Credit card debt is often referred to as the worst type of debt, and I agree. However, we normally think of credit card debt as the debt that accrues from months of making only the minimum payment, and the high interest that follows. While that’s definitely credit card debt, there’s also a less obvious form of debt that easily results … Full Article
Many people assume that if they are not financial wizards, they should use a financial advisor. Another common assumption (especially among high income earners with little time) is that a financial advisor could manage their money more quickly or effectively than they can. I believe, for most people, using a financial advisor is not only unnecessary, but even detrimental to their financial future. Here’s why, and what you should do instead… Full Article
Employers often present themselves as caring, flexible, and understanding of difficult situations. They want you to think this in order to keep you “content enough” to stay. It’s easy for them to send out an email here and there, reminding you of their “flexible” vacation, sick leave, and maternity/paternity policies. They tell you to “be safe” during holidays and may even give you a small gift as a token of their appreciation… Full Article
Do you ever get to the end of the month and wonder where all your money has gone? Or do you feel like you can never find extra money to save each month? Often we spend money we don’t even realize. Sometimes I realize I’m spending money each month on things I don’t even care about. For example, there was a period of time in my life where I was spending a significant amount of money on new, expensive clothing… Full Article
Sometimes when I’m at work, I wonder what would happen if I quit my job today. This thought usually emerges when I’m asked to do unnecessary work to make some “important” metric appear better. Or after being involved in a series of email chains that could be better handled with a quick conversation, or a lengthy meeting that could have been handled in a quick email. Gotta love the inefficiencies of the corporate life… Full Article
Whether or not you agree with his stances, Dave Ramsey is very well known in the personal finance space. He has very outspoken opinions, some of which are controversial because he takes an extremely risk-adverse position on debt. I do consider myself relatively risk-averse, but I am okay with taking on small amounts of mitigated risk in order to grow my wealth more quickly. Dave Ramsey is most famous for his baby steps… Full Article
If losing weight was as simple as creating a diet and workout plan, everyone would be in shape. And let’s be honest, if financial independence was as simple as creating a budget, everyone would be retiring early. The difficult part is sticking to your plan. I firmly believe that the biggest barrier to financial independence is mindset. That’s why I … Full Article
In my previous post, I suggested an optimal order for investing your money. To summarize, the steps were: Create a monthly surplus Emergency fund (3 months) Set 401(k)/HSA contribution to minimum to receive full employer match Pay off debt above 5% Emergency fund (6-12 months) Max HSA Max Roth IRA Max 401(k) Consider other options (pay off low interest debt, … Full Article
Recently, I was filling out an application for a mortgage preapproval (I’m looking to buy my first house and eventual rental property). One of the application questions was “Please list your sources of income.” The question asked me to list sourceS (emphasis on the S) of income, and it had multiple (though optional) lines for my response. This simple question … Full Article
I’m sure you’ve heard the following financial advice: pay off debts, save an emergency fund, invest in stocks, contribute to a 401(k), contribute to an IRA, etc. But how do you know which to do when you don’t have enough money to do all of those things? And now that you’re saving at least 10% of your income, where should … Full Article
In previous posts, I have mentioned the idea of making sure your budget and spending aligns with your values. I don’t think this is a very intuitive concept, but it is extremely important to take your savings to the next level. So today I want to take a deeper dive into this topic with some personal examples of how I’ve … Full Article
After evaluating your spending history and committing to tracking your spending, the next step is to create a surplus. By this I mean, find a way to spend less than you earn. This step must be taken even before you start saving for an emergency fund or start investing. Skipping this step is like trying to fill a bucket with … Full Article
In my previous post, I talked about saving any extra money that shows up in your bank account (whether by an increase in income or an unexpected decrease in spending). Personally, I experienced some savings opportunities since I’ve had decreased spending lately with everything shut down. However, many people have lost their jobs. And with the threat of a recession … Full Article
I wonder if, years from now, COVID-19 will have a chapter titled in history books as an “unusual and unprecedented time.” Who else is tired of hearing that phrase? In all seriousness, COVID-19 is scary and terrible and my heart goes out to all who have lost their job or otherwise struggled. A disclaimer: I know that COVID-19 has caused … Full Article
Once you’re tracking your spending and saving money, it’s important to track your net worth. Your net worth is a measure of your financial health and indicates how close you are to financial independence. Net worth is simply all of your assets (things that have monetary value) minus your liabilities (money you owe to others). Basically, it’s a snapshot of your current financial worth, and is commonly how people measure their financial independence (or lack of)… Full Article
You may hear a lot of people talk about their credit score, and maybe even about wanting to improve them. Someone has probably advised you to “start building credit” at some point in your life. But why is it important, and what determines a credit score? Credit scores are basically your financial rating. It’s like your grade report for finances (and just when you thought you were done with school forever). Lenders, landlords, credit card companies, and insurance companies may pull your credit score… Full Article
Once you’ve thought about your “why” behind wanting to improve your financial position, it’s time to start taking action towards it. First things first: you need to evaluate your current spending habits. You can’t improve or achieve a goal if you don’t know where you’re at and where you’ve been. Tracking your spending is the #1 way you can start to improve your spending habits, because it shows you where your money is going and what you’re… Full Article
Recently I wrote a post about your “why,” or your reason for pursuing financial independence. I think sometimes it can be difficult to picture what money can empower people to do, so I wanted to give some concrete examples. A caveat before reading: I struggled with whether I should include celebrities at all in this list. Fame is not required to be wealthy, nor are celebrities always wealthy… Full Article
If you’ve found your way on this site, you are probably seeking a path to save money and build wealth. The first thing you need to ask yourself on your wealth-building journey is whether you really want it. You may roll your eyes and ask, Who wouldn’t want wealth? But I mean truly want it. For example, who wouldn’t want to be in good physical condition? It’s very possible and pretty straightforward. Yet, how many people are at their target weight? Full Article