Your Personal Finance Pro http://yourpfpro.com Personal Finance for Young Professionals Thu, 19 Apr 2018 15:53:26 +0000 en-US hourly 1 31591919 Don’t Count on Luck to Improve Your Finances http://yourpfpro.com/dont-count-on-luck-to-improve-your-finances/ http://yourpfpro.com/dont-count-on-luck-to-improve-your-finances/#respond Mon, 12 Mar 2018 11:00:00 +0000 http://yourpfpro.com/?p=7759 It’s probably not a stretch of the truth to assume that many people have financial difficulties occasionally. Of course, for some people it happens more often than others. But one thing that doesn’t help is counting on luck to improve your finances. For most of us there is no pot of gold at the end […]

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For most of us there's no pot of gold at the end of the rainbow. Don't count on luck to improve your finances. Make your own luck instead.It’s probably not a stretch of the truth to assume that many people have financial difficulties occasionally. Of course, for some people it happens more often than others.

But one thing that doesn’t help is counting on luck to improve your finances. For most of us there is no pot of gold at the end of the rainbow. No wee leprechaun with the secrets to fortune.

Rather than playing the lottery or risking money at the blackjack table, maybe you should make your own luck.

Budget

Instead of counting on luck to improve your finances take control of them yourself. Start out by making a budget that works for you.

First, gather together all of your outstanding bills and debts. Use them to create a list or spreadsheet so you know everything you owe money on. Use this data to figure out how much your bills are every month.

Make sure you include things that are not paid monthly. These may include car tags and taxes, property taxes, and doctor bills to name a few.

Next, compare these numbers to your monthly income. Should you have money left at the end of each month yet the reality is that you run out? If so, start tracking the extra things you buy that were not included in your budget.

Once you know where the money is going you can make changes to help improve your finances. For instance, stop buying a coffee every morning before work or eating out for lunch each day. Changing these negative spending behaviors can improve your finances.

Pay Off Debt

Now that you have a handle on where and how you are spending your money you can begin eliminating debt. But don’t rely on cash windfalls, such as tax refunds or work promotions to do it.

Look for alternative ways to cut your expenses and keep more money in your pocket. Still, if you are lucky enough to get extra cash you can use it to make more debt progress. Remember every dime you pay toward debt will improve your finances.

One tip that can help you pay debt faster is to try to negotiate bills that you owe. Some creditors will work with you more readily than others, though. A few bills to try negotiating are cell phone bills, medical bills, and utility bills.

Emergency fund

Another way not to count on luck to improve your finances is to create an emergency fund. Most likely, no one is going to rescue your finances if you get in trouble.

When your car breaks down or your refrigerator quits using a credit card for repair bills is not the answer. This will simply dig you further into debt.

To get ahead of these types of issues before they happen, start an emergency fund. Even if you can only put $5 toward this fund some months you are still making progress.

After you commit to living frugally, paying debt, and saving it gets easier to save even more. Consistence and diligence with your finances creates habits that will make a difference in the long run.

Side hustle

In order not to count on luck to improve your finances you could also pick up a side hustle. It’s a great way to help meet monthly bills, pay off debt, and build your emergency fund faster.

Some examples of easy side hustles are filling out online surveys for cash, babysitting, tutoring, or mowing lawns. But there are plenty of other ways to make extra money too.

Certainly the battle toward financial freedom can be a long one and not won overnight. But it helps if you don’t ignore the problem or worse yet count on luck to improve your finances. Use these tips to help you get out of debt and take control of your finances.

What measures have you taken to improve your finances?

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How to Help Your Budget Using Social Media http://yourpfpro.com/how-to-help-your-budget-using-social-media/ http://yourpfpro.com/how-to-help-your-budget-using-social-media/#respond Mon, 26 Feb 2018 12:00:43 +0000 http://yourpfpro.com/?p=7721 Most people use some type of social media app on a daily basis. When you’re on the go you likely see them rapidly pecking away on smart phones or other electronic devices. In fact, you may even be one of them. I must admit that I am. I like to use social media to catch […]

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Social Media has other uses besides just catching up on news from friends or watching crazy animal videos. For example, you can help your budget using social media.Most people use some type of social media app on a daily basis. When you’re on the go you likely see them rapidly pecking away on smart phones or other electronic devices. In fact, you may even be one of them.

I must admit that I am. I like to use social media to catch up on news and photos of my friends or simply watch crazy animal videos for fun.

However, there are other uses for social media as well. For example, you can help your budget using social media.

Facebook Sales Pages

When you are searching for a particular item to buy it doesn’t always have to be brand new. Sometimes you can help your budget using social media to buy things that are gently used instead.

For example, my local community has a sale page where residents can list items they want to sell to others. You can look to see if your city or town has one too.

If they do, take advantages of the good deals there to save money on your purchases. You may be able to sell things you are ready to part with or offer your labor to others there as well.

Facebook Business Pages

You can follow the Facebook pages of your favorite companies by “liking” them. When you do you will see their discount codes, coupons, and sales.

This is a great way to help your budget using social media. Rather than paying full price for things you plan to buy anyway, why not save money?

Pinterest Notifications

Pinterest is another good way to help your budget using social media. Just access Pinterest settings and turn on the option that will notify you of price drops.

That way when items you’ve pinned from retailers go on sale in the future you will know it. Then all you have to do is go to their website and buy the item for less.

Pinterest Printables

There are lots of printables you can get free on Pinterest. You can find organization charts, recipes, patterns, and a host of other helpful things as well. Use these printables to save you money and time each month.

Pinterest Hacks

Hacks on Pinterest can ease the strain of a tight budget. This social media tool has neat ideas that help you DIY nearly anything you can think of.

Most of the pins have instructions and pictures to do household tasks, painting, repair jobs, and more. Use these tools to help you do the work yourself and avoid paying for expensive repair jobs.

Reviews from Friends

An additional way to help your budget using social media is to ask for reviews from your friends. Of course, you can read product review on company websites or Amazon instead. However, how do you know you can trust the opinions of people you don’t even know?

Rather than rely on the word of strangers, use social media to ask your friends.  I have done this more than once and saved myself from making a purchasing mistake that would have wasted my money.

Watch Videos

Once in a while I find that I just can’t figure out how to do a certain thing. For instance, a couple of years ago I needed to know how to cut a mango.

I was trying to save money by cooking at home rather than eating restaurant meals. Unfortunately, there wasn’t anybody around for me to ask and I really wanted to use my mango before it went bad. So, YouTube videos rescued me. This is just a tiny example of how to help your budget using social media.

Hashtag Searches

Hashtag searches can help you save money in your budget too. Use them to find more savings on Twitter, Facebook, and Pinterest when you are searching for used furniture, coupons, or discounted items to buy. Just type in your search, such as “#coupons”, to help you save money.

Social media isn’t just about watching silly videos or reading anecdotes from your friends. Clearly there are lots of ways to help your budget using social media as well.

Do you use social media to help your budget?

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Negative Impacts Friends and Family Could Have on Your Spending http://yourpfpro.com/negative-impacts-friends-and-family-could-have-on-your-spending/ http://yourpfpro.com/negative-impacts-friends-and-family-could-have-on-your-spending/#respond Mon, 19 Feb 2018 12:00:07 +0000 http://yourpfpro.com/?p=7709 Peer pressure isn’t something that only affects teenagers. It may be more subtle, but it affects adults too. In fact, if you pay close attention you can feel it in your relationships with friends, coworkers, and family members. If the peer pressure is great enough you may not be able to resist the temptation to […]

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Peer pressure doesn't only affect teenagers. It may be subtle, but it affects adults too and can result in unfavorable financial consequences. Here are some of the negative impacts friends and family could have on your spending.Peer pressure isn’t something that only affects teenagers. It may be more subtle, but it affects adults too. In fact, if you pay close attention you can feel it in your relationships with friends, coworkers, and family members.

If the peer pressure is great enough you may not be able to resist the temptation to give in to it. Sadly, when you succumb it can result in unfavorable financial consequences.

Here are some of the negative impacts friends and family could have on your spending.

Causes Overspending

One of the negative impacts friends and family could have on your spending is overspending. The peer pressure you feel when you are shopping with friends or family can cause you to make purchases you otherwise wouldn’t.

It could be that you give in to prevent others from poking fun at you. Or, you may feel the need to “one up” your friend or family member.

Regardless of the reason, you need to recognize it when it happens and think before you buy. Instead of spending on impulse, stop and think about why you want the item first. If you can come up with an important reason or reasons, go ahead and buy the item.

Increases Debt

Another of the negative impacts friend and family could have on your spending is increasing your debt. Friends and family who persuade you to spend what you shouldn’t may influence you to pull out your plastic.

The truth is that charging spur of the moment purchases on your credit card increases your total debt. If you’re living paycheck to paycheck or have a tight budget already adding debt can be devastating to your finances.

Furthermore, it can put you into a cycle of debt that you might never get out of. Rather than increase it, pay your debt down and manage your finances better.

Damages Credit Scores

Negative impacts friends and family could have on your spending includes damage to your credit score. If you are unable to keep up with your bills due to overspending your credit score can go down.

The next time you need to get a loan for a major purchase you may not get approval if your credit score is too low. Or, if you do get approval, your payments may be too high to afford.

Reduces Retirement

You don’t want to reduce your retirement funds or delay retirement significantly due to negative influences. If you overspend often and have trouble keeping household bills paid you probably aren’t contributing to your retirement funds.

Getting everything you want when you want can prevent you from retiring on time. It may even end your dreams for retirement completely. But you can plan ahead for your retirement.

Ruins Relationships

Ruined relationships are just one more of the negative impacts friends and family could have on your spending. For instance, hard feelings can develop if you are asked for money.

If you give in to the request it’s possible you may not get repayment. You may feel resentful knowing you could have used that money yourself, especially if money gets tight for you later on.

To avoid ruined relationships it’s ok to say “no” when asked for money. Of course, denying the money can also have negative impacts. However, that may be better option for you financially.

Lowers Emergency Funds

Finally, negative impacts friends and family could have on your spending includes lowering your emergency funds. If you are buying what you shouldn’t because it “looks cute” or you “just have to have it” you may have to short your budget elsewhere.

The problem is that you can’t predict when you will need emergency funds. If that is the area of your budget you are dipping into for unplanned purchases you could put yourself in a bind later.

Peer pressure will always be around. Keep in mind there will always be other cute clothes or cool electronics even if you pass up an item or to now. Remember these negative impacts and resist the urge to cause harm to your future finances.

Have you ever had friends or family negatively influence your spending?

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Often Forgotten Items That Should Be in Your Budget http://yourpfpro.com/often-forgotten-items-that-should-be-in-your-budget/ http://yourpfpro.com/often-forgotten-items-that-should-be-in-your-budget/#respond Mon, 29 Jan 2018 12:00:08 +0000 http://yourpfpro.com/?p=7660 As the first month of the new year draws to a close it is likely many people have already revised their budgets. If you are among them, it’s important to note that making changes to it doesn’t mean your budgeting is complete for the year. In fact, you should review your budget at least every […]

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As the first month of the new year draws to a close it is likely many people have already revised their budgets. If you are among them, it’s important to note that making changes to it doesn’t mean your budgeting is complete for the year.

In fact, you should review your budget at least every couple of months if not each month. In doing so you may find that you have forgotten items that should be in your budget.

Computer

One of the often forgotten items that should be in your budget each month is a computer upgrade. Granted, computer prices generally decrease as technology improves making them more affordable all the time.

However, even replacing a computer every couple of years will still require a chunk of change. Shelling out several hundred dollars all at once may not be an option if your budget is tight.

If your computer dies suddenly, though, you may have to do just that if you’re desperate. But there are better ways to pay for it than to pull out plastic and charge it. Instead, why not make it a line item in your monthly budget?

Take a look at computers online that are similar to what you may want. Then figure an average cost by adding all of their prices together and dividing by how many computers there are.

Next take that figure and divide by how many months you think it will be before you need to replace it. The resulting figure is an estimate of how much you need to set aside each month for your purchase.

Phone

Would you like to get control of your spending and budget accurately? Then you must not only watch for sales that can reduce what you spend but also budget completely. That means adding forgotten items that should be in your budget currently.

Your cell phone may be one of the items you don’t budget for but should. One reason is because prices can range from under a hundred dollars to over one thousand. That’s a pretty large gap.

Regardless, the smart phones of today undergo heavy use requiring you to upgrade every few years. To absorb the costs of upgrades, create a place for them in your budget each month.

Appliances

A couple of weeks ago, my 13 year-old oven decided it was ready for retirement. At the time, I was cooking something in the oven while writing at the kitchen table.

I saw a bright flash out of the corner of my eye and heard a loud “pop” making me pause in my work. Warily, I got up and walked over to check it out. That’s when I found my oven was no more.

So, after a failed attempt by my husband to fix it a few weeks and thirtyish dollars later– don’t judge because he is usually quite good at this sort of thing – we ended up buying a new oven.

Luckily, we had enough money set aside to afford spending several hundred dollars on a new appliance. But not everyone is in a good enough financial situation to be able to simply go out and buy another one on the spur of the moment.

If you are one of the unfortunate ones, don’t use your credit card to pay for replacement appliances. There are better ways to handle your debt. As an alternative, estimate what you believe you’d spend and add it to your budget.

Car

Obviously a new car is a major expense for anyone. Therefore, getting a new or nearly new one requires budgeting. Nevertheless, applying some of the same methods as above, you should be able to come up with a budgeting figure.

Don’t forget to include increased costs of insurance, tags, and taxes when you budget.

It’s true that budgets must be reviewed and evaluated fairly often to make them accurate. But they should also be looked over to ensure there are no forgotten items that didn’t get included.

What other forgotten items do you think should be in a budget?

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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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