Instead of Spending, Teenagers Can Turn to Saving

by Samantha Cueto

When Should Teens Start a Savings Account?

As soon as a teenager begins to spend the money that they earn, they should start considering opening a savings account. According to an ING Direct study, a surprisingly large percentage of teenagers amounting to approximately 83% admit they are clueless when it comes to how they should be spending their money.

How Teenagers can Earn Money for Their Savings Account

Around 35% of teenagers attain jobs, according to a graph from the U.S. Bureau of Labor Statistics. This is a moderate percentage considering how most teenagers focus on educational classes or internships for their resumes during the summer. Teenagers can attain their money inside homes through some of these popular options:

  • Some teens can receive small allowances each week, in return for completing chores throughout the house. Yet there are fewer parents who have been giving their teenagers money, and may even consider the prospect of chores as something that is more of a responsibility rather than an optional task nowadays. Therefore, this option may not be the easiest opportunity to earn money, and can only depend on what a parent’s perspective of allowance is.
  • Teens can babysit or tutor their neighborhood’s children, if there are any parents actively searching for either a babysitter or tutor. Teens who enjoy being in the presence of young children may find this option the most appealing, but it does require knowledge on the academic subjects the child may be having trouble with, and how to take care of children in general.

Teens who desire to work outside of a home can consider other viable jobs to earn money, such as:

  • Some retail stores or fast-food restaurants are willing to hire any teenagers vying for the occupation. Teens can learn some basic skills such as how to operate a cash register or how supplies can be properly stored. Retail stores and fast-food restaurants offer small salaries and a daily schedule that can help any teen become slightly more organized.
  • Any small tasks teens can complete around their local neighborhood can help them earn some extra cash. Some conventional examples do include, but are not limited to: washing neighbors’ cars, mowing a neighbor’s lawn, and offering cool refreshments to anyone passing by that may look dehydrated. This option does not earn as much money for a teenager than the other aforementioned ones, and are more of temporary solutions.

Teenagers who earn the money from these jobs end up spending it rather than saving. Teenagers who are interested in their future should open a savings account to pay for their dream college and the expenses that eventually come when they reach adulthood, such as purchasing an apartment or paying their bills.

Why Teenagers Should Open Savings Accounts with Their Banks

Once a teenager signs up for a saving account with their chosen bank, they can begin depositing the money they earn into their account. A savings account can even limit the number of withdrawals to six per month, which can keep teenagers on a reasonable budget instead of splurging most of their money on shopping sprees. Savings accounts also come with interest rates.
An interest rate can be beneficial to a teen if they earn it correctly. Savings accounts add a certain amount of money to the current balance if it has been deposited there for a certain period of time. The amount of interest a teenager can earn in their account depends on how much money they have deposited into their account, the bank they created a savings account with, and the general interest rate of that aforementioned bank. A teenager must also keep in mind that they would have to pay a fee if they do not maintain a minimum balance on their account that some banks can require, but not all.
A teenager who has just commenced the process of searching for the right bank may be encountering some trouble. There are hundreds of different banks offering several different options that can be overwhelmingly confusing to a teenager. Not all of these banks offer the best deals or have a teenager’s interests in mind, but there are three options that have been narrowed down so a teenager can begin their search:

  • Capital One 360 Savings Account is a superb option for a teenager because there is no minimum balance or deposit that can come with most banks. Teenagers can also find their Automatic Savings Plan extremely helpful, which transfers money automatically to the account and can be adjusted or stopped at any time. The interest rate is only 0.75% per year, which may sound small but will have money growing in no time.
  • The Barclay Dream Account is an online banking account option that will earn the most interest. If deposits are made continuously for six consecutive months, there will be a 2.5% bonus on the interest earned. If no money has gone through withdrawal for six consecutive months, another 2.5% bonus will also be added on the interest earned. It also promises no monthly service fees have to be paid and there is no minimum deposit number to open the account.
  • All of Ally Bank’s accounts can be opened as a custodial account, meaning that a parent will have control over the account until the child they’re saving for becomes 18. In-trust accounts can also be opened, meaning the income can be split between a parent and their child once the child reaches legal age as well. Ally Bank doesn’t require a minimum balance when opening an account and no fees have to be paid monthly. The interest rates vary depending on which account a teenager and their parents decide to choose. CDs, or certificates of deposit, are also a viable choice in Ally Bank.

Samantha Cueto is a teenager herself. She is a rising sophomore at Dominican Academy in Manhattan.

'Tis the Season for Savvy Spending

by Stacy Francis, CFP®, CDFA

Stretching your holiday budget doesn’t mean you’ll be giving lumps of coal as gifts this holiday season. Smart shoppers have always known that the holiday season doesn’t have to cost a lot to be fun.

Here are a few tips to make your holidays brighter but not budget busters.

Determine the total amount you can spend and don’t go over budget. Track what you have spent by keeping a tally of your purchases in your purse.

Simplify gift giving. Ask people what they want and need. You'll be able to choose more wisely from their lists than your perceptions of what they want. Encourage family to create a wish list on popular Internet websites such as Amazon or Barnes & Nobles.

Go shopping with your shopping list in hand. Don't succumb to impulse buying. Many holiday shoppers end up busted budgets by purchasing expensive gifts for themselves and spending more than planned on friends and family.

Give your family a gift everyone can enjoy, such as a museum or aquarium yearly pass.

Subscribe to a high-quality magazine everyone will read.

If someone gives you a gift you don’t like or need, save it to give as a gift later on or donate it to a charity for a tax deduction.

Ask family members to set a price limit on gifts. Insist everyone stick to the agreement.

If you're really stuck for ideas or cash, consider giving your time as a gift, including free babysitting, housecleaning or lunch out every few months. Seniors would be especially appreciative of help around the home. The gift of time is the most precious gift of all.

Happy holidays!

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Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Are You a Tortoise or a Hare?

by Jillian Beirne Davi

Today’s article is about why budgets and diets don’t work. And how to manage the Holiday Hangover you might be feeling.

When people decide they’re going to lose weight, or stick to a budget, or finally pay off their credit cards, typically they dive into the action mode.

The pain of being where they are jumpstarts into DOING things to feel better.

They start calculating expenses.  Cutting things from their budget, throwing out the cookies and pulling out the old exercise gear.  They join a gym. They hire a coach.

THIS YEAR, they think, is going to be different.

And yet, most people have dropped their new habits by January 28th.  Oh well, they figure. Maybe next year.

The reason why most people have trouble creating lasting change in certain areas of their life is because they jump right into Step Two – the action phase – without ever spending enough time in Step One.

This is what I call the “mindset stage.”

Your mindset determines which actions you take, which actions you ignore, what you pay attention to and what you gloss over. Your mindset is the filter for all the tiny decisions you make on a daily basis that turn accumulate into BIG things over time.

And if your mindset is flawed from the beginning, it will be difficult to sustain any lasting progress.

Ultimately there are two types of mindsets that I see when people come to me for help with their finances. The Tortoise mindset and the Hare mindset.

If you come from the Hare mindset, you are looking for a quick fix, someone to “save” you. You want instant results. Immediate gratification.  If you have this short-term mindset, it’s going to be difficult to make long-term change because you expect fast results. And when you don’t see them quickly enough, you get frustrated and you quit.

The problem with the Hare mindset is one of unrealistic expectations. New habits and behaviors take time to start and even longer to become automatic.  If you are expecting to lose five pounds overnight, or looking to put every last dime of your paycheck to pay off the first of many credit card bills, you are setting yourself up for failure.

If it took you a year or more to get into debt, or blow through your savings, or to gain the weight, then  plan for it to take about that long (or more) to reverse your situation.

Accepting this fact before taking any action is the best way to shift out of Hare thinking.

Now, let’s compare this to the Tortoise Mindset.  The Tortoise mindset goes slowly and steadily, plodding along daily and celebrating daily wins. (No matter how laughably small.)  The results are small at first – in fact many times they’re barely noticeable on the outside.  But eventually these small daily wins accumulate and take on a life of their own.

When you adopt this mindset you’re not expecting fast results from the beginning.  And because you don’t expect fast results, you don’t get frustrated as easily when the results aren’t visible yet. You are more likely to stick with your plans, trusting that you can’t NOT get there as long as you trust the process and keep going.

So, if you want your New Year’s Resolutions to “work” this year, spend some time changing your mindset.   Change doesn’t happen overnight and there may be looooong stretches of time where it seems like you’re not making progress.  A mentor, coach or mastermind group can help you stay on track even though it seems like “nothing’s happening.”

When you can really accept this, THEN you’re ready to move to Step Two with realistic expectations and get into action. From there, you’ve set yourself up for massive success!

 

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Jillian Beirne

Jillian Beirne Davi is a Financial Turnaround expert and the founder of Abundant Finances, a service that helps you get yourself out of debt and start amassing abundant savings in record time (without deprivation or eating cat food for dinner).   After digging herself out of $30,000 in debt and saving tens of thousands of dollars, she decided to share her strategies with others who struggle in this area.  Turns out:  They work! The Abundant Finances community continues to grow with conscious women who are committed to making RADICAL changes in their financial lives.   For more helpful money strategies to turn your finances around, visit http://www.AbundantFinances.com and sign up for the high-content, high value FREE newsletter today!

How To Avoid The Pressure Cooker

by Jillian Beirne Davi

It’s not how you act when the pressure is on that determines your success. It’s how you act when the pressure is off.
— Jill :)

Today we're going to talk about a common habit that keeps people stuck financially for years or even decades and it's something you absolutely want to avoid if you want to achieve financial stability in your life once and for all.

It's called the "pressure-cooker" dynamic and it's a concept Tony Robbins teaches around diet and exercise but I see the exact same pattern happening with people and their finances.

So first, let me set up the scenario for you. Let's say your finances are a mess. Let's say you've been ignoring the problem, ignoring the problem, ignoring the problem.

Then something happens in your life and you are forced to deal with it. You can't ignore it any longer. Your bills come due, the creditors call, you get stranded somewhere with your credit cards maxed out. You finally total up how much you owe. You've reached zero in savings. Whatever the situation is, you wake up and decide that you have to make a change.

(By the way, I find that Life will ask you nicely several times to make a change before finally grabbing you by the collar and demanding that you change. So it's up to you to make an empowered decision to change before things get so bad that you're backed into a corner. But that's a topic for another day.)

So now, you're frustrated and you feel a sudden burst of energy to start taking action and change. And this lasts for a little bit. Now you're not AS frustrated as you once were. Maybe you've paid off HALF of your credit card debt. Maybe you've saved up a little bit of money. Maybe you've stuck to a budget for a few weeks. Or a few months.

What happens next is fascinating. Once the pain starts to subside, we slowly start feeling "okay" again. And we start to give ourselves permission to fall back into our old ways.

We justify with all sorts of reasons, too! (Trust me, I've been there -- that's why I'm aware of this.) We say: "Well my debt's not AS high anymore." Or, "well I've got SOME money in savings, it's not as bad as it used to be." Or, this one: "I've been working so hard on this, I deserve to take a break."

And then we take our eyes off the prize, we backslide, we go unconscious and the next thing we know we're right back to where we started. We go back into debt, we've spent our savings, we're back to our old spending habits. And this goes on until we get upset again, we get motivated to make a change, and the cycle begins again. Out of debt, right back into debt. Save $5K, spend $5K.

The reason this happens is because we're usually only motivated to take action when pain is really high. Once the pain goes away, we fall back into our old ways. Because without accountability, we tend to quit. We stop taking action.

So how do you end this cycle? Well, I teach this to my private clients and it's something that a great coach can call you out on when they start to see this happening in your life in real time. Not months or years later when the damage is already done.

One way to end this cycle is to make sure that when you make a decision to get rid of the pain, that you back it up with a plan that you can stick to long term. Not one or two things that you do in the short term to ease the pressure. But instead you use that motivation to create a plan that includes small daily rituals that become automatic over time and keep you moving forward once the initial motivation wears off.

Trust me. The initial motivation WILL wear off. So when you accept this up front, you can make a smarter plan.

Another way is to keep your focus in front of you on a daily basis as a reminder of why you're making this change in the first place. I call this knowing your "Big Why" and connecting with it often.

By understanding this dynamic, you can use your frustration and convert it into a long term plan that includes daily actions that you use consistently with your vision in front of you. When you get support you increase your chances exponentially of breaking the pressure cooker cycle and make lasting change.

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Jillian Beirne

Jillian Beirne Davi is a Financial Turnaround expert and the founder of Abundant Finances, a service that helps you get yourself out of debt and start amassing abundant savings in record time (without deprivation or eating cat food for dinner).   After digging herself out of $30,000 in debt and saving tens of thousands of dollars, she decided to share her strategies with others who struggle in this area.  Turns out:  They work! The Abundant Finances community continues to grow with conscious women who are committed to making RADICAL changes in their financial lives.   For more helpful money strategies to turn your finances around, visit http://www.AbundantFinances.com and sign up for the high-content, high value FREE newsletter today!

The Beauty of a Budget

by Manisha Thakor

Many people think budgets are about deprivation. As a financial adviser, I feel they are about liberation. Here’s a simple three-step plan to create a budget that you will feel excited to follow.

Step #1: Understand the real purpose of a budget.

It’s not necessarily what you might think. The benefit of a budget is that it establishes boundaries. Importantly, these boundaries can set you free to focus on what is most essential. Let me explain. Because we live in a world with so many choices, people often think of budgeting as a constraining, joy-restricting activity. But when done correctly, budgeting actually creates a protective financial haven around you (by simplifying your set of choices) to help you make spending decisions that will enhance your joy.

Step #2: Learn what healthy spending looks like.

If you ask the average person, “What is a healthy mix between spending on needs and wants versus savings?” you will likely get a blank stare. That’s because very few of us were ever given straightforward guidelines to follow in this area.

Back in the early 1990's when she was a Harvard Law School professor specializing in bankruptcy, Senator Elizabeth Warren and her daughter Amelia wrote a delightful book called ALL YOUR WORTH. In it, they identified an optimal “balanced spending formula” of 50/30/20.  It is simple, powerful, and after all these years it’s still the most effective healthy spending rule of thumb I've come across.

The “Balanced Spending Formula” Looks Like This…

•  50 percent – the ideal amount of your take-home pay that goes toward needs

•  30 percent – the ideal amount of your take-home pay that goes to wants

•  20 percent – the ideal amount you set aside for savings

Step #3: Adjust to fit your specific situation.

While I agree that 20 percent is the ideal amount to strive to save, in this era of sky-high student loans and above average unemployment it may not be obtainable for many people right now.

For this reason, I have temporarily adjusted my thinking. Any amount you are paying for reducing student loan debt or credit card debt counts toward that 20 percent savings, if you will commit to channeling those dollars into savings after the debt is paid off.

Setting up a healthy budget with this ideal spending formula empowers you to take the first step in creating a life lived from a place of financial strength. It enables you to find that vital intersection between what is important and what you can control. Focus on that sweet spot and find your joy.


[Want more financial love? You can follow Women's Financial Literacy Initiative founder, Manisha Thakor, on Twitter at @ManishaThakor or on Facebook at /MThakor.

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Manisha Thakor

From Manisha's linkedin profile page:

Manisha Thakor is the Director of Wealth Strategies for Women at Buckingham Strategic Wealth and The BAM Alliance. 

Manisha and her colleagues provide both evidence-based wealth advisory services for high-net-worth households and core asset management solutions for women and families nationwide with $80,000 or more in investible assets. 

An ardent financial literacy advocate for women, Manisha is the co-author of two critically acclaimed personal finance books: ON MY OWN TWO FEET: a modern girl’s guide to personal finance and GET FINANCIALLY NAKED: how to talk money with your honey. She is on Faculty at The Omega Institute and serves as a Financial Fellow at Wellesley College. Manisha is also a member of The Wall Street Journal’s Wealth Experts Panel, a member of the 2015 CNBC Financial Advisor’s Council, and wearing her financial educator’s hat serves as a part of TIAA-CREF’s Women’s Initiative. 

Manisha's financial advice has been featured in a wide range of national media outlets including CNN, PBS, NPR, The Today Show, Rachel Ray, The New York Times, The Boston Globe, The LA Times, Real Simple, Women’s Day, Glamour, Essence, and MORE magazine.

Prior to joining the Buckingham team, Manisha spent over twenty years working in financial services. On the institutional side she worked as an analyst, portfolio manager and client relations executive at SG Warburg, Atalanta/Sosnoff Capital, Fayez Sarofim & Co., and Sands Capital Management. After this she moved to the retail side and ran her own independent registered investment advisory firm, MoneyZen Wealth Management. 

Manisha earned her MBA from Harvard Business School in 1997, her BA from Wellesley College in 1992 and is a CFA charterholder. She lives in Portland, OR where she delights in the amazing Third Wave coffee scene and stunning natural beauty of the Pacific NorthWest. Manisha’s website is MoneyZen.com.

Budgeting for Wealth: How to Create a Spending Plan You Love

by Jillian Beirne Davi

Six years ago I was depressed, broke and deeply in debt. I had nowhere to turn.  At the time, there was no such thing as a "Money  Coach" (that I knew of...).  But let me tell you, if that person existed, I would have hired them on the spot to help me.

Instead, I had to figure it out on my own.  And it took such a long time to get into the groove of turning my finances around and I made many mistakes along the way. Eventually, though, I paid back every cent I owed. But that wasn't the big accomplishment.

The big accomplishment was feeling like for the first time, I was in control of my money. Not the other way around.  It was a great feeling to be debt-free with abundant savings, but most importantly I knew that no matter what amount of money came in, I could manage it well, be generous with others and still have money left over for myself.

One of the best tools I used was a Spending Plan (aka "Budget") that helped me plan my finances out in advance.   Here’s how it works.

The Dirty - B Word: How to Create a Budget That Works!

In order to get a hold of your finances,  the first step is to know your numbers.  You must create a Balanced Budget that you can realistically stick to long term -- a budget you love.  (Yes! It's absolutely possible to love your budget.  Trust me on this.  I had one client call it "The Magical Spreadsheet" for a reason.)

The first thing you want to understand is that a budget does not mean deprivation. In fact, don't call it a budget at all.  Call it a "Spending Plan."  The truth is, once you receive your paycheck, it all gets "spent" somewhere, even if you're saving it.  So the plan just tells you exactly WHAT to do with the dollars that come on Pay Day so that you feel good for the next two weeks.

The best way to create a budget you love is to make sure that every time you get paid, you divide your paycheck into three buckets.  The Wealth Bucket, the Living Expenses Bucket and the Play Money Bucket.

Wealth Bucket:  These are the money habits that set you up for wealth long term – becoming debt free, saving money and making generosity a habit. This bucket makes the practice of Wealth Consciousness a habit in your life.    Here are the three things that go in this bucket:

Debt Repayment:   Credit card payments, student loans, personal loans, car notes are all examples of what goes in this bucket.

Personal Long Term Savings:  Like attract like in the money game. When you have personal savings, you feel more at ease. When you feel more at ease, it gets you out of survival mode thinking. When you are at ease, you attract more opportunities for new money to come into your life.  Personal savings is a must.

Tithing/Charitable Giving:  You also want to include some sort of regular tithing or charitable giving in this bucket. Why? Because this keeps the energy of money circulating in your life.

Living Expenses Bucket:  Fixed living expenses go here.  Fixed living expenses are the predictable expenses that do not change month to month.  Rent or mortgage payments, transportation costs, utilities, cell phone bills, cable, any recurring subscriptions, groceries are all examples of what goes in this bucket.     These are your fixed costs of living.

Play Money Bucket:  This is everything else.  I believe you must have a chunk of money left over from every paycheck that you set aside to simply ENJOY. Money is a tool for you to live well.  For many women that are paying down debt, struggling to stay afloat, or have little savings,  this bucket is the hardest to understand. They feel guilty: how can I have Play Money if I’m so deeply in debt?  Shouldn't every penny go towards debt or savings?

I believe the answer is no.  Deprivation is not a long term strategy to achieving your money goals.   If you deprive yourself for too long, you will begin to feel resentful and will rebel against your own rules

So, it’s important to make sure that you have some fun with your funds, too.   Reward yourself often with things that you love and that make you feel good.  This is the definition of good self-case.  If you do this, you’re less likely to go into "deprivation" mode with yourself or with others.

Quick coach’s tip:  Just go one paycheck at a time. Yep!  I'm advocating living paycheck to paycheck at first.  Create your budget and then focus on sticking to it for one pay period only.  If you accomplish this, then reward yourself on your next Pay Day with something that makes you feel really good.

This doesn't have to be expensive, but it must be something that really feeds your soul (For me, it was taking myself out to a sushi lunch on pay day and buying myself a brand new book a few days later).  Build meaningful rewards into your plan to keep you going!  

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Jillian Beirne

Jillian Beirne Davi is a Financial Turnaround expert and the founder of Abundant Finances, a service that helps you get yourself out of debt and start amassing abundant savings in record time (without deprivation or eating cat food for dinner).   After digging herself out of $30,000 in debt and saving tens of thousands of dollars, she decided to share her strategies with others who struggle in this area.  Turns out:  They work! The Abundant Finances community continues to grow with conscious women who are committed to making RADICAL changes in their financial lives.   For more helpful money strategies to turn your finances around, visit http://www.AbundantFinances.com and sign up for the high-content, high value FREE newsletter today!

How Five Daily Habits Rocked My Financial World

by Jillian Beirne Davi

Six years ago, I was broke. I was deeply in debt (to the tune of $30,000) and creditors called me nonstop. I felt powerless, hopeless and totally alone.  It was one of the darkest times in my life.  The worst part was: I thought I was making good money.  I was just clueless about how to manage it.

Eventually I decided to take my power back and get into action.  (Looking back now, I know that taking action is the best way to cure anxiety.  When you’re taking action towards your goal, you feel powerful!  When you’re hiding under the covers, anxiety will crawl into bed with you.)

Eventually, every debt was repaid and I went from being an impulsive spender to a devoted saver in about eighteen months – without bankruptcy, credit consolidation, or counseling.

And I've never looked back.

I shared my story with a friend who was struggling with similar issues.  Curious, she asked me how I did it.

The truth is, I never really thought about HOW I did it.  Without really looking closely, I just figured I got sick of being broke one day and got into action.  But when I retraced my steps I found that my success ultimately boiled down to a handful of daily habits that turned my finances around.  And anyone can repeat them.  The hardest part is remembering to do them consistently.

So here are the five habits I adopted that got me on the road of financial recovery, for good!

  1. I commit to using all cash every day for a year.   Me and the plastic? We had to break up for awhile.  I decided that debt equaled slavery and my first order of business was to cut the cards and use all cash instead.  I closed many of my store accounts and held on to my oldest card.  I kept that account open but did not charge any new purchases on the card.  (Note:  I used my debit card as a substitute for cash when a card was needed.)  At first, I was scared to go all-cash and it felt like my very survival was at stake.  But eventually I learned how to live within my paychecks.  It got easier over time especially since I also adopted the next habit...
  2. I checked my balances online every single day.  For a long time, I never shared this with anyone because I thought it seemed obsessive.    But for some kooky reason, this habit worked! Checking my statements every morning kept me honest about where my money was going and made it less likely to spend impulsively throughout the day.  I had a real dollar amount rolling around in my head, not some fuzzy estimate that made it difficult to make good decisions.
  3. I kept a crispy $100 bill in my wallet as a symbol of my financial future.  Okay, this one probably sounds a little nuts. But it worked like gangbusters.  See, when I was paying down debt, oftentimes I felt poor. To feel better, I kept this bill as a reminder that in my financial future, my wallet would always be full.  Anytime I made a purchase I was reminded of my goal.  It helped to keep my motivation high when funds were low.   (And, nope!   I didn't spend it!  I held on to that same bill for almost three years.)
  4. I put 1% (yes, just 1%) of each paycheck away into a savings account automatically.   In the beginning, my savings account was teeny tiny. But it wasn't about the dollar amount at first.   It was about getting into the habit of saving regularly.    As I began paying down debt and closing accounts, I would take money that was being used to pay down debt and instead put it towards my savings. Eventually the power of momentum took over and I started to save more aggressively over time.   Once I completely paid down my debt, I started putting all the money that was going towards credit card payments into savings.
  5. I rewarded myself on Pay Day.  Any time I stuck to my budget for an entire pay period, I treated myself on Pay Day with an “affordable luxury.” Something I really wanted, that was pretty low-cost.   I would treat myself to a nice lunch, a manicure, a brand new book, a 10-minute massage, or a bar of expensive chocolate to show myself a little love and appreciation.  Over time, I really came to look forward to those little treats, especially in those last few days before Pay Day when my bank account got low.  I knew there was a reward at the end so I was able to stick to my plan without dipping into my savings.

These are the five habits that I used on a consistent basis to help turn my finances around for good. The best part is, after six months of sticking to these habits, they became automatic.  I no longer had to “will” myself to do these things – they came naturally.    Now it feels weird when I’m not in harmony with my finances.  It’s become second nature and I have these powerful habits to thank for my success.

Your Turn: What about you? What are some powerful money habits you could adopt that would make dramatic changes over time in your financial life? The beauty is that once they become routine, you've got a strong foundation to make lasting change with your money, for good!

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Jillian Beirne

Jillian Beirne Davi is a Financial Turnaround expert and the founder of Abundant Finances, a service that helps you get yourself out of debt and start amassing abundant savings in record time (without deprivation or eating cat food for dinner).   After digging herself out of $30,000 in debt and saving tens of thousands of dollars, she decided to share her strategies with others who struggle in this area.  Turns out:  They work! The Abundant Finances community continues to grow with conscious women who are committed to making RADICAL changes in their financial lives.   For more helpful money strategies to turn your finances around, visit http://www.AbundantFinances.com and sign up for the high-content, high value FREE newsletter today!

Uh oh! That Unexpected Bill…

by Jillian Beirne Davi

It’s a common scenario.  You’re chugging along, getting your finances in order, paying your bills on time, keeping your spending down and brown baggin’ it to work.  You are SO in control and feeling on top of the world!

And then.  The unexpected happens.   A tax bill shows up, your car breaks down, a surprise expense.   Someone gets sick.  Setbacks like these make you question if it’s even worth the effort.  What to do when you get that defeated feeling?

  • Recognize that is an opportunity.  Now, I know what you're thinking:  “Yeah right Jill. How is this good thing?” But yes, this is an opportunity to step up and declare that you DO have more than enough to cover this bill. No matter what happens.  This is an opportunity for you to realize just how resourceful and creative you really are!  Start by making this powerful decision:  "I believe I have more than enough.  I don't know HOW I will cover this bill just yet, but I know the answer is on its way."    I find that the answer always appears when I make the decision that I’m going to “make it work.”
  • Communicate and Negotiate.  Even though the bill is high, you may not have to pay it all in one sitting.  Call and see if you can negotiate a payment schedule over time to help take the pressure off.  Remember to ask for the first payment to be due in a few weeks.   Sometimes the language they use in writing is downright scary.    But, you may find that when you call and speak to someone you have a LOT of room to negotiate.  Remember, they want to get paid and will most likely work with you to make that happen.  Just make sure you stay in integrity with this.  If you agree to pay on a schedule make your payments on time.

And now the most important step…

  • Get into action.  The best medicine for fear is ACTION.  Take out a pen and paper and start thinking about all the ways to create new income in order to pay for this unexpected bill.  Doesn't matter if the ideas or good or bad. It only matters that you come up with some ideas and take action on the ones that seem like they could actually work. Really stretch yourself and think of up to 100 creative ways to cover this unexpected bill. Then get moving.

Bottom line: Mistakes happen, unexpected events arise.  And you may feel discouraged.  The important thing is for you to recognize that change is a process and life is messy. But you always have more than enough and you are way more resourceful than you think!

Comment

Jillian Beirne

Jillian Beirne Davi is a Financial Turnaround expert and the founder of Abundant Finances, a service that helps you get yourself out of debt and start amassing abundant savings in record time (without deprivation or eating cat food for dinner).   After digging herself out of $30,000 in debt and saving tens of thousands of dollars, she decided to share her strategies with others who struggle in this area.  Turns out:  They work! The Abundant Finances community continues to grow with conscious women who are committed to making RADICAL changes in their financial lives.   For more helpful money strategies to turn your finances around, visit http://www.AbundantFinances.com and sign up for the high-content, high value FREE newsletter today!

10 Nice Things To Do For People That Won't Cost Much!

by Emily Co , Associate Editor, SavvySugar

Although it's good to focus on your own happiness, it's always beneficial to spread the joy around. In fact, studies have shown that people who perform kind acts see a boost in mood. Since today is world kindness day, let's celebrate by doing some nice things for people.

  • Send a postcard. Send a postcard to a friend or family member who doesn't live in the same city, updating them on your life and telling them that you're thinking of them.
  • Give affirmation. Praise someone about a quality that they have that you really appreciate. Make sure it's true for you or it won't sound genuine!
  • Help someone with their belongings. If you see an elderly person struggling with their belongings or even groceries, offer to help carry them. Perhaps you can help them load the bags into their car, or if you live in the same neighborhood, you can drop them off at their door.
  • Aid someone with their job search. Take some time out of your day to help an unemployed friend or family member. Go through job listings and send her a list of suitable jobs, offer to edit her resume and to prep her for interviews.
  • Clean your home. If you live with roommates or a partner, clean the home and do all the chores without any prompting.

Read on for more kind acts.

  • Offer to babysit. If someone you know has been looking like they need some time off, offer to babysit their kids so they can take a night off to enjoy.
  • Smile at a stranger in the elevator. Oftentimes, we have too many things on our mind and we forget about the little courtesies. Smile and say "hi" to a stranger in the elevator, because it's nice to be acknowledged.
  • Pick up litter. Be good to the environment and help to pick up litter while you're walking home. You can pick it up with a plastic bag so you won't dirty your hands.
  • Introduce friends. If you have a friend who just moved to a new city, introduce her to friends you have in the same area. If you just met someone who just moved to your city, do your best to make her feel included by inviting her to some of your weekend activities.
  • Forgive someone. If someone has wronged you in the past, try your best to forgive them and to just let it go. Doing so is a nice thing to do for yourself and for those closest to you as well. Resenting someone may cause you to vent your frustrations to other people, which spreads your negativity.
Comment

Emily Co

Emily Co is the associate editor of the PopSugar Network's SavvySugar, a career and personal finance website for savvy women who want to take control of their bank accounts and their life. She holds a master’s degree in journalism from the Medill School of Journalism at Northwestern University. Her work has appeared in Bloomberg, Kiplinger, the Japan Times newspaper, Singapore's Business Times newspaper, and the Chicago Journal. 

Eat Right for Your Body and Your Bank Account

by Loni Markman, MA, CHHC

Are you one of the many people who are under the impression that eating healthy means spending more money? As a nutrition and positive body coach, I hear it all the time. “Eating whole foods is too expensive” or “I want to feed my family better food but I need to stay within my budget.” I’ve even heard “organic foods are a rip off.”

Wherever you stand on this topic, I am here to tell you that it is possible.  You can feed yourself and/or your family mostly organic, whole foods without emptying your wallet.  Eating healthy is the fastest way to better health. Can I get a whoohoo!

Check out these simple solutions for healthy shopping and wallet watching:

1.     Go with homemade.  Americans spend about half of their food budget on eating out at restaurants. And NYC’ers even more so. Even just reducing your meals out by 1 or 2 times a week can save you about $15 - $25 per week. This is an easy way to save money and even have some extra to spend on higher quality foods. Cooking at home not only saves you money but it helps you know what is in the food and that it’s made with love.  By cooking at home you create an environment where you can manage your weight yourself, instead of leaving it up to that new Thai restaurant that just opened up around the corner.

2.     Switch to Water. Aside from obvious health reasons, buying beverages is expensive. Whether it’s coffee, soda, or vitamin water… they add up (quickly).. If plain water doesn’t sound appealing then try infusing it. Chop up some cucumber, lemon, or even mint and let it infuse overnight in your Britta. The next morning you will have a delicious and refreshing new way to get your 8 glasses of water in.

3.     Cut the junk. Evaluate how much money you are spending on items such as soda, cookies, crackers, prepackaged meals, processed foods, etc... By limiting or completely cutting out these unhealthy foods, both your wallet and your body will benefit.

4.     Always have a plan. The more prepared you are when you get to the store the less impulse purchases you will make.  Stores are sneaky and will tempt you into buying items you don’t need so be sure to write down your meals for the week and buy only the items that are on the ingredients lists.  You can check out my recipes for some meal planning ideas: http://elementsoffit.com/recipes/#.UGSVuWiViCQ

5.     Shop the perimeter of the store first. This is one of my favorite tips.  Grocery stores keep the healthy stuff on the outside of the store so if you shop the perimeter you will fill your cart with healthy whole foods like fresh produce and meat, leaving less room for the "junk food fillers" and once again saving you money.

6.     Cook large portions. It saves time to cook once and eat multiple times. One idea is to make a big pot of soup at the beginning of the week or whenever you go food shopping. When you don't feel like cooking, help yourself to a hearty bowlful and a green salad. This makes a nutritious but inexpensive lunch or dinner anytime.

7.     Eat before shopping. Grocery stores know the power of using all of our senses. Notice how some of them pop the best smelling popcorn or let you sample some treats? Never go food shopping hungry. You’ll end up grabbing some chips while you shop and spending almost double on food for that week.

8.     Go on a health food tour. Signing up for a health food tour is a great way to ensure you will know exactly what should be in your cart. I run a monthly tour at Fairway in Brooklyn and teach people how to buy organic, which produce is best for each season, how to buy in bulk, why using spices is a healthy and inexpensive way to make tasty food and much, much more. If this is something you are interested in email me for my next tour date.

Healthy food is a fundamental building block for a healthy life. For many of us, it takes some extra work and the building of new habits. But it turns out you can do the right thing for your body... and for your bank account.

Loni's signature 6 week program, The Positive Body Program, has helped women all over create a better relationship to food and their bodies. If you are looking to manage your weight, increase energy, reduce stress, eliminate cravings and quiet the inner critic then join her October 8th for this transformation program. All calls are recorded. Space is limited.

When you mention Savvy Ladies you will receive a complimentary private phone session.

 

Comment

Loni Markman, MA, CHHC

Loni Markman is not your typical Nutrition Consultant! 
Loni has been working in the field of wellness for almost a decade, helping clients find nourishment and balance in their everyday lives. She focuses on weight management, emotional and binge eating, body image and women’s health. She has a true passion for helping women create a better relationship to food and their bodies.

Budgeting: How To Be Realistic

by Carly Lance

Creating a budget is never an easy task. It seems like we always underestimate how often we go out in a given week. That $100 you budgeted for entertainment this month can go quickly if you like to have a few drinks or get your nails done every weekend. How can you do a better job being realistic with your budget?

Look At Previous Bank Statements

Take a lot at your bank statements over the last 60 days or so. Make a list of all the things that you spent money on. This will be your baseline for creating your budget. It is easier to create a budget that falls in line with your lifestyle if you actually know what that lifestyle is.

Find Practical Ways To Make Necessary Cuts

Say you spent $500 on food in the past two months. You know that you should aim to budget somewhere around that number. If you want to trim that budget, you can start looking at practical ways to do that. Perhaps you cut coupons to save 10 percent off your bill each month. Maybe you decide to only buy the cereal that you know you will eat on a regular basis. Small cuts to your budget can save you a tangible amount of money while not impacting your lifestyle too severely.

Don't Cut Out The Discretionary Fund Altogether

There is nothing wrong with buying a pair of shoes every so often. The trick is to shop around for the best price on those shoes. Only purchase them if you will wear them more than once before they go into the back of the closet. Ask yourself if you should pay for it with cash or credit card. If you choose credit card, make sure that you can pay it off before the end of the month. Do not use your credit card as an excuse to spend more than you planned. Stick to cash if you have trouble controlling your spending when using plastic.

Revise Your Budget Every 90 Days

Plan to revisit your budget every three months or so to make sure it still works for you. If you have gotten a raise, you may be able to put more money toward your savings. If you have seen a decrease in pay, you may want to start looking to make more cuts. A medical emergency or job loss could change things in an instant. The cost of rent, utilities and other household bills goes up at least once a year if not more. Never assume your budget forecast can be accurate for more than 90 days.

Budgeting is typically an inexact science. You never really know how much you will need to spend each month to the exact dollar. A budget is meant to be a rough framework to help you make smart decisions with your money. Don’t just spend your paycheck as soon as you get it each week. Make a plan and stick to it as best as you can.

 

Comment

Carly Lance

Carly Lance loves to blog about saving money and small business finances in hopes of helping others achieve financial bliss in their lives, such as her own.  Carly is also the blog manager for Personal Bankruptcy Canada, a company dedicated to helping “good people with bad debt” – even after bankruptcy.

Do You Have A Scarcity Mindset?

From our earliest childhood memories, most of us remember hearing specific messages about money from the adults that took care of us. What did you hear when you were growing up? Was money hard to come by? Was it tight? Did you hear the adults around you arguing about money? Did it feel like there was never enough for everyone to feel good?

Read More

Celebrity Inc

As part of her MoneyZen series, women and money expert Manisha Thakor highlights every day personal finance lessons that can be extracted from Jo Piazza's new book Celebrity, Inc. 

Read More

Have Less Holiday Financial Stress

by Manisha Thakor  

Does holiday shopping & spending stress you out?

A few years ago I stopped doing the holidays. My corporate job had me on a plane every 3 to 4 days. My daily work hours were in the double-digits, and the mere thought of picking out - let alone sending - holiday cards was enough to throw me into tears. Shopping for presents... forgetaboutit. I didn't have the emotional energy to face the crowds and stores.

Ironically, saying "Ba-humbug" to "traditional" holiday habits increased my happiness. How? It caused me to reboot my ingrained thinking and come up with a new game plan for how to joyfully participate in the holiday season in a way that felt right to me. If you are reaching a holiday excess breaking point, here are three steps to help you have less holiday financial stress:

1.     Set a shopping strategy & a specific dollar amount. This time of year there are a number of excellent news stories on how to "Avoid Holiday Spending Hangovers" and "Tips For Keeping Holiday Spending In Check." They almost always start by saying set a budget. That's excellent advice. Yet very few people do it - perhaps because "budgeting" sounds like deprivation. So instead, strive to create your own shopping strategy and assign a total dollar amount that you will spend in executing that strategy.  Will you go wide and shallow (low priced gifts for many people) or narrow and deep (few incredible gifts for a handful of people)?  Unless money is no object the key here is to avoid... wide and deep!

2.     Measure your progress. It's an oft-quoted axiom of business that "what gets measured gets managed." An easy way to see how well you are doing at executing your shopping strategy is to write at the top of a piece of paper your total holiday spending budget. At the end of any day in which you shopped for the holidays just add up our receipts, write that number on your tracking sheet and subtract from the total. You'll then have a simple way to know how much you have left with which to enjoy spreading holiday cheer. You can also take this up a notch to spreadsheets and online resources, but the key is it to get it down in writing.

3.     Don't be afraid to think out of the holiday box. The slow grind of this rough economy has caused many friends and families to reset gift-giving practices. But if you haven't yet, this is a great year to ask questions like these:  Should we only give gifts to kids under 18? Should we do a one-name-one-gift holiday grab bag? Or do we want to rethink gift-giving all together and instead donate time or money to charitable causes and enjoy ourselves by simply spending time together? Writer Francine Jay (MissMinimalist.com) has wonderful advice in her upbeat "Gift Avoidance Guide."  Blogger Leo Babauta (ZenHabits.net) shares some wonderful non-traditional thoughts in his "The Case Against Buying Christmas Gifts."

I'm still in the early stages of figuring out what new rituals work for my family, and its been a fun process. If you are rethinking your habits, you might find this podcast in which I speak with Melissa Foster Cook about holiday budget cripplers helpful (click here to listen or here to download). What about you? What changes are you making to have less holiday financial stress this year?


[Want more financial love? You can follow Women's Financial Literacy Initiative founder, Manisha Thakor, on Twitter at @ManishaThakor or on Facebook at /MThakor.]

Comment /Source

Manisha Thakor

From Manisha's linkedin profile page:

Manisha Thakor is the Director of Wealth Strategies for Women at Buckingham Strategic Wealth and The BAM Alliance. 

Manisha and her colleagues provide both evidence-based wealth advisory services for high-net-worth households and core asset management solutions for women and families nationwide with $80,000 or more in investible assets. 

An ardent financial literacy advocate for women, Manisha is the co-author of two critically acclaimed personal finance books: ON MY OWN TWO FEET: a modern girl’s guide to personal finance and GET FINANCIALLY NAKED: how to talk money with your honey. She is on Faculty at The Omega Institute and serves as a Financial Fellow at Wellesley College. Manisha is also a member of The Wall Street Journal’s Wealth Experts Panel, a member of the 2015 CNBC Financial Advisor’s Council, and wearing her financial educator’s hat serves as a part of TIAA-CREF’s Women’s Initiative. 

Manisha's financial advice has been featured in a wide range of national media outlets including CNN, PBS, NPR, The Today Show, Rachel Ray, The New York Times, The Boston Globe, The LA Times, Real Simple, Women’s Day, Glamour, Essence, and MORE magazine.

Prior to joining the Buckingham team, Manisha spent over twenty years working in financial services. On the institutional side she worked as an analyst, portfolio manager and client relations executive at SG Warburg, Atalanta/Sosnoff Capital, Fayez Sarofim & Co., and Sands Capital Management. After this she moved to the retail side and ran her own independent registered investment advisory firm, MoneyZen Wealth Management. 

Manisha earned her MBA from Harvard Business School in 1997, her BA from Wellesley College in 1992 and is a CFA charterholder. She lives in Portland, OR where she delights in the amazing Third Wave coffee scene and stunning natural beauty of the Pacific NorthWest. Manisha’s website is MoneyZen.com.

5 Ways To Eat Out For Less

by Manisha Thakor

Tough economic times present an interesting financial conundrum for our tum-tums.

During rocky periods it’s natural and healthy to want to seek out friends and companionship.  Breaking bread and having a good chat is a wonderful way to release work/life stress. But given our busy lives many of us end up spending time with others while eating out… which can really add up.  So here are 5 simple things you can do to eat out for less.

1.    Share an entree or make a meal out of appetizers: In modern America food portions have become so super-sized that the average meal can feed at least 2… and sometimes even 3 people.  To avoid any surprises when the check comes, be sure to see if the restaurant charges a split entree fee. On a related note, some appetizers are so large they could easily fill you up as an entree and they generally cost half as much as a main dish.

2.    Be sure to ask how much the specials cost before ordering: This a major hot button of mine.  How many times have you found yourself in a restaurant when the wait staff describes a succulent sounding dish?  You go for it, only to find yourself fighting the urge to hurl when you see the bill and find out the price.  Personally, I think it’s a sign of financial self-confidence to politely ask “and what do those specials run?” so you can make an informed decision. It can be awkward to do it at first – but trust me, the whole table will appreciate it, and you’ll be a trendsetter.

3.    Soup, it does a body good: A nice bowl of hearty soup (think gumbo, beef stew, tortilla soup, or chili) often costs a lot less, contains healthier ingredients, and fills you up as much as a regular entree.

4.    Think before you drink: Beverages – alcoholic and even non – are very high margin products for restaurants.  At a minimum, think twice before doubling down.  If you can, savor one drink throughout the meal.  And if you’re really trying to cut back, go to nature’s best… a glass of tap water.  Doing this can easily shave 20% or 30% off your bill (not to mention pounds off your waist line!).

5.    Do lunch: If you have a really strong urge to meet friends at a fancy new restaurant, try doing it at lunchtime instead.  Prices are much lower, portions are more realistic, and you’re less likely to run up a costly alcohol bill.

What about you – any other suggestions you’d add to this list?

 


Want more financial love? You can follow Manisha on Twitter at @ManishaThakor or on Facebook at /MThakor. Manisha Thakor, personal finance expert for women, can be reached via her website, MoneyZen.com.

Comment

Manisha Thakor

From Manisha's linkedin profile page:

Manisha Thakor is the Director of Wealth Strategies for Women at Buckingham Strategic Wealth and The BAM Alliance. 

Manisha and her colleagues provide both evidence-based wealth advisory services for high-net-worth households and core asset management solutions for women and families nationwide with $80,000 or more in investible assets. 

An ardent financial literacy advocate for women, Manisha is the co-author of two critically acclaimed personal finance books: ON MY OWN TWO FEET: a modern girl’s guide to personal finance and GET FINANCIALLY NAKED: how to talk money with your honey. She is on Faculty at The Omega Institute and serves as a Financial Fellow at Wellesley College. Manisha is also a member of The Wall Street Journal’s Wealth Experts Panel, a member of the 2015 CNBC Financial Advisor’s Council, and wearing her financial educator’s hat serves as a part of TIAA-CREF’s Women’s Initiative. 

Manisha's financial advice has been featured in a wide range of national media outlets including CNN, PBS, NPR, The Today Show, Rachel Ray, The New York Times, The Boston Globe, The LA Times, Real Simple, Women’s Day, Glamour, Essence, and MORE magazine.

Prior to joining the Buckingham team, Manisha spent over twenty years working in financial services. On the institutional side she worked as an analyst, portfolio manager and client relations executive at SG Warburg, Atalanta/Sosnoff Capital, Fayez Sarofim & Co., and Sands Capital Management. After this she moved to the retail side and ran her own independent registered investment advisory firm, MoneyZen Wealth Management. 

Manisha earned her MBA from Harvard Business School in 1997, her BA from Wellesley College in 1992 and is a CFA charterholder. She lives in Portland, OR where she delights in the amazing Third Wave coffee scene and stunning natural beauty of the Pacific NorthWest. Manisha’s website is MoneyZen.com.

Don’ts for Skiing on a Budget

Ski season is almost, so here are some tips to get the most of your skinny skiing budget.

Don’t Check Your Baggage, Compare Fees

Calculate the cost of baggage fees for flying with your own equipment versus the cost of renting on-site

Don’t go Alone, The More the Better

Go in a group with family or friends and save on accommodation by renting a house or a condo. Cook at home and enjoy your night in.

Shopping Around Permitted

Look for promotions, especially if you’re travelling with children. Many resorts offer packages with options where kids ski stay and/or eat for free. Some states also sponsor free or discounted skiing programs for children in certain grades as a way to encourage youth fitness.

Don’t Stay Less than 2 Nights

The longer you stay at a resort, the less per day you are likely to spend. This is thanks to multiday discounts on lift tickets, lodging and rental equipment.

Ski Early

If you must visit over the holidays, pick Thanksgiving. At many resorts, “peak season” doesn’t begin until the week before Christmas, and often resorts offer early season packages and specials.

Don’t Rent a Car

Look for “fly-in, ski-out” deals that include direct flights to local airports with transportation from the airport to the lodge so you don’t have to rent a car. Some resorts have free airport shuttles, and some airports offer buses to ski areas with inexpensive and convenient pickup and drop-off locations

Bounce Back Boot Camp

by Stacy Francis, CFP®, CDFA

Recently, I received an email from one of my “Bounce Back Boot Camp” members who has difficulty planning a budget with a fluctuating income.  I’ve found that uncertain incomes are a common occurrence and can make your wallet stretch beyond its means.  There are so many jobs out there with incomes dependent on jobs completed and not salary-based which make preparing a budget a difficult, but an imperative tool to learn.  Because monthly income fluctuates like it does, budgeting could be one of the best skills you may acquire toward your path to becoming financially independent and secure. 

My friend recently the mistake of setting her savings goals on a fixed dollar amount per month or year.   A more flexible method would have been for her to try saving a percentage of the earnings she had each month to allow more flexibility.  Many advisors will recommend you save between 10% and 20% of your take home income and use 80% to 90% for living expenses.  I would recommend you follow these guidelines.  Aim to spend only 80% of your earnings on living expenses and save 20%.  Because of uncertain income, choosing to save closer to 10% during the less lucrative months and 20% when you make the big bucks is a good idea. 

If you have any outstanding bills that are overdue, then the beginning months may include 5% or 10% of your savings to contribute towards overdue bills.  My husband’s co worker had overdue bills of $1200, and he took home about $10,000 this month- so I advised him to  save about $1,000.  10% of the $1,000 is $100 he used to pay off his debt. Its efficient and it doesn’t set you back too much!

Depending on your personal situation and comfort level, you may decide to adjust these proportions to better suit your needs.

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Your Cell Phone Bill: Is Prepaid a Better Option?

by Stacy Francis, CFP®, CDFA

At a recent family get-together, the conversation turned to cell phones. More specifically, my sister-in-law had received a statement that morning. Stunned that she had used less than a third of the minutes she paid for, she wanted to know whether prepaid would be a better option.

What an excellent question! And indeed, many families could save big by making the switch. However, below are a few things to consider first:

  1. How many minutes do you use – really? If you normally spend 600 minutes per month on the phone and the measly 100 minutes on your latest statement is the result of your phone being broken most of the month, you should probably stick with your plan. But if you find that during the past six months or so, you have never even used half of your minutes, prepaid could be for you.
  2. Could it be that you just have the wrong plan? Have you looked at different plans and providers? From unlimited plans with majors such as T-Mobile and AT&T to cheaper options with lesser-known companies like Tracfone, chances are you could find a plan better tailored to your needs.
  3. What about the handset? When you commit to a plan, most providers will throw in a free (or at least heavily discounted) handset. With prepaid, you typically need to purchase your own. If you have an extra handset, this may not make a difference. But if you don’t, you need to factor this price into the calculation.
  4. Are you shopping for yourself or for your entire family? Family plans tend to be cheaper than individual ones. On the other hand, if you have teens, between chatting with friends and text messaging, a prepaid plan could save you a fortune.
Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.