Steps to Take If Your Paycheck Is Late

The following is a post by MPFJ staff writer, CJ, who blogs at thesingledollar.com about personal finance, budgeting, frugality, and debt repayment.

We’ve all been there: it’s payday, we’ve got rent to pay and food to buy, and for one reason or another, the money’s not where it’s supposed to be: in our bank accounts! This is a really stressful situation, but it’s not as uncommon as it should be, so it’s good to have a plan in case it happens to you.

 

Protect Yourself First

If you don’t have your paycheck on time, the very first thing you need to do is make sure the situation won’t get worse. If you have enough money in savings, move that over to your checking account right away. But if you’re living paycheck to paycheck, you may have to take more drastic steps. For example, if you have an auto-draft set up on your bank account, you might need to cancel it. If you’ve already written a check, you might need to ask someone not to cash it yet, or you might need to ask your bank to stop the check (in other words, not cash it). Be careful with that last option, since there will probably be a fee — but it might be worth it to you to keep from going into overdraft. You’ll have to check your terms of service carefully to determine what to do. If you’ll have to be late on rent or some other vital bill, call up your landlord or service provider and explain the situation. Ask for a grace period so that you don’t have to pay a late fee.

 

Determine Why This Happened

There are many reasons your paycheck might be late. It could be because of a malfunction in an automated system; because of a bank holiday or something similar that prevents the check from clearing when you expect it to; or, more worryingly, it could be because your employer doesn’t have the money to hand. If it’s a mechanical or system error, it’s probably nothing to worry about for the future (unless it happens again!), but if your employer is short of cash, that is a major issue. Like these workers in Chicago who had frequent issues with late pay, you’ll have to use your judgment to determine how to respond.

 

Decide How to Respond

If your employer has been trustworthy in the past, you might be willing to let it slide. But you should let your manager know that it’s a big deal if you don’t get paid on time. Late paychecks may indicate that the company is in real trouble. If your paycheck is only a day or two late, this might not an issue, but in more extreme cases, employees have had to sue for breach of contract in order to receive back pay. Keep a careful eye on anyone who’s paid you late even once…and it can’t hurt to keep an eye out for another job.

We all hope that employee-employer relations are smooth and that, when we work as agreed, we’re paid as agreed. But since it’s not a perfect world, things don’t always go as planned. If a late paycheck is an occasional part of your financial landscape, you should be able to respond swiftly to keep the situation from getting out of control.

How about you all? Have you ever had to deal with the unfortunate situation of a late paycheck from your employer? If so, how did you deal with it while trying to maintain good ties with the employer?

Share your experiences by commenting below! 

***Photo courtesy of https://static.pexels.com/photos/3572/fashion-man-wristwatch-model.jpg

How I’m Avoiding Lifestyle Inflation to Get out of Debt

The following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, My Debt Epiphany. Enjoy! 

Graduating college and earning my degree was monumental for me. As a first generation college student, passing up the opportunity for higher education was always out of the question for me. I knew I was going to attend college and I knew I was going to graduate with flying colors.

When I did graduate, I enjoyed the day with all my friends and family and cherished the moment in my success. After that passed however, reality started to settle in and I realized the important milestone I reached came with a price to the tune of $31,000. That’s how much debt I was in after college. Just under $21,000 of that debt was student loans.

When I landed my first job out of college, I decided that I wanted my debt gone ASAP. I wanted to live a life that didn’t involve me paying for the things I did or the choices I made years ago.

 

I Decided to Avoid Lifestyle Inflation

Lots of recent college grads are introduced to lifestyle inflation and temped to spend more. Lifestyle inflation is basically increasing your spending as your income increases or your financial situation improves.

For example, if you get a raise, a higher paying job, or graduate college and land your first job, you may have thoughts about all the things you can do with you money that you couldn’t do before. It can be very tempting to run out and treat yourself one too many times, buy a new car, upgrade your living situation, etc.

If you value things and temporary, instant gratification, you may not have a problem with lifestyle inflation. Waiting to treat yourself to certain things isn’t always fun, but I decided to avoid lifestyle inflation for the time being in order to get rid of my debt quicker.

My debt always seems like it’s holding me back and I know I can’t get to the place in life that I truly want to be at with it dragging behind me.

I’m currently avoiding lifestyle inflation to pay off my debt in several ways.

 

Cheap Housing

When I landed my first professional job out of college, I stayed in my current apartment in my college town for as long as I could and enjoyed the cheap rent. Moving back with my parents wasn’t an option for me, but if I could’ve done it comfortably, I probably would have.

After about a year of working at my job, I ended up getting an apartment closer to where I work to reduce my commute. Yet and still, I found something reasonable and only about $200 more than what I was paying at my college-town apartment.

Sure, I could get a townhouse, condo, or larger living space with walk-in closets, extra amenities and other features, but I can also put the money I save on housing by staying in my current apartment directly toward my debt.

 

Used Clothes

I’ve always loved fashion, and purchasing clothes has always been a guilty pleasure of mine. When I started avoiding lifestyle inflation to free up more money to pay off my debt, I went cold turkey on shopping for clothes and started making due with what I had.

This wasn’t a huge sacrifice since I had a decent amount of clothes to wear all year-round, but when something became unwearable, it ended up being a bit of a struggle. Nevertheless, I lasted about 9 months without buying any new clothing.

As a mom, I’m also responsible for clothing my young son but I stuck to second-hand clothes and hand-me-downs when he needed anything new and young kids certainly don’t mind what they wear.

 

Less Paid Entertainment

As a young person, I found it hard to cut back on my entertainment spending at first and tell my friends ‘no’ when they wanted to do something that was out of my budget. I knew that by saying no to certain opportunities, I would be saying yes to myself and my goal of becoming debt free.

I also believe that life is too short and should be enjoyed, so I didn’t want to have an absolutely dull social life either. Then, I discovered how wonderful free entertainment could be. I started looking online for free events and festivals in my neighborhood and inviting friends over for game nights.

I am always on-the-go with my son during the weekends and I never spend much money at all. We visit the library, go to the park, check out free museums and zoos and visit with friends. For date night with my fiancé, I found a historical theatre that plays classic movies for $1 each week. I still utilize paid entertainment and dine out occasionally, but I stick to my budget and use sites like Group and Living Social to lower the costs of activities.

I’ve secured raises at my job, but I’ve never made a ton of money overall (less than $40k). This means avoiding lifestyle inflation has been a crucial factor when it comes to paying down large amounts of my debt.

How about you all? How do you cope with lifestyle inflation?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/86530412@N02/8231671430

Oil vs. Gold – Which Commodity Should You Trade?

The following is a post by Luis Aureliano. Enjoy! 

Understanding Oil and Gold

Oil, which is the most traded commodity in the world, affects the lives of almost every person on a daily basis in many different ways. The most important of these is to provide the fuel and lubrication for every mode of transport, be it land, sea or air, which you can think of. The wheels of industry are kept turning thanks to oil and the agricultural and other machinery used to grow or produce most of the other commodities we use, are almost totally dependent on oil for production to be maintained.

Gold, on the other hand, is the fourth most traded global commodity, and while its role has changed, gold also had a daily impact on our lives in days gone by. Most of the global currencies were linked to gold reserves for many years, making it a sought after commodity in that respect, while its uses in jewellery manufacture are legend. Today, many governments still maintain gold reserves, and while we also utilize gold leaf and gold foil for decorating, new uses for gold in the electronics and medical world are being discovered daily.

Oil versus Gold

Oil, once it has been used, is no longer around, while gold, in most of its uses, remains with us as an investment in some form or another, or it is present in electrodes, but it generally does not disappear with use. Oil is thus a diminishing commodity where the price and subsequent profit taking, is largely driven by supply and demand while the return on an investment in gold is derived from price fluctuations.

Because oil is a commodity that we use on a daily basis, the price of oil or fuel has a direct impact on inflation, which means that the rate of inflation follows the oil price trend. The gold price tends to move in tandem with the rate of inflation which means that when oil goes up, inflation will probably increase and the gold price will follow suit.

The inverse relationship the U.S. dollar has with all USD quoted commodities, such as gold and oil, means that the price of these two commodities is also subject to fluctuation in line with the greenback. Calculations on the respective prices on the 2^nd of December 2015 showed the following:-

• Gold traded at $1067.30 an ounce at 01:08, a price increase of 0.20 or +0.02%, while the price actually decreased by $1.70 or -0.16%, taking the strengthening of the USD into account;

• Crude oil traded at $41.63 a barrel at 01:08, falling by 0.17 or -0.40%, while the price actually decreased by 0.05 or -0.13% with the USD strengthening factored in.

The percentage decline in the price for gold and oil was almost the same with the currency fluctuation factored into the equation, illustrating the inverse relationship to the USD as well as how the prices track each other.

Oil and Socio Political Events

The oil price is currently very much a victim of global socio political events, which are largely centered on the major Arab oil producing states. OPEC (Organization of the Petroleum Exporting Countries), led by Saudi Arabia, has been steadily increasing productivity rates which has the supply side of world oil markets. The realities of a slowing in economic growth in China, which is the second largest global consumer of oil and oil based products, and the subsequent slowing of the economies in most of the commodity producing states, has had a negative effect on the demand side for oil. The increased production in the face of a falloff in demand has disturbed the supply and demand equation which has resulted in the current depressed oil price.

Gold and Socio Political Events

The uncertainties of the socio political scenario have the opposite effect on gold as many investors view the precious metal as a safe haven in uncertain times. This has created some demand for the precious yellow metal, more than compensating for the drop in consumption in China, which alternates with India as the world’s largest gold consumer.

According to World Gold Council data, the demand for gold in the third quarter of 2015 increased by 8% year on year, while the production of the precious metal declined by 1% in the same quarter.

The supply and demand scenario for oil is thus almost diametrically opposite to that of gold. Despite this difference, however, the gold price has fallen by 44% since it peaked at $1916.25 an ounce in August 2011, dropping to $1061.90 an ounce in November 2015. Oil, which was quoted at $93.35 a barrel in August 2011, has fallen by 55% when it was priced at $41.68 a barrel in November.

These figures show that the gold price actually does track the oil price as is generally asserted. The only reason the gold price has not declined to the same degree as the oil price is the fact that the supply and demand ratio has not been disturbed in the same way. Gold demand has increased by 8% while supply has dropped 1% while the opposite situation with oil has seen supply up by 5.30% over the past three years while the demand has only grown by around 1% annually over the same period.

Trading Oil and Gold

In terms of which commodity to trade, you need to establish the type of trader you are as well as your trading style and risk appetite. Both commodities offer a wealth of trading opportunities and by taking into account the impact of the current socio political events around the world, you will be able to more accurately predict the direction that the price of oil and gold are likely to move in the future.

Smart Vacation Planning in 2016

The following post is by MPFJ staff writer,Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

The New Year is here, and it’s tough to think about the coming year without having an itch to plan a vacation getaway. The great thing about vacations is that they allow you to escape from the day-to-day mundane things in life. Although most of us love routine to a certain extent, we all love a break from the norm occasionally.

We took our first big family vacation last summer. The drive from Minnesota to Seattle – with a stop at Yellowstone National Park – was crazy-busy-packed, but doing something fun and different was, as they say, priceless. We still talk on a weekly basis about how fun that first big family vacation was, and we eagerly dream of when we’ll take our next big getaway.

A great vacation, however, begins with a smart vacation plan. Here are some tips that will help you plan wisely for your 2016 getaway.

How to Take a Great Vacation in 2016

 

Pick Your Vacation Destination

Where is it that you dream of going on vacation this year? A trip cross-country to spend time with family and/or friends? A winter getaway to a warm and sunny destination? Consider your options and think about what type of vacation destination would best suit the entire family. Be sure to consider cost and location options as you choose a vacation destination. For instance, a month-long trip to Europe might not be a great idea if funds are tight and paid vacation time is limited.

 

Estimate Your Vacation Expenses

It’s a good idea to put together a realistic estimate of your potential vacation costs before you plan your getaway. Ask yourself the following questions as you work to put together a vacation expense estimate:

• Where will we stay and how much will it cost?
• How will we get there and what mode of transportation will we use once we arrive?
• What will our meal plan be? Will we get an AirBNB locale and cook in-house? Eat out? What will our estimated meal costs be?
• How much money do we plan to spend on “extras” such as theme parks, museums and souvenirs?

By putting together a realistic estimate of how much you’ll spend on your vacation, you can work to budget in the costs before you go on your trip.

 

Put Together a Payment Plan

Don’t allow yourself to be tempted to put your vacation expenses on credit unless you’ve got the cash to pay them off right away. Instead, put together a payment plan that will help ensure you’ve got the vacation paid for before you go. Here are some tips for creating a successful vacation payment plan:

1. Using the steps listed above, create a realistic estimate of your planned vacation costs.
2. Divide the estimated cost of the vacation by the number of paychecks you will receive until you go on vacation. For instance, if your vacation will cost an estimated $2,000, and you’ve got 14 paychecks until you go on vacation, you can allot $142.86 per paycheck to go into a vacation fund or other separate savings account toward vacation expenses.
3. If you use travel points, work to accrue points that will help you offset some of the costs of the vacation. Just be sure you don’t accumulate credit card debt in the process.
4. To bring in additional monies to help pay for your trip, consider selling items you no longer need on Craigslist or EBay, or consider getting a temporary second job or side hustle in order to bring more cash in to pay for vacation expenses.

Planning how you’re going to pay for your vacation ahead of time can help ensure you won’t be stuck with a vacation that costs twice as much as you’d estimated thanks to credit card interest payments.

By using the above tips to plan wisely for your upcoming vacation, you can maximize your fun and minimize the effort so that you can better enjoy your getaway destination. Happy vacationing!

***Photo courtesy of https://static.pexels.com/photos/6934/beach-vacation-water-summer.jpg

Exotic Investments: The Best Soccer Trades In History

The following is a post by Pauline. Enjoy! 

My grandpa always told me that it takes just two opinions to make a market. The simplicity of his words made what would become a life long challenge seem very simple at the time. All I had to do was form smart opinions. Simple, right?

Of course, at the time I could not know the psychological challenges that lied ahead. Nor could I account for the role played by discipline or luck, or indeed the costs of expressing my opinions at a frequency that would filter out the latter (or lack of), and scale the former.

Such ignorance could not be more prevalent in the world of football, where the financials involved are only outdone by the emotional tidal wave that follows them. Wenger, Ferguson, Levy… These are the traders on the touchline, where liquidity comes only a twice a year, and where the assets themselves depreciate by the day.
So with a tip of the hat, I give you the top 5 trades in football:

1. Gareth Bale (Tottenham Hotspur to Real Madrid): Estimated £80m return.Originally bought for £7 million as a left back from Southampton, Bales game transformed into a more attacking style while at Spurs. He caught the eye of European football during the UEFA Championships and was eventually transferred for an undisclosed fee (rumours: £77m – £85m).

2. Christiano Ronaldo (Manchester United to Real Madrid): Estimated £70m return.

Sir Alex signed Cristiano from Sporting CP for £12m, his impact on United was almost immediate.

Together with Bale, Ronaldo has helped give the Premier League the largest war chest in Europe.

3. Kaka (AC Milan to Real Madrid): Estimated £51m return.

Kaka joined Milan for an £8.5m fee later to join Real Madrid for €65 Million! The attacking midfielder spends the twilight of his career as an attacking midfielder for Orlando City.

4. Zinedine Zidane (Juventus to Real Madrid): Estimated £43m return.

Zidane’s transfer from Juventus was a world record setting fee €75 millions. Stomach churning to think Marseille let him leave for Turn for just £3 million.

5. Edison Cavani (Napoli to PSG): Estimated £40m return.

PSG’s new spending power puts Cavani fifth on the list, joining the Parisians from Napoli for £54 million.

A final note: Yield.

Of course, it wouldn’t be fair on Real Madrid, the buying party in 80% of these top trades, if we didn’t at least acknowledge the earnings yield of these assets. That couldn’t be more true for Christiano Ronaldo, but with number one the list, that remains to be seen 🙂

Financial Planning for Seasonal Workers

The following is a post by MPFJ staff writer, CJ, who blogs at thesingledollar.com about personal finance, budgeting, frugality, and debt repayment.

How often do you get a paycheck? If you’re like most American workers, you get paid on a regular schedule year-round. If you’re a freelancer, your pay is more irregular, and could arrive at any time. But there’s a third and more mysterious category: seasonal work.

Seasonal workers include professionals like teachers (who often receive a paycheck for only nine months out of the year); workers doing manual labor outdoors, who often can’t work much, if at all, during the winter (think farmhands, construction workers, or baseball players); and, conversely, workers who are regularly hired by retail stores for a few months during the holiday rush and then laid off in January. These workers have widely varying annual income, but they all have one thing in common: they are only paid during one, two, or three of the four seasons, yet they all have year-round bills. This can make regular budgeting really difficult.

Seasonal workers can take steps to stabilize their financial situation, however, by planning ahead. Here are several steps you can choose to take if you fall into this category.

 

Save for the Offseason

Although seasonal workers don’t get paid year-round, they can often accurately predict their yearly income and expenses. Teachers, for example, know they will get nine monthly paychecks but will need to cover twelve months of bills. They can set aside 25% of each incoming paycheck in a savings account and then pay themselves a “salary” over the summer.

 

Have a Big Emergency Fund

Seasonal work is more stable than full-on freelancing…but there’s always a risk. For example, if you’re a construction worker who often works substantial overtime during the summer, what are you going to do if it’s a particularly rainy year and there are many days on which you can’t work? Having a bigger emergency fund than a salaried year-round employee can help cushion these kinds of blows.

 

Check Your Insurance Options

When I did seasonal work, I received health and life insurance through a union (my employers paid into a centralized fund) so that I could be covered year-round even though there was typically very little work during the winter. Every seasonal worker’s situation will be different, but be sure you’re fully covered year round no matter what.

 

Pick Up Freelance (or Seasonal!) Work During the Offseason

If you have a seasonal job, you might be able to supplement your income by picking up other seasonal work. A teacher might teach summer school or, like one of my teachers did, spend the summer hawking beer at a sports stadium (bonus: he saw all the games for free!) A construction worker might get an indoor holiday retail job when the building trades go into their annual deep freeze. This kind of strategy can stabilize your yearly income, especially if you have a major emergency and can’t set aside enough during the year.

One way or another, seasonal workers know they’ll have at least a few months to cover sometime during each year. Planning ahead for this normal part of your career can make this less stressful, and allow you to enjoy some downtime rather than worrying about your bills.

How about you all? Would you consider yourself a seasonal worker? If so, how do you find is best to plan financial to live a balanced life throughout the whole year?

Share your experiences by commenting below! 

***Photo courtesy of https://upload.wikimedia.org/wikipedia/commons/e/e2/Financial_Planning_-_Expanding_the_Body_of_Knowledge.png

5 Real Ways To Increase Your Savings Rate This Year

The following post is by MPFJ staff writer, Chonce. You can read more articles by Chonce over at her personal blog, My Debt Epiphany. Enjoy! 

What will you do in the event of a true emergency or financial hardship?

Do you feel like your savings account is a scary joke? It’s likely that you’re not alone. According to CNN Money, more than half of Americans save next to nothing each month.

I used to be one of them. I was the person who thought things would be peachy keen until they weren’t and it was too late to prepare for the unexpected. Having enough funds saved up is important because sometimes, it will be all you’ll have to start from.

I did a great job meeting my goal to pay off a ton of debt last year, but the sad part is, after it was all said and done, I looked around and realized I still felt extremely trapped. Sure, I had less debt, but I had hardly anything saved up leaving me with even less control over my life. In my mind, I couldn’t really afford to save. But in reality, I couldn’t afford not to.

It’s important to manage your savings goals with your other financial goals and even prioritize them if you need to build up a suitable emergency fund. Most experts recommend saving up three to six months’ worth of expenses but how much you set aside is totally up to you and your specific needs.

If you’re looking to save more this year, but you’re wondering where the extra money will come from, here are five realistic ways to increase your savings rate.

 

1. Sell Items From Your Home

Have you ever wondered how much money is lying around your home in the form of unwanted things? With minimalism really trending lately, most people are eager to declutter and get rid of things that are just taking up space.

If you have old dishes, clothes, game consoles, furniture children’s toys, tools, bikes etc. that you no longer want or need, try selling them online or to others in person or through a garage sale and putting the money you receive directly into a savings account.

 

2. Create Rotating $0 Budget Categories

One of the best ways to save more money is to stop spending it period. To reduce your spending, try to cut a budget category out completely for a few weeks, then pocket the cash you save by not spending.

Creating and implementing $0 budget categories can sound intimidating at first, but it’s a liberating challenge that you can take your time with. Start by cutting out a non-necessity like entertainment or dining out. If your entertainment budget is usually $100 per month and you make it $0, that doesn’t mean you have to sit at home during your free time for the entire month and sleep or read books.

There are tons of free and fun activities you can do that won’t cost you a dime. These include: visiting  a museum, inviting friend over to watch a movie, attending a free festival or community event or hiking at a national park just to name a few. When the month is over, you can switch another non-necessity budget category to $0 and save the money you would have spent instead.

 

3. Lower Your Family’s Expectations

Lifestyle inflation can really put a damper on your savings rate. If you and your family are used to living above your means, you’ll need to lower your expectations in order to become more content with what you have and free up enough money to save.

For example, I think iPhones are wonderful, but I’ve never owned one and I have no desire to. Instead of paying over $100 each month to have a phone, I’d rather stick with my more practical smartphone with a lower monthly bill so I can save more money.

Sit down with your spouse and kids (if you have any) and find out what they really value and what they are willing to give up for the sake of financial stability.

 

4. Plan Your Meals

Food is reportedly the fourth biggest expense for American families and falls right behind, housing, transportation, and insurance. If you can manage you cut your food spending, you will be able to save quite a bit for hard times.

You can cut your food spending simply by creating detailed meal plans. Instead of just going to the grocery store with a rough idea of what you’d like to buy, try creating a detailed list of the meals you will eat each day and bring cash with you to ensure you stick to the budget. This will cut out impulse purchases and slash your food budget.

You can also cut back on work lunches by bringing your lunch to work each day and planning ahead to make sure you have enough items to pack for lunch. Bringing my lunch to work has easily saved me at least $1,000 during this past year.

 

5. Get a Second Job or Side Hustle

If you want to save more, you can always earn more. You can get a temporary second job to maintain until you earn enough money to fully stock your emergency fund.

You can always turn one of your hobbies or talents into a money making side hustle. Whether you love to write, draw, design, create crafts, work on computers or play instruments, you can market your  talents to others in order to create a profitable side hustle that will generate enough income to significantly boost your savings rate.

If you know that you need to step up your savings this year, these are all strategies that you can implement immediately to obtain measureable results.

How about you all? What specific steps will you take to increase your savings rate over the next few months?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/76657755@N04/6881508144

How One Couple Got to $3.7 Million in Net Worth

The following post is by MPFJ staff writer, Marie. You can read more of Marie’s articles over at her own blog, Family Money Values. Enjoy! 

This is the saga of a Boomer couple (in their mid-sixties) who started married life with next to nothing and achieved several million in net worth.  If accumulating wealth is your goal, perhaps parts of this story will inspire or instruct you on your journey to millions.

First however, lets remember that net worth is all your assets minus all your liabilities.  Our Boomer couple keeps track of net worth on a monthly basis using Quicken and does so not only to know where they stand but also to anticipate the potential need for estate planning changes (might their estate grow enough to trigger those hefty taxes at the second’s death).

So, to track their net worth, the Boomers keep track not only of cash, bank account assets, stock and bond market investments, real estate and autos, but also of any death benefit amounts for life insurance they own, artwork and collections as well as an estimate of the market value of their aggregate household possessions (which at 60+ years there are many).

 

Lets begin at the beginning.

The couple married in 1972 and had assets of some savings bonds the wife’s parents gave her for college graduation (around $2000) and liabilities of a car loan for a car the husband bought prior to the marriage ($2000) and an obligation to pay premiums on a whole life policy purchased in college.  Neither had college (thanks to parents and scholarships ) or credit card debt.  Now, this isn’t as dire as it sounds because that $2000 in 1972 dollars is about $12,000 in 2015 dollars.  That is a lot more than many Millennials have what with their college loans and the Great Recession.

Mr. & Mrs. Boomer entered the job market while the US economy was headed for decline.  Having no trade (their college majors were Business and Liberal Arts), the couple had a hard time finding work that paid much.  Both took temporary jobs in retail sales to tide them over, making minimum wage ($1.60 per hour or so at the time). Almost immediately after the marriage, the spouse joined the US Army as a private making around $2000 annually).

In the Army now.

After basic, the husband was stationed in the US Midwest in an administrative job (for which the wife was very thankful as the Vietnam War was still in progress at the time).  The wife moved to join the husband and they lived in a rural area close to base, paying about $60 a month for rent for a tiny duplex.

Using the wife’s graduation bonds (most of them) as a down payment, the couple located and purchased (with a loan) 40 acres of raw land for $4000.  As it turned out, this was a good move and a bad move.  The good part was that it forced the couple to save to pay the loan and thus they eventually ended up with a 40 acres asset.  The bad part is that raw land is a pretty risky investment, with little guarantee of any income.  The couple kept this 40 acres for many years, eventually selling it for around $40,000.

Also during the Army years, the young couple (then in their early 20’s) decided to have a baby.  After all, the birth would be free at the Army hospital so no problem – right? OK, all you parents, stop snickering – the Boomers obviously didn’t think about the many thousands of dollars that child would cost over the next 20 years! The Boomers later counseled their offspring to WAIT before having kids, wait until you are established in a career and have some stability.

Because they lived in a rural area, opportunities for the wife to earn a salary were scarce, so the couple was primarily living on $2000 a year (she did work at Pizza Hut as a waitress until the baby came).

Each month, the husband would use a credit card to buy gasoline to drive to his job at the fort and at the end of each month when the credit card bill came, it ate up much of that months Army salary.  This was a huge lesson to the Boomers.  They learned that they didn’t like paying for something long after that something was used up.  Ever after, they used credit only when they already had the money to pay the bill.  This kept them safely out of credit card debt for a lifetime.  Lesson learned.

Feeling the pinch (rent, loan for land, gasoline, food, insurance, heat, telephone and etc) the two decided that the husband should not re-up when his initial enlistment was over, even though he was now earning about $4000 a year.

 

The jobless period.

In late 1973, the economy took a turn to the downside.  Looking for work after the Army in 1974 was even more difficult than finding work out of college.  But both studied hard to take the exam to get on with the US Government.  Hubby studied more, because wife was busy taking care of new baby.

Out of the Army with no income, the couple moved back in with the wife’s parents for several months.  That had to be fun for the recent empty nesters – not only did your kid come back, but she brought a man and a baby too!  Family comes first, but the Boomers didn’t want to impose any longer than needed.

Thankfully, the Federal Government soon offered the husband (who scored better on the test than the wife due to all that extra study) a job.  The two checked out of hotel Mom&Dad and moved across the state.  The $8000 a year salary was a gold mine to them after living on the Army salary for 2+ years.  They found a unit in a quadraplex for $125 a month – two bedrooms, a tiny, tiny kitchen, one bath and a living room.  After a few months the landlord decided they were hard workers and diligent rent payers and offered them a chance to work off some of the rent by tending to the building and trash.  The couple was grateful for the chance and very glad that they had taken great pains to be good renters and responsible adults – otherwise they might not have gotten the opportunity to reduce their rent payment.

The wife took a low paying job delivering neighborhood newspapers with a baby strapped to her back in a pack to help with expenses.

 

Four years passed.

The urge to procreate was strong, the couple was nearing 30.  In 1977 the couple decided to go for a second kid.  They felt a bit more secure financially, the wife had taken a better paying job as a supervisor at a retail store (but they still weren’t really able to save).

Now, though, that small unit in the quadraplex seemed even smaller.  The new baby shared the Boomers bedroom and the 4 year old was growing like mad.  Time for a house of their own.

 

The housing mistakes.

By this time, the couple had sort of discovered that they had different tolerances for risk.  Hubby hated financial obligations (like a mortgage) but the wife saw the opportunity to build equity instead of paying rent.  To keep the loan as low as possible, the couple saved for a down payment instead of using a down payment free VA loan (mistake #1), and narrowed their search to a cheaper but declining neighborhood (mistake #2).

Luckily, it was a slow decline.  The couple stayed put for 10 years, during which time they were able to put aside small savings each month only to have to spend out at the end of the year.

Hubby got more and more stressed as his Federal Government job was not as lucrative as a private company job might have been and his aversion to risk kept him from looking for a better one.  Instead he took advantage of many many overtime hours.

Wife stayed home raising kids and working on the run down home – stripping old paint, painting, scrubbing and maintaining, but not enhancing.

 

The turning point.

Eventually, the couple imploded.  Tensions were high, finances were tight what with kids growing more expense and college funds and added life insurance, taxes and etc.  Neither one of the couple talked about the issues.  The Boomers didn’t talk money.  Years later they realized what a huge mistake this was and  began those discussions. 

Mrs. Boomer decided it was time to go back to work to try to alleviate the situation.  Besides, if a divorce was in the future, she would need a way to support the kids.

But, instead of going after a low paying easily obtained job, Mrs Boomer researched the job market at the time to see what jobs she could train for that would pay big bucks.  She found that computer programmers were in high demand.  She researched classes to learn programming and decided she could do this.  Instead of putting further strain on the marriage to pay for the classes, she opted to open a licensed day care home and save the money earned to go back to school.  She started her own at home business.

After two years she had enough money, quit the day care business and went to school full time.  On graduation, she started a job paying $18,000 a year (about $42 K in 2015 dollars).  In just a few years, hopping jobs for more and bigger opportunities, she was making more than hubby.

With more income, they decided to get out of the declining neighborhood.  Their timing was fortuitous and they were able to sell their $25,000 home for $45,000.  They had learned their real estate lesson and choose a home in a growing and desirable neighborhood this time.  Unfortunately, interest rates were near all time highs when they decided to leave that first home.

 

The march upward in networth.

The Boomers continued to live off of Mr. Boomers salary and saved every penny Mrs. Boomer earned.  They didn’t increase their lifestyle, and so they were able to greatly increase their savings. Mrs. Boomers career took off, offering opportunities for stock options, bonuses, employee stock into a retirement fund and ever increasing responsibility and income.  Mr. Boomer finally advance in his long held Federal Government job, paying in each payday to an actual for-real pension fund.

Soon their college funds were full, their offspring graduated and out in the world on their own and their net worth grew.  Mrs. Boomer played catch up with retirement savings in a 401K.  They paid off their mortgage early,saving years of interest payments.

It seemed that the money just kept rolling in.  Once they had enough saved for yearly expenses and emergency reserves, they began to invest in stocks, bonds and mutual funds.  They reinvested all dividends and capital gains and put new money into the market using dollar cost averaging.  All the while, they worked on getting to their target asset allocation – typically using new money instead of selling and buying.

 

Fast forward to now.

The Boomers are retired, living off Mr. Boomers Federal Government pension (and feeling pretty lucky to have one of the few pensions still around).  Their assets continue to grow (and sometimes shrink) with the market, and their net worth has continued to grow even without salaries to pump into it.

 

So, what did they do right?

• They gratefully accepted help from their parents to get an education (and scholarships) so they had no college debt.
• They learned not to load up with expensive credit card debt early in life.
• They were forced to learn to save (and yes their parents did drill it in as well) just to meet expenses and it became a lifelong habit.
• They (eventually) looked for career opportunities that not only were interesting but also paid well.
• They did not raise their standard of living when new money came into the household.
• They worked hard and smart at their careers to advance and earn more.
• They (eventually) made good decisions about retirement savings.
• They bought real property to build equity.
• They didn’t continually upgrade their real property, but did maintain it.
• They saved and saved and save.
• They didn’t risk current finances to fund new schooling.
• They found a way to maximize income for the wife at home with a business.
• They learned how to invest in the markets and did so with a plan and regularity.

And what did they do wrong?

• They didn’t pick college majors (initially) that would provide good income.
• They were impulsive in life choices (such as joining the Army and having babies early), instead of laying down goals and agreeing to them together.
• They didn’t do their research when embarking on their first home buying experience.
• They waited too long to buy their first home.
• They didn’t take advantage of home buying financing on their first home.
• They stayed in a less than desirable neighborhood too long and bought in a better neighborhood when interest rates were double digit.
• They saved for college for kids before retirement for themselves.

And how did they get lucky?

Any one may be beset by unfortunate circumstances outside of their immediate control.  The Boomers were lucky in that:

• Their parents provided college funding and some financial assistance.
• Their parents taught them the value of saving and hard work.
• They were both healthy.
• Their children were born healthy and had no serious health issues.
• Neither lost their jobs.
• Technological advances provided a lucrative career opportunity for the wife with minimal need for retraining.
• The stock market rallied after they started investing in it.

How about you all? What did (or would) you do differently than the Boomers?

Share your experiences by commenting below! 

***Photo courtesy of https://www.google.com/search?site=imghp&tbm=isch&q=net%20worth&tbs=sur:fmc#tbs=sur:fmc&tbm=isch&q=money&imgrc=vN2V0qwbyYhNnM%3A

5 Tips for Turning Your Finances Around in 2016

The following post is by MPFJ staff writer,Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

One of the great things about starting a new year is that it can be used as a time to make a fresh start in areas in which you may feel you aren’t functioning at optimum level. A full 25% of people made financial wellness a part of their New Year’s resolutions in 2015, according to this Nielsen article.

Most people, when asked, say that they’d love to have less debt and more money in savings. January is the perfect time to formulate a plan for turning your finances around and increasing your financial wellness. Interested? If so, here are 5 tips for creating a better financial life for yourself and/or your family in the coming year.

Financial Wellness 101

Assess Your Situation

You can’t improve your finances successfully without first knowing where you stand moneywise. Make a list of all assets such as savings, investment and retirement accounts, any homes you might own, and any large pieces of property, such as automobiles, boats or recreational vehicles. Write down:

• Name of asset or Bank name
• Type of asset (retirement, non-retirement, car, boat)
• Current worth
• Average interest rate earned

Now make a list of all debts or liabilities including mortgages, consumer debt, medical debt, etc. Write down:

• Name of debtor
• Balance owed
• Interest rate you’re paying
• Minimum payment due

After you’ve calculated your total assets and your total liabilities, you can subtract your liability number from your asset number. The answer you get is your net worth. Your net worth is an important number to know because it’ll give you an indicator of where your finances are at. From there, you can take steps to get to where you want to be.

Determine Your Financial Goals

Now that you’ve got a clear picture of where you’re at financially it’s time to determine where you want to be. What are your financial goals? Determine three short (within a year), three medium (within 1-5 years) and three long-term (longer than 5 years) financial goals, write them down and post them prominently.

Some ideas of short-term goals could be:

• Pay off “X” credit card or loan
• Save “X” amount of dollars in an emergency fund
• Save cash for an upcoming vacation
• Save cash for a needed replacement vehicle

Some ideas for medium-term goals could be:

• Pay off all consumer debt
• Save six to twelve months’ worth of living expenses
• Increase kids’ college savings accounts by fifty percent

Some ideas for long-term goals could be:

• Pay mortgage off in ten years
• Increase 401k or IRA contributions to the maximum allowed
• Save enough in a non-retirement investment to retire in 15 years

By choosing short, medium and long-term goals that are important to you, you increase chances of reaching those milestones.

Make a Solid and Doable Financial Plan

A solid and doable financial plan is one that is realistic enough that you’ll stay with it, but challenging enough that you’ll be motivated to reach it. If your goals are too audacious you’ll give up quickly, certain you’ll never reach the finish line. When it comes to successful financial plans, smaller, more realistic steps will get the job done more often.

Take Regular Steps to Achieve Your Goals

If your goals aren’t regularly at the forefront of your mind, you’ll soon forget about them. One of the keys to turning your finances around is to take regular daily or weekly steps to reach the financial goals you’ve set in place.

That might mean working side hustles to earn extra money to put toward debt each week, or working overtime at your job so that you can increase the amount of money you’re putting in your 401k. It might entail selling things you no longer use, looking for cheaper housing or any other number of things that will help ensure your financial renewal is successful. Just make sure to spend time on a regular basis looking for extra ways to help you achieve your goals.

Choose to Persevere

Perseverance is a successful key to achieving any goal. As you work to turn your finances around, roadblocks will come in the form of unexpected expenses or opportunities to spend money outside of your budget.

Choosing to persevere in spite of roadblocks – whether that means overcoming spending temptations, working to recover from a spending mistake or dealing with an unexpected expense – will help you to see that successful financial plans aren’t about not making mistakes; instead, they’re about learning to recover from those mistakes and move on.

How about you all? What steps do you plan on taking this year to improve your financial wellness? Do you have other ideas on how to improve your financial wellness that aren’t listed here?

Share your experiences by commenting below!

***Photo courtesy https://pixabay.com/en/packs-pile-money-finance-currency-163497/

Change Your Life One Year, One Goal, at a Time

The following post is by MPFJ staff writer, Melissa Batai.  Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food.  She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

If you’re like most people, you likely may have overindulged this holiday season. You may have had a few too many drinks, ate a few too many sweets, had a few too many glasses of egg nog.

Your budget may have suffered, too, as you bought additional gifts for people who weren’t initially on your list or you forgot how much expenses can balloon in December.

Now that the rush of the holiday season is over, like most people, you want to face the new year ready to make some changes. Maybe you want to lose some weight, pay off some debt, improve yourself.

But, let’s be honest, change is hard. If it wasn’t, we wouldn’t get stuck in negative ruts as we all sometimes do. It’s hard to give up old habits, especially if you overwhelm yourself with a big list of New Year’s Resolutions.

This year, try a different approach.

Find ONE thing that you want to change. ONE thing that will improve your life, and make changing that ONE behavior your goal for 2016.

Yep, just ONE thing.

But more importantly, take the steps necessary to prepare to change your life before you make the change.

My Life Change

Three years ago, I was a total soda addict. I started drinking Mountain Dew (yes, I know, it makes me cringe now to think about it) when I was 16. I didn’t stop drinking it until I was 32.

I thought everything would be fine once I finally gave up Mountain Dew, but instead, I switched to Pepsi. At first, I drank Pepsi in moderation, but then I started drinking two 24-ounce bottles a day. I was almost as hooked on Pepsi as I had previously been on Mountain Dew.

One day, I looked at my infant daughter and realized I would be leaving her a terrible legacy. If I didn’t kick the soda habit, she’d likely grow up drinking soda, and perhaps becoming addicted, as I was.

By consuming so many liquid sugar calories, I was literally drinking my way to diabetes. I was also making it very difficult on myself to lose weight.

I decided that since I couldn’t manage my soda consumption, I should give it up completely.

And I did.

I won’t say it was easy. In fact, for about six months, I always wanted to drink a soda, especially when we went out to eat. But then, after I got through those difficult months, I found that I didn’t even want to drink soda. Not even a taste. I have been completely off soda for three years now, and I know I’ll never go back to drinking it.

Changing a bad habit is hard, but if you can see the cravings through, you can make a lifelong change that will very likely improve the quality of your life. The key is to devote yourself to ONE change at a time.

How to Make a Permanent Change

Don’t automatically assume the perfect time to change your life is when the calendar turns to the new year. Instead, the best time is after you’ve taken the proper preliminary steps.

The following is what you’ll want to consider as you prepare to change your life:

What do you want to change?

The first step is to determine which behavior you most want to change.

Why do you want to change?

Then, you must give yourself valid reasons WHY you want to change. This is important because our natural inclination, when faced with a challenge, is to fall back on our old behaviors. A list of solid reasons why you want to change can help you fight this tendency.

Psychology Today explains, “If you aren’t sure why you’re changing, don’t fully believe you’re making the right choice, or question whether what you’re doing will work, you’re likely to settle back on your automatic behaviors. That’s why self-efficacy—the belief that you can make a change and overcome obstacles—is one of the best predictors of successful change.”

What routines cause you to partake in the behavior?

Another important task is to realize what routines are associated with the behavior. I had certain times when I wanted to drink a soda—at dinner time, with an afternoon snack, for an afternoon pick me up. In other words, I had made soda a natural part of my routine. After I gave up soda, if I ate a less healthy snack like popcorn or chips, I found myself wanting soda. So, I changed to healthier snacks like bananas and apples, which broke the association of a snack being soda and a salty treat.

What triggers cause you to partake in the behavior?

You may find that you have triggers that cause the behavior. For instance, maybe if you fight with your children, you find yourself reaching for a sweet treat to soothe yourself. Or, maybe you find yourself shopping online more than you should, especially after a rough day at work.

Know the ingrained habits and triggers that cause the behavior BEFORE you try to change your behavior. Then, when a craving is particularly strong, you’ll be able to determine what is causing the craving and fight it off.

Make access more difficult.

Once you’ve completed all of the above steps, make access to the item more difficult. For instance, once I decided to give up soda forever, I stopped buying it. I didn’t bring it in the house. (Luckily my husband does not drink soda, so it was easy to keep it out of the house.) If you spend too much money shopping on Amazon, for instance, change your notifications so they go to your spouse’s e-mail. Your spouse will know immediately if you’ve spent more than you agreed to spend.

Make your resolve public.

Many people find that telling others about the behavior they want to change helps them accomplish their goal. A friend I know recently gave up gluten and dairy for health reasons. As gluten products made up a large portion of her diet, this was quite difficult for her. She recently posted that she has now gone six days without either gluten or dairy. Sharing publicly like this helps her keep her resolve, and she also gets encouragement from all of her friends cheering her on.

Michael Hyatt, blogger and author of Platform: Get Noticed in a Noisy World, states, “When I decided to run my first half marathon, I decided to announce it on my blog. For me, this was like Cortez burning his ships off the Veracruz coast. Once I did it, there was no turning back. I was committed, and I was going to follow-through. It’s probably just pride, but ‘going public’ has proven to be a great lever in moving me toward my goals.”

This strategy may not work, however, if you’re largely surrounded by people who hope you don’t accomplish your goal. (Sadly, that is the case for some people.)

However, keep in mind that you have to find the strategies that work best for you. Dr. Nora Volkow, director of NIH’s National Institute of Drug Abuse notes, “There’s no single effective way to break bad habits. One approach is to become more aware of unhealthy habits, then develop strategies to counteract them: avoid walking halls where there’s a candy machine; avoid places where you’ve usually smoked; stay away from friends and situations linked to problem drinking or drug use.”

Resolve this New Year to change one habit and improve your life. Just remember that you don’t have to start on January 1^st. Instead, take the time to first understand your bad habit and why it exists. You’ll likely be more successful. Good luck!

How about you all? Have you kicked a bad habit? If so, what approach worked for you?

Share your experiences by commenting below!