Blog - Page 9 of 19 - Rebel with a Plan

Emotional Spending is Awesome

January 25, 2017

Making decisions based on your emotions is usually a recipe for misfortune. In fact, personal finance 101 discourages emotional spending. But…emotional spending is awesome in certain situations.

Why do I say this? Because right now the world feels very bleak. A part of my brain is telling me it’s always been this way. It still doesn’t help the emotional part of my mind from thinking about all that’s going on right now. People are scared, they feel afraid, angry, and unsure of how to continue to move forward.

The past few months have left people to try and make sense of the environment around them and how to foster growth and change in the face of active resistance. It’s been confusing, sad and frustrating. Providing budgeting and saving tips feels empty without addressing the emotional impact people have had lately. All the money tips in the world won’t help if your emotional confidence doesn’t feel full.

Formulating words, messages, and bonding with others. Connecting with people and letting them know they’re understood has been more important than ever.

In times of negative emotions and bleak outlooks, generosity becomes critical. Helping one another out and being there for people. There are a few ways to do this. Donate money or donate your time. Look up organizations that need help and see if you can donate a set amount to them. Find charities whose mission you passionately agree with and get involved with helping them out.

Below is a list of some popular organizations you can learn more about and consider donating to. Use a site like Charity Navigator to figure out the financial health and accountability of different charities.

Planned Parenthood: There has been lots of talk of defunding Planned Parenthood. For decades the organization has provided reproductive health services to women at affordable costs. Half of your donation will go to your local Planned Parenthood affiliate and half to the Planned Parenthood Federation of America. Donate here.

Center for Reproductive Rights: advocates for reproductive rights, access to birth control, and unbiased information on reproductive health. Donate here.

National Resources Defense Council: They work to safeguard the earth, its people, plants, animals, and the natural systems on which all life depends. Donate here.

Trevor Project: They provides 24/7 crisis intervention and suicide prevention for LGBTQ youth. Donate here.

National Immigration Law Center: fighting for the rights of low-income immigrants through litigation, policy analysis, and advocacy. Donate or find out how you can attend a training here: Donate here.

NAACP Legal Defense Fund: provides legal assistance to poor African Americans and civil rights and voting rights activists. They bring lawsuits against any violators of civil rights. Donate here.

Do you want to voice your concern to Senators and representatives? Call them! Talking on the phone is a weird foreign thing nowadays but calling (compared to tweeting or Facebooking) is the most effective way to reach them. Find their phone numbers here. Find your congressional district here.

For personal finance, consider getting involved with the Rockstar Community Fund. They do various initiatives focusing on helping one another out, spreading joy, and helping people kick down their debt.

Aside from donating money and voicing concerns, find other ways to connect with people and help out. Take time to express gratitude to someone you know, whether it be an old friend, family member, or someone else. Make discussion a habit and don’t rely too much on survivorship bias. Learn from others outside of your circle and viewpoint. Understand different perspectives and scenarios.

Practicing generosity, using your emotions, opens you up to a new state of mind. For me, it helps me appreciate what I have and develop a develop a deeper motivation for going after stuff.

Emotional spending is awesome and can be used for good. The “spend” part doesn’t always have to involve money. Generosity is spread in many ways. Make time for it.

How do you practice generosity?

Grow The Gap

January 18, 2017

Or in other words, Why picking sides between spending less or earning more isn’t thinking of the full picture.

Gaps are important. Write that down and say it three times! Haha. It’s true, though. Gaps are important and they’re talked about all the time. Usually, it’s with emergency funds (growing the gap between bank account zero and a few months of expenses).

In terms of building actual wealth? It’s so important. When it comes to your unique money management, what is best? Spend less or earn more? How about neither? Let me explain.

There is a rifle debate in the personal finance world of whether to focus on cutting back and spending less or, on the flip side, earning more. In fact, when you get on the path to being better with your money, the first step mentioned by several financial blogs, podcasts, and people is to comb through your monthly expenses and see where to cut back.

Cut the cable subscription, cut down on eating out, stop getting lattes, and stop going out and spending so much on entertainment. There is even extreme tips about cutting out all junk food, cell phone service, TV, downsizing to just one car, foregoing all fun and letting your soul die…(<—maybe not that last one).

You might balk at the tips and think about how you don’t want to do without certain things because you want to enjoy life. But then you read crazy inspiring stories about people who have paid off mountains of debt. Ahhh, those “person paid off [insert crazy amount] of debt in [insert a super small amount of time]” stories everyone loves to read.

The people who have paid off the debt talk about how they cut out a lot of their expenses and lived minimally. They detail how doing without cable and kicking their latte habit were the big reasons they don’t have the debt monkey on their back anymore. You read the stories, while sipping with your *bomb-tastic* delicious Starbucks mocha, and think about how you need to give up monthly indulgences. The thought sounds blasphemous. You look down at your latte and whisper “I’ll never let you go” a la Titanic-style.

Switching between browser tabs, you stumble upon the other side of personal finance: earning more. The blogs tell you like some sort of fantasy fairy godmother that earning more is the more important side to focus. After all, there is only so much you can cut back on. Earning more is infinite!

As it turns out, earning more money doesn’t have to be something solely achieved through promotions at work or getting a higher-paying job. There are lots of different money making opportunities. Some of them require going on and getting extra part-time work. Others are about making money online.

So which one is better to focus on? Spending less or earning more? It’s neither and here’s why. Size matters.

When it comes to money management and reaching your financial goals, it’s all about growing the gap.

What is the gap?

The gap between what you earn and what you spend. You want to grow this area as much as possible. Pay attention to it, treat it like a precious little puppy and help it grow. Growing it will help you reach your financial goals faster.

And let’s be honest, most people, especially twenty-somethings, have lots of savings goals they want to hit. There are weddings to save up for, other people’s weddings to save up for, a three to six-month emergency fund, house downpayment, travel fund, personal development, and more.

It’s important to tend to both sides to increase the gap. There are always ways to cut back even if you’re frugal and there are always money-making opportunities to be done.

I used to dismiss the whole “spend less, cut expenses” advice of personal finance. I thought I was good with money. Back when I was working my first job entry-level job out of college, I thought I was a pretty frugal person. I didn’t have a car payment, I didn’t buy lots of clothes and go out a lot. With my entry-level wage, I thought I was saving all I needed to save. It wasn’t until I started more closely tracking my spending and doing no-spend challenges, did I realize that there was usually room to cut back.

Being more conscious with grocery shopping, I was able to cut my food budget further. For my cellphone, I got a slightly cheaper provider. Even on an entry-level wage, not making a lot of money, there were still areas I was able to cut back in.

Since I’ve gone through the cutting expenses part, my focus lately has been on giving some TLC to the other side: earning more. Because, as mentioned earlier, there is unlimited potential when it comes to earning more. I like that and I’m sure you do too.

It’s all about growing the gap. Stretch each side as much as you can! It’s a journey that requires tenacity. I’ll be keeping you updated on how it progresses for me.

How do you go about growing the gap between what you spend and what you earn?

What I Would Tell My 22-Year-Old Self

January 16, 2017

Ah, to be 22-years-old again. Young. Full of life. Everything is ahead of you. Life in your early twenties is often a time of fast changes. You graduate college, move different places, start new jobs and begin to figure out what you want and don’t want out of life. It’s a time period of exploration.

Although, a time of exploration usually leads to many confusing periods. You don’t know if you want to stay at this job. You’re not sure if you want to keep doing this career. Should you switch careers? How do you change careers without having to go back to school? Should you break up with your significant other? Why is dating so hard? Oh, and crap, you forgot to turn off the A/C before leaving the house.

As Taylor Swift so eloquently put in her pop anthem “Feelin 22”, you’re often happy, sad, and confused all at the same time.

When I look back on my 22-year-old self, I see a guy who sort of knows what he wants out of life but feels confused amidst all the constant changes. Being young and fresh out of college, a lot of options are pushed at you.

Older adults look at you like you’re an alien when you say you’re not sure if you want to buy a house. According to old fuzzy logic, homeownership is the best thing there is. Renting is just throwing money away *eye roll*. You understand what people are saying but you can’t even imagine saving up the ungodly amount needed for a down payment on a house.

Material possessions get pushed on you at every corner. It’s all under the guise of ‘you deserve it!’. Buy a new car because your old one just won’t do anymore. Go out to eat constantly and call it networking, or brunch, or both. Get the nicest apartment, sans-roommates, that you can get. Those student loans are fine. Just paying the minimums on them is fine (spoiler alert: no it isn’t).

So, my younger self, a lot of things are going to get pushed on you during your twenties. There is going to be an intense pressure by society, peers, and family to constantly be upgrading your lifestyle. Don’t fall into it.

Lifestyle inflation can be a dangerous thing. Don’t contribute too much to it. Let your friends pass you up. They can have their nice cars, restaurant food, big houses, and debt. Focus on you. Stay in your lane! Figure out your why, find your goals and chase them like there is no tomorrow.

Relax and breathe. There is no need to be so stressed out at this point in your life. Right now, you’re relatively string-free. There is no mortgage, kids, or partner holding you down. Relax! Take deep breaths! Everything will work out.

Life is an experience. Learn to enjoy the ride!

*record scratch*

*freeze frame*

Yeah…no. Let me explain. I actually am 22. Right now. Right at this very moment (I just had my half birthday last month!). So why am I writing a list to my 22-year-old self when I am…22? It’s because I’ve been noticing an alarming trend in many of these “what I would tell my younger self” articles. The people writing them seem to almost romanticize their younger self. It’s as if they’ve lost touch with how things were in the situation they look back on.

Let’s assume you just saw a person get in a fender bender. No one gets hurt but the person’s car gets totaled. The people in the car accident would, fittingly, be distraught and stressed. They just totaled their car and they’re already stressed enough about money. After a few years pass, the person looks back on the ordeal and gives a faint smile. I would have told myself to not be so stressed! They reminisce.

It’s easy to offer advice like that. Advice that downplays past situations and even sort of romanticizes them. College commencement address speakers love to offer the ‘embrace failure!’ advice. It’s easier to say that than think about a 22-year-old scraping by with very little after going through a setback.

So, what would I tell my 22-year old self? Listen to advice that doesn’t lean too much on survivorship bias. Remember to take risks, but have them be calculated risks. And most of all, pay attention to advice that doesn’t overly romanticize past times.

To other twenty-somethings out there, I’d refer them to this article, which is filled with solid, sound tips. It’s a good, informative read, sans all the fluffy romanticism.

What do you think of those “what I would tell my younger self” lists?

How To Make Your Money Motivation Easier to Follow

January 4, 2017

One of the first things towards mastering your money is to understand your ‘why’. Why do you want to get better with your money? What do you want to put your savings towards? Maybe it’s to travel more or to have enough for a down payment on a house. Whatever it is, sometimes we can slip up on following our money why.

Having a money motivation. It’s so simple yet so complex. People often don’t scratch more than the surface when it comes to understanding their money motivation. Person: I need to save more money! …Oh…uh, I don’t know, cause saving more money will be better?

Knowing your money motivation is important. It’s arguably more important than even getting on a budget. Whereas getting on a budget would be step one to becoming more money savvy, knowing your money motivation/your money ‘why’ is step one’s prerequisite.

Your money motivation is the guiding light to keep you on track towards your goals, even when they are far off. You want to buy that new game console? How is your house downpayment fund feel about that? Those shiny shoes at the mall calling your name? How will your vacation fund feel about you giving more attention to shoes than it?

So…you get it. A money motivation, the underlying ‘why’ behind your financial self, is important to cultivate. The problem? Sometimes it can be really freaking hard to follow.

Lets use an example. Monica Gellar wants to save up for a house downpayment. Her time in New York City is coming to and end and she wants to move out of her unrealistically massive Greenwich Village apartment. A big audacious goal of saving up a big amount of money within three years is set. The goal? Use the money for a down payment on a house.

For the first few months, the habit of saving money is easy. She is diligent in putting money aside every month and the goal reminds in clear view. The house is going to be hers!

But then things start to slide. Saving fatigue sets in (yep, it’s a real thing) and the habit starts to slide. It’s innocent at first, just a few lattes at Central Perk with Monica. Soon, she starts buying things she doesn’t need. That pasta maker just had to be bought. It was on sale!

A few of her friends, Phoebe and Chandler, say their going on a weekend getaway somewhere upstate. Monica isn’t sure if she wants to go and knows the money is better reserved for her house fund. Temptation sets in, she wants to spend quality time with her friends, so she drops all her monthly savings towards the trip and decides to go.

Due to her spending more money in different areas of her life, she hasn’t contributed as much to her house fund anymore. The goal is even farther off now. The goal starts to feel pointless and way too far off so she slumps down, watches Netflix and spends an embarrassingly high amount on ice cream and pretzels for the night.

You don’t have to be like Monica. Remaining focused and committed on your money motivations can be challenging at times, but it’s so rewarding to stay on track. Achieving your money goals, even if they are far off, is one of the best feelings in the world. You feel like a superhero!

Below are a few ways to stay on track with your money motivations.

Automate savings (and utilize financial tech)

Set up automatic transfers to deposit money into your savings account every time you get paid. To take it a step further, open up a savings account at a different bank, preferably one at an online bank since they offer higher interest rates on savings accounts. Online banks like Ally Bank offer a 1% APY on savings accounts. This is a lot higher than what brick and mortar banks like Bank of America, Wells Fargo, Chase, Woodforest, CitiBank and others offer.

Have the money transferred over into the savings account and it’s out of sight and out of mind until you need it.

Don’t forget about financial tech apps like Digit, which rounds up your purchases and withdraws a few dollars at a time and puts them into your Digit savings account.

Name your accounts

Holy moly, this is so awesome to do! Saving money towards a goal feels a lot more real when you’re contributing to an account that says ‘house fund’ or ‘F**k off fund’ than when you’re contributing to ‘account: 0002233’.

I have different savings accounts set up at Ally Bank for my: emergency fund, personal development fund, and Australia fund (yep, I wanna go to Australia!).

Whiteboards and memes save the day

I promise this one is a solid tip, haha. Go to your nearest superstore and buy a big whiteboard. Stick it up somewhere in your apartment or house and write down your money motivation and different savings goals on it. It being a white board, you can erase and adjust your goals as need be. It’s great!

Now let’s talk about memes. I know what you’re thinking, how are memes going to help me stay on track financially?!? Well I’ll give a personal example. I used to watch the show Everybody Hates Chris. On the show, the dad of the family, Julius (played by Terry Crews), is characterized as being hilariously cheap and frugal. Chris spills milk on a table and Julius says how Chris wasted “70 cents worth of milk!”.

Since I loved the show a lot, I decided to put a picture of Julius on my apartment door, so that every time I leave, I’m reminded to not spend excessively. It’s ridiculous but it works!

How do you combat savings fatigue and maintain focus with your money motivations?

(also heads up, no stock photo in this post, I took this photo while visiting temples in Bagan, Myanmar!)

We’re All Time Travelers

December 8, 2016

Yesterday while fiddling with my phone, I hit the music player and started playing Imagine Dragon’s It’s Time. For a few brief seconds, I felt like I had been transported back to another time.

The transient period went in an out as I listened to the song. Imagine Dragons has been one of my favorites for the last several years. They’re a rock band that rose to fame in 2012 with the hit single “It’s Time”. Some would describe their sound as a variety of indie rock. Just in case you were interested in knowing!

As I listened to the song over and over, memories rushed back to me. Memories from my first year of college when I had blasted the song on repeat. It was a getup type anthem I used for motivation whenever I needed to study or do a shift at work I wasn’t all that excited about.

I continued listening to it throughout the rest of my freshman year. It stuck with me and even when I stopped playing it for awhile when it come on again, the music would instantly take me back.

Listening to it felt like time travel.

Usually, the only time you hear about time travel with the personal finance world is when it comes to compound interest. A young twenty-something gets advice from someone who’s older, wiser, and somewhat regretful about not putting enough money away while they were young.

Or you hear about it when it comes to the apocalyptic outlook the media throws on the social security system.

It’s going to fade away in 2034! BOO!

Those things deal with it but there are additional things time travel touches.

When not all purchases are bad

When you’re money conscious, focused on simple living or even have a frugal mindset, contemplating purchases can be daunting. There’s all this talk about avoiding lifestyle inflation, only buying things you need and value, and decluttering to just the essentials.

Well, what exactly counts as “essential”? Does your iPhone count as non-essential even though you love taking photos with it? Do your book purchases look like an unnecessary luxury even though you’re a dedicated bookaholic?

Simple lesson: purchases aren’t always bad. When you’re buying something because you know it will help you in some way, it can actually be a good thing. And yes, even when that certain something is a big ticket item.

It’s all about investing in yourself. The purchases/investments you make today could set you up towards success.

The idea of decluttering and paring down to just essentials involves going through your possessions. Possessions you’ve accumulated over the years. Possessions that, when you touch them, take you back to the time and mindset when you bought it.

Let’s say you want to learn photography. You’re probably going to want to buy a professional grade DSLR or mirrorless down the line as you develop your skills.

A few years down the line, when that camera is sitting on your table, you’re going to look at it and be taken back to the time when you decided to invest in something and purchase it. It’s a feel good kind of time travel. Except, in this case, you bought something you used to enhance your personal development, rather than something like shoes or a few $12 cocktails.

Habit building

One of my favorite movies of all time is the 1999 film Superstar! starring Saturday Night Live alumni Molly Shannon and Will Ferrell. It’s hilarious in lots of aspects, not the least being the fact that the “high schoolers” were real-life thirty-somethings.

In the film, the main character Mary Catherine Gallager decides to enroll in the school’s talent show. Against some (hilarious) adversity, she perseveres and ends up winning the show.

I know this is a fictional comedic example but it’s refreshing nonetheless. And it shows (in a funny way) how if you start small and keep at something, remaining consistent, you will get where you want to be.

Daily actions are a flavor of compound interest. The actual compound interest is the gold standard that will help you build wealth. Daily actions are the things that help you build personal development wealth. Instead of investing growth, we’re talking about building a habit around something you want to do in life.

Music

With music, aside from my love for Imagine Dragons, there are other songs that when I listen to them, bring me back to remembering a different time.

Listening to American Author’s Best Day of My Life helps me remember my second year of college, when I first started learning web design. In the hours before I walked across stage to accept my college diploma, I replayed One Republic’s Something I Need several times.

We’re all time travelers. We have the ability to look back and see what worked and what didn’t (anybody still sporting frosted tips? No? Okay…). Whether it be through song, building a habit, or making an investment through a purchase, we have the ability to shape ourselves toward something.

I’d like to think my 18-year-old self, the one who jammed out to Imagine Dragons, would be proud that I finally started to be more strategic about investing in myself. Not just from getting better with my money, but learning the importance of investing in myself.

Putting money aside every month for retirement no longer feels like throwing it towards some mysterious time period 40 years from now. Listening to Imagine Dragon’s It’s Time, and thinking of my 18-year-old broke college self, I remember I don’t really want that life anymore. Not contributing to retirement and being at the mercy of social security would give me that similar lifestyle I know I no longer want. It’s a gentle nudge from me…to me, to keep put money aside every month for my older self.

Retirement contributions and investing for personal development are just two of the ways I think of in terms of time travel. What’s yours?

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