1950s household budget. For comparison, the median home price in October 2015 was $281,500, and the modern household spends about 43% of its budget on housing.</p> <h2>Cool Rides With Tail Fins</h2> <p>Of course, living in a new suburban home meant dependence on another big status purchase: a car. And Americans embraced the automobile with open arms, making it the center of our culture. Just look at the rise of American auto manufacturing (one out of every six working Americans were employed directly or indirectly by the auto industry), the creation of suburbs and interstates, and the introduction of the drive-in theater, fast food, and the classic car song.</p> <p>As much as Americans loved their cars, the standard was for each family to have just one automobile. Owning more than one car often indicated top-hat-and-monocle levels of wealth. The one-car family can seem pretty odd in retrospect, considering how inexpensive a new car was back in the day. At the beginning of the decade, the average sticker price for a new car was $1,510 ($14,650 in today's dollars), and rising to $2,200 ($17,350 in today's dollars) by the end of the 1950s. Modern new car prices average $33,560 in 2015.</p> <p>But it's important to remember that cars of the 1950s, as solid as they may look, had vastly shorter lifespans and required a great deal more maintenance than their modern counterparts. According to Craig Fitzgerald of BestRide, &quot;it was exceedingly common to carry a little envelope with flat ignition wrenches in the glove box, so that car owners could adjust ignition points and timing, which started going out of spec the moment you turned the car on.&quot; Additionally, cars were more likely to rust out from under you, which is why many families made do with cardboard-covered holes in the floors of their cars.</p> <p>This meant cars tended to last no more than 60,000 to 80,000 miles, between the ignition point issues and the overwhelming problem with rust. All-in-all, families in the 1950s and modern families spend a similar percentage of their household income on transportation &mdash; it was about 15% of a 1950s family budget, and is about 18% of a modern family budget. The difference is that we now own multiple cars that we keep for longer and have to maintain less.</p> <h2>TVs and Sugary Snacks</h2> <p>In addition to houses and cars, there was one more big purchase families in the 1950s scrimped and saved to make: the television. TV sets cost around $200 in the 1950s ($1,600-$1,950 in modern dollars), but that was not the end of their influence on American spending. (See also: <a href="http://www.wisebread.com/this-is-how-much-a-rent-to-own-tv-really-costs">This Is How Much a &quot;Rent-to-Own&quot; TV Really Costs</a>)</p> <p>Changing the American downtime from radio-listening to television-watching meant that our grandparents suddenly had visual examples to imitate in real life. For instance, TV shows from the 1950s were all about families living in gorgeous, spotless houses. Watching television prompted American families to yearn for their own homes, and to spend more money on cleaning products to make their homes as squeaky-clean as the sets of <a href="http://www.amazon.com/gp/product/B013FCLEIG/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B013FCLEIG&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=44G3NJ7SEW37PC5C">I Love Lucy</a> and <a href="http://www.amazon.com/gp/product/B0038SUBDC/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B0038SUBDC&amp;linkCode=as2&amp;tag=wisbre03-20&amp;linkId=OIBYQW6BP6S26TWI">Leave It to Beaver</a>.</p> <p>Television also helped to create a brand new demographic: the teenager. While teenagers were already at work forming their own subculture, advertising agencies realized that teens were a potentially lucrative group to target since they had leisure time and spending power, unlike previous generations of adolescents. So television commercials were geared toward the new demographic. Teens responded by spending their money on <a href="https://youtu.be/bgAt4dMgwwU">Coca-Cola</a>, <a href="https://youtu.be/4gtM_mmvDww">M&amp;Ms</a>, and all the other products commercials sold to them &mdash; and by influencing their parents' spending habits.</p> <p>The financial power of the teenage demographic remains incredibly strong, but advertisers have had to change their tactics as our consumption of entertainment has changed.</p> <h2>Keeping Our Spending Habits, But Changing What We Buy</h2> <p>While the specifics of what Americans bought in the 1950s might look different from modern purchases (when's the last time you saw someone rock a coonskin cap?), the habits themselves were remarkably similar. Homes, cars, and the products advertised on your screen of choice are the items people most wanted to buy then, as now.</p> <p>That's because the spending habits we consider normal were born in the post-war 1950s. Prior to that decade, few households could boast discretionary spending, and before television, there were not as many large-scale outlets that allowed advertisers to tempt consumers into unnecessary spending.</p> <p>We may no longer consider a 983 square foot house or a car with a rusted-through hole in the floor to be normal, but our expectations for spending discretionary income remain mostly the same.</p> <p><em>Would you have preferred to live in the 1950s? Or another decade? Let us know in the comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">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/14-pricey-things-you-shouldnt-buy-and-what-to-get-instead">14 Pricey Things You Shouldn&#039;t Buy (And What to Get Instead)</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/do-not-buy-something-just-because-you-can-afford-it">Do not buy something just because you can afford it</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-improve-yourself-for-100-or-less">10 Ways to Improve Yourself for $100 or Less</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-exercise-mats">The 5 Best Exercise Mats</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/never-use-cash-for-these-11-things">Never Use Cash for These 11 Things</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting Lifestyle Shopping 1950s American spending shopping spending habits Spending Money Tue, 12 Jan 2016 12:00:03 +0000 Emily Guy Birken 1635539 at http://www.wisebread.com What’s Your Budget Personality? http://www.wisebread.com/what-s-your-budget-personality <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-s-your-budget-personality" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_using_tablet_000050902322.jpg" alt="Woman figuring out her budgeting personality" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Our personalities inform how we approach every part of our lives. From the workplace to friendships and even at home, your distinct style is uniquely yours when you interact with the world around you. This goes for budgets, too. Personalities often impact how you spend, save and manage your money, sometimes positively and sometimes impeding your progress.</p> <p>Do you know your budget personality? Check out these four common types and corresponding tips to jump-start your road to better financial health. You just may recognize yourself!</p> <h2>The Go(al)-Getter</h2> <p>You set incremental goals, map out a plan and then make it happen. Save for a big purchase? Check. Increase retirement savings? Check. Put money aside for a down payment? Check. Your drive, ability to focus and discipline help you stick to your plans and achieve what you want out of life, including hitting your financial goals big and small.</p> <p><strong>Tip</strong>: You plan for everything, but don't forget to plan for unexpected expenses like a car breakdown, a broken leg, or even three destination-wedding invitations in your mailbox! To keep with your planning personality, tell yourself, &ldquo;My car&nbsp;<em>will</em>&nbsp;eventually need repair,&rdquo; and &ldquo;I <em>will</em>&nbsp;have medical expenses at some point.&rdquo; That way you can anticipate the unexpected. Look at your budget from last year and map what categories you&rsquo;re most likely to experience surprises. In the world of budgeting, sometimes lightning does strike twice!</p> <h2>The Automater</h2> <p>You fill your life with the things you love: friends, family, and hobbies. Money isn't your favorite topic &mdash; it probably doesn&rsquo;t even crack the top 10. But that doesn't mean you don't stay on top of your financial responsibilities. You've created a system that does the work for you: automatic bill pay, deposits to your savings account from each paycheck and round-ups into an investment account with each purchase. Knowing your money is managed in the background of life gives you comfort as you go about your business.</p> <p><strong>Tip</strong>: Automation is a great way to manage your bills and saving, but don&rsquo;t become robotic about your budget. You may miss out on opportunities to optimize your money. Look at money coming in and going out of your accounts monthly. You may find that you're spending money on services you're not using (e.g. subscriptions) or not taking advantage of offers like credit card points or company 401(k) matching.</p> <h2>The Busy Bee</h2> <p>You are always on the go, so your phone is a mobile command center for your life. Your phone helps you understand your daily &ldquo;to-do list&rdquo; &mdash; alerts and push notifications make sure you're at meetings, kids' functions and paying your bills on time&hellip; even if it&rsquo;s by the skin of your nose! You focus your seemingly endless energy to what's immediately next, often doing three things at once&hellip; rarely without a phone in your hand to accelerate your tasks.</p> <p><strong>Tip</strong>: Mobile tools have made budgeting efficient and easy, even while in the car or at work. But don't forget to slow down and think about the big picture. Where do you want to be in 5, 10, and 20 years? Do you have the financial plans in place to make that vision a reality? Though it may be hard to imagine even a week in the future, make time for yourself (and your partner, if someone is along for the ride) to discuss what you want out of your future and make a plan together.</p> <h2>The Avoider</h2> <p>For you, money = worry. As a result, you avoid the subject as much as possible; putting off bills and financial decisions until they become late notices and missed opportunities. Your budget is more &ldquo;approximation&rdquo; than exact math, which usually creates more worry than your thoughts on money in the first place!</p> <p><strong>Tip</strong>: Start small. Creating a budget may seem like an insurmountable task, especially for someone who feels like they don&rsquo;t have enough money to cover his or her expenses. Knowledge is a powerful ally when cleaning up your financial act. Start off by tracking everything you spend in one week vs. the money that you bring in. You may discover things you didn&rsquo;t know about your spending habits. Once you see the value of these insights, <a href="https://www.mint.com/">Mint</a> can help you establish a budget and set you on a path to be worry-free.</p> <p>What&rsquo;s your budget personality? Share in the Comments or on Twitter with hashtag #BudgetPersonality.</p> <p><em>This is a guest contribution from our friends at&nbsp;<a href="https://blog.mint.com/" target="_blank">mintlife</a>.</em></p> <div class="field field-type-text field-field-blog-teaser"> <div class="field-items"> <div class="field-item odd"> What&#039;s your budget personality? Find out here! </div> </div> </div> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mint">Mint</a> of <a href="http://www.wisebread.com/what-s-your-budget-personality">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/the-surprising-way-birth-order-decides-your-money-habits">The Surprising Way Birth Order Decides Your Money Habits</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/too-broke-to-be-frugal">Too broke to be frugal?</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/flashback-friday-50-money-moves-you-need-to-make-when-big-changes-happen">Flashback Friday: 50 Money Moves You Need to Make When Big Changes Happen</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/47-simple-ways-to-waste-money">47 Simple Ways To Waste Money</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/getting-by-without-a-job-part-1-losing-a-job">Getting by without a job, part 1--losing a job</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Budgeting budgeting finances personality types spending habits Wed, 04 Nov 2015 17:16:29 +0000 Mint 1598543 at http://www.wisebread.com 7 Ways Millennials Are Better With Money Than You Are http://www.wisebread.com/7-ways-millennials-are-better-with-money-than-you-are <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-ways-millennials-are-better-with-money-than-you-are" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/000066219881.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>There's a lot of eye rolling, patronizing, and dismissal of Millennials by older generations &mdash; some of which is warranted, some not. But have you ever thought about this cohort of tech-savvy professionals poised to take over the world and stopped to consider that they're spending and saving much smarter than other generations? 'Cause it's true.</p> <p>What are they doing differently? Take a look at these seven ways Millennials are changing the money game entirely to forge their own path to financial success.</p> <h2>1. Millennials Are Quick to Adopt New Payment Technologies</h2> <p>There used to be only three ways to pay for purchases &mdash; cash, check, or charge. But today there are several paperless options that require neither physical money nor the prospect of accumulating debt with credit. These new mobile-based payment technologies are linked directly to a bank account for what's essentially a debit transaction without the card, and Millennials are adopting them in droves.</p> <p>&quot;Millennials are spending differently today than previous generations and it's easy to see why when you look at the banking technology and tools available to them,&quot; says Barry McCarthy, executive VP of network and security solutions at First Data, a provider of global payment solutions. &quot;With 51% of Millennials <a href="http://www.jwt.com/blog/consumer_insights/jwts-the-future-of-payments-currency-trend-report-explores-new-ways-to-pay-and-rise-of-alternative-currencies/">favoring new payment technologies</a> over cash, debit, and credit cards versus 33% of Gen X-ers and 17% of Baby Boomers, it's no surprise that money management among Millennials &mdash; whether they're just starting college or beginning to build a family nest egg &mdash; is different.&quot;</p> <p>Some of the smartphone-accessible solutions that Millennials are increasingly using include:</p> <h3>Mobile Check Acceptance</h3> <p>Many Millennials favor banking apps with remote deposit features. A study by Zogby Analytics found that 54% of Millennials would <a href="http://www.miteksystems.com/infographics/the-smartphone-is-the-millennials-bestie">use remote deposit features</a> on their phones if their bank offered the feature. Many banks offer mobile check acceptance for Millennials to engage in on-the-go banking to fit their busy lifestyles. These services, aside from cutting out in-person branch visits, also help promote education on mobile checking, savings, and even pre-paid debit accounts, all within a secure and modern pay-by-check option.</p> <h3>Digital Wallets</h3> <p>Among other things, the digital wallet &mdash; which allows people to digitally replace physical wallet contents, including gift cards &mdash; is catching on quickly with Millennials, who often spurn cash and plastic in favor of a smartphone. Digital wallets let mobile users upload and store their credit, debit, or plastic gift card info, allowing users to have a view into all of the funds available across their cards and keep track of balances in real time. Along with other tools, like the leading virtual gift card app <a href="http://www.jdoqocy.com/click-2822544-11949187-1442871035000">Gyft</a>, the mobile device becomes an easy-to-use money management system.</p> <h3>Mobile Bill Pay</h3> <p>In a recent report, Western Union found that 38% of Millennials (Generation Y) use apps and mobile tools to <a href="http://payments.westernunion.com/GenYmindsetindex">make bill payments</a> &mdash; more so than any other generation. As Millennials increasingly tap into the bill-pay solutions that companies offer, they'll gain a greater understanding of the payment options available to them to manage their financial obligations, whether using online, mobile, or recurring payments for anything from mortgages to student loans. For the roughly one-quarter of Millennials who <a href="http://www.aicpa.org/press/pressreleases/2013/pages/millennials-rely-on-friends-financial-habits-to-determine-their-own.aspx">missed a bill payment</a> in the last year, reminders can also be scheduled to help make payments on time and avoid penalties or credit score damages.</p> <h2>2. They're Less Reliant on Credit</h2> <p>As a Millennial myself &mdash; who's on the older end of the Millennial spectrum, mind you &mdash; I know firsthand the financial devastation credit card abuse can bring. I maxed out my cards before my 19th birthday (less than six months after I received my first credit card, in fact), yet it took nearly half a decade to eliminate the accumulated debt. These days I try to live a don't-spend-what-I-don't-have kind of lifestyle, and it seems I'm not alone: According to a survey by Princeton Survey Research Associates International, an incredible 63% of Millennials ages 18 to 29 don't have a single credit card, compared to only 35% of adults age 30 and older who don't have them.</p> <p>While cash, debit, and mobile pay are preferred methods of payment for Millennials, they're also using prepaid cards for purchases to keep their spending in check, according to David Smith, head of marketing for Kaiku Finance, a provider of prepaid products.</p> <p>&quot;Research has proven that the Millennial generation is opting for prepaid cards instead of credit cards and bank cards for their wealth management routines,&quot; Smith says. &quot;Already immersed in student loans, Millennials are not interested in running up credit cards and accruing more debt. They like the convenience, the transparency regarding fees, and the predictability that prepaid cards have to offer.&quot;</p> <h2>3. They're Using Coupons to Try New Products</h2> <p>Millennials are using coupons to try new products with greater frequency than other demographic groups, according to new data from the Shopper Promotion Impact Report (available to subscribers) published by Inmar, a company that provides analytics based shopper engagement solutions for brands and retailers.</p> <p>Inmar's research for the report &mdash; conducted during the first six months of 2015 &mdash; reveals several significant differences in the coupon-influenced shopping behavior of Millennials compared to other shopper segments. Specifically, Millennials use coupons to try a new brand at significantly higher rates than older shoppers do.</p> <h2>4. Millennials Are Active Coupon Sharers</h2> <p>I don't just love shopping with coupons &mdash; I won't shop without them, in fact &mdash; but I also enjoy sharing them with friends, family, and other consumers. Recently I struck up a conversation with two ladies at the Gap who were buying back-to-school clothing and I informed them about an exclusive SMS discount for that day's purchase by texting a code word to a designated number for 25% off. It's something I do often, as do other Millennials.</p> <p>According to Inmar, Millennials are much more active in coupon sharing than older shoppers. Research revealed that 20% of coupons used by Millennials were acquired through sharing. By comparison, just 9% of the coupons used by older shoppers were acquired this way.</p> <h2>5. They Engage More With Paperless, Digital Offers</h2> <p>Ask a Millennial if they clip coupons and you might render them confused. That's because in their world, physical coupons rarely exist. Instead, their coupons are found on their mobile devices, many of which are preloaded into loyalty-program cards and apps, of which Millennials are accessing regularly.</p> <p>According to Inmar's research, 22% of the promotions that Millennial shoppers used during the first half of 2015 were load-to-card offers.</p> <h2>6. They're Using E-Banking and Mobile Devices to Monitor Spending</h2> <p>Virtually nobody balances a checkbook anymore as paying by check becomes more and more inconvenient and, as a result, infrequent &mdash; but that's assuming you know how to balance a checkbook in the first place. For Millennials, the concept is foreign since many of them have never written a check in the lives. Rather, they've grown up with mobile banking, which keeps everything tallied and logged automatically for quick-and-easy access for up-to-the-minute banking information.</p> <h2>7. Millennials Are Buying Homes They Can Afford</h2> <p>While the rest of America is trying to keep up with the Joneses, Millennials are like, &quot;Who are they?&quot; &mdash; especially when it comes to home buying.</p> <p>&quot;When buying homes, Millennials take their time, more so than Boomers or Gen X-ers,&quot; says Pamela Hanson, founding partner of Downcity Home Closing in Barrington, R.I. &quot;A trend we've noticed as a residential home closing firm is that more often than not, Millennials buy under their means. Not so with the generations that preceded them where bigger was better, and the plan was to finance as much of their home purchase as possible.&quot;</p> <p>In fact, adds Hanson, &quot;Millennials often have 20% down, which is easier because they are not buying at the top of their affordability.&quot;</p> <p>&quot;I think being raised with Internet technology as their norm, the whole process of financing is less daunting to Millennials; they are often calm and self-educated about the home buying process.&quot;</p> <p><em>Are you a Millennial? Does this spending and saving research apply to you? How are you managing your money differently than previous generations? I'd love to hear your thoughts in the comments below.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/7-ways-millennials-are-better-with-money-than-you-are">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/4-things-millennials-should-do-today-to-prepare-for-retirement">4 Things Millennials Should Do Today to Prepare for Retirement</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/could-happy-hour-help-you-better-manage-debt">Could Happy Hour Help You Better Manage Debt?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-things-millennials-can-learn-about-saving-money-from-gen-x">5 Things Millennials Can Learn About Saving Money From Gen-X</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/12-personal-finance-skills-everyone-should-master">12 Personal Finance Skills Everyone Should 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-wake-up-calls-and-how-to-deal-with-them">8 Financial Wake Up Calls — And How to Deal With Them</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance generation y millennials saving money smart savings spending habits Mon, 14 Sep 2015 15:00:30 +0000 Mikey Rox 1555490 at http://www.wisebread.com Back in Debt? Here's How to Pay it Off for Good http://www.wisebread.com/back-in-debt-heres-how-to-pay-it-off-for-good <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/back-in-debt-heres-how-to-pay-it-off-for-good" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/couple_doing_taxes_000020148166.jpg" alt="Couple back in debt and learning how to pay it off" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>Finding yourself back in debt after having paid it off before is a horrible feeling. I know, because I've been there. In 2012, I spent 14 months aggressively paying off <a href="http://www.huffingtonpost.com/carrie-smith/getting-out-of-debt-_b_1581507.html">$14,000 of consumer debt</a> and worked hard to become debt free for the first time in life.</p> <p>Then, in 2013 I decided to quit my job to pursue my own freelance business. This is when my financial situation became much more volatile and resulted in taking on a bit of business debt to keep things going. So when I say that it's a horrible feeling to be debt free only to find yourself back in debt, I mean it. It's not fun!</p> <p>If you find yourself in a similar place, here's the strategy I'm using to pay it off again &mdash; and keep myself out of debt <em>for good</em>.</p> <h2>Identify the Problem</h2> <p>Before you can begin to pay off debt and get back on track, it's vital that you understand <em>why </em>and <em>how </em>you're back in the situation. Creating a permanently debt-free life is much more difficult than working towards becoming free of debt for the first time.</p> <p>The mindset and lifestyle changes are vastly different. This is something I miscalculated when I first got out of debt, as I obviously didn't change my mindset or spending habits sufficiently. I'd stopped using credit cards as part of my debt payoff plan, but after about a year I thought I could handle using them again. Wrong!</p> <p>I also thought that <a href="http://www.wisebread.com/basic-tips-for-investing-in-a-business-1">investing in a new business</a> was a smart idea as it would pay off in the long run. That's all well and good, but you have to draw the line as <em>how much</em> you're going to invest in business ventures and <em>how often</em> you use credit cards as an extension of your income.</p> <p>The need to depend on personal loans or credit cards for additional cash flow proved that my new business wasn't bringing in enough income to survive on its own. Doing a thorough inventory of my spending habits to elucidate why I was back in debt again showed that I needed to not only change my mindset, but also find ways to bring in more money.</p> <h2>Try a New Plan of Action</h2> <p>Obviously, if you've gotten out of debt once you can do it again, but in order for this time to really stick, you have to change your approach and try something new. As Albert Einstein put it, &quot;Insanity: doing the same thing over and over again and expecting different results.&quot; So don't expect to follow the same plan and have it work better this time.</p> <p>My mistake was that I viewed getting out of debt as the end goal. But getting out of debt is merely step one, and <em>staying out of debt</em> while changing your mindset and spending habits is a very long-term step two.</p> <p>My new plan of action includes:</p> <ul> <li>Finding ways to level out my inconsistent income<br /> &nbsp;</li> <li>Bringing in multiple streams of income to have more of a cushion<br /> &nbsp;</li> <li>Stopping the use of credit cards and loans as an extension of income<br /> &nbsp;</li> <li>Working with an accountability partner to stay on track<br /> &nbsp;</li> <li>Living well below my means and doing monthly budget check-in<br /> &nbsp;</li> <li>Performing a cash budget challenge (or other spending challenge) on a quarterly basis</li> </ul> <h2>Decide How You Want to Live</h2> <p>There are two key parts to being debt free: staying out of debt, and living a life without using debt as a tool to get what you want. For me, that second part has been the most difficult. Your <a href="http://www.wisebread.com/13-things-you-dont-know-about-your-credit-report-but-should">credit history and score</a> is basically determined by how much debt you leverage and pay off over time.</p> <p>So if you don't want to use debt to buy things, you will have to face that fact that it won't be easy. Most banks and lenders will not understand your reasoning for paying. And there will be instances where you simply cannot buy something without using debt, so you and your family will have to come to grips with this limitation.</p> <p>As long as you define a new set of priorities and have a renewed plan of attack, you'll be able to move forward and pay off debt for good. Take comfort in knowing that you don't have to stay here, and that since you've been debt free once, you can do it again. But now you'll have more experience and lessons to fall back on!</p> <p><em>Have you ever fallen back into debt? How did you climb back out again?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/carrie-smith">Carrie Smith</a> of <a href="http://www.wisebread.com/back-in-debt-heres-how-to-pay-it-off-for-good">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-8"> <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/want-to-master-your-debt-think-like-a-maze-runner">Want to Master Your Debt? Think Like a Maze Runner</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/avoid-these-5-common-mistakes-while-rebuilding-your-credit">Avoid These 5 Common Mistakes While Rebuilding Your Credit</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-escape-the-paycheck-to-paycheck-cycle">How to Escape the Paycheck-to-Paycheck Cycle</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/oops-i-maxed-out-my-credit-cards-now-what">Oops — I Maxed Out My Credit Cards. Now What?</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/building-a-credit-history">Building a Credit History</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Debt Management credit history finances owing money paying back spending habits Thu, 16 Apr 2015 11:00:09 +0000 Carrie Smith 1386121 at http://www.wisebread.com Bigger Paycheck or Bigger Tax Refund — Which Should You Pick? http://www.wisebread.com/bigger-paycheck-or-bigger-tax-refund-which-should-you-pick <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/bigger-paycheck-or-bigger-tax-refund-which-should-you-pick" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_money_000044737724_0.jpg" alt="Woman shopping with money from big tax refund" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>One of the earliest money lessons that I remember learning from my financial planner father was the correct protocol for tax refunds: The ideal situation is to receive a modest refund of $500 or less. (See also: <a href="http://www.wisebread.com/12-smart-ways-to-turn-500-into-a-better-future?ref=seealso">12 Smart Ways to Spend $500</a>)</p> <p>This advice struck a chord because it made perfect sense. Why give Uncle Sam an interest-free loan every year just to feel the excitement of getting <em>your own money</em> back each spring? I agreed with my father that it's a far better idea to keep the money in your paycheck, invest it throughout the year, and let it work for you.</p> <p>Which prompts the question &mdash; why do nearly <a href="http://money.cnn.com/2015/01/13/pf/taxes/taxpayer-refunds/">80% of taxpayers</a> get a refund each year, at an average size of $2,800?</p> <p>What financial planning advice often overlooks is the importance of psychology in money matters. For individuals like me, who can think of nothing more fun to do on a Saturday night than balance my checkbook, getting a modest refund really is the ideal situation for managing money. But for many taxpayers, getting a big refund can be the best path to good financial decisions.</p> <p>How do you know if you would be better off with a big refund or a modest one? Learn more about the psychological quirks could influence your refund decisions.</p> <h2>The Denomination Effect</h2> <p>The denomination effect is a phenomenon wherein people are less likely to spend big bills compared to small ones. If you have ever held onto a $50 or a $100 bill for several weeks, but don't blink an eye at spending the same amount in tens, fives, and singles, then you have experienced this effect.</p> <p>When it comes to taxes, the denomination effect is why you might not even notice an extra sixty bucks in your weekly paycheck &mdash; but turn that into a $3000 refund check at the end of the year, and suddenly it's a large enough amount of money that you feel the need to do something intelligent with it.</p> <p>If you struggle with keeping track of smaller amounts of money, but feel perfectly comfortable making good decisions with a large check, then it might make sense for you aim for a large refund that you invest. It will be a better use of that three grand than frittering away your extra $60 a week. (See also: <a href="http://www.wisebread.com/50-smart-things-to-do-with-your-tax-refund?ref=seealso">50 Smart Things to Do With Your Tax Refund</a>)</p> <h2>Loss Aversion</h2> <p>This cognitive bias describes people's tendency to strongly prefer avoiding losses over acquiring gains. Loss aversion is a nearly universal behavioral quirk that explains why so many investors hold onto tanking stocks, why would-be exercisers continue sending money each month to a gym they never visit, and why you probably still have a bread machine <a href="http://www.wisebread.com/10-things-in-your-basement-you-should-throw-out-today">collecting dust in your basement</a>. We all hate to feel as though we are losing money on something that we have already paid for.</p> <p>In terms of taxes, the idea of potentially owing the IRS more money come April 15 is off-putting enough to keep many taxpayers from reducing their refunds. Losing money each paycheck to taxes is a given, but the idea of having to write a check to the IRS triggers loss aversion in many taxpayers. They would rather give up the money temporarily throughout the year and overpay Uncle Sam than face the prospect of having to give up &quot;real&quot; money if they get their accounting wrong.</p> <p>If the thought of having to pay more in taxes than you had withheld from your paychecks puts you in a cold sweat, then aiming for a large refund might be the best option for you. Yes, your money could potentially be doing more for you in your pocket, but what good is maximizing your finances if you sweat bullets thinking about tax time?</p> <h2>The Money Illusion</h2> <p>This term was popularized by the famous economist John Maynard Keynes, and it describes our inability to recognize that a dollar amount is only as good as its purchasing power. Keynes used the term to describe the phenomenon of feeling richer when you receive a raise, even though costs have also risen; meaning you are earning the exact same purchasing power you did before the raise.</p> <p>When it comes to taxes, the money illusion means that for some people, having a $3,000 refund check burning a hole in their pocket could lead them to make poor financial choices because of the sheer size of the refund.</p> <p>For instance, if you are feeling flush, you may find yourself spending with impunity in every area of your life, from the expensive chocolate you rarely indulge in, to new shoes that you don't really need. But unless you are keeping careful track of each expenditure (which is the opposite of &quot;spending with impunity&quot;), you will likely reach the end of your big refund amount and keep on spending because you are focused on the dollar amount rather than what it buys. Your <a href="http://www.wisebread.com/mental-accounting-why-you-blow-your-tax-refund-but-not-your-raise">mental accounting</a> of your refund money has trouble keeping up with your actual spending.</p> <p>If you have a tendency to burn through money quickly when you have a big windfall, then it's probably a good idea to aim for a modest tax return &mdash; and set up a direct deposit of the saved money into an investment, retirement, or savings account. That way, you can make the intelligent decisions about your money before you are faced with an amount that will trigger the money illusion.</p> <h2>Don't Discount Your Money Psychology</h2> <p>We tend to think of money as a purely rational issue, but it's foolish to ignore the fact that how you feel about money will influence your financial decisions, for better or worse. In a purely rational world, receiving a large refund check every April does not make any sense. But depending on your personal money makeup, you might find that a large refund is your ideal, or you might find that keeping more of your cash in each paycheck works best for you.</p> <p>The important thing is to be mindful when you make decisions about money, and to take your psychology and your strengths and weaknesses into account. Know yourself, and your finances will thank you.</p> <p><em>Are you getting a big refund? Why or why not?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/bigger-paycheck-or-bigger-tax-refund-which-should-you-pick">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/surprise-5-reasons-you-might-not-get-your-tax-refund">Surprise! 5 Reasons You Might Not Get Your Tax Refund</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/simple-tax-strategies-to-maximize-your-tax-refund">Simple Tax Strategies to Maximize Your Tax Refund</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-smart-ways-im-spending-my-tax-refund">10 Smart Ways I&#039;m Spending My Tax Refund</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/get-a-bigger-refund-with-these-often-overlooked-tax-deductions">Get a Bigger Refund With These Often-Overlooked Tax Deductions</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-tax-tricks-to-try-if-youre-stuck-with-student-loans">8 Tax Tricks to Try if You&#039;re Stuck With Student Loans</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes denomination effect loss aversion money psychology spending habits tax refund Tue, 31 Mar 2015 11:00:08 +0000 Emily Guy Birken 1360774 at http://www.wisebread.com Why Our Brains Want to Buy New Stuff, Even When We Don't Need It http://www.wisebread.com/why-our-brains-want-to-buy-new-stuff-even-when-we-dont-need-it <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/why-our-brains-want-to-buy-new-stuff-even-when-we-dont-need-it" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/shopping-4835470-small.jpg" alt="shopping bags" title="shopping bags" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Ask anyone why they want new things, and you&#39;ll get almost the same answer from each of them: It will make their lives better. Or at least, that&#39;s what they believe. It&#39;s not a new concept, and we&#39;re all aware of it, but that doesn&#39;t stop us from either buying impulsively or fighting the desire to buy new things. It&#39;s the reason people lease a car for three years; they know they&#39;ll want a new model soon enough. And we all have a list of what we would buy if we suddenly inherited money, won the lottery, or simply found $20 in a jeans pocket. (See also: <a href="http://www.wisebread.com/mental-accounting-why-you-blow-your-tax-refund-but-not-your-raise?ref=seealso">Why You Blow Your Tax Refund but Not Your Raise</a>)</p> <p>With the New Year now in full swing, many of us are moving forward with goals for 2014. These New Year&#39;s Resolutions range from calorie diets to debt diets, but most of us give in to old habits quickly. One of the biggest is overspending on new things that we just don&#39;t need. And it all boils down to two different aspects of our psyche: emotional triggers, and behavioral ones.</p> <h2>1. We Like Novelty</h2> <p>Our brains are actually made to be <a href="http://lifehacker.com/novelty-and-the-brain-why-new-things-make-us-feel-so-g-508983802">attracted to novelty</a>. It&#39;s part of the brain&#39;s natural desire to seek out new experiences, which provides us with stimulation and improves learning capacity. That means we&#39;re fighting hard-wired instincts to seek out something new and different, every single day.</p> <p>For example, take buying a new car. When you enter the dealership, you&#39;re excited. The new car has everything you want, and then some. It smells wonderful. It&#39;s pristine. It will change the way you live your life! This is the car for you, forever. (See also: <a href="http://www.wisebread.com/how-much-should-you-spend-on-a-new-car?ref=seealso">How Much Should You Spend on a New Car?</a>)</p> <p>Well, not really. Within a year, or less, your eyes are already be searching for that next ride because the one you have is no longer impressive. It&#39;s lost its luster. It&#39;s dusty in places. There are dirty footprints on the floor. The new smell? Gone. The novelty disappears as we become familiar with it.</p> <p>Advertising plays its part in this, of course. As an ad man with almost twenty years of experience, I know all too well the tricks and psychological manipulation used to have people drooling for the latest, greatest products. We are taught in college that we must create a hole, and then fill it. But that hole will never be filled. (See also: <a href="http://www.wisebread.com/17-things-car-salesmen-dont-want-you-to-know?ref=seealso">What Car Salesmen Don&rsquo;t Want You to Know</a>)</p> <p>After understanding this hardwiring, it&#39;s easy to then understand some of the other reasons people constantly seek out new things, despite a lack of need.</p> <h2>2. We Get Bored</h2> <p>This ties into the novelty idea, but also the simple nature of something to do. Bright lights, upbeat music, fun displays &mdash; stimulation! Boredom can be the reason you start flicking through the deal sites, perhaps looking for something interesting for a birthday or anniversary. Before you know it, you&#39;re checking out online for something you had absolutely no intention of buying. (See also: <a href="http://www.wisebread.com/15-frugal-ways-to-battle-boredom?ref=seealso">Frugal Ways to Fight Boredom</a>)</p> <h2>3. We Crave Excitement</h2> <p>Shopping can <a href="http://www.womenshealthmag.com/life/benefits-of-shopping">release the same endorphins</a> in your brain that are released during sex, taking drugs, or eating chocolate. It&#39;s <a href="http://www.psychologytoday.com/files/attachments/2557/howell-and-hill2009the-mediators-experiential-purchases.pdf">thrilling to spend money</a>. For a second, we believe the brand new thing we have will make our lives so much better. Of course, this stimulation wears off quickly, and like a drug, we soon want to have that euphoric feeling again. This is one of the reasons some people can go into severe debt and bankruptcy. They have a home filled with things they don&#39;t want, and no money in the bank. Yet, they cannot fight the addiction.</p> <h2>4. We Create Distractions</h2> <p>We are all guilty of this. If there is a consuming issue at hand that you can&#39;t remedy at the moment, such as medical test results, work concerns, relationship woes, then going shopping can be a wonderful distraction. It&#39;s a pause from the worries of life, even if the worries are financial. Indeed, it&#39;s ironic that some people will go shopping, spending money they don&#39;t have, to avoid facing their financial problems. It&#39;s an easy trap to fall into.</p> <h2>5. We Bow to Peer Pressure</h2> <p>This is the classic example of keeping up with the Joneses. They say we measure our misery, and our happiness, by our surroundings. And this is the reason many people can go into debt just by trying to keep up with a more affluent family next door. They get a new car, so you want a new car. They get new bikes, so you want new bikes. They get a 70&quot; TV, so you get a 70&quot; TV. The tragedy is, many of these people are living way beyond their means. But because you see only greener grass, and will do anything to live on it. (See also: <a href="http://www.wisebread.com/is-peer-pressure-keeping-you-poor?ref=seealso">How Peer Pressure Keeps You Poor</a>)</p> <h2>6. We Are Often Passive Aggressive</h2> <p>Shopping can be a way to stick it to your spouse. This is something often seen on shows like Dr. Phil, where a neglected spouse will spend money like crazy to punish their partner, and &quot;hit &#39;em where it hurts.&quot; Of course, while it may feel good in the short term to spend his or her money, it&#39;s ultimately a behavior that will come back on you.</p> <h2>7. We Practice Symptom Substitution</h2> <p>This one is a big problem for people who replace one problem, or addiction, with another. For some, quitting smoking will lead to excessive shopping. For others, it&#39;s giving up food or alcohol.</p> <p>There are many other reasons as well, including depression, anxiety, loneliness, self-esteem issues, poor body image, past poverty, and deprivation. These are all symptoms we will substitute with overshopping, filling one void with another.</p> <h2>So, How Can We Fight The Desire for New Stuff?</h2> <p>Well, it&#39;s not so much fighting the desire. It&#39;s more about not giving in to those feelings. If you find yourself in Target, or on Amazon, for no good reason, take a pause. It&#39;s much easier to control your impulses if you pay attention to them, rather than blindly shopping. (See also: <a href="http://www.wisebread.com/9-simple-ways-to-stop-impulse-buying?ref=seealso">Simple Ways to Stop Impulse Buying</a>)</p> <p>That simple pause is usually enough to make you stop and think. Then, ask yourself some easy questions:</p> <ul> <li>How are you feeling?</li> <li>Why am I here?</li> <li>Do I need this?</li> <li>What if I wait?</li> <li>How do I pay?</li> <li>Where will I put it?</li> <li>Will this make my life better?</li> <li>Will I regret this decision later?</li> <li>Can I use the money for something else?</li> </ul> <p>Look at the consequences, and even write them down. Use this <a href="http://www.federalreserve.gov/creditcardcalculator/">online calculator</a> to remind yourself of the high cost of credit card debt. Remember, this overspending on new stuff is a common problem. It&#39;s important to recognize it before it snowballs and creates a larger problem, not just financially, but emotionally.</p> <p><em>How do you resist the allure of the new? Please share your tips in comments!</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/paul-michael">Paul Michael</a> of <a href="http://www.wisebread.com/why-our-brains-want-to-buy-new-stuff-even-when-we-dont-need-it">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/6-ways-to-use-google-alerts-to-save-money">6 Ways to Use Google Alerts to Save 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/my-budget-challenge-2016-how-to-live-frugally-when-you-have-no-time">My Budget Challenge 2016: How to Live Frugally When You Have No Time</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-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</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/flashback-friday-47-best-back-to-school-shopping-hacks-ever">Flashback Friday: 47 Best Back-to-School Shopping Hacks Ever</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/things-you-might-not-know-about-your-local-thrift-store">Things You Might Not Know About Your Local Thrift Store</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living new shopping spending habits Tue, 21 Jan 2014 10:36:25 +0000 Paul Michael 1112796 at http://www.wisebread.com Identify and Solve Your Spending Mysteries http://www.wisebread.com/identify-and-solve-your-spending-mysteries <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/identify-and-solve-your-spending-mysteries" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/finances-3258918-small.jpg" alt="spending" title="spending" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Do you feel like some of your hard-earned cash seems to vanish into thin air each month? I kept noticing a big chunk of my change seemed to be disappearing into a monthly black hole, despite what I thought was decent budgeting. So, I decided to clean up my act and set out to locate these hidden areas. Here are a few tips that I learned along the way that can help you nab your mystery spending, too. (See also: <a target="_blank" href="http://www.wisebread.com/find-your-hidden-spending-habits-and-save">Find Your Hidden Spending Habits and Save</a>).</p> <h2>1. Unplanned Dining Splurges</h2> <p>Despite having a <a target="_blank" href="http://www.wisebread.com/five-more-tips-for-eating-in-restaurants-and-sticking-to-a-budget?wbref=readmore-2">dining budget</a>, I admit I was not keeping track of every single drink or ice cream that seemed like a small splurge at the time. While an occasional treat is well deserved, often I was being silly. For example, last week while waiting for our table, my husband and I ordered two glasses of not-so-good, lukewarm chardonnay for $21 including tip. When I go to the liquor store, I can buy two or even three suitable bottles for that price. Do the &quot;quick drink at the bar&quot; a few more times, and you can easily run up $100 a month and not really enjoy it.</p> <p>I noticed that other little treats were adding up, too. We always visited the ice cream shop after a dinner out or made a few unplanned, weekly fast food stops. Somehow, I was forgetting that the tab for such outings can easily run $15-$20 for four people.</p> <p><strong>Curbing the Treat Buying</strong></p> <p>Once I realized what was happening, I established a treat allowance per month. This consisted of setting aside a small, fixed amount in cash, bound in a rubber band. I could do what I wanted with my little roll of cash, but once it was gone, that was it for the month. This quickly stopped the previous over-spending and made me prioritize my buying and how badly I wanted something.</p> <p>Secondly, I found ways to spread out little splurges more. For drinks, it was as simple as holding off for a more economical bottle of wine at the table, or eating at home, followed by an affordable beer at the bar afterwards. For the ice cream shop visits and fast food stops, I made such trips into planned, special outings for my family. This meant not indulging after already out to dinner or because we were just driving by. Looking forward to these planned jaunts made everyone appreciate them more. Spreading treats into separate outings actually made us feel like we were going out more, too.</p> <h2>2. The Curse of the Last-Minute Gifter</h2> <p>I budgeted for big items, like Christmas and my daughter's birthday, but I was still shocked at my annual gift spend. Things like housewarming gifts, other children's birthday parties, and smaller-scale holidays were really adding up. Throw in a wedding or two, and you can easily go off the rails. I never stopped to think about just how many events we were attending and the types of gifts we bought. Additionally, I would often buy presents at the last minute, meaning I usually spent more out of convenience.</p> <p><strong>The Gift-Giving Fix</strong></p> <p>Once I realized that we were averaging 10 dinner parties, 5 kids' birthday parties, and a handful of holidays and special events per year, I made a better gift budget. Then, I saved a bundle by <a target="_blank" href="http://www.wisebread.com/25-gifts-you-can-make-today">making some of my own gifts,</a> like painted flowerpots, or easier projects like repurposed jars filled with fresh flowers from my garden. Next, I stocked up on some attractive home goods, which I found at craft stores for $5 or less, using coupons or hitting seasonal sales. When out shopping, if I saw a good deal on a toy or baby clothes, I bought a few to have as inventory for upcoming events. In the last six months, we saved over $300 by doing this, and many of these gifts were more appreciated than the default bottle of wine.</p> <h2>3. Too Many Shows, Too Little Time</h2> <p>With the dizzying array of cable packages and providers, it is hard to know if you are really saving. I took a long, hard look and realized I had at least 10 movie channels I hadn't watched in the last 12 months. And, if you have young kids, chances are your days of surfing premium channels to watch &quot;Office Space&quot; undisturbed for the fortieth time are long gone. It was time to take inventory of what I really needed and cut down. My plan was also up for renewal, and when I viewed my account online, I saw a $20 per month increase for the same stuff I currently had. This was not good.</p> <p><strong>Making Cable Worth It Again</strong></p> <p>I already had a combined package for my phone, Internet, and cable, so I was pleasantly surprised more savings could be had. First, instead of settling for what you may see online and giving up any previous promotions, investing the 10 minutes to call your provider directly can pay off. I called expecting a fight, but before I could even plead my case, the representative said <a target="_blank" href="http://www.wisebread.com/thirteen-minutes-to-a-lower-cable-bill">there were special deals for those willing to renew</a> for two more years. I was immediately given a renewal plan that included faster Internet and all of my existing features for $10 less per month. Once that was done, I cut out two premium channel lineups we never use, which saved another $30 per month.</p> <p>The next time you are looking to tune up your budget, take a look at your non-essential spending and really think through where your money goes. My examples were very relevant for a family with a young child in the house, but everyone can attempt to cut down mystery spending. By identifying the common pitfalls and making some useful adjustments, you can save a bunch and still do the things you enjoy.</p> <p><em>Have you uncovered any hidden spending habits? What did you do to spot them and correct them?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kelly-medeiros">Kelly Medeiros</a> of <a href="http://www.wisebread.com/identify-and-solve-your-spending-mysteries">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/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</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-surprising-way-birth-order-decides-your-money-habits">The Surprising Way Birth Order Decides Your Money Habits</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-spend-almost-nothing-on-gifts-this-year">10 Gift Ideas That Cost Almost Nothing</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/what-s-your-budget-personality">What’s Your Budget Personality?</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/bridging-the-gap-from-dining-out-to-eating-in">Bridging The Gap From Dining Out To Eating In</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Budgeting cable bill dining out homemade gifts mystery spending spending habits Wed, 03 Jul 2013 09:48:32 +0000 Kelly Medeiros 980278 at http://www.wisebread.com