5 Ways Your Money Is Being a Jerk (And How to Fight Back)


They say money is the root of all evil. That’s debatable, but it can certainly be at the center of a lot of problems. You want to get out more, but your money says no. You want to retire someday, but your money gives you the finger. You want to take a vacation to Europe, your money laughs in your face. Money can be a real jerk sometimes. But, you can fight back. Take control of your finances, and you’ll be the one calling the shots.

1. Your credit cards are tempting you to spend, spend, spend

Oh, those credit cards with their promotional APRs, low-rate balance transfers (with a 3 percent fee, of course), and flashy rewards programs. Your mailbox is stuffed with offer after offer of five-minute applications and 60-second approvals. Credit lines are upward of $10,000. That’s $10K you can spend on whatever you want, whenever you want, and you don’t even have to pay it all back at once.

Want a new coat? Swipe the card. Have your eye on a new watch? Grab that plastic. Thinking about a new car? The down payment is in your pocket. And when you have so many of these cards, it feels like a license to spend. The thing is, credit cards aren't free money, and it’s way easier to spend with them than it is to pay them back.

How to fight back

Credit cards are financial tools, and if used correctly, they can be very good to you. They help you build credit, offer travel rewards and perks that make life easier, and are safer and easier to carry than cash. But, you must use them wisely.

Do not spend money on a credit card unless you can afford to pay off the balance in full at the end of each billing cycle. If you don’t have the money to do that, well, maybe you shouldn’t be buying the item you cannot afford. Once you stop paying the full balance, interest is added. And the longer you keep a balance, the more interest is added on. If you’re not careful, the debt will bury you over time. (See also: The Fastest Method to Eliminate Credit Card Debt)

2. Your monthly debt payments are ripping off your budget

You look at the amount of money you have coming in every month and you’re happy with it. But then you look at your debts and monthly obligations; The credit cards. The car payment. The mortgage. The student loan. By the time you’ve paid those bills, you barely have enough left to buy groceries. And money for fun, like going out to eat or a weekend away? Forget about it. Your debt is like a ball and chain around your whole life.

How to fight back

The first thing you need to do is get your financial house in order. Analyze your monthly bills, and make a list of your debts, the payments, and the length of time needed to pay them all off. If this already makes your head hurt, consider meeting with a financial adviser who can help you break the process down into simpler steps. (See also: 5-Day Debt Reduction Plan: Search and Destroy)

Once you have all your ducks in a row, look at ways to pay down the debt. You may have to make some sacrifices to get this done. No trips to Starbucks for a while. Go for cheaper generic brands (which, to be honest, are usually made in the same facility as the expensive brand names). Pack your lunches every day. Free up as much money as possible, and do something with your debt called “snowballing.” Put every cent you can toward paying off the smallest debt first, and make minimum payments on the others. When that debt is paid off, move onto the next in line, applying the maximum to it, and the minimum to the others. It’s a satisfying way to tackle debt because it progresses quickly. (See also: 6 Secrets to Mastering the Debt Snowball)

At the same time, look into other ways to generate extra cash. Can you refinance your home and pay off a debt while still hanging onto a substantial chunk of the equity? Paying 4 percent interest per month is way better than the 22 percent interest some credit cards charge.

3. Your “savings” account is laughing at your dreams

Savings; that’s wishful thinking. For a lot of us, a savings account is just a temporary resting place for our money until the next emergency beckons it.

A recent GOBankingRates study found that 34 percent of Americans have no savings at all, and 35 percent have less than $1,000. Sure, you want to go on that trip to Europe, or finish the basement for the kids. But guess what? The water heater just went on the fritz. Or the furnace just curled up its toes and died. Instead of looking forward to some time away, or something to make home life a little easier, you’re staring into a savings account filled with cobwebs and shattered dreams.

How to fight back

Every financial adviser will offer you the following piece of advice: Pay yourself first. Sure, it’s easier said than done, but you need to get into the habit of squirreling away a percentage of your income each month automatically.

A dedicated emergency fund is critical for surprise expenses that threaten to wipe out your other savings — savings you may have wanted to use for that overseas trip or basement remodel. Many experts recommend having between six and 12 months' worth of your expenses covered in this fund. If you have nothing set aside in an emergency fund, now is the time to start building one.

Set up an automated transfer from your checking account to a savings account and your emergency fund. Find small ways to save money without even thinking about it. There’s an app called Earny that checks price drops on purchases you have made, and automatically claims the difference on your behalf (Earny takes 25 percent of the refund). Put any Earny refunds into your savings account or emergency fund.

Other apps like Digit, Chime, and Acorns can help you save money without even noticing it. Acorns simply rounds up purchases to the nearest dollar, and puts the change into an investment account (fees range from $1 per month for balances under $5,000, to 0.25 percent for larger balances). Do whatever you can to make saving a monthly, or even weekly, habit. (See also: 11 Ways Life Is Amazing With an Emergency Fund)

4. Your retirement fund is MIA

You’re sitting on a beach with a cool breeze kissing your face. The sun is out. The waves are lapping around your feet. You're sipping a Piña Colada. And then you hear that record needle scratch, open your eyes, and realize it’s a dream; a far-off dream. Your 401(k) is looking about as healthy as a fly that just splattered against the windshield of your car. You have been working your butt off for 20 years, and have very little to show for it. At this rate, you’ll be dreaming of retirement for the rest of your life.

How to fight back

Start by taking a breath. Hopefully retirement is still a good 20 or 30 years away, and that gives you time to beef up your fund and take advantage of compound interest.

If you are employed by a company, you probably have a 401(k) match of some kind. The first thing you need to do is max out that match. If it’s 6 percent, put in 6 percent of your salary each month. You’ll actually be saving 12 percent of your salary, and that’s an excellent start. If it’s a maximum amount each year, hit that figure.

Next, look at the kind of 401(k) fund you have. You should be able to choose what kind of risk you want to take, and if retirement is 25 years from now, you can afford to be in an aggressive fund; one that’s going to be a bigger roller coaster ride for your money, but will lead to bigger gains over time. (See also: 7 Roadblocks to Retirement (And How to Clear Them))

5. You’ll be making the minimum payment … forever!

Those accounts whisper in your ear constantly; “There’s no need to empty your bank account to pay me off. Just make this teeny, tiny minimum payment. You’ll hardly notice it.” Yeah, well, that might seem better in the short term, but in the long run those small minimum payments are keeping you in a never-ending cycle of debt.

When you make the minimum payment, most of the money goes toward the interest that was applied to the balance. You pay it, forget about it, and next month you do it again. And again. And again. The balance never seems to go down, and that’s what the credit card companies want. Before you know it, you’ve spent five years paying the minimum and the end is nowhere in sight. (See also: All the Ways Minimum Payments Are Evil)

How to fight back

Never make the minimum payment unless it’s part of a debt snowball plan mentioned earlier. Paying just 2–3 percent of the balance is only making the credit card companies richer.

You also need to stop using the credit card. By paying the minimum and adding to the balance, you’re putting yourself in the pocket of the credit card company for the rest of your life. Instead, cut down expenses and find other ways to make purchases until you can get this balance down to zero.

Look for 0% balance transfer credit card offers. Some will give you 18 months or more at zero interest. Once you grab one of those, all of the money you pay each month goes toward the principal. Find ways to cut costs from your monthly budget and apply that to the payment on this card. The 0% interest combined with a much bigger monthly payment will really help you shrink that balance significantly. Just make sure to pay off the balance transfer card in full within the promotional APR window to avoid interest.

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