Category Archives for Invest & Retire

High Yield Investing – Gift or Curse?

Tough competition and bad publicity has created a negative image about high yield investing in the industry. If you believe that this is yet another scam to rob your money – then you couldn’t be more wrong. It is true that the credit risks are quite high when you put your money into these investments. However, the important question is, is it worth it? Definitely. Take a look at the following information to get a better, and accurate, idea about this investment plan.

Investment Portfolios

This plan is spotted in many investment portfolios over the recent years. There are two main reasons for this inclusion. First of all, they offer investors risk-adjusted returns that enables them to invest any amount of money. The feeling of investing money without having to worry about things such as security or profitability is definitely a gift. This plan has the ability to keep you informed about the future status of your investment. Moreover, it also enables you to diversify your investment portfolio. This diversification of investments eliminates any potential financial risk.

Global Trends

Although the market originated in the 1960s, it has grown to be popular only over the recent years.  As the original developer, the United States has 80% of control over the internal high yield market. This is not only because it was the first to develop the idea, but also due to the number of smart investors in the country. Although Europe and Asia have small capacities, they have shown a higher growth rate than the USA in the past few years. This indicates that the number of high yield investments in these continents are rapidly growing – especially in Europe.

Not a Curse

You might wonder, ‘then why are people calling it junk?’ The phrase ‘junk bonds’ was coined due to the low rankings such as triple C ratings given by investing sites due to the credit risks. However, the ratings have increased over recent times up to double B standards. This indicates that there has been a significant development in the field. This negative media has to be eliminated in order to create a stronger support for this investment plan.

Best Gift Ever

This investment plan has a number of benefits for investors. First of all, investors are exposed to lowwe interest rates and inflation risks. This is due to the fact that the trading takes place at shorter maturities. That is, their contracts are based on short periods of time in order to reduce the risk of financial threats. It has also been found that this plan has a higher return-on-investment. Moreover, it also enables portfolio diversification since they are much different to equities and government debts.

It is time you changed your opinion about high yield investing now that you have been exposed to the reality of it. It does not ruin your business or put you at risk. It is a profitable investment plan that offers value for you money by reducing your debt levels to a great extent.

How to Organize Your Freelance Taxes

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

Disclaimer: I’m not an accountant or tax professional!

I used to absolutely dread tax season as a freelancer. I worked on movies and plays; they usually only lasted a month or six weeks, so at the end of a year I would have had many employers. One year I had ten W-2s and 1099 forms to deal with, not to mention income from a few jobs that didn’t send me a form at all!

Getting organized makes all the difference in a situation like this. Don’t be a stressed-out mess by April 15 this year; instead, give these steps a try now.

1) Collect incoming paperwork.

Hopefully most or all of your employers will send you an official statement of your income from the previous year. In the United States they are legally required to do this by January 31. As each form shows up in the mail, put it into a folder marked “Tax Forms 2015” (or whatever year).

2) Check your income paperwork.

In early February, make a list of all your employers and other income sources for the year. Ideally you can check a calendar, budget, or other record you’ve been keeping — but if you haven’t done this, look at your bank statements online and look for large deposits to jog your memory. If all else fails, visualize each month of the preceding year and try to remember what you were doing! When you have the best list you can get, check to make sure that you have a tax form from each employer and that the total income numbers on it are accurate.

• If you see a mistake, call the employer (their number will be on the form) and ask for a corrected form. If you are missing a form, try to get in touch with the employer and ask about it.

3) Check Your Expenses.

If you’re a freelancer, you will also need a list of deductible business expenses. Ideally, you can make this list from a folder of receipts you’ve been keeping all year…but if not, you’ll need to figure out what you can claim. There are a lot of special rules about what is claimable, so it’s a good idea to consult a CPA who specializes in freelance workers (ask your friends who they use.) You will need proof of the expenditure to claim most expenses.

4) Research Which Forms You Need to File.

Many freelancers have both W-2 income and 1099 income. You can deal with your W-2s on the basic federal and state forms (1040 for federal). However, 1099 and other miscellaneous freelance income typically needs to be reported on at least one other form. The federal forms are Schedule C and Schedule SE, but your state will probably also have a separate form or three. An accountant or good tax software can help you with this, of course. The IRS has a site for self-employed/small business filers and your state department of revenue website should also have information for you.

5) Set Up a Better System for Next Year.

It’s too late to go back in time and keep really good records in 2015, but it’s not too early to start getting ready for next year’s taxes right now. If you’re a freelancer, I want you to go directly to your desk and label three folders:

•  Business expenses/receipts 2016
• Credit card statements 2016
• Paystubs 2016

Then, on your computer, make a spreadsheet labeled “Income 2016.” Every time you get freelance income, list it in this spreadsheet, and file any relevant paystubs in the right folder immediately. Then, when January 2017 rolls around, you’ll know exactly what happened in 2016!

Special Note: Quarterly Taxes. If you are a freelancer, you may be required to file quarterly taxes during 2016. (Your accountant can advise you about this.) If you have to file quarterly in 2016, your first payment and form will be due April 15 — the same day as your full tax return from 2015! If you think you might need to file quarterly taxes, it’s especially important to be organized now so that you’re not scrambling to do two sets of paperwork at once.

Good luck with tax season, freelancers! Do you have a freelance tax-filing horror story? Can anyone beat my record of 10 official employers in a year?

***Photo courtesy https://pixabay.com/static/uploads/photo/2015/02/23/20/12/taxes-646512_960_720.jpg

Using Forex to Make Extra Money

The following is a guest post. Enjoy! 

The global forex market boasts over £2.64 trillion in average daily trading volume, making it the largest financial market in the world. Forex’s popularity entices traders of all levels, form complete rookies to seasoned traders, due to its ease of access and simple format. Its around-the-clock sessions, access to significant leverage and relatively low costs make it an interesting prospect, however it also means it’s very easy to lose money trading forex.

Forex is fast becoming a way for people to make a little extra cash on the side due to its ease of use and access. However, venturing into unknown territory and putting your money on the line is unlikely to end well, so we’ve put together the top 5 tips for any novice trader looking to get off on the right foot at the start of their forex journey.

1.Practice
The vast majority of trading platforms will come with a practice account, sometimes called a demo or simulation account. These type of accounts allow traders to place hypothetical trades without risking any real money. This will allow you to get to grips with the basic format of trading along with getting a feel for the software. Making silly mistakes when trading with real money can lead to potentially devastating financial implications so it’s of paramount importance that you do enough practice.
2. Research
Just because forex is easy to get to grips with doesn’t make it easy to master. Learning about the platform is crucial to success in the markets. While the majority of learning comes from experience, a trader should learn everything possible about the market along with the geopolitical and economic factors that drive currency values. It’s important that you have a basic knowledge allowing you to make decisions and adapt to changing market conditions whilst achieving the optimal end result.
3. Start Small
Once you’ve done your homework and spent some time with a practice account it’s time to put your money where your mouth is. No amount of practice will prepare you for the real thing so it’s vital to start small when jumping in at the deep end. It’s a completely different ball game once real money is at stake, simple decisions become much harder as risks have true consequences. By starting small, a trader can evaluate his or her performance and strategy before putting their whole account on the line.

4. Record Keeping
Maintaining a trading journal is a great way to learn, both from your losses and successes. Recording dates, profits, losses, your performance and emotions can be incredibly beneficial to becoming successful. Without a journal and good record keeping, traders are likely to continue making the similar mistakes, minimizing their chances of become profitable and successful traders.
5. Trade Like A Business
Treating your account as a business is a great way to remember that individual wins and losses don’t count for anything, it’s how you perform over time that is key. Traders should avoid becoming over thinking either wins orlosses, and treat each as just another day at the office. Like any business, trading incurs expenses, taxes, risk, losses and uncertainty, along with the fact that like a small business your account will take time to grow and mature. Planning, setting realistic goals, staying organized and learning from both successes and failures will help ensure a long, successful career as a forex trader.

Conclusion

Forex trading presents a great opportunity to generate a little extra income for anyone who does their homework and approaches it sensibly. When viewed as a business, forex trading can be profitable and rewarding. Staying focussed, organised and determined are all key to a successful career.

Set Your Financial Goals for 2016

The following post is by MPFJ staff writer, Jeff. Jeff has been writing online about finance related issues since 2009, and after a lot of soul searching in 2015 has crystallized his goal of financial independence and blogs about his journey to freedom at zerotofi.com

Now that the New Year has come and gone, have you set any financial goals? If you did, 1 month later how are you doing on them? If you’re anything like me (and lots of other people) your motivation to pay off debt, start saving more, eat out less or anything like that is probably beginning to wane. If you’re looking for new goals or just never got around to setting some for 2016 yet, here are a few you should shoot for.

Pay off credit card debt

This is a popular one, and for good reason. Many credit cards have balances on them because of overspending or because they were used an emergency situation for a car repair or something similar. When you’re using credit cards and not paying them off in full every month, you’re racking up huge interest charges (typically >15%), making it tough to get ahead. To accomplish this you’ll need to be steadfast about not adding any new charges and trying to find any extra cent that you can use to pay above your minimum. If you have more than one card, look into the debt snowball method and see if it suits you. I was able to pay off my debt using this method in 2010, and have not carried a balance on a credit card ever since. It was certainly not easy, but looking back it has allowed me to do so many things.

Build An Emergency Savings Account

Many people get stuck with high interest credit card debt that they cant pay off because they dont have any cash for emergencies or unexpected events, like a car repair or home repair. If you find yourself in this situation, you’ll want to have a bit of money saved as a backstop so you dont return to credit card useage. While there are many plans and amounts, I think the following one would be easiest to follow, and would give you a savings balance of >1,300 by the end of 2016. You’ll be saving a certain amount of money each week, so you’ll need to find it in your budget.

Start off saving 52 the first week, then 51 the next week, then 50 and so on. By the end of the year, you’ll have a good amount saved up. Bonus part is if you get to July or August and want to save more than the required amount, just do that! A bigger savings account never hurt anyone.

At the end of the year, you should have money to help you weather most emergencies, and wont need to fall back on credit cards again.

Start a Side Hustle

If there’s one thing thing related to earning income that has changed my perspective, it is starting a side hustle. Paying off debt was an awesome feeling and very, very freeing, but being able to earn even a little bit of income on my own, outside of my day job is incredible. Just about anyone has some skills that they can trade for money in their spare time. You can mow lawns or shovel snow, fix things around the house for seniors, change oil in cars for your neighbors, help people move, start an online business and the list goes on and on. There are so many people who would rather just pay someone to deal with something than spend the 15 minutes to do it themselves! Step up and be one of those people making extra money! You can use the extra money to fund your savings account, or pay off debt!

How about you all? What money goals do you have for 2016?

Share your experiences by commenting below!

***Photo courtesy https://www.flickr.com/photos/pictures-of-money/17123254699/

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

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.

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 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!