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Emotional Spending is Awesome

January 25, 2017

Making decisions based on your emotions is usually a recipe for misfortune. In fact, personal finance 101 discourages emotional spending. But…emotional spending is awesome in certain situations.

Why do I say this? Because right now the world feels very bleak. A part of my brain is telling me it’s always been this way. It still doesn’t help the emotional part of my mind from thinking about all that’s going on right now. People are scared, they feel afraid, angry, and unsure of how to continue to move forward.

The past few months have left people to try and make sense of the environment around them and how to foster growth and change in the face of active resistance. It’s been confusing, sad and frustrating. Providing budgeting and saving tips feels empty without addressing the emotional impact people have had lately. All the money tips in the world won’t help if your emotional confidence doesn’t feel full.

Formulating words, messages, and bonding with others. Connecting with people and letting them know they’re understood has been more important than ever.

In times of negative emotions and bleak outlooks, generosity becomes critical. Helping one another out and being there for people. There are a few ways to do this. Donate money or donate your time. Look up organizations that need help and see if you can donate a set amount to them. Find charities whose mission you passionately agree with and get involved with helping them out.

Below is a list of some popular organizations you can learn more about and consider donating to. Use a site like Charity Navigator to figure out the financial health and accountability of different charities.

Planned Parenthood: There has been lots of talk of defunding Planned Parenthood. For decades the organization has provided reproductive health services to women at affordable costs. Half of your donation will go to your local Planned Parenthood affiliate and half to the Planned Parenthood Federation of America. Donate here.

Center for Reproductive Rights: advocates for reproductive rights, access to birth control, and unbiased information on reproductive health. Donate here.

National Resources Defense Council: They work to safeguard the earth, its people, plants, animals, and the natural systems on which all life depends. Donate here.

Trevor Project: They provides 24/7 crisis intervention and suicide prevention for LGBTQ youth. Donate here.

National Immigration Law Center: fighting for the rights of low-income immigrants through litigation, policy analysis, and advocacy. Donate or find out how you can attend a training here: Donate here.

NAACP Legal Defense Fund: provides legal assistance to poor African Americans and civil rights and voting rights activists. They bring lawsuits against any violators of civil rights. Donate here.

Do you want to voice your concern to Senators and representatives? Call them! Talking on the phone is a weird foreign thing nowadays but calling (compared to tweeting or Facebooking) is the most effective way to reach them. Find their phone numbers here. Find your congressional district here.

For personal finance, consider getting involved with the Rockstar Community Fund. They do various initiatives focusing on helping one another out, spreading joy, and helping people kick down their debt.

Aside from donating money and voicing concerns, find other ways to connect with people and help out. Take time to express gratitude to someone you know, whether it be an old friend, family member, or someone else. Make discussion a habit and don’t rely too much on survivorship bias. Learn from others outside of your circle and viewpoint. Understand different perspectives and scenarios.

Practicing generosity, using your emotions, opens you up to a new state of mind. For me, it helps me appreciate what I have and develop a develop a deeper motivation for going after stuff.

Emotional spending is awesome and can be used for good. The “spend” part doesn’t always have to involve money. Generosity is spread in many ways. Make time for it.

How do you practice generosity?

Grow The Gap

January 18, 2017

Or in other words, Why picking sides between spending less or earning more isn’t thinking of the full picture.

Gaps are important. Write that down and say it three times! Haha. It’s true, though. Gaps are important and they’re talked about all the time. Usually, it’s with emergency funds (growing the gap between bank account zero and a few months of expenses).

In terms of building actual wealth? It’s so important. When it comes to your unique money management, what is best? Spend less or earn more? How about neither? Let me explain.

There is a rifle debate in the personal finance world of whether to focus on cutting back and spending less or, on the flip side, earning more. In fact, when you get on the path to being better with your money, the first step mentioned by several financial blogs, podcasts, and people is to comb through your monthly expenses and see where to cut back.

Cut the cable subscription, cut down on eating out, stop getting lattes, and stop going out and spending so much on entertainment. There is even extreme tips about cutting out all junk food, cell phone service, TV, downsizing to just one car, foregoing all fun and letting your soul die…(<—maybe not that last one).

You might balk at the tips and think about how you don’t want to do without certain things because you want to enjoy life. But then you read crazy inspiring stories about people who have paid off mountains of debt. Ahhh, those “person paid off [insert crazy amount] of debt in [insert a super small amount of time]” stories everyone loves to read.

The people who have paid off the debt talk about how they cut out a lot of their expenses and lived minimally. They detail how doing without cable and kicking their latte habit were the big reasons they don’t have the debt monkey on their back anymore. You read the stories, while sipping with your *bomb-tastic* delicious Starbucks mocha, and think about how you need to give up monthly indulgences. The thought sounds blasphemous. You look down at your latte and whisper “I’ll never let you go” a la Titanic-style.

Switching between browser tabs, you stumble upon the other side of personal finance: earning more. The blogs tell you like some sort of fantasy fairy godmother that earning more is the more important side to focus. After all, there is only so much you can cut back on. Earning more is infinite!

As it turns out, earning more money doesn’t have to be something solely achieved through promotions at work or getting a higher-paying job. There are lots of different money making opportunities. Some of them require going on and getting extra part-time work. Others are about making money online.

So which one is better to focus on? Spending less or earning more? It’s neither and here’s why. Size matters.

When it comes to money management and reaching your financial goals, it’s all about growing the gap.

What is the gap?

The gap between what you earn and what you spend. You want to grow this area as much as possible. Pay attention to it, treat it like a precious little puppy and help it grow. Growing it will help you reach your financial goals faster.

And let’s be honest, most people, especially twenty-somethings, have lots of savings goals they want to hit. There are weddings to save up for, other people’s weddings to save up for, a three to six-month emergency fund, house downpayment, travel fund, personal development, and more.

It’s important to tend to both sides to increase the gap. There are always ways to cut back even if you’re frugal and there are always money-making opportunities to be done.

I used to dismiss the whole “spend less, cut expenses” advice of personal finance. I thought I was good with money. Back when I was working my first job entry-level job out of college, I thought I was a pretty frugal person. I didn’t have a car payment, I didn’t buy lots of clothes and go out a lot. With my entry-level wage, I thought I was saving all I needed to save. It wasn’t until I started more closely tracking my spending and doing no-spend challenges, did I realize that there was usually room to cut back.

Being more conscious with grocery shopping, I was able to cut my food budget further. For my cellphone, I got a slightly cheaper provider. Even on an entry-level wage, not making a lot of money, there were still areas I was able to cut back in.

Since I’ve gone through the cutting expenses part, my focus lately has been on giving some TLC to the other side: earning more. Because, as mentioned earlier, there is unlimited potential when it comes to earning more. I like that and I’m sure you do too.

It’s all about growing the gap. Stretch each side as much as you can! It’s a journey that requires tenacity. I’ll be keeping you updated on how it progresses for me.

How do you go about growing the gap between what you spend and what you earn?

How To Make Your Money Motivation Easier to Follow

January 4, 2017

One of the first things towards mastering your money is to understand your ‘why’. Why do you want to get better with your money? What do you want to put your savings towards? Maybe it’s to travel more or to have enough for a down payment on a house. Whatever it is, sometimes we can slip up on following our money why.

Having a money motivation. It’s so simple yet so complex. People often don’t scratch more than the surface when it comes to understanding their money motivation. Person: I need to save more money! …Oh…uh, I don’t know, cause saving more money will be better?

Knowing your money motivation is important. It’s arguably more important than even getting on a budget. Whereas getting on a budget would be step one to becoming more money savvy, knowing your money motivation/your money ‘why’ is step one’s prerequisite.

Your money motivation is the guiding light to keep you on track towards your goals, even when they are far off. You want to buy that new game console? How is your house downpayment fund feel about that? Those shiny shoes at the mall calling your name? How will your vacation fund feel about you giving more attention to shoes than it?

So…you get it. A money motivation, the underlying ‘why’ behind your financial self, is important to cultivate. The problem? Sometimes it can be really freaking hard to follow.

Lets use an example. Monica Gellar wants to save up for a house downpayment. Her time in New York City is coming to and end and she wants to move out of her unrealistically massive Greenwich Village apartment. A big audacious goal of saving up a big amount of money within three years is set. The goal? Use the money for a down payment on a house.

For the first few months, the habit of saving money is easy. She is diligent in putting money aside every month and the goal reminds in clear view. The house is going to be hers!

But then things start to slide. Saving fatigue sets in (yep, it’s a real thing) and the habit starts to slide. It’s innocent at first, just a few lattes at Central Perk with Monica. Soon, she starts buying things she doesn’t need. That pasta maker just had to be bought. It was on sale!

A few of her friends, Phoebe and Chandler, say their going on a weekend getaway somewhere upstate. Monica isn’t sure if she wants to go and knows the money is better reserved for her house fund. Temptation sets in, she wants to spend quality time with her friends, so she drops all her monthly savings towards the trip and decides to go.

Due to her spending more money in different areas of her life, she hasn’t contributed as much to her house fund anymore. The goal is even farther off now. The goal starts to feel pointless and way too far off so she slumps down, watches Netflix and spends an embarrassingly high amount on ice cream and pretzels for the night.

You don’t have to be like Monica. Remaining focused and committed on your money motivations can be challenging at times, but it’s so rewarding to stay on track. Achieving your money goals, even if they are far off, is one of the best feelings in the world. You feel like a superhero!

Below are a few ways to stay on track with your money motivations.

Automate savings (and utilize financial tech)

Set up automatic transfers to deposit money into your savings account every time you get paid. To take it a step further, open up a savings account at a different bank, preferably one at an online bank since they offer higher interest rates on savings accounts. Online banks like Ally Bank offer a 1% APY on savings accounts. This is a lot higher than what brick and mortar banks like Bank of America, Wells Fargo, Chase, Woodforest, CitiBank and others offer.

Have the money transferred over into the savings account and it’s out of sight and out of mind until you need it.

Don’t forget about financial tech apps like Digit, which rounds up your purchases and withdraws a few dollars at a time and puts them into your Digit savings account.

Name your accounts

Holy moly, this is so awesome to do! Saving money towards a goal feels a lot more real when you’re contributing to an account that says ‘house fund’ or ‘F**k off fund’ than when you’re contributing to ‘account: 0002233’.

I have different savings accounts set up at Ally Bank for my: emergency fund, personal development fund, and Australia fund (yep, I wanna go to Australia!).

Whiteboards and memes save the day

I promise this one is a solid tip, haha. Go to your nearest superstore and buy a big whiteboard. Stick it up somewhere in your apartment or house and write down your money motivation and different savings goals on it. It being a white board, you can erase and adjust your goals as need be. It’s great!

Now let’s talk about memes. I know what you’re thinking, how are memes going to help me stay on track financially?!? Well I’ll give a personal example. I used to watch the show Everybody Hates Chris. On the show, the dad of the family, Julius (played by Terry Crews), is characterized as being hilariously cheap and frugal. Chris spills milk on a table and Julius says how Chris wasted “70 cents worth of milk!”.

Since I loved the show a lot, I decided to put a picture of Julius on my apartment door, so that every time I leave, I’m reminded to not spend excessively. It’s ridiculous but it works!

How do you combat savings fatigue and maintain focus with your money motivations?

(also heads up, no stock photo in this post, I took this photo while visiting temples in Bagan, Myanmar!)

How To Fly Spirit Airlines

November 21, 2016

There are a bunch of ways to save money when flying: book on a certain day at a certain time, use reward points, pick a less popular time to fly, and so on. Another big way to save on airfare is to book with a low-cost budget airline.

Not too long ago, I started looking into flying with a low-cost airline. Let me tell you, it can be amazzzing (because of the whole saving $$ thing) or terrible due to…well, lots of things (bad customer service, non-existent leg room, etc).

Spirit is the most well-known budget airline in the U.S., for both good and bad. Spirit has had public relations chaos and dealt with a notable bout of hate from people who have flown on the airline. Never fear! There is a way to fly Spirit airlines and have it not suck (for the most part…).

Spirit has routes running all over America, the Caribbean, and Central America. When you first see their pricing, you’ll be blown away. The fares are very low when compared to other airlines. You’ll think you scored some massively awesome deal. You did! Sort of.

In an effort to provide the lowest of low airfare prices, Spirit cuts out everything you would normally expect when flying. The mission is simple: get you from point A to point B. If you want the traditional amenities you’ve been accustomed to when flying, you’ll have to pay up with additional fees.

Peanuts? That costs extra. Picking your seats? Costs extra. Reclining your seats? Hahaha, nope.

When I flew with Spirit on a trip from San Diego to Houston, the base fare for the flight only cost $61. Adding in some fees, I ended up having to pay $113 total. Still a way better deal than the other airlines, and the experience of flying with them was mostly okay.

BAG CHARGES

Spirit charges additional fees on everything you can probably think of. It really is a bare bones flight. Be aware of how you will be flight (how many bags, how big, etc) when booking so you can add on anything extra at the time of booking rather than paying more for it later on.

There is no free carry-on. You are allowed one personal item per person. For my flight from San Diego to Houston, I paid an additional $35 to bring one carry-on bag with me on the flight.

flying with spirit airlines — Only one personal item is allowed per person. A carry-on bag costs extra

BRING YOUR OWN SNACKS

Spirit doesn’t give out peanuts or even a small complimentary drink. For a person like me who orders ginger ale and sips it as I look out the window pretending to be in one of those cool alcohol commercials, it can be a bummer not to get anything.

Think ahead and bring some snacks and an empty water bottle with you to the airport. Fill up the water bottle after you get through security.

If you buy a snack and soda on the flight, it’s going to run you around $5-15. Although apparently Sprit’s on board alcoholic beverages are cheaper than other airlines. Maybe that’s something to be excited about? 🙂 (I wouldn’t know, not much of a drinker).

OTHER CHARGES

Seat selection. On default, Spirit will pick your seat for you. Not something that’s ideal if you’re flying with someone else or in a group and want to stay together.

Customer selected seats range from $1-50. The big front seats, which have more leg room and no middle seat, cost between $12-199.

On my flight from San Diego to Houston, I opted to let Spirit choose the seat for me. It would have cost $10 if I had wanted to pick a standard seat of my own and $50 if I had wanted one of the big front seats.

If you book over the phone or online (a.k.a. they way almost everyone books flights nowadays) you will be subject to a “passenger usage fee” which ranges from $8.99 to $17.99. I got charged $17.99. The fee is waived if you go directly to the airport and book at the clerk counter. So if you happen to live close to the airport, book there.

Getting your boarding pass from the clerk desk costs $10, so either print at home or at one of the airport kiosks (the kiosks are free!).

I remember another blogger mentioning how Spirit felt like a “greyhound bus in the air” because of how not great the flight was. Many people have mentioned how Spirit’s flights are frequently late on arrival.

My experience flying Spirit was positive and I didn’t have any problems. The seat was a little tight, given that I’m 6’2 and Spirit puts their seats closer together but it wasn’t too bad. I had snacks I brought on the flight and kept myself entertained with a book and my flight arrived on time.

Have you ever flown with Spirit or another low-cost budget airline? What has your experience been like?

Don’t Look Down!

October 24, 2016

I don’t have a fear of heights (within reason) but I still don’t look down. Although, heights aren’t the issue here. The issue is my compulsive obsession with scrimping and loading up on money knowledge at every chance.

I used to have a big problem with constantly checking my retirement accounts, savings accounts, and other accounts. I would check them several times a week, daily, and whenever I had downtime. It was a bad habit brewing stronger every day.

My handy dandy smartphone didn’t make it any easier.

Reaching for my phone was simple, though. With mobile apps for banking stuff and lifestyle, checking up on my money and figuring out more ways to get better became dangerously easy. I started to question and micro-manage everything.

Why is the rate of return so low on this?! Should I sell it off?

Maybe I should invest in some new funds. *obsessively researches for the next half hour*

Let’s see if I can save a few bucks doing it this way vs. the other way.

The obsessive checking happened when I was watching TV, trying to do blog work, or even errands. The ridiculousness went into overdrive when the money reading turned into recurring subconscious money thoughts and one too many dreams about me and my FIRE ambitions.

The most memorable dream included visiting Antartica in a penguin costume immediately after retiring at age 40. Weird…although something I wouldn’t rule out. 🙂

It seemed harmless at first. Reading personal finance info and checking my accounts several times a week gave me a feel good “responsible” vibe. It became second nature and that wasn’t a good thing.

When I signed up with Wealthfront for my Roth IRA, I downloaded their mobile app to stay up to date with my investments. Even though Wealthfront is a robo-advisor and handles the managing of my portfolio, I would periodically check in via the app. It felt like a good way to not be too passive about my investing.

Well…I checked the app constantly. Every night, curled up in my bed, with my body patiently waiting to fall asleep, I would open up it to monitor what had happened. In my mind, some big stock market crash would have come out of nowhere in the timespan of the 12 hours since I had last checked.

Without even realizing it, I had developed this apocalyptic mindset. I would question different sorts of small purchases and how my investing account was doing. My hand developed an automatic movement of reaching for my phone, check things to ensure all was good. My money scarcity mindset came back to me. I needlessly questioned everything and started to consume more and more information. It became exhausting.

As I like to think of it, I was spending too much time looking down.

Personal finance, to me at least, is about keeping your eyes up, focusing on the things right in front of you, fixing them, and moving on to the next. Doing small actions one at a time towards bigger goals. There’s a lot of information down below you. A lot of money “shoulds”.

These money “shoulds” feel immediately necessary when you read about them. I should build up a 10k, 15k, 20k, etc emergency fund, I should be checking my brokerage account a lot, I should be doing this, that, and so on. Sometimes we like to focus on way too many things when getting started with just one is the better case.

Emotion reveals itself in damaging ways. Not in the stereotypical hysterical crying, eat all the ice cream, type of way (Although if you do, I would make sure it’s Ben & Jerry’s, gotta have the good kind of ice cream at least).

Checking my accounts constantly wasn’t doing any good. It grew my sense of worry about whether I was doing everything right. It prompted me to seek out way more information than I needed.

Insecurity and comparison syndrome set in. Being “good” at personal finance felt like some elusive clique that would take forever to reach. Rather than just focusing on the one piece of information I needed to get going, I wanted to fix and monitor everything in one big swoop.

The habit has been mostly remedied. The former compulsive tendency looked a lot like what happens when you go to WebMD to find answers for your sickness. You type in your symptoms and suddenly you think you’re going to die by next Tuesday.

There’s a lot of information, good information, down below but I’m learning to not always look down. Big changes result from small actions. Small actions happen when you keep your head up and plug away, slowly but surely.

Little by little I’m building up my savings, learning more and growing more. As long as I’m making progress, I feel good.

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