4 Ways to Battle Lifestyle Inflation

Slowly but surely, lifestyle inflation will creep up. It has the potential to ruin you financially, burying you in piles of debt and keeping you from your long-term goals. An undeniably real thing many college grads will experience (including me) is the rush of going from an internship or job in college (or no job) to suddenly having a steady paycheck, paying you more money than you’ve likely earned in your entire life. If you’re not disciplined, there’s a good chance that you’ll soon grow accustomed to your new-found income; by itself this isn’t bad, but as you continue to earn more, it leaves you in a position to start racking up debt and buying stuff just because you “can”. […]

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Should You Have a Roth IRA?

IRA’s, or Individual Retirement Accounts, are good avenues to invest your money for the long-haul, and come with a number of advantages. They’re similar to employer-sponsored 401(k)’s in a way, but are totally decoupled from an employer; hence the I in IRA. Just like a 401(k), the money you put into these retirement accounts is what some people refer to as “tax advantaged” – meaning that your tax liability goes down as a result of using them, depending on the flavor. Just like 401(k)’s, they come in two primary flavors: traditional and Roth. Some people have IRA’s, but only 32% actually have an IRA, and the number that actively contribute to theirs is even less. This is based on research a couple years […]

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 3 Perfect Ways to Handle a Windfall

Cha-ching! Out of nowhere you suddenly have money that you weren’t counting on. Whether it’s an inheritance, your tax return, winning the lottery, or getting a bonus at work, handling a windfall responsibly is important to make sure you don’t squander your dough on something useless. How many stories have you read of lottery winners who win large sums of money only to end up dirt poor down the line? It’s hard to fathom how somebody could just lose millions of dollars. But not having and sticking to a plan for windfalls – even the most modest of them – will almost guarantee that you’ll end up in the same boat. And the time for making that plan isn’t only […]

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Zero Based Budget

I’ve played around with a bunch of different budgeting methods in my time, but I keep coming back to the concept of Zero-Based Budgeting, or ZBB, as the most fundamental of them all. On the surface, ZBB is incredibly easy. Incoming – Outgoing = 0. Every dollar you bring in has a specific home, whether it’s being spent on rent or food, being saved, or used to pay off debt. Really, it’s a fundamental behind any budget; but what I like about how I’m using a Zero-Based Budget is how I allocate last month’s income. This is great for me and Kristin, since we’ve got income that can fluctuate a bit. Previously when I was a salaried employee I always […]

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Use the “Snowball” Method to Destroy Your Debts and Jump Start Your Investments

If you’ve read Dave Ramsey’s book Total Money Makeover you’re familiar with the snowball method for paying off debt. For those who aren’t, here’s a quick primer: List out all of your debts Order them by amount of debt, the lowest amount first Throw everything you can at paying off that debt, and pay the minimum on everything else Once you knock that debt out, move onto the next, snowballing what you were paying toward the higher-amount debts into knocking out the lower-rate debts even more quickly An alternate way to do this is to list your debts out by interest rate, tackling the highest rate one first. Doing so will mathematically be the most beneficial, ensuring you pay the least amount of […]

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Avocado Toast Isn’t Ruining Anything

$19 avocado toast isn’t stopping millennials from buying homes, no matter what some millionaire in Australia may think. Sure, flippant spending is a surefire way to ruin your finances, but many who indulge in the occasional brunch do so consciously, knowing what they’re doing. If you truly believe that avocado toast and coffee are ruining your finances, here’s the truth: it’s a bigger issue than your $4 coffee and your $19 avocado toast. Those things are fine to enjoy every now and then, and a coffee is fine more frequently (I don’t know anybody who’s buying avocado toast every day…). The key is that you need to budget for them. All too often, millennials – and people in general – […]

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Emergency Funds: How Much is “Too Much”?

If you have an emergency fund of just $500, congrats; you’re better-off than about half of the population (is anybody else freaked out by this?). But having too much cash on hand to help with life’s curveballs can also hinder you from making the kind of progress you’d like to see over the longer term. Starting Off In Total Money Makeover, Dave Ramsey is a huge proponent of having $1000 for emergencies while you aggressively pay off any debts you have. A thousand dollars should cover many of life’s immediate challenges, but once you’ve got your debt paid off it’s a good idea to save for more. If you lose your job you could find yourself out of work for […]

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The “Personal” in Personal Finance

Over the past few weeks I’ve been doing a ton of reading – much more than I used to ever do. Reading is a great way for me to pass the time on my morning or afternoon commute on the train, and it also keeps me energized. I enjoy a wide array of books from science-nerd titles like Carl Sagan’s Contact or NDGT’s Death by Black Hole, to more self-improvement-esque books like Gretchen Burin’s The Happiness Project and Stephen Covey’s 7 Habits of Highly Effective People, to financial classics like Your Money Or Your Life by Joe Dominguez and Monigue Tilford, or Dave Ramsey’s Total Money Makeover. One of the things I’ve realized as I hammer through the non-fiction books (some for the second, […]

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Four Things I Won’t Skimp On

Clipping coupons from the Sunday paper was a pastime I remember fondly growing up in my household as my parents raised two kids on one (self-employed) income. We didn’t grow up poor, but my parents were always very money-conscious, and when you’ve got two hungry mouths to feed (my brother moreso than me, you should have see him in 6th grade…), food tends to be a pretty significant chunk of your budget. In the mornings I’d sit with my mom, finding deals on groceries for the week. I remember her green coupon box; some things carefully organized, others just haphazardly scrunched up from the thing being overstuffed. My parents taught me and my brother about money from a young age and […]

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3 Lessons From Watching “Blank Check”

Kristin and I just watched the 90’s Disney flick Blank Check last night. It was as amazing as when I was a kid; if you haven’t watched it, you should. For those who need a quick recap, here’s the general synopsis: Preston, a 10-year old living in a middle class family, feels like his two older brothers are stealing the spot-light from him. They are starting some sort of business and take over his room, all with his parents’ blessing because his dad is also an entrepreneur. He sees that money could buy his own space. He takes some birthday money (all eleven dollars of it, for his 11th birthday) to the bank, but they’ve got a $200 minimum – disheartened, he […]

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