capsule wardrobe
Capsule wardrobes have become yet another icon of simplicity in an overly-consumeristic culture. High-profile executives even like the concept because it frees their “creative energy” for more important decisions than what to wear every day. Downsizing your closet might sound appealing if you:

  • Hate deciding what to wear every day
  • Dislike having to shop every season
  • Wish you had less clothing to maintain
  • Want to spend less on clothing

Building a capsule wardrobe saves both time and money in the long run, but it does require an initial investment. For instance, one of the first steps ‘capsule experts’ suggest is eliminating anything in your closet that doesn’t fit, flatter, or you simply don’t love.

What does that leave?

If you do it right, not much! Unlike high-profile executives, not many of us can afford to go out and replace our entire wardrobe in one shot, regardless of how much it will save long-term. Is it possible to build an amazing capsule wardrobe on a budget? If you consider the following tips, I think so.
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budgeting rules
There are dozens of choices when it comes to budget plans. If you’re still looking, or are completely new to the concept of budgeting, let me re-introduce you to an age-old budgeting guideline: the 50/20/30 rule. Even though it’s a classic, it bears a fresh look, especially through the lens of the modern American’s financial outlook.

Three Categories and What They Contain

The 50/20/30 rule splits up take-home pay into three large spending categories — fixed costs, financial goals, and flexible spending. Here’s a list of what each contains.

  • Fixed Costs (50%) – These are the expenses most vital to your survival, which don’t vary from month to month: mortgage, rent, vehicle payment and utilities. Some versions also include non-essential monthly subscriptions, since they require a monthly commitment and the amount doesn’t vary unless you choose to discontinue them.
  • Financial Goals (20%) – This category includes any monthly payments and contributions toward improved financial health: 401K and other retirement accounts (from post-taxed income), extra payments on credit card debt or student loans, building an emergency fund, and savings goals such as a down payment for a home or funding an education.
  • Flexible Spending (30%) – This category includes expenses that vary from month to month: groceries, gas, eating out, shopping, hobbies and entertainment.

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salary inflation
Getting an annual raise or a promotion that comes with a higher salary is a great feeling. It makes you feel appreciated for what you do, and, if your finances were tight, it brings a sigh of relief.

What’s the first thing people tend to think of immediately after a raise? What to do with the extra income, of course, and usually, where to spend that sum. It’s not the immediate reward that’s the biggest problem though. Going out to a nice restaurant, taking the weekend away, or even purchasing an item you’ve had your eyes on for a while (assuming it isn’t a Lamborghini) is nothing to feel guilty about.

It’s when a little extra monthly income turns into an excuse for lifestyle creep (also called lifestyle inflation) that you need to really guard against.
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impulse shopping
I visited an antique shop with my cousin recently, as we sought inspiration for an apartment she will be moving into in a few months. I wasn’t planning on buying anything, but I saw a piano bench that looked perfect for our piano. My son had been complaining about our bench and the hinged top of this bench appealed to me; the current bench didn’t have a place to store music.

On impulse, I bought the bench for $65. I don’t regret the purchase. It’s a nicer bench than what we had before, and now my son has a place to store his sheet music and lesson books — instead of just tossing them on the floor.

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how to invest in bitcoin
We’ve been hearing a lot about Bitcoin in the news lately, and financial advisors say they’re fielding more and more questions about this intriguing digital currency.

(If you need to get caught up on Bitcoin and block chain technology, read this article).

As with any technology, it’s taken a few years for Bitcoin and other cryptocurrencies to become more mainstream — and that time seems to have arrived.

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thrifty couple

My wife and I figured it was a great time to try something we’d always wanted to do since starting my blog—live with very little money for a set period of time and see what I learn.

I think we did well, because we ended up using only $34.01 in a whole week. It was an interesting and eye-opening experience, but more importantly, I learned some invaluable personal finance lessons.

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