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tips to budget

7 Tips On Budgeting for Big Purchases

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81% of people research big purchases before buying. For all investments, you should have a game plan.

Especially for big purchases such as:

  • House
  • Renovation
  • Car
  • Boat
  • Etc.

You want to make sure that you do not have outrageous interest rates. You also want to avoid paying on a loan for 84+ months.

The payments will be cheaper, but you will pay more interest.

In an ideal world, you would want to pay cash for all purchases, but you can’t, so at least make the least amount of payments and interest.

You can do this in two ways:

  1. Make a down payment, so you will have less to pay back.
  2. Get your credit score right and as high as possible to pay less interest.

This post can help you budget for your more significant expenses.

Let’s get started

Determine the Total Cost of Said Product

cost of product

Knowing the cost of a product and just buying it is a foolish way to purchase anything.

Sure, you can do that with a candy bar or even brunch, but you must know the cost of a house, car, boat, or renovation.

If you know the cost, you can adequately save for the product or get a good enough loan.

  • 51% of people plan on making a big purchase.

Look at more than just the ticket price; the regular maintenance cost, the taxes associated with the item, and repairs for when something breaks.

These are just some of the few extra costs when buying a product; do not forget about insurance.

If you sit down and focus on all the aspects of the cost, then there will be little to any surprise when buying such items. That’s why this is the first step and first item to investigate

Soo the best way to do this is to do your research before you buy an oversized purchases item, write down all the questions that you have and then search and find it or find an expert in that field and ask that person, for instance:

  • Car: Car edge, Autotempest, or CarGurus to look up details for that car
  • House: real estate agent and a CPA or Financial advisor for different costs when buying a home.
  • Renovation: Talk to a handyperson to help you estimate the cost of certain items most likely come up. So that you can see if it is something that you can handle or if you want to save for said repairs that will come

Break it down into smaller amounts.

break down to smaller amounts

Now that you have the cost of the product now, break it down into small parts. As we hinted before, looking at the expense of a heater going out, the price of a roof if insurance does not pay for it.

An oil change is priced differently for a Mercedes vs. a Toyota car. If the house is larger, the expenses will be more significant for you, from the cost of a roof to the cost of utilities.

Simply because it’s bigger, nobody thinks of these things when buying and finds out later after they have committed, and typically it is hard to back out of these contracts after you sign on the dotted line.

That’s why research is needed when buying these vast purchases.

Breaking down the amounts you must spend on such an object or item can help you understand the total purchase price.

Also, it gives you how much you need to save for such an item.

For instance, some people like to have an emergency fund for each house before buying a new home or an emergency fund for a car for the estimated expenses for that year.

With that amount saved up, you won’t have to worry about it when other costs pop up because they will.

Prioritize Your Spending

prioritize spending

You must understand where you spend your money to save for purchases or down payment. The best way to do that is by tracking it through an app, pen, paper, etc.

Yes, a budget

WAIT!!!

Please don’t drop off now.

Budgeting is a good thing.

Look at it as something other than a restraint; look at it as what it will allow you to do.

If you prioritize your spending and find out where you are spending your money, then you can.

If you need to know where your money is going, how will you know if you can afford that item or how can you save for that item if you don’t know how much you can save each month?

Until you have a clear picture of what you have, so look at you’re prioritizing your spending freedom. Because once you do that, you can spend within your boundaries confidently and afford those big purchases.

Create a separate savings account.

create a separate savings account

If you ignore everything else, then at least do this. I do this to this day. It will help you save because if you keep your money out of sight and mind. When you don’t see, you won’t spend.

If you have a job, then set up your payment so that you have a certain percentage go to your account that you do not have access to.

Preferably with a higher interest, such as an online bank account like an alley, etc. This offers a 3.40% rate; that way, you can gain some interest and save up for your purchase.

Creating a savings account can be critical. It helps you save for big purchases and can help you save and invest in general.

You can do that, and having your big purchases different from regular savings will help you track your progress and avoid dipping into that money for other purchases.

Cutback on other expenses

cutback on expenses

To buy big purchases, you must at least cut back on expenses, especially if you can’t find a way to make more money. As discussed earlier, please find a way to cut back and put that money into a separate savings account.

That’s where having a budget comes into place to find a way to eat out less and cook more or cancel subscriptions.

The last case scenario finds a way to make more money, which could be your first choice if you can’t find a way to save more money.

Earning has no limit.

If you can’t add income or cut back, wait until you can do those things before buying that big purchase.

Consider buying used

consider buying used

I know everybody wants the newest house, the newest car, or the newest gadget, whatever.

But buying used can be good, especially if you get a good brand and you can sometimes get it at a reasonable price too. Getting a used vehicle or an older house is good for you.

Why? Because you can get it for cheaper and it may last longer.

See if you can buy a used car or an older house vs. a brand-new one.

Conclusion

Buying big purchases can be daunting, but these tips can make the process easier for you.

Lets recap:

  • Determine the Cost of Said Product
  • Break it Down Into Smaller Amounts
  • Prioritize Your Spending
  • Create a Separate Savings Account
  • Cutback on Other Expenses
  • Consider Buying Used

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investing in your 20s

Why You Need To Invest In Your 20s

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Investing in your 20s is essential; a whopping 45% of millennials are waiting for regular times to invest for retirement. Waiting, in this case, is not a good thing because today, the Dow YTD is down -10% from a year ago (2021).

Which is saying everything is on sale

  • 10% car sale, you’ll buy the car
  • 10% clothing sale, you’ll buy the clothes
  • 10% sale on the iPhone, and you’ll buy the iPhone

All that to say, invest now.

Why should you invest in your 20s?

It’s essential to invest in your 20s because your future self will thank you. The earlier you invest, the better the compound interest will work for you.

Compound interest = the interest you earn on interest

Ex. If you have $100,000, it makes 8% each year. You’ll have $108,299 by the end of the year, and by the 20th year, you will have $492,680.

Now don’t you see why how important investing is?

Investing in your 20s can help you start pursuing your passion without needing money. 

Investing allows you to eventually quit that nagging job and spend more time with your family.

Investing early can allow you to have FU money and do anything you want with your family.

The only thing you must do is start! Here is Why!

BECAUSE TIME IS ON YOUR SIDE

Your 20s is the youngest you will ever be, and you have at least 50 years ahead of you.

This allows you the opportunity for your money to compound to extraordinary amounts. 

Even better, investing in your 20s will enable you to start with a modest amount of money vs. if you were in your 40s.

If you start investing $500 a month beginning at 25, you can have 1.7 million by 65.

If you start at 35, you will have $745K, which is a lot of money but not nearly how much you could have had beginning at 25.

So, get started now, even if it’s $100. Start with that, then build; how do you build?

Take a percentage of your pay raise or bonus, and invest a portion of it.

You can get a side hustle and invest all that money, especially if your primary job already pays for your current lifestyle.

Just find a way to invest now.

RETIRE EARLY

The average savings for those 55 – 65 is only $197,322, and the average for those over 65 is only $216,720.

That is a little money for someone in their 60s, who could live at least until their late 70s, 10+ years.

In 2021, the employment rate of the workforce of 55 years and older increased to 36.7%

Furthermore, the U.S Bureau of Labor statics projects that in 2024 – just two years from now – 13 million people aged 65 and older will still be working.

Now because you are reading this, there is a higher chance that you will not be retiring in your 60s but possibly a bit earlier.

Investing in your 20s will keep you from having to work to the retirement age of 65 and beyond. You’ll be able to set your retirement, which won’t be defined by age.

Your retirement will be determined by investing and living off the next 25 years+ of your life or depending on your lifestyle. You can implement the 4% rule.

Ex. Your lifestyle is good, around $50k a year, then 

$50k * 25 = $1.2 Million. 

With this, you can pull out $50k a year for the next 25 years while still having the remainder of your money compounding. That’s just with index funds.

You could get there faster with real estate, or you have both. (Get rents from real estate and have your index funds compound while only pulling out a small 4% or less).

The main point is that you want to invest early in your 20s to retire earlier. So, your retirement won’t be an age but a number in your account that you can live off.

The earlier you save, the faster you can get to that number. 

That way, you won’t be forced to work until you are 65 or more when you are supposed to be in your golden years and enjoying life.

ALLOWED TO TAKE RISKS AND MAKE MISTAKES 

When you invest in your 20s, whatever mistakes you make are more forgiving, and plus you are allowed to be a little bit riskier. For instance, you can invest in real estate, crypto, or induvial stocks.

Being in your 20s, you have less to lose vs. someone in their 40s who has a home and a family. They are less likely to take risks depending on your repopulates and age.

You can take the calculated risk because you will have a long runway of earning potential.

Keyword CALCULATED

Having the advantage of being young and investing allows you to put a small percentage of your cash and take on some investments that have more volatility but may produce more gains.

Even if you take the less risky route (index funds that track the S&P 500), you risk losing 35 – 50% of your investments. Do not let that scare you because you will be able to bounce back because of your runway and because you chose to start early.

You will be able to withstand those falls.

Just because you can take a higher risk does not mean you must take them. 

You can invest in an index fund that tracks the S&P 500 if you do not have a high-risk tolerance.

CONCLUSION

You have three reasons to invest early in your 20s.

  • Time is On Your Side
  • You Can Retire Ealier
  • You Can Take On More Risk

At the end of the day, you should be investing and multiplying your money at ANY age, especially if you are in your 20s.

You will give yourself the benefit of having time on your side and allowing it to work for you, doing so in your 20s before you have responsibilities and have too many excuses not to.

So START

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Best Free Budgeting Tools You can Use Right NOW

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Only 32 percent of U.S households prepare a monthly budget. 

I know you are thinking, So what is the point? What does this have to do with budgeting tools? see, not having a budget often means many people do not know where their money is going. 

56% of people in the U.S do not have $1,000 in their savings. 

See, only having $1,000 in savings is not a problem if you are just starting in the workforce, but it sucks if you are near retirement age. 

Now, don’t you see where the problem comes into play? 

No budget + No Planning = No retirement

Not having retirement savings means working longer than the retirement age of 67. Now, who wants to do that? Budgeting can help you retire early by using whatever excess money into investing in index funds or real estate. 

Budgeting can be daunting, stressful, embarrassing, and downright hard. With everybody trying to take a piece of your cash, I put together a list of budgeting tools that can help you for FREE! 

I have used a couple of these to help pay off over $11k in debt this year.  

Let’s Get it Started!!

Summary

  1. Pen and Paper
  2. Spreadsheet
  3. Budgeting Apps
  4. Conclusion

Pen and Paper 

Pen and Paperw

Everybody has pen and paper, which leaves you with. . .

No Excuses 

No Fancy Formulas

No Reason Why You Can’t Budget. 

Using pen and paper allows you to get to the bare basics, especially for those who are not technology savvy. 

Granted, with pen and paper, you must manually go through your financial statements to make sure you use this budgeting tool effectively.

It allows for mistakes, tedious, but it may be just what you need to get started and on track. 

A study showed that most people prefer to budget with pen and paper. 

There is a 12% increase in people budgeting more than in 2019, and most of those people prefer pen and paper over digital apps. 

You can also transfer what you have to your notepad on your phone. That way, you can always see where you are budget-wise. You won’t have an excuse since you put the budget into your phone, and your phone is always with you. 

The only problem with this way is that mistakes can be more frequent, especially if you have multiple banks and accounts that you have to look through. 

Spreadsheet

Spreadsheet

We have established that budgeting can be a drag and most people like to spend until they have no more money left and are back in the same boat as last month. 

We can take this budgeting thing a few steps further from pen and paper, which is good in case you have sloppy handwriting. It also helps if you are a little more knowledgeable about computers, formulas, etc.

Spreadsheets are more modern and more digital. 

It’s easier to keep up with, especially if you use notion, a great note-taking app. You can access it from your phone or desktop, and notion also has spreadsheet templates. 

If you have apple product(s), you can start your budget on one note and finish it or look through it on another app such as your mac or iPad. 

There are a few downsides, as I mentioned above. 

You still have to manually put your categories in the spreadsheet even if you decide to use templates. Most likely, you will not have every category you need, and you still have to make sure you stick to it and go through the process of going through your statements. 

Spreadsheets are better than pen and paper because you can neatly see where you have been spending money.

Hopefully, seeing that you will decide to change your life for the better, it did for me when I noticed I was spending $1500 a month on fast food over a few months, which was a gut punch.

Seeing enormous spending will make you want to get back on track and not spend so much in that area. 

Budgeting Apps 

Budgeting Apps

Now for those who are immersed in technology and have a tight handle on it. Then this will be for you. 

Budgeting tools are straightforward for you to use. 

Just attach your bank, loans, and credit card information. Then the app will sort it for you, at the very least, calculate your total spending. 

Budgeting apps may also put all of your transactions into a particular category for that month. Of course, there are a few apps that are not free. 

These are the two that are free and the ones that I use the most: 

Mint

Mint has a rating in Forbes as the best budgeting app and is worth strong consideration regarding budgeting.  

You will have to create your monthly budget. 

After creating your budget, if you have a high amount of spending for a particular category, then Mint will notify you.

The main thing with Mint is that it is made for you to budget; plus, it is free and easy. On top of that, you can download the app on your phone or tablet or log in through your desktop, which gives you no excuse as to why you can’t keep up with your finances. 

So for beginners, this is best for you; you have no idea what a budget is, and you don’t know what you spend each month. 

Mint thrives on that and helps you to focus on saving and paying off debt. 

Personal Capital

Personal Capital is free and mainly used for net worth tracking and retirement planning. It also tracks your spending and puts it in categories like Mint. 

As you can see, it is highly similar to Mint, but why should you use both? 

Personal Capital focuses on net worth and retirement planning. As you pay down your debt and save/invest more, you can watch your net worth grow. 

What is net worth? 

The short answer is Assets – Liabilities = Net worth.

(Assets) $100,000 – (Liabilities) $75,000 = $25,000 

$25k is your net worth in this scenario. The more liabilities you pay off, your net worth will be higher. 

Why is net worth Important?

Net worth is significant because the closer to whatever net worth you want, the closer to retirement you will be. Allowing you to stop working and do what you want in life. 

You could continue working if you genuinely enjoy what you are doing. But knowing you can leave any day and not be stressed about money is truly freeing. 

Even though personal capital is not as strong as Mint regarding budgeting, it will show you how your money is growing and what investments you have. While also showing you how much you are spending each month as well.

Which is the whole point, right? Taking the money you use to pay off the debt to invest is a faster way to grow your net worth than strictly saving. 

Especially if you don’t want to work until age 67.

Using both tools to track your spending and investments will make you debt-free and build wealth! 

Conclusion

No matter what you use:

  • Pen and Paper
  • Spreadsheet
  • Digital Tools
    • Mint
    • Personal Capital

You must budget and find the holes in your finances so you can use that money and invest. So you can potentially retire before 67.

Just find which one is right for you and get to work, because it is essential to budget no matter how much money you make. You do not want that money to slip through your hands, and you are in your golden years, having to work because you could not save and invest earlier in life. 

If these tips and apps helped you, please comment below and let me know. 

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saving money

5 Most Strategic Ways To Accelerate Your Savings Rate

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I have paid off $11,642 in debt so far this year. I know you are thinking, That is not much money, etc. or whatever lies you want to tell yourself. 

Because Americans under 35 have an average savings balance of $3,240, I think this is a step in the right direction for me. 

Now a few of you are wondering how? Well, read on, and I will tell you, I may even be able to help you do the same thing. 

Here are some strategies I used to save more money because I understand it can be challenging. It can be easy, but implementing it cannot be easy.

I want to help people build wealth, live a healthy lifestyle, and be great parents all at the same time.

Building wealth is easier if you make more money. That way, you can have the ability to invest more and invest in that business you have wanted to start so that you can potentially fire your boss.  

THREE THINGS TO DO BEFORE SAVING MONEY

FIRST STEP

We should set broad goals to understand what you want in the next 12 months, five years, and 20 years. 

  • Maybe you want extra beer money on Friday nights
  • Do you want to be a millionaire in 20 years?
  • Do you want extra money for family vacations? What do you want? Think about it and out it down.

SECOND STEP

This is essential to achieving financial success and saving money effectively, and that is by creating a straightforward personal budget. And monthly budget.

Creating the budget helped me pay off the debt because I saw where my money was going and could cut in the critical areas. You have heard this time and time again. I know you may not want to, but you should try it.

All of your monthly expenses and your total income are monthly. That way, you can see where the money is coming in and where it’s going out. If you’re not measuring and calculating your cash inflows and outflows, you will have many issues trying to save money.

If you don’t know what’s going on and you don’t know where that money is going. You don’t know how much money you’re spending on food and how much you’re spending on other various expenses in your life. It can pile up and get ahead of you. 

Budgeting is how I went from barely having anything to put towards my debt to putting at least $1000 a month towards my debt. 

THIRD STEP

Here is to create more specific goals. So you had those initial goals of where you wanted to stand financially some years ago. 

Now you want to set short-term goals. I want to take this and save $500 a month or maybe $100 a month, whatever you can afford. Maybe $1000 a month (Like Me) or perhaps $10,000 a month.

Budgeting is tough, and it depends on your income, and that’s understandable. So be realistic with yourself. You can’t save $1,000 a month on $30k a year; that’s almost impossible unless your expenses are $1,000 a month. 

So start with a small amount of $5 a day.

Maybe expand that as you go on; as you increase your income, you will be able to save money more efficiently. 

Quick Tip

One of my biggest and probably the main reasons I can put $1,000 a month towards debt is to take a percentage and save it automatically into an account where I can’t access the money. I also have automatic debt payments every month.

At the beginning of this year, I split my check into three separate accounts, one for bills (70%), one for saving/paying off debt (20%), and one for spending money (10%). 

As you can see, I live off between 70% and 80% of my income. Mainly because my income is higher than the average, I decided to stop being broke. 

Let’s dig into the five necessities that most people can cut back on.

Summary

FOOD

This is one of my favorite ones to cut back on. Granted, it’s tough because it’s one income with a family of 5. It’s also hard because I love to eat, another reason I am on a weight loss journey.

So cutting back on food costs can be effective. Here are a few ways that you can cut on food.  

  • Stop eating out so much.
  • Cook your food or at least try to cook one meal, so if you buy lunch, try to cook dinner or vice versa.
  • Consider buying off-brand products.

The reason I say consider buying off brand products from a store like Aldi is because it forces you to purchase none brand name foods. Surprisingly is good, so consider buying products that are not branded.

Store brand products can save you $50 a month, $100 a month, or more, depending on how much you spend on food.

Don’t cut back to the point where you are depriving yourself of nutrients. Make sure you’re getting good and healthy food in your body, which is essential now.

HEALTH

Health is essential. Not to be a clique, but health is wealth. Without health, you can’t spend the money you are saving or investing. You can’t do anything if you are stuck in a hospital bed.

The best way to help you health-wise is to do preventive maintenance. You are eating a balanced meal, working out, and taking time alone to relax and meditate (mental health). If you can keep your health intact, you may prevent yourself from paying high health bills, which America has the highest in the world.

Yes, things happen, and you can’t prevent certain things from happening to you. But I will say at least try to put yourself in the best position to keep your health intact. The three most important things you can do to try to save your body:

  • Eating healthy
  • Drink water mostly
  • Workout

If you continue to treat your body like crap, then maybe 20 years from now, you’ll be paying a high health bill because of the compound health problems. So make sure you address that and think about that in the future.

CLOTHING

This one is straightforward to cut back on. The best way to cut back on the cost of clothing is to buy once a year (which is what I do) or only buy when it is a necessary time to buy, such as:

  • After Major holidays
  • Back to School (September)
  • May(Memorial Day)
  • July
  • Black Friday

If you need to save money, you could go to thrift stores such as Goodwill, Ross, TJ Max, or Salvation Army if you need to go that route. There’s no shame in that, I have done it in the past, and I do it now, especially when I want a quick suite.

I will go there and get it tailored, which is reasonably cheap. I think it is an effective way to get decent clothes. Especially if you can find out when the drop days are for those stores. An extremely effective way to shop on a budget if you need to.

SHELTER

The next one is with shelter.

Sometimes where you are, the cost of shelter is challenging to cut out the cost.

Well, one way you can do it is to get a roommate or consider renting out a room in your home through something like Airbnb or Vrbo to cut the cost of living for yourself literally in half. Or possibly make some money.

Make sure that your apartment, HOA, or city will allow you to put your home up on Airbnb because some towns do not let you do that.

Another thing you can do is cut utility costs, and you can do this by finding another WiFi or electrical company which may have better rates than their competitors.

Just because you’ve been using the same provider for the past five years doesn’t mean you shouldn’t consider getting a different one.

Now, if there is only one provider in your area, ask for a discount.

TRANSPORTATION

Like housing, this one is tough to avoid, but the Bureau of Labor Statistics estimates that the average cost of operating and owning a vehicle is close. About $8500 per year. Owning and operating a car is expensive, especially if you’re raking many miles on it.

Different Transportation expenses:

  • Auto Insurance
  • Vehicle Expenses
  • Gas
  • New Tires
  • Oil Change
  • Etc.

Suppose you live in an area with some public transportation or even Uber. Do some calculations and see if it’s cheaper to take the metro or uber to work, or if you want to be extreme, bike to work.  

Of course, vehicles are difficult to avoid in rural areas like mine. It isn’t easy to have a vehicle. So at least try to get a reliable car brand and a brand that is known for having a good MPG.

Good Reliable Car Brands:

  • Kia
  • Hyundai
  • Toyota
  • Buick
  • Honda

CONCLUSION

Hopefully, I can give you some different ideas for saving money. Let’s go back through it; the best way to keep in these categories:

First, identify your goals, then you can:

  • Budget with food
  • Budget with Health
  • Budget with Shelter
  • Budget with Transportation
  • Budget with Clothing

This is what I am doing to help me get out of debt. I know some people will disagree with this. If that’s you, then make sure you comment below so I can hear your thoughts and learn from you.

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The Real Truth About Why You Need Life Insurance

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Quite frankly, I am tired of doing fish fries, cash apps, or seeing gofundme set up because that person did not have life insurance set up or did not have adequate life insurance set up, especially if they have a spouse or Kids or both.

There are many reasons why you need life insurance, and these are only five of them that I will point out. 

Summary:

  1. While You’re Healthy
  2. Your Kids Are Expensive
  3. Kids Education
  4. Your Spouse Living Expenses
  5. The Prevention of Fire Sales

What is Life Insurance

Before we get into the reasons, what is life insurance, for those who may not know.

In a nutshell, life insurance is a policy that the insurer and policy owner have together, where the insurer pays a set amount of money to the beneficiary or beneficiaries of the insured deceased. 

The insured beneficiaries receive this money because (like all insurance) they paid a monthly, quarterly, or yearly premium to the policyholder while the insured was alive.

To determine how much the insured must pay each month, that person must disclose any health conditions, current or past. Also, disclose any high-risk activities such as drinking excessively or smoking.  

Three Key Points

  • To keep your life insurance policy, the insured must pay a certain premium either monthly, quarterly, or one upfront price for the year.  
  • Life Insurance is a legally binding contract that pays the beneficiaries of the insured deceased. 
  • A permanent life insurance policy stays in place until the insured dies. Term Life insurance policy expires after a certain number of years; the insured stop paying the premium or cancels the policy.  

Two Types of Life Insurance

Term Life Insurance:  This insurance lasts a set number of years. The most common being 10, 20, or 30 years. 
  • Decreasing term
  • Convertible term 
  • Renewable term 
Permanent Life Insurance: This insurance is enforced for the entirety of the insured life unless the insured stop paying the fee or cancels the policy.
  • Whole Life 
  • Universal Life 
  • Index Universal 
  • Variable Universal

Plenty of life insurance policies can fit your needs, but the cheapest will always be getting insurance when you are healthy. Also, talk to your current insurance agent about the different policies that you could qualify for. 

Now let’s get why you NEED life insurance. 

WHILE YOU’RE HEALTHY

Having insurance ensures your insurability to your family. Meaning. . .

While you are healthy (mentally and physically), you ensure that you can get insurance for the cheap as well. While you can qualify for it. 

If something happens to you tomorrow in which you could not qualify for insurance at all, you could, at the minimum, have it now for any future events. 

YOUR KIDS ARE EXPENSIVE

If you have kids (3) like me, if nobody else, please do it for your kids. 

Children are crazy expensive. The USDA estimates that each child will cost an estimated $233,000. So, if you have one kid, $233k that’s quite a lot of money. I have three kids, and that’s almost pushing $700,000 in taking care of your kids up until 17. This does not include college. 

That does not include if your child is not healthy, for instance, down syndrome, autism, etc. You’ll want that money for someone to continue caring for your kids(s) when the inevitable happens. 

KIDS EDUCATION

Your kids, college education savings plan. 

Yes, we are talking about kids again, but in another aspect. Now, it doesn’t matter if you’re not saving, and you’re going to keep it up, or have you already started saving? This is a huge, huge goal. 

Inflation for schools is at 8%. This is lower than today’s inflation, which is currently (9.1%), but still high, so let’s examine some of these costs. So, if we’re looking at somebody born today (2022) and attending the University of North Carolina (out of state), it’s an excellent school. 

$36159 is how much money you will need yearly, and if we inflate that out, we’re looking at over $651,000. So, you need that life insurance just in case you do not have that money saved before passing away.

Look at that first year, 2040 for that year. The first year is keeping up with the inflation year, showing that the first year is $144,492 Cost vs. $36,159 currently. 

Resource: calculator.net.

As you can see, it continuously rises. So, this neat little calculator is taking the cost of actual colleges today—the price of colleges today and inflating them. 

The thing to understand is the rapid inflation of schools and saving for it. You want to ensure that gap is protected, so you might be doing everything right, saving for your kid’s college education, but that’s a massive expense. 

It almost just as much depends on where you go as it is to raise them, which immediately doubles the cost. 

Your SPOUSE’S Living Expenses 

Spouse living expenses. These expenses could change so drastically. But if you look at the spouses’ living expenses, whether one person works or it’s a dual-income household. 

Whatever the structure is, most people get comfortable and adapt to their current income lifestyle.

Whether we think we can adjust to the loss of a spouse, there’s a grieving period and adjustment, and those periods can be financially catastrophic.

The Prevention Of ‘Fire Sales’

To Prevent a fire sale, just in case of your untimely death. 

So, what’s a fire sale? We call it a fire sale because that asset must sell quickly, usually at a discount. Say, we are losing the support, and now we’re selling it for much less than it’s worth. 

Let’s say there is a debt payment, such as a mortgage, another debt on your house, or any other asset you own. If the beneficiary doesn’t have cash or doesn’t have access to money, they might lose the support you worked hard to pass along. 

To close this gap, you can look at life insurance specifically to pay off some of those debts, especially when linked to an asset you want to transfer. 

In Conclusion

You may need life insurance for many different reasons, and it could take on different meanings for you and cover other things over time. 

Bottom line, look at your life insurance coverage. Make sure it’s enough. If you’ve enjoyed this article and it has brought value, subscribe and leave your comments at the bottom. 

6 WAYS TO SPEND YOUR TAX REFUND EFFECTIVELY

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I know that some of you who are reading this article expect tax refunds either as a check or a direct deposit. I hope I can give you some good tips for using your tax refund better. 

A tax refund check can make a massive difference in helping you achieve your financial goals and improve your finances. Let’s talk about my six tips/suggestions to help you spend your tax refund check wisely. I know some of you don’t like telling anybody what to do with your money. Remember, these are just tips.

BUT

If you want to go out and blow your money on a pink giraffe, then so be it do your thing.

In This Article:

  1. Pay Off High-Interest Debt
  2. Bulk Up Savings
  3. Invest in Stock Market
  4. Catch Up On Retirement Savings
  5. Finance A Goal
  6. Improve Your Personal Development

1. Pay Off High-interest debt

Use your tax refund check to pay off your high-interest debt. Using your check to pay off your debt can accelerate how quickly you’re able to pay off your debt. It can take months off of your debt repayment plan.

Wouldn’t that be great if you could speed up the time in which you’re able to pay off your debt? That would be awesome.

When people get these refund checks, they’re telling themselves I worked so hard last year I deserve an expensive vacation. I want to buy that handbag or get that dress.

However, you want to think about the big picture of your finances than spending that money on that vacation.

That dress will not get you closer to your debt freedom. I recommend you use some of that money to pay off your debt and get closer to debt freedom.

Think about it this way.

Once you pay off your high-interest debt and are debt-free, you will free up money to put towards the things you want to do, like a vacation. The shopping spree will also be guilt-free.

2. bulk up savings

You can use your tax refund to bulk up your emergency savings, which is extremely important.

The importance of having these emergency savings in place is to weather the storm so that if an unplanned situation or circumstance comes up, it doesn’t completely derail your financial goals because you have money to take care of it.

You won’t have to go out and get more debts to pay for whatever underlying circumstance. So, for instance, you lose your job and have a previous medical expense, or your car breaks down.

These are all situations where you’ll need money to take care of to help you get by. The last thing you want to do is set yourself back naturally by leveraging debt to take care of that situation.

If you have an emergency fund, you can use your saved money to take care of the situation without throwing off your financial goals. Using your tax refund to bulk up your emergency fund is an excellent idea.

3. invest in the stock market

The next tip, which is the obvious tip here, is to invest in the stock market.

If you have been considering investing in the stock market, your tax refund check can help you get started.

You can open an account at a major brokerage firm such as TD Ameritrade.

Start investing in things like index funds or ETFs it helps you build long-term growth outside of your retirement plan.

It’s essential that before you get into investing, you spend some time researching to make sure you have a basic understanding of what you’re putting money into. Getting started with investing is a great way to use your refund check.

4. catch up on retirement savings

The next tip on our list for your refund check is to catch up on your retirement savings.

If you have not quite maxed out your retirement savings for the year, you can take that money and put it in a ROTH IRA. Or towards your company’s 401k retirement savings. Your future self will be proud of you.

5. finance a goal

Another recommendation is to put that refund check towards a short-term or a mid-term goal.

Suppose you’ve been thinking about starting a business, thinking about saving for a down payment on a house, or thinking of saving up to buy a car.

Then your refund check may help you accelerate your short-term or mid-term financial goals.

6. improve your personal development

Lastly, you may want to invest in your personal development and give back to others, so no knowledge is lost. I am a firm believer that you should always keep learning.

You always want to keep improving yourself the day you stop learning, in my opinion, is the day you stop living, so invest in your personal development. It is a worthwhile investment. It will be wise to invest in something to help you improve your skillset to get a better-paying job.

You can invest in something to help you learn about starting a business. You can invest in helping you improve your finances. There are many things you can do to invest in your personal development. Even investing in a few books/audiobooks on topics you’re interested in can help you improve your personal development.

Conclusion

Bonus tip, if you have enough bread saved up and make good money, you could give back to others through charity.

You can give to a worthwhile cause that you’re highly passionate about. There is so much reward in giving back to others and helping other people.

So I hope you all have enjoyed reading this article, and I hope my tips and suggestions help you with what to do with your tax refund.

The last thing you want is to have that money slip through your fingers and not be accounted for.

You don’t want that; you want to put the money you work hard for towards something that’ll be worthwhile. I hope you all have enjoyed reading this article, and if you enjoy finance-related content, please subscribe.

If you want to add to this list or feel a few tips should not be on this list, comment below and let me know.  

5 Side Hustles That Can Earn You Extra Income

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According to bankrate, 45% of people in the USA report having a side hustle which is about 70 million people.

On top of that over 50% of them of those people are millennials (born 1981 -1996)

With that being said, why are people doing these side hustles, well according to Side Hustle Nation, it comes down to one thing PERSONAL FREEDOM.

Hence comes my story, I have been side hustling since before college, but it picked up the most for me in college because I wanted money and I wanted it bad. I mean what broke college kid don’t want money HAHA.

So my first one for college was cutting hair and occasionally shaping up ladies’ eyebrows. I made a few $100 dollars a weekend which was enough for me to gas my car, buy my lady something nice, and eat something instead of cafe food YUCK!

Fast forward to my adult life, my main side hustles were delivering groceries for Shipt and flipping items on eBay! Because those side hustles are common I won’t be speaking on them.

Below we will speak on the most uncommon side hustle but can really make money though, letss go!!

TRASH HAULING

Trash Hauling Yes, seriously, trash hauling can make you a serious bank as a side hustle. If you have a truck to haul trash, you can make about $58 an hour, and if you work an 8-hour day.

You can make $464 a day which is about $2,320 a WEEK, which is about $116,000 a year! not including taxes and expenses. If you are down bad and need extra cash, then trash hauling could be for you until you get back on your feet. 

Tree Trimming/Removal

This side hustle I think this is something many people don’t think much about. I have a couple of friends who do this now and make more than a lot of engineers.

You can make about $33,000 a year being the average price (depending on the size of the tree, of course). Truck, Chain Saw, and Trimmers are what will be required here. That’s not bad for a side gig.

Laundry Services

No, not a laundromat but doing other people’s laundry. I wish someone would do my laundry; it is challenging with a family of 5.

It takes about three days to wash and about a week or two to fold up, lol (I’m partially kidding). Drive around, collect laundry, do it at a laundromat, and deliver it. Granted, the most I see you can make is about $15 an hour; is this side hustle worth it? That’s up to you.  

Gutter cleaning 

Another one that requires some elbow grease, but it is easy, but a dirty, dirty job, but the most you need is a ladder and a bucket really, you can make between $25 – $50 an hour for sure.  Beggars can’t be choosers here. . .

Landscaping 

Finally, another elbow grease and hard-working job. I used to go door to door and do this for $20 a yard as a boy (yeah, they got me for cheap). These days I see you can make between $200 – $600 a day.

Depending on how many people on your team, how many clients you have, and how many you can do weekly. Do you know why it pays so much? Because Nobody wants to do it, hence that’s where the bread is at.

With all of these Jobs, you HAVE to WORK HARD!!!, SHOW UP ON TIME!!!, and HONE YOUR SKILL Till PERFECTION!!! There is no way around it. I didn’t say these were easy side hustles, but if done right and with small startup costs, you can have the potential upside if you work hard! I hope this helps.  

If you have any side hustles that I missed or that you want to share, please comment below!

5 Investing Mistakes You Could Be Making Right Now

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Ok, let me get this out there investing mistakes are invetiable but they are easier to avoid if you see what mistakes others have made.

Investing sounds scary to many millennials that I know. Of course, with the 08 recession, many people were spooked.

If you do not want to work until you are 65, then getting rid of bad debt and investing is a MUST.

Of course, you don’t want to go into it blind, so here are a few investing mistakes to look out for before you start or to stop making if you are investing. Let’s get it started. 

Fear

Fear of starting, yes, you have read about people making money in the stock market, you have seen the greats make money in the stock market, Warren Buffet, Phillip Fisher, Benjamin Graham, Peter Lynch, and many others.

Yet, you still have not jumped in the game; why? Yes, you are scared you are going to lose your shirt.

I say this start $5 a day is all it takes to change your life! You may think that you do not have $5 a day, or it is not enough; trust me, you spend at least $10 for lunch today; $ 5 a day will not hurt you.

If it does, find a way to increase your income. . .and get started!!! From 30 – 65, $5 a day or $152 a month on average will set you up for at least $400k+ at a 9% interest, just something to think about.

Timing the Market

The next mistake you are making is trying to time the market, buying, then turning right back around selling, thinking that the price could not go any higher.

Still, BAM, it goes higher, and there you go regretting jumping out or waiting to jump into the market until the next crash or until the next blue moon or whatever comes first.

Only to miss the gains before the “Crash” or whatever excuse you give yourself, stop trying to time the market and buy and hold, sure it takes a while to see gains.

Still, I have found that buying and holding is the BEST way to make money when investing.

To be honest, most people will not be able to time the market accurately and consistently, and that is a fact.  

Not Investing

Not investing at all is a big mistake many people are making.

Especially young people, you could be missing hundreds of thousands of dollars by not investing, especially while you are younger in your 20s.

The longer you invest, the more your money can make you more money, which is a HUGE advantage when investing. 

Not Taking Advantage of Company Stock 

I almost made the mistake of not taking advantage of your 401k Employer match. In my first job out of college, around the first week.

An older gentleman asked me if I knew about the company 401k matching 50% of the first 8% invested, which is 12% in total.

I told him of course, but I will get to it when I can

He stopped me right there, took me to our 401k settings, and made me take out 8% to invest into my 401k.

I have been investing ever since. It will save you A LOT on taxes in the long term.

The average wage in 2019 was $51,916, and 12% of that is $6,229 at a 9% return for 30+ years will end up being $830K+ at the end of your working life.

You will not be a millionaire, but you will be able to change your kids’ life.

If you do not have kids, that is better than having nothing to retire on, especially with the average retirement savings at 65 being $206k.

Investing in What You Do Not Understand

Listening to someone else investment strategy without understanding what that investment is.

Your goals might be different than theirs; you may not be able to take that type of risk.

Most importantly, you should only invest in stocks and businesses that you utterly understand.

You should make sure YOU are responsible for what stocks, real estate, or business you invest in.

Do your research, and make logical decisions based on your goals and dreams. For instance, I invest in dividend stocks and ETFs, and someone else may say I am too young to be doing that, find growth stocks to get into.

They do not know the goals that I am going to achieve. Always invest for yourself! If you are making smart investments for yourself.  

I hope these investing mistakes help you, somebody once said to me , “A fool learns from his mistakes but a wise man learns from the mistakes of others”

If you like this post or have any other investing mistakes, please comment below! I would love to read about it!

5 Ways To Spend Less Money

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Having a family of five with one income is extremely tough. Sometimes it is hard to spend less.

Especially with convenience at every turn, and telling the kids no is no easy task either, lol.

After a while, you have to find a way, so let us get into my five ways to spend less money. 

Write Out a Grocery List Before Going to the Grocery Store 

I won’t tell you how many times I went to the grocery store to get XYZ and promised myself that I would get what I needed.

Of course, I ended up leaving with all ten items from under the for sale sign or, better yet, “let’s just take a walk down the clearance aisle” it’s for clearance; I’ll “save on money.”

When I started making a list, I got what was on my list and walked out. It’s hard at first, but after you decide to find a way to spend less, you make the change too.  

Stop Spending Money on Alcohol and Tobacco! 

The average American smoker spends $2,292 a year!!

That’s a whole extra mortgage or rent payment for some parts of the country. According to the Bureau of Labor Statistics, Americans spend about 1% of their income on alcohol (I’m convinced it’s more than that).

At least for me, it was; I decided not to buy alcohol at all, especially not at bars or clubs.

It has saved me a lot of money and forced me to be the DD, so saving my friends money on a rideshare company. 

Track Your Expenses 

Yes, I get it who has time to track expenses.

You must keep track of what you spend if you want to spend less money. When I was checking my mint account, I saw that I spent $1,500 on fast food for that month!! I knew I spent a lot on food but not that much.

Since then, I have constantly checked my Mint account daily, even if I didn’t pay anything.

As Robin Sharm once said, “What gets measured gets improved” that goes for everything, especially finances.  

Buy Generic (If you can) 

Usually, the difference between generic and the “name brand” is the label.

Sometimes, both are made in the same factory.

Granted, this won’t make you a millionaire, but this post is not about becoming a millionaire.

It’s about a millionaire habit, aka spending less money, and sometimes buying generic is cheaper and taste just as good.  

Pay Everything On Time 

One of the things I hate most in this world is wasting my money on late fees; geez!

That $25 late fee or $30 reconnection fee is just a drag and can be avoided sometimes.

I finally was able to stop doing this by having a month’s worth of bills in our family bills account and having all of our bills come out automatically so that I won’t get that stinking fee again. 

Yes, I get it, most people don’t have $1,000 in their checking account. A good way to pay your bills are to have them scheduled. Not automatic but a weekly reminder or bi-weekly remainder.

That way you will at least check to make sure you are not late.

I hope these tips help you spend less money, if you have any tips or tricks please comment below!