Budgeting – Your Personal Finance Pro http://yourpfpro.com Personal Finance for Young Professionals Mon, 22 Jan 2018 12:00:42 +0000 en-US hourly 1 31591919 New Year’s Resolutions You Can and Should Keep http://yourpfpro.com/new-years-resolutions-you-can-and-should-keep/ http://yourpfpro.com/new-years-resolutions-you-can-and-should-keep/#respond Tue, 26 Dec 2017 12:00:30 +0000 http://yourpfpro.com/?p=7591 With Christmas just a day behind us, the new year is fast approaching. Many people will take the next few days to reflect on all of the changes the past year has brought. But multitudes of people will also begin thinking about their goals and New Year’s resolutions for the year ahead. They’ll try out […]

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New Year's Resolutions You Can and Should KeepWith Christmas just a day behind us, the new year is fast approaching. Many people will take the next few days to reflect on all of the changes the past year has brought.

But multitudes of people will also begin thinking about their goals and New Year’s resolutions for the year ahead. They’ll try out the newest diet fads, relationship advice, and even the trendiest fashion all in the name of improving their lives.

Unfortunately, some of these same people will break their resolutions in the coming days and weeks ahead. So, are there some New Year’s resolutions you can and should keep more than others?

Examine Your Financial Goals

Important New Year’s resolutions you can and should keep ought to include examining your financial goals. In fact, it should be one of the first resolutions you make and fulfill.

Review any money goals you had for last year to see whether or not you made progress or met them. If you did not, give honest effort into finding out why.

Could it be those goals were too lofty? Did something unforeseen happen that prevented you from hitting the mark? What could you have done differently to help you attain your financial goals?

Asking yourself these questions can help you not only understand why those goals went unmet but also how to set realistic ones for the year about to start.

However, another reason to examine your financial goals is because they may need to be different for the new year. It’s possible you reached one or more of your goals this past year resulting in the need to set new ones.

Use Windfalls in Smart Ways

There are times throughout the year when you could end up with a cash windfall or extra money in your budget. There are lots of different sources for this extra money, such as tax refunds, Christmas money from gifts, year-end bonuses, and more.

This extra money is most commonly spent by the receiver on high dollar electronic equipment, vacations, or other frivolous, high dollar items. What is sad is that these same people could have used the money differently to make a greater impact in their lives.

To use windfalls in smart ways you should invest at least part of it. Additionally, you could choose to pay off debt or grow your emergency funds.

Review Your Budget

If you are wondering what other financial New Year’s resolutions you can and should keep, reviewing your budget is one of them. Take a look at your monthly budget from last year to see what adjustments need to be made for this year.

Add any new bills to your budget that have come up and remove those that are paid off. Don’t forget to account for those bills that do not get billed monthly.

Eliminate Expensive Habits

While reviewing your budget you may also notice things you used to spend money on that you no longer need. Or, you may see expenses and habits you could cut from your monthly bills.

Similar to diets and other New Year’s resolutions that do not last, this is another that could cause some people to falter. But taking a hard, honest look at some of your money wasters is important in order to get your finances on track.

Consider alternatives such as making meals at home instead of eating out and shopping only for what is a necessity. Go take a walk instead of paying for a gym membership. Making different choices can help you eliminate expensive habits, save money in your budget, and put that money toward better uses.

Check Your Credit Report

Checking your credit report is a good way to see how you are doing financially. It is also one of the New Year’s resolutions you can and should keep.

Have you looked at yours recently? Doing so can alert you if there are errors on your report. It will also let you know if there are any unauthorized purchases under your name.

Lots of people will make New Year’s resolutions in the next few days or weeks. Instead of creating the usual ones that everyone else makes and breaks, set some New Year’s resolutions you can and should keep for the year.

What New Year’s resolutions will you be making this year?

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What You Should Teach Your Kids About Money http://yourpfpro.com/what-you-should-teach-your-kids-about-money/ http://yourpfpro.com/what-you-should-teach-your-kids-about-money/#respond Mon, 02 Oct 2017 11:00:13 +0000 http://yourpfpro.com/?p=7388 It’s a sad truth that many young people today have not been taught how to handle money. Quite a few of them, in fact, are unable to count back change when they need to, such as at a job. But why are our youth not learning these fundamental life skills? For one thing, schools may […]

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Teach Your Kids About MoneyIt’s a sad truth that many young people today have not been taught how to handle money. Quite a few of them, in fact, are unable to count back change when they need to, such as at a job.

But why are our youth not learning these fundamental life skills? For one thing, schools may be relying on parents to teach money management skills while the parents rely on the schools to do it.

Neither one is making sure the children learn what they need to survive once they head out into the world on their own. Therefore, our young people can’t manage the simple tasks of balancing their checkbooks, budgeting their money, our counting back change when they need to.

Clearly change is needed. But if you intent to fill that gap in your own family, what should you teach your kids about money?

1. The Way Money is Earned

One of the first things you should teach your kids about money is how it is earned. From a young age your children need to learn what it is you do to pay the household bills.

Tell them about your job and what you do each day to earn a paycheck. Keep it brief and general for very young children. If your kids are older, however, you may be able to provide a little more information.

For example if you are a nurse, you might tell young kids that you help sick people to get well again at your job each day. When your kids get older you can tell them a little bit about taking blood pressures, giving medications, administering shots, and various other duties.

It’s important that children know how money is earned so they can better understand how job skills and education impact jobs and income. They must also understand the value of money, which is another reason they need to know how you earn your income.

2. Practice Makes Perfect

When my kids where somewhere around middle school to high school age, I bought one of those paper money and plastic coin sets. Next, I set up different scenarios where they had to “buy” something from me using the fake money.

Sometimes they didn’t have the exact amount, so I gave them change. It was up to them to tell if I gave them the correct change or not. Of course, at times I had them act as cashier too, making them count back change.

As teenagers sometimes do, they rolled their eyes and got a bit impatient with me. But when my high school age daughter was the only person at her fast food job who could count back change correctly I knew I was onto something.

3. How to Budget

Something else you should teach your kids about money is how to budget it. Again, you could set up different practice situations, or just show them how you budget instead.

Start out by letting them help you stuff envelopes and put on the stamps when they are young. As the mature into middle school and high school they will be ready to see how you budget, pay bills, and file paperwork.

4. Why Saving is Important

Show your kids how much you put away in savings each month. They don’t need to know the total amount you have in savings if you don’t wish to share that information with them. Nevertheless, instill in them the importance of saving a portion of what you make each month.

Let them know why you save, such as for an emergency fund, vacation, or college education for their future. When they know why it is important to save they will be more likely to save also once they are out on their own.

Take it a step further by allowing them to save toward a goal they have, such as paying for a new toy or game they want. Give them chores to do around the house and pay them for those they do well. Then, once they reach their goal, take them shopping for the item they saved up for.

5. Reasons to Invest

Another thing some parents forget to teach their kids about money is why investing is essential. If you have any investments, even if it is just a 401K, you should let your children know about them.

Talk to your children not only about how to invest but why you invest. When they know the reasons why you invest for the future they will have a better grasp on how it impacts them.

Instilling financial literacy in our children is vital to their future. Don’t wait on someone else to teach them about money. Teach your kids about money at home and ensure they have the skills they need once they are no longer under your roof.

What additional concepts should you teach your kids about money?

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8 Financial Tips for College Freshmen http://yourpfpro.com/8-financial-tips-for-college-freshmen/ http://yourpfpro.com/8-financial-tips-for-college-freshmen/#respond Mon, 07 Aug 2017 11:00:58 +0000 http://yourpfpro.com/?p=7265 Summer is winding down and retail stores are beginning to stock their shelves with back to school items. Soon it will be time for last spring’s high school graduates to pack up their belongings and head away to college. Starting your freshmen year of college is an exciting rite of passage. It comes with lots […]

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Financial TipsSummer is winding down and retail stores are beginning to stock their shelves with back to school items. Soon it will be time for last spring’s high school graduates to pack up their belongings and head away to college.

Starting your freshmen year of college is an exciting rite of passage. It comes with lots of good times and possibly a few bad ones as well. If you are beginning your college experience with very little extra money to spend there are 8 financial tips for college freshmen that can help.

1. Don’t Borrow Unless You Must

As a college freshmen, you may be tempted to join the throngs of students who borrow as much as possible, don’t work, and buy whatever they want. Unless you are gifted with mommy and daddy’s credit card and a nearly unreachable credit limit, this is a recipe for disaster.

Instead, put yourself in a better position to not only start college but to also finish it. Something that will help is to only borrow if you absolutely must. There are other alternatives to getting a loan.

2. Save as Much as Possible

If you haven’t already been saving for college, don’t put it off a second longer. Every dollar you save will get you that much closer to your goals.

Stop spending money on junk food, music, and other frivolous items. Now is not the time to buy everything you want simply because your parents aren’t there to say “no”. You need to save as much as possible.

3. Make a Budget

Something that will really help you start your freshman year off right is to make a budget. In fact, one of the things you probably won’t learn in college is how to establish a realistic budget.

Write down expenses and income for a month to get started. If the numbers do not match, look at items you spent money on that could have been avoided. Trim your budget accordingly.

4. Buy Used Textbooks

Once you have your class list, check on which classes require textbooks. Next, check online or on college bulletin boards to see if anyone has used versions of books you need for less. Sometimes a little extra work and time spent on your part can save you a bundle.

5. Use Student Discounts

Some stores and restaurants reward students with discounts when they go to pay. Although you should also limit your purchases to save money, when you must buy, ask if they offer a student discount.

6. Live as Cheaply as You Can

Start out right by not spending money on extras. Watch every dime until you can get your budget made and see if you have any room in your budget for other wants.

7. Get a Job

Although it has been a few years, I worked all throughout my college years to help pay my way through college. This allowed me to get an education without have to go into serious financial debt. Believe me, once you graduate from college and your loans become due, you will be glad you worked to supplement your income.

There are lots of different choices when it comes to what kind of job you should get. Working on campus will be the most convenient for you, if possible, but there are a variety of different jobs you could apply for.

Deposit your checks automatically into your checking account. When you don’t have to make regular trips to the bank it will save you time and could deter you from spending as well.

8. Use Caution When Getting a Credit Card

When you first get to college you will be bombarded with tons of credit card offers. Use caution in selecting one and even more in using one.

Even though some people don’t believe it to be wise for college students to have and use credit cards there can be valid reasons to do so. However, keep in mind that a credit card is not a money tree. If you get and use one you must eventually pay for what you charge.

As you prepare for yourself for college and all that you will experience, follow some of the 8 financial tips for college freshman and save yourself some money.

What other financial tips might help college freshmen?

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3 Things People Who Are Broke Are Tired of Hearing http://yourpfpro.com/3-things-broke-people-are-tired-of-hearing/ http://yourpfpro.com/3-things-broke-people-are-tired-of-hearing/#respond Thu, 22 Sep 2016 05:43:33 +0000 http://yourPFpro.com/?p=6813 Lately, it seems like there is a lot of sniping between and even among generations about who is playing the “game of life” better. If you’re a Baby Boomer, Millennials are lazy, overly-educated people who wish all their debts would disappear by magic. If you’re a Millennial, people born before you (especially Baby Boomers) got […]

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Lately, it seems like there is a lot of sniping between and even among generations about who is playing the “game of life” better. If you’re a Baby Boomer, Millennials are lazy, overly-educated people who wish all their debts would disappear by magic. If you’re a Millennial, people born before you (especially Baby Boomers) got free tuition and hardly had to struggle to afford a home. And if you’re a Gen Xer, you just don’t like anyone (just kidding, Gen Xers!) 🙂

While all or none of the stereotypes are true, for many Americans, one thing is common: we’ve all been broke at one point in our lives. Unless you inherited a ton of money, you’ve probably had to struggle to pay the bills – working two jobs, eating less, skimping on medication or doctors’ visits, etc. Right now, more than 50% of Americans have $1,000 or less in savings, meaning many of us are living on the edge – and might be considered “broke.”

Unfortunately, it’s easy to forget what life is like for people who are broke or struggling to afford day-to-day necessities. I don’t consider myself “broke” any longer, because money doesn’t stress me out like it used to when I was working two jobs, but being broke wasn’t that far off for me or many of my peers and friends. In an effort to remain humble and not look down on people who are struggling, here are 3 things people who are broke are tired of hearing.

1. Just Take a Sick Day

Sick leave varies depending on the industry you’re in, and depending on how much money you make. According to the Washington Post, more than 30% of Americans don’t get sick leave. And the less money you make, the less likely you are to get paid sick leave (the opposite is true for those who make more money – mo’ money, mo’ sick leave).

If you’ve ever come down with an illness, like the flu or a much-needed dental appointment, you know it can take a while to get better. If your job doesn’t offer you paid sick leave, trying to get over being sick is much more difficult. The unemployed don’t fare better either: while they may have more “time” to deal with their illness, finding a doctor that they can afford or who takes the insurance they have can eat up time and delay their recovery time.

Taking sick days is an option not afforded to many in the US, and it’s even less likely to be offered to those who make the least. So the next time you think about telling an intern “just take a sick day”, think again!

2. Replace Your Car – Repairs Cost More Than Its Worth

Some common knowledge seems to be that, if your car repairs cost more than your car is worth, you should just replace your car. However, if you’re broke, a $1,000 fix that will keep your car running for two more years might make more financial sense than taking out a car loan for $15,000.

While replacing your car before it completely breaks down and leaves you stranded does make sense, it doesn’t make sense if the following is true:

  • You’ve paid off your car (no monthly car payments)
  • Repairs will keep your car going for more than 6 months
  • Repairs won’t put you in debt

There are, of course, times when you’re repairing your car so often that you should replace it and eat the monthly car payment costs. However, it’s not reasonable to replace a car with 150,000 miles if it’s driving fine and doesn’t cost you much in maintenance.

3. Save Money and Ride Your Bike

This is one comment I continue to hear everywhere, and I just have to laugh when I hear it. For those who can safely bike to work – that’s great! Do it! It will probably save you money.

Unfortunately, there are many places in the US where biking is unsafe or not feasible. In many of the major cities where I have lived or visited, biking is very dangerous and public transit is not convenient. In Phoenix, where I currently live, biking is very difficult, no matter what the biking aficionados would have you believe. If you live anywhere outside of the downtown “core” of Phoenix, you’re facing biking around several freeways on streets that have no marked bike lanes. And don’t even get me started on biking during the summer… you can, quite literally, die (I’m not being sarcastic – 115 degrees and biking do not mix).

While I think it’s worthy to try to become a one-car family, I think for a lot of people that’s a difficult request. Broke people have probably heard this tip before and, if they haven’t become a one-car family or bought a bike, they probably have made the reasonable decision to keep multiple cars so they can get to work.

Every generation has their own struggles (walking uphill both ways in the snow, not having the Internet, having too much Internet, etc.), but one thing a lot of people have in common is, at one point in their lives, being broke. While it’s reasonable to share advice to friends or family members who may be currently broke, there are tips they’ve probably heard that won’t really be that helpful. When my friends and I were broke, the above comments were only a small number of the things we heard that weren’t, surprise, super helpful.

What advice would you have for someone struggling to make ends meet, or what comments did you hear when you were broke that you found unhelpful or helpful?

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5 Ways I’m Saving On Our Wedding http://yourpfpro.com/budget-ways-im-saving-on-my-wedding/ http://yourpfpro.com/budget-ways-im-saving-on-my-wedding/#respond Wed, 17 Feb 2016 14:48:53 +0000 http://yourPFpro.com/?p=6558 With only three days to go before the big day, there has come a point in wedding planning where I’m just saying “forget it.” Ring not cleaned right before the wedding? Forget it! Welcome bags for guests not quite complete? Hopefully no one will notice! One thing I’m not saying “forget it” to is our […]

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With only three days to go before the big day, there has come a point in wedding planning where I’m just saying “forget it.” Ring not cleaned right before the wedding? Forget it! Welcome bags for guests not quite complete? Hopefully no one will notice!

One thing I’m not saying “forget it” to is our budget. While lots of little things have popped up that I didn’t think about, for the most part, we are right on budget. A lot of this has to do with the planning we started over a year ago, right after we got engaged. While some things I wish I could go back and change, I wouldn’t change how much money we’ve spent on most things. Here are the 5 ways I’m saving on our wedding – share yours in the comments!

Not Hiring a Wedding Planner

Up until about 8 months before our wedding, I was set on hiring a wedding planner. Everything online said you needed a wedding planner, that wedding planners make your life easier, and that day-of wedding planners are an absolute must so you don’t lose your mind.

Making it more enticing was the fact that I don’t have siblings or bridesmaids to help me out on the day of. I can’t ask my friends and family to help me with my wedding, right? WRONG! Once I realized a day-of wedding planner would be half of my budget, I quickly realized I just needed to do it myself (and, yes, lean on family a bit).

Luckily, planning your own wedding doesn’t have to be a nightmare. I’m lucky because our wedding is small – only 50 people total. If you have a 150+ person wedding, you might actually want a wedding planner, because all of that could be stressful.

However, if you’re having a fairly small wedding and are very organized, between The Knot’s wedding planner (lists and notebook) and Evernote, plus a calendar, you should be able to take care of most things yourself. It also helps I’ve taken off a few days before the wedding, which means I can tie up any loose ends before the big day. A wedding planner isn’t a necessity for most weddings, and you can save $500+ just on doing it yourself.

Competent Friends

One of the most expensive parts of your wedding, after venue and food/drink, is probably going to be your photographer. It makes sense: photographers are taking photos you’re going to (hopefully) keep forever, and no one else can get the shots they’re going to. A good photographer might even touch up your photos and offer to print a small photobook!

Good photographers in Phoenix go for $2,500 and up, with some of the best around $3,500. While their work looks amazing, that price is almost half our budget. I want great photos, but writing a check for $3,500 (or even $2,500!) for one night would definitely be a stretch.

Luckily, I have a friend who is a professional photographer looking to grow her wedding photography business. She’s already been in the professional photography industry for years, so I know her work, but she hasn’t done many weddings and wants to branch out. I was able to get her to do our wedding for less than half of the expensive pros, and I know she’s going to do a phenomenal job.

Even if you don’t have a friend, ask your friends for their recommendations. I was able to get a professional make up artist to do my make up for a fraction of the price most pros choose just because my friend is her friend – a friend-by-extension discount. You never know who friends or coworkers will know, so ask!

No Expensive Treatments

So many people tried to tell me I needed expensive procedures before the wedding: multiple hair and make up trials (each trial at $75+), teeth whitening treatment, juice cleanses, weird procedures to “melt fat” and make me look trimmer, etc. etc. Did I mention that each of these treatments cost well over $50?

I don’t know what these people were trying to say (maybe my teeth are horrible? I didn’t think so…) but Crest Whitestrips seem to be doing a pretty good job so far. Also, I fit in my dress and look fine, so why expensive juice cleanses or weird fat loss procedures?

If someone tries to tell you you need to do an expensive procedure to “look better” for your wedding, feel free to tell them “thanks, but no thanks.” There’s a lot you can do before your wedding with diet and exercise to look good, and your main concern is fitting into your dress (or suit!), not losing extra weight to look a certain way. Also, if your spouse-to-be thinks you look great, that’s all that matters too, right? 🙂

Shopping Around

I always knew that shopping around for the best deal usually pays off, but I had no idea how true that was until I started shopping around for the wedding. Before choosing your florist, your alterations, your venue – basically everything – make a list of 3-5 places to check out and get quotes from all of them.

Some quotes might horrify you ($14,000 for a venue – and it doesn’t even include food and drinks?!), but eventually you’ll start realizing what a “reasonable” price is and what a dreaming price is. Once you get a ball park range, feel free to go with the business you feel most comfortable with, knowing you’ve done your research.

For example, I went to several different alterations places. The first place wanted to charge me $375 to alter my dress. I had heard from coworkers that $300 to alter a wedding dress was actually “reasonable”, so I was a little prepared. However, when we went to another alterations place the next day, and the woman quoted us $95, I almost fell over. Not only did she do a great job, that price was incredible – and we’ll be going to her for all future alterations!

Even better was my flowers – I went to 4 different places, and all were quoting $2,000+, for pretty average flowers. The last place I went to? $900 total for outstanding flowers! By shopping around, you could save $1,000 or more – so take the extra time to do it, if you can! (Note: you can save even more if you do it yourself, but if you don’t have time or talent for that, make sure to shop around!)

A Desire to Stick to Your Budget

Setting a budget and making a plan is great – but you have to stick to it. It’s so easy to be convinced that you “need” this for your wedding, otherwise it will be a disaster. If I could count how many times people told me I “needed” this or that, I would probably have enough money to pay for an exotic honeymoon!

In the end, all you need for a wedding is you, your spouse, someone to marry you, and maybe witnesses to sign your document. You don’t need an expensive venue, amazing flowers, or even a DJ. If you keep that in mind, it makes it easier to stick to the budget you initially set. Sure, there will be unexpected costs, but if you keep the big picture in mind, you won’t be as easily swayed by “designer guest favors” – yes, that’s a thing!

How did you keep your wedding on budget, and what recommendations do you have for recently engaged couples?

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Using the KonMari Method on Your Budget http://yourpfpro.com/using-the-konmari-method-on-your-budget/ http://yourpfpro.com/using-the-konmari-method-on-your-budget/#respond Thu, 11 Feb 2016 04:53:16 +0000 http://yourPFpro.com/?p=6551 By now, you’ve probably heard of Mari Kondo’s best-selling book The Life-Changing Magic of Tidying Up. In the book, author and professional organizer Mari Kondo describes how to declutter and simplify your life using her methods. The #1 bestseller on the New York Times list has developed a cult-like following, according to the Wall Street […]

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By now, you’ve probably heard of Mari Kondo’s best-selling book The Life-Changing Magic of Tidying Up. In the book, author and professional organizer Mari Kondo describes how to declutter and simplify your life using her methods. The #1 bestseller on the New York Times list has developed a cult-like following, according to the Wall Street Journal, with people all over the world thanking their possessions for their service before tossing or donating them.

If this all sounds a little “New Age” or hipster (“life-changing magic”? Thanking your possessions?), I would have once agreed with you. Then I read the book, and I realized that while Mari Kondo’s presentation style can be a little far-fetched, the whole decluttering and simplifying your life is fantastic for so many reasons.

I recently implemented the KonMari method (Mari Kondo’s name + method) into my finances, and I’ve realized using the KonMari method on your budget can help you save money, make money, and finally get your finances under control. Here’s how I use the KonMari method to manage my finances, and how you might want to as well.

Using the KonMari Method on Your Budget

The KonMari method is designed to help you declutter, simplify and organize your life – many things we all strive for in our budgets, too. The primary questions asked throughout the KonMari method is: does this thing give me joy? If the answer is no, Mari recommends you discard it (or don’t buy it if you were about to).

According to Mari Kondo, clients who truly embrace the course have the most success. In fact, Mari says that of those who embrace the KonMari method, there is a 0% failure rate. If you’re serious about managing your money, it might be time to try the KonMari method and see if it’s right – and successful – for you.

Using the KonMari Method to Save Money

What’s interesting about the KonMari method is that it’s all about working with what you have first. Mari Kondo requires you to go through your stuff first and discard everything that doesn’t immediately make your life better.The KonMari method actually asks you to touch and ask your possessions “does this bring me joy?” Surprisingly, this works!

What this means for your finances is reviewing everything you pay for now and asking if it really makes you happy. Yes, this includes your mortgage payments too! Almost everything in your budget can be negotiated, and if it can’t, consider downsizing or eventually making a move that makes you happier. (Note: this may not apply to debt you can’t discharge, like student loans or hospital debt. On the other hand, you could try to call your bank and see if your payments can be lowered).

In addition, you can use the KonMari method right away, every time you go out. The KonMari method is most useful when you’re contemplating buying a new item (i.e. not food). That new shirt? Really think about if it’s right for you. If you have another shirt that will work, save your money and make do with what you have.

Using the KonMari Method to Make Money

Once you’ve gone through your budget, use the KonMari method to help you make money! Define your goal (debt repayment, travel, retirement savings, etc.) then figure out how you can augment what you bring in every month.

This is where doing the other things Mari Kondo recommends, like cleaning out your home, comes in handy. Unless you regularly clean out your home of unneeded possessions, you likely have things in your home that are valuable and that you don’t use anymore. Once identified, consider selling these items to make extra money:

Don’t forget yard sales, Craigslist, and eBay too!

In the end, the KonMari method can be very effective for helping you get your budget in order. The premise of the KonMari method is not to overwhelm you: it’s actually to get your life simpler. Instead of having file folders for taxes, insurance, home, health, etc., keep 1 file folder with important, long term items (birth certificate, for example) and 1 for immediate things, like bills you need to pay. That’s it!

Have you heard of the KonMari method, and have you tried it? How do you currently organize your finances?

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5 Ways to Reduce Your Taxable Income This Year http://yourpfpro.com/5-ways-to-reduce-your-taxable-income-this-year/ http://yourpfpro.com/5-ways-to-reduce-your-taxable-income-this-year/#comments Wed, 28 Oct 2015 13:30:10 +0000 http://yourPFpro.com/?p=6383 It’s almost the end of the year, which means you might be a little curious about next year’s taxes. If you received a raise this year, had a change in marital or family status, or run your own side business, you may also be wondering how to reduce your taxable income to not owe as […]

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It’s almost the end of the year, which means you might be a little curious about next year’s taxes. If you received a raise this year, had a change in marital or family status, or run your own side business, you may also be wondering how to reduce your taxable income to not owe as much in April.

Lucky for you, I love to plan ahead of time. In this case, months ahead of the April 15, 2016 tax deadline. Every year, I try to reduce my taxable income as much as I legally can. After all, no matter what you think of them, you can probably think of better ways to use your money than by giving more of it to the federal government.

In the spirit of reducing your taxable income so you can put your money to things you enjoy, here are 5 ways to reduce your taxable income legally.

Know What You Might Owe

One of the best ways to prepare yourself for tax season is to understand your current financial status. Try to estimate your taxes by preparing your tax returns using all the information you have right now. You may need to estimate some numbers, but you can base a lot of the unknowns on previous year’s taxes, unless your status changed dramatically (multiple new children, a new job going from a teacher to a Wall Street banker, etc.)

Knowing what you owe will help you decide on a strategy now to reduce your taxable income. If you work with a tax professional, they may also be able to guide you in determining the best avenues to take to reduce your taxes.

 

Supercharge Your Retirement Savings

If you’ve been putting in the minimum in your retirement savings accounts and just coasting through the process, it’s time to supercharge your savings to reduce your taxable income. Increase your 401(k) contribution as much as you can afford, making sure not to go over the $18,000 contribution limit for 2015.

Already maxed out your 401(k), or don’t have one? Contribute to your Traditional IRA, up to $5,500 this year. You can also contribute to your Roth IRA, but you won’t see any tax breaks for it up front. While you have until April 2016 to contribute to your IRA, the sooner you put money into your IRA, the more time it has to grow tax-deferred. Saving for retirement and reducing your taxable income? Win-win!

 

Save for Future Health Expenses with Your HSA

One of Harry’s (and now mine) favorite investment vehicles, you can contribute $3,350 as an individual and $6,650 as a family to your HSA. Best part? Your savings helps to reduce your taxable income!

In addition to reducing your tax burden, you’ll also be saving for future medical expenses. Medical care is only projected to get costlier, so it’s nice to start seriously saving for it while you’re young! I also love HSAs for their portability and flexibility. With your HSA, all of your investments go with you, even if you leave your job. There’s also no spending requirement by the end of the year like there is with a flexible savings account.

 

Give to Charity

Another one of my favorite ways to reduce taxable income is giving to charity. Now, in many cases your charitable giving does need to be paired with some other deduction, like student loan interest or home mortgage deduction, but this doesn’t mean you should neglect charitable donations to reduce your taxable income.

If you’re already planning on donating this year, and you’ve planned ahead to determine how much you may owe in April, consider donating a little more to reduce your overall taxable income. You may find that, including other itemized deductions, your charitable deduction will save you more money than taking the standard deduction. This way, you’re helping out your favorite charity (or your kid’s school, etc.) and reducing your taxable income!

 

Paying for Childcare

Speaking of kids, if you have children in daycare, you may want to consider paying your child care expenses with pre-tax dollars. Some employers offer flexible spending accounts with dependent care, allowing you to save up to $5,000 for childcare (including daycare, but not babysitting).

While daycare around the country generally costs much more than $5,000 a year, saving $5,000 pre-tax and spending it on your child’s daycare or other approved expense is definitely a good way to reduce your taxable income – if you have a kid, of course. This plan doesn’t yet apply to pets 🙂

Of course, it only makes sense to defer income if you think you will be in the same or a lower tax bracket next year. You don’t want to be hit with a bigger tax bill next year if additional income could push you into a higher tax bracket. If that’s likely, you may want to accelerate income into 2015 so you can pay tax on it in a lower bracket sooner, rather than in a higher bracket later.

 
There are still many ways for you to reduce your taxable income this year. It’s not too late to increase retirement contributions, stash away more money in your HSA, or even increase your flexible spending account (as long as you make sure to spend it on time). Are you trying to reduce your taxable income, and how do you plan to do so this year?

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Why You Need to Fight Lifestyle Inflation http://yourpfpro.com/why-you-need-to-fight-lifestyle-inflation/ http://yourpfpro.com/why-you-need-to-fight-lifestyle-inflation/#comments Wed, 12 Aug 2015 13:30:47 +0000 http://yourPFpro.com/?p=6264 After graduating from college, or moving out of your parents’ house and into your own place, it’s easy and sometimes necessary to increase your lifestyle. After all, eating ramen every single day is affordable, but not healthy. Upgrading your food budget to incorporate fruits and vegetables may be a little more expensive at first, but […]

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After graduating from college, or moving out of your parents’ house and into your own place, it’s easy and sometimes necessary to increase your lifestyle. After all, eating ramen every single day is affordable, but not healthy. Upgrading your food budget to incorporate fruits and vegetables may be a little more expensive at first, but a healthier diet will save you money in the long term.

However, as you start to increase certain parts of your budget in the pursuit of living like a reasonable adult, it gets harder to distinguish what is a necessary upgrade and what is just you wanting to improve your lifestyle. Lifestyle inflation, or increasing your lifestyle commensurate to pay increases, is tricky to identify but can lead to financial insecurity. Before it takes over your life and budget, here are some ways lifestyle inflation manifests itself and how you can combat it. Lifestyle inflation is an easy trap to fall into - who wouldn't want to enjoy their hard earned money? But how much enjoyment is too much? Here's what to look out for!

What Lifestyle Inflation Looks Like

In reality, lifestyle inflation is more than just increasing your budget as your salary increases. Lifestyle inflation occurs when you start to compare yourself to others and become dissatisfied with what you have. In order to combat this dissatisfaction, you buy things you think will improve life. Examples of lifestyle inflation could be:

  • Throwing yourself an extravagant party when you turn 30 because you “deserve” it
  • Buying a brand new car because everyone at your company drives a 5-year-old or less car
  • Purchasing a bigger home than you need because you can, then having to fill all the empty rooms
You know you’re encroaching into lifestyle inflation territory when you tell yourself “if only I made 5% more, then I could save for retirement” or “when I get my bonus, then I can start my emergency fund.” If you’ve started a new job or received a raise, can pay all reasonable bills to put a roof over your head, yet still can’t save anything? You might be into lifestyle inflation territory.

Why Lifestyle Inflation is So Insidious

In addition to not adding much to your happiness, lifestyle inflation can keep you from achieving financial stability. According to The Pew Charitable Trusts, 55% of American households are “savings-limited”, meaning they can replace less than one month of their income through liquid savings. The typical low- to middle-income family can only replace 2 weeks to 4 months of lost income – total.

Earnings growth has also been stagnant. In many companies and organizations, productivity has increased but wages have not raised as quickly, if at all. Consider your last raise: how long had it been before that raise? How often can you reasonably expect a raise like that? If you can’t expect a raise on a regular basis, the income you bring in now should be the only income you budget from – not future income you expect to make.

How to Combat Lifestyle Inflation

Keeping lifestyle inflation at a distance will be a consistent challenge, especially as you do increase your salary. Luckily, there are several steps you can implement that will make beating lifestyle inflation easier throughout your life.

Keep a Budget & Pay Yourself First

We all know about the importance of creating a budget. Creating a reasonable budget can show you where lifestyle inflation is creeping in and can help you decide what’s most important to you in life.

When creating your budget, make sure to pay yourself first. This could mean setting aside as little as $100 per paycheck in order to fund your emergency savings, or saving 10% a month for retirement. By immediately reducing your paycheck and saving for your future self, you’ll automatically reduce your ability to increase your lifestyle.

Determine Your Priorities

Before you assume I’m telling you to live a boring life, with no fun expenses ever, let me assure you I’m not. In fact, I want you to figure out what’s important to you and then spend your money on it. There are things in life you’ll love to do, even if others see them as frivolous, but you should enjoy your money as much as possible.

For example, my fiancé and I love to travel. Some may see our travels as wasting our money instead of investing it soundly. However, my fiancé and I have reduced our lifestyle in other ways, such as an affordable house and a limited clothing/entertainment budget, in order to afford our travels.

If a scuba diving habit is your priority, budget for it! It’s your passion and, as long as you’ve reduced expenses in categories you don’t care as much about, you’re not falling a victim to the lifestyle inflation trap. Same thing goes for you if you love to cook and want to spend money on expensive equipment or nice ingredients: as long as you’ve made a reasonable budget, there’s no reason not to enjoy your money on a hobby you love!

Forget Comparisons

Avoiding lifestyle inflation is easier once you stop comparing what you have to what others have. Everyone has different priorities and expenses, and that expensive 30th birthday party your friend had might not have been as extravagant as you thought. As long as your budget and savings works for you and your family, that’s the only thing you need to worry about.

Sometimes lifestyle inflation makes a lot of sense. After all, we’re not designed to lead boring lives devoid entirely of fun. You work hard for your money and should enjoy the money you’ve made, but it’s easier to enjoy it if you have a plan. There’s a happy medium between lifestyle inflation and enjoying life, and it’s up to you to determine your own priorities for financial security and happiness.

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Money Moves to Make in Your 30s http://yourpfpro.com/money-moves-make-30s/ http://yourpfpro.com/money-moves-make-30s/#comments Sat, 31 Jan 2015 14:30:10 +0000 http://yourPFpro.com/?p=5843 In today’s society, it’s easy to get complacent when it comes to your finances.  Today, PF Pro contributor, Melissa Hoffman takes a look at five money moves you should make in your 30’s.  Don’t put these off until it’s too late, take action now! While your twenties may have been a time of massive change […]

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Money Moves to Make in Your 30s

In today’s society, it’s easy to get complacent when it comes to your finances.  Today, PF Pro contributor, Melissa Hoffman takes a look at five money moves you should make in your 30’s.  Don’t put these off until it’s too late, take action now!

While your twenties may have been a time of massive change (and perhaps some massive debt, either in student loans or credit cards), your thirties are the sweet spot: young enough to still have tons of earning potential, and old enough to have made enough mistakes and (hopefully) be more prepared for the life expenses coming your way.

Some things in your 30s will stay constant: building up your emergency savings and making sure you can survive an unexpected job loss or major car repair, saving up for retirement and increasing your contribution rate. However, your 30s bring additional challenges in the form of a spouse who may rely on you, kids you may want (or are currently raising), and buying a house (or maintaining the one you have). With your 30s brings great responsibility, but also great power to harness your maximum potential.

Money Move #1: Focus on your career

By now, you probably have a few years of experience under your belt in your chosen field. Now is the time to evaluate your career track: is this a career you’ll want to stick with for another 20-25 years? If yes, ramp up your exposure to the company. Volunteer for more visible roles, sign up for public speaking classes, and document all of your achievements. If there is a position you want, aggressively pursue it by reading up on the job description and getting some of that experience under your belt. When the position opens up, you’ll already have the exposure and experience to be a seamless fit.

If you don’t like your job, take the skills you’ve mastered over the last few years and shop them around to new companies. Dust off your resume and update it to reflect your new skills, then send it to sectors or employers you’ve heard about and are interested in working for. Don’t feel tied to one location, either. If you don’t yet own a home, open up your search nationwide, or narrow it down to a few different cities you like. Now is your time to maximize your earning potential, so don’t hesitate to apply for many different jobs.

Money Move #2: Ask for a raise

Check salaries on Glassdoor.com to see if you’re being paid equitably. While some companies are more transparent about pay, some are not, which is where Glassdoor.com comes in handy. If you’re friends with coworkers, you could broach the topic of pay, but tread carefully. If you think you’re underpaid compared to Glassdoor’s analysis or your own sleuthing, take a look at your accomplishments and draft up a game plan to ask for a raise.

An employee moving up the ladder who takes on additional work is an incredible asset to companies, and in your 30s, you have enough experience to ask for more. You’re no longer entry-level, so you have much more negotiating power than you may have had in your 20s.

Money Move #3: Shore up your income by side hustling or establishing passive income

If you’ve been reading Your PF Pro for a while, you’ll know that Harry is a big proponent of side hustling to bring in extra money. Whether yours is to pay off debts or bring in extra income, your 30s are a good time to establish some form of extra income generation.

Get started by evaluating your strengths: are you good at Excel and managing databases? Offer your services on Elance.com or network with people who work in your sector. Want a more passive income stream? Consider investing in dividend-paying funds or, if you have the money, consider buying a home to rent out. Being a landlord isn’t necessarily an easy way to make money, but with the right renters, you could have a steady stream of income that will last for decades.

Money Move #4: Get Your Affairs in Order

In your 30s, you may own a house, have a child, or are planning on settling down and expanding your family. Have you looked at your insurance lately? If you’ve had any major life changes, it’s time to review your insurance policy. If you have a spouse and kid(s), it’s imperative you have a life insurance policy set up to take care of them in case of your death. Even if you are not the primary breadwinner, it’s still important to have a life insurance policy to help out with expenses if you pass away. While no one wants to think of that, it’s important to have a policy in place, because the alternative (no money for your family) is worse.

In addition to making sure you have the right insurance (including home, auto, and adequate health insurance for your family), you’ll want to get your estate in order. I know, it sounds so far off: your “estate.” But your estate means a lot of things: if the worst were to happen, who do you want to take care of your kids? If you have your own business, have you set up a trust to make sure your assets are protected? At the very least, sit down with a lawyer and draft up a will. If you have anything of value, you’ll want it protected and bequeathed to people you choose, and not have it tied up in probate forever.

Money Move #5: Become a Finance Ninja

If you still have debt, especially credit card debt, work your butt off to eliminate it in your 30s. By erasing as much debt as you can in your 30s, you’ll free up your 40s to invest the maximum in your retirement accounts. If you don’t have any debt by your 30s (congratulations!), take advantage of company benefits. If your employer matches 401(k) contributions, contribute the maximum to take advantage of the match. Enrolled in a High Deductible Health Plan with a Health Savings Account? Invest in that for a double benefit: reduce your taxable income and save for health related expenses in retirement.

Continue with your current investment strategy, but seek to max out at least one investment account, whether it’s your 401(k), Roth IRA, or traditional IRA. If you haven’t bought a house, consider buying one, particularly if you’re in a city and job you love. It’s a major investment, with its own major expenses, but it’s another way to build equity. A house also includes the intangibles, including having a place to call home and raise your family.

While 30 may not be the new 20, that’s not necessarily a bad thing. A lot of us going into our 30s graduated during the recession of 2008 and are finally starting to get our on feet. Your 30s should be the decade to really get going on life: establishing a solid career or your own business, having a family (whatever your definition of family is – pets included!), and buying a house (or being a traveling nomad). By following these money moves, you’ll enter your 4th decade on this planet already ahead of the game!

What money moves are you making to enter your 30s successfully, or what money moves did you make in your 30s? Do you agree with this list, or are there money moves you would add?

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The Gamification of Investing http://yourpfpro.com/gamification-investing/ http://yourpfpro.com/gamification-investing/#comments Wed, 14 Jan 2015 14:30:41 +0000 http://yourPFpro.com/?p=5809 Turning events into games is one of those endearing hobbies that a lot of us like to indulge in. Whether it’s Fantasy Football or Fantasy Football, The Bachelor Edition (yes, that’s a thing), we all like to turn things we can’t control into a game. It turns out even investing isn’t immune to being turned […]

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Turning events into games is one of those endearing hobbies that a lot of us like to indulge in. Whether it’s Fantasy Football or Fantasy Football, The Bachelor Edition (yes, that’s a thing), we all like to turn things we can’t control into a game.

It turns out even investing isn’t immune to being turned into a game. Fidelity Investments has created a new product that makes investing in the stock market seem like a game. From the review by Time Magazine, the game appears to look like one of the early versions of SimCity. From Time, “as you glide through the virtual city [StockCity] that you’ve designed, buildings represent the stocks or ETFs in your portfolio, the weather represents the day’s market performance, and red and green rooftops tell you whether a stock is down or up for the day. Who wants to be a measly portfolio owner when you can instead be the ruler of a dynamic metropolis—a living, breathing personal economy?

FIdelity’s tool uses Oculus Rift, the virtual reality headset, to get you into the game managing your own city and investments. The consumer version of the game won’t be available for a few months and, unless you’ve got your hands on an Oculus Rift, you’ll have to use the 2D version of it. However, it got me thinking: many Americans don’t like investing, and would this technology get them more into it?

Virtual Stock Market For All?

There are obvious pros and cons to this type of investment-gaming. First of all, it’s your actual money. You don’t want to get so into a game that you start throwing money into dubious investments just because it’s more fun. It’s like gambling in Las Vegas: while the bright lights and free drinks make for a fun environment, that doesn’t mean you should shell out an extra $1,000 just to keep that party going.

It’s also not clear you’re getting any sort of advice on these investments. Stocks by themselves are not right for everyone. Some people are better served with index funds, dividend stocks, etc. Without any type of guidance on the investments you’re buying, we’re again back to gambling.

That all said, I do think there is a case for making investing more fun. When roughly only half of Americans are investing in the stock market, I do think it’s a signal that the message of why investing is important is not getting across to people. So how can we make investing more appealing, while still making sure people understand the risks associated with it?

Making Personal Finance Enjoyable At a Young Age

If virtual investing is not for you (whether you already find investing fun or think Fidelity’s game is a gimmick), there may be some people in your life you’d like to get into investing. Personally, I think making investing more fun is beneficial. At the very least, getting the next generation involved in investing is a worthy goal, and sometimes people just won’t listen to you unless you make the topic more fun or relevant to them.

While the virtual stock market may be too much for most people, it’s easier to go back to the basics: board games. Now, this may be too basic for those of us reading YourPFPro.com, but it’s not too basic for the younger people in your life. Given the sorry state of financial literacy in the US, you may want to play some of the following board games at your next family gathering.

Monopoly

Monopoly, while not one of my favorite financial board games to play, can teach people a lot about planning ahead. While it’s nice to buy up every property you land on in the early rounds, that strategy quickly goes out the window if you land on something important, like Boardwalk, but have spent all your money on Mediterranean and Baltic Avenues (among others).

Even more importantly, Monopoly teaches you to save for emergencies. You never know when you’ll land on someone’s Pennsylvania Avenue with three houses and immediately owe your jubilant cousin $1,000. While in real life, your cousin would hopefully give you a deal on rent, any other landlord won’t be so forgiving.

In addition to teaching your loved ones the value of having an emergency fund, Monopoly also teaches budgeting skills. When you’re looking to add a house on to one of your properties, not only do you have to save up to purchase that house, but you’ll also want to have money left over for contingencies.

The Game of Life

One of my all-time favorite games, The Game of Life immediately forces you to make some tough life choices. From the beginning, you have to choose whether or not you want to go to college (and take on debt) or start working immediately (and command a lower salary throughout the game).

As with all board games, there is an element of luck to the game. Sometimes I’ve played without a college degree and still ended up winning, other times I’ve played with the college degree but landed on tough spots and never fully paid off my debt. However, other times I’ve been the Doctor with a $100,000 salary and completely shredded all of my opponents (beloved family members) halfway through the game.

In addition to evaluating college choices, The Game of Life also encourages you to think about home and auto insurance. If you have the Mobile Home card for $60,000, you may think less of home insurance than your $200,000 Mansion card. However, if you can’t afford home insurance at the time, do you risk it and cross your fingers your home doesn’t flood? While your younger family members might not understand the gravity of a home flood in relation to a game, it at least starts a conversation about what insurance is and why it can be beneficial.

Whether making investing fun through games is for you or not, it is interesting to see how companies are trying to make investing more interactive. With only half of Americans in the stock market, the market is obviously there for more people to become investors.

Personally, I’d like to see more gamification of saving and budgeting. Creating a budget and planning long-term isn’t glamorous or sexy, but you have to wonder if some people are avoiding the stock market because they simply don’t have any money to invest. Unless we tackle the problem of getting people to not live paycheck-to-paycheck, I’m not convinced these games will be that effective. While playing board games may seem frivolous, it’s one way to open a dialogue with kids and teens about investing and planning for the long term.

What do you think of Fidelity’s StockCity? Do you think it will get more people into investing, or is it only a marketing ploy? How do you think the next generation could be more financially literate – in schools, at home, or both?

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My Favorite Frugal Fall Activities http://yourpfpro.com/frugal-fall-activities/ http://yourpfpro.com/frugal-fall-activities/#comments Wed, 22 Oct 2014 12:45:46 +0000 http://yourPFpro.com/?p=5541 PFP: Living in SoCal has its benefits but it would be nice to see the leaves change color once in a while.  Today, PF Pro contributor Kali Hawlk takes a look at all the best free activities out there to do during the fall.  Personally, I think the best types of activities are the free […]

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Frugal Fall ActivitiesPFP: Living in SoCal has its benefits but it would be nice to see the leaves change color once in a while.  Today, PF Pro contributor Kali Hawlk takes a look at all the best free activities out there to do during the fall.  Personally, I think the best types of activities are the free ones and if you look hard, you will be amazed at the opportunity out there to have fun for little to no cost.

Fall is, hands down, my favorite time of year. I live in the South, and you do not know how amazing it is to simply exist outside until you have endured 90 degree heat with a gazillion percent humidity one day, and then a comfy, breezy, 70 degree, not-a-cloud-in-the-blue-sky day with zero humidity the next.

Fall is also great for the abundance of opportunities to get out and enjoy the day for cheap or entirely free. So forget about your pumpkin spice latte. (Seriously, please leave it behind. It’s not that good and doesn’t even contain pumpkin, people.) Instead, grab your friends and family and try one of my favorite frugal fall activities this season.

Hit Up Local Festivals

Festivals, fairs, arts and crafts shows — they’re everywhere this time of year and many of them don’t charge an admission if you simply want to walk around and check out what’s on display. And if you do want to pull out your wallet and spend a little money, you’ll most likely be buying from local or individual artists and vendors and receiving something unique in return.

Take a Hike

I’m a bit biased, having grown up in the foothills of the Appalachian mountains, but I don’t see what could be better than walking out your front door and into the woods for an outdoor adventure. Bring a small pack and some snacks or sandwiches and hit up your local hiking trails this fall!

If you don’t live in an area with lots of trails in the wilderness, there’s nothing wrong with paved city bike paths or walks around your local park. Whatever you do, take advantage of the crisp fall air and pleasant temperatures to get yourself moving outside. Not only does this cost you nothing, it’s good for your mind and body, too!

Hide from Trick-or-Treaters

Y’all, I am not even kidding. This started out kind of sad, but now I actually look forward to this every fall.

We live in a neighborhood that’s heavily trafficked by the kiddos on Halloween. This was our first house, so our first opportunity to be on the receiving end of the candy exchange. We were so excited.

Then we went to the store to pick out bags of candy. As the broke newlyweds we were, we could not believe how much bags of candy cost. (Even $20 was a big deal to us at the time, and not something we took parting with lightly.)

We decided to skip it and simply pretend we weren’t home. We turned off all the lights, closed the blinds, and went and hid upstairs where we binged watched Netflix. And it was kinda fun!

So we became big ol’ curmudgeons who won’t spend money on candy to give to kids at Halloween and I love it.

Pick Pumpkins and Apples

What would a fall activity list be without this suggestion?

Sure, it’s cliche, but that doesn’t mean going to the pumpkin patch or apple orchards isn’t a lot of fun — and it definitely doesn’t need to cost too much.

Host a Seasonal Party

Whether you want to get dressed up in crazy costumes with your friends for Halloween or want to invite people over for a dinner party featuring some of your favorite fall dishes and drinks, this is a great time to get together and start spending time with the people you enjoy being with most.

Plus, it’s a great excuse to use the carload of pumpkins and apples you just brought home.

This may sound a little silly considering the holidays right around the corner, but getting together now gives you a chance to enjoy everyone’s company without all the stress. You’re not obligated to invite members of your family over if you don’t want to see them, and because there’s no specific occasion you might be a little more free from the usual rituals and traditions.

Don’t worry about a fancy dinner or dressing up. Have some folks over and enjoy a campfire in the backyard along with some apple cider and pecan pie.

What do you love to do during this season? What’s your favorite frugal fall activity?

-Kali @ PF Pro

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How Much Does It Cost To Go To FinCon? (And My Biggest Takeaway From The Conference) http://yourpfpro.com/much-cost-go-fincon-biggest-takeaway-conference/ http://yourpfpro.com/much-cost-go-fincon-biggest-takeaway-conference/#comments Wed, 01 Oct 2014 17:09:24 +0000 http://yourPFpro.com/?p=5445 One of the coolest parts about being a personal finance blogger is the community that I get to engage with on a daily basis.  I started blogging three years ago as a way to really just jot down all my thoughts on personal finance.  A lot of times when I can’t remember why I’m investing […]

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One of the coolest parts about being a personal finance blogger is the community that I get to engage with on a daily basis.  I started blogging three years ago as a way to really just jot down all my thoughts on personal finance.  A lot of times when I can’t remember why I’m investing my HSA a certain way or what the process was like applying for my latest credit card, I can simply look back and read one of my old articles.

The thing that’s surprised me most though during my blogging tenure is how awesome and friendly other bloggers have been.  Unlike most industries, PF bloggers are one big family and they’re all pretty much willing to help each other out(as long as you approach it the right way of course).  Over the years, I’ve e-mailed back and forth with countless bloggers but I have never met any of them in person.  That all changed with this year’s FinCon though.

FinCon in New Orleans

FinCon is a conference held annually where members of the money media community get together for a few days of learning, fun and networking (that is adult speak for drinking fyi).  I’ve always had some excuse why I couldn’t go to FinCon in the past but when I found out this year’s event was going to be in New Orleans that pretty much sealed the deal for me.  It’s a city I’ve always wanted to visit and I actually thought about having my bachelor party there at one point but the flights ended up being just too expensive.

Everything seemed to align this year though, so there was no way I could say no!  I’ve heard great things about New Orleans: awesome food, beautiful architecture, great night life, amazing live music so what better way to visit than for a business trip where I would also get to deduct all of my expenses.

I also felt like now was the perfect time to go because I’ve e-met a large number of people through blogging but never even met any of them in the flesh.  There are a handful of bloggers who I’ve been e-mailing back and forth with for years but all I’ve ever seen of them is a tiny little profile picture.

How Much Does FinCon Cost?

You might think that at a personal finance conference you wouldn’t spend much money but I was actually surprised at how care-free everyone was.  No one really complained about where we were going to eat or how much this or that cost, everyone was pretty cool and laid-back about things.

I don’t think you need to spend a ton of money to enjoy yourself when you travel but at the same time I’m not going to buy a Subway sandwich when I’m in New Orleans to save a couple bucks, I’m gonna go get an awesome Po’Boy and live it up!  It does help though if you have a knack for finding deals that will save you some cash.

So here’s what my budget looked like for the trip:

Cost My Cost
Flights $740 $11
Exit Row Upgrade $78 $39
Airport Transportation $129 $69
Hotel $488 $408
Food $143 $143
Drinks $173 $173
Taxi $24 $24
Miscellaneous $38 $20
Conference Cost $205 $205
Total $2,018 $1,093

Flights

One of the reasons why we ended up going to San Francisco instead of New Orleans for my bachelor party was the insane cost of flights.  Even flying off-peak, New Orleans (MSY) was still pretty expensive.  And if you want to fly direct, it’s even more ridiculous.  Direct flights were in the $500-$750 range from Los Angeles when I looked them up a few months ago.

I found some reasonably priced flights on Southwest for $300-$400 but they all included a stop over.  Normally, I would have been ok with this but I found a decent option on Delta for 42,500 points.  Delta is known for being among the worst airlines when it comes to redeeming miles but I guess I got lucky.  I’ve had 14,000 miles sitting in my Delta frequent flyer account for years and this was the first time I’ve ever even been inclined to redeem them.  There’s a reason why Delta’s Sky Miles have been dubbed ‘Sky Pesos’ in the miles and points industry.

I ended up booking a roundtrip non-stop flight out on a Wednesday (12,500 pts) and back on Sunday (30,000 pts!) evening for 42,500 points.  I used the 14,000 points in my account and transferred in 29,000 more from my Amex Membership Rewards account (Delta is a 1:1 transfer partner of Amex).  The flight would have cost me over $700 if I paid cash so it was actually a pretty decent redemption value.  Although, I will admit I’d probably take Southwest and a layover for $350 before I’d ever pay $700+ for a non stop flight on Delta.

I ended up paying $11 in taxes and 42,000 points for a $700+ flight.

Exit Row Upgrade

Delta gives you the option to upgrade your seat 24 hours before the flight.  You can try to upgrade for free on the day of but since I get 24 hour check-in reminders from Tripit Pro I logged on to see what they could offer.  An upgrade to economy comfort was $79 while an upgrade to the exit row was only $39.  Despite being 6’3″ I can normally handle anything under 4 hours in economy no problem.  But it is nice to be able to stretch out a bit, leave your bag under the seat in front of you and actually be able to work on your laptop without being too confined.

According to Seat Guru, the exit row seats actually had more leg room than economy comfort so for me it was a no brainer to spend the extra $39.  On the way back, I actually used my brand new Ritz Carlton Rewards card to pay for the upgrade so that leg was free. The RC card reimburses you for up to $300 in airline incidental purchase each calendar year.

I ended up paying $39 for $78 worth of upgrades.

Airport Transportation to/from LAX

I live about 45 minutes away from LAX and since my flight was pretty early I figured my best option was to take an Uber to/from the airport.  I used whatsthefare.com to approximate the fare and found out it would cost around $60-$65 for a ride.  Since I have a bunch of $30 free ride coupons from referring new passengers, the ride was essentially half off both ways.

Related Article: How to Get Picked Up By Uber at Major Airports Like LAX

If you haven’t tried out Uber yet, you can actually still get your first ride free up to $30 (and Lyft is also giving away $25 free for new riders).  There’s nothing better than free rides!

I ended up paying $69 for $129 in rides from Uber.

Hotel

The hotel for the conference was the downtown Marriott on Canal St. It was in a great location right in the heart of the city and just a few minutes walk to Bourbon St. and about 10 minutes from Jackson Square and 15 minutes to Frenchmen St.  The hotel itself was pretty nice but the rooms were a little dated compared to other Marriotts I’ve stayed at in the past.  My only real complaint though was that I felt like I was in a room built for hobbits.  When I walked into the bathroom, the mirror only came up to my chest and the ceilings were also very low.  I’m not sure if it was just my room or what, but I kept joking with everyone that I felt like I was a giant in my room 🙂

I could have used points to stay at a hotel nearby but I think there is a lot of benefit to staying at the same hotel where the conference is being held.  For one, it’s great for taking naps since your room is right upstairs and it’s a lot easier to meet people, re-convene, have drinks at the bar, etc.  This is one area of the trip where I’m glad I didn’t cheap out on and stay somewhere else to save money.

I did manage to find a way to save a little money though on the hotel stay using my Amex cards.  Right now, Amex has a Twitter sync deal where you can link your card to your Twitter account and activate certain promotions.  One of the promotions I found was $20 off $100 spent at Courtyard Marriotts.  So on Sunday before I checked out, I hopped over to the Courtyard down the street and bought 4 x $100 gift cards with four separate Amex cards.  Since Courtyard gift cards can be used at any Marriott property, I was able to pay for part of my room and save $80!

I ended up paying $408 for about $488 in hotel expenses.

Food

Food is always a huge part of my trips, I’ve even been known to stopover in certain cities just to sample the local fare (ahem, Istanbul!).  I love experiencing new cuisines, trying new things and eating foods that I don’t get to see on a regular basis.  Obviously New Orleans is world famous for their seafood so I was pretty excited to try all that the city had to offer.  I actually didn’t eat out as much as I thought I would though since the conference did a great job providing us catered lunches and free food at events like the Betterment Happy Hour.

My favorite meal came at a small restaurant in the Marigny/Treme area off of Esplanade St. at a place called Buffa’s Bar and Restaurant.  This was actually my first meal of the trip and I split a red fish po’boy with a friend.  It was very simple but the fish was so tender and juicy and cooked to perfection.  What a great first meal in New Orleans!

My second favorite meal of the trip came at a small local creperie called Deville right near Jackson Square.  I walked right by Cafe Du Monde to get to this place and I’m glad I did.  In my experience, touristy places like that are always over-hyped, over-priced and underwhelming.  You want to eat where the locals eat!  At Deville, I had a really good iced coffee and an amazing Chicken Florentine crepe!

The last memorable meal of the trip came with my buddy Sam on the day after the conference.  A little hungover, a little tired and a little exhausted, we headed out for one final showdown with the muggy streets of New Orleans.  We went to a place called Port of Call off of Esplanade St (by far my favorite street in all of New Orleans: lots of saloon style balconies, old school converted mansions and big trees).  It’s an old sailor themed bar that serves some of the best burgers in NOLA, plus they give you a loaded baked potato with your meal.  The burger was pretty solid, not the best I’ve ever had but definitely a good final meal in New Orleans 🙂

Altogether, I spent $143 on some pretty solid food over 5 days!

Drinks

Even though I managed to secure copious amounts of free drink tickets, this was still by far one of the biggest budget items of my trip.  I’ve never been the type of person to wait around for someone to buy me a drink so I’m usually one of the first ones at the bar.  So if I bought you a drink, you’re welcome!  I probably spent a lot more on drinks than the average attendee but it was well worth it and I’d do it again in a heartbeat.

Ignoring all the free drink coupons that PT and countless others gave me, I managed to spend $173 on drinks over 4 nights – now that’s impressive.

Taxi

I was able to get a ride from the airport to downtown with a friend when I arrived in New Orleans and during the conference I only took one cab for $7.  I split a cab three ways on the way back to the airport and that cost $17 each.

I hate paying for taxis so I was pretty happy that I only spent $24 on cabs while in NOLA despite it being hot and humid the entire time.

Miscellaneous

Outside of the main categories, I really didn’t spend much on anything else.  Didn’t buy any coffee, snacks or souvenirs – just a whole lot of drinks.  I did have to take out some cash here and there to pay for certain meals so I ended up racking up $18 in ATM fees but since I used my Ally debit card, all of those fees will be re-imbursed.

I ended up paying $20 for $38 worth of ‘miscellaneous expenses’.

Conference Cost & Wrap-Up

The cost of the conference had to be by far the biggest steal of the trip.  PT (the founder of FinCon) does an awesome job and it is definitely the best one I’ve ever been to.  There were so many engaging speakers, sessions and a wide variety of sponsors.  There were a ton of networking events outside the conference too and I felt like I must have gotten over $200 in free drink tickets alone!  I probably would have been happy to pay double that amount but at the end of the day, there are some really great sponsors that help defray a lot of the costs for us bloggers.  I actually already bought my ticket for next year at a reduced price of just $149!

My biggest takeaway from the conference was that there are some amazing things people are doing right now to make a full time living working online.  And I’m not talking about just barely getting by either, there are hundreds (if not thousands) of people out there making an absolute killing in the personal finance niche doing what they love, working for themselves and living that entrepreneurial dream.

For me, personal finance blogging has always been more of a hobby but I do make a decent amount of money off the site.  Attending the conference really reinforced my belief that if I wanted to go full time working online and was willing to put in 8-10 hours a day on my site I would definitely be able to succeed.  But at that point, I don’t think it would be nearly as fun.

As it stands now, I spend about 10 hours a week writing and producing content for this blog and it’s extremely enjoyable.  I’d have to spend about 4-5x that to equal my day job salary though.  It definitely wouldn’t be a bad way to make a living but I’m also fortunate to have a day job that I don’t hate.  I go in to work every day, get my sh$t done and walk out with a paycheck.  It’s not the most challenging or exciting job ever but it definitely pays the bills, lets me max out ALL of my retirement accounts and allows me to save a couple bucks here and there too.

I already know that my time in engineering is limited, it’s not something I want to do or something I’m going to do for the rest of my life.  But right now, it just doesn’t make sense to leave my job when I’m still able to do what I love on the side.  Since I won’t ever put in more than 15-20 hours a week on this site, I don’t think my personal finance blog alone will ever be enough to let me quit my day job but it will definitely be a part of the equation.  My goal since day one has been to replace my day job income with multiple sources of income and every day I’m getting closer using things like: blogging income, freelance income, rental income, rideshare driving, coaching volleyball, etc.

The last thing that I kind of already knew, but attending the conference really reinforced, was that if you want to really make it working online and be one of the top dogs in your industry you have to really carve out a niche for yourself.  You can’t just do what everyone else is doing and expect to be super successful.  I think my blog has some great content but to be perfectly honest, it’s nothing out of the ordinary.  There are hundreds of sites out there just like mine with unique ideas, great content and engaging authors.  What makes the best ones stand out is that they appeal to a very specific niche.

I’m definitely going to keep writing and producing content for this blog for years to come but I don’t expect it to ever make me insane amounts of money.  Personal finance is a highly saturated niche and that means the odds are really stacked against you to make it to the top.  If I would have gotten in 5-10 years ago it would be a different story, but I didn’t and I’m ok with that.

Ultimately, I’m going to take everything that I’ve learned from the PF niche and apply it to a new industry/niche when the timing is right.  During the conference, I talked to a lot of people about my new rideshare site because I think that’s the perfect opportunity for me to really become an industry leader online.

I was able to get in on the ground floor of a niche that is currently exploding, highly lucrative and doesn’t have much content out there yet.  I’m producing the same level of great content for that site but since there’s less competition it’s easier for me to stand out.  My site appeals to a very specific niche group of people but my goal is to be the authoritative source for the entire industry one day.

So my advice is simple: find a niche that you can really dominate.  At this point, if you start a blog that talks about investing you’re going to have a minute chance of ultra-success.  There are still plenty of niches out there in personal finance (just look at MMM with ultra savers or WCI with doctors) but there is also a ton of competition.  Find an industry or niche that you have an interest in, has potential and go dominate it.

For those who weren’t able to attend or have no idea WTF FinCon is, here’s a great video that was produced by Matt of Listen Money Matters that sums things up in a nut shell.  Warning: this song is super catchy and I’m not gonna lie I’ve already added it to my music collection! (If you’re reading this via e-mail, please visit the article on my site to view the video)

So I’d love to hear what other FinCon’ers thought about their experience?  What was your biggest takeaway from the conference and did you stay within your budget or even have one in the first place?  For you regular readers, what do you think about the conference experience?  Can you believe that over 600 bloggers and money media professionals met up for one crazy weekend in New Orleans?  Does it make you want to start a blog or what?!

-Harry @ PF Pro

The post How Much Does It Cost To Go To FinCon? (And My Biggest Takeaway From The Conference) appeared first on Your Personal Finance Pro.

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