Here are some savvy financial tips to consider and some insights on how you can implement some lasting positive changes to your financial situation. Including a suggestion to take an alternative view on reaching your goals, why you need to analyze your monthly costs, plus some tips that should help you keep more of your cash.

Think small to improve the bigger picture

It’s easy to adopt the mindset that paying an extra $30 or so extra toward your credit card debt payments is hardly worth the bother and won’t really make much of a difference.

It is perfectly understandable that you look at the balance and think how can I clear the debt in one go? But it often pays to take an alternative approach to clearing your debts and adding to your savings pot.

Those seemingly insignificant additional payments actually make a substantial difference to reaching your goals and rather than keep wondering how you are going to raise a chunk of cash in one go, start chipping away at your balances with these small additional sums of money.

It is a good strategy to think small as those extra payments will ultimately get you to where you want to be a lot quicker than if you keep holding back trying to raise enough cash to make what you might consider a meaningful contribution.

When you are committed to clearing debt and putting more toward your savings, don’t try to do it all almost immediately, make regular additional payments when you can and also try to make small changes to your finances to help you free up extra cash.

Where are you overspending?

It is essential that you revisit your budget on a regular basis and review what you are spending your money on to see if you can get a better deal elsewhere or cut out the expense altogether if it is not something you really need or even actually want.

Take a look at all your monthly expenses and do some research such as working out which is the best car to get for your needs and whether you can improve on the deal that you are currently paying.

Pay close attention to every amount that depletes your bank balance each month. Many of us can find magazine subscriptions that you no longer want and gym membership you don’t use anymore can still be going out of your bank every month.

Check your monthly payments regularly and cancel anything you no longer need or use.

Take the cash test

Handing over your credit or charge card doesn’t feel like you are spending real money and this can make you immune to the actual level of your spending, which is probably higher than it would be if you were paying by cash instead.

You will almost certainly discover you are much more cautious when buying your groceries or shopping for clothes with cash, having left your cards at home.

Try taking an amount of cash out of your bank for the week and keep your cards away from temptation when you go shopping. Taking the cash test should see you become much more aware of the value of the money you are spending and it can often help you change your habits for the better.

Keep track of spending

Another good discipline to get into is to write down all the purchases you make.

Seeing what you are spending in black and white in front of you often creates a heightened sense of awareness and is another good trick for reining in your spending.

If you don’t want to write the details down manually there are a number of useful apps that make it easy to track your spending on your smartphone.

If you can introduce a greater awareness of where all your money goes there is a good chance that you will spend less of it on frivolous items, giving you more cash towards your debt repayment and savings goals.

Take a moment to decide

Another useful trick that can improve your finances is to give yourself some breathing space before you commit to a purchase outside of your normal weekly spending.

There are a number of people who tend to buy things on impulse, even including high-value items like cars as well as clothes and gadgets, only to wish they had thought about it before going ahead.

Learn to take a raincheck on those financial decisions. If you still feel you want it after giving yourself some time to think it over, fair enough. But there will definitely be times where that initial excitement fades and you are glad you didn’t rush in to spend the money.

If you try some of the savvy tactics with your money management it could make all the difference to your financial situation.

Nathan Cartwright is an ordinary guy who changed his financial life around 4 years ago. He now shares his tips and money-thoughts online with his articles helping others to take control.

Smart Money Moves: Little Changes to Make a Big Difference in Your Finances is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

New Year’s resolutions can be difficult to keep, as anyone who has tried to spend January losing weight, saving money or doing some other type of self improvement knows. Too often, the resolution is thrown to the side by February, and that includes financial resolutions.

With a late start being better than no start at all, I’m starting February with three financial resolutions that I hope to keep on track. These go beyond my resolution to lose weight, which I started in October 2015 after getting the idea that an early resolution might help motivate me. So far, not much, but I’m working on it.

After losing weight and getting organized, spending less and saving more was the third most popular resolution in 2015, according to the Statistic Brain Research Institute. Forty-six percent got past six months, which gives me some hope.

Here are three financial resolutions I’m working on immediately in 2016:

Find a better business checking account

I accept payment in various ways as a freelance writer and editor, and as owner of three other websites, and I’ve been mostly happy with my business banking account. PayPal works great, but I’m never thrilled with the fees they take out of the payments I receive.

I also have direct deposit from a few clients, which I think is the best solution for both sides. For others, I accept checks, and taking a photo of a check on my phone and depositing it via my banking app is swift.

The problem is with the checking account that I keep my business income and expenses in. When I first started freelancing as an independent contractor, an accountant recommended having a separate account from my family’s checking account. I quickly set one up, but a few years into it my bank changed the requirements for having a free account.

After initially only having to make a few debit card payments through my business account so that I wouldn’t be charged bank fees, the bank eliminated that benefit and required me to spend at least $250 a month with its credit card to avoid a $16 per month account maintenance fee.

I realize that $16 per month isn’t much, but I hate paying any fee for a service that should be free. After all, they have my money all year to profit off of in other ways, such as using it to make loans to others.

I have the bank’s credit card for my business — which is another step my accountant recommended — but spending $250 per month on it is sometimes difficult for my business. I don’t always get there, and face a $16 fee from time to time.

My goal this year is to move my business checking account to a bank, credit union, online bank or anyplace that’s safe and doesn’t charge me a monthly fee. It may be a little difficult to find, but I expect I’ll get there. My current bank will not only lose my business account, but income from my business credit card.

With that change, I’ll need to find a new business credit card, which might be a blessing in disguise. It could allow me to collect more rewards points for hotel stays — something my family already does on most purchases while paying the credit card bill in full each month.

Never pay credit card interest

My financial resolutions are overlapping a bit here, which is a good thing and might make accomplishing them easier. This second resolution ties in some with the first. If I can find a better bank for my business account, I should be able to get a better business credit card.

One of my goals with my credit cards is to never pay interest on them. As I mentioned above, my family uses one card for most daily purchases, and then we pay the bill in full when the statement comes due.

By doing this, we’ve saved a lot of rewards points. Last year, we spent almost a week of our summer vacation without paying for a hotel room because our rewards points paid for it.

But every once in awhile a monthly fee creeps in. I’m either late by a few days making the full credit card payment, or we spent more than we planned to and couldn’t afford the entire bill one month. While this is a rarity, my goal is to not have it happen at all in 2016. Among my financial resolutions, this one costs a lot less than paying an occasional monthly fee on a business checking account. But every dollar counts.

Automate my retirement fund

One of my main financial goals in 2015 was to automate our savings account by making monthly deposits. This automation added up to thousands of dollars saved, and was mostly invisible to us.

The account, unfortunately, isn’t as clean as I’d like it to be, and is a mishmash of saving for emergencies, property taxes, income tax payments and vacations. Earmarking that money in separate accounts is a task for another day of financial resolutions.

I used to automate deposits to my retirement account, but as a freelancer my income varies from month to month, and I found that big transfer to be problematic at the end of the month when money is tight.

My goal this year is to go back to automating my retirement fund by making smaller contributions twice a month. It’s something I’ll still have to keep an eye on and make sure I have enough money in my business account to make the transfer, but I think that’s a better plan than hoping I’ll remember to make a monthly contribution.

One way I’ve funded it in the past is to earmark income from one source — such as residuals from my past work at AOL — to go to my retirement account. But AOL is no longer accepting freelance work (though I do get an occasional direct deposit for past stories of mine that people click on), so I’m trying to find a steady client to take that space in my financial cubbyholes.

Last year I got lucky and got income from a big client for a project, and split the money from it to pay my income taxes for the year and make a big contribution to my SEP IRA.

This year I’m going to automate it, figuring that if such a windfall does come again, I can then decide what to do with it.

What are your financial resolutions?

Those are my financial resolutions for 2016. I’m sure I could come up with plenty more to keep me busy.

But too many financial resolutions, I worry, could keep me so busy that I may not complete any of them. These three should keep me on my toes.

What are your financial resolutions for 2016?

This article by Aaron Crowe first appeared on CashSmarter.com and was distributed by the Personal Finance Syndication Network.

Source

3 Financial Resolutions I’m Getting a Late Start On is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

After talking to financial experts and others who have either experienced or seen other people make the worst financial mistakes of their lives, we compiled the following list of 25 of them. Many are common after graduating from college and starting a financial life on your own, but they can still happen to anyone at any age.

We should also note that these worst financial mistakes aren’t listed in any order. We’ll leave measuring their importance to you:

25 Worst Financial Mistakes

1. Not going to college

The average starting salary for a high school graduate is about $28,000. That figure almost doubles to $48,127 for college graduates in the class of 2014 with bachelor’s degrees, according to a salary survey by National Association of Colleges and Employers. Starting your working life by being that far behind in pay is one of the worst financial mistakes you can make.

2. Not paying off student loans fast

The average student loan debt for a college graduate is $28,400, according to the Institute for College Access and Success.

For a college grad who is earning some real money after four or more years of living like a student, it can be tempting to spend much of their new income before paying off debt. That’s one of the worst financial mistakes a graduate can make, says Alfred Poor, a college speaker and author of books about problems young people are having in the workplace.

“If college graduates tighten their belts and lower their expectations, and live like they only have the high school diploma, they will rapidly pay off their average $27,000 in student loans,” Poor says. “If they spend their whole salary on a more comfortable lifestyle, they could be struggling to pay off that debt for decades, and end up paying much more in interest.”

3. Paying off student loans too quickly

Paying off student loans quickly can also have a downside, says Steven Fox, a financial planner in San Diego with NextGenFinancialPlanning.com. If they use all of their extra income paying off student loans, they could be in financial trouble if they don’t put some in an emergency fund and lose their job or get in a car accident and have unexpected medical expenses, Fox says.

“They should really think about whether they should pay off their student loans as fast as they possibly can once they get their first job if it means that they’re doing so at the expense of not saving or investing anything,” he says. “Ending up with zero debt is good, but ending up with zero savings is very bad.”

An emergency could lead to borrowing money at a higher rate than what they were paying on student loans, says Fox, who reminds graduates that student loan interest is tax deductible for up to $2,500 for individuals making $80,000 or less without having to itemize.

4. Using max credit card limit

“Just because a bank offers you a credit card that allows you to spend money doesn’t mean you should,” Fox says.

This goes for all debt, he says. Being approved for a $20,000 auto loan doesn’t mean your budget for a car is $20,000.

“That money needs to be repaid,” Fox says, “and you are paying a very high cost to borrow it at this stage in life. Spending should be determined by a well thought out budget, not by the size of the line of credit.”

5. Living beyond your means with credit

Building an expensive lifestyle for yourself early in life is possible with credit cards, and is one of the worst financial mistakes anyone can make, says Matt Becker, a fee-only financial planner and founder of Mom and Dad Money.

“That debt will make it a lot harder to pursue exciting opportunities later on, and may even force you to stay in a job you hate just so you can make the payments,” Becker says.

6. Not having health insurance

Young people may think they’re invincible, but unexpected tragedies like a car accident can happen, causing a large financial setback early in life and leading to financial mistakes, Fox says.

Health insurance options for college-age students include staying on their parents’ health insurance until age 26, signing up for their school’s health program, or buying low-cost catastrophic coverage from commercial carriers.

7. Choosing money over mission

We all want to make money, and it’s hard to tell someone to turn down a bigger paycheck, Becker says.

“But you will find much more fulfillment from a job with a mission you believe in than one that simply pays a lot,” he says. “Make sure you’re paid what you’re worth, but don’t forget to make your work meaningful.”

8. Waiting to invest

After spending your first paycheck on something fun, set aside part of your next paycheck for investing, Becker recommends.

“The sooner you start investing, the sooner you’ll be able to say goodbye to that job forever,” he says. “And if your employer offers a 401(k) match, contribute at least enough to get that full match. That’s free money!”

9. Paying credit card bill late

Not making credit card payments on time can be one of the worst financial mistakes anyone can make, says Peter Creedon, chief executive officer at Crystal Brook Advisors.

Credit card companies can bump up interest rates to as high as 36 percent to late-paying customers, Creedon says. Pay your credit card bills in full each month to avoid interest charges.

10. Consolidating credit card balances

Know how your credit card company is going to categorize how your credit card balance consolidation is rolled over, otherwise you might be in for one of the worst financial mistakes ever, Creedon recommends.

“Some companies consider it a cash advance and assessed a slightly higher interest rate and put the amount behind the cards’ balance so the amount takes longer to pay off,” he says.

Develop a cash reserve of at least three months so you won’t have to take on more credit card debt, he says. “Become the bank and pay yourself instead of paying everyone else,” Creedon says.

11. Not asking your parents to cosign a loan

Many young people don’t have a long enough credit history to qualify for a car loan or first home purchase on their own, leading to one of the bigger financial mistakes, says Danna Jacobs, founding partner at Legacy Care Wealth.

Financially strong, mature young professionals with good relationships with their parents should avoid one of the worst financial mistakes in life by not asking their parents to cosign a loan because they want to maintain their independence, Jacobs says. Without their parents as cosigners, they’re missing out on an opportunity, she says, noting that only “financially strong, mature, young professionals” should do this.

12. Not asking for a raise early

Not asking for a raise, promotion or increased responsibility because you only have a short tenure at a firm is one of the worst financial mistakes you can make, Jacobs says.

“You may not get it this time, but when coupled with strong performance, it can increase the rate at which you would be bumped up to the next level,” she says.

13. Not recognizing investment bubbles

Figuring out when to enter and exit the stock market is something even experts have difficulty doing. Guy Smith, a marketing consultant in San Jose, Calif., says among the worst financial mistakes to make, his was not recognizing investment bubbles and therefore cheating himself out of an early retirement.

“I remember the Christmas before the (tech) bubble burst, my Uncle Bob said he had sold all his stock,” Smith says. “He being a savvy businessman, I wanted to know why he bailed. His advice was simple: ‘When you see a lot of people doing a stupid thing, run the other way.’ Had I exited when Uncle Bob did, I would have had $100,000 in cash in my pocket.”

Smith also didn’t act on the housing bubble. He bought a rental home in Florida for $100,000 that doubled in value seven years later. His long-term strategy for the house was to own a home paid for by someone else, so he held on to it. The value dropped and he didn’t sell at the peak for a $100,000 profit.

14. Buying new

Everything depreciates, especially cars, says Rick Sellano, owner of the writing service My Ink Shines. Buying new is one of the worst financial mistakes anyone can make, Sellano says.

He recommends buying used cars with low mileage, gently used furniture and other used items to save money throughout your life.

15. Focusing only on the present

Among the worst financial mistakes to make in life, focusing exclusively on the present is the worst, says John Vespasian, the author of seven books about rational living.

“If you fail to think long-term, you will render yourself blind to the best opportunities,” Vespasian says. “You will waste your money on foolish purchases. You will destroy your motivation to learn complex subjects. And you will surround yourself with the kind of people who are also incapable of thinking long-term.”

“People who focus exclusively on the short term tend to make incredibly stupid financial decisions,” he says. “In doing so, they subject themselves to high stress and anxiety that could have been easily avoided. A man who lacks a long-term perspective in his life will never be able to save money consistently, nor to spend it wisely.”

“Our society places a disproportionate emphasis on purchase that delivery little or zero long-term value. Few people take the trouble to acquire the discipline to think in terms of a lifetime. If you can see yourself living to become 100 years old, and realize what that means in terms of financial foresight, you will avoid making foolish financial mistakes.”

16. Focusing on monthly car payment

A common sales tactic at car dealerships is to get buyers to a monthly payment they’re comfortable with. Many buyers go in with a set amount they’d like to pay every month, and are happy to share that figure with the salesperson, says Jeannine Fallon, executive director of corporate communications at Edmunds.com. That can lead to one of the worst financial mistakes they can make as a car shopper, according to Edmunds.com.

“When you do that, you’re not actually talking about the total price of the car,” says Edmunds.com senior consumer advice editor Phil Reed. “You also need to take into consideration the interest rate, as well as the length of the loan.”

The dealer may suggest a longer loan so the car fits in your budget, but a longer loan also means you pay more in interest.

17. Not having renter’s insurance

Focusing on the present, however, can be important. Not having renter’s insurance was one of the worst financial mistakes that Eric Narcisco, CEO of EffectiveCoverage.com, made when he was young.

“After college, when I was living in an apartment in Jersey City, I came home from work one day to find everything I owned lost to a fire that my neighbor had started,” Narcisco says. “I didn’t have much at the time, but since I was just out of college I didn’t have much money to replace those things, either.

“I had convinced myself that I didn’t need renters insurance because I didn’t own anything to speak of. If a policy had been in force, I would have been able to replace all of those things quickly and move on with my life instead of spending years in the process just to get back to where I had already been.”

18. Not saving for retirement early

Layton Cox, a financial advisor at My Pathway in Tucson, AZ, says one of the worst financial mistakes someone can make is not saving for retirement earlier in life. It’s the top regret and one of the many financial mistakes Cox says he hears from people over age 45.

Saving $2,400 annually at age 25 with an 8 percent return will result in more than $52,000 saved at age 65 — 20 times what was originally saved, he says.

Waiting just 10 years longer to “get your life together” will grow that same $2,400 to a little more than $24,000 at age 65. That’s half of what you would’ve saved at age 25, but still 10 times what was originally saved.

“The problem is, most people don’t save for retirement until they are in their late 30s to early 40s,” Cox says. “In their 20s, they save for a downpayment, vacation, or they are too busy paying off student loan debt. In their early 30s, they are saving for a bigger house or children’s education.

“It’s not until the kids are about to leave the house that most Americans save for retirement. This ruins their chance of benefiting from compounding interest.”

19. Taking on more risk than you can afford

As Bernard Kliban once wrote, “Never Eat Anything Bigger Than Your Head,” which is good advice for investors in terms of risk, says Jim Pearce, CIO of Baton Investing in Falls Church, VA.

Don’t trade options, buy penny stocks, or speculate in commodities unless you really can afford to lose every penny, Pearce says of financial mistakes to make when investing.

“Too many investors try to play ‘catch up ball’ by engaging in reckless investing that usually ends up in a wreck, putting them even further behind the eight ball,” he says.

20. Mimic other investors

This is partly in contrast to #13, but mimicking someone else’s investment strategy can be one of the biggest financial mistakes of your life, Pearce says.

“For some reason most people seem to think that anyone else’s judgment is better than their own, so there is a tendency to blindly duplicate what another person tells you they are doing in the market,” he says.

That leads to two problems: (1) they may be lying and only telling you that to impress you, and (2) even if they really are doing that, they may have no idea why they are doing it, either (or doing the same thing you are, and copying someone else).

21. Investing with a friend

Investing in a friend’s or family member’s business opportunity is one of the worst financial mistakes anyone can make, Pearce says. “It’s human nature to want to help the people you care about, but giving them your hard-earned money to capitalize their high-risk business venture isn’t the best way to do it,” he says.

Instead, offer to provide them with a low/no-rent housing situation (if you have the space) so they can live on very little income until their business gets going, or hook them up with someone else who really is in the business of in investing in high risk ventures, Pearce recommends.

22. Pyramiding profits

When an investment is going good we tend to think it will go on forever, so we sink even more money into it, Pearce says. This is sort of like betting double or nothing until you inevitably lose. Instead, set a limit on how much money you are willing to risk on any one thing and stick to it, which could help avoid this and other financial mistakes.

23. Allowing money drains

It’s OK to reward yourself with the occasional night out on the town or well-earned vacation, Pearce says. Those sorts of things don’t help your balance sheet, but provide psychic wealth.

“However, engaging in potentially costly behaviors such as gambling, substance abuse, or simply buying things you don’t really need create ‘money drains’ that rob you of the opportunity cost of putting that cash to better use in something that has value and can sustain you later in life when you really need it,” he says of financial mistakes.

24. Not paying taxes

One of the worst financial mistakes someone can make is not paying income taxes, says Nicole Erwin, a licensed tax professional at Tax Defense Network.

“What many people of all ages fail to realize is the significance of creating or ignoring issues with the IRS,” Erwin says. “If you choose not to file your returns, for instance, a series of undesirable events are sure to follow.”

First, the IRS may file a Substitute for Return (SFR). This allows them to use whatever previous tax information they have on you (no matter how inaccurate) coupled with information provided by your employers to file your return.. This substitute can work to your disadvantage by creating a tax liability that could have been avoided if you’d simply filed accurately, on time, she says..

“If you do wind up with a tax debt and you don’t pay it, you’re really asking for trouble, Erwin says. The IRS can place a lien against you, destroying your credit, or garnish your wages or bank account. If the debt persists, the IRS can even seize your property and assets. And while these are all serious actions, the worst is yet to come.”

“The problem with unpaid tax debts is they tend to become inflated in a short period of time,” she says. “The amount you originally owed quickly mutates with the addition of penalties and interest. What you end up with is a staggering tax bill which has destroyed your credit and haunts you for years.

“By the time you realize just how big of a mistake you made, you’re not young anymore — and you’re in a conceivably worse position to do anything about it. None of this has to happen, of course. If you have a tax debt, consult with a licensed tax professional who can ensure your youth is spent on more entertaining pursuits.”

25. Not having a personal financial advisor

Just as everyone needs a family physician, a financial practitioner is needed every bit as much, recommends Rob Drury, executive director of the Association of Christian Financial Advisors. Without one, you could be headed to other financial mistakes.

“A financial advisor’s job is absolutely identical to the doctor’s; he assesses wellness, diagnoses illness, prescribes cures, and designs wellness programs,” Drury says. “He simply performs these functions in the financial realm rather than the medical.

“Employing a qualified advisor and being accountable will prevent one from committing most financial mistakes. Most basic planning functions can be performed at little or no cost.”

That’s our list of the worst financial mistakes to make at any age. What are some of the worst financial mistakes you’ve made?

25 Worst Financial Mistakes Anyone Can Make is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

Everything about yesterday went bad from the very beginning. I overslept my alarm and was rushed to get to work on time. I ended up being about 10 minutes late, and from there the day only got worse. I had several stressful phone calls and situations to deal with for everything from my part-time job to an organization I volunteer for, and more. In fact, I ended up having to use some of my paid vacation time from my full-time job to deal with these situations. Talk about wasting my precious vacation time!

By the end of my full-time job’s workday at 5 p.m., I was ready to burst from all the emotions of the day. I was craving comfort food, and for me that means a massive chocolate and sugar-filled snack. So on the way to my evening haircut appointment, I tried two of my local bakeries, which were both closed (it should have been a sign!), before finally I gave in to my emotional temptation and splurged on a chocolate doughnut and soda at the convenience store next to the salon.

The entire time I was eating, ok I was scarfing, my snack, I knew I had made not only a financial mistake, but also a health mistake too. This deliciously unhealthy snack did make me feel better for a minute or two, but then it made me feel worse because it doesn’t correlate with my financial goals or  my health related goals.

Of course this small splurge isn’t a budget busting purchase, it was only about $2, and it probably won’t be the straw that breaks the camel’s back for my health either, but it still wasn’t a smart decision.

After some thought, I decided that I need to be more aware of how I treat emotional decisions like this in the future so I don’t nickel and dime, or soda and doughnut, my way into a financial rut or a health rut. My goals are more important to me than my $2 snack that will only satisfy my craving for a few minutes before my brain is back to thinking about the crap-shoot of a day I just had.

Crappy days happen to everyone at some point, and it’s probably okay to splurge on a temptation like this once in a while when your emotions kick in. But if this is something I turn to each time I have a rough day, then I need to find a more constructive way to work off the emotions of my crappy day.

While brainstorming, I came up with these ideas for the future:

• Go Workout! Working out releases endorphins. Endorphins make you happy, and happy people just don’t shoot their husbands. (Bonus points if you just got the reference!)
• Spend Time Outside. If the weather is nice, spend a little time outside enjoying it to get some fresh air and take your mind off the events of your day.
• Play With Pets. I have plenty of furry companions around me, I should use them for what they do best, comforting their owner.

How do you deal with a crappy day? Do you let your emotions get the best of you?

Photo courtesy of: Live Life Happy

My Emotions Got The Best of Me is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

Money makes people crazy

Emotions have an effect on everything in our lives, and our finances are no different. It is always more difficult to make the right financial decision when your emotions are running high and you are tired, stressed out, or angry. But even positive emotions like joy can have a negative impact on your financial willpower. We tend to forget about how large an impact emotions can have on our finances, but today we’ll talk about 7 different emotions and how they might be sabotaging your finances.

Anxiety

Having anxiety when it comes to money is a huge self-sabotage. People who are anxious about money are typically worried they’ll make the wrong financial decisions, like getting back into debt or taking a huge financial risk. But in all actuality, avoiding all risk isn’t the best solution to help you build wealth. To maximize your wealth-building power you have to take some financial risks from time to time. The key is to be in control of your emotions rather than letting them control you and your decisions.

Fear

People who have been extremely broke or poor in the past often carry the fear of being in that situation again with them for their entire lives. The fear they have of being broke or not having enough (enough money, enough food, enough to pay bills, etc.) is a detriment. Most of the time these people end up wasting a lot of money on stockpiling goods they don’t even need just to help make themselves feel better. Instead of using their money to buy security, they should be putting that fear to use by making sure they have a large enough emergency fund in place to cover any situation that might leave them short on cash to pay for their needs.

Jealousy

The “big green monster” known as jealousy can have a huge impact on your finances. Feelings of jealousy and inadequacy are what lead many people to try to keep up with the Jones’ and when that happens financial ruin is usually the next step. Instead of letting your jealousy help you make bad decisions, you should try to use it for good.

When you see your peers take the next step financially, like buying a newer car or a house, you should use try to set your jealousy aside and ask yourself if you are truly envious of them and their new purchase or if you are simply feeling inadequate or behind. If you truly want what they have, set up a plan so you can truly afford it instead of setting yourself back financially to get it right away.

Embarrassment

As someone who is still fairly new to living as frugal a life as possible, I can really relate to how embarrassment affects your finances. I’ve let my embarrassment affect my finances more than I’d like to admit. There have been times where I was embarrassed to be taking my lunch to work when all of my co-workers were going out to lunch. I have been embarrassed about the huge overgrowth of my hair when the line from my last dye-job is easily noticed. But I’ve discovered that my being honest with my closest friends and family about why I haven’t gotten my hair done in a while they are supportive of my decision to save money to pay off debt instead.

Sadness

It’s easy to see how sadness can have a negative impact on your finances. For example, after my divorce I was pretty sad and lonely. Instead of trying to cheer myself up by spending time with friends and family, I spent a lot of time shopping for new clothes at the mall and racking up credit card debt. My emotions definitely got the best of me (and my finances) when I was sad. When you are sad, don’t stick your head in the sand and ignore your finances. Instead you need to face them yourself or find a trusted friend or family member to help you make decisions while you are grieving.

Joy

Generally joy is a positive emotion, but even positive emotions can have a negative effect on your budget. When you are feeling happy or joyful, it’s easy to spend too much money to celebrate whatever positive things might be going on in your life. Wanting to celebrate joyous occasions in your life is normal and you should allow yourself some room in your budget to do so reasonably.

Over-confidence

Over-confidence is also something I used to suffer from. When I signed up for my first credit card I thought I knew everything I’d ever need to know about personal finance and credit. I was confident that I was “smart enough” to not over-spend and end up paying interest on my purchases. To beat the detrimental effect that over-confidence can have on your finances, make sure you give yourself a firm dose of reality every now and then.

What other ways can you think of that emotions affect your finances?

Photo courtesy of: Maksim Jeskevic

How Emotions Affect Your Finances is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

A recent study by the Center for Retirement Research at Boston College found that elderly people in their 80s have declining cognition on financial decision making, though the declines in financial literacy “have little effect on an elderly individual’s confidence in their financial knowledge, and essentially no effect on their confidence in managing their finances.”

In other words, their financial decision-making abilities are declining in old age, but they’re still confident they can handle them.

That overconfidence, as anyone with a stubborn grandparent may know, can cause them to mismanage their finances and be easily lured into financial schemes by crooks. They may think their financial literacy is high, but old age takes some of it away.

Many not getting financial help

The good news is that the study found that people with declining cognition were more likely to get help with their finances. However, it found that more than half of elderly individuals with significant declines in cognition get no help outside of a spouse.

With more retirees depending on 401(k)s and IRAs, instead of defined benefit pensions, cognitive decline could hurt the elderly more, according to the study.

It can be a scary thing to slowly lose the ability to understand financial literacy in old age. But remaining over confident to manage your finances while losing the ability to do so can be a scarier thought.

Financial Literacy Drops in Old Age, But Not Confidence is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

I’ll bet you have problems.

Major money issues.

Sometimes it’s hard to sleep.

When your credit card gets denied do you smile and tell the clerk, “Oh, I gave you that card? The strip doesn’t work right.” Then do you hand over the next one, hoping that this one has a “good strip?” I’m sure the clerk never realizes that by “good strip” you mean “one with money available.”

Maybe you make a ton of cash, but you’re behind on your taxes. You haven’t paid them in three years and you know, deep down, that it’s only a matter of time until The Man catches up with you.

Worse yet, your problem might be that you just don’t understand all the terminology of investing. Like one of my favorite songs from the band Camera Obscura: “I should be suspended from class, ‘cause I don’t know my elbow from my ass.” Maybe you’re just hoping someone will take control for you.

But this class is your financial life. And it’s not graduate school…this is more like Personal Finance 101. Yet you still don’t know.

Do any of these sound familiar? Are any of these partly the reason why you thought you’d read Add Vodka? Maybe glean a little financial knowledge while Daisy entertains you?

It’s a Good Start.

First, Daisy’s very funny. Second, she owns a good head for money. She can teach without preach. I need to learn that lesson.

Here’s the thing: I was that guy. I didn’t know about money.

Let’s go stronger, Joe: I was clueless.

So, you know what I did about it.

I became your financial advisor.

My Story

…okay, maybe I wasn’t your advisor, but I was an advisor. I managed $60M dollars for clients. I worked with about 180 families at a time, helping them make financial decisions. I was a fee based guy. You paid good money to follow my lead.

–and I didn’t know much about money. I was the guy in the song: I should have been suspended from class. I didn’t know my elbow from my ass.

Then I made a ton of money, and because I was technically self employed, I owed a lot of tax. I was that guy who didn’t pay taxes for three years. That’s because I owed an astronomical sum and hadn’t really planned for that (again, see “I don’t know my elbow….”)

And, because I owed a bunch of money, my credit cards all were in jeopardy of going away. I had that “Oh, I gave you THAT card?” look down to a science. It isn’t polite to let the lady at Target know you’re praying when she swipes your credit card.

You Can Change

I wish you could have gone into client meetings with me. You would see something uncomfortable but also more than a little interesting: you would have seen people financially naked.

I didn’t meet a person who wasn’t a little self conscious in their financial birthday suit.

Everyone had problems.

1)  I worked with a man who had 2.4 million in savings and didn’t know how an IRA worked. He was pretty embarrassed when I showed him that he had an annuity inside his IRA and didn’t need the dual protection. He was wasting over $20k a year in unnecessary fees.

2)  One client had over 30 credit cards and $125k in credit card debt. Her husband had no idea (or so he wanted to believe…but I think in his gut he knew something was amiss). We cut up credit cards for nearly an hour before she stopped pulling more from her purse. They just kept coming and coming….

3)  One guy owned a business that had created a net worth in the range of $40M dollars.  He had to call someone to find out if he had a no fee checking account. He didn’t.

4)  A nice family had severe medical issues for two of their sons. They were busy keeping up with the Jones’ and had no savings. They’d been borrowing money from his retirement plan and now couldn’t pay it back because they had to cover the bills. They owed about $18k in taxes.

5)  MANY people didn’t understand their 401k plan or work benefits package. Disability insurance? “I’ll check what I’ve got at work.”

6)  MOST people didn’t know anything about investing. Zip, zero, nada. And insurance? They’d heard insurance was bad so they really didn’t want to talk about it. Understand it? No. Talk about it? Learn? No.

7)  EVERYONE had embarrassing situations to share. Often I felt like a priest in the confessional. I’d learn to listen and nod. If you think I’m judging the people in the above scenarios, I’m not. How could I?  I was right there with them.

It All Starts With You

We all start from somewhere. I remember waking up one day and deciding that instead of saying “this needs to change” I said “I have to change.” Just a couple words made a powerful difference. I was in control and it was time to take charge.

My situation was bad, sure, but so was everyone else’s! Further, it really didn’t matter if my client had credit card issues or couldn’t understand why an annuity was bad. It was about me.me.me.me.me. Normally I’d call that selfish. This time it was taking control.

Joe’s 5 Steps to Change

I became a change agent. I started working on ME and began thinking about how best to help you. Powerful change required a mindset shift, that, while not as easy as some finance gurus will have you believe, did require only five steps:

1)  Take control.Make a decision and stick to it. Example: I will call an accountant today and figure out my taxes.

2)  Write down everything.  I owned a 529 plan for my kids. I didn’t know how it was invested. I created filing systems for all of my investments. Started using Mint, a budgeting software. I needed a dashboard to quickly look in on my money.

3)  Talk about money. Enter the conversation. I’m amazed by how open the financial community is on Twitter and Facebook. Not the Wall Street crowd. They’re shrouded in technical jargon that (by and large) is irrelevant. I’m talking about the everyday community. Follow people like Daisy, Jeff Rose (Certified Financial Planner), Financial Samurai, or people openly stumbling through it and winning, like Andrea from SoOverDebt. These people are open about money and because they’ve felt the pain of real life before, won’t judge you.

4)  Get comfortable with your financial body. It’s your skin. Be comfortable in it. Own it. Then, just like you would if you were out of shape, begin developing muscle. Read Add Vodka. Stop by lesser blogs, like Average Joe’s Money Blog (shameless plug).

5)  Begin eating the elephant. Whenever I would get freaked out by all the change that needed to happen in my life, I would go back to the old joke: “How do you eat an elephant?” Answer: “One bite at a time.” By focusing on only the next step, I’d hold off my anxiety and

The meeting with my accountant led to an efile of back taxes. That led to a letter and visit from the IRS (Ever had an IRS visit? Even when you’re pretty sure it’s coming it’s still more than a little intimidating.) That opened a discussion on paying my taxes, which was the first step to catching up. One nerve-wracking bite at a time. To get there, I just had to take a first step.

Now it’s your turn. Take the first bite.

Do you have money problems?

Money Problems? Jump On Board is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

Pokemon cards and POGS were the norm in the schoolyards, and at any given time you could hear some of the younger students fighting over whether Tinky-Winky was really gay.

We named our Barbies Topanga and scrunchies resided on almost every (fashionable) little girl’s pony-tail. High-kicks were a socially acceptable – nay, encouraged – dance move, usually in tear-away pants, and Furbies were all the rage. The only thing cooler than a Furby was a Tamogachi, a toy of which I had 7.

I have a theory that Gen Y is having trouble financially because the 90’s set us up to fail with money. Let’s take a look.

Polly Pockets

As a little girl in the 90’s, it was a birth right to have all the Polly Pockets, ever.

I had all of the ones that looked like compact mirrors, but I also had this gargantuan Polly Pocket mansion (by gargantuan I mean it was still alarmingly small, because – duh – it’s a Polly Pocket mansion). A car literally shot out of the garage when you pressed down on a plastic shrub, and you could open the roof for a nice, rooftop patio. I believe there was a pool involved and a greenhouse.

Plus, there were flags. So there’s that.

Obviously, I expected this to be the norm. I’d definitely have a mansion with flags atop the turretted roof. Rooftop patio? No problem! Technology that allows a car to shoot out of a garage with a flick of a shrub? Obviously.

Sabrina The Teenage Witch

Shame on you if you didn’t watch Sabrina struggle with her witchery in the 90’s.

Sabrina, when getting ready in the morning, would point at herself and be instantly dressed in brand new clothes and perfectly styled hair.

She never wore the same outfit twice, and any self respecting girl stood in front of her mirror pointing at herself repeatedly until she crawled away, defeated, dreams shattered, wearing the same clothes as last week.

If Sabrina could do it, why couldn’t we?

The girl could get anything she wanted by being a witch, as long as it wasn’t love. That’s the only thing that couldn’t be wished.

Sabrina tainted my view of style and clothing and heightened my expectations of the ability to point at oneself and get everything one wants.

Where In The World is Carmen Sandiego

Carmen was priveleged. She could jet-set all over the world, leaving us to try to find her.

She escaped the law by showing up all over the world.

I thought it would be awesome – my future job (criminal or not) would definitely fly me all over the world and travel around.

I’m actually pretty sure that Carmen was my idol. Plus, I liked her coat.

In the video game, there wasn’t a set amount of money you could spend before you had to crawl home, broke and frustrated. It just allowed you to look wherever you pleased.

The Magic School Bus

I don’t know about you, but I remember most field trips being relatively expensive. You usually had to pull out all the stops with fundraising before your class could go on a trip to the human body to the museum of Canadian art.

With the Magic School Bus, money wasn’t even a concern. It would shrink, grow, convert into a plane, a boat, you name it.

The scchool that they went to clearly had unlimited funds, and no kid was left behind due to failure to pay up. Perhaps they had generous donors?

In any case, the Magic School bus got my hopes up, that I’d get to go on great adventures without a care in the world.

(Also, I could never quite figure out what animal Liz was. Obviously she’s some sort of lizard, but what lizard has horns growing out of it’s head?)

How did your coming of age decade set you up to fail?

(obviously, most of this is tongue in cheek)

How The ’90s Set Us Up to Fail Financially is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.

I have always had decent hair. When I was younger, everyone commented on it. As I got older, so did my hair, and it showed – it wasn’t as crazy shiny as it used to be, I started to notice split ends, and it became a little more temperamental. I didn’t invest in a good shampoo or conditioner, and my hair showed it.

I went to get my hair cut and highlighted, and I was going to a new stylist because my old one had moved. When I sat down in her chair, the first thing she did was comment on how dry my hair had been. She asked me if I washed my hair every day. I said yes, probably with a lip-curl and the whole “who doesn’t” attitude  (as if people are crawling with dirt and bacteria).

I was chastised by my stylist and then set on the right track. Since then, my hair has bounced back a bit and is far shinier and healthier looking. There are a handful of reasons why you should skip washing your hair every day, on top of looking pretty.

1) Brittle hair isn’t cute.

Your scalp is made of skin. So are your hands. Think about what happens to your hands when you wash them a lot: they dry out.

Since your hair is fairly sensitive, and your scalp produces natural oils to moisturize your hair, washing it every day will strip your hair of crucial natural oils and leave your hair and scalp dry.

The drier the hair, the more brittle. Even pulling it up in a ponytail can snap your strands, so just think what washing it must do.

2) It styles better when it’s a little dirty.

It’s a fact. The extra oil is crucial for keeping styles in.

Ask anybody who gets their hair styled for any reason; it just doesn’t come out the same when your hair is clean.

3) It saves money.

This is a pretty silly reason to not wash your hair every day, if this is the only reason your doing it, but hey, if you are money motivated and super cheap, all the power to you.

Not only does skipping the wash save on shampoo and conditioner, allowing you to spend your hard earned money on the good stuff, which is really important, it also saves water.

I’m not saying that you shouldn’t shower ever day. I do. But showering and shampooing takes double the time, if not longer, than just quickly exfoliating. Think about it: you have to get your hair appropriately wet, lather up the shampoo, then wait for forever for it to rinse out of your hair, then condition it. Leave that on for about 2 minutes, then finally take a few minutes to rinse the conditioner out of your hair.

Then, you have to blow dry it (if you have longish hair and want to style it). You are saving the environment if you only do so every second day, as a blow dryer (or any hair styling tool for that matter) sucks up a lot of energy.

4) Skipping a Shampoo is Green

See the reason above, as well as the fact that you would be saving water if you didn’t wash your hair every day and saving the environment from all of that extra harmful shampoo being rinsed down the drain. Bonus!

5) Washing your hair is dad for your color

If you have highlights, low lights, or any color, you know that it can be expensive and time consuming to keep up. Even if you don’t, your hair color could be much more vibrant if it wasn’t constantly exposed to the cleaning chemicals in water (lots of water has chlorine in it).

So this really ties into all of of the reasons above. You’d be saving your hair the damage of being coloured more frequently, plus you’d be saving your wallet money, plus plus the environment because of all of those chemicals.

So there you have it, friends. Three really great reasons for not washing your hair every day – hair health, environment, wallet, color and style. Plus, after awhile, your hair gets used to it and it won’t feel dirty after the first day.

Do you wash your hair every day?

Why It’s Better To Skip Shampooing Every Day is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.