Tag: personal finance

Wants vs. Needs: How to Turn Grey Into Black & White

wants vs. needs

At their simplest, expenses really fall into two different categories: wants vs. needs

1. What you need: the things that you need to survive and function effectively in society: food, heat/electricity, a means of transportation, clothing, and water. I’ll even throw in basic telecom and insurance.

2. What you want: everything else.

The problem, of course, is that even in the category of things we “need”, there is a ton of grey area.

 

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Why Utility Companies Don’t Report to Credit Agencies

credit agencies

Every single month I get a bill from Georgia Power, Georgia Natural Gas, Dekalb County Water, Comcast, and AT&T.

And while most of you probably don’t live in Georgia, my guess is you have a similar list of utility obligations that you have to pay every month.

Utilities are a form of credit, meaning some sort of service is provided in advance with the expectation of payment being made at the end of some sort of billing cycle?

If utilities are “credit”, then why aren’t utility accounts commonly reported to the credit reporting agencies?

 

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11 Tips For Retiring When You’re Nervous About The Economy

Affording retirement can be a challenge even in the best economic times. But in our post-recovery world with its steady stream of fiscal uncertainty, retiring can seem the stuff of legend.

Surely, retirement is a more complicated proposition these days: A good 401(k) balance combined with Social Security just won’t cut it. Today, retirement planning needs to be more aggressive and focused, funds need to be more broadly sourced, and retirement itself needs to be more flexibly defined.

 

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How to Slay The Debt Monster

debt

The Debt Monster

It all started one dark day while Kyle and Diana were on vacation celebrating their first anniversary. Kyle needed to visit the magical ATM wizard and decided he should check his checking account balance first to see how much was available. While examining his account on his phone, another number jumped out and grabbed him — their credit card balance. The couple’s balance was already dangerously close to their limit with much of the month still remaining.

 

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5 Painless Ways to Pay Yourself First

save for yourself

We all know that we ought to be paying ourselves first (or save for yourself) — by building a healthy emergency fund, investing in our retirement accounts, and saving for important future purchases.

But for many of us, it can feel like paying ourselves first will end up shortchanging our other financial obligations. How can you pay yourself first when you barely have enough money to make it to the end of each month?

But saving is just like Lao Tzu’s journey of a thousand miles. They both start with a single (and, in this case, easy) step.

 

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5 Things You Can Do This Week to Start Growing Your Wealth

Three years ago, I broke free from being broke. I was 26 at the time and was worth as much then as the day I was born back in 1984. I decided that 26 years was enough time to learn that I didn’t want to be broke anymore. I knew what I needed to know. I knew growing your wealth meant:

  • Our culture wants me to be broke.
  • No one else will look after my money but me.
  • Friends and family will encourage me to spend my money and buy nice things.
  • Life is packed full of unexpected, expensive things that I’ll have to pay for.
  • If I have kids, their college will be expensive.
  • My income is my biggest wealth building tool.
  • I never want to borrow money again.
  • Being broke brings me stress and anxiety.
  • I won’t be at my job forever.

 

Squeeze Extra Savings Out of Your Current Paycheck

extra savings

Saving money—actually depositing money into a bank account that won’t be touched in the short-term—happens when both the physical and mental elements are right. What do I mean by this? A healthy savings account does not just manifest by itself. If a person makes a decent income but sees no benefit in saving any of it, then extra savings will not automatically accumulate. Conversely, if a person is a natural-born saver but is struggling to make ends meet, then it will be difficult to accumulate money as well.

You need both an income as well as an extra savings mentality in order to build up your money.

 

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The 4 Types of Retirement

types of retirement

A few days ago, I read this great post on Len Penzo’s blog about two types of retirement: a hardworking, straight-shooting early retirement vs. a slow, leisurely traditional retirement.

Len compared the two models to climbing a mountain: you can either shoot straight up the face, gaining altitude quickly (but sacrificing some scenery during the climb), or you can take switchbacks, acclimate, enjoy a picnic, and eventually reach the summit.

It’s a beautiful analogy, but I think a few routes are missing. I’ve embraced a different style entirely.

 

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The Real Challenge of Personal Finance

I believe it is far easier to earn more money than it is to accumulate wealth, in America at least.

72% of Americans would find it somewhat difficult or very difficult to pay that month’s bills if they lost their job today. In simplest terms, that simple fact means that it’s the norm to spend everything that you bring in and not accumulate anything.

Add to that the fact that the average American household income is above $50,000 a year and you have a recipe for a society in which an awful lot of people are spending an awful lot of money without accumulating very much at all.

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