One of the most interesting areas of finance is called behavioral finance, which is the study of how our behaviors can influence the outcomes of our portfolios.
According to H. Kent Baker and Victor Ricciardi in The European Financial Review, there are several behavioral biases that can impact your investment portfolio and result in lower returns.
Here are two of those biases:
According to a recent report by CareerBuilder, 78% of Americans who work full-time live paycheck to paycheck.
That number is staggering.
I know it’s tempting to splurge a little and spend on things you’ve never had the opportunity to before whenever you have extra money to spare at the end of the month, but consider investing the sum instead before all of it is gone.
Thinking about the long term is hard, especially when it comes to finances, but life does get easier the earlier you start laying the foundation for good financial habits.
Whether you have $100 or $1,000 to spare every month, investing extra funds wisely can have a significant impact on your future. Let’s take a look at four things you do with extra money every month:
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You wouldn’t let your teenager cruise around solo before he’s had some driving lessons, would you? It’s pretty obvious that the responsibility of driving is something that requires education, practice, and time.
But many parents are allowing their teens to take on another important responsibility without the benefit of an education. Specifically, many young people get their first credit card without any idea of how to manage the privilege. This can have disastrous results.
Rather than letting your teenager navigate the potentially treacherous waters of credit by himself, start providing him with age-appropriate lessons early on.
Here are a few reasons why you should give your kids a credit card.
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Mathematically, it’s obvious that paying off loans with the highest interests rate first makes the most financial sense but as you may know, some financial experts promote “paying off the smallest loans first”. Why do they do that? Let’s take a look today.
The smallest loans first method is simple. Instead of paying off debt with the highest interest rates (ie, the ones with the least favorable terms), you put that aside and list out all your debt sorted by the amount owed. Then, you pay the minimum payment of all your loans each month and pile all other available income for debt repayment into the loan with the smallest amount outstanding. Once the first debt is repaid, you try to repay the second smallest debt you owe and so on.
The argument for this approach is that eliminating bills are so satisfying it will be easier to stay on track with the overall debt repayment plan. The positive and quick feedback will have a great impact on your commitment to repaying your debt and will overcome the increase in interests that you need to pay.
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Your child’s Extra Academic Activities, or extracurricular activities, can be rather steep. On top of paying for regular school functions and events, these activities go above and beyond the normal curriculum. As a mother of two very athletic boys, I’ve spent my fair share of cash on sports programs and outings.
Thankfully though, I’ve discovered a handful of quick ways to save money. With sports especially, this is one area that many parents frequently overlook when trying to cut costs. Here are nine tips for saving money on extracurricular activities, without having to say “NO” to your kids.
Many of us dream of owning our own hot tub one day. They’re a symbol of luxury, something that’s usually found in hotels, spas, or gyms. I used to be one of those dreamers, and about 10 years ago that dream became a reality.
Just a few days after Valentine’s day we had our brand new hot tub delivered. My wife and I were excited as we anxiously awaited the tub to be filled, and the water to be hot enough for us to jump in for the very first time.
But if you’re not careful, buying a hot tub can be a huge time and money waster. As we quickly found out, owning a hot tub was much more expensive than we thought.
Buying a hot tub is a lot like buying a car. There are almost infinite brands and models to choose from, all in varying price ranges. If you’re thinking of buying a hot tub of your own, the spending doesn’t stop the day your new jetted tub of relaxation is delivered.
Here are six hidden expenses that come with being a hot tub owner:
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