Connect with us

The Daily Digm (News)

Americans are Not Feeling Hopeful About Their Financial Situations + How to Get Your Financial Life Together

Published

on

Most Americans don’t expect their financial situations to improve in 2019,according to a new Bankrate survey. Of those, 12% think their situations will worsen and 44% expect things to stay the same. About half of those who see their finances getting worse blame the government. Despite the overall pessimism, millennials were generally upbeat — with 59% saying they expect their finances will get somewhat or much better in 2019.

But what about you? Where do you stand? If you are unsure or want to get your financial life in order, follow these 5 tips:

1. Establish financial goals.

As the saying goes: “If you fail to plan then you are planning to fail.” As cliché as that may sound, it is important to realize that the first step of establishing your financial goals is the most important step to take—especially when attempting to get your financial life together after college.

Start by separating your goals into three buckets: short-term goals (between 0-3 years), mid-term goals (between 3-7 years) and long-term goals (7+ years). Once you have identified which goals fall under each category, map out a plan of action that will help you achieve each financial goal within the given timeframe. It is also a good idea to make each goal a S.M.A.R.T. goal—Not SMART as in intelligent but S.M.A.R.T. as in Specific, Measurable, Achievable, Realistic, and Timely. This will help you organize your financial goals into bite size chunks that are digestible and doable.

2. Build an emergency fund.

Building an emergency fund is one of those necessities you don’t realize you need until you need it. It’s sort of like car insurance; you drive your car every day with the hope that you never get into an accident, but if ever you do, you need a system in place that will help!

An emergency fund is just that—preparation for the unexpected that will make you whole again. Emergencies can be the loss of a job, significant medical expenses, home or auto repairs, or any other situations that disrupts the flow of your life. An emergency fund should be between three and six months worth of your monthly expenses. This figure gives you enough lead-time to get back on your feet if needed.

Start small by saving at least 10% of your income with a goal of saving one month of expenses. Once you you do, increase your goal to two months and so forth. But remember, you must pay yourself first! This means that before you pay your bills, buy groceries, or anything else vital before setting aside a portion of your income to save. In essence, the first bill you should be paying each month is to YOU!

3. Create a monthly spending plan.

Now that you know your financial goals are and have a process in place that will help you build your emergency fund, it is time to create a monthly spending plan. This will help dictate where your money should go.

To begin, separate your needs from wants. Your needs can be fixed expenses: rent, utilities, food, clothing, transportation, taxes, health care, childcare, and (possible) home repairs. Wants can include entertainment, cable, Internet service, magazine subscriptions, eating out, hobbies, and cell phone bills. Once you identify your expenses, start by paying yourself first (as discussed in step 2), then create a system where you are paying all of your needs/expenses in a timely manner. Make them automatic if you can. Your wants should be included in your budget, but make sure you are keeping track of everything you spend to assure you are not veering from your plan.

4. Stay on top of student loan obligations.

“I love student loans,” said no one ever! Regardless of how much you despise your student loans, it is imperative you stay on top of them to avoid getting into financial trouble. Student loans can really have a negative effect on your financial life if you don’t manage them properly—not only will they affect your credit by showing up as a derogatory account on your credit report, but in some cases your paycheck can be garnished and bank account levied.

Make sure you are, at least, paying the minimums. If your current financial situation doesn’t permit this, speak to your lender about a deferment or forbearance so your loans stay in good standing.

5. Use credit wisely.

Lastly, using credit wisely will only help your financial situation. Good credit can help you rent an apartment or buy a home. It can allow you to finance a car, save money on insurance, or even help get a job (in some states employers check credit before making job offers).

The first step in using credit wisely is to understand that credit is not free money and should not be used for everyday purchases. It should be use for emergencies. Also, it is important to check your credit report at least once a year to make sure what is on your credit report is accurate. Visit www.AnnualCreditReport.com for your free credit report from all three credit bureaus (Transunion, Experian, and Exquifax).

Ash Exantus aka Ash Cash is one of the nation’s top personal finance experts. Dubbed as the Financial Motivator, he uses a culturally responsive approach in teaching financial literacy. He is the Head of Financial Education at BankMobile and Editor-in-Chief at Paradigm Money. The views and opinions expressed are those of Ash Cash and not the views of BankMobile and/or its affiliates.

The Daily Digm (News)

American Are Wasting Money + How to Become a Smart Saver

Published

on

New cars, spacious homes, and morning coffee are some of the top ways Americans waste money, according to financial experts. The criticism comes at a time when 29% of Americans say they have more credit card debt than emergency funds, up 8% from 2018. Young Americans aged 18-29 have a combined debt of $1 trillion, and demographics show steady increases before petering out, with 60-69 year-olds in debt totaling $2 trillion.

So how do you become a smart saver? The best way to do so is to cut your expenses in ways that will bring more money to your bottom line. The following are tips on how to save money:

1- Stop Shopping at Convenience Stores.

Convenience stores are notorious for marking up the price on items significantly compared to grocery stores. If it isn’t worth the hassle to go to a grocery store, you probably don’t need it anyway.

2- Avoid Late Fees When Paying Bills.

Pay your bills on time so that you aren’t charged that unnecessary extra amount. If the problem is a lack of organization and forgetting the dates, use a reminder service like Google’s calendar feature that can send you a text or email to let you know when due dates are approaching. If you are worried about not having enough funds, call ahead and see about changing the due date or getting an extension.

3- Save Your Change.

Make it a habit to keep all that pocket change in a jar. Use cash to pay for most things and instead of trying to give the right change, only use the bills. When you get home, drop that coinage in a jar and let it accumulate. You will be surprised at how quickly it adds up.

4- Carpool as Much as Possible.

You can be doing yourself and others a lot of good when you decide to travel together. It might not be as convenient, but it can help in the long run. Carpooling to work or taking the kids to school are obvious ones to do. You can also get to know your neighbor and coordinate shopping trips.

5- Buy Used or Discounted

You can find a decent collection of clothes and other needs if you will buy used or at discount stores. Shopping at consignment shops or Goodwill will provide you with some good options. Discount stores like TJ Maxx or Marshalls are good places to find good designer clothes at a low price. Yard sales are good places to look for things that you need for the home. Discount food stores will give you the most value on food products. The names of the brands may not be familiar, but you won’t notice much of a difference in taste or quality.

You can find many more ways to save money, but the keys are to get organized, be disciplined, and learn to sacrifice. There won’t be many how to save money tips that will save you much money on their own, but using several together will net you the results that you want.


Continue Reading

The Daily Digm (News)

Amazon Is Helping People Build Credit + Credit Knowledge to Keep You on the Right Track

Published

on

Amazon is opening up its rewards credit cards to people with no or bad credit. The tech giant and Synchrony Financial are launching “Amazon Credit Builder” for people who don’t qualify for the company’s other reward cards. The cards will offer Prime customers 5% cash back on Amazon purchases, with the person’s credit limit equal to the size of the deposit they make before receiving their card. Since 11% of the U.S. population have credit scores below 550, the move could increase Amazon’s customer base, says CNBC.

This seems like a good move for those who are unbanked or underbanked, but without being of how to manage or maintain good credit, this effort might exacerbate the problem. Many people are aware of the important role the credit rating plays in their lives. However, understanding what goes into a credit score (the credit score breakdown) might present some difficulty. There are several different methods of scoring, but most lenders and banks rely on the FICO method that has been in existence since the 1980s when it was developed by the Fair Isaac Corporation. The three prominent credit bureaus (TransUnion, Experian, and Equifax) all worked with Fair Isaac to come up with the FICO algorithm.

Your credit score may be any number from 300 to 850. The average American falls at about 690, which is deemed relatively good credit. However, while this score should secure you a loan, it will not get you the very best interest rates on loan. In fact, 300-640 = Bad Credit, 641-680 = Fair Credit, 681-720 = Good Credit, and 721-850 = Excellent Credit. Excellent credit should be the aim.

Following is the credit score breakdown:

Payment History

The biggest chunk of your score (35%) is derived from your payment history. This score is influenced by how well (or not) you pay your bills on time, how many have been sent to collection agencies, bankruptcies, tax liens, etc. Keep in mind that missing a payment is worse than making a late payment and that being late or especially missing a mortgage payment is a bigger blow to your credit score than missing a credit card or utility payment.

Usage Ratio

The amount of debt you have (compared to the amount of credit you have not used) accounts for 30 percent of your score. Try not to max your credit cards out. In fact, it is recommended that you only use 25 to 50 of the credit that is available to you. A way to balance this out is to obtain more lines of credit and not use them. However, you do not want to apply for a bunch of credit cards all at once as this is marked against you. If your credit is in good standing, apply for a reputable card every six months or so and save it for a rainy day.

Length of Credit History

Fifteen percent of your credit score is based on how long you’ve established credit. This is common sense. The longer your credit history, the better your overall score will be. More data about your past leads to a more accurate prediction of your future credit worthiness.

Credit Mix

Having several types of credit will actually boost your score if they are managed well. This counts for 10 percent of the overall rating.

New Credit

As mentioned earlier, opening new credit accounts all at once will negatively affect your score in the short term. It’s also important that you are aware that your score can be lowered for too many “hard inquiries” about your status. A “hard inquiry” is one that you have authorized a lender to perform. If you are inquiring about your own score, this will not count against you.

Understanding what goes into the credit score breakdown is the first step in improving your score and what will allow you to design your score and begin you on the journey to financial freedom.

Continue Reading

The Daily Digm (News)

Job Growth in the U.S. Slows down + How to Use Entrepreneurship as a Plan B

Published

on

Job growth across the U.S. took a big hit in May, with private payrolls growing by just 27,000, against the 173,000 estimated. The disappointing figures from ADP and Moody’s Analytics are the worst since March 2010, when the employment market posted a loss of 113,000 jobs. Small businesses with less than 50 employees were the worst hit in the most recent report, posting about 50,000 lost jobs. “Labor shortages are impeding job growth, particularly at small companies,” according to Moody’s Analytics.

With job uncertainty looming, it is time to sharpen up our skills, but it’s always a good idea to get your feet wet first before you fully jump in. As always, we are here to help. Here are some ways to get you started as an entrepreneur:

1. Sell your good-quality, unwanted items.

Since one person’s trash is another person’s treasure, consider selling unwanted items on eBay, Craigslist or other similar sites—it is a great way to begin learning about entrepreneurship. You simply have to take all the stuff that you have laying around the house that you don’t need, and sell it. You’ll learn how to price your items, ship them, and many times how to negotiate.

2. Sell freebies from Craigslist.

Continuing in that same vein…what if you want to keep everything you have? Or what if you just don’t have anything to sell? Well, selling freebies from Craigslist is a great alternative. Just look for free stuff on Craigslist. Some items are in great shape. But if they’re not, spruce them up and resell them either on Craigslist, at a flea market or a garage sale.

3. Sell yourself (not that way).

Fiverr, Elance, Craigslist gives you a platform to sell your skills. Have a beautiful voice? Create personalized phone greetings. Are you a wiz at editing videos? Do it for others. Are you knowledgeable about design? Create a logo for someone. The list is endless.

4. Teach classes online.

Teaching classes online is actually a very lucrative business if you can find your voice and audience. How lucrative? It’s a 100 billion dollar industry! If you are particularly good at something, you can create online courses on Udemy or start your own online school using teachable.com or thinkific.com. Though top experts use this as a worthwhile way to earn residual income, everyday Joes and Janes use this as a way to sell anything from how to knit to their mobile app development expertise. Don’t know where to start? As you can see, there’s a class for that.

5. Offer to watch children.

Another way to start your journey as an entrepreneur is to hit up mom and dad. No, not your mom and dad. I mean parents who are busy professionals with small children. They may have to strain to remember the last time they were able to go to a restaurant or spend some quiet time with their significant other. Offering to watch their children can give you a head start on creating your own business as well as a valuable lesson in patience.

6. Become a brand ambassador.

Lastly, becoming a brand ambassador is a great way to not only get your feet wet in business but your knees and thighs too. Whether you have a small or large social media presence, you can use your influence to promote brands and get paid for it. (Make sure you’re only aligning yourself with brands you believe in). Doing this will give you an inside look into how established businesses (and even start-ups) want to portray themselves to the public.

While there are many other ways, those mentioned above are just some to get you started. What are some ideas that you may have? I want to hear from you. Leave a comment below and let me know how you believe that you can start your journey as a business owner/side-hustler.

Continue Reading

Trending

Copyright © 2019 PARADIGM.MONEY, All Rights Reserved. PARADIGM.MONEY is owned/operated by BankMobile, a Division of Customers Bank. The opinions/Views expressed on PARADIGM.MONEY are not considered opinions/Views of BankMobile, a Division of Customers Bank.