budgeting – Early Start Retirement

6 Financial Mistakes I see 20 Year Olds Make

1.) Putting too much money in savings.

It’s good to have money saved in case of an emergency, but a savings account isn’t the best way to store money long-term. This may come as a surprise, but money left in a savings account is actually losing value! Due to inflation,-although the dollar value stays the same- your money has less buying power the longer it sits. Instead you should invest some money so you not only match inflation, but gain value over time. (How Inflation Affects Your Savings)

2.) Overusing your credit card

Many college students are enticed into getting a credit card. Credit cards are a great way of building credit, but are also a great way of building debt. Many people don’t learn how to use their credit card efficiently until they already have mountains of debt. Learn how to use a credit card before you get one. ( Should You Have a Credit Card in College?)

3.) Over-speculating

In your 20’s is a great time to invest in riskier investments since you will hopefully not need your money for a few more years. However, it is possible to put too much of your money at risk. The most common thing I see millennials over-investing themselves in is cryptocurrency as a get rich quick scheme. I own cryptocurrency myself, but try to keep in a set, smaller amount of your overall investing portfolio.

4.) Not bringing in enough income

When you live at home, it is easy to live off a part-time job. Although you might not need the money now, it’s important to save and invest for the future. Pick up a side gig or barter for a raise to bring in more income. Funnel any extra money into an investment account.

5.) Overspending

Having your own money to spend is invigorating! The sense of financial freedom can encourage some people to overspend. Decide how much money you want to save and invest each month. Don’t be afraid to wait a few months for something you really want to buy.

6.) Oversharing

If your friends are having financial trouble it can be tempting to loan them money so they don’t miss a fun night out. This money adds up overtime, and you will likely not get it back. Spend money on your friends, but know where to draw the line.

Anything you would add to the list? Let us know!

Learn to Love the Spreadsheet!

My dream boyfriend is cool, always available, calculating… and a spreadsheet?! It’s true, I have a secret love affair with spreadsheets. I absolutely cannot get my hands off them. Sometimes I dream of coming home, slipping into something comfortable, and getting down and dirty in the spreadsheets.

I’m so sorry for that imagery, but I really wanted to drive home the idea that I love making spreadsheets. Spreadsheets have a bad rap for being boring and only for people who like math *Bleh*. But if anything, I think spreadsheets are best for people who DON’T love math. They do all the math for you!

Spreadsheets are the best budgeting tool at your disposal. They make is easy to adjust numbers and data if it changes. You can also make colorful graphics so the data is easy to read. Instead of estimating 12% of your income, you can use a spreadsheet to calculate the exact number for your budget.

Unfortunately, many high school and college students never learn how to use a spreadsheet much less how helpful they can be. Although not hard to learn how to use at the beginner level, there are many spreadsheet commands that can be hard to figure out on your own. Advanced mastery of spreadsheets is an impressive skill that requires mathematical knowledge and knowing where to look.

Knowing how to use a spreadsheet is crucial for many jobs. Thankfully, it’s easy to find learning resources if you need some extra help. Online there are Youtube tutorials and blogs that provide a quick answer to any problems. If online learning isn’t your forte, then check your local community college for classes! That is probably the best way to learn, as you will have an instructor available to answer any questions.

Do you love spreadsheets as much as I do? What’s your most impressive spreadsheet feat?

Should You Get a Sugar Daddy?

It sounds easy to have a sugar daddy, right? Some older rich man will just pay for your company. And you can use that money to pay for things you actually enjoy doing instead of selling yourself out to some boring job. Unfortunately, the realities of being a sugar baby are rarely so ideal.

Being a sugar baby is NOT EASY. For one thing, you have to have a likable personality and favorable looks. You don’t need to be a model to be a sugar baby, but you have to keep yourself well kept up. That’s why becoming a sugar baby is also expensive, although you can make a good amount of money, you will also spend a lot on clothes, makeup, and sometimes even travel.

If you are going to have many men after your company, you will also have to learn how to schedule your time. This may not be a job you can easily juggle part-time. You have to keep track of all the “gifts” the men give you and report them on your tax forms, but you can also get tax write-offs for things you deem necessary for your business.

Don’t assume no one will find out; your friends and family are likely to find out eventually. This is not a job you should do if you want it to be a secret. Selling your time to men for money is often stigmatized and it could hurt your relationship with jealous partners or worried family members.

There is also a safety aspect and you must be ready to protect yourself not only physically, but legally. You can’t give out too much personal information because it could make you susceptible to stalking. Learn the laws in your state for the job. Prostitution is illegal in many states so you must make it clear if you engage in sexual acts with these men that they are NOT paying you for sex.

Some women and men have been able to use sugar baby/daddy sites to fund college, a family, or even made it into a career. Although it is often seen as a way to make easy money, there are many risks and drawbacks that you should be aware of before committing to the job. If you think it’s right for you, then be prepared to do your research.

Have you been a sugar baby or something similar? Share your experience!

Netflix Method for Building Credit

Sticking to a budget is easier when you know how much you are going to pay each month. That’s why subscription services are so great, you don’t have to budget in the number of times you use the service.

Just like the Gas Method of building credit, my completely un-patented and unoriginal “Netflix Method of building credit” is a way to keep credit card usage consistent. Putting a subscription service on your credit card could be a good way to budget your credit usage, but like all credit tips, it can come with its potential risks.

How to do it?

1.) Set your payment method for Netflix (or any other subscription service) on auto-pay with your credit card

2.) Use Netflix (as we all do)

3.) Remember to pay it off every month!

The 3rd step is the real kicker. If you forget that you paid for Netflix on your credit card, the payments could add up and gain interest! Thankfully, a Netflix subscription is cheaper than a tank of gas a month, so forgetting it isn’t going to blow your credit if you only forget once. But forgetting for a year or more could easily begin to put you hundreds of dollars in debt.

Is this right for me?

If you like having a steady, consistent budget and have a good memory then I think this is a great budgeting technique. But, I do know it’s already easy to forget about auto-renewing payments and having one on a separate card than your regular account does make it hard to remember. Someone on a tighter budget may not find it worth the hassle of remembering.

Is it worth it to use a Coinstar?

Coinstars offers a helpful service for a very costly fee. At 11.9% you can have your coins converted to cash at your local grocery store. Although I’m all for saving every bit of money you can, sometimes the Coinstar is more convenient. Also, it’s better to have the money in easy to spend dollars than sitting on your shelf.

Here’s when it’s worth it to go to the Coinstar:

Your personal bank doesn’t have a coin machine.

Some banks have coin machines where you can convert your change into cash for free. Personally, I haven’t seen one in any of the banks I’ve been to, but it’s worth it to call and ask around. If a local bank has a coin machine that you don’t have a bank account with, you can make an account, but this is pretty drastic unless you are converting large sums of change consistently.

You have under $100 in change.

If you have a small amount of money, it’s better just to take it to the bank. If your bank doesn’t have a coin machine you can ask the teller for coin wrappers to hand-roll them. I’m not going to sugar coat it. Rolling coins is a bitch. The first few minutes can be very relaxing, but over $100 it becomes a pain to roll and to transport it to the bank.

You don’t have lots of free time.

Going to the Coinstar and paying the 11.9% fee is sometimes worth it just for the amount of time it saves you. However, if you have a lot of free time, there are tons of fun things you can do with the coins as you roll them. Look for interesting dates or coins with a high silver content. I always look for wheat-back pennies and war nickels.

You shop at a few places consistently.

GIFT CARDS! Check the Coinstar website to see if any places you shop at offer gift cards from the Coinstar kiosk. The best part is, if you convert your money to a gift card, you don’t have to pay the fee! This is definitely the best option, but be warned that not all Coinstar kiosks offer the same gift cards. I always convert mine to an Amazon gift card, because it gives me the most options.

You want the silver content.

Because of the way Coinstar evaluates the coins, it will reject most silver dimes, quarters, nickels, and half dollars. You can sell these online or keep them for their solver content. There is some dispute online about what machines reject silver. But currently, the consensus seems to be that almost every green Coinstar machine will reject silver, but some bank machines do not.

You just want the coins gone.

If you just want the coins to stop cluttering off your shelves and are feeling particularly charitable you can use the Coinstar to donate to a charity. The donation you make is tax-deductible. Currently, Coinstar has 8 charities you can donate to including the Red Cross, Feeding America, and the Leukemia and Lymphoma Society.

Whatever you do, make sure to save the receipt.

Do you use Coinstar or prefer to hand-roll your coins?

Hard vs. Soft Credit Inquiry

Creating an accurate credit score is a very complicated process. Many things decide your credit score, including those unrelated to making payments. One thing credit card companies don’t want to seeis someone gaining too much credit too quickly.

Quickly trying to open many lines of credit could be a sign that someone is heading into financial trouble or may be taking too many risks. In order to track how often people are checking or changing their credit, credit bureaus classify it as either a hard or a soft credit inquiry.

Hard Inquiry

A hard inquiry affects your credit score negatively. It tells the credit card company that you are trying to increase your lines of credit. Hard inquiries appear if you open up a new credit card, try to get approval for a loan, apply for a mortage, etc. Generally, you will have to approve a hard inquiry, but that is not always the case. Luckily, hard inquiries have a small effect on your credit score, and the effect lessens over time. If you find yourself having too many hard inquiries, the best option is to wait them out and keep your credit payments up to date.

Soft Inquiry

Soft Inquiries have no affect on your credit score. Soft inquiries occur when you track your credit or sometimes when a company asks to check your credit score. Some credit bureaus do keep track of the soft inquiries into your credit, but they do not affect your credit score and should only be visible to you.

How to know if someone will perform a soft or hard inquiry?

If the company asks your permission, it is likely a hard inquiry. Don’t fret however, because a single hard inquiry will have a very small effect on your credit score.