Jun 22, 2019 | Money Professor
You Should Check Your Balances $ Regularly
How often do you check your account balances (credit card, checking, and savings)? For most people, the truth is never because checking the balance can be anxiety wrecking. One of my friends told me that she gets the same sinking feeling in her tummy when she logs into her account as when she goes to the dentist. It can be scary, but like going to a dentist checking our account balances is important.
It can feel like so
How often should you check your balances? Ideally, at least twice a week but as with everything take baby steps until you feel comfortable and maybe you will check your accounts daily. You should also floss daily, but you know…
Advantages of checking your account balances on the regular
- Confirm that all transactions are correct. It is possible to get overcharged because service providers are human and make mistakes too.
- Catch ERRORS!- AT&T is notorious for small charges like $13.99 that can go one for years. Look over your accounts and make sure you are not paying for a service you are not getting. The good news is that if you report the charge, you may even get a refund
- Avoid overdrafts or spending more than you can pay off on your credit card. Most people probably go over their budget because they innocently assume that they have enough funds. Overdrafts are costly, so avoid them.
- Catch FRAUD– You want to know if Joe Stealmoney in Georgia charged $300 for new the Michael Kors bag on your account. If you don’t know the story go to twitter and search #michaelkors
- Stay on top of your balance– Know how much money you have in your account. Know how much you have spent on your credit card
Log on to your BANK or Mobile Balance NOW-
This is the goal
Jun 20, 2019 | Money Professor
It’s SUMMERTIME SO!!!!
Nothing sucks like coming back home to an empty bank account – because YOLO- when in fact you have bills to pay.
A newish survey from Bankrate found that about 60% of people living in the US will not be able to take a vacation because funds are tight. Holidays are not a need, but it is fun to let loose and travel. On social media, I have had enjoyed following conversations on vacations but not listening to my friends pinning for trips they feel they can’t take. Can we agree that many of us would love to travel? It doesn’t matter if you are going a couple of hours from home or a few thousand miles – you will have more fun if you budget for your trip.
Vacation is expensive. Are you planning a trip? Think about how much you think you will spend – now double or triple that number. I am a planner, and I was shocked by how much we spent on our recent trip to Paris. I am glad I had budgeted, but we certainly underestimated the small costs associated with international travel.
STEPS TOWARDS A $$ STRESS-FREE VACATION
- Three to Six months out– Set a realistic savings goal
- Get realistic about the cost of flights to your destination. Use google flights and cross check that number with a few airlines. You can fly to Capetown for just under $1,500 if you book today – Just saying JWrite down the number $$$
- Get a realistic cost for housing – I suggest Airbnb or some other house share for a trip longer than three days & hotels for a shorter trip. Airbnb is probably better if you are going as a group. Write down the number $$$
Some airbnb’s and hotels can be trash too so do your research
- Get a realistic cost of local transportation – if you plan on renting a car then use your favorite car rental website to compare deals
STOP HERE – If there is no way you can manage steps 1.1 to 1.3 without dipping into your credit card and incurring debt, then you are not ready for this trip. Instead of going to Capetown consider something close to home
- Set a realistic goal for dining: When we went to Paris, I completely underestimated how expensive Europe is. Use yelp to get a sense of what people are spending per night – how much you pay depends on your taste and how much work you do. This confession will not make me look good, but in the spirit of transparency (truth is overrated), we once spent $150 for a simple dinner at a Jamaican restaurant in New York City because we had no idea where to go for reasonably priced -or regular black person- Jamaican meal in NYC. Strangely enough, I never spend a lot on meals in London because the drinks are cheap, hahaha. In Harare, Capetown, Nairobi, Lagos, etc. you can eat for cheap or spend a lot – the point is to get a sense of the average cost of meals, multiply that by 3 to get a daily rate and by the total number of days to get an estimated bill.
You will likely spend between $50 and $100 per person per day in most places around the world.
- Set a realistic goal for local transportation – in Europe use public transit. For five days, you are looking at about $60/week. Most major African cities have uber, but the rates are quite high so that local taxes might be a good option. Seek local advice and stay safe.
- Set a realistic budget for all your sight-seeing adventures: I assume you are going on vacation to have some fun
- Pre-purchase any tickets for museums or anything that has an entry fee. Do not use third-party websites if you can avoid them- pre-purchasing will not only keep you within budget, but you avoid exchange rate dilemmas
- Research the other things you won’t get to up to- swimming with dolphins will cost between $50 and USD 100 in Zanzibar, entering the Vic Falls is between $2 and $45 depending on your citizenship (You do not want to die without ever having visited the Falls)…
You can watch the video of him bungee jumping – it was awesome. I have also done a few crazy things in Vics like walking with lions – I know – why are you judging me
- Remember, most things are free- visiting the Eiffel Tower is free you only pay if you want to go to the top (est. $30).
I took this loopy looking pic
- Start saving for the trip
- Divide the totals from step 1 by the total number of paychecks before your trip. That is how much you should be setting aside each month.
- Set up direct deposit into your savings account for your trip – DO THIS
- Pay for most expenses before you leave home
- Purchase your ticket on your credit card and pay it off
- Book your hotel (set aside the money and be ready to pay it off when you check in.)
- Buy your museums passes etc. and pay off the balance
- Get travel insurance: protect all your purchases because things happen
- Set aside an emergency or over budget fund – about 20% of your expenses (excluding fixed things like flight and hotel)
- STICK TO YOUR BUDGET AND HAVE FUN
Jun 17, 2019 | Money Professor
What is your money story?
Understanding your money story is the key to unlocking a new, balanced and healthy relationship with
money
Everyone has a money story.
Whether you say:
I grew up poor- we never had money
I grew up wealthy; my parents never talked about money
I have no idea how my parents made money
Our money stories shape the way we think about and spend money. In a perfect world, we all grew up with parents or guardians that opened up to us about finances, budgeting, saving, and overcoming particular hurdles. But, many of us did not. I think this is something that transcends culture, although there is always some degree of variation.
It is important to be able to tell yourself your money story. You can write it down or email me if you want.
Now that I am an adult, I think most parents and guardians did the best that they could do given their upbringing. While it is essential to acknowledge that some of our money stories are have caused some problems for us in how we deal with money, try not to judge yourself and your family too much. Acknowledge the stories, identify areas of healing or improvement, and begin small steps towards healthy money habits.
My parents heavily influenced my money story. My mom and stepdad were very open about money. Not the nitty gritty but they did share some necessary details about their decision making as far as it concerned me. I will share some stories that I hope will help you as you flesh out your money story.
- Living below our means
At some point in my life, I was stressing to mom that I wanted to go to a more expensive school. My school was not bad as far as academics went, but I was having my issues about what I thought was good enough. Anyway, my parents sat me down and explained that my tuition at my current school was manageable for them because they could pay for my entire annual tuition once without straining. Additionally, a reasonably priced education gave them room to provide me other extras like school trips, novels, toys, etc.
My parents explained that taking me to a fancier school – in my case, this lovely school called Peter House- would force them to cut down on other expenditures and they would always be anxious about managing the fees should their financial situation face a slight change. My dad was retired, and my mom ran her own business. Owning a business is incredible but in places like Zimbabwe, business owners deal with severe fluctuations in profits.
- Planning ahead for the big items
For my parents, it was always important to be able to pay in advance for big-ticket items. If I wanted to go on a school trip, I had to tell my parents way in advance, or I was not going. Their worrying created a bit of anxiety, and subsequently, I am a little bit obsessive about planning. My mom especially hated surprises.
- Being open to all kinds of work opportunities
My mom always emphasized that I am not above doing any job. My mom believes that when it comes to working, you do your best so that you can go home and live in relative comfort. My mom balanced running her business and being a trader in South Africa. As a trader, she was gone for months at a time and lived in less than ideal housing circumstances in SA, but it meant afterward she returned to her extremely beautiful and super comfortable home.
As a result, I am very comfortable doing any job. I have no issues, BUT that also means that sometimes I get stuck wasting time on random hustles when I should be out there strengthening my portfolio for the career I want.
Whatever your story is- write it down or think it out loud. Do you see some patterns that you need to change? What have you learned from your story?
Jun 10, 2019 | Money Professor
License to Splurge
I don’t know about you, but sometimes I need a couple of my girlfriends, plus my husband and maybe mom to give me the go-ahead to spend on myself. There is all this advice that we should stop drinking coffee or eating avocados because those tiny expenditures will add up to a million bucks and before you know it you just missed out on being a millionaire. Crazy, I know!
What is the point of life and working hard if we can’t give ourselves little pleasures? I also learned that if we do not spend on ourselves, we become bitter. There was a time when it felt like every other phone call that I got from home was about bad news death, illness, broken down vehicles, etc. – and all of these things required money. A lot of the way I think about money is informed by my own experience living away from home at a very young age and doing so at a time when the Zimbabwean economy was in free fall. A friend of mine came up with a suggestion- she said for every western union trip we made we should buy ourselves something nice, ice cream or a dress.
So how do we splurge responsibly? Ladies and gents, I know you want to get your hair done, nails, get those nice running shoes, yoga pants, nice phone, bigger TV the list is endless. We all have things that we want. Here are a few ways that you can work towards splurging responsibly in a way that is in line with your goals and doing so without breaking the bank or diving into the emergency fund. I know that sometimes getting your hair done feels like an emergency, but it is not an emergency fund worth crisis, so don’t even think about it.
1. Make a list of your wants
2. Get a sense of how much you spend on your desires per month. I would suggest printing out your bank and or credit card statements from the last year and highlighting all the wants. If you use online banking, you can request these nice-looking graphs for your expenses. I did this exercise at the beginning of the year, and the results shocked me. I had not realized just how much I was spending on traveling.
You can break down to the merchant, which is nice. Doing this small exercise forced me to be very honest with myself about what kind of things I spend my money on and how I can make adjustments to those expenditures.
3. Set up a small budget for your splurge! Yes, budget it in. If you know that you spend $20/week on coffee, then add $20 to your weekly food budget. Consider how your numbers change when you add in all these small things. If you suddenly find yourself over budget, then look through your budget and find places to make cuts. For example, if you are paying $26 for a gym membership that you have only used once but you ride your bike more then maybe consider canceling the membership and adding to your bike maintenance budget.
4. Save over time for bigger or costlier splurges like a vacation. Vacations are fantastic, but you do not need a vacation every month. I will write in a separate post on how to budget for holidays more productively.
5. Enjoy life a little 🙂
May 23, 2019 | Money Professor
That is all.
My only saving grace this week is that I have no money in my easy to access checking account. I spent it all. I can not spend what I do not have.
Being honest with ourselves is important. Sometimes sticking to those numbers and being faithful is HARD.
May 20, 2019 | Money Professor
Financial Goals
I realized that in my blog and almost every other financial blog, everyone is telling us to make goals, stick to our goals, evaluate our goals, but how do we make goals?
In this post, I attempt to breakdown the process of thinking about financial goals.
Practical tips:
- Create a monthly even annual budget
- Live within your means
- Pay off any debt
- Set up an emergency fund
- Contribute to your retirement funds/ start a retirement plan (even if you are in Zimbabwe!)
- Visualize the life you want
- Do work that keeps you happy (when possible – sometimes we just have to do what have to do)
- Spend on what you like
- Cut out any expenses that waste your money and do not bring you joy
- Make charitable giving an integral part of your financial goals
I think about money as a vehicle for living the life that we want. A wholesome, happy life of giving, traveling, and doing the things that bring us (me) joy.
Before we get down to business, I would suggest doing a visualization exercise. Close your eyes and think about the life you want, where you want to be, and what makes you happy. Maybe when you close your eyes, you see a beautiful house, your parents with a car, a million dollars in your retirements account. It doesn’t matter as long as you are honest. I daydream a lot- my therapist says this is healthy. So there you go- I just saved you $150.
Step one:
Build your budget – we now write down our budget, so do this. This is worth repeating at every turn.
Step two:
Think about what you want – what are your five-year goals? Where do you see yourself in ten years? Thinking through these questions is how you come up with short and long term goals.
Your fixed goals should include living within your budget, paying off debt, setting up an emergency fund, contributing to retirement and saving at least 20-30% of your income. After that, the goals you make are entirely dependent on the kind of life you want to live.
- If you are a student, you need to regularly set aside a small nest for after graduation to cover trips to visit friends, to support the family and additional health expenses (we have to talk about the cost of dental care -yikes) that might come up.
- If you have just started working you may need to furnish your home, get a car and or you may be thinking about settling down, etc
Our financial goals change; this is perfectly normal. Do not stress when you find yourself needing to adjust some plans. Life changes, things happen, pause, assess the change, breath, and embrace the change.
Step three:
Do I need big purchases? What brings me the most joy? How well do you know yourself?
My husband and I are in our early 30s, so everyone we know is continually asking us if and when we are planning to buy a house. We also get asked a lot if we are planning on getting a new car. And about kids! I am not a minimalist or even planning to retire early, but I value financial independence.
- What is keeping you up at night? The things that keep us up at night should be at the top of our financial goals. For a while, debt was keeping me up at night – so I came up with a strategy to pay it off and exclusively focused on that. Then organizing things for my mom was stressing me for a while, so I researched what I needed to do and dealt with that. Owning a house and or a bigger car has never kept me up at night, so it is not part of our immediate goals. What do I need to be happy? What kind of living situation would make me happy?
We would love to buy a house in the future (Because Boston- seriously who can afford a house here?). We have learned that I hate commuting – I loathe it, BUT my husband prefers distance between home and work. As a result, as we are thinking about home purchases, I might have to give up my dreams of a big yard for a home walking distance to work. Houses closer colleges tend to cost more money. We also have to be realistic about the timeline. It is a lot better to save at least 20% for a down payment. We also have to think about the various hidden costs associated with homeownership. Once you have considered multiple things, you can be honest with yourself about how much house you can afford and how long it will take you to raise those funds. There is no competition, so do what fits your budget and your goals.
We are all different: I love traveling. You love gadgets. She loves yoga. He loves driving a nice car. They love buying a lot of books.
I believe that money should enhance our lives. Access to cash should allow us to do the things that we love. Look at your budget – if you tend to spend $500 on books a month then think about how you can cut out the things that do not bring you joy and think long term about the things you love.
If you are not passionate about cars like me, then you can buy yourself something functional that you pay less for. My car is a 2000 Toyota. I have kept it well, and it gets me from point a to b. Since I live walking distance to work, I hardly drive. Everything I need yoga, church, groceries is within walking distance or a two-mile radius. If I bought a pricier car, I would end up spending a lot on insurance for no reason.
I have a friend who loves gadgets. They spend almost nothing on clothes and save for the newest iPad or headphones (I have tried out fancy headphones – and let me tell ya, if I weren’t cheap I would get me some beats- also dear husband if you are reading this my birthday is today). On the other hand, I have had the same phone since 2014, and before that, I had last bought a phone in 2009. If it works, why change it. I like reliable brands that I can keep for a long time.
Do not spend money on things you do not value – that bring you no joy. I have stopped going to Marshalls because I would end up buying a lot of things that I hardly wear. I now buy clothes on a need to basis from brands that I like to wear.
I love traveling and going on vacations. I save for that and find ways to get to beautiful places within our budget. When we travel, I like to do touristy things – my husband would be fine sitting on a balcony with a cold beer, but he is a good husband so follows along with my plan.
Resources
Here are some of the top savings account options for your emergency fund.
I loved reading Dave Ramsey’s snowball method for paying off debt
Brainstorming life insurance
Discussion