5 No Cost Things You Can Do to be Financially Stable

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People that teach financial education often talk about lowering your expenses and increasing your income to increase your financial stability. Of course those things are good but today I want to focus on the five free things you can do to increase your financial stability.

Money Matters: The Get It Done in 1 Minute WorkbookFor all of my personal finance tips, order my book “10 Things College Students Need to Know About Money“. If you already have a few challenges, order my Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook“.

 

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#1 Open an Account at a Credit Union

One of the best financial decisions you can make is to open a checking account at a credit union. It costs nothing to open an account and the benefits are many: better customer service, often lower account fees, usually cheaper car loans, mortgages, and credit cards, and the opportunity to build a relationship with a financial institution with all these great benefits before you need to ask for a loan. Check here to find the credit union closest to you.

 

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#2 Check Your Credit Reports

You may know that there are three credit reports and three credit scores for each of us but did you know that you can have free access to your reports? The credit bureaus have the right to control who has access to the scores that they’ve created the mathematical formulas to create, BUT the records …  the information that make up the data those formulas use is your data and is free for you to access. Visit AnnualCreditReport.com to get a free copy of your reports once every 12 months.

 

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#3 Collect Your Change

For years I’ve told people that an easy way to find money to build up your Emergency Fund or invest in a no-load mutual fund was to throw your spare change in a jar. I still believe it’s true. On average, you’ll have about $50 per month is quarters, dimes, nickels, and pennies. Instead of that spare change ending up under the couch cushions, in your car’s ashtray, and at the bottom of your purse throw it in an empty water jug or an actual piggy bank. Don’t believe me? Check out this blog.

 

 

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#4 Open a High Yield Savings Account

Since I’ve been badgering you to create an Emergency Savings Account, I thought I’d help you out by providing you with the latest lists of accounts with the highest interest rates (you’ll earn more money than at your local financial institution) across the US. Check out the highest yielding savings accounts here.

 

blog success is when preparation meets opportunity

#5 Choose You

This is the hardest free thing you might ever have to do: choose yourself over everything. Choose to save some money for an emergency instead of eating out. Choose to invest some money in a mutual fund instead of purchasing an extra excursion on a trip. Choose to think you’re going to create the exact life you’d like to have …   and then do the prep work so when your opportunity comes, you’re ready.

 

 

 

 

 

 

7 Things High School Grads Must Do This Summer to Prepare for Life

Group of Diverse International Students Celebrating Graduation

Congratulations on graduation. Ready for life?

 

Congratulations on graduating from high school! Whoo hoo!

Since you’re graduating, you either 18 years old or about to 18 years old very soon. That means that you are, or will be, legally an adult. It’s time to think about starting your financial empire. Below, you’ll find 7 financial things high school graduates must do this summer:

Check Your Credit Report
It’s imperative that each graduate get a print out of their credit report from each of the “Big 3” credit reporting agencies. The government has passed a law that makes our credit reports available once a year for free from www.AnnualCreditReport.com. This is the only site that will provide a copy of your credit report at no cost to you, from each of the “Big 3”, once a year. You will not get your credit scores though; scores are computed through separate companies.

Tip: Nothing in life is free. Any company offering you a free credit report and/or score is more than likely trying to sell you a monthly credit monitoring service. Read the fine print.

 

Figure Out How Much College Will Cost
Whatever college you choose, it’s important that you understand how much the total cost of your degree will be. Consider the costs of tuition, books, dorm fees, and any other monies you’ll have to pay. Take a look at estimates fees per semester and then multiple that by eight semesters, perhaps ten semesters if your school is impacted. Once you see the costs in terms of tens of thousands of dollars it might make you a little more motivated to be responsible with your money. Apply for as many scholarships and grants as possible because you don’t have to pay those back. When you take out loans not only will you have to pay the money back, you’ll have to pay it back with interest.

Tip: Look for opportunities to make small financial changes that make a big difference. Buying used textbooks can save you hundreds over four years.

 

Consider the Return on Investment
You are going to make some decisions in the next year or two that will be the foundation for your life. Don’t make decisions based on your emotions or what your friends are doing; look at the return on investment. If you are spending money on something, it’s because you are expecting to get some kind of benefit. If you choose to attend an Ivy League university you expect to command top salary at a major fortune 500 company. If you choose to attend a community college it’s because you want to save a few dollars on your foundation classes. Did you know that you can attend a community college, transfer as a junior to a university and no one will know? You’ll cut your college expenses by half and end up with the classes you need. You must consider the return on investment with any purchase and paying for college is a big one.

Tip: If you’re undecided about a purchase, sleep on it. Never make a decision in a hurry.

 

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Create a Spending Plan
Writing things down is good. I’m sure you have a general idea of how much money you’re expecting from jobs, financial aid, etc., but unless you have a written plan to spend it the money will pass through your account and you’ll have no idea what happened to it. Have you ever taken $20 out of the ATM and the next day you have no idea how you spent it? Research studies have proved that writing down your goals makes it easier to achieve them. When I want coaching clients to focus on spending, I ask them to write down the financial goal on a Post-It Note and stick it onto their debit card or credit card. The same thing works with writing a spending plan. Knowing how much money you want to spend in each category will help you stay on track.

Tip: making the plan before you actually have the money is the key to putting the spending plan into action.

 

Move Your Money
Visit www.aSmarterChoice.org to find a credit union in your area. Credit unions are financial institutions that offer the same products and services as traditional banks, but they are not-for-profit. The only purpose of credit unions is to serve the community; each credit union member loans money to the other members so loan interest rates are usually lower than a bank. Pretty soon you’ll want to purchase a car and in the not-too-distant future, a home. Credit unions tend to be smaller, offer more personalized service, and offer better rates on loans so having a relationship is a good thing. Moving your checking and savings account to a credit union could potentially save you thousands of dollars over your lifetime.

Tip: Search for a financial institution that is a good fit for you, don’t just choose whatever your parents have.

 

Start an Emergency Fund
Ever heard of Murphy’s Law? It states, “Anything that can go wrong, will go wrong”. It’s up to you to make sure that you have at least $500 in an Emergency Fund at your credit union or bank because there will always be something that you need money for unexpectedly. Having at least $500 in an account that you can have access to when times are rough might be the difference between having to borrow from a family member or take out a cash advance loan or being able to borrow from your stash and go on about life without being a hindrance to anyone. Start by opening a money market account at your credit union or bank and then add $20 a week to the account until you have at least $500.

Tip: Don’t touch it unless it really is an emergency.

 

Open a Retirement Account
Did you know that investing $5 a day will make you a millionaire by retirement? You read that correctly, investing just $5 a day in an average performing mutual fund account that returns 9% a year (industry average is 10%) will put $1.3 million in your pocket. The first step is to find a mutual fund company that will let you open a no-load Individual Retirement Account (IRA) with no money as long as you contribute at least $50 a month. Put your money in an account that’s not too risky and not too safe. You have a long time horizon so don’t be scared to invest more in stocks, but you have to be able to sleep at night. A fee-only advisor can help you determine how comfortable with risk you are and suggest some mutual funds to you. The process is as easy as filling out a one page application and sending in your credit union or bank checking account information. The second step is to commit to adding at least $50 a month to the account. The third step is to watch your account become fatter every month.

Tip: Set up the account so that the money is added to the retirement account automatically every month from your checking account. Add at least $150 per month to reach that million with no sweat.

 

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In case you’d like to find out more financial information, you can order 10 Things College Students Need to Know About Money from Amazon or directly from the author through PayPal. Happy summer!

 

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Virtual Book Launch June 8th

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As you all know, I am ecstatic about the printing of the 2nd edition of 10 Things College Students Need to Know about Money! I’m so excited that for the first time ever I’m hosting a virtual book launch on Facebook. What is a virtual book launch you ask? Good question.  *wink*

A virtual book launch is an opportunity for you to ask me about the book, win some cool gifts and score an AMAZING discount on the book. I’m so excited.

Sign up to receive my emails and get another gift.

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See you Wednesday, June 8th between 6:30pm and 8:30pm Pacific Standard Time.

Create a Legal Will Using Willing

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Image is from MyMoneyBlog.com

 

I came across a website called Willing. It claims to make a simple, free legal will with a few clicks of your mouse. I read reviews here and here to see if it made sense to use. The site came out of the tech start-up incubator Y-Combinator.

The reviews I read seem to agree that it is really easy to use the website and it doesn’t ask for any social security numbers or credit card numbers. They also agree that it will create a simple will. They are not sure how legal it will be after time passes. Like most legal documents, they have to be updated periodically to adhere to laws that may have changed over time.

Prince just died without a will and the money to worked so hard to earn will be distributed among people as the judge sees fit. Since Prince left no will, the judge has no idea what he would have done. You don’t want this to happen to you.

I encourage people to have a legal will (what will happen to your things), a living trust (you will manage your things when you’re gone), and a living will (what will happen to you if you are incapacitated or die). There are attorneys that can set these things up for you, but sometimes the costs are a bit much. If you have few assets (car, house, checking accounts, personal items) and want to make sure that everyone knows what you want to happen after you pass, this might be a great free solution.

Here’s a bit about why Willing was created and how it works:

Willing is divided into two main products. The first is an online tool that helps users create a will or living will (a document that outlines their wishes for end-of-life care) in minutes. The second, which Medina and Dyson are currently fine-tuning, is a platform that lets users find and compare costs for funeral homes and cemeteries.

At the very least, going through the site will help you think about what your family might need to make decisions about. Take it for whirl and let me know what you think.

 

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Invest for Retirement NOW

broke“Twenty-one percent of those surveyed who have not retired have saved nothing for retirement and 44 percent have saved less than 10 percent of their salary.”

This quote is from Financial Advisor Magazine talking about a survey done by TIAA-CREF. How do people think that they are going to live in retirement? Do they plan on retiring?

Regardless of how old you are, it’s better to have something rather than nothing. Take a look at how much the Social Security Administration will pay you in retirement and you tell me if you can afford NOT to invest an extra $50 per month in your 401k, 403b or IRA.

Let’s take a look at the numbers, shall we?

Start Investing  Per Month  % Return   Value at 67

18                      $50                      9%          $536,841.50

21                     $50                      9%         $408,642.74

30                     $50                      9%         $178,618.62

40                     $50                      9%         $68,888.51

50                      $50                       9%         $24,125.50

It’s pretty simple:

  • If you have a 401k or 403b at your job you probably have a match. Investing a few dollars every pay period lowers your tax base (instead of paying Uncle Sam you invest in yourself) and your company will contribute a few coins to every dollar you invest. Start early. Invest often. Check and see how much contributing $50 or $100 each pay period will change your take home pay. There won’t be much change in how your check looks every two weeks, but it could change how your retirement looks.
  • If you don’t have access to a 401k or 403b then open an Individual Retirement Account (IRA) at a brokerage house that you trust. You have to fill out a two page application and send over a voided out check. You can open many accounts by promising to contribute at least $50 per month. That $600 per year could grow into 5 or 6 figures using compound interest. Start early. Invest often.

If you are thinking about investing and you’re not sure where to start:

  • If you are a member of a credit union: contact Balance for FREE help.
  • If you have an Employee Assistance Program (EAP) at your job: contact the EAP for FREE help.
  • If you do not have access to these: find a fee-only financial advisor for help.

You can create the life you want.

You are powerful.

Go get it.

PEACE,

Shay

Order Money Matters on Amazon.com

Order Money Matters on Amazon.com

Shay Olivarria is the most dynamic financial education speaker working today. She speaks at high schools, colleges, and companies across the country. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times, among others. To schedule Shay to speak at your event visit www.BiggerThanYourBlock.com

Valentine’s + Money: A Couple’s Guide

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Valentine’s Day, the day to “prove” your love by buying things you can’t afford and wasting money in the same old ways that you do every other day. This year, why not switch things up by showing your partner that you really love them while building a solid financial future and making them feel special?

Don’t Follow the Crowd

Every year from January to February 14th I hear tons of ads for chocolates, red roses. flowers and stuffed animals. Demand is ridiculous. According to Visual Economics (see images below) people will end up spending anywhere from $80 to $150, on average. And those Valentine’s Day chocolates? “Valentine’s Days increase the sale of heart-shaped boxes of chocolate to more than 35 million.”Instead of doing what everyone else does, why not do something your partner will really appreciate? Make them dinner. Give them a massage. Create a bath-for-two with mood lighting and soft music. Write them a thank you note for all the amazing things they do for you. My partner still has a note I wrote to them years ago. It reminds them of why they love me.

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Many people are in relationships hoping to one day be married. Some are already married. We know that about 50% of marriages end in divorce, but did you know that many of those relationships break up due to money issues? Want to save your romantic situation? Use your money wisely. Imagine what couples could do with that money if they chose to instead invest that money in their relationship instead of giving more money to companies.

Think About the Future

Let’s say that there is a heterosexual couple and each person in the couple spends the national average on gifts this year (see image below).  Visual Economics tells us that the age range that spends the most is between 25 and 34 years old, so let’s assume that the couple we’re talking about is 27 years old. The couple will spend about $254. If that couple instead had a night in, shared how they really feel about each other and enjoyed each other’s company (all free) instead of spending that money, they could choose to put that money in a money market account. Making that one decision not to spend money on Valentine’s Day could end up saving that couple $10,160 in principle alone over 40 years of marriage. Tack on about another $2,500 in interest (free money) and that couple could save about $12k by making one different decision on one day of the year. You know I like to say, “Find small opportunities that make a big difference” but I won’t say it this time! *wink*

Don’t forget, “There’s nothing your partner wants more than to be seen, acknowledged, loved, and appreciated on Valentine’s Day” says Colin Drake on Money Management Tips for Couples. Make the extra effort that will enhance your relationship and invest a few more dollars into your relationship coffer.

A few images from Visual Economics:

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For a heterosexual couple, that’s a little more $250!

VDayGiftSpending

My hypothosis (are you ready for this?) is that the 25  to 34 category spends more because these are people that are in serious relationships (leading to marriage or married) and want to show their love with big, showy flower arrangements, expensive dinners and lavish gifts.

Financial Institutions Owned by People of Color

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Did you know that there are 28 financial institutions owned by Black people? How about that there are 33 owned by Latinos? 86 owned by Asians and 19 owned by Native Americans? If you want to use your funds to grow your community then using a financial institution owned by communities of color might be right up your alley.

Check out the whole list here.