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Avoiding Overdraft

Avoiding Overdraft

“It’ll be fine,” you think as you swipe your card and enter your pin.

You haven’t spent that much money this month. There should be plenty left over to cover this, right?

Wrong.

Before long, the bank has sent you the alert—your account is in the red. You’ve overdrafted. Now you’ll almost certainly face two consequences…

1. Overdraft fees. The bank’s favorite way to slap you on the wrist for overspending. These are, on average, $33.58 per overdraft as of 2021.¹

2. Interest. The only reason you can keep purchasing once you’re in the negative is because the bank loans you money. And with every loan comes interest.

It may not seem significant, but these add up. In 2020, Americans spent 12.4 billion in fees alone.²

Here are some strategies to help your bank account stay above water…

Don’t activate overdraft coverage.

This way, purchases that push your bank account past zero will be denied. Overdrafting becomes impossible. There are, however, two serious drawbacks…

You may feel silly if you try to make a purchase and it doesn’t go through. You may need to make a legitimate emergency purchase that exceeds the amount in your account.

Fortunately, there are other strategies at your disposal.

Link a savings account.

If you have an emergency fund, you can link it directly to your spending account. That way, if you overdraft, your emergency fund will automatically make up the difference.

This works well for covering emergency expenses. But if your regular spending overdrafts your account, you may squander your emergency fund on non-emergencies.

Budget better.

Consistent overdrafting may mean that you have a spending problem. If that’s the case, the time has come to cut back. Set up a budget that keeps your spending above water each month. That way, you won’t come close to the dangers of overdraft.

It all comes down to why you’re overdrafting. If you overdraft on occasion because of emergencies, simply link your emergency fund to cover the difference. But if it’s the symptom of a deeper issue, it may be time to seek help.


¹ “Overdraft fees hit another record high this year—here’s how to avoid them,” Alicia Adamczyk, CNBC, Oct 20, 2021, https://www.cnbc.com/2021/10/20/overdraft-fees-hit-another-record-highheres-how-to-avoid-them.html

² “Banks Charged Low-Income Americans Billions In Overdraft Fees In 2020,” Kelly Anne Smith, Forbes, Apr 21, 2021, https://www.forbes.com/advisor/personal-finance/how-to-prevent-overdraft-fees/


Are You Prepared For a Recession?

Are You Prepared For a Recession?

The purpose of this article isn’t to speculate whether or not a recession is on the horizon. It’s to make sure you’re ready if it is.

Some downturns can be seen from a mile away. Others, like the Great Recession and the Coronavirus lockdowns, are black swan events—they catch even the experts off guard.

But they don’t have to find YOU unprepared.

Here’s a quick checklist to help you assess your recession readiness.

Your emergency fund is fully stocked.

Without well-stocked emergency savings, losing your job could spell disaster for your finances—you’d be forced to rely on credit to cover even basic expenses. When you re-enter the workforce, a huge chunk of your income would go straight towards paying down debt instead of building wealth.

That’s why it’s critical to save three to six months of income asap. It may be the cushion you need to soften the blow of unemployment, should it come your way.

You’ve diversified your income.

Recessions don’t discriminate. They affect everyone from the poorest to the wealthiest. But one group weathers downturns better than most—those with multiple streams of income.

If you have more than one source of income, you’re less likely to feel the full brunt of a recession. If one stream dries up, ideally you would have others to fall back on.

What does that look like? For many, it means a side hustle. Some create products like books, online guides, etc., or they might do something like acquire rental properties. These types of businesses typically only require a one-time effort to produce or purchase but will yield recurring income.

If you’re ambitious, you could create a business to generate income that far exceeds your personal labor. It’s not for the faint of heart. But with the right strategy and mentorship, it could lend your finances an extra layer of protection.

You’ve diversified your savings.

Just as you diversify your income streams, you should also diversify your savings. That way, if one account loses value, you have others to fall back on.

What could that look like? That depends on your situation. It’s why talking to a licensed and qualified financial professional is a must—they can help tailor your strategy to meet your specific goals.

You’re positioned to make bold moves.

The wealthy have long known that recessions can be opportunities. With the right strategy, you may actually come out ahead financially.

But in order to take advantage of those opportunities, you need to have cash on hand. That way, when others are forced to sell at a discount, you can scoop up assets at a fraction of their true value.

So if you want to be in a position to take advantage of a downturn, make sure you have ample cash on hand. That way, when an opportunity comes knocking, you’ll be ready to answer.

No one can predict the future. But by following these tips, you can prepare your finances for whatever the economy throws your way.


The Hidden Truth About Debt Consolidation

The Hidden Truth About Debt Consolidation

You’ve probably heard of debt consolidation. It’s a way to help lower your interest rates and monthly payments by packaging all of your debts into one neat little bundle.

And it can be helpful—if properly structured, consolidation can noticeably lower your interest rate.

But if you’re serious about getting out of debt, it shouldn’t be the only tool in your arsenal. Why? Because debt consolidation doesn’t do anything to attack your balance.

Let’s say you have three debts…

■ $3,000 personal loan at 7% interest

■ $15,000 car loan at 5% interest

■ $8,000 credit card balance at 15% interest

That comes out to a total monthly debt payment of $2,160. That’s a lot of money!

But what if you consolidate those debts into a single $26,000 loan with a 7% interest rate? Your new monthly payment would be $1,820. Not bad!

Now consider another scenario—what if instead of consolidating your debts, you could slice your total debt burden in half?

Your monthly payment would plummet from $2,160 to $1,080. And because you’re paying less each month, you’d have more money available to put towards building wealth, ASAP.

That’s important because the sooner you start building wealth, the better. The longer your money can grow via compound interest, the wealthier you can become.

So while debt consolidation can be helpful, it shouldn’t be your only strategy for getting out of debt. It’s just one tool in the arsenal.

If you’re not sure where to start with debt, meet with a debt relief specialist. They can point you towards the strategies and relief programs you need to get out of debt—for good.

This article is for informational purposes only and is not intended to promote any certain products, plans, or strategies that may be available to you. Any examples used in this article are hypothetical. Before taking out a loan, enacting a funding strategy, or setting up debt consolidation, seek the advice of a licensed and qualified financial professional, accountant, debt expert, and/or tax expert to discuss your options.


The Power of Paying with Cash

The Power of Paying with Cash

Debit card usage spiked during the COVID-19 pandemic, a trend that seems unlikely to reverse soon.¹

In an era of less social contact, debit cards are convenient. Just swipe and go. Even more so for their mobile phone equivalents: Apple Pay, Android Pay, and Samsung Pay. We like fast, we like easy, and we like a good sale.

But are we actually spending more by not using cash like we did in the good old days?

Studies say yes.

We spend more when using plastic – and that’s true of both credit card spending and debit card spending.² Money is more easily spent with cards because you don’t “feel” it immediately. An extra $2 here, another $10 there… It adds up.

The phenomenon of reduced spending when paying with cash is a psychological “pain of payment.” Opening up your wallet at the register for a $20.00 purchase but only seeing a $10 bill in there – ouch! Maybe you’ll put back a couple of those $5 DVDs you just had to have 5 minutes ago.

When using plastic, the reality of the expense doesn’t sink in until the statement arrives. And even then it may not carry the same weight. After all, you only need to make the minimum payment, right? With cash, we’re more cautious – and that’s not a bad thing.

Try an experiment for a week: pay only with cash.

When you pay with cash, the expense feels real – even when it might be relatively small. Hopefully, you’ll get a sense that you’re parting with something of value in exchange for something else. You might start to ask yourself things like “Do I need this new comforter set that’s on sale – a really good sale – or, do I just want this new comforter set because it’s really cute (and it’s on sale)?” You might find yourself paying more attention to how much things cost when making purchases, and weighing that against your budget.

If you find that you have money left over at the end of the week (and you probably will because who likes to see nothing when they open their wallet), put the cash aside in an envelope and give it a label. You can call it anything you want, like “Movie Night,” for example.

As the weeks go on, you’re likely to amass a respectable amount of cash in your “rewards” fund. You might even be dreaming about what to do with that money now. You can buy something special. You can save it. The choice is yours. Well done on saving your hard-earned cash.


¹ “Debit Spending Is On The Rise, But Is It Here To Stay?” Visa Navigate, Apr 2021, https://navigate.visa.com/na/spending-insights/why-debit-spending-is-on-the-rise/

² “MIT study: Paying with credit cards activates your brain to create ‘purchase cravings’ for more spending,” Cory Stieg, CNBC, Mar 13, 2021, https://www.cnbc.com/2021/03/13/credit-cards-activate-brain-reward-network-create-cravings.html


How to Build Credit When You’re Young

How to Build Credit When You’re Young

Your credit score can affect a lot more than just your interest rates or credit limits.

Your credit history can have an impact on your eligibility for rental leases, raise (or lower) your auto insurance rates, or even affect your eligibility for certain jobs (although in many cases the authorized credit reports available to third parties don’t contain your credit score if you aren’t requesting credit). Because credit history affects so many aspects of financial life, it’s important to begin building a solid credit history as early as possible.

So, where do you start?

1. Apply for a store credit card.

Store credit cards are a common starting point for teens and young adults, as it often can be easier to get approved for a store card than for a major credit card. As a caveat though, store card interest rates are often higher than for a standard credit card. Credit limits are also typically low – but that might not be a bad thing when you’re just getting started building your credit. A lower limit helps ensure you’ll be able to keep up with payments. Because you’re trying to build a positive history and because interest rates are often higher with a store card, it’s important to pay on time – or ideally, to pay the entire balance when you receive the statement.

Become an authorized user on a parent’s credit card.

Another common way to begin building credit is to become an authorized user on a parent’s credit card. Ultimately, the credit card account isn’t yours, so your parents would be responsible for paying the balance. (Because of this, your credit score won’t benefit as much as if you are approved for a credit card in your own name.) Another thing to keep in mind is that some credit card providers don’t report authorized users’ activity to credit bureaus.* Additionally, even if you’re only an authorized user, any missed or late payments on the card can affect your credit history negatively.

Are secured cards useful to build credit?

A secured credit card is another way to begin building credit. To secure the card, you make an initial deposit. The amount of that deposit is your credit line. If you miss a payment, the bank uses your collateral – the deposit – to pay the balance. Don’t let that make you too comfortable though. Your goal is to build a positive credit history, so if you miss payments – even though you have a prepaid deposit to fall back on – you’re still going to get a ding on your credit history. Instead, it’s best to use a small amount of your available credit each month and to pay in full when you get the statement. This will help you look like a credit superstar due to your consistently timely payments and low credit utilization.

As you build your credit history, you’ll be able to apply for credit in larger amounts, and you may even start receiving pre-approved offers. But beware. Having credit available is useful for certain emergencies and for demonstrating responsible use of credit – but you don’t need to apply for every offer you receive.


Source:
“Will Authorized User Status Help You Build Credit?” NerdWallet, Sep 24, 2021, https://discvr.co/2lAzSgt.


Financial Relapses

Financial Relapses

Oops. You did it again.

Maybe you used the credit card to buy something you didn’t really need, even though you’ve sworn it off time and time again.

Maybe you found yourself clicking checkout, even though you promised to stop online shopping.

Or maybe you just found yourself discouraged by the number in your bank account… again.

Either way, you’ve had a financial relapse—you did something to set back progress with your goals, even though you knew better.

It sucks. It’s enough to make you throw up your hands and quit.

But here’s the truth—it’s part of the process.

Research suggests that there are six steps to changing behavior…

Pre-contemplation Contemplation Preparation Action Maintenance Relapse

Why is relapse the final step? Because it’s an opportunity. It reveals the limitations in your strategy, unnoticed behavior triggers, and above all, new areas for growth.

This is good to acknowledge, but it’s a far cry from how relapses make you feel. They feel like proof positive that you’ll never change, that you didn’t change. You fell back into your old behaviors.

But nothing could be further from the truth. The reality is that relapses merely point you to deeper truths about yourself… and what you’re capable of.

So next time you feel down about a hard-to-break financial habit, give yourself some grace. Examine what happened, and integrate what you learn into your strategy.

Consider meeting with a financial professional to chat things through. They can help you process what happened, refocus on your goals, and create a strategy to prevent future relapses.

And if you feel like you’re stuck in harmful financial habits that you can’t break, book a meeting with a licensed and qualified mental health professional. They can help you identify patterns, understand their origins, and develop steps for change.


¹ “Prochaska and DiClemente’s Stages of Change Model for Social Workers,” Yeshiva University, May 11, 2021, https://online.yu.edu/wurzweiler/blog/prochaska-and-diclementes-stages-of-change-model-for-social-workers


The Right Way to Respond to Economic Volatility

The Right Way to Respond to Economic Volatility

Inflation. Tumbling market values. Supply chain catastrophe. Wars and rumors of wars. Pandemics.

These words have been plastered all over the news and social media feeds for the last two years. And there’s no sign of it stopping.

As individuals and as businesses, we can’t control the economy.

But what we can control is how we respond to it.

The key is to stay focused on your long-term goals, and make sure your actions align with them.

Here are a few tips on how to navigate economic volatility…

1. Check your emotions. Fear is the natural response to economic volatility. What will happen to your job? What will happen to your business? What will happen to your retirement savings?

Know this—one of the worst mistakes you can potentially make is acting rashly on those fears. Volatility creates opportunity. Don’t lose out on potential because of headlines you read. Instead, assess your situation, what you stand to lose, and opportunities you might have.

2. Stay focused on your goals. It’s easy to get caught up in the day-to-day noise of the news. But if you want to help your sanity—and make sound financial decisions—it’s important to keep things in perspective.

How far are you from retirement? What kind of lifestyle do you want in retirement? What’s your strategy for protecting against long-term losses?

If your goals are in line with your current reality, take a deep breath and ride out the storm. If not, it’s time to reevaluate where things stand and make adjustments as necessary.

3. Review your budget and financial strategy. Once you’ve gotten past the initial emotional reaction, it’s time to take a clear-eyed look at your budget and finances.

There are two critical components to examine here—your emergency fund and your debt.

If you have an adequate emergency fund in place, keep it intact. Resist the temptation to tap into your savings to cover short-term losses. You’ll need your emergency fund for different expenses, like emergencies.

As for debt, make sure you’re not overextending yourself with credit cards and loans that only might make sense when the economy is booming. If you lose your job in a downturn, the last thing you want is high-interest debt hanging over you.

4. Meet with your financial professional. It’s simple—a licensed and qualified financial professional can help stop rash financial decision making in its tracks.

A financial professional can help you see the big picture, keep things in perspective, and develop a strategy that can help you stay on track—no matter what the economy throws your way.

While economic volatility can feel frightening, it’s important to stay focused on your long-term goals. Having the right mindset and guidance can help you navigate a crisis with confidence.


Credit Score vs. Credit Report

Credit Score vs. Credit Report

Your credit score is a big deal. At the least, a low score can saddle you with high interest rates, or at the worst, prevent you from getting important loans.¹ It can even be a roadblock to renting a house or getting a job!²

But what exactly is a credit score? And how is it different from a credit report? It turns out the two have a close relationship. Let’s explore what they are and how they relate to each other.

Credit Report. Your credit report is simply a record of your credit history. Let’s break that down.

Many of us carry some form of debt. It might be a mortgage, student loans, or credit card debt (or all three!). Some people are really disciplined about paying down debt. Others fall on hard times or use debt to fuel frivolous spending and then aren’t able to return the borrowed money. As a result, lenders typically want to know how reliable, or credit worthy, someone is before giving out a loan.

But predicting if someone will be able to pay off a loan is tricky business. Lenders can’t look into the future, so they have to look at a potential borrower’s past regarding debt. They’re interested in late payments, defaulted loans, bankruptcies, and more, to determine if they can trust someone to pay them back. All of this information is compiled into a document that we know as a credit report.

Credit Score. All of the information from someone’s credit report gets plugged into an algorithm. It’s goal? Rate how likely they are to pay back their creditors. The number that the algorithm spits out after crunching the numbers on the credit report is the credit score. Lenders can check your score to get an idea of whether (or not) you’ll be able to pay them back.

Think of a credit report like a test and the credit score as your grade. The test contains the actual details of how you’ve performed. It’s the record of right and wrong answers that you’ve written down. The grade is just a shorthand way to evaluate your performance.

So are credit reports and credit scores the same thing? No. Are they closely related? Yes! A bulletproof credit report will lead to a higher credit score, while a report plagued by late payments will torpedo your final grade. And that number can make all the difference in your financial well-being!


¹ “The Side Effects of Bad Credit,” Latoya Irby, The Balance, Mar 4, 2021, https://www.thebalance.com/side-effects-of-bad-credit-960383

² “The Side Effects of Bad Credit,” Latoya Irby.


Should You Buy an Electric Car?

Should You Buy an Electric Car?

Electric cars are becoming more and more popular, as people look for ways to save money on fuel costs.

But is it really worth the investment? This article looks at the cost of electric cars and whether they’re a good purchase in the long run.

The main way that an electric car can save you money is with its lower fuel costs, especially when gas prices are high. One study found that an EC is 60% cheaper to fuel compared to cars with combustible engines.¹

That’s not all—because they have fewer parts, they can require up to 31% less maintenance. No more oil changes!

Finally, some states incentivize purchasing electric cars with tax credits. These credits can range from a few hundred dollars to a few thousand, making the switch to electric even more enticing. Incentives vary from state to state, so do your research before making your final decision!

But there are serious drawbacks to consider. Many places have yet to build the infrastructure needed for electric cars. An electric car may not be feasible if you live beyond the cities and suburbs.

You should also consider the sticker price of an electric car, which is often higher than gas vehicles. The cost of the car can be offset over time with the lower fuel and maintenance costs, but it’s important to do your due diligence to make sure that the numbers add up for you.

Plus, the consensus seems to be that electric car prices will only drop in the future. Perhaps you should purchase an electric car at some point, just not now.

It’s important to do enough research to know the different benefits of an electric car before you make a purchase. An EC may save you money in fuel costs but they are often more expensive than traditional cars, so it might be hard to justify that investment. It’s worth doing your homework to determine if buying an EC will actually help you save money over the long term.


¹ “Here’s whether it’s actually cheaper to switch to an electric vehicle or not—and how the costs break down,” Mike Winters, CNBC, Dec 29 2021, https://www.cnbc.com/2021/12/29/electric-vehicles-are-becoming-more-affordable-amid-spiking-gas-prices.html#:~:text=Electric%20vehicles%20tend%20to%20have,to%20internal%20combustion%20engine%20vehicles


Getting Out Of Debt Doesn't Make You "Free"

Getting Out Of Debt Doesn't Make You "Free"

Debt is an unfortunate reality for most people in America.

The average household owes $6,000 in credit card debt alone, and the total amount of outstanding consumer debt in the US totals over $15.24 trillion.¹ It’s a burden, both financially—and emotionally. Debt can be linked to fatigue, anxiety, and depression.²

So it’s completely understandable that people want to get rid of their debt, no matter the cost.

But the story doesn’t end when you pay off your last credit card. In fact, it’s only the beginning.

Sure, it feels great to be debt-free. You no longer have to worry about making minimum payments or being late on a payment. You can finally start saving for your future and taking care of yourself. But being debt-free doesn’t mean you’re “free” to do whatever you want and get back into debt again. It means you’re ready to start building wealth, and chasing true financial independence.

For example, when you first beat debt, are you instantly prepared to cover emergencies? Most likely not. And that means you’re still vulnerable to more debt in the future—without cash to cover expenses, you run the risk of needing credit.

The same is likely true for retirement. Simply eliminating debt doesn’t mean you’ll retire wealthy. When you become debt-free, you can put those debt payments towards saving, leveraging the power of compound interest and more to help make your dreams a reality.

But now that you’ve conquered debt, that’s exactly what you can do! You have the cash flow needed to start saving for your future. You can finally take control of your money and make it work for you, instead of the other way around.

So don’t think of being debt-free as the finish line. It’s not. It’s simply the starting point on your journey to financial independence. From here, the sky’s the limit.


¹ “2021 American Household Credit Card Debt Study,” Erin El Issa, Nerdwallet, Jan 11, 2022, https://www.nerdwallet.com/blog/average-credit-card-debt-household/

² “Data Shows Strong Link Between Financial Wellness and Mental Health,” Enrich, Mar 24, 2021, https://www.enrich.org/blog/data-shows-strong-link-between-financial-wellness-and-mental-health


Don’t Become a Victim of These Secret Money Mistakes

Don’t Become a Victim of These Secret Money Mistakes

The most dangerous money mistakes are the ones you don’t notice.

Is racking up credit card debt or taking out payday loans financially dangerous? Of course! But they’re obvious. Hard to miss. They’re like a voice yelling into a megaphone “Hey! Don’t do it!”

But what about money mistakes that aren’t so obvious? Or even worse, money mistakes disguised as money wisdom?

Those may not devastate your bank account in one swoop. But they often go unaddressed. And over time, they add up.

So here are some money mistakes you might not have noticed.

Penny pinching. Sure, it sounds like a great idea in theory. But when you’re constantly scrimping and saving, it’s tough to enjoy life. What’s the point of working so hard if you can’t enjoy a reasonable treat now and then?

Plus, penny pinching may stop you from taking calculated risks that could save your money from stagnation.

So instead of extreme thriftiness, try moderation instead. You may find yourself far more inspired to budget and save than if you commit to complete frugality.

Under or over filling your emergency fund. A lot of people make the mistake of not having an emergency fund at all. It leaves them vulnerable to unexpected expenses and financial emergencies.

But when you have too much money in your emergency fund, it might be tough to make any real progress on your long-term financial goals. A good chunk of your net worth could be sunk into an account that’s not growing.

The solution? Save up 3 to 6 months of income in an easily accessible account, but no more. Use that money to cover emergencies ONLY. If it runs low, refill it.

Once your emergency fund is fully stocked, you can devote the rest of your income to building wealth.

Leaving goals undefined. It’s tough to achieve a goal you don’t have. Do you know where you’ll be financially in 5 years? 10? What are some things you’d like to save towards? A nicer home? An awesome vacation? A comfortable retirement? Not sure?

That uncertainty makes it easy to fudge good financial habits. It’s hard to see how lapses in your overall strategy can impact your big picture because you don’t have one.

So when it comes to your money, be specific. Very specific. Write out your goals and make sure they’re measurable. That way, you can monitor your progress and ensure you’re on the right track.

Be on the lookout for these dangerous money mistakes. They may seem innocuous, but they can add up over time and stop you from reaching your financial goals. Stay vigilant and steer clear of these traps!


Why The Financial Industry Loves Debt

Why The Financial Industry Loves Debt

The financial industry loves debt. They love it because it’s how they make money.

And best of all (for them), they use YOUR money to make it happen.

Here’s how it works…

You deposit money at a bank. In return, they pay you interest. It’s just above nothing—the average bank account interest rate is currently 0.06%.¹

But your money doesn’t just sit in the vault. The bank takes your money and loans it out in the form of mortgages, auto loans, credit cards, etc..

And make no mistake, they charge far greater interest than they give. The average interest rate for a mortgage is 3.56%.² That’s a 5,833% increase from what they give you for banking with them! And that’s nothing compared to what they charge for credit cards and personal loans.

So it should be no surprise that financial institutions are doing everything they can to convince you to borrow more money than perhaps you can afford.

First, they’re counting on the fact that you never learned how money works. Why? Because if you know something like the Rule of 72, you realize that banks are taking advantage of you. They use your money to build their fortunes and give you almost nothing in return.

Second, they manipulate your insecurities. They show you images and advertisements of bigger houses, faster cars, better vacations. And they strongly imply that if you don’t have these, you’re falling behind. You’re a failure. And you may hear it so much that you start to believe it.

Third, they lock you in a cycle of debt. Those hefty car loan and mortgage payments dry up your cash flow, making it harder to make ends meet. And that forces you to turn to other loans like credit cards. It’s just a matter of time before you’re spending all your money servicing debt rather than saving for the future.

So if you feel stuck or burdened by your debt, show yourself some grace. Chances are you’ve been groomed into this position by an industry that sees you as a source of income, not a human.

And take heart. Countless people have stuck it to the financial industry and achieved debt freedom. It just takes a willingness to learn and the courage to change your habits.


¹ “What is the average interest rate for savings accounts?” Matthew Goldberg, Bankrate, Feb 3, 2022 https://www.bankrate.com/banking/savings/average-savings-interest-rates/#:~:text=The%20national%20average%20interest%20rate,higher%20than%20the%20national%20average.

² “Mortgage rates hit 22-month high — here’s how you can get a low rate,” Brett Holzhauer, CNBC Select, Jan 24 2022, https://www.cnbc.com/select/mortgage-rates-hit-high-how-to-lock-a-low-rate/


Why It's Time To Create Wealth

Why It's Time To Create Wealth

Are you one of those people who assumes that you’ll never be wealthy?

It’s a common mindset, and it keeps many from reaching their financial goals. But the truth is, you don’t have to be born into money or have some special talent to create wealth. It all comes down to making a commitment to start building your fortune today.

So why do so many people put off working to create wealth until later in life? There are many reasons, but chief among them is fear.

What if you save your money in the wrong place and lose everything?

What if you can’t access money when you need it?

What if you confirm a deep-seated suspicion that you don’t really know what you’re doing?

But here’s the truth—you’re better positioned to start building wealth today than you ever will be again. That’s because your money has more time to grow and compound today than it will in the future.

That’s especially true in your 20’s and 30’s. But it’s also true if you’re 45 or 55. The best time to build wealth is right now, this very moment.

So what can you do? How can you leverage time to start building wealth? Here are a few simple financial concepts you can use right away.

Create an emergency fund. I know it seems counterintuitive, especially if your credit is in shambles or you have a lot of debt to pay off. But the truth is, building an emergency fund is one of the best ways to begin building wealth because it gives you a margin of safety. If you have money set aside for a rainy day, you won’t have to turn to credit cards or high interest loans when life throws you a curveball. Instead, you can take care of things with your own savings and move on.

Automate saving right now. The best way to start building wealth is to put something away every month. Forget about how much you’re putting away or your interest rate. For now, just put something away, even if it’s just $5. You can work with a financial professional to boost those numbers later on. The important thing is to start now.

If you want to learn more about how to start building wealth today, let’s chat. I’d love to help you set some goals and create a plan for getting there. We all deserve financial security, regardless of our age or income level. So let’s find out how you can get started today.


The Rat Race

The Rat Race

BEEP BEEP BEEP…

That’s not just your morning alarm, set for 6:15am each and every darn weekday.

It’s a starter’s pistol. The rat race has begun.

The rat race is a behavior experiment. Scientists condition rats to run races, solve puzzles, complete mazes, do tricks, reproduce, not reproduce, and a host of other feats.

How? By dangling a treat in front of them. Perform the tasks. Get the reward.

Sound familiar?

Many are caught in a human rat race. They’re told that to be an adult they need a credit card, a car, a mortgage, and a 9 to 5 job.

So they jump through the hoops, solve the puzzles, and perform the tasks to get that treat—their paycheck.

That paycheck gets consumed by their basic needs, their payment plans, and their lifestyle.

And the cycle continues. Jump through hoops. Get paid. Spend. Jump through more hoops. Ad infinitum.

Bigger “treats” help—like a bonus or a raise—but only for a little while. Eventually, they get consumed by increasingly extravagant spending. It’s why people with high incomes stay trapped in the rat race.

The result? You keep running a pointless and repetitive race that leads nowhere.

Is it any surprise, then, that there’s a “great resignation” happening? Or that businesses can’t find employees?

Maybe it’s because people are finally waking up to the truth—they’ve been playing someone else’s game. They’ve been making someone else rich. And now they’re ready for a new and better opportunity.


Peer-to-Peer Lending Explained

Peer-to-Peer Lending Explained

Sick and tired of borrowing money from financial institutions? Well, no longer! You can now borrow money directly from your peers.

That’s right—with the magic of the internet, you can be in debt to faceless strangers instead of faceless institutions.

One moment while I get my tongue out of my cheek…

But seriously, peer-to-peer lending—or P2P—is exploding. It’s grown from a $3.5 billion market in 2013 to a $67.93 billion market in 2019.¹

Why? Because P2P lending seems like a decentralized alternative to traditional banks and credit unions.

Here’s how it works…

P2P lending platforms serve as a meeting point for borrowers and lenders.

Lenders give the platform cash that gets loaned out at interest.

Borrowers apply for loans to cover a variety of expenses.

Lenders earn money as borrowers pay back their debt.

No middleman. Just straightforward lending and borrowing.

Think of it as crowdfunding, but for debt.

And make no mistake—there’s a P2P lending platform for every loan type under the sun, including…

▪ Wedding loans ▪ Car loans ▪ Business loans ▪ Consolidation loans

But here’s the catch—debt is debt.

The IRS. A bookie. A banker. Your neighbor. It doesn’t matter who you owe (unless they’re criminals). What matters is how much of your cash flow is being consumed by debt.

Can P2P lending platforms offer competitive interest rates? Sure! But they can also offer ridiculous interest rates, just like everywhere else.

Can P2P lending platforms offer lenders opportunities to earn compound interest? Of course! But they also come with risks.

In other words, P2P lending is not a revolution in the financial system. In fact, two leading P2P platforms have actually become banks.²

Rather, they’re simply options for borrowing and lending to consider with your financial professional.


¹ “19 P2P Investing Statistics You Need to Know for 2021,” Swaper, Feb 22, 2021 https://swaper.com/blog/p2p-investing-statistics/

² “Peer-to-peer lending’s demise is cautionary tale,” Liam Proud, Reuters, Dec 13, 2021 https://www.reuters.com/markets/asia/peer-to-peer-lendings-demise-is-cautionary-tale-2021-12-13/


Life Without (Credit Card) Debt

Life Without (Credit Card) Debt

Our parents, uncles, aunts, and maybe even our grandparents tried to warn us about credit cards.

In some cases, the warnings might have been heeded but in other cases, we may have learned the cost of credit the hard way.

Using credit isn’t necessarily a bad thing, but it may be a costly thing – and sometimes even a risky thing. The interest from credit card balances can be like a ball and chain that might never seem to go away. And your financial strategy for the future may seem like a distant horizon that’s always out of reach.

It is possible to live without credit cards if you choose to do so, but it can take discipline if you’ve developed the credit habit.

It’s budgeting time. Here’s some tough love. If you don’t have one already, you should hunker down and create a budget. In the beginning it doesn’t have to be complicated. First just try to determine how much you’re spending on food, utilities, transportation, and other essentials. Next, consider what you’re spending on the non-essentials – be honest with yourself!

In making a budget, you should become acutely aware of your spending habits and you’ll give yourself a chance to think about what your priorities really are. Is it really more important to spend $5-6 per day on coffee at the corner shop, or would you rather put that money towards some new clothes?

Try to set up a budget that has as strict allowances as you can handle for non-essential purchases until you can get your existing balances under control. Always keep in mind that an item you bought with credit “because it was on sale” might not end up being such a great deal if you have to pay interest on it for months (or even years).

Hide the plastic. Part of the reason we use credit cards is because they are right there in our wallets or automatically stored on our favorite shopping websites, making them easy to use. (That’s the point, right?) Fortunately, this is also easy to help fix. Put your credit cards away in a safe place at home and save them for a real emergency. Don’t save them on websites you use.

Don’t worry about actually canceling them or cutting them up. Unless there’s an annual fee for owning the card, canceling the card might not help you financially or help boost your credit score.¹

Pay down your credit card debt. When you’re working on your budget, decide how much extra money you can afford to pay toward your credit card balances. If you just pay the minimum payment, even small balances may not get paid off for years. Try to prioritize extra payments to help the balances go down and eventually get paid off.

Save for things you want to purchase. Make some room in your budget for some of the purchases you used to make with a credit card. If an item you’re eyeing costs $100, ask yourself if you can save $50 per month and purchase it in two months rather than immediately. Also, consider using the 30-day rule. If you see something you want – or even something you think you’ll need – wait 30 days. If the 30 days go by and you still need or want it, make sure it makes sense within your budget.

Save one card for occasional use. Having a solid credit history is important, so once your credit balances are under control, you may want to use one card in a disciplined way within your budget. In this case, you would just use the card for routine expenses that you are able to pay off in full at the end of the month.

Living without credit cards completely, or at least for the most part, is possible. Sticking to a budget, paying down debt, and having a solid savings strategy for the future will help make your discipline worth it!


¹ “How to repair your credit and improve your FICO® Scores,” myFico, https://www.myfico.com/credit-education/improve-your-credit-score


Toxic Financial Habits

Toxic Financial Habits

As well-intentioned as we might be, we sometimes get in our own way when it comes to improving our financial health.

Much like physical health, financial health can be affected by binging, carelessness, or simply not knowing what can cause harm. But there’s a light at the end of the tunnel – as with physical health, it’s possible to reverse the downward trend if you can break your harmful habits.

Not budgeting A household without a budget is like a ship without a rudder, drifting aimlessly and – sooner or later – it might sink or run aground in shallow waters. Small expenses and indulgences can add up to big money over the course of a month or a year.

In nearly every household, it might be possible to find some extra money just by cutting back on non-essential spending. A budget is your way of telling yourself that you may be able to have nice things if you’re disciplined about your finances.

Frequent use of credit cards. Credit cards always seem to get picked on when discussing personal finances, and often, they deserve the flack they get. Not having a budget can be a common reason for using credit, contributing to an average credit card debt of $6,913 for balance-carrying households.¹ At an average interest rate of over 16%, credit card debt is usually the highest interest expense in a household, several times higher than auto loans, home loans, and student loans.²

The good news is that with a little discipline, you can start to pay down your credit card debt and help reduce your interest expense.

Mum’s the word. No matter how much income you have, money can be a stressful topic in families. This can lead to one of two potentially harmful habits.

First, talking about the family finances is often simply avoided. Conversations about kids and work and what movie you want to watch happen, but conversations about money can get swept under the rug.

Are you a “saver” and your partner a “spender”? Is it the opposite? Maybe you’re both spenders or both savers. Talking (and listening) about yourself and your significant other’s tendencies can be insightful and help avoid conflicts about your finances.

If you’re like most households, having an occasional chat about the budget may help keep your family on track with your goals – or help you identify new goals – or maybe set some goals if you don’t have any.

Second, financial matters can be confusing – which may cause stress – especially once you get past the basics. This may tempt you to ignore the subject or to think “I’ll get around to it one day”.

But getting a budget and a financial strategy in place sooner rather than later may actually help you reduce stress. Think of it as “That’s one thing off my mind now!”

Taking the time to understand your money situation and getting a budget in place is the first step to put your financial house in order. As you learn more and apply changes – even small ones – you might see your efforts start to make a difference!


¹ “2020 American Household Credit Card Debt Study,” Erin El Issa, Nerdwallet, Jan 12, 2021 https://www.nerdwallet.com/blog/average-credit-card-debt-household/

² “2020 American Household Credit Card Debt Study,” Erin El Issa


How To Spend Your Windfall

How To Spend Your Windfall

If you come into some extra money, how should you spend it?

On one hand you may have some debt you’d like to knock out, or you might feel like you should divert the money into your emergency savings or retirement fund.

They’re both solid choices, but which is better? That depends largely on your interest rates.

High Interest Rate. The sooner you eliminate high interest rate debt, the better. Credit cards and personal loans can swiftly spiral out into crushing financial burdens. Even the highest income gets stretched thin if the interest rate is too high!

So if you fall into some extra cash and you’re faced with high interest debt, consider the peace of mind debt freedom would bring. It may be far more valuable than some zeros in a retirement account.

Low Interest Rate. On the other hand, sometimes interest rates are low enough to warrant building up an emergency savings fund instead of paying down existing debt. An example is if you have a long-term, fixed-rate loan, like a mortgage.

The idea is that money borrowed for emergencies, rather than non-emergencies, will be expensive, because emergency borrowing may have no collateral and probably very high interest rates (like payday loans or credit cards).

So it might be better to divert your new-found funds to a savings account, even if you aren’t reducing your interest burden, because the alternative during an emergency might mean paying 20%+ rather than 0% on your own money (or 3-5% if you consider the interest you pay on the current loan).

Raw Dollar Amounts. Relatively large loans might have low interest rates, but the actual total interest amount you’ll pay over time might be quite a sum. In that case, it might be better to gradually divert some of your bonus money to an emergency account while simultaneously starting to pay down debt to reduce your interest. A good rule of thumb is that if debt repayments comprise a big percentage of your income, pay down the debt, even if the interest rate is low.

The Best for You. While it’s always important to reduce debt as fast as possible to help achieve financial independence, it’s also important to have some money set aside for use in emergencies.

If you do receive an unexpected windfall, it will be worth it to take a little time to think about a strategy for how it can best be used for the maximum long term benefit for you and your family.


Unwinding Yourself Into Stress

Unwinding Yourself Into Stress

Americans carry a stunning amount in credit card debt— $895 billion as of June 2021.¹

You read that right: $895 billion. And that’s after decreasing in 2020 due to the pandemic.

It seems like many have ended up being owned by a tiny piece of plastic rather than the other way around.

How much have you or a loved one contributed to that number? Whether it’s $10 or $10,000, there are a couple simple tricks to get and keep yourself out of credit card debt.

The first step is to be aware of how and when you’re using your credit card. It’s so easy – especially on a night out when you’re trying to unwind – to mindlessly hand over your card to pay the bill. And for most people, paying with credit has become their preferred, if not exclusive, payment option. Dinner, drinks, Ubers, a concert, a movie, a sporting event – it’s going to add up.

And when that credit card bill comes, you could end up feeling more wound up than you did before you tried to unwind.

Paying attention to when, what for, and how often you hand over your credit card is crucial to getting out from under credit card debt.

Here are 2 tips to keep yourself on track on a night out.

1. Consider your budget. You might cringe at the word “budget”, but it’s not an enemy who never wants you to have any fun. Considering your budget doesn’t mean you can never enjoy a night out with friends or coworkers. It simply means that an evening of great food, fun activities, and making memories must be considered in the context of your long-term goals. Start thinking of your budget as a tough-loving friend who’ll be there for you for the long haul.

Before you plan a night out:

  • Know exactly how much you can spend before you leave the house or your office, and keep track of your spending as your evening progresses.
  • Try using an app on your phone or even write your expenses on a napkin or the back of your hand – whatever it takes to keep your spending in check.
  • Once you have reached your limit for the evening – stop.

2. Cash, not plastic (wherever possible). Once you know what your budget for a night out is, get it in cash or use a debit card. When you pay your bill with cash, it’s a concrete transaction. You’re directly involved in the physical exchange of your money for goods and services. In the case that an establishment or service will only take credit, just keep track of it (app, napkin, back of your hand, etc.), and leave the cash equivalent in your wallet.

You can still enjoy a night on the town, get out from under credit card debt, and be better prepared for the future with a carefully planned financial strategy. Contact me today, and together we’ll assess where you are on your financial journey and what steps you can take to get where you want to go – hopefully by happy hour!

¹ “2020 American Household Credit Card Debt Study,” Erin El Issa, Nerdwallet, Jan 12, 2021, https://www.nerdwallet.com/blog/average-credit-card-debt-household/


What to Do First If You Receive an Inheritance

What to Do First If You Receive an Inheritance

In many households, nearly every penny is already accounted for even before it’s earned.

The typical household budget that covers the cost of raising a family, making loan payments, and saving for retirement usually doesn’t leave much room for extra spending on daydream items. However, occasionally families may come into an inheritance, you might receive a big bonus at work, or benefit from some other sort of windfall.

If you ever inherit a chunk of money (or large asset) or receive a large payout, it may be tempting to splurge on that red convertible you’ve been drooling over or book that dream trip to Hawaii you’ve always wanted to take. Unfortunately for many, though, newly-found money has the potential to disappear quickly with nothing to show for it, if you don’t have a strategy in place to handle it.

If you do receive some sort of large bonus – congratulations! But take a deep breath and consider these situations first – before you call your travel agent.

Taxes or Other Expenses. If you get a large sum of money unexpectedly, the first thing you might want to do is pull out your bucket list and see what you can check off first. But before you start spending, the reality is you’ll need to put aside some money for taxes. You may want to check with an expert – an accountant or financial advisor may have some ideas on how to reduce your liability as well.

If you suddenly own a new house or car as part of an inheritance, one thing that you may not have considered is how much it will cost to hang on to them. If you want to keep them, you’ll need to cover maintenance, insurance, and you may even need to fulfill loan payments if they aren’t paid off yet.

Pay Down Debt. If you have any debt, you’d have a hard time finding a better place to put your money once you’ve set aside some for taxes or other expenses that might be involved. It may be helpful to target debt in this order:

  1. Credit card debt: These are often the highest interest rate debt and usually don’t have any tax benefit. Pay these off first.
  2. Personal loans: Pay these off next. You and your friend/family member will be glad you knocked these out!
  3. Auto loans: Interest rates on auto loans are lower than credit cards, but cars depreciate rapidly – very rapidly. If you can avoid it, you don’t want to pay interest on a rapidly depreciating asset. Pay off the car as quickly as possible.
  4. College loans: College loans often have tax-deductible interest but there is no physical asset you can convert to cash – there’s just the loan.
  5. Home loans: Most home loans are also tax-deductible. Since your home value is likely appreciating over time, you may be better off putting your money elsewhere rather than paying off the home loan early.

Fund Your Emergency Account. Before you buy that red convertible, put aside some money for a rainy day. This could be liquid funds – like a separate savings account.

Save for Retirement. Once the taxes are covered, you’ve paid down your debt, and funded your emergency account, now is the time to put some money away towards retirement. Work with your financial professional to help create the best strategy for you and your family.

Fund That College Fund. If you have kids and haven’t had a chance to save all you’d like towards their education, setting aside some money for this comes next. Again, your financial professional can recommend the best strategy for this scenario.

Treat Yourself. NOW you’re ready to go bury your toes in the sand and enjoy some new experiences! Maybe you and the family have always wanted to visit a themed resort park or vacation on a tropical island. If you’ve taken care of business responsibly with the items above and still have some cash left over – go ahead! Treat yourself!


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