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We hear a lot about different money styles. Some of the more common personal finance dichotomies that we are used to reading about include:
Spending vs. Saving
Denial vs. Indulging
Impulse Buying vs. Planning Purchases
While all of these financial styles illustrate different characteristics about how we spend our money, I always thought it interesting that few people address spending styles in terms of what we like to spend money on. We talk a lot about whether we should or shouldn’t spend, but not much about the type of spending.
This oversight occurred to me a few years ago when my husband told me that it was a “waste” to spend money on short trips to a neighboring state, at which point I fired back that I thought it was a “waste” to buy a television that we didn’t need—especially when our current TV worked just fine and was certainly adequate.
We often think of a six-figure income to be the answer to all our problems. After all, if you make at least $100k a year, you must be doing something right — and have plenty of money.
The reality, though, is that there are plenty of people making six figures and struggling to make ends meet.
While there’s no one reason that this happens, here are three reasons why expenses can get a little out of control with your budget, even if you are considered “rich” in the eyes of others:
When we go out to eat, my husband always asks, “How much should I tip?” It seems as though this flexible figure stymies many patrons, especially when the service is above average or far less than stellar.
As a former waitress and hostess, I can honestly say that dealing with the hungry public can be challenging and exhausting, and that servers deserve far more than the reduced minimum wage plus tips the government says they’re worth. With more and more people seeking second jobs or temp work to boost their incomes, this issue is more important now than in previous years.
Automation is a buzz word among financial advisors. And for good reason too. There are simply too many benefits of automating your finances for someone who cares about accumulating money to ignore. Whether direct depositing money into a savings or retirement account when you get paid, setting up automatic bill-pay, or investing in no-hassle index funds, automation can mean less stress, guess-work, and precious time managing your personal finances.
Complete automation can also have some serious disadvantages as well. Becoming aware of them can help you make more informed decisions about how — and how much — to use this strategy.
Here are three possible downsides to “set it and forget it” finances. [ continue reading… ]
Almost every week, I read an article telling me how big of a nest egg I need to retire comfortably, and almost every time, I think about my own retirement funds and try to compare it to the guidelines. Yet, every single time, I ask myself:
Is the retirement savings being referred to a post or pretax amount?
It seems like minor detail, which makes the point all the more important. Pretax retirement savings does not equal post tax funds. Make sure you take this into account when you do your retirement planning, or risk a true awakening when you can least afford it. [ continue reading… ]
I hardly ever recycled (other than turning in soda bottles and cans for Michigan’s $.10 deposit) growing up, and I shrugged it off as too much of a hassle in early adulthood — especially when I lived in rural areas that didn’t provide curbside recycling pickup. It wasn’t until I moved to Washington a few years ago that recycling truly became a habit for me, and now I can’t imagine not doing it.
Recycling protects the environment for only a small cost to us. It’s a good way to redeem waste, but what if we could create zero waste in the first place?
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