goals

How Habit Boredom Makes You Abandon Your Goals

Emily Guy Birken — Mon, 20 May 2019 08:00:11 +0000

Earlier this year, fueled by a trip down the rabbit hole that is Pinterest's bullet journaling suggestions, I found a new way to make a habit of cleaning my house: habit tracking.

I set up my new habit tracker like a game board, with each of my daily housekeeping chores shaped like a different Tetris piece. Each night, I drew and colored in each piece corresponding to all of the cleaning tasks I'd taken care of that day. After coloring in my board every night for five weeks, I was absolutely certain that this time I would finally achieve my goal of having an effortlessly and continuously clean house.

I was doing everything right according to habit research. I'd created a game to give myself extrinsic motivation until the new habit took over. Repeating that habit every night for weeks meant I was well on my way to my goal.

Unfortunately, I'm currently sitting in a house that's a mess, and I haven't updated my board since March.

It turns out that reaching a goal can be incredibly difficult even if you set yourself up for success by creating a new habit. That's because of something called "habit boredom," which is the weakening of your positive emotional response to an action once it becomes habitual.

Here's what you need to know about how habit boredom can create setbacks with your goals, just when you think you're finally on your way to reaching them.

Understanding habit boredom

Establishing good habits has long been touted as a way to reach your goals. After all, researchers have found that about 40 percent of your daily activities are performed habitually. Creating beneficial habits — like putting things away, making a bag lunch to take to work each day, and drinking a glass of water before each meal — can ensure that your actions are working toward your goals of a cleaner house, better finances, and improved health.

The problem is that intentionally creating a new and beneficial habit means you have an emotional response to it. For instance, you may feel proud of yourself when you begin your habit of packing a lunch each day. Look at you, starting a new money-saving habit! You can puff out your chest with pride as you calculate how much you're saving with each homemade sandwich.

But that emotional response is not going to be quite as strong on day 17. That's because the process of creating a habit also numbs your emotional response to that habit. In other words, as the habit takes over, you're more likely to feel bored by it, since it's no longer novel.

By that point, throwing together some turkey and cheese on wheat is no longer something to be proud of — it's just Tuesday. And when your coworkers ask if you want to check out the new taco truck, the fact that you no longer have a strong emotional connection to your lunch-making habit means it'll be easy to let your poor sandwich get soggy in the refrigerator while you enjoy some tacos.

Combatting habit boredom

Part of the problem with habit boredom is the fact that you may not realize that's why you're abandoning your newly-formed habit. It may seem rational to just skip your new routine one time because you're tired, hungry, busy, or otherwise unable to let the habitual action take over.

However, habit boredom means you're resistant to making your usual brown bag lunch the next day, too. And the one after that.

There are a couple of ways to keep habit boredom from wrecking all your progress, however.

Fall in love with the boredom

Habit and productivity expert James Clear writes in his book Atomic Habits that truly elite goal-setters find a way to enjoy the boredom of their habits. If the only path to become an Olympic athlete is to spend each day doing boring, repetitive athletic exercises, then those individuals who are capable of finding ways to enjoy the boredom have a leg up over those who feel like doing yet another set is about as interesting as watching paint dry.

So how do you go about falling in love with boredom?

Pair your boring habit with something novel. Adding a fun motivator to your new habit can help you keep going with a habit that has lost its sheen. For instance, if you're trying to keep your brown bag lunch habit going, you could use fun and colorful food storage, start cutting your sandwiches into shapes, or even experiment with recipes and snacks you've always wanted to try.
Partner with a friend. You probably already know that exercise is more fun with a buddy. So is any other boring, repetitive habit. If you're trying to establish a money-saving habit, partner up with a friend who is also trying to start a new habit. Holding each other accountable can help you both stay on track when habit boredom strikes.

Embrace the process orientation

We generally establish new habits because we have a goal in mind. The problem is that habit boredom can make us feel like we've failed if the boredom strikes before we've reached the goal.

When you're focused solely on a goal, whether that goal is a cleaner house, better finances, or improved health, you often focus on the question, "Can I do this?" rather than "How do I do this?" The first question assumes that failure is an option. The second assumes that you will succeed and prompts you to figure out your process for doing so.

That's why the process orientation, which focuses on how to do something, is more likely to lead to success. The guiding principle of process orientation is the mantra "there are no failures, only ineffective solutions."

If your habit boredom leads you to abandoning your new habit, there's no need to feel like you're never going to reach your goal. You just need to tweak your solution to see if it'll better help you reach it. When you're open to asking yourself why something didn't work, you're more likely to find a solution that will work rather than simply abandon the habit and goal altogether. (See also: Habits Aren't Boring — They're the Secret to Happiness. Here's Why.)

The double-edged sword of habits

Becoming a creature of habit can do a great deal to help you reach your goals if you're intentional about your habits. But human beings are not machines that can be programmed and left to run.

We need to consistently tweak our habits, indulge our need for motivation and novelty, and recognize that reaching our goals is a process that may require a number of fits and starts.

Unfortunately for me, that means not even a beautifully rendered bullet journal Tetris board is sure to overcome the problem of habit boredom. (See also: The Surprisingly Easy Way to Change Your Habits and Your Life)

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Money Challenges That Will Strengthen Every Relationship

Denise Hill — Tue, 26 Jun 2018 12:41:09 +0000

Mixing love and money is tricky. In fact, a recent study conducted by Dave Ramsey and Ramsey Solutions found that money is the second leading cause of divorce. Infidelity is number one. The study concluded that debt, communication, and attitudes about money and spending habits keep couples broke and disgruntled.

Money challenges are the ultimate team-building activities for couples. When done correctly, they can expose areas of pain and fear, open or improve lines of communication, and help you become a more disciplined unit.

Whether you are newly married, been together for a while, or are on the cusp of divorce, engaging in a financial challenge — as a couple — could improve or even save your marriage. The challenges themselves aren't magic. You have to commit and do the work. They can, however, assist you in revamping how you view and handle finances as a pair.

Here are a few money challenges that every couple should try. (See also: 4 Ways Couples Can Tackle Money Goals Together)

1. One Income Challenge

The One Income Challenge is a doozy. This isn't the type of challenge you wake up one morning and just begin. No, this one takes preparation and planning — which is what makes it such a great challenge for couples. The goal is to get your overhead and bills so low that you can live off just one income for at least one or two months. That doesn't mean that you only spend from one persons' paycheck — the goal is simply to save the sum of what one of you brings in monthly.

This challenge will not only save you a ton of money, but will also fling open the doors of communication. You have to talk during this challenge to ensure things are paid on time and both parties know exactly what they are allowed to spend. It really takes a concerted effort to do this. It will also allow you to see what you could accomplish if you could reduce your overhead and live off one income long term.

Becoming a one-income household is also something you could aspire to in the future. So, if you can't live on one income today, make it your goal to be there this time next year or in two years. Even if you never reach your goal, you're still way further than you were before you started. Your wallet and your marriage will benefit from your efforts. (See also: How to Go From Two Incomes to One)

2. The Cash Only or No Credit Challenge

The Cash Only Challenge is less extreme than the One Income Challenge, but it's still very difficult — especially for those who rely heavily on credit. During this challenge, you only spend cash for everything that is not drafted automatically or requires you to pay online. The goal is to pay with cash as much as possible for the duration of the challenge.

The reasoning behind this challenge is that paying with cash causes you to plan and to think about purchases before you actually buy something. With cash you can only spend what you have. Overspending is not an option. Paying with cash will also help you track expenses easier and it will develop your discipline muscle. If you allocate $250 for groceries but spend $75 on shoes, you only have $175 left for groceries. Once the cash is gone — it's gone.

A great way to modify this challenge for those who are wary of carrying cash is to only use your debit cards. Take all of your credit cards (your spouse's too) and put them in a drawer. Only spend what you actually have in your bank account. This modification lowers the degree of difficulty, but it still remains challenging. (See also: 5 Money Conversations Every Couple Should Have)

3. The 50/50 Challenge

I read about this challenge on CoupleMoney.com and I fell in love with the concept. The concept of the 50/50 Challenge is twofold: spend less and earn more. You and your spouse should work to reduce your monthly cost of living expenses while simultaneously figuring out ways to earn more money during the challenge.

This challenge will not only do wonders for your savings, but it is also the ultimate team-building exercise. You learn where you can cut and how you can bring in more during lean times. Together, you and your spouse can set savings and earnings goals and find creative ways to cut costs and earn a little extra. You can organize a yard sale, sell stuff online, or get side gigs. The possibilities are endless. (See also: 14 Best Side Jobs For Fast Cash)

4. No Shopping Challenge

The No Shopping Challenge is a pretty popular money challenge. The goal is for you and your spouse to eliminate any unnecessary spending. During this challenge, you buy only the basics. This means forgoing luxuries such as dining out, getting your hair done, and anything else that is not an absolute necessity. You take your budget down to its bare bones.

A twist that my husband and I like to add is to write down every single thing we are spending money on for the month. So, in lieu of writing "groceries," we would actually add the entire grocery list to our list of expenses. And if we forget to list something, we do without it for the month. This really improves communication and ensures that you are working together and planning every dollar you spend.

You can modify, rework, and mix and match any of these challenges to fit your particular situation and lifestyle. The goal is not to follow a challenge verbatim — the goal is to do something that takes you out of your comfort zone and changes your perspective about money and marriage. (See also: 8 Steps to a Blissful Matri-Money)

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Do You Have These Key Character Traits for Investing Success?

Toni Husbands — Fri, 22 Jun 2018 08:30:23 +0000

Warren Buffett, the Oracle of Omaha, summed up the key to investing success like this: "Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing."

Let's say you and I have ordinary intelligence and want to improve our investing chops. What are the traits that make for a great investor?

Compassion

Hollywood is awash with stories of money men who live by this mantra: "Greed is good." The Gordon Gekko character is burned into our collective memories for life. From The Boiler Room to The Wolf of Wall Street, we get it — the industry is full of sharks.

It turns out, sharkiness may work against you in the world of finance.

A study published by the Society for Personality and Social Psychology looked at the behavior of hedge fund managers over a decade. Managers with psychopathic, narcissistic, or Machiavellian personalities underperformed their peers by 1 percent annually. Over time, their ruthless approach to decision making added up to notable losses.

By avoiding aggressive instincts and underhanded tendencies, we can focus on developing the positive, compassionate traits that have helped billionaire investors like Warren Buffett and George Soros achieve amazing results. This means leaving the shady, cunning type of investor to Hollywood. (See also: The 5 Best Pieces of Financial Wisdom From Warren Buffett)

Optimism

Some people avoid investing altogether because they believe they'll never succeed at it. That mentality can become a self-fulfilling prophecy. Make no mistake; if you never take the plunge into investing, you're guaranteed to never see any returns.

Believing that you have the ability to be successful at investing and building wealth is the frame of mind you should always strive for. Whether you endeavor to develop the skills and DIY your approach to investing, or seek the services of a qualified money manager, believing in your ability to make sound financial decisions will help you move forward.

Optimism can be hard to sustain, but immersing yourself in a world of productive investment information has never been easier. Connect with groups through Facebook, browse personal finance websites, and follow the advice of investors with a track record of long-term success. Seeing your glass as half-full is great for the bottom line. (See also: 6 Confidence-Inspiring Facts About the Stock Market)

Patience

Successful billionaires like Warren Buffett take a long-term approach to investing. "Our favorite holding period is forever," he's quoted as saying. Patience will help you avoid reacting rashly to groupthink surrounding market fluctuations or hyperbolic headlines predicting the end of life as we know it. You may have done some research and found that the stock market's average annual return is 7 percent when you look at any 10-year period. This information feeds your optimism, and therefore you're willing to be patient. And your patience will help you keep a long-term perspective.

Goal-orientation

Since investing success requires a long-term perspective, goal-oriented people tend to have a leg up in this arena. Staying focused on the end goal helps you avoid distractions. Deciding whether you're investing for retirement, to purchase a house, or to save for a child's college fund will determine your best course of action. Setting interim goals, like completing an investing for beginners class or interviewing three financial planners, keeps goal-oriented people on the path to desired results.

Levelheadedness

Do you keep a cool head when everyone around you is in meltdown mode? Do you immediately default to the next steps required in the midst of a crisis? Your levelheaded temperament may easily be the most important personality predictor of success with investing, not your intellect. That is according to Mr. Warren Buffett.

Panic in the markets can be contagious; especially when our hard-earned cash is at stake. Your ability to remain calm in the face of short-term fluctuations will lead to better decisions and opportunities that investors who follow the crowd may overlook. (See also: 6 Investment Truths to Remember When the Stock Market Is Down)

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This article is from Toni Husbands of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Want to Win at Personal Finance? Start a Money Club

Toni Husbands — Mon, 18 Jun 2018 08:00:21 +0000

We will talk about anything. Sex. Politics. Religion. Most controversial topics are fair game in today's world of openness and authenticity, and Americans will bare our souls — as long as the topic doesn't venture into money. A 2017 report from the makers of micro-investing app Acorns found that 68 percent of respondents would rather discuss their weight than how much they had in savings.

But making progress on your money goals may require an open, honest approach to finances. And this may be as simple as starting a money club.

Money clubs are making a comeback. People are borrowing the idea of connecting with a group to improve their financial literacy. I started a money club in 2017 for that very reason. I wanted people to have a safe space to ask questions, share success stories, and find accountability to help them accomplish their financial goals. In just three months, a group of 33 women collectively paid off $35,000 of debt and added just over $7,000 in savings.

Starting a money club doesn't have to be difficult. You should, however, keep these aspects in mind to create a lasting club that serves all members well.

Identify club members

Look for people in your circle who have either expressed an interest in learning about finances, are already working toward a financial goal, or are generally open to self-improvement concepts. Keep an eye out for social media posts from friends with a personal finance focus. You might find a willing participant.

Start with your family, friends, or co-workers and then broaden your search from there. Join social media groups related to personal finance if you can't tap anyone in your immediate circle.

Remember, everyone approached may not be receptive. Money can be a very sensitive topic. A committed group of three to five people is a great starting point. Continue to reach out to those in your sphere of influence until you have a solid, yet manageable group.

Schedule meeting logistics

Everyone is busy, and adding a new activity to a packed day can be difficult for many. Consider options to host your money club in a way that doesn't complicate the members' lives. Conference calls or online video chats are a great way to fit in regular meetings. Co-workers can meet in a conference room during lunch.

You can also start a private social media group that will allow your members to stay connected between official meetings. You can check in on each other and offer quick advice or encouragement as a means to keep everyone on the straight and narrow.

Think through meeting options that will work best for everyone so it's easy to attend. Organizing the group in a way that minimizes scheduling conflicts will ensure more members stay committed for the long run.

Set group goals

Decide as a group on the desired outcomes. Are you working toward becoming better budgeters? Do you all have a debt-free finish date in mind? Outline areas that the group should focus on in addition to goals for individual members.

Establish an overall timeline, too. Limit your participation to a specific time frame and re-evaluate if the group should continue once that time frame has expired. This will force you to constantly review your progress to ensure members' needs are being met. (See also: 5-Minute Finance: Create Financial Goals)

Locate helpful resources

The internet is brimming with helpful resources on just about every financial topic imaginable. Some members may be familiar with specific books or approaches that they can bring to the table. Start with an assignment that requires each member to suggest a resource and review it together as a group. (See also: 9 Online Forums That'll Help You Reach Your Financial Goals)

Celebrate group wins

Remember to celebrate interim milestones. Encourage each member to succeed. Even a small recognition of a goal accomplished or interim good news can help keep the fuel of motivation burning. When individual members are doing well, the good news is contagious.

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This article is from Toni Husbands of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Smart Things You Should Do With Your First Real Paycheck

Denise Hill — Tue, 22 May 2018 08:00:37 +0000

You've finally landed your first real job. And with that, comes your first real paycheck. This is a monumental occasion and should be celebrated. But what should you do? Should you blow all of your funds on an expensive and wild weekend? Should you buy a new wardrobe? Or should you just pay your bills and save the rest?

The answer to this question depends on your overall financial plan, your budget, and your surplus once you've met all of your obligations. An important thing to do once you receive that first check (preferably before) is to establish a plan. It's OK to splurge a little and celebrate the fact that you are officially a taxpaying, adulting member of society. However, it's critical that you use this first paycheck to jump-start your journey to financial independence.

Here are some important money moves you should make with your first real paycheck.

Let your money breathe

This sounds ridiculous, I know. But one of the biggest challenges people with newfound wealth face is getting used to having money.

One of the most important things to remember is that your thoughts, beliefs, and attitudes about money directly influence how you spend it. When you're not used to having it, it's easy to spend a small windfall immediately. And often, you overspend. You have to give yourself time to acclimate to having money. Paradigm shifts take time. Allowing your checking and savings account to remain full can be difficult.

If possible, allow the money to sit for a while. Pay your bills and let what's left breathe. Buy only what you absolutely need, at least at first. You don't have to go out to eat, buy new clothes, or cop a new ride just because you're earning steady money. Begin conditioning your mind to enjoy seeing a positive checking and savings balance. And vow to keep the trend going.

Create a budget

The most important thing to do with that first paycheck is to create a budget before you spend a dime. Once you see exactly what you're working with, establish a spending and savings plan by creating a zero-based-budget. You want to give every dollar a purpose. There's no such thing as leftover money or a surplus. Every dollar is accounted for, and if you do find a way to save a buck, that buck goes to savings.

Creating a budget is a great way to set a good financial habit moving forward. It's like establishing a healthy diet, but with finances. It helps you determine correct portion sizes and helps you guard against overextending yourself and becoming house poor. It allows you to see where every dollar is going. It also helps you to better track your spending and find ways to save during lean times. (See also: How to Budget When You're No Longer Broke)

When you receive your first paycheck, make a list of all of your regular monthly bills, debts, and necessary expenses along with the due dates, in order of importance. This not only helps you see what needs to be paid and when, but it also helps you establish payment priorities in case there ever is a shortfall.

There are multiple budgeting, bill pay, and tracking apps that can help you streamline your finances. But the most important thing is getting it all written down — in some form — and having a plan. Taking the time to organize your finances and create a budget with your first paycheck sets you on the path to good financial stewardship. (See also: These 5 Apps Will Help You Finally Organize Your Money)

Establish a solid savings plan

After you've listed and prioritized your bills and expenses, it's important that you add savings to the budget and move it to the top of the list. It should be ahead of everything. Your budget shows you how much you owe and how much you have left after the necessities are paid — which allows you to determine how much you should save each month. The old financial advice, "Pay yourself first" is still very true and should begin with your first paycheck.

Start by establishing how much you can afford to save and lock in that number. If possible, set up an automatic transfer so that as soon as your paycheck is deposited into your bank account, your savings amount is automatically transferred to another dedicated savings account. That way you never see the funds. You won't miss what you never see.

Part of savings involves establishing your retirement and emergency fund. Traditionally, an emergency fund is three to six months' worth of daily living expenses, but can be more or less depending on your particular circumstances. This fund should only be used in real emergencies, like an urgent medical bill or a job loss. (See also: 7 Easy Ways to Build an Emergency Fund From $0)

If you work for a company that offers a workplace retirement plan, use your first paycheck to establish how much you'd like to contribute. You should contribute something, even if it's a small amount at first. If you are self-employed, freelancing, or work for a startup that doesn't have a workplace retirement plan option, look into setting up an IRA through your banking institution or other reputable financial management firm. You may need to save up a minimum amount to open an IRA, but you can use a portion of your paycheck as the first step toward saving that amount. (See also: 11 Basic Questions About Retirement Saving Everyone Should Ask)

Set financial goals

After you've gotten your budget in place and saving money is at the top of the list, it's time to set some financial goals. Setting financial goals is important for a variety of reasons. It helps you stick to a realistic budget. It puts something concrete out in front of you and challenges you to go get it. It gives you a purpose for earning, saving, and spending money. Even if you don't reach your goal, you still make progress and move forward. Setting financial goals allows you to view money as a tool that will help you live an independent life.

Financial goal setting is pivotal to becoming and remaining financially independent. You should set immediate, short-term goals (less than six months), some intermediate goals (up to three years), and some long-term goals. Write down legitimate things you want to do with your money and determine the steps you need to take to reach each goal. Make sure your goals fit the SMART frame work (Specific, Measurable, Achieveable, Realistic, and Time-bound) and fit your lifestyle and unique situation. (See also: 5-Minute Finance: Create Financial Goals)

Your first few goals should be to live by your budget, maintain a healthy emergency fund, and kickoff your retirement savings. From there, make other goals that will help keep you on track, such as eliminating debt or paying cash for your next car or vacation.

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Become a Minimalist With Your Money

Rachel Slifka — Thu, 17 May 2018 08:00:48 +0000

Minimalism is a way of living that centers on finding contentment with less. Becoming a minimalist can benefit many aspects of your life, including your finances. You may be inspired to purchase less stuff, consider quality over quantity, and declutter to create systems that keep you organized.

If you are interested in taking on a minimalist approach with your money, here are a few tips to get you started.

Establish your personal and financial priorities

Everyone has different values. What is important to one person might not be important to you. Your values should drive your spending. If you are working to become more of a minimalist, you'll need to be very specific about what is valuable to you and cut out everything else.

Often, people spend money on things that are of little to no value to them. This is partly because of the world around you, which can influence your money decisions if you aren't careful. Aggressive marketing on television, social media, and other platforms is constantly trying to convince you to purchase something. Unfortunately, many people fall into this trap and end up spending money on things that add no real value to their lives.

What's truly important to you and your finances? For instance, some common financial priorities include paying off debt, saving for retirement, or putting 20 percent of your income aside for savings. By setting your priorities, you can better determine how you should be spending your money.

Simplify your budget

Now that you have a better understanding of your financial priorities, the next step is to take a hard look at your budget. Where is your money going?

Carefully observe your spending patterns. Do all of your purchases align with your financial priorities?

After analyzing your expenses, you are likely to find you are spending money on material things that you don't really need or for experiences that aren't adding value to your life. For instance, is shopping or eating out every week really bringing you joy? Would you be just as happy if you cut back on some of your spending in these areas?

Don't forget to consider the value of your typical expenses. When you are billed for something every month, it is easy to accept that it is a bill you will always have. All too frequently, people find themselves paying regular monthly fees for things that are not truly important to them. Maybe you're paying for a membership to a club you no longer participate in, or you're paying for subscription cable that you don't watch. Take the time to cancel those subscriptions now to help simplify your financial picture. (See also: Build Your First Budget in 5 Easy Steps)

Limit shopping trips and consider every purchase

One tactic to avoid overspending on needless purchases is to limit how often you go to the store. By doing this, you can better plan for what you actually need and remove a lot of the temptation to spend altogether. It can also help you save time, which is always a welcome benefit. (See also: How to Shop for Food Once a Month and Save Big)

If shopping is your weakness, try limiting your visits to the grocery store to once a week and your trips to the mall to once a month. Purchase everything you need in one trip. Any time you want to buy an item, ask yourself if it is really worth it. It is an absolute necessity? Will it add value to your life? Is it useful? Do you really love it?

Often, when you take the time to honestly think about each purchase, you'll find the answer to these questions is no.

If you forget something during your planned shopping trip, wait until the next planned trip to make the purchase. By then, you may discover that you can live without it. (See also: 7 Effortless Ways to Prevent Budget-Busting Impulse Buys)

Clean out your home

What's the best way to become a minimalist in all areas of your life? Start by cleaning out your home. Sort through all of your drawers, closets, and cupboards. Sell or donate anything you don't like or that you don't use anymore.

You'll likely find that you can live with much less stuff than what you've been holding on to. This step is important because clearing out your home will also help you to better evaluate future purchases. In order to prevent cluttering your home again, you're more likely to evaluate an item before buying it to decide if it's something you really need.

Push your savings goals

One simple way to spend less is to encourage yourself to save more money. By creating lofty savings goals, you may find that you are more likely to consider the opportunity cost of a potential expense. When you are thinking about buying something new, you'll not only have to consider if you truly need it and how much you'll use it, but you'll also need to think about whether or not the purchase is worth putting less into your savings account.

Automate your bills

Bills piling up on the counter do nothing but contribute to the disorganization of your home and your money. If you're constantly losing bills, missing payments, and racking up fees and penalties, take some time to set up e-statements and autopay for all of your accounts. When the statement comes due, the money will come straight out of your bank account without you having to think about it. This doesn't mean you shouldn't check to make sure everything looks correct, but autopay can be a huge help in a minimalist approach to money management. (See also: 5 Ways to Automate Your Finances)

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This article is from Rachel Slifka of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

12 Things You Should Do in the First Six Months of a New Job

Paul Michael — Mon, 26 Mar 2018 09:30:23 +0000

A new job comes with a lot of excitement, trepidation, and change. While you're settling into your new role, it's easy to forget the reasons you got the job, and the things you need to do to make sure you keep it, grow, and move up the ladder. Here is a guide to the first six months on the new job, with what you should aim to achieve by month one, month three, and month six.

The first month

Some would say it's the hardest month, but that's not always true. As a newbie, you'll be cut a little slack, but after the first month you'll see that wiggle room disappear. So, take advantage of it, and do whatever you can to create an excellent impression. (See also: 6 Things to Do on Your First Day at a New Job)

1. Establish yourself as a conscientious worker

First impressions last. During the first month on the job, get in early and leave late as often as you can. Never do that the other way around; you need to become a valued team member before you occasionally duck out early or stroll in a little late. You should also be making sure you cross every t and dot every i. No mistakes. No sloppy work. No excuses. Think of your first month as a trial period. During this time, you're still being tested, and you want an A. (See also: 6 Simple Ways to Make a Fantastic First Impression)

2. Ask as many questions as you can

How do things work? Who are the people you need to know? Who are the heads of the different departments, and what do they do? What are the challenges of the company? What are the strengths? Become the most inquisitive employee you can, and take notes. Learn from the people that have been at the company for years, but remember to take some comments with caution. Jaded employees can inaccurately color your view of the company. Also, don't be afraid to watch how people do certain tasks. Ask if you can shadow them; most of the time, they'll be flattered that you want their expertise.

3. Find out what is expected of you

Job descriptions are all well and good, but once you have the position, you may find out that reality is a little different from perception. The employer may have painted a glowing picture of the company, but it might not really be all smooth sailing. Also, managers and interviewers are only human, and may have forgotten a few of your duties.

So, make sure you sit down with your supervisor as soon as you can after starting in your new position, and find out exactly what is required of you. Do you have to submit reports, and if so, when? How will your daily duties be assessed? What standards are you required to meet? Get it all down, and if possible, get your boss to acknowledge it.

4. Get to know your colleagues

Whether you're working in a massive corporation or a mom 'n' pop shop, you need to make an effort to get to know people. Do it sooner rather than later, otherwise you may come across as anti-social or aloof.

You don't have to be the life and soul of the department, but find the time to introduce yourself to the people you'll be working with on a regular basis. Learn about their roles, and how you can help each other out. You're not looking to make best friends, you're simply laying the foundation for a good working relationship. If possible, ask for an organization chart from human resources or your supervisor, so that you can see how you fit into the company.

5. Show enthusiasm and passion for your role

The first month may present unexpected challenges, but you have to take them all in stride. You've only been on the job around 30 days, so you really haven't had the time or experiences to become jaded and downtrodden. Remember, you are fresh blood and there will be an expectation for you to inject new life into the department. So, approach your job with zeal and energy, and try to turn every challenge into an opportunity.

Three months in

Crunchtime. The honeymoon period is over. Now, you're part of the team and should know what you're doing. By now, your employer will expect to see you start walking the talk you gave in the interview. In many ways, this is your make-it-or-break-it milestone.

6. Find a mentor

After three months, you'll have a pretty good lay of the land. Now, if you haven't already done so, you need to connect with someone that can really help you get ahead in the company.

This is not about sucking up or finding cliques to cover your back. In fact, either of those strategies can often have a negative impact on your career. Instead, consider who the shining stars are in the company. Who are the ones leading the charge? Who has a lot of common sense and business savvy? Who is respected or admired, even if he or she is not the most popular person at work? That is someone you should be looking to for advice.

7. Get a feel for your performance so far

Some organizations insist on a performance review after three months. Some are more relaxed. If you haven't been invited to a meeting with your supervisor to discuss your progress, take the initiative and set one up.

This is a great time to establish, on paper if possible, what the positives and negatives have been about your first 90 days. Hopefully, it's way more good than bad, but don't be afraid to ask about the latter. What can you improve? Where have you made a few missteps? Your boss will appreciate your candor, and will be more invested in you if he or she believes you genuinely want to be better.

Set some goals, but also get down your achievements and your contributions to the company so far. This is also a great time to read your boss directly. Are you getting good vibes and positive body language? Are you hearing a lot of references to the future? This means you're becoming valued.

8. Begin to push boundaries

After three months, you should know which rules to follow, and more importantly, which rules you can bend a little. This kind of flexibility will come in handy when you want to push ideas or initiatives that have, for one reason or another, never been implemented.

As a newcomer to the business, you will have a fresh set of eyes on problems and solutions. You also aren't weighed down by the baggage of being told no a bunch of times. You will be amazed at what can be achieved simply by not having any history with the typical negativity or cynicism that can come from years of doing things the same old ways. What's more, even if your ideas don't come to fruition, the fact that you're really trying to push boundaries and make things happen will be seen as positive.

9. Make your voice heard

It's not easy to speak up during the first few months. You're new, you don't know how a lot of things work, and you could be saying things that may sound naive, or are just uninformed due to your lack of company experience. After three months, however, you should have a good grasp of the culture, the business, and the successes and failures that have come before you. Now is the time to start speaking up and get noticed for the right reasons.

Often the people that get the promotions aren't the brightest or the most talented — they're simply the loudest. They speak up, they say what they're thinking, and they are not a wallflower in the weekly status meeting. Do likewise. Don't speak all the time and have nothing to say, but don't stay quiet and let someone else make the point you wanted to make two days earlier. You're good at your job. You have great ideas. Now … let everyone else know that.

Six months in

By this point, you can breathe a little easier. You've been accepted, you will probably have a six-month review coming up, and you'll want to reinforce the positives you've achieved. However, this is no time to rest on your laurels.

10. Establish a network of professionals

You're settled in. You've made a name for yourself. You're comfortable with your day-to-day tasks, and have a good feeling for the place. This is the perfect time to reconnect with some of your old colleagues and professional friends, for several reasons.

First, it never hurts to have friends in other businesses. They can help you should you ever get laid off or want to switch jobs. They can also offer valuable advice. Some of these friends may help you win new business for your new company, or give you leads that turn into great opportunities.

Perhaps most importantly, friends who know you and what you do can really help when times get tough. After six months, the bloom will definitely have gone off the rose, and you'll start to see problems that now seem impossible to solve, or challenges that the culture make impossible to change. This network of professionals will be there for you, and could help you on those days you really need a boost.

11. Cement your reputation

You have six months of solid work behind you (hopefully). It's time to use that bank of achievements to establish yourself as an indispensable member of the team. This doesn't mean bragging or constantly bringing up your wins. What it does mean is using what you have learned to have a positive and lasting impact on other initiatives. Your contributions on certain projects can be your "in" to larger developments. You have proved yourself on smaller jobs, now is the time to build on that success. From the foundation you have worked hard to establish, you can start looking at the next role.

12. Set your sights on a raise/promotion

If you have worked wonders for the company, you could have built up enough validation for a raise and/or promotion even though you've only been at the company for six months. Take a look at the hierarchy, talk to the human resources department (if you have one), and find out the process and procedures involved in getting promoted or adding to your paycheck.

It's quite possible that there is a history of some people being promoted after six months, or even less. It's also possible that there are some gaps in some departments, and you are a natural for that larger role. Scope it out. Start asking for more responsibility. Begin doing the job you want, not the one you currently have. Even if it doesn't pay off right away, you will be seen as a go-getter, and someone that is valued enough to get a raise or promotion to keep you from looking elsewhere. (See also: 5 Times You Should Demand a Raise)

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Use Bucket Budgeting to Overhaul Your Finances

Emily Guy Birken — Wed, 21 Mar 2018 09:30:16 +0000

You know the drill: You're supposed to save up at least three to six months' worth of expenses in an emergency fund. That way, you're covered in case of a job loss, an expensive car repair, or another "life happens" moment. You've set up an automatic transfer into your savings account to make sure you don't have to rely on your own inconsistent memory to fill it up. You should be all set.

So why is it that you never seem to have more than a couple hundred dollars in your savings account, despite making all the right moves?

It's likely that your savings account doesn't have a specific purpose, which makes it much easier to make withdrawals for nonessentials. That's where bucket budgeting (also known as targeted savings) comes in.

Here's what you need to know about bucket budgeting and how it can improve your finances.

What is bucket budgeting?

Bucket budgeting is similar to the old-fashioned envelope budgeting system, where you would set aside cash in different envelopes labeled with their purpose. For instance, under the envelope system, if you budget $400 per month for groceries, you would put $400 cash in an envelope marked "groceries" each month, and only spend that particular money when you went shopping at the supermarket. With bucket budgeting, however, instead of setting aside cash in envelopes for regular spending, you set up targeted savings accounts for various savings goals.

For instance, let's say you've had to take money from your savings account several times over the last year to help pay for a car repair, a leaking water main in your house, summer camp for your kids, and your anniversary trip with your spouse.

Even though each of these purchases may be perfectly valid reasons to dip into savings, it's tough to know if you're making good choices with your money if it's all in one place. That's why bucket budgeting would have you create five sub-accounts for your savings, each with a different savings goal:

Emergency: $1,000
Car repairs: $500
Home repairs: $500
Kids' camp fees: $650
Anniversary trip: $350

With this system, you have a better sense of how much is available to spend. In addition, it's much easier to scale down your anniversary trip expectations from "a week in Mexico" to "a weekend at a local bed-and-breakfast" when you realize what you'd be taking the extra money from.

Bucket budgeting and motivation

The other aspect of bucket budgeting that can really kick your finances into high gear is the motivational aspect of it. We are much more likely to feel excited about saving money if we have a specific goal in mind.

This increased savings motivation stems from our mental accounting, which is our tendency to value money differently depending on how it is physically and mentally labeled. You might feel no compunction about "borrowing" $500 from your general savings account for that getaway with your spouse, but taking that money from your kids' camp fund would hurt. (See also: What Happens When We're Not Logical With Money)

In addition, it's a lot more fun to see a savings account with a specific purpose grow over time than it is to see a general fund get bigger. Seeing money transferred from your checking account to your savings account can be dull and painful, but seeing money go from your checking account to the account where you're saving for a dream vacation or a new car can be downright enjoyable.

How to create your buckets

There are any number of goals you could be setting money aside for, so how do you determine which goals should get their own bucket? In general, there are four types of bucket categories you will want to create sub-accounts for: emergency expenses, irregular expenses, big-ticket items, and dreams. (See also: Reach Your Money Goals Faster With a Simple Naming Trick)

Emergency expenses

These are the urgent expenses that you have no way of predicting before they crop up. These include things like car repairs, home repairs, or medical needs. These needs can each have their own buckets, in addition to a separate emergency fund that you keep at least $1,000 in.

Why have separate funds for these emergency expenses when you could have just one emergency fund? Having separate buckets for the various emergencies you might encounter can help you weather those times when everything seems to break all at once. That way, if you need to take care of a car repair, fix a broken window, and get an emergency root canal all in the same month, you will still have some emergency money to fall back on just in case something else goes wrong. (See also: 7 Easy Ways to Build an Emergency Fund From $0)

Irregular expenses

Irregular expenses are the ones that are predictable, but don't come as part of your regular monthly budgeting. They include annual, biannual, or quarterly bills, membership dues, and taxes. Any expenses that you kick yourself for having forgotten are excellent candidates for bucket budgeting.

For instance, how many times have you been surprised by an annual bill? Without bucket budgeting, it's easy for the annual car insurance bill to slip your mind until it's staring you in the face and you're scrambling to pay it.

How much to put in emergency and irregular buckets

To figure out how much to put in each of your emergency buckets and your irregular expense buckets, go back over your expenses for the past few years and determine about how much you spend per year on each type. Divide each expense total by 12, and set up automatic monthly transfers to the specific accounts. That way, when an emergency occurs and when an irregular expense comes due, you'll have money already set aside to deal with it.

Big-ticket items

Your laptop, your phone, and your car are all items you use everyday that have a limited life span. Bucket budgeting can help you be prepared to replace any of these items should something happen to them. Setting aside a little money each month is a lot easier than trying to find hundreds or thousands of dollars all at once.

In terms of saving for a car replacement, consider transferring the equivalent of your car payment to your "new car" sub-account once you've paid off your current car. For your laptop and phone, divide the cost of a replacement model by 24 and put that amount in each sub-account per month, so that you'll have enough for a replacement within two years — and hopefully you won't even need it.

Dreams

Bucket budgeting is also a great tool for helping you to realize your dreams. Whether you want to buy a house, travel, or learn how to brew beer, you'll be in a much better position to follow those dreams if you're saving for them. Having separate, targeted accounts for each one of your future goals means that you are always working toward those goals. It's a lot tougher to forget to save for a goal if you have a specific account named for it — and it's a lot harder to borrow money from your dreams than it is to borrow from an unnamed savings account.

Where to put your buckets

Both online and traditional banks have gotten into the sub-account savings game. You can start with your regular bank, although it can be a good idea to have your buckets in a different bank. Not only does that lessen the temptation to dip into your savings accounts unnecessarily, but you can also take the time to shop around for the best rates, since your money might as well be working for you.

Bucket budgeting for the win

Putting a name to each one of your savings goals not only helps you save more and spend less, but it can also help you to be more prepared for potential financial problems — and feel more relaxed when they do occur.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Ways an Annual Self Review Can Boost Your Career

Paul Michael — Tue, 20 Mar 2018 09:30:17 +0000

There are formal performance reviews, and informal performance reviews. There are also self-reviews, and many of us don't take the time to sit down and do one.

It's crucial to spend some quality time reviewing the last 12 months of your time on the job. You should evaluate your own goals and accomplishments at work just as your boss would. This will give you a chance to be honest with yourself in a way you can't be with your boss, and use that to really hit a home run when the official review comes around. Here's how you can get started.

1. Recognize all that you've accomplished in the last year

Start your annual review by poring over everything you have worked on during the last 12 months. Hopefully, you have a way to keep track of all your projects, whether it's computer files, physical files and folders, or photographs and documentation of your work. Begin in January and really take the time to go through each month carefully.

This list will become the foundation for any kind of raise or promotion you're looking to get, and it is also a great way to boost your self-esteem and start the review on a high note. Look at everything you did. You rocked it.

2. Identify the goals you did not meet

Moving on from that list of accomplishments, you should now be able to compare it to the goals you set for yourself last year. If you didn't actively do that, take some time to write down everything you had hoped to achieve over the year.

Now, what did you miss? What did you do, but not as well as you'd have liked? What was a priority at the start of the year, but got thrown onto the back-burner? What was simply forgotten in the chaos? Highlight these unmet goals and add them to the top of the list of goals you want to set for the coming year. Which leads nicely into the next point.

3. Establish new goals for the coming year

You've identified what you achieved, and what you didn't get around to in the previous year. Now, it's time to make a list of new goals. How has the company changed and grown over the past year? Has it created new opportunities for you? Is there more money to play with? Do you have a larger team working under you, or with you? Has there been a significant change in management, or even a merger? Has the economy or current events created issues or challenges that need to be addressed?

Although you don't have a crystal ball, you can make some good predictions based on your own experiences and those of your colleagues. Set new goals for yourself, and don't be afraid to aim high on a few of them. (See also: 6 Steps to Achieving All Your Goals)

4. Get a good grasp of your strengths and weaknesses

There are two sides to every appraisal, just like there are two sides to every story. As you look at the accomplishments you have made over the year, and some of the tasks you didn't get around to completing, you should start to see a pattern. You'll be able to identify your greatest strengths based on the successes you had. You'll also be able to spot your weaknesses from the projects or initiatives that were not quite as successful.

What were the commonalities in each case? Are you highly organized with superb attention to detail? Great. However, did this lead to being so focused on some tasks that others did not get the attention they deserved? Feel free to reach out to coworkers and friends and ask them to give it to you straight. Then, put a plan together to build on those strengths while building up your weaknesses.

5. Discover what you've learned since your last review

You've come a long way, baby. That's something you'll hear a lot when you're first starting out in your career, and rightly so. When you first enter the workplace you're very green and have a lot to learn. Within a year, you'll have developed a dizzying array of new skills. As technology changes, and industries evolve, so too will your abilities. Look at where you were this time last year, and think about what you know now that you didn't back then. It can be quite an eye opener.

6. Figure out which skills you want to develop

It's important to take a long, hard look at your current skill set to see what is missing and what needs to be developed. Are you right where you need to be for your particular position in the company? Are you seeing a lack of skills that are increasingly in demand, while having other skills that are slowly being phased out? There is no time like the present to act on this. If you're lucky, your employer will pay for classes that directly benefit the company, so talk to your human resources department. You may also be able to get grants or attend free classes in your area.

7. See yourself from the boss's perspective

This one is tough. You know yourself, but do you really know what the boss thinks of you? Look back and analyze the past year. What were your interactions with the boss like? Did you find yourself going to him or her with a lot of problems, but few solutions? Are you a bit of a chatterbox, or do you sneak in late and escape a little early? Are you a team player? Do you go above and beyond? Are you cynical, or known to be a naysayer? This kind of self-analysis isn't easy, but the self reflection can help you identify areas you need to work on. (See also: 10 Things to Bring Up With Your Boss at Your Annual Review)

8. Be one step ahead of the game

When you give yourself an annual review, you are setting yourself up for success when it's time for the boss to do your official appraisal. You'll already have answers to some of the most common questions, like, "What have you achieved over the past year?" or, "What skills do you want to work on?" You've done the thinking. You've gone through the year, and you know all of your strengths and weaknesses. You will be so tightly prepared that you may well knock the socks off your supervisor with your level of professionalism.

9. Give yourself positive reinforcement

At the end of the day, we're all way too hard on ourselves. We inflate small problems to be way bigger than they really are. We focus on all the things we said wrong. We cringe at comments we made that got more than a few raised eyebrows in meetings. But when all is said and done, we're all just trying to make a living, do a good day's work, and provide for ourselves and our loved ones. So pat yourself on the back. Seriously. Be proud of the year you've had, and the challenges you overcame. You may only do this once a year, so make the most of it.

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

8 Traits of People Who Live Debt-Free

Kentin Waits — Mon, 05 Feb 2018 09:00:06 +0000

Why are some families debt-free and others chronically debt-ridden, even when they have nearly the same amount of income and expenses? Are there universal qualities that keep some of us on the financial straight and narrow, while others crash and burn?

After years of introspection and observation, I think there are certain traits all debt-free folks have in common. Here are the key characteristics of a successful debt-free lifestyle.

1. Goal-driven

Living debt-free doesn't happen by accident; it takes a combination of crystal-clear goals and sheer force of will. And once one goal is reached, it's time to tackle the next. You'd be surprised by what you can accomplish personally, professionally, and financially when you're free of crippling consumer debt. (See also: 5-Day Debt Reduction Plan: Pay It Off)

2. Nonmaterialistic

It's nearly impossible to be debt-free if accumulating more stuff is your measure of success. There will always be something newer, faster, flatter, or bigger to buy. And worse, you'll happily pay for it with plastic. Those who live without debt steer clear of the more stuff/more money/more debt trap and keep their consumerism in check. (See also: Why We're So Materialistic)

3. Controlled

Americans live in a consumer wonderland that's designed to test our willpower at every turn. But in order to embrace debt-free living, control has to override impulse a majority of the time. Those of us who live debt-free understand how marketing manipulates human behavior, and we're able to acknowledge — but not act on — wealth-draining whims. (See also: 10 Classic Impulse Buys We Need to Stop Falling For)

4. Self-aware

Sophisticated advertising, easy credit, and countless consumer baubles — it's a dangerous mix. Those who've conquered debt have developed a strong filter and a clear understanding that buying isn't the same as being.

Before any purchase, we're able to ask ourselves (and truthfully answer) three crucial questions: "Do I really want it or need it?" "Will this simplify my life or make it more complicated?" and, "Am I buying this from a position of strength or weakness?"

5. Self-assured

There are numerous ways to broadcast affluence in our society, but very few ways to communicate the sort of freedom that comes from living debt-free. Instead of keeping up with the Joneses, we have to be comfortable in our skin. The race (if you want to call it that) is only with ourselves and only we know when we've won. (See also: 6 Ways Envy Is Keeping You Poor)

6. Strategically sacrificial

Not all sacrifices have to hurt. For those who live debt-free, strategic sacrifices feed a greater good. We gladly skip a few meals out, buy used cars instead of new, and try to make our old brick cellphones last as long as possible. Why? So we can enjoy the luxury of living debt-free.

7. Patient

Buying something is immediately gratifying. You get to open it, play with it, buy accessories for it, and show it off. By comparison, the real rewards of budgeting, saving, and paying off debt come much later. The debt-free take a long view of success and have achieved a nearly Zen-like level of patience. (See also: 8 Ways Being Patient Saves You Money)

8. Consistent

Becoming — and staying — debt-free is a slow march that's marked by unwavering dedication and consistency. Success is all about finding a formula that works and executing it month after month and year after year. The journey may not always be glamorous, but the destination is wonderful. (See also: 11 Good Money Habits That Will Keep You Out of Debt)

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This article is from Kentin Waits of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Build a Side Business While Keeping Your Day Job

Denise Hill — Mon, 29 Jan 2018 09:30:09 +0000

The saying, "Don't quit your day job," has become all but obsolete. We live in an era of entrepreneurship. Being your own boss is the chic new trend. But while throwing caution to the wind and only having a Plan A is tempting, keeping your day job while turning a side gig into a business is a great way to mitigate risk, learn your market niche, and test ideas and business models.

However, building a business and a brand while working a nine-to-five is tough. Below are a few tips to help you ease your way into doing both. (See also: 15 Ways to Make Money Outside Your Day Job)

1. Consider getting a business partner or co-founder

Taking on a business partner is an excellent way to hedge risks, gain access to additional resources, and split the workload. It is also the quickest way to ruin a friendship and drag your business down before it gets off the ground. Before jumping into bed with your bestie, here are a few things you should consider:

What type of partner do you need?

The first step in getting a partner is to determine the type of partner you need and the role he or she will play. Do you need help with ideas, branding, marketing, balancing the books, procuring finances or additional resources? Or, do you need a silent partner — someone who helps financially and that's it?

How much of the business does your partner own?

Drawing lines in the sand early is essential. The longer you wait, the murkier things become and the harder it will be to determine who owns what. It is critical that you state upfront who is in charge or if everything will be split 50/50. Draw up a contract that reflects this decision. A contract between friends, you ask? Absolutely.

How do you make decisions?

Who has the final say? Establishing how decisions are made during the infancy stages of the partnership is beyond important. If you are the sole owner, should your partner make decisions on your behalf? If so, which decisions? Or should they run all decisions by you? A great way to work through this is by establishing roles and areas of responsibility. Your partner will clearly know his or her sphere and the boundaries will be better defined.

2. Respect your nine-to-five

Understand and respect the fact that your nine-to-five is your main, primary, and most important job. Your side gig has to be done outside of business hours. Until you are ready to divorce your employer and make your side gig your new bride, you must prioritize your day job as such — even if you hate it.

Just remind yourself that your day job is paying the bills and providing you with the means and motivation to launch out on your own. Here are a few ground rules when it comes to respecting your nine-to-five:

Work while you are at work

Do your best to be the best at your current job. Work to be fully present and to always do a good job. This will translate to your business as well.

Beware of conflicts of interest

If your side business is in the same market or area as your current employment, you need to tread lightly. Your employer's clients, business procedures, and intellectual property should not be used for personal gain.

Check what contracts you've signed

If you signed a nondisclosure or noncompete agreement, then you may be prevented from working for a competitor or against your employer for a specific amount of time. Find out exactly what your rights are and what you can and cannot do.

3. Do the hard, boring, and expensive stuff

While you are gainfully employed, it's a good idea to do as much foundational work as possible. Draft your business plan, secure any licenses or certifications you may need, and establish your business as an LLC or sole proprietorship.

It's also a good idea to begin buying equipment and paying any legal fees associated with your business niche. It may feel like a waste of money to shell out this type of cash upfront before you begin earning revenue, but it's worth it. The more you can take care of before launching the business, the more profits you keep and the less capital you'll need down the road.

This is also a great time to work on branding and developing a solid marketing strategy. It's easier to nail these things down before you begin doing business versus winging it after you're officially open. (See also: 6 Simple Ways to Market Your Side Business)

4. Start generating revenue

If it is in any way feasible, start generating revenue while you are still employed. Test out your prototype. See how much of your product you can sell or which services you can provide on a smaller scale before you go all in.

This allows you to test the market, make better financial projections, and properly scale your business before you open. You can tweak processes, find new vendors, and get a sense of your business's flow. It will also help you answer these questions:

What adjustments do I need to make?
How are people responding to my marketing campaign?
Am I properly branded?
Are my prices too high or too low?
Do customers pay on time?
How much business can I handle alone? At what point should I hire additional staff?
Is my service or product in demand? How can I increase demand?

Generating revenue before you officially dive into business ownership is also crucial if you need investors. You need to demonstrate the profit potential of your business in order to entice people to invest. And the best way to show that you can make money is by actually making money. (See also: 10 Fundamentals of Naming a Small Business)

5. Use downtime efficiently

The biggest myth concerning entrepreneurship is that you get to set your own hours. As a business owner, your time is no longer truly your own — your customers, the market, and the need to get work done are your new bosses, at least at first. You work when you need to work — or you go out of business.

You've got to learn to use downtime efficiently. Days off from your nine-to-five become full workdays for the business. And yes, you will have to work on holidays.

It also means getting up an hour or two earlier to reconcile the books, answer emails, or order more inventory. You lunch hour is now time for you to nibble on a sandwich while you update your website, post on social media, and generate new marketing ideas (on your own computer). And the evenings — which used to be a time for socializing with friends and vegging out with Netflix — are now devoted to doing whatever needs to be done to keep the business running.

The schedule may sound brutal, and it is. But hopefully, it's only temporary. Success comes at a cost, and in order to make it in business, you have to initially pay up. (See also: 8 Common Myths About Starting a Small Business)

6. Set a date

Make your business Plan A and your current job Plan B. Set a firm date for quitting your day job and work diligently toward that goal. Structure your life around achieving that goal. Restructure your personal finances to help you reach that quit date. Cut back, reduce your overhead, downsize, and save as much money as possible to help stabilize your income while you shift business gears. See if your employer will allow you to work part-time for a while before quitting.

Quitting your job and going into business full time must be your end game. If not, your business will become and forever remain a hobby. With a good idea, proper planning, and a bit of luck, your business will eventually be able to provide you a full-time income, and then some. (See also: Starting Your Dream Business Is Easier Than You Think — Here's How)

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Clever Tricks to Make Your New Year's Resolution Stick

Max Wong — Thu, 11 Jan 2018 10:00:07 +0000

Another year, another list of New Year's resolutions that most of us will be unable to keep. The problem with resolutions is that they require a tremendous amount of mental processing power to get from point A to point B. You not only have to begin with over-the-top motivation, but you also need to stay that way. (See also: 4 Money Resolutions Anyone Can Conquer)

When you overtax your brain by trying several new things or adopting new routines at the same time, you subject yourself to cognitive overload, which can result in reduced productivity, and lead to anxiety.

Luckily there are brain hacks and workarounds that you can use to fine-tune your resolutions and ultimately achieve your goals.

1. Simplify your goal

If your New Year's resolution is so complex and grand that it requires a checklist, you are stacking the deck against yourself. Keep it simple. Don't choose an ambiguous goal like, "Save Money." Instead resolve to turn one good financial behavior into a habit. For example, "I will open my bills as soon as I get them and pay them promptly." (See also: Why You Need to Make Financial Habits, Not Goals)

2. Avoid multitasking with your resolution

Most resolutions are not one goal, but sprawling, impossible-to-schedule projects with hundreds of moving parts. But successful resolvers are the people who make one actionable goal and put it into practice until it becomes a regular routine they don't even need to think about. For example, instead of making your goal to “lose weight,” resolve to always drink water instead of soda, and watch as your overall health improves with that one new habit.

3. Don't overschedule yourself

It's hard to stay motivated, to do anything, over a long period of time if you have to continually start and stop due to scheduling issues. One of my goals in 2017 was to reduce my number of personal belongings down to 1,000 items. I failed to meet this goal because the scope was too big. I didn't lose my desire to downsize, but my revised goal for 2018 is to spend one hour each day listing items for sale online. I may not widdle my belongings down to my target number in the next 12 months, but I will succeed in reducing the number of things I have to spend time dusting, and I'll even make some additional cash. (See also: 7 Ways to Make Money Off of Your New Year's Resolutions)

4. Reward yourself along the way

People that have successfully maintained their weight loss know that cheat days are a key part of their success. If you never reward yourself for good behavior, then the healthy habits start to feel like punishment.

However, unlike weight loss — which has visible results that can be validated by peers — no one is going to tell you how cute you look in your new 401(k). While financial responsibility should be its own reward, saving money generally involves a certain level of deprivation. So if your resolution involves saving money, give yourself the ability to splurge in a structured way. For example, give yourself $50 to spend selfishly for every $1,000 you put into savings. (See also: 21 Frugal Ways to Reward Yourself Right Now)

5. Practice, practice, practice

It only takes 13 days to make a new habit. Or 21 days. Or 28 days. Or close to 70. Really, it depends on who you ask. Don't despair, though, because it really is possible to create a new habit; it's just easier if you follow three steps.

Choose a small action

"Lose weight" is not small. Instead choose a tiny component to losing weight, like, "I will take a 30-minute walk five days a week."

Attach it to an existing habit

The easiest way to make a new habit stick is to attach it to an existing habit. For example, if you drink coffee each morning, walk to a nearby coffee shop to get your 30 minutes of walking in. (See also: The Surprisingly Easy Way to Change Your Habits and Your Life)

Create multiple reminders

You have to make your new habit super easy to remember, especially during the first week. Make your new routine as mindless as possible by setting up multiple reminders to get it done. Swap out your regular coffee mug with a travel thermos that will remind you to get your coffee down the street. Ask your coworkers if they want to join your "Walk to Coffee Club" so they can keep you accountable. Wear a fitness tracker, or set your phone to prompt you to walk for 30 minutes each day. Write, "Why aren't you walking?" on the lid of your to-go coffee cup at home. (See also: The Productivity Secret That'll Change the Way You Work)

6. Find a buddy

Why is it so much harder to break a promise to someone else than it is to break a promise to yourself? It will be much easier, and way more fun to keep your resolution if you have an accountability buddy to commiserate and compete with. (See also: 6 Surprisingly Simple Ways to Motivate Yourself)

7. Focus on timing

New Year's is a totally arbitrary start date for practicing new habits, so why not start a resolution when your schedule best matches your end goal? For example, why not start working toward your savings goal the day after Tax Day? If you've done your taxes for the previous year, you're already caught up on your accounting and have a fresh view of all your finances.

Or, if your goal is to lose weight, why not start your new healthy habits at the beginning of spring, when you have your choice of fun, outside physical activities to enjoy, rather than in the dead of winter when you'll be stuck inside using the machines that you hate at the gym? If you give yourself a running start, you are more likely to maintain your new practice for one calendar year.

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This article is from Max Wong of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Reasons to Get Spring Cleaning Done During Winter

Kentin Waits — Thu, 04 Jan 2018 09:00:09 +0000

Spring cleaning — it's a timeless tradition that makes perfect sense … until you think about it for a minute or two. Why does everyone wait until spring to start that deep clean? Wouldn't winter be a more ideal time to tend to all things indoors? Let's turn this unquestioned custom upside down. Here are seven reasons to get spring cleaning done during the dark and dreary months of winter.

1. Baby, it's cold outside

With fewer reasons to be outside, winter gives us more time to focus on the inside of our homes. This is the season for nesting, and cleaning is an essential part of making our nests as comfortable as possible. (See also: 7 Ways to Prepare for Spring Cleaning)

2. You're organizing new stuff anyway

If you're like most Americans, you probably have loads of new trinkets and gadgets coming into your homes during the holidays. As long as you're organizing your haul, why not clean out your closets, rearrange the attic, and clear out the garage to make room for your new toys?

3. It's the giving season

Organizing, decluttering, and donating — they all work together in perfect harmony. Wintertime is the time to give away cold-weather gear your kids have outgrown, clothes you don't wear, and household items that could brighten the lives of those in need. (See also: 12 Ways a Deep Declutter Can Improve Your Life)

4. And the season of getting sick

Stuffy noses, sore throats, and sneezing — they're all part of the magic of the chilly season. But a thorough winter clean can help you keep the nastiest germs and viruses at bay. If your family is already under the weather, a deep clean can prevent a second round of sickness.

5. Everyone's home

With everyone home for the holiday break and the following snow days, it's much easier to declutter. Get the whole family involved; decide together which items can go and which should stay. Then, assign each person a simple cleaning chore and make short work of long to-do lists.

6. It's the right way to ring in the new year

New Year's is all about fresh starts. Clear your mind by clearing out the accumulation of years past. A spotless, clutter-free, and organized home is the perfect place to discover what's next for you and your family. (See also: 31 Things to Do in January to Start the New Year Off Right)

7. It'll be on your mind until you get it done

Spring is still a few months away. However, you know you'll have to buckle down and get this time-consuming deep clean done eventually, so why not cross it off your list now? Completing necessary tasks early will make you feel accomplished, stress-free, and will keep you motivated to keep checking those boxes and chasing your New Year's goals.

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This article is from Kentin Waits of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Ways to Bounce Back After You Miss a Credit Card Payoff Goal

Denise Hill — Wed, 03 Jan 2018 09:30:14 +0000

You've been diligently working to pay off that pesky credit card and get your finances in order. You've cut back on spending, quit eating out, and you drive for Uber and Lyft twice a month. Yet after all that hard work, you still didn't pay the card off within six months like you planned.

Missing a milestone can be disheartening and demotivating. But just because you didn't meet your debt payoff goal in the allotted time, doesn't mean it's time to quit. Consider this quote from Michael Jordan, arguably one of the greatest basketball players of all time:

"I've missed more than 9,000 shots in my career. I've lost almost 300 games. Twenty-six times, I've been trusted to take the game winning shot and missed. I've failed over and over and over again in my life. And this is why I succeed."

Failure and falling short are risks in any meaningful endeavor. Here are several things you can do to bounce back after missing your credit card payoff goal. (See also: 5 Things to Remember Every Time You Face a Financial Failure)

1. Forgive and forget

The first thing you must do is forgive yourself. Whatever role you played that made you miss your goal has to be acknowledged and forgiven.

You may have strayed from your budget a few times. You may have miscalculated how much you needed to pay. You could have missed entire payments. Whatever it is, you did it. Own it and make amends with yourself.

After you've taken responsibility for your role in the failure, move on. No need to cry over spilled milk. What's done is done. The quicker you can wipe it from your memory, the quicker you can regroup and move forward. (See also: The Fastest Way to Pay Off $10,000 in Credit Card Debt)

2. Consider the factors

The next thing you should do is to go back and look at all the things that impeded your progress. Were there unexpected emergencies or expenses that hindered you from paying the credit card off as planned? Did you miscalculate? Did you incur any fees? Did the repayment terms or interest rate change?

Also during this process, it is important to conduct a self-audit. You are the most important factor to paying off your credit card debt. Did you miss any payments? Did you spend money that wasn't planned? Were you disciplined? Was your goal reasonable for your situation?

Answering these questions will allow you to see what you did right and what you need to change moving forward. It allows you to assess your plan, your income, level of discipline, and other factors you may have been unaware of initially. Once you have these answers, you can tweak your process, set a new goal, and pay off that credit card.

3. Look on the bright side

There is a silver-lining to every dark cloud — you just have to find it. As it relates to your credit card debt, it's pretty easy to see. Just look at your credit card balance. Even though you didn't pay it off in full, you drastically reduced the balance and expedited the repayment time.

You've also saved yourself hundreds of dollars in interest and potential fees. You have made progress and moved yourself closer to financial freedom. You've also made progress toward improving your credit score. Your score may not reflect it at the moment, but as soon as you pay off the card, it will go up.

One of the greatest benefits of the process you've just endured is that you've improved as a person. You've developed more discipline, tenacity, and grit. You set a goal and worked to achieve it. You saw something you didn't like and you put a plan in place to intentionally change it. That should be celebrated.

4. Set SMART goals (re-evaluate your plan)

You didn't reach your repayment goal, but you are a lot further along than you were before you started. It's not time to quit. It's time to re-evaluate your plan and establish smaller SMART goals to get you there. Your goals should be:

Specific: How much will you pay on the bill every month? When will you make the payments? Should the payments be automated? Do you need to get a side gig or part time job to generate more income? (See also: 14 Best Side Jobs For Fast Cash)

Measurable: How often will you check in to make sure you're on track? What adjustments will you make if you find that you have fallen behind?

Attainable: Is your repayment goal reachable? Do your income and expenses allow you to pay off the card in the allotted time frame? (See also: 5-Day Debt Reduction Plan: Pay It Off)

Realistic: Is your repayment plan realistic? Does it leave room in your budget for unexpected expenses? Is the budget too tight? Have you allowed any wiggle room for eating out or the occasional movie?

Timely: Does this time frame represent a practical sense of urgency? In other words, does what you would like to accomplish line up with your reality? What is an appropriate time limit for paying off the credit card? (See also: 6 Steps to Eliminating Your Debt Painlessly)

5. Celebrate small wins

The brain is hard-wired to win. Research shows that whenever you win at something, dopamine receptors in your brain are increased. This in turn enhances intelligence, confidence, and feelings of happiness. It's called the "winner effect."

According to Ian Robertson, cognitive neuroscientist and author of The Winner Effect: The Neuroscience of Success and Failure, success and failure have more of an effect on humans than genetics and drugs.

Creating opportunities for small wins increases your odds of reaching long-term goals and staying motivated along the way. Pausing to celebrate a small victory — for instance, paying down your credit card by $200 — is a reminder that you are making progress. (See also: Get Out of Debt Faster With the "Debt Snowflake")

6. Keep it moving

No matter how many times you get off track, pick yourself up, complete the first five steps, and begin again. Every payment gets you closer to your goal. Staying focused and committed is tough and you will slip up from time to time, but the key is to keep moving.

Each time you restart, you build a little bit more tenacity. Every time you fall and get back up, you win. Progress is about putting one foot in front of the other, over and over, month by month.

Even if you miss a payment or three, once you have the ability and opportunity to regroup and move forward, do it. Debt repayment is a slow and steady process. The process in and of itself — when done slowly and consistently — discourages you from incurring new debt. You not only pay off your current debt, but you reduce the likelihood of developing new debt. (See also: 20 Free and Fun Ways to Reward Yourself)

7. Get a support system

Having people that support your goal, encourage you throughout the process, and hold you accountable is a sure way to keep you dedicated and focused. So, start reporting your progress to someone.

Accountability requires courage. When we hold ourselves accountable for something and don't follow through, our brain processes it as a loss. The brain hates to lose. It takes courage to make a commitment because there is always, looming in the distance, the opportunity to fail.

Write out your goal and your plan to reach it and give it to a friend. Have them check in with you every couple of months to see if you are hitting your smaller goals and sticking to your repayment plan. Celebrate with them if you are, or regroup and make the necessary adjustments if you are not.

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Questions Your Financial Adviser Should Ask You

Emily Guy Birken — Wed, 20 Dec 2017 10:00:06 +0000

When you're looking for the right financial planner, you are essentially interviewing someone to work for you. Any hiring manager will tell you that a prospective hire who has no questions about the job during the interview is not well prepared to become an employee. The same is true for your prospective financial adviser. If the entire meeting is only about them answering your questions, you don’t have the full story on whether or not this will be a good fit.

That’s why you should expect to hear the following questions from an adviser before you decide to entrust your financial future with them.

1. What are your financial goals and objectives?

If you don’t know where you’re going, it will be tough to know how to get there. A financial adviser who asks you this question will not only help you better understand and articulate your goals, but they’ll also be in a much better position to help you achieve them.

This is also a good way to help you and your adviser understand your values, needs, and reasonable expectations. If you simply say you want to prepare for retirement and save a little for your kids’ college funds, your adviser should dig a little deeper to help you put specifics and numbers to your goals, so that you don’t find yourself saving for a goal you don’t really want. (See also: 5 Details Your Financial Adviser May Be Ignoring)

2. What are your biggest financial concerns right now?

We all carry some sort of financial stress, and an important part of your adviser’s job is to help you arrange your finances to minimize that stress. Letting your adviser know that you are regularly losing sleep over your debt will help them recognize that getting that debt paid off is an important goal. Even if it might make better sense on paper to focus on investing while paying off debt slowly, tackling the debt more aggressively will be more beneficial to your mental wellbeing.

While many advisers will ask you to fill out some sort of risk assessment questionnaire to help determine what kind of investor you are, it’s important for them to also understand the more day-to-day type of financial thinker you are. The goal of financial planning is helping you live well on the money you have, both today and in the future, and the best financial planners recognize that they can help you by addressing your most pressing concerns.

3. What are your biggest nonfinancial concerns right now?

It’s important to remember that money does not exist in a vacuum. The nonfinancial issues that are causing you stress will also affect your financial life, so it’s important to talk through those issues, as well. That could include your concerns about your child’s education or your parents’ declining health, or your concerns that you don’t spend enough time with your family. Your financial adviser can help you figure out what aspects of your life could improve and how financial planning can help. (See also: 11 Secrets You Need to Tell Your Financial Adviser)

4. Where do you expect to be in five years?

This is a common job interview question, and it’s also a good question to hear from your financial adviser. So often, we think of financial planning as being solely about retirement and estate planning, but there are any number of important life milestones long before you reach the end of your career. Knowing where you’d like to be in the near future — and what upcoming potential issues you may be facing — can help you to determine what goals to set for yourself and with your financial adviser.

5. What do you expect to get out of this relationship?

Unmet expectations are the root of bad feelings and resentment. If you expect your financial adviser to be there for your debt payoff journey, tax questions, retirement planning, estate planning, and college savings, you’ll be sorely disappointed if your adviser is only planning on chatting with you once a year about how your retirement investments are doing. Similarly, if your adviser is usually very hands-on while you are happy to DIY anything that you can do on your own, you might find them too invasive when they make recommendations you don’t feel you need.

Laying out the expectations on both sides for how the relationship will work can help you determine if the adviser you’re meeting with will take care of your needs. (See also: 3 Reasons to Be Picky When Hiring a Financial Planner)

What to do if you don’t hear these questions

While many good financial advisers will ask you these sorts of questions during your initial interview, it’s not necessarily a given that every good financial adviser will think to ask them. That means you risk turning away a financial adviser who would be a good fit just because they didn’t ask these questions.

It can often be up to the client to take the bull by the horns. If your prospective adviser hasn’t asked deep getting-to-know-you questions, let them know that you would like to discuss these issues. Come right out and explain your financial goals and objectives, your concerns, and your expectations. This will prompt a productive discussion with a good planner who just hasn’t thought to ask these questions, and will be dismissed or minimized by a planner who isn’t actually interested in helping you.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: