Tips to Combat Burnout

March 3, 2021

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Rich & Kristina Messenger

Rich & Kristina Messenger

Senior Vice President



McKinney, TX

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February 22, 2021

What Are The Odds of Winning the Lottery?

What Are The Odds of Winning the Lottery?

Your odds of winning the Powerball are 1 in 292.2 million. For Mega Millions, your odds are 1 in 302.5 million.¹

Translation—you almost certainly will not win the lottery.

You have a greater chance of being killed by lightning (1 in 2 million), having a fatal encounter with a venomous plant or animal (1 in 3.4 million), or being crushed by a falling plane (1 in 10 million).²

The worst part? Playing more doesn’t improve your chances of winning. The probability of drawing the lucky numbers resets every time you buy a scratch-off or choose your “lucky number.” You’re throwing money at a tiny moving target that you’re almost guaranteed to miss.

If you do like to purchase lottery tickets for entertainment—try to keep it to just that. Make sure you budget in ticket purchases with other fun-related activities, and if you do reap some winnings, make sure you have a strategy for saving a portion towards your financial goals.

Buying lottery tickets is generally an unproductive activity. If left unchecked, it can turn into a money blackhole that will almost certainly never pay off. You work too hard for your paycheck to waste it on what amounts to impossible odds.

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¹ “What Are the Odds of Winning the Lottery?,” Kimberly Amadeo, The Balance, Nov 4, 2020, https://www.thebalance.com/what-are-the-odds-of-winning-the-lottery-3306232

² “The Lottery: Is It Ever Worth Playing?,” Investopedia, Jan 29, 2021, https://www.investopedia.com/managing-wealth/worth-playing-lottery/

February 17, 2021

Spend Less or Earn More?

Spend Less or Earn More?

What’s the most effective way to meet your financial goals—increasing your income or cutting your spending?

The answer? It depends on your situation. While both strategies can be useful, they’re not interchangeable. Read on to discover the advantages and limitations of each approach… and which one may be right for you.

Spending less: An immediate solution with a fixed floor. There’s no doubt that cutting expenses is the fastest way to move closer to your financial goals. Canceling a streaming service, clipping digital coupons on your phone, and carpooling are simple lifestyle adjustments that take only seconds or minutes to accomplish.

But stricter budgeting can only go so far. Moving back in with your parents, walking to work, and never having fun again may still not be enough. There’s only so much you can cut before you seriously decrease your quality of life!

Earning more: High effort, massive potential. On the surface, increasing your income can seem like a daunting task. Developing your skills, working an extra job and starting a side hustle or business can be labor and time intensive. Furthermore, some of those investments may not pay off immediately—a business or side gig may not generate significant income for weeks, months, or even years!

But those investments also have massive payoff potential. Once you’ve mastered a skill, your earning power is only limited by the market demand for your abilities and your time. And as you grow more and more competent, your potential to earn only increases.

The takeaway? Spending less is a quick and simple move towards your financial goals. But, over the long-term, earning more has far more potential to create the wealth you desire. If you need to quickly increase your cash flow, create a budget and reduce your excess spending. But when your financial situation stabilizes, take inventory of your skills. You might be surprised by how many money earning talents you have, if you take the time to cultivate them!

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February 10, 2021

How to Save for Large Purchases

How to Save for Large Purchases

So you’re saving for retirement. Good for you!

You’re further in the game than a lot of people. But retirement’s probably not your only financial priority that requires saving for. Buying a house, raising children, buying cars for your children, and paying for college for your children are just a few expenses you can expect along the way. Preparing for those purchases now can protect your finances from getting blindsided when the time comes. Here are a few steps you can take to start preparing for substantial purchases today.

Write down upcoming expenses and purchases. Make a timeline of all your major, non-regular expenses. Determine how much they could cost, and then rank them in terms of urgency and importance. If it’s urgent and important–like saving for the delivery of a newborn–address it as soon as possible. If it’s important, but less urgent–like toddler-proofing your home–schedule it for later.

Budget out how much you’ll need and start saving. Once you have your priorities straightened out, figure out how much you’ll need to have saved and how much time you have available. Then, set up automatic deposits that put aside money for your savings goals.

Seek higher interest rates. Saving for your purchases in accounts with higher interest rates can give your money the extra juice you need to crush your goals. That may mean opening a high interest savings account with an online bank. But for some items, you might be able to find accounts specifically designed to help you. Meet with a licensed and qualified financial professional and see what options you have available!

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February 8, 2021

3 Steps to Reduce Debt with Limited Income

3 Steps to Reduce Debt with Limited Income

Is your income holding you back from paying down debt?

It may feel like necessities such as housing, groceries, and transportation are consuming your cash flow. So how can you pay down debt if you feel like you’re struggling to put food on the table?

Reducing debt with a limited income is certainly a challenge. But if you know the right strategies, it’s an obstacle that you can work to overcome. Read on for tips that can help you pay down debt, regardless of how much you earn.

Budget debt payments first. The next time you sit down to budget, start by allocating money for reducing your debt. It should be your number one priority. Then, budget for essential living expenses like housing, utilities, and groceries. If you need more cash flow, cut down on non-essential spending like dining out and purchasing new clothes.

Start a side gig. If cutting expenses alone doesn’t free up enough cash, explore ways to make more money. That doesn’t always mean starting a second job—after all, this is the golden age of side gigs! Here are just a few hustle ideas for your consideration…

■ Resell books, clothes, and shoes you might pick up from the thrift store on eBay ■ Rideshare or deliver groceries and food ■ House sit, baby sit, or pet sit for friends and neighbors

Ultimately, your ability to earn income is only limited by your creativity in solving problems. What other opportunities are there for you to help others and earn extra income?

Make more than minimum payments. Your debt will linger if you make only minimum payments. That’s because minimum payments are nearly erased by interest. You make a payment, but the interest may put you almost right back where you started.

Instead, choose one debt to eliminate at a time. You should start with the one with the smallest total balance or the highest interest rate. Keep making the minimum payments on your other debts, and target that one debt with the rest of your available financial resources. Once it’s gone, choose the next smallest balance. Rinse and repeat until your debts are gone.

The biggest takeaway is that if you’re working with a limited income, paying off debt has to become your number one financial goal. Devote as much of your budget towards it as possible and increase your earnings if you have to. But it’s well worth the effort—once your debt is gone, you’ll have significantly more income for building real wealth!

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February 3, 2021

Strategies for Coping With Medical Bills

Strategies for Coping With Medical Bills

What’s your strategy for paying medical bills?

It’s a question anyone serious about protecting their finances must answer. Afterall, medical expenses are the number one cause of bankruptcy in the country.¹

But there are resources at your disposal. Read on for some strategies to help you lighten the financial burden of medical bills.

Review your bill for mistakes. Somewhere between 30% to 80% of medical bills contain errors.² Check every bill you receive for any mistakes and report them immediately. You don’t need to pay for medical services you didn’t use!

Negotiate a payment plan. The scary price tag on your medical bill isn’t always final. Hospitals are sometimes willing to negotiate a lower cost if they’re aware of your financial situation. Contact your healthcare provider and inform them if you’ll struggle to pay the sticker price. Then, ask for price alternatives or for a more lenient payment plan.

Avoid using credit cards for medical bills, if possible. Using credit cards to cover medical bills can be a critical blunder. Instead of paying a low interest–or maybe no interest–bill to a hospital, you may end up making high-interest payments to your credit card company.

Whenever possible, use cash to pay for medical expenses. That may mean cutting on vacations, not dining out, and holding off on purchasing new clothes until the bill is settled. (Hint: A great reason to keep an emergency fund is to pay unexpected medical bills.)

If none of these strategies make a dent in your medical expenses, consider reaching out to a professional for help. Hospitals and insurance companies sometimes have case workers who can point you towards programs, organizations, and agencies who may be able to help provide some financial relief.

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¹ “Top 5 Reasons Why People Go Bankrupt,” Mark P. Cussen, Investopedia, Feb 24, 2020, https://www.investopedia.com/financial-edge/0310/top-5-reasons-people-go-bankrupt.aspx

² “Over 20 Woeful Medical Billing Error Statistics,” Matt Moneypenny, Etactics, Oct 20, 2020, https://etactics.com/blog/medical-billing-error-statistics#:~:text=80%25%20of%20all%20medical%20bills%20contain%20errors.&text=Some%20experts%20across%20the%20web,between%2030%25%20and%2040%25.

January 20, 2021

What All Early Retirees Have in Common

What All Early Retirees Have in Common

Early retirees track both their net worth and annual spending… and you should too!

Why? Because those two pieces of information are critical to evaluating your current financial situation and understanding what separates you from your financial goals.

Retiring early takes meticulous preparation, a willingness to sacrifice temporary comfort, and consistency. Every financial decision must effectively move you closer to your goal or you run the risk of failure.

Ignorance about your net worth hampers your ability to make certain financial decisions wisely. It may cause you to save less, if you assume your net worth is closer to your retirement goal than it actually is. When the time comes to retire, you’ll be in for a shock!

Failing to monitor your expenses can lead to a similar outcome. What if you never identify the expenses that eat up the majority of your cash flow? You might swear off lattes or designer clothes, but you might miss bigger saving opportunities. There’s a reason that so many early retirees cut back on housing, transportation, and food–they’re the biggest drains on cash flow!¹

Here’s the takeaway—imitate early retirees and regularly evaluate your net worth and spending, regardless of when you plan to retire.

Knowing what you’re worth and what’s eating up your cash flow empowers you to make effective decisions that bring you closer to your lifestyle goals.

What’s your financial status? How close are you to achieving your goals? And what’s standing in your way?

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January 11, 2021

Simple Ways to Streamline Your Budget

Simple Ways to Streamline Your Budget

Is your budgeting system slowing your financial progress?

It’s not hard to tell if it is. Consistently ignoring your budget and failing to see results like increased cash flow and reduced debt could be indicators that something’s wrong.

Fortunately, it’s not hard to streamline your budgeting process. Here are two simple steps you can take to make your budget more manageable and more effective.

Prioritize your short-term budgeting goals
Splitting your cash flow between non-discretionary spending, savings, your emergency fund, and debt reduction may make you feel like you’ve got all the bases covered, but spreading yourself too thin might actually be diminishing the power of your money. It creates a house of cards that’s waiting to collapse!

Instead of trying to knock out everything at the same time, your budget should reflect your current financial situation. Prioritize where you put your money for the goal you’re trying to achieve. Start by putting all your excess cash flow towards an emergency fund. Then, target your debt. And finally, start directing your income towards building wealth. You’ll more effectively clear the obstacles that block the way towards financial independence.

Automate everything
What if there were a way to automatically make wise financial decisions without even thinking about it? That’s the power of automation.

Once you’ve determined your short-term budgeting goal, set up automatic deposits that move you closer towards achieving it. If you’re building an emergency fund, set up an automatic transfer from your checking account to a high-interest savings account every payday. You can do the same with essential bills and utilities as well.

Once you prioritize and automate your budget, there’s a great chance that you’ll see real progress towards your goals. And once you see progress you’ll feel empowered, maybe even excited, to keep pushing towards building wealth and creating financial independence.

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January 4, 2021

Is a Metal Roof Right for You?

Is a Metal Roof Right for You?

Metal roofs might just be the best way to put a roof over your head.

And not just because the sound of rain hitting metal is incredibly relaxing. They clobber traditional asphalt shingle roofing in several critical categories. Read on to discover why a metal roof might be right for you!

They last for decades
A properly installed metal roof can last up to 70 years.¹ That absolutely clobbers asphalt roofing, which typically lasts only 12 to 20 years. Make no mistake–20 years is a long time. But a metal roof has the potential to be the only roof you’ll ever need installed.

Plus, they tend to be more durable than traditional roofs, meaning they require less total upkeep and preserve the resale value of your home.

They’re more energy efficient
It’s understandable if you’re concerned that a metal roof would transform your house into a walk-in oven. It seems like they would absorb so much heat and radiate it throughout the house, right?

But it turns out that they actually reduce cooling costs by up to 25%.² Instead of absorbing radiation, a metal roof actually reflects heat and light away from your home. That means you can stay cool without having to crank up the air conditioner!

They handle extreme conditions
Metal roofs tend to perform better in the face of extreme weather and natural disasters. For instance, steel and aluminum won’t catch fire if they’re struck by lightning or embers from a fire land on them. And if you’re more concerned about hurricanes than forest fires, a metal roof will still have you covered–they can withstand gusts of wind up to 140 miles per hour!³

But be warned–installing a metal roof is a skill-intensive process that can cost up to 10 times more than traditional roofing.² Before you decide to remodel your home, it’s critical to find a roofer who’s well-reviewed and qualified to do the job right. It’s also worth considering how long you’ll stay put. A metal roof might make more sense on your forever home than it would on a small starter home.

Research the costs and benefits, identify the style and materials you want for your roof, and, if you decide to go through with it, seek out a qualified contractor. Then, sit back, close your eyes and enjoy the sound of rain gently falling on your brand new metal roof!

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¹ “Pros and cons of metal roofs for your home,” State Farm, https://www.statefarm.com/simple-insights/residence/metal-roof-pros-and-cons

² “7 Things to Know Before Choosing a Metal Roof,” Donna Boyle Schwartz and Bob Vila, Bob Vila, https://www.bobvila.com/articles/metal-roof-pros-and-cons/

³ “Standing Tall in Hurricane-Force Winds with a Metal Roof,” Liquid Creative, Gulf Coast Supply and Manufacturing, Apr 8, 2019 https://www.gulfcoastsupply.com/standing-tall-in-hurricane-force-winds-with-a-metal-roof/#:~:text=Metal%20roofs%20can%20be%20a,are%20prone%20to%20blow%2Doffs.&text=In%20wind%20uplift%20tests%2C%20metal,gusts%20up%20to%20180%20mph.

December 23, 2020

Ways to Curb Holiday Spending

Ways to Curb Holiday Spending

More than 174 million Americans spent an average of $335.47 between Thanksgiving and Cyber Monday this year. And the holidays are just getting started!

You and your wallet don’t have to suffer if you follow these simple ways to curb holiday spending. Well, ways to curb the rest of your holiday spending.

1. Decide beforehand how much you’re going to spend on gifts. Yes: Budget. This is one of the most spoken of tricks to curb spending, but do you actually follow through? Before you ever start your holiday spending, have a firm plan about what you’re willing to spend, and do not go a penny over. If you’re one of the millions mentioned above that already spend a good chunk of cash, be sure to take that into account when you set your new amount. A budget can help get the creative gift-giving juices flowing, too. Remember White Elephant parties where no one could bring a gift that cost over $15? There had to be a little extra thought involved: What would be an unforgettable gift that would fit right into your budget?

2. Dine in. When you’ve budgeted for picking up the tab on a big family meal outing, it can be no sweat! But when you haven’t, the cost can really sneak up on you. Say you venture out with a party of 15 family members. At $10 an entree plus appetizers, desserts, cups of cocoa for the kids, eggnog or something harder for grown ups, and any other extras… Whew, that’s going to be a credit card statement to remember! But what if you instead planned a night in with the whole family? A potluck or pizza night. The warmth and comfort of home. Baking cookies. Still with cups of cocoa and eggnog, but at a fraction of the cost. And with much more comfortable chairs.

3. Stay with relatives when you travel home for the holidays. This practice is standard for some, but if this suggestion makes your face flush and your blood run cold, this may help you change your mind: the average hotel stay costs $127.69 per night. That’s not including taxes and fees. Let’s say you head to the town where you grew up for 4 days and 3 nights. The 3 nights at a hotel are going to cost you…

$127.69 x 3 = $383.07

Add in tax and hotel fees as well as the daily cost of gas to and from the hotel, and the thought of a few nights spent in your childhood bedroom that now has the surprise treadmill-as-a-clothing-rack addition might not be so terrible.

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December 14, 2020

Good Financial Decisions You Can Make Today

Good Financial Decisions You Can Make Today

Are you afraid to fix your finances?

It’s understandable if you are! Confronting a bad spending habit or debt problem can feel overwhelming and uncomfortable.

But leaving financial issues unresolved is never a good idea. Little annoyances become serious threats if you don’t take initiative to nip them in the bud!

Fortunately, there are dozens of simple financial decisions that you can make today. Here are some of the most important ones!

Save anything you can, no matter how small
If you stash away a single dollar, you’re already ahead of the game. Half of all Americans had zero dollars (you read that correctly) saved before the COVID-19 pandemic started in 2020.¹

Anything that you’ve put away where you can’t spend it is a good thing, even if it’s a dollar. Putting money away regularly is even better. You might literally have only $1 to start. That’s fine! It’s the thought (i.e., habit) that counts, and you’ll already be closer to financial stability than many people in the country.

Don’t gamble
Americans might not be great at saving, but we sure do love playing the lottery! We spend, on average, $1,000 per year on precious tickets and scratch-offs.² Yikes! You’ll probably get struck by lightning or crushed by falling airplane debris before you win a powerball.³

If you don’t play the lottery now, don’t start. If you do play (which should fall in your budget under “fun fund”), write out how much you’ve spent on tickets vs. how much you’ve won. That’s a ratio to always keep in mind!

Eat at home
Regularly eating out can devour your income. We spend about $232 monthly at our favorite restaurants, or about $2,784 annually.⁴ There’s nothing wrong with occasionally enjoying a meal out at your favorite spot. But it becomes a problem when you’re eating out multiple times a week and using fast food as a substitute for cooking for yourself while your budget goals suffer.

So instead of hitting up a drive-thru tonight, go to your local grocery store and buy some fresh ingredients. It doesn’t have to be complicated or fancy. Ground beef and pasta or chicken curry with rice are both great (and tasty) ways to start. Check out some online recipes and try some new dishes!

Just trying these three simple things can put you ahead of the curve. They might seem small, but you’ll take a huge step forward to financial independence. Choose one of these actions and try it out today!

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¹ “Here’s how many Americans have nothing at all in savings,” Ester Bloom, CNBC Make It, Jun 19 2017, https://www.cnbc.com/2017/06/19/heres-how-many-americans-have-nothing-at-all-in-savings.html

² “Americans spend over $1,000 a year on lotto tickets,” Megan Leonhardt, CNBC Make It, Dec 12 2019, https://www.cnbc.com/2019/12/12/americans-spend-over-1000-dollars-a-year-on-lotto-tickets.html

³ “The Lottery: Is It Ever Worth Playing?,” Investopedia, Jan 27, 2020, https://www.investopedia.com/managing-wealth/worth-playing-lottery/

⁴ “Don’t Eat Out as Often,” Trent Hamm, The Simple Dollar, April 13, 2020, https://www.thesimpledollar.com/save-money/dont-eat-out-as-often/#:~:text=What%20kind%20of%20money%20are,Again%2C%20that's%20reasonable.

December 7, 2020

How To Save Money On Transportation

How To Save Money On Transportation

Americans drain a huge portion of their income on transportation.

It eats up roughly 16% of our income every month, the majority of which is spent on car purchases ($331 per month), then gas and oil ($176 per month), and then insurance ($81 per month).¹

But what if you made that money work for you?

Here are some simple ways to spend less on getting around, so you can save more for your future!

Drive the speed limit
Speeding is never a good strategy. Zipping around town with your pedal to the floor is dangerous for you and others and realistically doesn’t save you much time.¹ Even worse, speeding can cost you money in the long term.

Obviously, speeding tickets are expensive. They cost about $150 on average.² They also have a nasty habit of increasing insurance premiums by up to 25%.³ But that’s not all. Rapidly accelerating and suddenly stopping reduces the efficiency of your engine and can cost you at the pump as well. Stick to the posted speed limit, accelerate gradually, and drive safely!

DIY the basics
There are plenty of car maintenance basics you can handle from the comfort of your own garage. For instance, a new air filter can boost your gas mileage by up to 10%.⁴ They’re also cheap and usually easy to change out once they get dirty. Even something as simple as inflating your tires can boost your car’s performance.⁵ Remember to do your research and consult your car’s owner manual.

Take the bus
If public transportation is available, use it! Research says trading your car for a bus or train can save you over $10,000 annually.⁶ The cost of tickets and metro passes pales in comparison to car insurance premiums, car maintenance, loans, and gas.

Buy Used
Don’t have access to public transportation? Stick with used cars and drive them as long as you can.

New cars almost always lose value. By the end of their first year, a new ride will shed 20% to 30% of its value. Over 5 years it loses 60% of its value.⁴ Unless you’re restoring a vintage masterpiece or have cash to blow, you’re much better driving an older model of the same car for a fraction of the price.

Remember, how you get around is a practical problem. It doesn’t need to be fancy or flashy when you’re starting your journey towards financial freedom. Utilize local transportation options, buy a clunker that you maintain yourself, and drive the speed limit. Your wallet will thank you in the long term!

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November 25, 2020

Money Black Holes You Should Avoid

Money Black Holes You Should Avoid

It’s true that sometimes you’ve got to spend money to make money.

But there are plenty of things that people spend money on that give them absolutely no return. Some of these are obvious (lottery tickets and ponzi schemes), but others are subtle parts of our lifestyle. Here are three money black holes that you should avoid at all costs!

New Cars
Nothing feels better than driving off the lot with a new set of wheels. Until, that is, you realize that your car’s value has already started plummeting.

The most important rule to remember is that cars are practical tools, not long-term investments. Blowing a huge stack of cash might feel cool, but it’s a huge misallocation of money if you don’t have any to spend. Try to find a used model of the same car that’s five years old or more. Chances are you’ll get many of the same features for a fraction of the cost.

Pricey Phones
It seems like phones are improving every day and in every way. But is your high-end, name brand personal assistant really worth the steep price tag? Phones always decline in value after you buy them; The highest value-retaining phone dropped almost 50% a year after its release.¹ Unless your mobile device is a tool of your trade (i.e., you’re a TikTok influencer), dodge the hype and choose a cheaper or refurbished alternative.

Designer Clothes
New threads are awesome. You’ll never feel more like a hero than when you first hit the town in a freshly fitted suit or a designer t-shirt.

They’re also insanely expensive. Sure, they might not all cost $1,690 like a Tom Ford long sleeve solid T-Shirt. But regularly buying top-of-the-line clothes can burn huge holes in your wallet.

Fortunately, you have some fun alternatives at your fingertips. Off-price retailers might sometimes carry your favorite brands at a fraction of the cost. And thrift stores can be goldmines of high quality finds if you’re adventurous enough to explore them with a friend!

Remember, it’s okay to spend money on cool gadgets and gear if you’ve saved up for them or you’re already financially independent. But if you’re just setting out on your journey, it’s best to practice some discipline and seek out cheaper alternatives to these potentially dangerous money black holes.

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“Depreciation among top smartphone brands compared: Apple’s iPhone tops the list as the least depreciating brand,” Abhin Mahipal, SellCell, Oct 14, 2019, https://www.sellcell.com/blog/depreciation-among-top-smartphone-brands-compared-apples-iphone-tops-the-list-as-the-least-depreciating-brand/#:~:text=Apple%20once%20again%20blows%20the,release%2C%20making%20it%20worth%20%24580.

November 18, 2020

The Most Important Retirement Rule

The Most Important Retirement Rule

The best way to determine your retirement target savings is to use your income.

Here’s why.

Almost nobody wants to work 40 hours a week in retirement. Not you, not me. To avoid that, you must have money at your disposal to cover expenses like food, travel, and medical bills.

But how much do you need?

There’s a 38% chance that if you retire at 65 you will live to 85, and a 5% chance that you’ll make it to 95.¹ That means you’ll need enough cash to cover at least 20 years of life with no income.

This is where your paycheck comes into play.

Aiming to save 20 to 30 times your income helps prepare you to maintain your current lifestyle into retirement. You might even have extra spending money if you’re debt free!

Plus, it forces you to scale your savings as your income grows.

Setting a goal based solely on how much you want to spend in retirement can result in lowering your savings goal. You might splurge more now, telling yourself that you’ll just live on less later. But you’re cheating your future self!

Using your income as a retirement benchmark forces you to increase your savings amount as your paycheck grows. Let’s say you make $80,000 annually and you start saving. Your goal is to stash away 20 times your income, or about $1.6 million.

After a while, you’re able to save 5 years worth of earnings, or about $400,000.

But then you get a raise! Suddenly you’re making $100,000 per year. Your retirement target shifts up accordingly to $2 million. That $400,000 you have in the bank is a hefty slice of cash, but it’s now only worth 4 years of income instead of 5.

In other words, basing your saving around your income actually encourages you to save more as your income increases.

The best thing about this method is that it focuses on the most important part of retiring—to sustain the lifestyle that you envision. Meet with a licensed financial professional to map out what that would look like for you and how much you must save to make that vision a reality.

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¹ “How Long Will Your Retirement Really Last?,” Simon Moore, Forbes, Apr 24, 2018, https://www.forbes.com/sites/simonmoore/2018/04/24/how-long-will-your-retirement-last/?sh=31a59fb37472

November 11, 2020

How Much Should You Pay For a Car?

How Much Should You Pay For a Car?

Cars will drain your wealth.

In 2019, Americans were spending about $773.40 per month on their vehicles, or $9,281 annually.¹ That’s like owning a tiny house whose value nosedives the instant you buy it!

That’s not even counting the opportunity cost of throwing that money at a car. How much could that cash grow if it were invested or saved?

That’s why you should follow this simple rule for guarding your wealth from a car.

It’s called the 20/4/10 rule, and it’s composed of three parts. Let’s explore them one by one.

Start with at least a 20% downpayment.

Committing a hefty downpayment to a car curbs how much you’ll lose in interest later down the road. It’s always best to cover as much as you can up front with cash.

Finance the car for no more than 4 years.

How long would you want to dump money into an “investment” that doesn’t grow in value? Not long! Keep your financing period short and sweet and then get back to saving for your future.

Dedicate no more than 10% of your income to car expenses.

Your cash flow is a powerful wealth building tool if it keeps, well, flowing. Don’t let a car divert it somewhere else that it won’t grow and won’t build wealth.

Remember, this is not a bulletproof strategy.

You might be facing substantial mortgage or credit card debt obligations that make it difficult to afford the car you want. It’s always a good idea to meet with a licensed financial professional before you commit to buying a new vehicle.

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October 7, 2020

How To Talk To Your Spouse About Money

How To Talk To Your Spouse About Money

Family finances isn’t always a fun topic.

But getting in the habit of discussing money early on in your relationship may help pave the way for a smoother future. Whether or not you see eye to eye, learning each other’s spending habits and budgeting styles can help avoid any financial obstacles in the future. Below are some tips on getting started!

Talk about money regularly
One of the best ways to approach a conversation about money is to decide in advance when you’re going to have it, rather than springing it on your spouse out of the blue. Family budgeting means making the time to talk upfront and staying transparent about it on a consistent basis. If you and your spouse choose to set a monthly or annual budget, commit to sitting down and reviewing family expenses at the end of each month to see what worked and what didn’t.

Start a budget
It’s easy to feel overwhelmed if you don’t have a family budget and don’t know where to start. However, with the development of mobile applications and online banking, you can now more easily track your spending habits to find ways to cut unnecessary expenses. For example, if you see that you’re going out to dinner most nights, you can try replacing one or two of those evenings out with a home cooked meal. Small changes to your routine can make saving easier than you might have thought!

Remember your budgeting goals
Budgeting comes down to a simple question—how will these money decisions affect the happiness of my family? For example, you might need to ask yourself if taking an awesome vacation to your favorite theme park will give your family more happiness than fixing your minivan from 2005. Can’t do both? You aren’t necessarily forgoing the vacation to fix your car; instead, you might need to invest in your car now rather than potentially letting a problem worsen. You might then decide to rework your budget to set aside more money every month to take the trip next year.

The key is that talking to your spouse about money may actually become more about talking to them about your goals and family. When you put it that way, it may be a much more productive and rewarding conversation!

Even if you haven’t discussed these things before you walked down the aisle, it’s never too late to sit down with your spouse. This topic will continue over time, so talking about your financials with your partner as you approach new milestones and experience different life events as a family can help you financially prepare for the future.

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July 22, 2020

What Are We Spending Money On?

What Are We Spending Money On?

We spend a lot of money.

All things told, we spend about $101 per day, whether we feel it directly or not.(1) That comes out to roughly $36,764 per year. Over half of all Americans spend more than what they earn.(2) The bulk of that goes to important categories like shelter and utilities.(3) But it doesn’t take much digging to find some less important spending patterns. Here’s a quick look at what we’re spending (i.e., wasting) our money on!

Food
How can you waste money on food? It’s essential to survival and health!

But it turns out that throwing away cash on food is really easy. Americans spend an average of $209 per month on just eating at restaurants, which comes to a total of $2,508 yearly. Add in the cost of drinks and you’re at $4,776!(4) But that’s just eating when you’re out. Another huge issue is chronically overbuying food to consume at home. We throw out around $1,600 of food per family every year.(5)

That brings us to a grand total of $6,376 dollars spent each year on restaurants, drinks, and wasted food. And that’s not including categories like takeout!

Shopping
We’re notorious shoppers. We spend around $108 on approximately five impulse purchases per month. Online shopping is a substantial category as well, with our digital purchases costing us around $84 monthly. Interestingly, we spend nearly $94 per month on subscription boxes. That adds up to $3,432 on non-essential shopping annually.

Personal care
Everyone wants to look, smell, and feel attractive. And it turns out that most people are willing to pay a king’s ransom on their appearance. Personal grooming comes out to $94.25 monthly. Gym memberships (which often go unused) cost the average American $72.53 per month. All told, we spend around $2,000 annually on looking good.

Cable and streaming
Another big category of spending is entertainment and apps. The biggest culprit here is—surprisingly—cable. On average, we shell out $90 per month for unlimited access to reality shows and documentaries, many of which are now available online. Throw in spending on movie streaming ($23.09), music streaming ($22.41), and other paid apps ($23.24), and our overall spending on digital entertainment is around $1,904.88 per year!

Tallying these four categories, we see that Americans are spending about $13,712.88 annually on non-essential items. That’s a staggering amount of money! It’s enough for a full year of college, including tuition and books.(6)

Non-essential spending does have its place—it can actually be very important to your quality of life and overall well being. But you might be surprised by how much of your financial power is getting wasted on things that are truly unnecessary or have cheaper alternatives.

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June 24, 2020

Read this before you walk down the aisle

Read this before you walk down the aisle

Don’t let financial trouble ruin your future wedded bliss.

Most newlyweds have a lot to get used to. You may be living together for the first time, spending a lot of time with your new in-laws, and dealing with dual finances. Financial troubles can plague even the most compatible pairs, so read on for some tips on how to get your newlywed finances off to the best possible start.

Talk it out If you haven’t done this already, the time is ripe for a heart to heart talk about what your financial picture is going to look like. This is the time to lay it all out. Not only should you and your fiancé discuss your upcoming combined financial situation, but it can be beneficial to take a deep dive into your past too. Our financial histories and backgrounds can influence current spending and saving habits. Take some time to get to know one another’s history and perspective when it comes to how they think about money, debt, budgeting, etc.

Newlyweds need a budget Everyone needs a budget, but a budget can be particularly helpful for newlyweds. A reasonable, working household budget can go a long way in helping ease financial stress and overcoming challenges. Money differences can be a big cause of marital strife, but a solid, mutually-agreed-upon budget can help avoid potential arguments. A budget will help you manage student loans or new household expenses that must be dealt with. Come up with a budget together and make sure it’s something you both can stick with.

Create financial goals Financial goal setting can actually be fun. True, some goals may not seem all that exciting – like paying off credit cards or student loans. But formulating financial goals is important.

Financial goal setting should start with a conversation with your new fiancé. This is the time to think about your future as a married couple and work out a financial strategy to help make your financial dreams a reality. For example, if you want to buy a house, you’ll need to prepare for that. A good start is to minimize debt and start saving for a down payment.

Maybe you two want to start a business. In that case, your financial goals may include raising capital, establishing business credit, or qualifying for a small business loan.

Face your debt head on It’s not unusual for individuals to start married life facing new debt that came along with their partner – possibly student loans or personal credit card debt. You may also have combined debt if you’re planning on financing your wedding. Maybe you’re going to take your dream honeymoon and put it on a credit card.

Create a strategy to pay off your debt and stick to it. There are two common ways to tackle it – begin with the highest interest rate debt, or begin with the smallest balance. There are many good strategies – the key is to develop one and put it into action.

Invest for the future Part of your financial strategy should include preparing for retirement, even though it might seem light years away now. Make sure you work a retirement strategy into your other financial goals. Take advantage of employer-sponsored retirement accounts and earmark savings for retirement.

Purchase life insurance Life insurance is essential to help ensure your new spouse will be taken care of should you die prematurely. Even though many married couples today are dual earners, there is still a need for life insurance. Ask yourself if your new spouse could afford to pay their living expenses if something happened to you. Consider purchasing a life insurance policy to help cover things like funeral costs, medical expenses, or replacement income for your spouse.

Newlywed finances can be fun Newlywed life is fun and exciting, and finances can be too. Talk deeply and often about finances with your fiancé. Share your dreams and goals so you can create financial habits together that will help you realize them. Here’s to you and many years of wedded bliss!

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June 10, 2020

The Food Waste Epidemic... And What You Can Do About It

The Food Waste Epidemic... And What You Can Do About It

Food waste is a big problem.

Don’t believe me? Just check out these food waste facts:

- The average family throws away around $1,500 of food every year.(1)

- One recent study found that we toss around a third of all consumable food, with wealthy nations being the biggest culprits.(2)

- Cutting back our food waste just 15% would free up enough food to feed 25 million Americans.(3)

Those are incredible numbers. And they touch everything from the poor in other parts of the world to your own wallet! But what can you do? How can you not only combat a global problem but also look out for your own financial needs? Here are a few practical ways to reduce food waste and save some money while you’re at it!

Shop with a plan
The first step to not wasting food is only buying food you plan on eating. That means deciding ahead of time what you want to eat, making a list, and only buying those items at the store. Sure, it’s thrilling to walk down the produce aisle just waiting for an exotic veggie to catch your eye or buying extra meat just in case you want pork chops instead of chicken thighs. But you’ll quickly find that shopping without a strategy can lead to overbuying. This raises the potential that food won’t get prepared and will get thrown out. Always start with a list and shop from there.

Online shopping may help you stay on track with your list—and save you a ton of time! It’s fairly simple these days to log in to your favorite grocery store app, check items off, then click Delivery or Pick-up. (Keep in mind the store may charge a small fee for these services, but if it means not throwing out yet another unopened box of spinach, it might be worth it!)

Store wisely
Even the best planner will overbuy at some point. Maybe there’s a great sale on your kids’ favorite snack crackers, or you want to pick up a couple extra bottles of wine since they’re BOGO. You might stock up on Monday and then remember you have dinner plans with the in-laws on Friday. Don’t panic! Keeping your food from going bad is actually pretty simple. For many perishable items, just take a deep breath, open your freezer, and put your food inside. Close the freezer door. Your food should be safe from going bad until your schedule clears up. Just remember to dethaw your food before you try cooking it!

If you find you’re stocking up often on dry goods, you might want to invest in some quality containers (plastic, glass or metal) to help keep your food fresher, longer.

Reuse (safely)
But what happens if you prepare a ton of food for a meal only to discover that your stomach is smaller than you anticipated? Open up the trash can and dump all of that delicious, edible food?

Never!

The classic leftovers loophole is to put your food in proper containers and leave them in the fridge until you can get back to them in the next day or two. You can also freeze leftovers if you need. But why stop there? Those leftovers are just begging to be transformed into something fresh and delicious! Why not stir fry them with some rice or cook them into a casserole? Get creative and make something new and amazing!

Reducing food waste takes a little work and planning. But with the right attitude, it can be a fun way of contributing to your community, helping the planet, and avoiding a hunger strike by your bank account!

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May 6, 2020

How Much Should You Save Each Month?

How Much Should You Save Each Month?

How much are you saving?

That might be an uncomfortable question to answer. 45% of Americans have $0 saved. Almost 70% have under $1,000 saved (1). That means most Americans don’t have enough to replace the transmission in their car, much less retire (2)!

But how much of your income should you send towards your savings account? And how do you even start? Keep reading for some useful strategies on saving!

10 percent rule
A common strategy for saving is the 50/30/20 method. It calls for 50% of your budget to go towards essentials like food and rent, 30% toward fun and entertainment, and the final 20% is saved. That’s a good standard, but it can seem like a faraway fantasy if you’re weighed down by bills or debt. A more achievable goal might be to save around 10% of your income and start working up from there. For reference, that means a family making $60,000 a year should try to stash away around $6,000 annually.

A budget is your friend
But where do you find the money to save? The easiest way is with a budget. It’s the best method to keep track of where your money is going and see where you need to cut back. It’s not always fun. It can be difficult or even embarrassing to see how you’ve been spending. But it’s a powerful reality check that can motivate you to change your habits and take control of your finances.

Save for more than your retirement
Something else to consider is that you need to save for more than just your retirement. Maintaining an emergency fund for unexpected expenses can provide a cushion (and some peace of mind) in case you need to replace your washing machine or if your kid needs stitches. And it’s always better to save up for big purchases like a vacation or Christmas gifts than it is to use credit.

Saving isn’t always easy. Quitting your spending habit cold turkey can be overwhelming and make you feel like you’re missing out. However, getting your finances under control so you can begin a savings strategy is one of the best long-term decisions you can make. Start budgeting, find out how much you spend, and start making a plan to save. And don’t hesitate to reach out to a financial professional if you feel stuck or need help!

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April 29, 2020

Budget Date Ideas

Budget Date Ideas

Budgeting might seem like the death knell for your dating life.

No more extravagant dinners? No more fun times at the movies? No more nights out on the town? How else can you keep that spark alive? But sometimes adding constrictions to your dating life can be a fun change of pace and actually spice things up. Here are some great budget-friendly date ideas.

Cook dinner together
An expensive dinner in a nice part of town is always a killer date idea. But it can start to add up if you’re not careful. That’s why cooking a special dinner at home as a couple is a great alternative. You save money on ingredients, you get real portion sizes that will last you for days, and it’s a fun activity that takes teamwork. Not a chef by nature? YouTube will be your best friend. There are tons of great recipe walkthroughs that will help you two knock this one out of the park!

Go on a hike
You should never tell your partner to take a hike. But you should definitely ask your partner to go on a hike! There’s nothing much better than some physical exertion in the great outdoors with someone you care about. Just remember that this one can add up if you’re not careful. Here are some pointers to make your hike a thrifty winner:

-Drive your most fuel efficient car

-Avoid cutesy stops full of expensive trinkets

-Research and see if the trail you’re hiking charges for parking

-Pack as much food as possible

Follow these tips and you might be surprised how inexpensive a trek can be!

Watch a sunset
Sunsets are incredible. There’s no reason that you and your significant other shouldn’t be sitting outside to take in the everyday beauty of the sun slipping behind the horizon. Any sunset is good, but here are a few steps you can take to find the absolute best sunset for your dollar!

-Choose the right day. The best sunsets typically occur a few hours after rain while there’s still a bit of cloud coverage. Too many clouds hide the sun, but just a few will catch the final light of the day. Check your forecast ahead of time!

-Choose the right location. You don’t have to go far to find the perfect sunset viewing spot. Watching the last beams of the sun shine through skyscrapers? Amazing. Hitting up a small, local airport to watch planes at twilight? Gorgeous. Bathing in the light of golden hour on your front porch with your gal (or guy) beside you? One for the books.

-Pack a picnic. Wherever you decide to watch the sunset with your partner, just remember to pack some food. It’s a great alternative to an atmospheric (and expensive) restaurant!

Creativity is key. The more inventive your budget date ideas are, the more memorable they’ll be. You might find yourself looking back on your budget dating years as some of the best and most exciting of your relationship!

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