Monthly Archives: November 2018
With Money Goals, Multitasking Pays Off
Tackling money goals one at a time cost financial literacy expert Barbara O’Neill at least $1 million.
That’s how much O’Neill, a distinguished professor at Rutgers University, figures she lost by starting saving for retirement only after she had created an emergency fund, bought a car with cash and purchased a home.
“I tell students that eventually, 30 years later, I hit the million-dollar mark, but I could’ve had $2 million,” O’Neill says.
Too often, financial experts say, people want to attack their money goals one at a time: “As soon as I pay off my credit card debt, then I’ll start saving for a home,” or, “As soon as I pay off my student loan debt, then I’ll start saving for retirement.”
These folks don’t realize how costly the words “as soon as” can be. Paying off debt is a worthy goal, but it shouldn’t come at the expense of other goals, particularly saving for retirement. Company matches and tax breaks are not retroactive. And the sooner money is contributed, the longer it can benefit from compounded returns. Compounded returns are when your investment gains earn their own gains, which can dramatically increase your balances over time.
“By putting off saving for the future, you are really inhibiting yourself from benefiting from that wonderful magic,” says Kimberly Zimmerman Rand, an accredited financial counselor and principal at Dragonfly Financial Solutions in Boston. “If you can start saving today … you are going to have a lot more five years from now than if you decide to pay off debt for three years and start saving in year four.”
Why people tackle one goal at a time
The desire to laser-focus on one goal at a time is understandable, says financial coach Linda Matthew. People see faster results if they put every spare dollar toward paying down debt, for example.
But much of life requires multitasking, and money is no different, she says.
“I’ve got to take care of the kids, and stay in a relationship with my husband, and keep the house clean, and earn some money,” says Matthew, an accredited financial counselor and owner of Money Mindful, a financial coaching service based in Davis, California. “I can’t get into a relationship with my husband after I finish raising the kids; that’s called divorce.”
Busy lives make it tempting to try to focus on one goal at a time, Rand says. People may pay the most attention to their most immediate need or something that is causing them pain, ignoring the rest of their financial life.
“If you’ve got a bill collector calling, they’ve got your attention,” she says.
“As soon as” thinking can delay progress on any financial goal, Matthew adds. One woman told her the reason her family hadn’t saved was that they planned to start as soon as they had extra money, and they never did.
“You can’t wait for that,” Matthew says.
How to multitask
Financial experts recommend starting and maintaining a regular savings habit, even if it’s only $5 a week.
“I work with very low-income consumers, and I think most people can do this,” Rand says. “And then once your hours start to get more regular, maybe you’ve got a better job, now you can boost that amount.”
Rand also is a fan of making transfers automatic whenever possible.
“Setting it and forgetting it is actually a good thing when it comes to savings because then you don’t have to make that active decision every month,” she says.
O’Neill, who’s co-writing a research paper called “‘As Soon As’ Finances: A Study of Financial Decision-Making,” suggests dividing savings among different “buckets”: one for retirement, one for emergency funds, perhaps one for a home down payment. At the same time, target high-interest debt, such as credit card bills.
Once the system is in place, stick with it, O’Neill says. If a goal is achieved, or an expense such as an auto payment or child care ends, redirect that money to one of the other goals.
“You’re already used to paying that child care or whatever, and it’ll just fund everything a lot faster,” O’Neill says.
Inexpensive gift ideas for everyone on your list
Everyone knows that holiday shopping can be difficult. Whether you’re a part of a family that’s big, picky, or on a tight budget, getting the best gift can be trying. Here’s a quick list of inexpensive gifts to think about giving to a loved one this holiday season.
Sound. A set of Bluetooth earphones is always a good option. Bluetooth earphones can range from about $15 to over $200, so keep things cheap and search for the best deal with good quality. Any of your friends can use these, especially if they’re frequently on the go.
Scent. The classic candle is always a good choice, especially during the holidays when the seasonal scents range from a cozy gingerbread to a sweet candy cane smell.
Sips. If you know someone who must have a cup of hot tea every day, consider gifting a novelty tea infuser. The designs can be holiday themed, have meaningful quotes on the sides, or be a simple color. It’s a unique gift that won’t empty your wallet.
And where there is a tea drinker, there’s a coffee addict. For the coffee lover, a new mug is always a safe bet, and the creativity is endless. Buy a mug in a store, online, or even decorate a mug yourself! Simply buy a solid-colored coffee mug and use permanent markers to make a pattern and design it however you wish. If you mess up your design, put some rubbing alcohol on a cotton swab to erase. To ensure that the design doesn’t fade after washing, place your creation in the oven for 30 minutes at 350°F.
Even if coffee or tea are not your choice of beverage, a sturdy water bottle is another option. It’s easy to find inexpensive water bottles that will keep drinks cold for hours or even days! If you want to make it a more personal gift, go to a local store to get it engraved with their name or a cute phrase.
Succulents. If you’re loving the DIY activities, consider creating a trendy, DIY succulent display. The first step is to find a cute pot for the succulent or cactus. You can even create your own by following the same steps used to make handmade mug but choose a different container. Most craft stores sell small arrangements for your succulents. It’s fun to add plastic figurines like reindeer, decorative grass, rocks, and everything in between. It’s a chance to be creative and give a handmade gift.
Safety. If DIY isn’t your thing, give the gift of safety! Since many states are now hands-free, give a cell phone mount to a new driver or traveler for GPS purposes. They’ll really appreciate it, and it’ll keep them safe on the roads.
What are your favorite inexpensive gift ideas? Let us know in the comments!
Thumbs Up, Bucks Up 2018
How to start your career without a college degree
Not everyone heads to college after high school. Some jump straight into the workforce. You might think they’re at a disadvantage because they don’t have a college education, but there are many well-paying and satisfying careers they can pursue. Some opportunities are even higher paying than those that require a degree.
If college isn’t the next step for you, here are some tips for starting your successful career on the right foot:
Opt for on-the-job training
The best way to hone your skills is on-the-job training. It’s real-life experience that presents you with the normal day-to-day activity and the unique challenges that you won’t encounter in the classroom. Maybe you followed the technical or vocational training path in high school and can work as an apprentice in your field of interest. You could also opt to voluntarily shadow a skilled professional who can show you what an average workday entails.
Contact some professionals in your community and set up a time to meet. Even if it doesn’t result in a position, you’ve earned some networking experience and the chance that you’ll be top of mind in the future. The U.S. Department of Labor website can also help you find an apprenticeship in your area.
Take your idea to the bank
Innovative ideas for products and services happen every day. If you’ve got an idea for something unique, a product that fills a need or makes life easier, you could be the next Mark Zuckerberg, Bill Gates, or Steve Jobs. They’ve proven that you don’t need a college degree to change the world.
David Green is the founder of Hobby Lobby. He was also a high school graduate who started the company with $600. Steve Madden, shoe designer, dropped out of college, Wolfgang Puck, chef and restaurant owner, left high school at the age of 14, and Wally “Famous” Amos, founder of Famous Amos Cookies, joined the Air Force at 17. Clearly, a college degree isn’t the golden ticket to success.
Consider the military
In addition to serving your country, joining any one of the military branches can also be a jumpstart to a successful career. Whether it’s Army, Navy, Air Force, Marine, or Coast Guard, they all provide educational benefits and job-placement programs. Moreover, all tuition and fees for trade schools or public in-state colleges are covered by the U.S. government. If you’re interested, check out each branch’s website for more information or contact your local recruiter.
Earn a training certificate
A popular alternative to a degree program is a short-term certificate training program. From healthcare to web design, and court reporting to information technology, these programs can help you develop the skills you need and increase your chances of finding a well-paying job. With a few months of hard work and commitment, you’ll be better prepared and more qualified for the opportunities in your field. Here’s a list of high-paying certification programs that offer the potential for advancement.
The governance structure and policy and program priorities differ for each state. The Association for Career and Technical Education has a database that includes details about the system for each state’s technical schools.
Think about law enforcement and firefighting
Some law enforcement agencies require 60 hours of college credits, but many only require a high school diploma or GED. Detention officers, police officers, police dispatchers, and U.S. border patrol agents, are just a few. Many people pursue a career in the criminology or criminal justice field in order to serve their community. Not only can it be interesting and exciting, but especially rewarding, too.
Another career in courageous service is firefighting. Although it does not require any post-secondary education, recruits must participate in vigorous physical training exercises. Nearly all U. S. firefighters must also be certified as emergency medical technicians (EMTs) before they’re allowed in the field. This training can take up to one year to complete and also results in EMT-Basic certification.
In today’s job market, there are many opportunities for those who don’t choose the college route. While it may not be in the classroom setting, you can still continue to learn, sharpen your skills, and rise to the top of your field.