creating a budget Archives - Hanover Mortgages

Apache is functioning normally

June 4, 2023 by Brett Tams

This post may contain affiliate links. That means if you click and buy, I may receive a small commission. Please see my full disclosure policy for details.

Last updated – August 31, 2022

I’ve shared a lot of great tips to help your kids learn spending vs. saving and even about credit and debit. There is of course, more that they need to know.

The principles are the same as with creating any budget at all. The difference is in the amount of money the make and the types of expenses they will have. These differ as your child grows.

When your teenager is first creating a budget, that may be a term that is difficult for them to really fully understand. You might call it a Spending Plan instead. By calling it something other than a budget, it can make it take a positive stand. Now, your teen knows how they get to spend their money instead of a piece of paper telling them what to do. Spending Plan is much more positive than budget.

WHY THEY NEED A BUDGET

There are lot of principles your teen needs to learn when it comes to finances. Their budget, or spending plan, helps set them up for success.

The budget is their roadmap to financial health. Just like they see a doctor and dentist to make sure that they are physically healthy, their budget does the same for their finances.
Help them plan for the unexpected. What will they do if their car breaks down? They need to learn how to be prepared for the curve balls life will certainly throw their way.
How to spend wisely. When spending is documented, it gives teens a better view of where they spend money. They can easily identify the areas where they are spending too much money. A budget allows them to see if they are spending more than they are making and then make adjustments according.y.
Plan ahead. There are expenses which come up only once or twice a year. For example, college books are purchased only a couple of times a year. Paying for these needs to be budgeted all year long. This way, when it is time to buy them, the money is set aside.
Develop a healthy relationship with money. If you look your own views of money, there may be things you do not want your children to do. You might be obsessed with it or fear it. Whatever your views, you want to make sure your teen has a healthy relationship with his or her money.

HOW TO GET STARTED

Making a budget or spending plan is relatively straight forward. Their budget will be a projection of the income they will receive and the expenses they will have. They will be able to use this budget to plan ahead and know which expenses they need to cover each and every month.

To being, you can use a paper and pencil. You can also download our free Teen Budget Worksheet if you would like. You might even want to use a spreadsheet. Any way will work, as long as it is something your teen feel comfortable using.

Have him or her look back at the past 2 – 3 months of income. This will help them determine how much income to include on the budget. The amount to put on the form will be the monthly average.

For example, if payday happens every 2 weeks, total up 6 – 7 paychecks and divide it by 3. That will provide you with the average income every month. This will be recorded on the budget as income.

Make sure all sources of income are included in this total. Some to consider include:

Allowance
Wages
Gifts
Interest/Dividends
Tips
Bonus

Next, have your teen look over the past 3 months of spending. Add up all of the various amounts paid and divide by 3. This will be the average amount for each expense.

CATEGORIES FOR THE BUDGET

A teen’s budget will look much differently than one for an adult. The categories will be different than those you have on your own, as expenses change as you take on more responsibilities. If you are using our free teen budget worksheet, then you will see many categories are already included for you.

If you wish to make your own budget, you can do so, make sure that

Source: pennypinchinmom.com

Apache is functioning normally

June 4, 2023 by Brett Tams

Are you interested in creating a budget?

68% of households in the U.S. do not prepare a budget. Here are my tips on how to make a budget, so that you can start creating a budget that works.

68% of households in the U.S. do not prepare a budget. Here are my tips on how to make a budget, so that you can start creating a budget that works. The average family carries a lot of financial stress. Most people have student loans, credit card debt, a mortgage, car loans, and sometimes even other forms of debt.

However, not many people have a budget.

According to a survey done by Gallup, 68% of households in the U.S. do not prepare a budget.

I believe budgets are extremely important and nearly everyone should have one. Rich, poor, middle-class, whatever you are, a budget will likely help improve your financial situation.

Some people think budgets are only for people living paycheck to paycheck, or those with no money.

WRONG!

Budgets are for everyone.

Yes, that means no matter how much money you make, you should probably have a budget. I recently read something that said couples who make $50,000 a month, on average, only save 4% of their income. FOUR PERCENT on a $50,000 monthly income? The majority of that monthly income went towards clothing, food, cars, and homes. I can’t even imagine how someone could blow through so much money each month.

This just proves my point, more people need a budget.

Budgeting may not be the most fun thing in the world, but it needs to be done. Budgeting can help you take control of your financial life, which can help reduce stress and let you reach your dreams.

Other budgeting-related articles you need to read:

Below are my tips on how to make a budget and creating a budget.

The positives of creating a budget.

Budgets help people manage their money better. It’s that simple.

Budgets are great, because they keep you mindful of your income and expenses. With a monthly budget, you will know exactly how much you can spend in a category each month, how much you have to work with, what spending areas need to be evaluated, among other things.

Budgets have helped people reach their goals, pay off debt, make more money, retire, and more.

Should a budget be electronic or on a piece of paper?

Everyone has a preference, so this depends on what will work best for you.

Pencil and paper can be great, but an electronic version (such as a spreadsheet, Mint, or Personal Capital) can help you easily make changes.

I suggest choosing whatever you are most comfortable with. It doesn’t matter how you keep your budget; it’s just important that you stick to it.

Side note: I recommend you check out Personal Capital. Personal Capital is similar to Mint.com, but much better. Personal Capital allows you to aggregate your financial accounts to easily see your financial situation. You can connect accounts; such as, your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more. And it’s FREE.

You MUST track your income and spending.

What you want is to create a realistic budget. To show you where your money is coming from and where it is going, you need to gather all of your receipts, bank and credit card transactions, and so on.

Or, you could even take it a step further by tracking everything for the next month or two, this way you know you’re not missing any expenses. This means recording every single transaction with a note that tells you exactly what you bought (if a receipt is not itemized). Then, at the end of the month, you can evaluate your spending.

After one month of closely tracking your spending, I’m sure you’ll be shocked by your results. This is the best way to create a realistic budget, as you will truly see where your money is going, and this will help show you how much should be dedicated towards each category in your budget.

Plus, the shock from seeing exactly where your money is going will encourage you to be wiser with your spending.

Budget category: Income.

For the income part of your budget, it can be from varying sources. You can include income from your day job, rental properties, side jobs, passive income sources, and so on.

One common mistake is that many don’t realize their income can drastically fluctuate from month to month, even when you work the same hours every month or if you are paid salary. Due to this, you will want to be mindful of whether you are paid twice a month, every two weeks, once a week, etc. The difference of when you are paid can change the amount you make each month. Budgeting with a fluctuating income can be difficult, and in a future blog post I will go over it in more detail.

Also, I don’t think bonuses should be included in a person’s budget. Including them in your budget is not usually the best thing to do unless you are 100% certain you are receiving the bonus. I have heard of far too many people who have counted on bonuses only to be let down when it was less than anticipated. Your budget should be realistic, not a fairytale.

Related:

Budget category: Expenses.

Have you ever truly totaled your expenses?

When making a budget, many people only estimate their expenses. However, you actually should be taking your realistic expenses and putting them in your budget as your estimations may be way off.

Here are expenses you may include when creating a budget:

Home – House payment, rent, maintenance, utilities, insurance, property taxes, etc.
Car – This includes all car expenses such as your monthly car payment, gas, maintenance, insurance, license plate fees, and so on.
Television, cable, Netflix, Hulu, etc.
Cell phone.
Internet.
Food – This includes all groceries, eating out, snacks, etc. Seriously, sit down one day and add up your food expenses for the month before.
Clothing.
Entertainment – Entertainment can include many things, such as going to the movies, going out for drinks, concert tickets, sports, and so on.
Charity – If you regularly donate to charity, then this should be an area you budget for.
Savings funds – This can be for your retirement fund, wedding, travel, etc.
Taxes – If you are self-employed, then taxes will make up a large part of your budget.
Health insurance.
Miscellaneous – Pet expenses, fees, childcare, school, gifts, etc.

Related posts on creating a budget:

Keep your loved ones involved when creating a budget.

Even if only one person manages the family’s finances, the other person in the relationship should, at least, have somewhat of a clue. Conducting regular family money meetings is crucial to having a successful budget and meeting financial goals.

A budget doesn’t work if the other person doesn’t even know it exists!

Make changes when/if needed when creating a budget.

I recommend going over your budget on a regular basis. This may mean once a week, once a month, or something else. Do what feels right for you and what you think your situation calls for.

Many things can change in your budget. Your income may change, your expenses may change, or your goals may change. When something changes, you should adjust your budget to reflect that.

You may have noticed a recurring theme in this budget post, that you should be realistic about everything. Be realistic about what you make, what you spend, and if things need to be changed.

Do you believe in the power of creating a budget? Why or why not?

Apache is functioning normally

June 3, 2023 by Brett Tams

INSIDE: Need help knowing how to budget? This step-by-step guide will help you create a budget that actually works. Includes free printable budget spreadsheet template!

This post may contain affiliate links. That means if you click and buy, we may receive a small commission. Please see our full disclosure policy for details.

When you’re trying to pay off credit card debt or save money, you’ll hear it time and again: “You need a budget.” But if you’ve never created a budget, the mere thought may make you want to run and hide. Making a spending plan that works is not hard, however, if you have someone to help you.

create a budget that works

If you’re ready, I can help. Below you’ll find step-by-step instructions to follow to create your budget, whether you’re a beginner or have budgeted in the past.

You can use a pen and paper with our printable form or software for online budgeting.

Improving your money management skills doesn’t just mean spending less. It also means learning about your spending habits and making changes.

A few tweaks may help you pay off your debt and reach long term goals, such as saving for retirement.

MY BUDGET JOURNEY

I know it can be terrifying to really look at how you spend your money. Trust me, I’ve been in your shoes. But I’ve learned that the things that were the most challenging in my life have led to the biggest rewards.

Declaring bankruptcy was a low point for me. But it also taught me many valuable lessons about personal finance. Most importantly, I learned why I must have a budget.

My husband and I used to have a “bare bones budget.” Except it wasn’t, really. Rather, it was a piece of paper where I’d write down who I had to pay every month, so I didn’t forget.

When we began our journey to become debt-free, we had to look at all aspects of our finances. One thing we did was sit down together to create a budget.

Seeing our expenses and income in writing for the first time still sticks with me. I remember being in tears. It was shocking to see that we had not been in better control of our money.

Creating a budget made us acknowledge where we were, and we realized that we didn’t like what we saw. It instantly provided us with a goal: We wanted to make positive changes and get out of debt. It took time, but we did achieve our goal (and that was one of the best moments of my life).

I am going to be blunt here. Creating your first budget and managing your money with it will bring significant challenges your way.

But I can guarantee that it will be worth it in the end. Just wait until you can finally control where your money goes instead of the other way around. It is liberating.

Before we begin, you can download our free budget form by clicking on the pink box below.

If you want something more high-tech, I recommend You Need A Budget (YNAB) or EveryDollar. These are apps I’ve tested and reviewed. Both work very well, so I’m confident recommending them to you.

WHAT IS A BUDGET?

A budget is a plan that lists your estimated income and expenses for a specific period of time. Most people use a monthly budget period. Budgets are helpful for everyone, no matter what your financial situation is.

Tracking your spending in the past helps you predict your future cash flow so you can start saving more.

WHAT SHOULD BE INCLUDED IN A BUDGET?

It’s important to include every dollar you earn and spend when making a budget. Tracking your income is easy, but your budget should also include spending categories. Some you need to remember to use include:

Your list may include more categories or fewer. Our budget template includes categories that will cover just about anyone.

Read more: The categories you need to include in your budget

HOW TO CREATE YOUR BUDGET

Now that you have your categories, it’s time to start filling in the numbers. Follow these instructions to prepare your budget.

Step 1: Gather Necessary Papers

Before you begin, be sure you have all the things you’ll need. These include (but are not limited to):

Bank statements, including debit card payments
Pay stubs
Credit card statements
Utility bills
Monthly bills from various stores
Personal/vehicle loan information

Step 2: Calculate Your Income

Next, look at your pay stub(s). Your budget should reflect your monthly income. If your paychecks come more frequently than once a month, some simple calculations are necessary to come up with an accurate monthly income.

Here are some formulas to help you:

If you’re paid biweekly (i.e., every other Friday), add four pay stubs and divide by two to get your average monthly income.
For monthly pay, you can use the income you see if the amount listed for each pay period is the same. Otherwise, add three or four months’ worth of income and divide by the same number of months.
If you’re paid weekly, take the total of four income periods.
When you’re paid hourly or on commission (i.e., your income fluctuates), add your last four months of salary and divide by four to reach an average. If your income varies frequently, you’ll need to adjust your budget more often than someone with a regular income. You may also want to follow our tips for creating a budget with irregular income.

Step 3: Determine Fixed Expenses

You must make certain payments, such as your mortgage or rent, insurance premiums and car payments, on a regular basis. These recurring expenses are usually a fixed amount.

If your bill varies slightly each month (for instance, if your utilities aren’t on a budget billing system), take the past three months’ worth of statements and average them to get your estimated payment.

You can use a spending form to figure out the exact amounts to include in your budget. For example, say your October gas bill is $45.79, your November bill is $52.95, and your December bill is $49.22.

Add those three numbers and divide by three to reach your average (in this case, $49.32). I recommend you look at the months when your utility bills are the highest. For instance, you may use more gas or oil in the winter, so use those months as the basis for your budget.

One of the most important rules of personal finance is to pay yourself first. Do this by adding categories for saving. You need to save for a rainy day as well as for long term goals, such as college or retirement.

You can set up automatic transfers each month from your checking account to a savings account for your emergency fund (aim to build up at least three months’ worth of living expenses). If you have a retirement plan at work, such as a 401(k), your money is automatically withdrawn from each paycheck before you get it.

Step 4: Calculate Discretionary Expenses

Your discretionary expenses include those that vary more, such as food, gasoline and clothes. Treat them the same way you treated the gas bills described in step 3. Make sure you take the average of three months’ spending to get the figures to add to your budget.

Be sure to include occasional expenses, such as car repairs and maintenance. The goal is to pay these bills with your regular income instead of running up credit card bills.

Step 5: Fill in the Numbers

Transfer the figures you’ve calculated above to the appropriate spots on the budget form or spreadsheet. Put your monthly income at the top, followed by the amounts for each expense category.

The categories listed on our form are a guide for tracking your spending. You can add categories that aren’t included or ignore the categories you don’t need.

Add all your income and all your expenses. Then subtract your expenses from your income. The result should be zero. If it’s not, then figure out the changes you need to make.

If your total is a negative number: You’re spending more than you earn. Reduce your spending until the total reaches zero.
If your total is a positive number: You haven’t spent everything you make. Either increase your debt payments or your savings.

FINE-TUNE YOUR BUDGET

After you complete your budget for the first time, you may feel discouraged. As mentioned above, it happened to us. But once we started to rework the numbers, I began to feel better. I began to feel like I could live with a budget. It was tough, but nothing in life worth having is easy!

To balance your budget, first look at your fixed expenses. One I always like to mention is cable. We found out we were paying way too much and found a way to cut the expense in half. (As much as we would like to cut the cord entirely, we’re not yet there.)

Perhaps you could do the same and sign up for a lower-cost cable plan to free up some income. There are many other ways to reduce your monthly expenses, such as reshopping your insurance or refinancing your mortgage.

Once you’ve cut back your fixed expenses, it’s time to look at your discretionary spending. Perhaps you’re eating out a bit too much, so your budget takes a hit. You may even be overspending on shoes. These are areas where you might need to scale back to balance your budget.

Making these decisions isn’t fun, but consider what is more important: paying off debt or buying a bigger television. These are choices only you can make. But if you’re willing to scale back now and pay off debt, it will be worth it when you can buy that new TV or those new shoes without guilt!

If you’ve scaled back on everything you can and your budget still doesn’t balance, make some calls to your debtors. Ask for a reduced interest rate or a lower minimum payment on your credit cards. You never know what they will accept until you make those phone calls.

My husband and I wanted to get out of debt, so we decided that we wouldn’t eat out as often. For more than two years, we ate dinner out no more than 10 to 20 times a year. We saved a lot of money, which we used to pay off debt. It was challenging, but the result was well worth the temporary sacrifice.

WHAT TO DO ONCE YOU HAVE A BUDGET

First of all – congrats! You now have a budget you can use. You should revisit and update your budget at the end of each month.

After a few months, you probably won’t need to make any changes. But if you get a raise, have an added expense or finally pay off your car, that will require a shift in your budget numbers. Remember that your budget must always end in zero!

Creating a budget isn’t easy, but once you have one set up and continue to refer to it, it will pay off. You’ll find it helps because you are now telling your money where you want it to go rather than it telling you where it is going each month. Financial control is a fantastic feeling.

how to budget for beginners

Source: pennypinchinmom.com

Apache is functioning normally

June 1, 2023 by Brett Tams

This post may contain affiliate links. That means if you click and buy, I may receive a small commission. Please see my full disclosure policy for details.

Last updated – April 12, 2018

Have you ever used a spending plan? This is a great tool which can really help you see where your money goes every month. It really helps you track your cash flow and honestly, can be very eye-opening.

If you are struggling with creating a budget, this can be the perfect way to get started. You can track your spending over a month (or even two or more). It will help you learn where you may be overspending. The form may also show you why you may be living paycheck to paycheck.

This method is also called the reverse budget. Instead of you deciding how much to budget for each budget category, you see where you are spending your money and that dictates how much to allocate to each category.

HOW TO CREATE A SPENDING PLAN (OR REVERSE BUDGET)

1. Enter the pay period at the top of the form

Record your income in this line. If you and your partner/spouse are paid on the same schedule, total your income together. However, if you are paid on different schedules, then each of your income amounts will be recorded separately.

2. Review your bank account to find your expenses

Look at all of the outflows of money for each pay period. Do not leave ANYTHING off. If you know you spend cash, make sure that you include that in the various categories. It is important that you leave NOTHING off of the list. You may think it is too small to be included. Keep in mind that it is the small items which add up.

For instance, you might spend $150 at the grocery store. However, you also had 3 other smaller trips where you spend $25 more. You will record $175 under groceries.

3. Now track your “leftover money”

As you entered the expenses into the sheet, you will notice that your leftover money is automatically tracked. This helps you see what money is left after you make each payment during each pay period. If the ending amount is negative, it means you are spending too much during your pay period.

You will need to find a way to make an adjustment going forward. This happens by holding money back from one pay period. It may also mean carrying forward money to use at a later date.

You now have the expenses to include in your monthly budget! Instead of you trying to figure out how much to put into each budget category, you allowed your current spending patterns tell you how much you need to budget.

Of course, you may find that you are spending a bit more than you would like. For example, you might find that you are spending far too much dining out and need to make a change. The form may also show that you have money left every pay period which you should be applying towards your debt.

You may not like what you see, but now, you know what changes you need to make so that you can work towards achieving your financial goals.

the reverse budget method

Source: pennypinchinmom.com

Apache is functioning normally

May 30, 2023 by Brett Tams

Timeshares may be a fun vacation option for a while, but sometimes people want to end the arrangement. Those time share contracts, however, can seem pretty ironclad.

Whether you want out due to buyer’s remorse, a shift in your financial situation or health, or any other reason, here’s some good news: You’re not necessarily stuck.

If you change your mind soon after the purchase, for instance, you might be able to opt out during the “rescission period.”

Those who have had their timeshare for years can have alternatives, including having the resort take it back or perhaps re-selling it.

There are also what are known as “exit” companies that help timeshare owners get released from their agreements (though it’s important to vet those companies before signing an agreement).

If you’re ready to say goodbye to your vacation place, read on to learn steps for legally getting out of a timeshare contract.

5 Steps to Escaping a Timeshare

If you’re thinking about getting out of a timeshare or know you’re ready to make a change, here are five options to consider.

1. Checking the Rescission Period

If your second thoughts occur within several days of your purchase, you may be able to rescind the transaction if you’re still within the “rescission period.”

If you are, you should be able to get your money back and go on your merry way.

Keep in mind, however, that the rules vary from one state to the next.

Depending on the state where the timeshare is located, rescission periods can be anywhere from three days (the minimum required by the Federal Trade Commission) to two weeks.

In some cases, the rescission period may kick in as soon as you buy the timeshare. In others, it might start when you receive the public offering statement that includes general information about the timeshare.

For a timeshare on an exotic isle somewhere outside the U.S., you’ll need to find out what the laws are there.

If you’re eligible for rescission, you’ll want to follow the instructions in the documents you received when you purchased your timeshare.

Most likely you’ll need to send the resort a letter telling them you want out via rescission for a full refund.

It’s a good idea to send this letter using certified or registered mail.

💡 Quick Tip: Typically, checking accounts don’t earn interest. However, some accounts do, and online banks are more likely than brick-and-mortar banks to offer you the best rates.

2. Contacting the Timeshare Resort

If rescission isn’t possible because too much time has passed, another option you may be able to take advantage of is a “deed back” program.

Also known as “take-back” and “surrender” programs, these programs allow distressed owners to give their timeshares back to the resort developer, often for a fee of a couple of hundred dollars or so.

To find out if your developer offers this type of program, you may want to contact them directly and ask to speak with someone who handles “deed-backs” or “surrenders.”

You can also check online resources like ResponsibleExit.com for information about return programs.

Generally, developers will only go for this if the timeshare is fully paid for, and you’re up to date on your maintenance fees.

Some developers that accept returns may require owners to pay annual fees for a year or two while the resort finds another buyer.

In some cases, you may have to prove financial or medical hardship in order to qualify for a take-back program.

Even if your resort doesn’t have an official take-back program, you have nothing to lose by asking. Who knows; they might go for it.

Recommended: How to Automate Your Finances

3. Reselling The Timeshare Yourself

If you’re considering reselling your timeshare, it’s probably best if you don’t go into it with hopes of making a killing.

There are typically many people looking to unload their timeshares and demand isn’t generally high, unless your property is in a hot destination.

As a result, reselling can often be a losing proposition.

The best approach might be to think of reselling as someone taking the timeshare off your hands and becoming responsible for the fees moving forward, rather than making a profit.

You can list your timeshare on a general resale marketplace site, such as eBay and Craigslist. There are also sites just for timeshares, such as TUG (the website for the Timeshare Users Group) and RedWeek .

💡 Quick Tip: When you feel the urge to buy something that isn’t in your budget, try the 30-day rule. Make a note of the item in your calendar for 30 days into the future. When the date rolls around, there’s a good chance the “gotta have it” feeling will have subsided.

4. Reselling the Timeshare Through a Broker

If you opt to resell your timeshare, another option is to hire a real estate broker or agent who specializes in reselling timeshares.

If you choose this route, however, you’ll want to pick your broker carefully, cautions the Federal Trade Commission (FTC) .

Some real estate brokers and agents who specialize in reselling timeshares may falsely claim the market in your area is hot and that they’re overwhelmed with buyer requests.

They may even tell you that they already have buyers ready to purchase your timeshare, or promise to sell your timeshare within a specific time.

It’s wise to be skeptical of all such claims, says the FTC, and also to vet the reseller before agreeing to anything on the phone or in writing.

A good safeguard is to contact the state Attorney General and local consumer protection agencies in the state where the reseller is located, and ask if any complaints are on file. You also can search online for complaints.

You may also want to ask the reselling agency if their agents are licensed to sell real estate where your timeshare is located. If they say they are, you may want to verify it with the state’s Real Estate Commission.

Recommended: How to Manage Your Money Better

Other questions you may want to ask before hiring a reselling agent:

• How do you plan to advertise and promote the timeshare unit?

• Will I get progress reports and, if so, how often?

• What fees do you charge, and when do they have to be paid?

It’s generally preferable to do business with a reseller that takes its fee (or commission) only after the timeshare is sold.

If you must pay a fee in advance, however, it’s wise to ask about refunds, and to get all refund policies and promises in writing.

💡 Quick Tip: If you’re creating a budget, try the 50/30/20 budget rule. Allocate 50% of your after-tax income to the “needs” of life, like living expenses and debt. Spend 30% on wants, and then save the remaining 20% towards saving for your long-term goals.

5. Hiring a Timeshare Exit Company

The concept is good. With a timeshare exit company you often get a small army to handle your business.

A good one knows the inner workings of the timeshare industry, which could be advantageous to you.

One major caveat is that these services generally don’t come cheap–prices vary considerably, but can be as high as $4,500.

It’s also important to be aware that there are many bad apples out there. There have been numerous lawsuits against timeshare exit companies that backed out of their payment agreements with customers.

To help ensure that an exit company you’re thinking about hiring is reputable, you may want to check with the Better Business Bureau, and also search online, to see if there have been complaints about the company and (most importantly) how they have handled those complaints.

You can also protect yourself by refusing to make any payments before a contract has been signed by both parties.

Recommended: 5 Reasons to Switch Banks

The Takeaway

Unloading a timeshare property isn’t always easy, but some of your exit options include: backing out during the “rescission period,” reselling it yourself, hiring a broker to resell it for you, and hiring a timeshare exit company to take care of the whole separation process.

It’s important to understand all of your options (and the potential pitfalls of each) in order to choose the best solution for your situation.

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SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
This article is not intended to be legal advice. Please consult an attorney for advice.
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Source: sofi.com

Apache is functioning normally

May 29, 2023 by Brett Tams

The average person probably wants to learn how to get rich.

The average person wants to learn how to get rich. If that's you, read more here so that you can learn how to become rich with no money, at any age, etc. Read this if you want to learn how to get rich quick and fast, make more money, learn new ideas, how to get rich young, my best tips, and more!

The average person wants to learn how to get rich. If that's you, read more here so that you can learn how to become rich with no money, at any age, etc. Read this if you want to learn how to get rich quick and fast, make more money, learn new ideas, how to get rich young, my best tips, and more! While many think figuring how to get rich may be impossible, I’m here to tell you that it isn’t. And no, you don’t need to win the lottery or become a professional athlete.

The meaning of wealth and being rich means something different to everyone. For some, it means having lots of money, for others it may mean having a positive net worth, and for others it may be to retire one day.

Whatever your definition of “rich” is, everyone has the potential to build and improve their financial situation.

If you want to be rich one day, then you’ll have to form good financial habits now, work hard, and reach outside of the norm.

Learning how to get rich won’t be easy – but what good things come easy anyways?

For many people, learning how to get rich may seem impossible and completely unattainable, but that’s simply not true.

Building wealth and learning how to get rich is about your mindset, and figuring out how to get rich now is better than waiting any longer.

Related posts about how to get rich:

Here’s how to get rich– for anyone and at any age.

Don’t wait until tomorrow to learn how to get rich.

Instead of thinking that you’re invincible and that you have all the time in the world to improve your finances, you should stop procrastinating and learn how to build your wealth now.

Many people push things off and/or spend their money carelessly because they think they can start tomorrow, start next month, and so on. However, for everyday that you push off improving your finances the further away and harder you’ll have to work towards your goal.

Stop wasting time and take control of your financial situation now.

Related tip: I recommend looking into Digit if you want to trick yourself into saving more money. Digit is a service that looks at your spending and transfers money to a savings account for you. Digit makes everything easy so that you can start saving money with very little effort.

Be better than average if you want to learn how to get rich.

If you want to build your wealth, whatever that might mean to you, then you’re going to have to go outside the norm, be better than the average, and do new things.

When learning how to get rich, you should always strive to do your best as sometimes “average” is not good enough for you to build wealth. Keep in mind that the average person is not the greatest with money, and many are wrecked with stress and hardship due to their unfortunate financial situation.

68% of people live paycheck to paycheck.
26% have no emergency savings.
The median amount saved for retirement is less than $60,000.
The average household has $7,283 in credit card debt.
The average student loan debt is $32,264.

To be better than average, you’ll have to work hard, learn how to manage your money better, and perhaps take some risks (such as starting a business or applying for your dream job) as well.

Give yourself great goals.

Those who set goals are much more likely to be successful than those who do not. Due to that, if you want to be rich, you’ll want to start setting goals for yourself.

Setting goals is important because without a goal, how do you know where you’re heading? Goals can keep you motivated and striving for your best.

When building your wealth, you should always make sure that any goal you set is SMART.

A SMART goal is:

Specific – What is your goal? Is it specific enough or is it too broad? What needs to be done for you to achieve your goal? Why do you want to reach your goal?
Measurable – How can you measure your progress? How will you know if you’re on track?
Attainable – Is this a goal that can be achieved?
Realistic/relevant – Can you achieve your goal? Is the goal worth it?
Time – What’s your time frame for reaching your goal?

To reach your financial goals and learn how to get rich, you’ll want to:

Write down your goals and objectives.
Create a plan to reach your life goals.
Break your goal apart into smaller goals.
Keep track of your goal setting progress and make changes (if needed).
Find small ways to stick to your goal.
Find ways to motivate yourself when setting goals.
Make reaching your goal a friendly competition.

Read further at The Best Way To Set Goals And Reach Success in 2017.

Create a realistic budget.

To learn how to get rich, you’ll want to create a budget. Yes, even the rich have budgets!

The average person has a lot of financial stress and may be dealing with student loans, credit card debt, a mortgage, car loans, and sometimes even other forms of debt.

However, not many people have a budget. In fact, more than 60% of households in the U.S. do not have a budget.

Budgets are great, because they keep you mindful of your income and expenses. With a monthly budget, you will know exactly how much you can spend in a category each month, how much you have to work with, what spending areas need to be evaluated, among other things.

Remember, even those with high incomes have a budget. The rich stay rich because they have learned how to manage their money better than the average person, which includes being aware of your spending and saving.

When creating your budget, be sure to include all of your income and expenses.

Here are some expenses you may want to include when creating a budget, but don’t forget any expenses you have that aren’t listed:

Home – House payment, rent, maintenance, utilities, insurance, property taxes, etc.
Car – Monthly car payment, gas, maintenance, insurance, license plate fees, and so on.
Television, cable, Netflix, Hulu, etc.
Cell phone.
Internet.
Food – Groceries, restaurant spending, snacks, etc.
Clothing.
Entertainment – Entertainment can include many things, such as going to the movies, going out for drinks, concert tickets, sports, and so on.
Charity – If you regularly donate to charity, then this should be an area you budget for.
Savings funds – This can be for your retirement fund, wedding, travel, etc.
Taxes – If you are self-employed, then taxes may consist of a large part of your budget.
Health insurance.
Miscellaneous – Pet expenses, fees, childcare, school, gifts, etc.

You can get a free budget printable by signing up below.

Realize that a good life can be affordable.

As you all know, I really dislike the myth that people who save money are boring. That’s not true at all.

I believe that you can balance living a good life along with saving a comfortable amount of money.

There are plenty of ways to live an awesome life while saving money. Yes, you can still see your friends, have fun with your loved ones, go on vacations, and more, all while staying on a realistic budget.

Here’s a list of some great early retirees who are leading great lives. I definitely recommend reading about them:

If you want to learn how to get rich, then learning how to be happy with yourself and figuring out affordable ways to enjoy life are key.

Related: How To Become Rich – It’s More Than Millions In The Bank

Pay off your debt if you want to learn how to get rich.

If you want to learn how to get rich, then you’ll most likely want to figure out how to eliminate any debt that is preventing you from reaching your financial goals. For the average person, this probably means any high interest debt, any debt that’s causing you stress, and so on.

Paying off your debt can lessen your stress levels, allow you to have more money to put towards something else (such as retirement), stop paying interest fees, and more.

The first step to eliminating debt is to realize why you have debt in the first place. I believe that if you don’t understand where your problem with debt stems from, then it would be hard to make a positive change.

Yes, it is great to just start attacking your debt, but you also don’t want to fall into the same cycle of going into debt over and over again.

After you realize why you are in debt (or why you keep going back into debt), the next step is to figure out how you will eliminate it. There are many different ways to attack your debt, and I prefer a mixture of everything.

To pay off your debt and learn how to get rich, you should:

Quit adding more debt to your life. You may want to cancel or freeze your credit card, think harder before your next purchase, and avoid spending temptations like the mall.
Be realistic with your income and spending. If you have debt, then you either have an income or spending problem. You may need to start earning more money and/or start spending less if you want to learn how to become wealthy.
Decrease your spending and expenses. Depending on how quickly you want to get rid of your debt, there are different things that you may want to cut out. You could cut out Starbucks (I know, I know), lower your restaurant spending, find a cheaper way to workout, sell your car for something cheaper/more affordable, cook from scratch, and so on.
Make more money. The extra money that you earn can be put towards your debt to help you pay it off more quickly.
Pay more than the minimum. If you have debt, you should always be paying more than the minimum so that you can lower the amount you are paying towards interest.
Put little amounts toward your debt. For example, whenever you get an extra $25 (such as by selling something), then you should just throw that extra money (that you won’t even miss!) towards your debt.

Related: How To Take A 10 Day Trip To Hawaii For $22.40 – Flights & Accommodations Included

Start investing as one of the ways to get rich.

One of the best ways to figure out how to get rich is to start investing. After all, you need to have your money work for you!

The sooner you start saving, the more it becomes a habit and the easier it becomes. By investing money now, you will learn good investing habits that will help you well into the future.

I always say that the first thing you need to do if you want to start investing is to just jump in. However, what if you don’t even know how to start investing?

If you are like many out there, you may not know how to start investing your money.

Investing your money can be a scary, stressful, and overwhelming topic to tackle. You want to invest so that you can:

Retire one day.
Prepare for unexpected events in the future.
Allow your money to grow over time.
Learn how to get rich.

Remember, time is on your side, and due to the powerful impact of compound interest it can change your life. This means the sooner you invest, the more you will earn.

Compound interest is when your interest is earning interest. This can turn the amount of money you have saved into a much larger amount years later.

This is important to note because $100 today will not be worth $100 in the future if you just let it sit under a mattress or in a checking account. However, if you invest, then you can actually turn your $100 into something more. When you invest, your money is working for you and hopefully earning you income.

For example: If you put $1,000 into a retirement account that has an annual 8% return, 40 years later that would turn into $21,724. If you started with that same $1,000 and put an extra $1,000 in it for the next 40 years at an annual 8% return, that would then turn into $301,505. If you started with $10,000 and put an extra $10,000 in it for the next 40 years at an annual 8% return, that would then turn into $3,015,055.

A great article that explains the power of compound interest is Mr. Money Mustache’s The Shockingly Simple Math Behind Early Retirement.

Here are the easy steps to take so that you can start investing your money:

Start saving your money. In order to invest your money, you need to start setting aside money specifically for it. The amount of money you save for investing is entirely up to you, but in general, the more the better.
Do your research. Before you start dumping your money into the stock market and other investments, it’s a good idea to know what you’re putting your money towards. Reading about various investment-related tips and research will help you become more informed about your investing decisions, which will then help you make better decisions well into the future.
Find an online brokerage or someone to manage your investments. There are two main ways to invest your money. You can either invest your money yourself through a brokerage or you can find someone to manage your investment portfolio for you. You will need to take part in one of these options to actually start investing your money. Personally, I like to do everything myself through Vanguard.
Decide how you will invest. Now that you’ve opened an investment account, you will want to decide where you will put your investments. How you invest depends on your risk tolerance, the time period for which you are investing (when will you retire?), and more. Generally, the sooner you need your funds the less risk you will take on, whereas the longer your time period is, then the more risk you may be willing to take on.
Track your investment portfolio. The next step when learning how to get rich by investing is to regularly track the things you have invested in. This is important because you may eventually have to change what you are invested in, put more money towards your investments, and so on.
Continue the steps above over and over again. To invest for years and years to come, you will want to continue the steps above over and over again. Now that you know the steps it takes to invest your money, it only gets easier.

Related tip: I recommend using Motif Investing if you are looking to invest your money. Motif Investing allows individuals to invest affordably. This approachable investing platform makes it easy to buy a portfolio of up to 30 stocks, bonds or ETFs for just $9.95 total commission.

Start making more money.

Figuring out how to get rich usually means that you’ll have to find ways to make more money than you currently do.

On Making Sense of Cents, I talk a lot about how to make extra income because I believe that earning extra income can completely change your life. You can stop living paycheck to paycheck, you can pay off your debt, and more- all by learning about the many different ways to make money.

Trust me when I say that making more money is important. I was able to pay off $38,000 in student loans within 7 months, I was able to leave my day job in order to pursue my passion, travel full-time, and more!

The great thing about finding ways to make more money is that your income potential is unlimited. There’s no cap on how much money you can make- it all depends on what you decide to do and how much time you plan on devoting to it.

Making more money can change your life in great ways, such as:

You can pay off your debt.
Save for big purchases, such as a vacation.
Stop living paycheck to paycheck.
Reach retirement sooner.
Become more diversified with your income sources.

Whether you have just one free hour a day or if you are willing to work 40 to 50 hours a week on top of your full-time job, there are many options when it comes to earning more money. Finding ways to make more money will only help you as you learn how to become rich.

Some ways to make more money include:

Find a part-time job.
Make money online such as creating a blog, becoming a virtual assistant, etc.
Become an Uber or Lyft driver – Spending your spare time driving others around can be a great money maker. Read more about this in my post How To Become An Uber Or Lyft Driver. Click here to join Uber and start making money ASAP.
Maintain and clean yards. You can make money by mowing lawns, killing/removing weeds, cleaning gutters, raking leaves, and so on.
Answer surveys. Survey companies I recommend include Swagbucks, Survey Junkie, Clear Voice Surveys, VIP Voice, Pinecone Research, Opinion Outpost, Survey Spot, and Harris Poll Online. They’re free to join and free to use! You get paid to answer surveys and to test products. It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money.
Move furniture and find jobs on Craigslist. Movers can earn a broad range when it comes to hourly pay, but it’s usually somewhere around $50 an hour if you run your own business.
If you love animals, then you may want to look into how to make extra money by walking dogs or pet sitting. With this side hustle, you may be going over to your client’s home to check in a few times a day, you may be staying at their house, or the animals may be staying with you. Rover is a great company to sign up with in order to become a dog walker and pet sitter. Learn more about this at Rover – A Great Way To Make Money And Play With Animals.
Babysit and/or nanny children.
Sell your stuff.
Rent a spare room in your home to someone else.

As you can see, the list is endless when it comes to making more money.

Related posts on how to make extra money:

Diversify your income streams to learn how to be rich.

One thing that separates the rich from those who aren’t is that the rich and successful tend to have many different forms of income streams.

They may have a day job, a business, rental properties, dividend income, and more. This allows them to bring in more money.

They also do this because the rich know that one source of income may not last forever, and they are also able to lessen their risk by having multiple income streams.

So, if you want to learn how to get rich, then you may want to add more income streams to your life.

If you ever feel too reliant on one source of income, then you know how important this is. Maybe you are afraid that one day you will lose your job or that something will happen to your main source of income.

If you work towards building up multiple income streams and diversifying your income, then you won’t have to worry as much if something happens to one of your income streams.

By diversifying your income with multiple income streams you will have a backup plan, you may be able to retire easier, you will learn how to get rich, and so on.

Note: I recommend that you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but 100 times better as it allows you to gain control of your investment and retirement accounts, whereas Mint.com does not. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, and it’s FREE.

Even the rich find ways to save money.

Finding ways to save more money may allow you to pay off your debt a little faster, improve your financial habits, help you reach your dream sooner, and more.

And yes, even the rich find ways to save money.

Sure, there are stories about rich people who spend their money like crazy and end up in bankruptcy. But surprisingly, the average millionaire is frugal, and they know how to manage their money well.

Don’t believe me? Here are some examples of millionaires and billionaires who still find ways to save money:

Warren Buffett lives in a house that he bought in 1958 for around $30,000.
Mark Zuckerberg drives an Acura.
John Caudwell (worth $2.7 billion) rides his bike 14 miles to work every day and even cuts his own hair.
Jim C. Walton (son of Walmart founder) drives an old truck with no air conditioning.

Another interesting statistic is that the average couponer is someone who earns over $100,000 a year. Surprisingly, those who earn less than $100,000 a year rarely use coupons compared to those with high incomes!

By finding ways to save money, you’ll be able to keep more of your money, learn how to get rich, add more to your investments, and so on. You worked hard for your money, so you may as well find ways to keep more of it!

Find ways to save money at 30+ Ways To Save Money Each Month.

Stop trying to impress others.

When was the last time you bought something that was mainly purchased to impress someone else?

Sadly, this is something that the average person does quite often.

If you want to start building wealth and understand how to get rich, then you’ll want to stop trying to impress others and start living your own life.

The rich tend to live below their means. Yes, many of them still spend money extravagantly, but many aren’t living paycheck to paycheck in order to do so. Many millionaires buy items used, they drive “normal” cars like Toyotas, and they aren’t buying things with the sole purpose of impressing others.

This is drastically different from those who aren’t rich.

Many people try to keep up with others and fall for lifestyle inflation, which can prevent a person from being a good money manager.

When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards so that you can (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.

Instead, you should focus on what you want and need. This will help you to save more money, be more realistic with your income and spending, and to build wealth.

Do you want to learn how to get rich? What does “rich” mean to you?

Apache is functioning normally

May 28, 2023 by Brett Tams

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

How many times have you thought about how much FI would it take to retire?

It’s a question that can be frustrating, especially since the answer is different for everyone.

What if there was an easy way to calculate your personal FI number and find out what kind of portfolio you need based on your spending habits? That’s where this handy calculator comes in!

Calculating your FI number is not as difficult as it sounds.

This is an important personal finance number to know.

If you desire to do something else or are just looking forward to retirement, you need to know how much money you need!

Find out your FI Number Calculator and learn how to FI. This is a very important tool for anyone looking to change their life.

What is FI number?

FI number is the amount of money needed to retire.

It can be calculated using your salary, interest rate, and the time period in which you need to save for retirement.

The 4% figure is a reasonable place to start. The 4% rule is a conservative estimate, with the expectation that Social Security will play a larger role in retirement income.

Why Choose Financial independence?

Financial Independence, or “FI”, is a term used to describe the state of not needing to work for a living because your passive income from investments or savings can cover your living expenses.

It doesn’t mean you have to stop working altogether, it just means you’re no longer tied down by the need to earn a certain amount of money each month.

FI is an attractive proposition for many people because it allows them the freedom and flexibility to pursue their passions or hobbies without having to worry about financial constraints. And if you have money saved up, you can live comfortably off your savings or investments!

How to calculate your FI number?

There are a few different ways to calculate your FI number. The easiest way is to use an online calculator. This will give you a ballpark estimate of what you need to save in order to achieve financial independence.

Option #1 – Using Yearly Spending

One way to calculate your FI number is by multiplying your annual spending by 25. This will give you the amount you need in savings to have 25 times your annual spending available each year without having to touch the principal.

FI Number = yearly spending * 25

For example, if you spend $50000 a year, your FI number would be $1,250,000.

Option #2 – Using a Safe Withdrawal Rate of 4%

Another way to calculate your FI number is by using the safe withdrawal rate of 4%. In fact, many studies believe that 4% is the too old way of thinking and 3.3% is a better safe withdrawal rate (SWR).

You can calculate either way. If you prefer to pull more money out at retirement, then stick with 4%.

FI Number = yearly spending / Safe Withdrawal Rate

For example, if you spend $50000 a year and choose a 4% Safe withdrawal rate, your FI number would be $1,250,000.

Using a 3% safe withdrawal rate, your FI number would be $1,666,666.

The Financial Independence Formula

Do you know your FI number?

It’s a question people are often too embarrassed to ask, but if you don’t have an idea of what it is or where it comes from, you might be spending too much of your money.

Let’s start with the basics and work our way up to where we are today in terms of financial independence!

Calculate Your Spending

In order to calculate your spending, you need to know how much money you spend in a year. To do this, simply multiply your monthly spending by 12. This will give you an estimate of how much money you spend on an annual basis.

It’s important to have a detailed zero based budget before calculating your Financial Independence Formula. This way, you can be sure that you are including all of your regular expenses (and irregular expenses) in your calculations.

The FI Formula is based on conservative retirement calculations, so it’s important to include all of your regular expenses in the formula. The more accurate your figures are, the better idea you’ll have of how much money you’ll need for retirement.

Find Your FI Number

In order to achieve financial independence, you need to find your FI number.

This is determined by two factors: spending and withdrawal rate. The safe withdrawal rate (SWR) determines how much money you are able to withdraw each year without running out of savings in your lifetime. You divide your current spending by SWR to find out how much wealth you need in order to reach a certain financial target.

FI Number = yearly spending / Safe Withdrawal Rate

Everyone will have different FI numbs.

Determine Years to Financial Independence

The Financial Independence Formula may help estimate how much time it will take to reach financial independence. The formula is only a rough estimate, and you must adjust it as needed for more accurate calculations for your own savings plan.

The Financial Independence Formula factors in how much you need to save each year to become financially independent.

The goal of the Financial Independence Formula is to achieve financial independence before the typical retirement age of 45.

Years to FI = (FI Number – Amount Already Saved) / Yearly Saving

Using the example above, we calculated your FI number to be $1.25 million. You have already saved $450,000 and currently saving $25000 a year.

32 Years to FI = (1250000 – 450000) / 25000

However, if you increase your savings rate to $80000, then

10 Years to FI = (1250000 – 450000) / 80000

As you can tell, the more you are able to save and invest, the quicker you will reach FI.

For the amount already saved, you need to use the amount saved in retirement plans as well as any taxable accounts that will fund your lifestyle.

A commonly asked question is… should I include my house value? Honestly, the answer is no – unless part of your FI plan includes selling your house and moving to a lower cost of living area. Then, you would use the difference of your appreciated house value minus the cost of a cheaper home.

How to FI – Create a Plan

Picture of a lady working on how to FI and create a plan.

One of the most important aspects of actually achieving financial independence is to create an action plan.

Without action, you will be spinning on the same cycle over and over.

So, take an hour and start making your plan.

Step #1 – Figure out Numbers

The first step is figuring out your FI number and how many years away you can be.

There are many ways to make variations on finding your FI number. So, make sure you take into account how many years it will take for you to reach financial independence at your current savings rate.

This is the most important step!

Step #2 – Pick a Realistic Date

This is when most people get motivated when they pick a realistic date to retire early.

Every single decision you make will take you one step closer to your goal.

You are working backward from your “selected” date.

Step #3 – Take Action to Enjoy Life

The hardest step for actually making the decision to FI is to take action.

There are so many factors going into what you need to do once your know your FI number.

You can’t just sit back and do nothing once you know your FI number. You have to follow the steps below on saving and investing to reach financial independence.

For many people, this is choosing to live a frugal green lifestyle while saving money.

How to FI – Saving to Achieve Financial Independence

The FI Number Calculator is a simple tool that helps you calculate how much it will take to reach financial independence when investing in the stock market and using your savings rate as well.

But there are certain steps you must take to be able to save more money to jumpstart your path to financial independence. While many of our money saving challenges will help you, you need to find ways to save more money.

Step #1: Pay Off Debt

When you’re working to achieve Financial Independence, it’s important to address your debt. Paying off debt will help you achieve financial independence faster.

There are two types of debt that are especially important to pay off:

Credit card debt
Student loan debt

Credit card companies have high interest rates, so it’s important to consolidate your credit card debt by using Tally or an equivalent service. This can help you find a lower monthly payment and reduce the amount of time it takes to pay off your debt.

Before seeking to consolidate your credit card debt, make a plan for how you’ll avoid future use of this type of loan!

Debt is a cash flow drain while pursuing Financial Independence.

Step #2: Reduce Expenses

There are many ways to reduce expenses and achieve financial independence faster.

One potential area for savings is housing, which can be achieved through refinancing, house hacking, or downsizing.

Other options include trading in your new car for a beater car, scaling back on eating out or cutting back on your streaming services.

Typically those who budget consistently have an easier time reducing their expenses. Using a budget binder will help you find ways to reduce your expenses.

Step #3: Boost your income

Picture of a sign that says extra income.

This is probably the most important step to be able to increase your saving percentage significantly!

There are many ways to boost your income and save more money.

For example:

Find ways to increase your income from your 9-5 job.
Develop skills or get promoted to earn a better job with higher pay.
Side hustling can help you earn a decent income every month.
Find passive income streams as ways to start earning more money without any effort on your part.
Sell your old stuff on websites like eBay or Amazon for some quick cash infusion into your savings account.

Finding ways to make money fast is important during your FI journey.

You must search for additional sources of income, as they can help you save more and invest more in the future.

Step #4: Invest Money

It’s important to invest money in order to grow your wealth. You can do this automatically by investing through most online brokers.

This way, you’ll avoid making any rash decisions based on fear or greed. Investing consistently is a great way to get an average of 8-12% returns on your investments.

The idea is to save as much as possible and invest in assets that provide a high return on investment. This could include buying stocks, real estate, or other investments that offer long-term stability and growth potential.

Learn how to invest $100 to make $1000 a day.

How to FI – Investing to Reach Financial Independence

Now is a good time to start investing for financial independence.

When you’re ready to invest, it’s important to make sure the investment risk matches what you can handle. A portfolio must match your risk tolerance and long-term goals if you want to achieve financial independence.

We will cover various options on how to use investing to help you reach FI sooner.

Step#1: Make Investments Automatic

When you invest your money automatically, you don’t have to think about it and you can take advantage of dollar-cost averaging.

This means that over time, you’ll get a better price for your investments since you’re buying them in small batches instead of all at once.

In layman’s terms, that means investing a certain amount of money each month.

Step #2: Choose an Index Portfolio

Creating a lazy index portfolio is one of the best ways to invest your money.

This type of portfolio is made up of low-cost index funds or ETFs, which means that you don’t have to worry about timing the market or trying to pick stocks that will outperform the rest.

All you need to do is hold on for the long term and let the market do its thing – in good times and bad.

Step #3: Track Your Progress

As you save and invest your money, it’s important to track your progress so that you can see how well you’re doing and whether or not you’re on track to reach Financial Independence.

This can be done easily by creating a budget and tracking your net worth, both of which will give you great insight into where you are with your finances.

Also, track your liquid net worth separately.

Seeing this progress in black and white is often motivating enough to encourage people to keep saving and investing!

Empower is a comprehensive suite of financial tools that offers a FREE way to track your investment and cash accounts. You can connect all of your accounts so you can see an overview of all of your finances in one place, and the best part is that it’s free! Check out my Empower Review.

Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.

FI Number Calculator

The Financial Independence Number Calculator uses a range of variables to calculate the length of time it would take to save for FI. This information can be helpful in developing a savings plan that is tailored specifically to your individual needs.

Here is a simple FI number calculator.

As you can imagine, there are many different scenarios for finding your FI number.

For starters, get a ballpark range and amount you need to save each year to reach your goal. As you get closer to actually, hitting that switch and becoming fully financially independent, then you can refine your FI number.

Remember, while this formula provides a ballpark estimate, more precise results are possible by using a financial independence calculator such as Networthify’s model.

Saving for Retirement or More Savings to Quit work?

If you have some money saved already, the time to reach FI will be shorter than if you are starting from zero. Saving at a high rate is important to reach FI in the shortest time possible; saving at a lower rate or not saving anything makes reaching FI impossible.

Financial Independence is reached by saving a certain amount each year.

This number can vary depending on your unique circumstances, such as income and expenses.

There are a variety of reasons people are pursuing FI – more than likely it is because I hate my job or you want to spend your time doing something else.

The FI Number formula is just a starting point: remember that there are many other variables that could impact your individual savings plans, such as debt load, income, and monthly spending habits.

While using this formula can provide helpful insight into when you might achieve financial independence, it’s important to remember that there is no one-size-fits-all answer.

Every person’s situation is different, so it’s important to tailor your savings plan to your own needs and goals.

Source: moneybliss.org

Apache is functioning normally

May 27, 2023 by Brett Tams

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

Do you want to make your money work for you?

I know what you’re thinking—money doesn’t grow on trees.

It takes money to make money.

That is a true case, but it doesn’t mean you have to be a millionaire to start. You can invest $100 to make $1000.

But there are a few things that will help any of us start seeing some green: time, patience, and perseverance.

We all know that money is a powerful tool. It helps us get what we want, live the way we want to, and achieve our goals. But how do you make your money work for you?

If you’re new to financial success or are looking for some fresh ideas on increasing your wealth, then you are in the right place!

That’s where this post comes in! In it, we delve into the five best ways to grow your wealth and show you how they work.

Are you struggling to save money or grow your wealth? This guide will teach you the best ways to make your money work for you, no matter what your financial situation. From saving and investing to using passive income streams, this guide has everything you need to get on the right track.

How can you make your money work for you?

There are many ways to grow your wealth. You can invest in stocks, bonds, and other securities. You can also start your own business or invest in real estate. Whatever you choose to do, make sure you are diversified and have a plan.

Making your money work for you is all about creating passive income streams.

This means finding ways to make money without having to actively work for it. Some examples include investing in stocks, real estate, and businesses.

How to Make Your Money Work for You: The [Best Ways] to Grow Your Wealth.

Picture of stacked coins with plants growing out of them for how to make you your money work for you.

Your money is a powerful tool that can help you save, invest and grow your wealth, but only when you know the ways to make it work for you.

This is something that many people don’t learn and don’t invest the time to understand.

The best way to grow wealth is by taking your time and doing the research necessary for you to understand what it takes. You have to know how much money you need, where it will come from, and how you will invest it.

#1 – Create Financial Goals

It’s important to have specific financial goals because they give you something to work towards and help keep you motivated. Having specific goals also makes it easier to measure your progress and see how far you’ve come.

To create specific financial goals, start by thinking about what you want to achieve.

Do you want to save for a down payment on a house?
Are you looking to pay off debt?
Looking to increase your saving percentage?
Or do you want to retire early?

Once you know what your goal is, break it down into smaller steps that you can take to get there. For example, if your goal is to save for a down payment on a house, your first step might be saving $2000 for a down payment fund. Then, once you have that saved up, your next step might be saving $1,000 for the down payment fund.

Keep breaking your goal down into smaller and smaller steps until it feels achievable.

When setting financial goals, avoid setting goals that are too vague or unrealistic. For example, don’t set a goal of “saving money” without specifying an amount or timeline. Also, avoid setting goals that are so small they’re not worth achieving (like saving $5 over the course of a year).

#2 – Develop Passive Income Streams

Passive income is a type of earnings that does not require active work to generate. This can include earnings from investments, rental properties, and other business ventures in which you are not actively involved.

There are several different types of passive income:

Interest and dividends from investments: This can include earnings from stocks, bonds, and other investment vehicles.
Rental income: This can come from renting out a property you own, such as an apartment or vacation home.
Business income: This can come from owning a business in which you are not actively involved in the day-to-day operations. For example, you could own a franchise or be a money-only investor.
Royalty payments: These are payments made to you for the use of your intellectual property, such as patents, copyrights, or trademarks, a book, or a song.
Other types of passive income include blog or affiliate revenue. For example, if you have a blog and it generates ad revenue or affiliate income from referrals to third-party products, that would be considered passive income.

Passive income is money you earn without having to work directly for it. It can come from any number of sources. Remember, passive income is different than active income, which is money you earn through a job or business ownership.

In fact, most millionaires have at least 3 passive income streams (source).

Passive income is the Holy Grail for online marketers. It’s automatic. Effortless. But, not at first. In the beginning, it’s grueling. I liken this to doing the most amount of work for the least initial return. However, over time as your passive income begins to increase, your reliance on an active income plummets.

That’s when the real magic starts to happen.

#3 – Plan for Each Dollar

The first step to making your money work for you is creating a budget. This will help you track your income and expenses so you can see where your money is going. You can use a budgeting app or spreadsheet to do this.

When it comes to managing your finances, it’s important to have a plan for each dollar that comes in. You should make conscious choices about where to spend your money and what type of accounts to use.

Your highest priorities should be determined by what is most important to you.

It is also important to remember that every penny counts- so use your money wisely!

#4 Pay Yourself First

One of the best ways to grow your wealth is to save first. This means putting away money into savings or investments before you spend it. This will help you reach your financial goals more quickly.

When you get paid, make sure to put some money into savings or investments before spending it. This way, you are prioritizing your own financial well-being.

Automating your finances is a great way to make sure your bills first are always paid on time and that you are saving regularly. You can set up automatic transfers from your checking account to savings or investment accounts

#5 – Get Out of Debt

Debt can be a major financial burden, preventing you from achieving your financial goals. It’s important to get out of debt as soon as possible so that you can free up your money to save and invest for the future.

In fact, this is one of the first steps we stress here at Money Bliss – pay off debt!

There are a few different ways to get out of debt. You can try negotiating with your creditors, consolidating your debts, or making more money to pay off your debts faster. Whatever method you choose, make sure you have a plan and stick to it.

There are a few things you should avoid when trying to get out of debt.

First, don’t miss any payments or make late payments, as this will damage your credit score.
Second, don’t use credit cards while you’re trying to pay off debt, as this will only add to your balance.
Finally, don’t take on any new debts while you’re trying to get out of debt – focus on paying off the debts you already have first.

#6 – Start an online business

This can be a great way to create passive income and build wealth over time. There are many different types of online businesses that you can start, so do your research and find the one that is best suited for you.

Starting an online business is a great way to make some extra money on the side. It can be done relatively easily and doesn’t require much upfront work. Once you have the foundation in place, it’s easy to start generating income without any additional effort.

In fact, learning how to make money online for beginners is a hot topic!

The internet provides a unique opportunity to start and grow an online business. With the right tools, you can use the internet to your advantage and build a successful business.

#7 – Invest in the stock market

There are many ways to invest in the stock market, but the most common is through buying and selling shares on a stock exchange. You can also invest in mutual funds, which pool money from many different investors and then invests it in a portfolio of stocks or other securities. Another way to invest is through exchange-traded funds (ETFs), which are similar to mutual funds but trade like stocks on an exchange.

Before you start investing in the stock market, there are a few things you should consider.

First, you need to decide what your investment goals are. Are you looking to grow your wealth over time, or do you need access to your money quickly?
Second, you need to understand the risks involved with investing in the stock market. While there’s always the potential for making money, there’s also the potential for losing money.
Finally, you need to research different investments and choose one that fits your goals and risk tolerance.

Investing in the stock market comes with a number of risks, including the potential for losing money. While there’s always the potential for making money, there’s also the potential for losing money. Before you invest, you should understand the risks involved and make sure you’re comfortable with them.

#8 – Automate your finances

Automating your finances means setting up automatic payments for your bills and other regular expenses. This can help you to stay on top of your finances and avoid late payments or overdraft fees.

There are a few different ways that you can automate your finances. You can set up automatic payments through your bank or credit card company. Alternatively, you can use a service like Quicken to track your spending and create a budget.

Automating your finances can save you time and money. It can help you to stay on top of your bills and avoid late fees or overdraft charges. Additionally, it can free up more of your time so that you can focus on other aspects of life.

#9 – Habit of Automatic Savings

Automatic savings works similarly to automating your finances, but instead of paying bills, money is automatically transferred into a savings account each month. This can help you build up your savings without having to think about it.

With automatic savings, you can grow your savings without extra work; however, if you need access to the money in your savings account quickly, it may take a few days for the funds to transfer back into your checking account.

Challenge yourself to save more than the average 5% personal saving rate.

Overall, automating your finances can be a great way to stay on top of your bills and save money. Just be sure to consider the pros and cons of each method before you decide which one is right for you.

#10 – Use a Rewards Credit Card and Pay It Off Each Month

When you use a rewards credit card, you earn points for every purchase you make. These points can be redeemed for cash back, merchandise, travel, or other perks. Some cards also offer bonus points for spending in certain categories, such as gas or groceries.

To get the most value from your rewards card, it’s important to pay off your balance in full each month. This way, you’ll avoid paying interest on your purchases and will actually save money by earning rewards.

This is something we do on a regular basis and helps us to pay for our travel.

There are both pros and cons to using a rewards credit card. On the plus side, you can earn valuable rewards just by making everyday purchases. And if you pay off your balance in full each month, you’ll avoid paying interest and will actually save money.

On the downside, if you carry a balance on your card from month to month, the interest charges will outweigh any benefits you earn from the rewards program. Additionally, some cards have annual fees that can offset any savings you might accrue from using the card.

#11 – Learning How to Budget

A budget is an estimation of revenue and expenses over a specified future period of time. A budget is often created annually, but may also be created more or less frequently like biweekly or by paycheck.

Budgeting is important because it allows you to track your income and expenses so that you can make informed financial decisions. It also enables you to save money by identifying areas where you can cut back on spending.

Simple Budgeting tips:

Make sure your income and expenses are realistic
Track your progress over time
Don’t be afraid to adjust your budget as needed
Keep your long-term financial goals in mind

Budgeting shouldn’t feel constricting – just that you are able to do what you want to do.

#12 – Save Your Money

Saving money is a key component of building wealth. You need to have money saved in order to invest, and you need to be investing in order to grow your wealth. There are a few different ways that you can save money.

One way to save money is to create a budget and stick to it. This will help you track your spending and make sure that you are not spending more than you can afford.
Another way to save money is to make sure that you are taking advantage of all of the tax breaks that are available to you. This can help you keep more of your hard-earned money in your pocket.
Finally, another way to save money is by automating your savings so that you do not have to think about it every month.

Try to save your money wherever you can, even if it is a small amount. Every little bit counts in the long run!

#13 – Now, Invest Your Money

Investing your money is one of the best ways to grow your wealth over time.

When you invest, you are essentially putting your money into something that has the potential to grow over time. This can be done through stocks, bonds, mutual funds, real estate, and other investments.

The key is finding an investment that has the potential for growth and then holding onto it for the long haul.

Especially learn how to flip money!

#14 – Put Money away for retirement

How much you need to save for retirement depends on a number of factors, including how long you expect to live and what kind of lifestyle you want in retirement.

A general rule of thumb is that you’ll need 70% to 80% of your pre-retirement income to maintain your standard of living in retirement.

There are a number of different options for where to save for retirement, including 401(k)s, IRAs, and annuities. Each has its own set of benefits and drawbacks, so it’s important to do your research before choosing one.

The main benefit of saving for retirement is that it gives you a nest egg to help cover expenses for retirement. Additionally, many employer-sponsored retirement plans offer matching contributions, which can help boost your savings.

#15 – Invest in yourself

The most important thing you can do with your money is to invest in yourself by getting higher education or learning new skills. By investing in yourself, you are ensuring that you will be able to earn a higher income and grow your wealth over time.

There are a few different ways you can invest in yourself.

One way is to invest in your education by taking courses or attending seminars that will help you learn new skills.
Another way is to invest in your health by eating healthy foods and exercising regularly.
Finally, you can also invest in your relationships by spending time with positive people who will support and encourage you.

Investing in yourself has many benefits that are normally overlooked.

First, it will help you earn a higher income which means you will be able to save more money and grow your wealth faster. Second, it will improve your health so that you can live a longer and happier life. Third, it will help improve your relationships so that you can have more supportive and positive people in your life.

This can help you earn more money over time and set you up for success.

Bonus Tip = Be Generous

When you give to others, you are actually helping yourself. Numerous studies have shown that giving makes us happier and can even improve our health.

There are many ways to be generous. You can give your time, your money, or your talents. You can also simply be kind and helpful to others. Whatever way you choose to give, make sure it is something that feels good for you.

Many people ask what to give and there is no one answer to this question. It depends on what you have to offer and what would be most helpful to the person or cause you are supporting.

Things to consider when putting money to work

When it comes to making money, there are a lot of different ways you can go about your little endeavor. But before we get into the specifics of how and when you should put your change to work, we have some general tips to help you along the way.

Where are you today?

First, start by looking at your current spending and saving habits. If you’re not saving anything right now, start small by setting aside $50 from each paycheck into a savings account. Once you have a cushion built up, you can start thinking about investing your money.

Also, think about your long-term financial goals and how much money you’ll need to save to reach them. Automate your savings so that it’s easier to stay on track.

How Much are You Spending?

You should also be mindful of your spending habits as they can have a big impact on your ability to grow wealth over time. Try to live below your means and avoid unnecessary purchases so that more of your money can go towards savings and investments.

It can also be helpful to create a budget so that you have a better idea of where your money is going each month. This will allow you to make adjustments as needed in order to free up more money for savings and investing.

Are you Investing?

Investing is one of the best ways to grow your wealth over time. When you invest, you’re essentially putting your money into something that has the potential to earn more money in the future. This can be done through stocks, bonds, mutual funds, and other investment vehicles.

It’s important to do some research before investing so that you understand the risks involved and don’t end up losing all of your hard-earned money.

Is Debt Holding You Back?

Last but not least, debt can also impact your ability to grow wealth over time. High-interest debt, such as credit card debt, can eat away at your savings and make it difficult to invest.

If you have high-interest debt, it’s important to focus on paying it off as quickly as possible. You may need to make some sacrifices in other areas of your life in order to do this, but it will be worth it in the long run.

How to Make Your Money Work for You FAQs

1. Invest in stocks: This is one of the most popular methods of growing wealth. When you invest in stocks, you are buying a piece of a company that will be worth more in the future. The key to making money with stocks is to buy low and sell high.

2. Invest in real estate: Another popular way to grow your wealth is to invest in real estate. When you invest in real estate, you are buying a property that will increase in value over time. The key to making money with real estate is to make sure your portfolio is set up for high probability of success.

3. Invest in bonds: Bonds are another way to grow your wealth. When you invest in bonds, you are lending money to a company or government that will pay you back over time with interest.

Saving money is one of the best ways to use your money. It allows you to have a cushion in case of an emergency, and it also allows you to save for future goals. There are many different ways to save money, but some of the best include setting up a budget and sticking to it, setting up a savings account, and investing in yourself.

Investing your money is another great way to use it. When you invest, you are essentially putting your money into something that has the potential to grow over time. This can be a great way to build your wealth over time and secure your financial future. Some of the best things to invest in include stocks, bonds, and mutual funds.

Of course, you can also use your money by spending it on things that you need or want. While this may not seem like the most productive use of your money, it is important to remember that spending is necessary in order to live a comfortable life. Therefore, it is important to find a balance between saving and spending so that you can enjoy both now and in the future.

Keep your money in a safe place.
Invest in a good financial institution.
Diversify your investments.
Review your insurance coverage regularly.
Have an emergency fund.

Money Works for You

In this article, we covered a few different ways to grow your wealth.

Making your money work for you is a great way to grow your wealth without having to put in a lot of extra effort. By following the tips and tricks in this guide, you can easily make your money work for you and watch your wealth grow over time.

If you are looking for where to put your money to make it work for you, we uncovered the 15 best ways to make your money work for you.

Whichever method you chose is up to you.

The best answer is to diversify your portfolio and create multiple streams of income.

So what are you waiting for? Get started today and see the results for yourself!

Source: moneybliss.org

Apache is functioning normally

May 26, 2023 by Brett Tams

Whenever I read an article about someone who retired early, I always scroll down to the comments because I find it interesting to see what people have to say about early retirement. After all, just a few years ago, I myself, didn't even know that retiring early was a thing. However, once I realized that people were doing it and living financially free lives - I knew I wanted it as well.

Whenever I read an article about someone who retired early, I always scroll down to the comments because I find it interesting to see what people have to say about early retirement. After all, just a few years ago, I myself, didn't even know that retiring early was a thing. However, once I realized that people were doing it and living financially free lives - I knew I wanted it as well. For most people, retirement means something that only older people do after decades and decades of working. However, more and more people are thinking about early retirement. And, when I say early retirement, I mean being financially secure enough that you don’t need to work unless you want to.

Even though it takes a lot of work and planning to retire early, some people seem to think that early retirees aren’t very smart, are lazy, or even boring.

I see this a lot when I read articles about people who have retired early. I always scroll down to the comments of these articles because I find it interesting to see what people have to say about early retirement. I’m always shocked, and saddened, when I read comments that say these early retirees are being careless and won’t be able to live exciting lives after they retire.

Some people assume these people haven’t saved enough and are naively thinking their money will last forever. Some assume early retirees just want to stop working because they are lazy. Others think that early retirees just sit around all day and do nothing in order to save money.

However, none of these common myths about early retirees are true!

And, I just don’t understand these negative feelings about early retirement because I personally love the idea of people striving to retire early.

Really, what could feel better than working hard to your save money, investing it well, and then realizing the financial freedom you have to quit your day job so you can live your dream life!?

Whether you want to travel, continue working (yes, you can continue working your job! There’s no rule that you have to quit), spend more time with family, or whatever else, retiring early gives you the ability to choose your own future.

Plus, early retirement can be at whatever age you want it to be, it doesn’t have to be that you retire early at age 30. If you are able to retire at age 60, that’s awesome! The point is just to strive to better yourself so that you can be financially free and not stuck and miserable in debt, and/or living a paycheck to paycheck life.

Sadly, there are many out there, who do not save enough money when preparing for retirement. According to one survey, 56% Of Americans Have Less Than $10,000 Saved For Retirement. According to a different survey done by Bankrate.com, 36% of people in the U.S. have absolutely nothing saved for retirement.

Due to the above, I think it’s obvious that more people should make saving for retirement a priority.

And, even if you love your career, you can still think about early retirement.

I have saved enough to retire whenever I would like. Yes, I earn a high income, but I also save a large part of my income and watch any wasteful spending.

Now, don’t get me wrong, I absolutely love life and my online business. However, knowing that I can retire early means I am prepared for whatever might happen in the future. As you know, I’m a worrier, and I would much rather be safe than sorry. There are so many what ifs, like there could be a medical emergency, the industry may change, I may change, and so on.

You just never know what may happen in the future!

Related:

To me, having the ability to retire early is all about freedom and flexibility.

Now, I’m not going to automatically assume that extreme early retirement is for everyone. Because, it’s not.

Not all early retirement paths have to be extreme – some can actually be quite normal. Many people can still live a normal life, without really cutting too much out. It’s all about being realistic with your income and spending.

The majority of the population does not seem ready for retirement at any age, let alone the retirement age of around 65-67, so to discount early retirees altogether just seems crazy to me.

Whether you’re thinking about early retirement, still planning for a “normal” retirement age, or are just confused about what these early retirees are thinking, this post will, hopefully, debunk any myths you may have about early retirement.

Related content:

Are early retirees dumb, lazy, and/or boring?

Are early retirees naively thinking that their money will last forever?

This is one of the most common myths I hear about early retirees. Many like to assume that early retirees haven’t thought about possible future expenses, such as from having children, health insurance costs rising, inflation, the stock market dipping/crashing, and more.

However, planning for early retirement definitely takes all of these expenses into consideration.

For most early retirees, it starts with creating a budget that allows them to really know their expenses and save for them well into the future.

Related content: The Complete Budget Guide: Creating A Budget That Works

A person planning for early retirement is thinking about all of these what ifs well into the future. While no one’s calculations are going to be correct down to the penny, it is possible to factor in possible future expenses.

Still, many people don’t believe that early retirement is possible. I have heard countless people say that retiring early is dumb because $1,000,000 – $5,000,000 isn’t enough to retire young, that early retirees aren’t thinking about future expenses, etc.

I believe this has a lot to do with the fact that many people don’t understand compound interest and investing. Both of these things let your money work and grow for you, well into the future, meaning that an early retirees’ retirement funds are most likely going to grow well into the future. I have seen countless comments where a person just divides $1,000,000 by 50 years and assumes that the early retiree is living off of $20,000 a year and not a penny more for the rest of their life.

However, that’s not how investing and early retirement works.

If you want to learn how investing works and how you can start saving for early retirement, read more at How To Start Investing.

Honestly, early retirement is possible.

By saving enough of your money and living off a designated percentage of your savings or invested income each year after you retire early, you will find that early retirement is possible.

Before throwing the whole idea out, you may want to look into how it may be possible for you.

Whenever I read an article about someone who retired early, I always scroll down to the comments because I find it interesting to see what people have to say about early retirement. After all, just a few years ago, I myself, didn't even know that retiring early was a thing. However, once I realized that people were doing it and living financially free lives - I knew I wanted it as well.

Retirement Calculator: https://networthify.com/calculator/earlyretirement

As you can see from the above:

With just a 1% savings rate, it would take you 98.9 working years until you reach retirement.
A 5% savings rate means that it would take you 66 working years to retire.
A 20% savings rate means that it would take you 37 working years to retire.
A 50% savings rate means that it would take you 17 working years to retire.
A 75% savings rate means that it would take you 7 working years to retire.

So, by saving more of your money, you are likely to retire sooner. Makes sense, right?

Related content: Do You Know Your Net Worth?

Are early retirees lazy and just not wanting to work?

I’m going to be honest, this myth is absolutely crazy! If you are planning for early retirement, you definitely aren’t lazy. Like I said before, it takes a lot of planning and forethought to retire early. It’s not at all for the lazy!

However, I have heard so many people say this about early retirees. And, I think it’s the exact opposite.

If you are looking to retire early, you probably aren’t the type to just sit around all day. I mean, if that’s your plan for after you retire, that’s totally fine because you get to choose. But, for many, early retirement isn’t just about not working. It’s about having the freedom to spend your time pursuing your passion, traveling, spending more time with friends and family, and more.

Still, I have heard so many times that early retirees are lazy and are just looking for a way to escape the work world and essentially be homeless, live in a shack, eat rice and beans, etc., instead of working.

I believe early retirees are hard workers who want to live life on their own terms. After all, they had to save enough to retire early some way – and I’m sure it wasn’t due to any laziness.

Don’t early retirees just sit around all day in order to save money?

I have heard countless people say that early retirees are boring, lead meaningless lives, and probably just sit around all day doing nothing. Some of these same people justify not saving for retirement by saying that they’d rather work until they’re 70.

I don’t know how much fun the average person has while working, but I’m fairly positive that the average person is probably not in love with their job. In fact, it is somewhat rare for a person to be absolutely in love with their job. Yet, I still hear this myth all the time.

An early retiree isn’t just going to sit around all day. Even if that’s what they want to do, who cares?! Retiring early certainly doesn’t mean that you have to be bored.

With all the extra time you have after retiring early, you could volunteer, pursue a passion, find fun things to do, take up a hobby, and more.

Heck, you could even continue working, if that’s what you truly desire. Early retirement just gives you choices in case something changes in the future.

I know that for me, if I chose to stop working one day, I could easily find time to fill my day outside of work. I could travel even more, go on more long hikes, be more fit, read more, learn more (I’ve been wanting to learn a new language), find a passion project, spend more time with friends and family, etc. The list is endless!

The average early retiree, that I know, has a very active and meaningful life. They don’t need work in order to feel valued in the world; instead, they find other things to make themselves happy.

Plus, just because you are saving for retirement doesn’t mean you are eating ramen noodles for breakfast, lunch, and dinner. However, this is a myth that is often associated with early retirement.

Sure, a person who seeks early retirement or who has already retired early may be frugal, but I highly doubt that the majority of early retirees live boring and uneventful lives.

There are plenty of ways to have frugal fun, eat on a budget, and so on. You can even see the world, while saving for early retirement, too. We currently live in our RV, while traveling North America (yes, I know that’s not the world), and we have met many early retirees who are doing the same. Remember, the best things in life are free. The outdoors, spending quality time with those you love, laughing, and more are all FREE.

When do you want to retire and when WILL you retire? What do you think of early retirement?

Apache is functioning normally

May 26, 2023 by Brett Tams

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

When you are trying to tighten down the hatches on your spending, you are doing everything possible to stick to your budget.

You are determined to stick to your budget this time around. But, you always hear that budgeting can be hard.

Well, here are some quick budgeting tips that will make sure to stick to your budget.

As most new budgeters learn, they struggle to stick to a budget for their monthly expenses. It is a natural process everyone goes through.

Budget, if you are looking for an easy button, then learn which payment type is best if you are trying to stick to a budget.

Especially if you spend a lot of time on social media, studies have shown you are more likely to overspend. So, you must learn which payment type will have you stick to a budget.

Then, you may be wondering and wanting help deciding which payment type is best for you.

Which payment types is best if you are trying to stick to a budget? Do you want to stick to a budget but find it difficult in choosing which of the many options available including budget debit cards? This guide will help you decide among the different types of payments on the market.

The Optimal Solution Payment Type Solution

The most efficient payment type is something that is instantaneous and there are no fees associated with the transaction.

Cash is the most efficient payment type: Cash payments are usually the most efficient and convenient way to pay for goods or services.
Credit cards can be a less favorable option: Credit cards tend to have high-interest rates and can lead to financial disaster if used irresponsibly.
Debit cards are a great way to keep your spending within your budget: Debit cards should be considered a top priority for budgeting because they keep you within your spending limits.
Developing a budget will help you avoid financial disaster: A budget helps you stay organized and make informed decisions about which payment method works best for you.

Today, there are so many options on which payment type to use in today’s online world.

1. Cash

Cash is a payment type that can be used to reduce debt spending. It is versatile and can be used for a variety of expenses, such as groceries, medical bills, and gym memberships.

Cash is an excellent choice for people just starting to budget and save.

It is more restrained than credit or debit cards. The envelope method of cash budgeting can be used to train your brain to reduce spending. Cash is the most traditional payment method and has the fewest drawbacks. However, you need a safe place to store your cash, and some stores may not accept it.

Benefits of Cash:

Cash is an excellent payment type when your financial goals are to reduce debt spending.
Cash is a finite payment method that prevents you from overspending.
You have a set amount of money to spend each month, so there’s no chance of overspending.
Easy to track with the envelope method: Utilizing the envelope method ensures that you are tracking your spending (i.e groceries, gas, medical bills) and making sure that you aren’t overspending.
Cash is a quick and easy way to pay for goods and services.
No Fees. No maintenance fees or interest rates as credit cards. Cash is just plain cash – printed paper of currency.
You can avoid high fees associated with card transactions: There are no associated fees when paying with cash, making it the cheapest option overall.
Cash discounts may be available. Since you are paying with cash many small businesses offer a cash discount of 2-5%.
You can use cash at any store: No need to carry around extra cards or checks.
It’s easy to get cash: You can easily get cash and make extra cash.
There’s no need for bank account details: No need for bank account details means you’re free from identity theft risks and other inconveniences that come with having a bank account.
Cash allows you to skirt some financial regulations: Because cash payments don’t fall under the purview of many financial regulations, businesses can take advantage of loopholes in the law that allow them to charge higher interest rates on loans or engage in shady business practices. (highly recommended to stay above book)

Cons of Cash:

Possibility of losing or stolen cash: Keep your cash in a safe place!
You need a safe place to store your money: Another disadvantage of using cash is that you may need a safe place in which to keep it – some stores don’t accept it as a payment method.

Why Choose Cash?

Total control over your money, so there’s little chance of unexpectedly running out of funds.
Cash is a great way to stay on budget, as you can easily track your spending and see where you need to cut back.
Unpleasant to spend money with cash, which can help train your brain to reduce spending.
Cash is a quick and easy way to pay: Using cash eliminates the need for banks, credit cards, or other forms of payment.

Verdict: Paying with cash is the best method for budgeting and saving.

Overall, cash is a great payment type when it comes to budgeting. You can immediately see how much money you’ve spent and what needs to be cut back.

You can’t make impulsive buying decisions with debit cards or credit cards.

With a finite amount you can spend, cash is an excellent choice to prevent overspending. According to research, paying with cash can feel unpleasant, which can train your brain to reduce spending as much as possible.

2. Credit cards

Credit cards offer a number of benefits, including convenience, cash back, and the ability to make large purchases or pay bills in case of emergency. However, credit cards also come with credit card debt and can lead to overspending and financial problems if not used carefully.

For many, credit cards are the easiest way to blow your budget because you don’t have control over how much money you spend.

It is possible to overspend with credit cards if you are not mindful of what you charge.

On the flip side, this is a preferred method as many credit cards also offer rewards programs that give you cash back or points for purchases. If you make the conscious decision to use credit cards, you must make payments on time to avoid penalties.

Benefits of Credit Cards

Credit cards are convenient: Convenient to use and don’t have to worry about losing cash.
Use a credit card if you are disciplined and have strict spending habits: If you are disciplined and have strict spending habits, then using a credit card can work well for budgeting purposes.
Flexibility on larger purchases: Some benefits that come with having a credit card include more cash flow as well as being able to make larger purchases.
Credit cards provide support in times of crisis: Many credit cards offer extended services that can help like 24-hour fraud protection, lost wallet services, traveler’s insurance, and many other benefits – check each issuer for details.
$0 Liability on Unauthorized charges: Your credit card company will not be held responsible for any charges that were not authorized by you. This means that if you did not authorize a charge in person, online, or otherwise, you will not be responsible for it.
Fraud protection: Check your credit card issuer, but many offer fraud protection.
New card introductory APR is helpful to pay down debt: The introductory APR for the new card may not last long.
Payments on balance transfer should be manageable: Make sure that the payments on your balance transfer are manageable.
Points: You can accrue points along with your spending which can be a great perk.
Credit card interest rates are significantly lower than payday loans: Interest rates on credit cards are usually much lower than payday loans.
Due Date is After your statement closes. Since your bill cycle is at least another 21 days between the closing date for your statement and the due date, it gives you flexibility. Personally, I still account for the credit card bill in the same month that it was accrued.

Cons of Credit Cards

Potential for credit card debt: When using a credit card, be aware of your credit limit and the interest rate that you will have to pay on your debt. Also one of the categories of debt.
Credit limit often leads people to spend money: The credit limit often leads people to spend money by giving them a false sense of security, when they should stick to a budget and pay attention to their credit card statement and the billing cycle.
Credit card overspending can lead to debt: Consider the purchase if it is essential or delay it if possible.
Ability to easily purchase something you cannot afford. Buying something that you don’t have the money saved up for will cost you interest fees associated and maybe even with a credit card balance transfer.
There are a number of fees associated with a balance transfer: Transfer fee, interest on new purchases charged to the card.
Your introductory APR may not be valid if you make too many payments late: If you fall more than 60 days behind on payments your introductory APR might be canceled and you may face higher interest rates.
Credit score can suffer from debt: When you carry a credit card balance or don’t pay your monthly bills on time, you will lower your credit score.
Avoid carrying a balance: Pay your statement in full each month to avoid paying interest and maximize your grace period.

Key Takeaways on Credit Cards

Make sure to pay attention to the dates: Don’t spend more than you can afford, and make sure you’re making your minimum monthly payments on time so that your debt doesn’t increase over time.
A credit card can be used for budgeting only if you’re very disciplined: If you know that overspending is NOT an issue and you pay the credit card’s monthly balance in full, then using a credit card is fine.
Credit card transactions usually take several days to register in the feedback system: Something to look out for!
You can step back into debit cards or cash if needed: If credit cards are not for you, there are other options available such as debit cards or cash

3. Debit cards

Debit cards are a good option if you want to stick to a budget because the predetermined amount of funds can help you stay within your means. Additionally, debit cards are more convenient than cash and just as accepted as credit cards in most places.

A debit card works more similarly to cash than to credit cards.

They provide an easier way to track your spending and avoid having to carry a lot of cash.

Pros of Debit Cards:

No Need to Carry Cash: A debit card is better than cash because you don’t have to carry a lot of paper money and change around, and they’re also safer.
Debit cards are faster and easier to use: Debit cards work just like credit cards – withdrawing cash, making purchases, and paying bills – but they are linked directly to your bank account, so there is no need to carry around a separate cash envelope wallet or purse for them.
A debit card is a good option if you want to stick to a budget: Debit cards come with a predetermined amount of funds that you can spend from your bank account just like cash.
Tracking payments is easy with debit cards: Your debit payments will appear on your issuer’s dashboard, which you can monitor anytime from any location.
Convenience: Debit cards are more convenient to use and faster than needing to write a check or carry around cash. Plus they don’t add to your debt.
Shopping online is easy. You can use your debit card to make online purchases with your bank account, and digital banking tools make tracking your spending easy.
Points: Some debit cardholders can earn points for spending on their cards, which can be redeemable for rewards such as cash back or gift cards. This is new to compete with credit cards.
Fraud protection is typically offered for free with most debit cards—meaning if your card is stolen or used without your permission, you can get your money back.
No impact on your credit report. When you use a debit card, the funds are actually withdrawn from checking or savings accounts so there is no credit reporting occurring.

Cons of Debit Cards:

An overdraft on a debit card can happen when a purchase exceeds the amount of money in the checking account, leading to overdraft fees.
Funds on hold with fraudulent charges. If your account gets hacked, your losses will be limited since most banks protect their users against fraudulent charges and online purchases with their accounts. However, those funds will be held while they investigate and you may be liable for $50.
No chance to improve your credit score. Since you are not borrowing money, you are unable to improve your credit score.

Debit cards are a great way to keep your spending within your budget and avoid overspending which can lead to many detrimental issues.

Regardless of the overdraft fee, debit cards are still better than cash because they’re safer and easier to carry around.

4. Checks

Checks… do people still write checks? Why yes they do!

Checks offer a few benefits as a payment method, even though they are slowly being replaced by more modern options.

This can help you keep track of your spending and make sure you do not overspend. Additionally, if you ever need to dispute a charge, having a check can be helpful in proving what you paid for.

What is a check?

A check is a written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer from the check writer’s account. The date is usually written in month/day/year format. The signature of the check writer is usually on the line below “Pay to the order of.”

There are three main types of checks:

A cashier’s check is a check guaranteed by a bank, drawn on the bank’s own funds, and signed by a cashier.
A certified check is a personal check for which the bank has verified that there are sufficient funds to cover the payment.
A personal check is one that you write yourself and that is not guaranteed by the bank.

Pros of Checks

Checks are still a payment option: Checks are one of the traditional payment methods, but it is slowly dying out because of modernization.
Physical written record. It can be helpful to have physical copies of checks in addition to digital records through the bank.
You need to make both digital and physical copies of the check: Save check stubs but also transfer the information to a budgeting system.

Cons of Checks

Saving check stubs is helpful, but you still need to transfer the information to a budgeting system: Useful for tracking spending, but you’ll likely want more detailed records than just check stubs.
Not as convenient as credit or debit cards.

5. Apple Pay or Apple Cash

Apple Pay is easy to use and convenient since you only need to connect your smartphone to your cards and bank accounts via the app.

It is easy to use since you just hold your phone up to the reader and wait for the payment screen to appear.

You can even get cash back with apple pay.

Pros of Apple Pay:

Apple Pay is easy to use and convenient: You only need to connect your iPhone to your cards and bank accounts via the app.
You don’t need to carry any extra cards or cash: No need for additional cards or cash when you’re out and about
You can use Apple Pay on different devices: You can use Apple Pay on your iPhone, iPad, and Mac.
Transactions are secure: Your transactions are secured with Touch ID or a passcode.
Set up Spending Limits for each user. This way you can make sure you (or others with authorized access) are not spending more than you intended. Learn how.
Protection of Data during transactions. Your actual credit card number is changed to a different digital number, which allows limits your card number’s exposure.

Cons of Apple Pay:

Not widely accepted (yet). This method of payment is 100 percent guaranteed. While many stores offer apple pay, not all do quite yet.
The same rules apply if you load apple pay with a debit or credit card drawbacks include late fees, interest rates, and overspending: Keep that in mind when choosing Apple Pay as your payment method.

6. Mobile wallets like Google Pay, Samsung Pay, Venmo, or Zelle

Mobile wallets are digital payment systems that allow you to pay for items with your smartphone. Many people find mobile wallets are very convenient and becoming a traditional method of payment (such as credit cards).

With mobile wallets, you are making digital payments without having to carry around cash or cards using just your smartphone.

Mobile wallets are easy to use and provide instant payment convenience, making them perfect for shopping online.

Pros of Mobile Wallets:

Mobile wallets use credit cards and debit cards: Connect your smartphone to your bank accounts and use it for digital payments.
Mobile wallets are easy to use and convenient: Instant payment convenience makes them perfect for shopping online as well.
No need for cash or cards: No need for cash or cards.
Strong secuirity features provide privacy and security features that ensure your personal information is safe from data breaches and unwanted charges.
You can make purchases without having to show your identification: You can make purchases without having to show your identification.
Additional Layer of Security. Additionally, mobile wallet data is protected with verification, such as fingerprints.

Cons of Mobile Wallets:

With Zelle and Venmo, it is easy to send money to the wrong person or add an extra zero and send more money from planned. More often than not, it is difficult to recover your money.
You need to be disciplined when using a mobile wallet: Pay attention to late fees and interest rates, as well as the amount you spend in a month.

7. Prepaid Cards or Gift Cards

A prepaid card or a gift card could be right for you. The advantage of these is the mere fact that you reached the limit is enough to deter overspending.

It can make you think twice about whether you need to purchase an item or not.

Pros of Prepaid Cards and Gift Cards

Easy to use: Prepaid and gift cards are easy to use and manage your finances with.
The mere fact that you reached the limit is enough to deter overspending: It can make you think twice about whether you need to purchase an item or not.
No strings attached: No need to worry about any fees associated with the prepaid card once activated.
Privacy: The prepaid card does not track your spending or use any personally identifiable information.
Credit Score Doesn’t Matter: Your credit score does not matter when obtaining a prepaid card.

Cons of Prepaid Cards or Gift Cards

Losing a prepaid card is not a fun experience. Contact the prepaid card issuer right away to protect the funds on the prepaid card.
Fraud protection: Consider whether your prepaid card issuer offers any theft or fraud protection, as not all providers offer this feature.
Prepaid cards have limits on how much money you can load onto them, which can be frustrating if you need to make a large purchase.

8. PayPal

PayPal is a very convenient way to pay for items online or in person. It is widely accepted and used by many people.

PayPal is a digital payment service that offers convenience and ease of use. You can use them to send money to people or pay for online purchases.

However, because these services can only be used online, they should not be relied on as your sole method of budgeting and tracking expenses. Instead, consider Paypal in combination with another budgeting tool, like a spreadsheet or app, to get a fuller picture of your spending.

Pros of PayPal:

PayPal is one of the most popular online payment methods: Widely accepted and used by many people.
You can use them to send money to people or pay for online purchases: Help you review your spending prior to purchase.

Cons of Paypal:

Easy Target for phishing scams. A phishing scam is when someone tries to trick you into giving them your personal information, like your password or credit card number. They might do this by sending you an email that looks like it’s from PayPal, but it’s not. Or they might create a fake website that looks like PayPal. If you enter your information on these sites, the scammers can then use your account to make purchases or send money to themselves.
Reputation for poor customer service. This is evident in their customer service ratings, which are some of the lowest in the industry. The majority of complaints against PayPal revolve around poor service received when asking for assistance with fund freezes and account holds.

9. Cryptocurrency (ie: Bitcoin)

Cryptocurrencies offer a new and innovative way of handling payments. They’re not yet widely accepted, so there’s potential for businesses to get in on the ground floor with this new technology.

However, because cryptocurrencies are so new, it’s uncertain if they will be regulated or not. This could pose a challenge for businesses down the road.

Pros of Crypto

Not subject to the same regulations as traditional currency, which makes them appealing to those who want to avoid government intervention.
The valuation of Crypto changes rapidly. If you are smart with crtyple this is a great way to spend your crypto coins.

Cons of Crypto

Cryptocurrencies are not accepted everywhere: Cryptocurrencies are not accepted by most organizations yet, which it makes it difficult to use them in day-to-day life.
It’s unclear if cryptocurrencies will be regulated: It’s uncertain if cryptocurrencies will be strictly regulated or not. This poses a challenge for those who want to use them as a payment method.
Bitcoin and other cryptocurrencies are still in their infancy: Bitcoin and other cryptocurrencies have only been around for a few years, so they may still face challenges in the future.

Here are the most popular budget apps today:

Other Payment Methods:

ACH payments

ACH Payments is an excellent way to pay bills and other financial obligations: You can easily set up a billing cycle for recurring payments, making it safe and convenient.

Fewer people are aware of your transactions when using ACH payments, reducing the chances of fraud or theft.

Key Facts:

Fewer people know about your transactions when using ACH payments, reducing the chances of fraud or theft.
Your checking account information is not shared or accessed by the system in any way.
You can quickly pay bills and other expenses with ACH payment: Financial institutions offer this as part of their deals.
When setting up recurring bills with ACH payment, you are aying your bills on time is important for maintaining a good credit score.
Pay attention to your check account balances: Make sure you have enough funds in your check account to avoid paying overdraft fees.

Money orders

A money order is a document that orders the payment of a specified amount of money. Money orders are convenient because they can be bought at many locations, including post offices, banks, and convenience stores.

To get a money order, you will need to fill out a form with the payee’s name, the amount of the payment, and your contact information. You will then need to purchase the money order with cash or a debit card.

To cash a money order, you will need to take it to a bank or post office. You will need to show identification and sign the back of the money order. The teller will then give you the cash for the payment.

More secure than cash: Money orders are more secure than cash because they don’t require a bank to make the transaction.
Less convenient: money orders are less convenient because you must purchase them in person.
Able to trace. They are also more secure than cash because they can be traced if lost or stolen.

Wire Transfers

Wire transfers are a more secure way to transfer money than traditional methods like checks and cash. These are sent through the banking system and are usually processed within two business days.

Typically, wire transfers are used when sending and receiving large sums of money (over $10000).

More secure than cash: Wire transfers are more secure than cash as the bank verifies there is enough money to make the wire transfer.
Fees involved with using a wire transfer. Most institutions charge for handling a wire transfer.

What method of payment is best?

Cash is the most widely accepted form of payment, but debit and credit cards are very popular.

The payment method that is best for you depends on which one helps you to stick to your budget and spend less money. The goal is to be financially stable.

What method is best for sticking to a budget?

There are several different types of budgeting methods that people use in order to manage their finances. Many people focus on using the 50/30/20 method, in which each percent corresponds to a different category of expenses.

There are plenty of budgeting tools available today to make sure you stick to your budget.

You need to find what works best for you. At the end of the month, you want to spend less than you make. That is the winning combo!

1. Budgeting App

There are many budgeting tools available online, which can be helpful as it can be easier to track your progress and budget over time.

You can use various popular budgeting apps like Quicken, Qube Money, or Simplifi.

These apps can help you track your spending, set goals, and stay on track with your budget.

2. Paper and Pen or Simple Spreadsheet

Some people find that they prefer using a simple spreadsheet or paper budget. This may be due to personal preference or because they find it easier to understand and use.

Additionally, using a paper budget may help you stay more organized as you can physically see where your money is going.

Options to get you started include our own budgeting spreadsheets or using an automated system like Tiller.

3. Envelope budgeting method

The cash envelope system is a good way to stick to a budget because it is rigid and based on envelopes and cash. You can’t get more money until your cash payday. So, this system helps you track your spending and budget better.

However, using only cash can have drawbacks as having large amounts of cash on hand can be risky.

The envelope method gives you a sense of control over your spending and makes it more tedious to write down your transactions. If you find writing down your transactions tedious, the envelope method may be too much for you.

4. Know Your Budget Categories and Track expenses

Tracking expenses is essential to move ahead financially: Knowing what you have spent in each category will help you make better financial decisions.

Be specific with your budgeting categories. Don’t make it too complicated. Always remember to include household items, clothing, and groceries when tracking expenses.

5. Prioritize your Budget Plan

A budget can provide a realistic picture of your finances, help reduce stress related to money matters, and guide you toward achieving your goals.

Creating a budget can help ensure that you are able to meet your financial obligations and still have money left over for savings and other goals. A budget can also help you track your spending so that you can make adjustments if necessary.

Make a budget plan: This will help you stay on track and make sure that you are spending your money wisely.
You decide where to spend money: A budget helps you set future goals and achieve your financial goals.
Creating a budget can help reduce stress: If you tend to get stressed about money matters, creating a budget can give you peace of mind.
A budget has other benefits beyond financial ones: If you want to achieve something in life, creating a budget can help guide you in the right direction.
See where to cut back spending. You can also look at your past spending habits to see where you can cut back. Sometimes it may be necessary to save more in order to achieve long-term goals, like buying a house or having a wedding. Always be mindful of your budget when making payments and spending money.
It’s a three-step process that involves basic math: Making a budget is simple and requires only basic math skills.
Stay on track: Making a budget plan will help you stay organized and keep track of your expenses.

A budget plan will help you stay on track and make sure that you are using the best payment type for your budget.

Making a budget is an easy way to save money. By following a few simple steps, you can keep track of your expenses and make sure that you are spending your money wisely.

Which type of payment is best for sticking to a budget?

One of the main pros of using cash as a method of payment is that it is the most efficient way to keep track of your finances. This is because it is very easy to budget when you are only dealing with cash.

However, many people prefer debit or credit cards are the best type of payment. They are more convenient than cash and can help you keep track of your spending. However, if you have a bad credit history or a low credit score, credit cards may not be the best option for you.

Cash payments are the most efficient: Most convenient and easiest to keep track with cash envelopes.
Credit cards allow you to accrue points along with your spending: These are a great benefit and one that can be a perk if handled well as part of your budgeting process. As long as pay them off in full each month to avoid credit card debt, high-interest rates, and other negative consequences.
Debit cards are also a good option for sticking to a budget. They can be used like credit cards but with less risk of debt.
Cash-based payments are a newer option and are more reliable: May not have as many negative consequences as other payment methods such as credit cards or loans.

What Not to Use when you are Trying to Stick to a Budget

You need to steer clear of these types of payments if you want to be financially stable person.

Personal loans

Personal loans are a risky way to budget. However, if you need the money for an emergency or unexpected expense, a personal loan can be a lifesaver.

There are many risks to consider and other ways to lower your spending before resorting to a personal loan.

Loans can cause budgeting problems: Loans can mess up your budget and make it difficult to stick to spending plans.
Taking out a personal loan just for the sake of having money can disrupt your budgeting: Consumers often borrow money in order to pretend they’re doing better financially than they really are.
Borrowing money is usually not a good idea: When you borrow money, you may find that you cannot handle seeing low checking account balance, which can lead to deeper debt problems.

Payday Loans

Payday loans are a bad option for someone looking for a long-term solution. They are expensive, and there is a high chance that the person will not be able to pay back the loan.

The interest that is charged is also high, and it can add up quickly.

Write bullet points about what happens with a payday loan

Payday loans can trap people in a cycle of debt, as they are often unable to pay back the loan in full on the due date.
When someone takes out a payday loan, they are borrowing money from a lender in a short amount of time, usually two or three days.
Payday loans are often expensive, with interest rates that can be above 300%.

Debt Consolidation Loans

Debt consolidation can be a good way to manage your debt because it can result in a lower monthly payment and extended payments may impact your financial plan. You can use a debt consolidation calculator to estimate how much debt you can afford before taking out a consolidation loan.

Debt consolidation loans also provide convenience because they have lower interest rates than payday loans. However, be careful when consolidating your debt because it is possible to overspend and lose your introductory APR.

You may be able to pay off your debt with one monthly payment: A consolidation loan often results in a much lower monthly payment than all of your previous monthly payments combined.
Extended payments may impact your financial plan: Take a look at how these extended payments will impact your financial planning.
You can estimate how much debt you can comfortably afford: use this tool – Tally .
It is possible to overspend with debt consolidation: If you spend more money than you planned on your day-to-day expenses, this could increase your debt. Consider if the purchase is necessary or if it can be delayed.
You may lose your introductory APR: If you fall more than 60 days behind on payments, you will likely lose your introductory APR and may even trigger a penalty interest rate.
You need to be careful when transferring a balance: Transferring a balance can also forfeit your grace period and you’ll need to pay interest on new purchases charged to the new card.

What type of payment method is best for sticking to a budget?

There are a variety of payment methods available, and each has its own benefits and drawbacks. It’s important to choose the payment method that’s best suited for your business and budget.

A payment method that allows you to stick to a budget is the best option.

FAQs

There are three main types of payment methods: cash, debit cards, credit cards, and cash-based payments.

The envelope budgeting method is a simple way to create a budget. You will need envelopes and divide your money up into the different categories that you spend money on. You will then put the corresponding amount of money into each envelope. This method can be helpful if you have a hard time sticking to a budget.

The zero-based budgeting method is a more methodical way to create a budget. With this method, you track every penny that you earn and spend. This can help you to see where your money is going and make adjustments accordingly.

A debit card is a plastic card that is linked to a checking account. Customers can spend money by drawing on funds they have already deposited. An overdraft on a debit card can lead to overdraft fees, which have high-interest rates.

A credit card is a plastic card that allows customers to borrow money up to a certain limit in order to purchase items or withdraw cash. Using a credit card can help build credit or improve your credit score.

There are a few different ways to use a credit card. You can use it to check your balance and review your spending history, which can be helpful in staying accountable.

Credit cards also offer online tools which make the analysis of your spending easier which can be helpful in tracking your budget.

Finally, you can use a credit card to rebuild your credit score by using it responsibly and paying off the balance in full each month.

Which payment type can help you stick to a budget?

When it comes to choosing a payment type that will help you stick to a budget, there is no one-size-fits-all solution.

The best payment method for you will depend on your specific needs and preferences.

When you are creating a budget, it is important to consider which payment type will help you stay on budget. Different payment types work better for different people, so it is important to experiment and find the one that works best for you.

As I stated for me, I have learned how to use credit cards to maximize cash back. But, I learned how to budget with cash when first starting.

Please pay attention to your budget and how it changes over time, as different payment types may work better at different stages of your life.

Consequently, I hope that this guide has given you a better understanding of the different payment types available and helped you narrow down your options. There are a variety of payment types that can help you stick to a budget, so it’s important to research each one carefully.

I highly recommend using an app to track your expenses and know where you spend your money. By developing a budget and choosing the right payment type, you can stick to your financial goals.

Source: moneybliss.org

WHY THEY NEED A BUDGET

HOW TO GET STARTED

Below are my tips on how to make a budget and creating a budget.

The positives of creating a budget.

Should a budget be electronic or on a piece of paper?

You MUST track your income and spending.

Budget category: Income.

Budget category: Expenses.

Keep your loved ones involved when creating a budget.

Make changes when/if needed when creating a budget.

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MY BUDGET JOURNEY

WHAT IS A BUDGET?

WHAT SHOULD BE INCLUDED IN A BUDGET?

HOW TO CREATE YOUR BUDGET

Step 1: Gather Necessary Papers

Step 2: Calculate Your Income

Step 3: Determine Fixed Expenses

Step 4: Calculate Discretionary Expenses

Step 5: Fill in the Numbers

FINE-TUNE YOUR BUDGET

WHAT TO DO ONCE YOU HAVE A BUDGET

HOW TO CREATE A SPENDING PLAN (OR REVERSE BUDGET)

1. Enter the pay period at the top of the form

2. Review your bank account to find your expenses

3. Now track your “leftover money”

5 Steps to Escaping a Timeshare

1. Checking the Rescission Period

2. Contacting the Timeshare Resort

3. Reselling The Timeshare Yourself

4. Reselling the Timeshare Through a Broker

5. Hiring a Timeshare Exit Company

The Takeaway

Here’s how to get rich– for anyone and at any age.

Don’t wait until tomorrow to learn how to get rich.

Be better than average if you want to learn how to get rich.

Give yourself great goals.

Create a realistic budget.

Realize that a good life can be affordable.

Pay off your debt if you want to learn how to get rich.

Start investing as one of the ways to get rich.

Start making more money.

Diversify your income streams to learn how to be rich.

Even the rich find ways to save money.

Stop trying to impress others.

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What is FI number?

Why Choose Financial independence?

How to calculate your FI number?

Option #1 – Using Yearly Spending

Option #2 – Using a Safe Withdrawal Rate of 4%

The Financial Independence Formula

Calculate Your Spending

Find Your FI Number

Determine Years to Financial Independence

How to FI – Create a Plan

Step #1 – Figure out Numbers

Step #2 – Pick a Realistic Date

Step #3 – Take Action to Enjoy Life

How to FI – Saving to Achieve Financial Independence

Step #1: Pay Off Debt

Step #2: Reduce Expenses

Step #3: Boost your income

Step #4: Invest Money

How to FI – Investing to Reach Financial Independence

Step#1: Make Investments Automatic

Step #2: Choose an Index Portfolio

Step #3: Track Your Progress

FI Number Calculator

Saving for Retirement or More Savings to Quit work?

How can you make your money work for you?

How to Make Your Money Work for You: The [Best Ways] to Grow Your Wealth.

#1 – Create Financial Goals

#2 – Develop Passive Income Streams

#3 – Plan for Each Dollar

#4 Pay Yourself First

#5 – Get Out of Debt

#6 – Start an online business

#7 – Invest in the stock market

#8 – Automate your finances