money management

How to Make Better Financial Decisions

Barbara O’Neill — Sun, 01 Nov 2020 17:32:44 +0000

A key financial decision people struggle to make is how to allocate savings for multiple financial goals. Do you save for several goals at the same time or fund them one-by-one in a series of steps? Basically, there are two ways to approach financial goal-setting:

Concurrently: Saving for two or more financial goals at the same time.

Sequentially: Saving for one financial goal at a time in a series of steps.

Each method has its pros and cons. Here's how to decide which method is best for you.

Sequential goal-setting

Pros

You can focus intensely on one goal at a time and feel a sense of completion when each goal is achieved. It's also simpler to set up and manage single-goal savings than plans for multiple goals. You only need to set up and manage one account.

Cons

Compound interest is not retroactive. If it takes up to a decade to get around to long-term savings goals (e.g., funding a retirement savings plan), that's time that interest is not earned.

Concurrent goal-setting

Pros

Compound interest is not delayed on savings for goals that come later in life. The earlier money is set aside, the longer it can grow. Based on the Rule of 72, you can double a sum of money in nine years with an 8 percent average return. The earliest years of savings toward long-term goals are the most powerful ones.

Cons

Funding multiple financial goals is more complex than single-tasking. Income needs to be earmarked separately for each goal and often placed in different accounts. In addition, it will probably take longer to complete any one goal because savings is being placed in multiple locations.

Research findings

Working with Wise Bread to recruit respondents, I conducted a study of financial goal-setting decisions with four colleagues that was recently published in the Journal of Personal Finance. The target audience was young adults with 69 percent of the sample under age 45. Four key financial decisions were explored: financial goals, homeownership, retirement planning, and student loans.

Results indicated that many respondents were sequencing financial priorities, instead of funding them simultaneously, and delaying homeownership and retirement savings. Three-word phrases like “once I have…,", “after I [action],” and “as soon as…,” were noted frequently, indicating a hesitancy to fund certain financial goals until achieving others.

The top three financial goals reported by 1,538 respondents were saving for something, buying something, and reducing debt. About a third (32 percent) of the sample had outstanding student loan balances at the time of data collection and student loan debt had a major impact on respondents’ financial decisions. About three-quarters of the sample said loan debt affected both housing choices and retirement savings.

Actionable steps

Based on the findings from the study mentioned above, here are five ways to make better financial decisions.

1. Consider concurrent financial planning

Rethink the practice of completing financial goals one at a time. Concurrent goal-setting will maximize the awesome power of compound interest and prevent the frequently-reported survey result of having the completion date for one goal determine the start date to save for others.

2. Increase positive financial actions

Do more of anything positive that you're already doing to better your personal finances. For example, if you're saving 3 percent of your income in a SEP-IRA (if self-employed) or 401(k) or 403(b) employer retirement savings plan, decide to increase savings to 4 percent or 5 percent.

3. Decrease negative financial habits

Decide to stop (or at least reduce) costly actions that are counterproductive to building financial security. Everyone has their own culprits. Key criteria for consideration are potential cost savings, health impacts, and personal enjoyment.

4. Save something for retirement

Almost 40 percent of the respondents were saving nothing for retirement, which is sobering. The actions that people take (or do not take) today affect their future selves. Any savings is better than no savings and even modest amounts like $100 a month add up over time.

5. Run some financial calculations

Use an online calculator to set financial goals and make plans to achieve them. Planning increases people’s sense of control over their finances and motivation to save. Useful tools are available from FINRA and Practical Money Skills.

What's the best way to save money for financial goals? It depends. In the end, the most important thing is that you're taking positive action. Weigh the pros and cons of concurrent and sequential goal-setting strategies and personal preferences, and follow a regular savings strategy that works for you. Every small step matters!

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This article is from Barbara O’Neill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

Learning How to Become a Money Master From Author David Bach

Chrissa Hardy — Fri, 26 Apr 2019 18:13:05 +0000

Entering the working world is particularly harsh nowadays, and twenty-somethings trying to juggle their student loan debt, possible credit card debt, and low wages understandably feel discouraged and exhausted. While debt can become isolating, it's important to remember that you're not alone, and The Latte Factor (available May 7), by best-selling author David Bach is the perfect companion for those struggling to make ends meet.

We had the honor of chatting with author David Bach about The Latte Factor, and he offered some additional financial wisdom for people young and old trying to manage their money.

Wise Bread: David, THE LATTE FACTOR, Why You Don’t Have To Be Rich To Live Rich is your 13th book. You've written nine consecutive New York Times best-sellers, including your most popular book, The Automatic Millionaire, which spent nearly a decade on the best-seller list. You have over 7 million books in print. Why this book now? Also, THE LATTE FACTOR is written as a parable. What made you, for the first time ever, want to write a story-based book?

David Bach: I've been wanting to write this book for well over a decade, ever since I went on The Oprah Winfrey Show with The Automatic Millionaire and shared the power of the latte factor on her stage. Since then, I've wanted to put out a short book that told a story people could read in 90 minutes to learn the most important principles about money.

I've always been inspired by parables and short books that are easy to read. One great example is The Alchemist by Paulo Coelho, which is one of the greatest books ever written. Other examples include Who Moved My Cheese by Spencer Johnson, who also wrote The One Minute Manager with Kenneth Blanchard. Those books have touched tens of millions of people all over the world. That's my goal with The Latte Factor.

I want this book to inspire the 98 percent of people around the world who want to be smarter with their money, who want to buy their financial freedom, but because they're living paycheck to paycheck, they don't know where to start. I want this book to reach the 98 percent of people who wouldn't normally read a book about money. Even though I've sold 7 million books, I know I haven't even scratched the surface of reaching the number of people who need to be reached. I believe this book, in particular, will connect with the 100 million young people in this country who are Millennials and Generation Z. These young people want to live the American dream, but many are starting to lose hope.

Don't get me wrong, this book also applies to the Baby Boomers. But I believe a lot of Baby Boomers will buy this book for themselves and then turn around and give it to their children and grandchildren because they know it's so much easier to become financially free when you start young. The number one thing people always say to me is, "I wish I had known how to do this when I was younger." I think this book will be a popular gift, especially around graduation time, and it's written in such a way that even a teenager could understand the important financial lessons that are being communicated.

WB: The Latte Factor comes out on May 7. Before it's even been released, what are some things that excite you about this book and its potential?

DB: As a matter of fact, the greatest personal satisfaction for me with this book has already happened, and that is I got my 15-year-old son, Jack, to read it. Keep in mind, he's never read any of my other books because he's not interested in them yet. Since The Latte Factor is a story, he gave it a shot and ended up reading it cover to cover in two days. When he finished it, he turned to me and said two things, the first of which was, "Dad, is this real?" He was pointing to a chart in the book that showed how a young person could have over $1 million by the age of 65 if they started saving at age 19.

I told him it was real thanks to the miracle of compound interest. His next question was, "When do I pay taxes on it?" I explained that with a traditional IRA account, he wouldn't have to pay taxes on the money until he took it out. His eyes lit up at that point, and he asked, "How do I get one of these accounts? I can have way more than that because I’ll be starting at 15, not 19." So, at age 15, my son is asking all the right questions and he's motivated to be financially free because of this book. That's a huge victory.

Another thing to know about this book is that it's not just about money, which is where the second victory comes in for me. You see, this book is also about going after your dreams and the need to take risks to reach your dreams. When I asked my son the biggest takeaway he got from reading the book, he said, 'When I got to the end of the book and read the story about your grandmother, I really thought about my life. I realized I'm going to need to take risks in life to go for my dreams."

We recently decided to move to Florence, Italy, as a family. I gave my son the choice to come with us and he decided he would. Here's what he said about that decision after reading the book: "I realized that not only was going to Florence the right decision, but it was really the right decision. If I had decided not to go with you, I think I would look back on my life later and my biggest regret would be not taking the risk to move to Florence."

That blew me away. If my 15-year-old son can come away with those two lessons, I've achieved everything I wanted to achieve with this book. If this little book can do that for thousands, maybe even millions of other people, it's just going to be incredible.

WB: Can you explain the latte factor for those who aren't familiar with it?

DB: The latte factor is a phrase that has gone all over the world and impacted millions of people. I've talked about it in all of my books and shared it everywhere from Oprah to NBC, CNBC, CNN, Fox, and CBS. Everywhere I've gone and in every speech I've ever done, I talked about the latte factor. Here's why: The latte factor wakes people up to the fact that you don't have to be rich to live rich, which is the subtitle of the book. The latte factor shows you that small amounts of money can truly change your life.

When I first started teaching the latte factor, I told the story of a young woman named Kim, who worked at The Gap and didn't believe she had the money to save. I showed her that by going through her expenses and cutting out her latte, muffin, and some snacks she was eating before lunch, she could save $10 a day. If she invested that $10 instead of spending it, she could be a multimillionaire by the time she retired. That little story went viral as I shared it over and over again all over the world. It woke people up to the fact that, in all likelihood, they do have the money to start saving.

Again, the key is that small amounts of money can change your life. Starting with $5 a day may not seem like a lot, but if you combine that savings with 10 percent annual interest, you'd have $948,611 40 years later. That's the power of the latte factor.

WB: How does the latte factor play into the story you tell in the book?

DB: Throughout the book, you follow the journey of Zoey Daniels as she learns all these important financial lessons. Zoey is 27 years old, she lives in Brooklyn, and has a dream job working in the Freedom Tower as an editor for a travel magazine. It's exactly what she wanted to do with her life when she moved to New York and yet, when the story picks up, Zoey is stressed out because she's not getting ahead. Even though she's gotten raises at work, she's still living paycheck to paycheck. Like so many young people, she's beginning to lose hope that she can live the American dream.

One day, as she's coming out of the subway station at the Fulton Center and walking through the Oculus, she sees a message displayed on a massive LED screen:

If you don’t know where you’re going, you might not like where you end up.

Seeing this phrase starts her on a journey of questioning the path her life is on, which is something that many of us do. We stop and wonder where our lives are going. As she begins to share her pain with others, her boss introduces her to a mentor named Henry who works as a barista at the coffee shop Zoey stops by every morning for her latte and muffin. Henry takes Zoey by the hand and begins to teach her some principles of life that she needs to learn in order to really go after her dreams. Through these mentors and the lessons they teach — including the latte factor — Zoey begins to realize she's richer than she thinks, she's stronger than she knows, and that her dreams deserve to come true. We watch Zoey go from lacking confidence and hope for her life to putting in place a system where she begins to create financial freedom.

It's an incredibly uplifting, inspirational story that also tugs on your heartstrings. We have a couple thousand people on our Latte Factor Insider Team who received preview copies of the book and the initial reviews have been off the charts. A lot of people have told us the book made them realize there's so much more they can do with their lives, but they have to go for it. Wherever you are in life, if you're living paycheck to paycheck, you're behind on your retirement plan, or you simply want to wake up the dreams that have become buried in the background of your busy life, this book will give you the direction, the hope, and the road map to focus on what matters most to you.

WB: David, you're also known for the phrase "pay yourself first." Can you talk about what that means and share with us the way you look at that?

DB: The three most important words you could ever hear when it comes to personal finance are "pay yourself first." That's the way ordinary people with ordinary incomes all over the world become millionaires: they pay themselves first.

Before we get into what it means to pay yourself first and where the money should go, I want to share some startling statistics. The average American is going to work over 90,000 hours in their lifetime, and unfortunately for most Americans, they're going to have nothing to show for it financially. According to the Federal Reserve, nearly half of Americans can't get their hands on $400 for emergency purposes.

According to GOBanking, 66 percent of Americans can't get their hands on $1,000 in case of an emergency. Seven out of 10 working men are living paycheck to paycheck, as are eight out of 10 working women. The average American has just six days of expenses set aside. We have to do something to fix this. What we should be doing is teaching our kids about money in middle school and high school, but until then, my hope is The Latte Factor will provide young people with a financial education.

So, what does it mean to pay yourself first? It means you have to get financially selfish and set yourself up so that you're the first person paid when you earn a paycheck. I recommend at a minimum that you save the first hour a day of your income and have it moved automatically from your paycheck into a retirement account. If your employer offers a 401(k) or 403(b) plan, you can have your employer move the money into that plan for you. If you don't have either of those, you can set up an IRA account.

Whichever account you choose, the key is that the money gets moved without you having to touch it. We're not talking about budgeting or discipline here. We're talking about automation. In The Latte Factor, Henry shows Zoey how much money she could save if she earned 10 percent annual interest. We have other charts in the book that show what the savings would be with interest rates ranging from 2 percent to 12 percent. But the number that matters the most when it comes to saving and investing is your savings rate.

In other words, how much are you saving?

You should start by saving one hour a day of your income. That comes out to 12.5 percent of your gross revenue. If you're using a 401(k), then hopefully there;s a match. Most employers offer one and it's usually around 4 percent, so now you're looking at saving 16.5 percent of your annual income. If you're in your 20s or even your 30s, that's a fantastic place to start working toward financial freedom when you retire.

WB: It's well-known that you hate budgets. In the book, Zoey also hates budgeting. Can you explain why you hate budgets so much?

DB: I've been involved in financial services and financial education for 26 years and what I can tell you is that budgets are difficult to set up and people don't stick to them. It's a lot like a diet. People tend to start out strong, but after a while, they fall off the wagon.

Budgets also lead to a lot of fights in marriage because we tend not to marry someone who's our financial equivalent. If you're a spender, you’ll fall in love with a saver. If you're a saver, you fall in love with a spender. When you have two people who view money differently trying to create a budget, it can actually pull them apart.

If you want to build wealth for retirement, a college education, a dream home, or a nice family vacation, budgeting does not lead to success. The secret is automatic savings. In my other books, including Smart Women Finish Rich, and Smart Couples Finish Rich, I break savings down into three baskets: a retirement basket, a security basket, and a dream basket. That's what I recommend: move savings automatically into those three baskets.

WB: Let's talk about three myths of money you discuss in the book, one of which is that if you make more money, you'll be rich. Why is that a myth?

DB: For most of us, we're making more money today than we did 10 years ago. The question is: Are you saving more? The answer in most cases is "no." As our income grows, our expenses tend to grow along with it. It's this idea that when the tide goes up, the boat goes along with it. This is what's known as "lifestyle creep."

Basically, when you make more money, you desire more things and you spend more money to have those things. That's the American rat race. Everything in front of us is designed to separate us from our paycheck. But what people eventually realize as they make more money is that having more things actually provides less freedom.

What I teach people is that it's not about having a certain amount of money so that you can stop working. It's really about having a lifestyle of freedom and choice. But if you believe this myth that you need to make more money to start saving and investing, you'll never start saving and investing. You're only going to see your lifestyle costs increase as you earn more, which means you'll never get to a place where you feel free.

The message of The Latte Factor is that you can live rich now. You don't have to wait 40 years to feel free and have less stress and anxiety. You can live that way today.

WB: What about the myth that it takes money to make money?

DB: The common misconception from people living paycheck to paycheck or even middle-class people is that the reason the rich get richer is that they have money. The truth is most people in the U.S. were not born with money. Sure, there are millionaires who were born with a silver spoon, but most made their money through saving and investing.

Tied into that misconception is this idea that you need a lot of money to start investing. That's simply not the case anymore. Today, you can start investing your spare change. There are robo-advisors and financial service companies that will help you invest as little as $1 a day. So, no, it doesn’t take a lot of money to start investing. But if you get stuck believing that, you'll never start investing because you don't see the point. Saving a small amount of money can transform your financial life. Even if you can't save the first hour of income you earn every day, start where you can.

The smallest amount, even if it's spare change, can make a huge difference.

WB: Let's tackle the myth that someone else will take care of you.

DB: I've been an advocate and crusader for women’s financial empowerment for 25 years. We've had over a million women read Smart Women Finish Rich. My fundamental message to women is based on what my grandmother, Rose Bach, taught me.

She was a self-made millionaire who started with nothing at the age of 30. By the time I was seven years old, she was teaching me how to buy stocks. But the biggest lesson I took from her was, as a woman, you have to take charge of your family's financial future. That's what my grandmother, who was married to my grandfather, Jack, did, and thank goodness for that. She changed the entire destiny of our family. I may not be doing what I do if she hadn't made that choice and taught me everything she did.

The thing that I want women to know is that you need to be involved in your family's finances. Statistics tell us that 80 percent of men die married and 80 percent of women die widowed. What that means is you can't afford to be in the dark and delegate your financial well-being to your spouse. You have to be in charge of your money.

WB: David, your tagline has always been live rich, finish rich. When you say "live rich," what does that mean to you, and how should we be thinking about it?

DB: For me, living rich means that I'm in a position of freedom, that I'm able to do with my life what I want to do. Now, that doesn't mean every day is rainbows and sunshine, but it means I get to spend my life on my passion, my purpose, and my family. I get to focus my time and energy on the things I love the most. That's what it means to me.

The whole idea of living rich is looking at what parts of your life aren't working and figuring out what can you do to get rid of those things as fast as possible. By doing that, you open up room to get more of what is working and what you really want. What I've seen time and again is that the fastest way to fix your life is to fix your finances.

Just the other day, a woman posted in our Facebook group that she decided to start saving and investing after reading The Automatic Millionaire. With that one change, she was able to get herself out of a neighborhood where she didn’t feel safe and out of a job that she didn’t like. Today, she lives in her dream neighborhood and has her dream job. She changed her whole life by reading one book and deciding to live rich and taking action!

Living rich means freeing yourself. You've got one life to live and you deserve to live your dreams. By fixing your finances, you set yourself up to live the life you want.

You can pre-order the book at TheLatteFactor.com. When you do, send the receipt to teamdavidbach@gmail.com and you’ll get a slew of bonuses worth over $500!*

*This is a limited-time offer that expires May 12th. Act Now.

This article is from Chrissa Hardy of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Talk to Your Teen About Student Loans

Ashley Eneriz — Mon, 28 Jan 2019 09:01:08 +0000

With college almost close enough to touch, your high schooler has probably been talking your ear off about which universities they want to visit and which majors they're considering. While this is a very exciting time for your teen, you also don't want them to go into massive debt chasing their dreams.

Student loan debt is running rampant today. Your teen might see student loans as an easy way to go to school without worrying about financial costs, but in reality, a heavy debt load can get in the way of their post-graduation dreams. Here's how to help your teen see the big financial picture.

Address scary student loan stats

According to a 2016 study by Citizens Bank, millennial graduates are spending almost one-fifth of their income (18 percent) on loan repayment. That means that graduates are well into their 40s before they even see the light at the end of the student loan debt tunnel.

Not only are graduates paying more money towards loans, but they're also having to delay life milestones like weddings and buying a house. Fifty-four percent of millennials have said they have limited their travel, and 40 percent have limited the amount they can spend on rent or mortgage payments.

Sit down with your teen and ask them about their future. Do they see themselves spending 20 years paying off debt, or would they rather spend that money on a new car, a wedding, or their first house? Also ask them if they want to be forced into taking a higher paying job that they hate just so they can pay back their student loans. When you saddle yourself with debt before graduation, you limit how much freedom you have when you enter the job field.

It is also good to remind your kid that debt does not go away. Even if they have no money to pay for it, they cannot declare bankruptcy and expect their student loan to miraculously disappear. (See also: How to Manage Student Loans On a Low Income)

Start with smart financial decisions

Once your teen understands how heavy student loan debt can be, they'll know they need to make other money moves in order to pay for college. They can apply for scholarships, and applying for FAFSA can make them eligible for financial aid and also school-sponsored scholarships. Encourage them to apply for scholarships regularly — as if it were their part-time job — because even a $1,000 scholarship will be highly beneficial.

Encourage them to also raise money through part-time jobs and saving birthday money. Every little bit helps, especially when they're repaying student loan debt while still in college. Attending community college first can also reduce the student loan burden by half.

If they don't need to take on maximum debt, then why should they? Along with going to community college first, they can test out of classes that they are already experts in, such as freshman English and math courses. This will save time and money.

There are also many jobs that offer tuition assistance that are available to college students. These jobs may only offer $500 reimbursement per semester, but it's still something.

Stick with federal loans

There's a huge difference between federal loans and private loans. Federal student loans have better repayment options, lower interest rates, and they're more forgiving when it comes to job loss and disability.

Even if your teen makes minimum wage after graduation, they can apply for income-driven repayment programs through federal loans and still be able to make payments. Federal loans can also come with forgiveness programs that forgive remaining debt after so many years of on-time payments, or that forgive debt for working in public service. (See also: 5 Sobering Facts About Student Loan Debt)

Clearly state how you'll be helping

You've been providing for your child since they were born, and they might expect you to provide for them while they're in college as well. Make sure they know exactly what you'll be paying for. If you're not going to be paying for their loans, or car, or insurance, let them know so they know how to budget correctly.

If you do want to help your child with student loan debt, consider paying off some of the payments while they're still in college. Even paying $50 a month towards their loan while they're in school will help significantly. (See also: 4 Things You Should Make Your Adult Child Pay For)

Don't use the whole loan amount

Your teen might be granted $40,000 worth of student loans for the year, but that doesn't mean they need to use every last dollar. If possible, they should live at home and live frugally. They don't need to buy a new laptop or make rent payments with this money. Remind them that every dollar borrowed is a dollar plus interest they have to repay after graduation.

Make payments in college

Even though your teen will have a grace period of up to six months after graduation to start paying back student loans, that doesn't mean you can't start making payments while they’re still in school. This is especially helpful if they have unsubsidized federal loans, since this type of loan accrues interest while the student is in school, during the grace period, and during any forbearance.

Remind them that any amount of repayment is too little while they're in school. Set regular minimum payments to occur each week, even if it's just $10 to $20. This might mean that your teen needs to eat out less or skip a movie, but it will be worth it once they graduate. (See also: 10 Tips from a Financially-Savvy Teen)

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This article is from Ashley Eneriz of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Ways to Come Clean When You've Been Financially Unfaithful

Denise Hill — Thu, 25 Oct 2018 08:00:11 +0000

Financial infidelity is a real thing. It can ruin relationships and financially devastate families. You've probably heard stories of people hiding accounts, buying big ticket items without their partner's knowledge, or cleaning out a joint bank account. Infidelity ruins trust and robs the relationship of financial stability and security.

But what happens if you're the one who's been unfaithful? How do you correct the issue and change course? And most importantly, how do you win back your partner's trust and repair the damage?

Addressing your financial unfaithfulness starts with honesty — which is a tough and scary thing to do. Here are a few ways to come clean after financial cheating. (See also: 8 Signs You're Committing Financial Infidelity)

Understand why you've been unfaithful

Before you drop the bombshell on your partner, it's a good idea to take a moment and understand why you did it in the first place. You really have to become introspective and do a bit of soul searching to understand your motives.

The key is to be honest with yourself.

Your reasons could be deep-seated issues that stem from your childhood. Or, they could be a simple momentary lapse in judgment and self-discipline. You could be driven by fear, lack of trust, or maybe you've just been given bad advice. It's important to unearth your fears, hidden control issues, or whatever is driving you to exhibit this behavior.

It's also important to remember and convey to your spouse that your reasons don't excuse your behavior. Understanding facilitates correcting the behavior, but it doesn't absolve the wrong or heal the hurt. (See also: 4 Money Fights Married Couples Have — And How to Avoid Them)

Repent with remorse

When you do reveal what you've done, be upfront and open. It's important that you don't try to downplay or sugarcoat your actions. And don't blame your partner for driving you to do what you've done. Your partner's actions may have contributed to your decision to be dishonest, but the onus is on you.

It's also important that your confession is accompanied by a sincere and heartfelt apology. Most people need to see or feel remorse in order to begin the process of forgiveness. Showing remorse places you in a posture of humility and displays that you understand — to some degree — the depth of your actions. Give your spouse space to be angry and don't allow their anger to make you angry.

Of course, the more egregious the infraction, the more you may need to apologize. Spending the grocery money on shoes can be wiped away with a simple sincere apology. However, stealing your partner's identity to finance a motorcycle you've kept hidden in a storage shed across town requires more than a shoulder shrug and flippant "Sorry."

Implement accountability and transparency

After you have confessed your financial infidelity and apologized to your spouse, you need to add some sort of reassurance that this won't happen again. At the very least, assure them that you are working to correct the issue. And that requires more than just a verbal statement.

Most people are inherently good, but the fear of consequences and having to account for your actions also keeps you on the straight and narrow. Every time you think about robbing a bank, you might think about The Shawshank Redemption and quickly reconsider. Accountability gently nudges you in the right direction. Accountability is your friend.

Adding an accountability component provides a safeguard for both you and your partner. It shows that you are truly working to correct the issue. It can be something as extreme as adding your spouse to your bank and/or credit card accounts, or simply allowing them to review your statements with you each month. The key here is to do something that requires you to be accountable and transparent to someone else, and that provides some sort of preventive measure to stave off future occurrences. (See also: 4 Money Challenges That Will Strengthen Every Relationship)

Write your spouse a note

Communicating difficult things to someone you love is not only gut-wrenching, but it can also be tricky. Especially if it's something that will hurt them. Writing your spouse a letter explaining yourself is a great way to get things out in the open and start the conversation.

This is especially true if verbal communication is difficult for you or if your partner is explosive or talks over you. It allows you to process your thoughts and explain exactly what you've done and how you feel in a clear and concise way. Keep in mind, it shouldn't take the place of a face-to-face conversation — it's merely a way for you to analyze, process, and explain things in a controlled environment before sitting down to talk further.

When penning your letter, make sure you follow the steps previously outlined. First, ensure you understand why you committed the infraction. Then, explain exactly what you've done in detail. Take full responsibility for your actions and explain your reasons for making the choices you've made. Make sure that you express remorse and sincerely apologize for your actions. From there, you want to propose a plan of action that allows you to be more accountable to your partner and ensure that this type of thing doesn't happen again. You also want to give your spouse room and permission to feel hurt, betrayed, and angry.

Financial infidelity is serious and can ruin a relationship, especially if the infidelity is continuous. Your reasons for coming clean shouldn't be to rid yourself of guilt or to tell on yourself before your spouse finds out. It should be done because you understand that you've wronged your partner and want a relationship that is open and honest. (See also: 5 Money Conversations Every Couple Should Have)

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Tools That Can Help You Boost Your Credit Score This Year

Holly Johnson — Mon, 25 Jun 2018 08:30:20 +0000

Building credit takes time and vigilance, and that's especially true if you need to repair credit problems from the past. If you have a history of late payments, debts in collections, or a bankruptcy, for example, you can't expect your credit score to fix itself.

Once the dust has settled and you're ready to get on the right track, you need to take the appropriate steps to rebuild trust and boost your FICO score month by month. Some of the best steps to take whether you're building credit from scratch or trying to fix poor credit include getting a secured credit card, making sure you pay all your bills on time, paying down your debts, and keeping your credit utilization ratio low.

Fortunately, there are some apps and online tools that can make improving your credit score easier. Some of these tools are free and easy to use, while others require a bigger commitment. If you know your credit score needs help but you need help to move it along, consider these apps and strategies.

1. Self Lender

If you need to build credit from scratch but can't yet qualify for a credit card or loan on your own, you may want to consider a "credit builder loan." To understand how these work, you need to forget about the usual notions of why you borrow money. In this case, you're only taking out a loan in order to build credit.

With a credit builder loan from Self Lender, the amount you borrow is held in an interest-bearing CD and you don't see it until the end of the loan term, which is 12—24 months. You make regular monthly payments, which are reported to the three credit reporting agencies — Experian, Equifax, and TransUnion. Once the term is complete, you'll get the funds back you paid in. In that sense, a credit builder loan is like a forced savings account.

In addition to a small administrative fee, you'll also pay interest on your loan. As an example, if you take out $1000, you'll pay $89 per month for 12 months. After 12 months you get $1000 back. That ends up being an additional $68 in interest that was paid out over the course of 12 months, plus a $12 administrative fee. That's a total cost of $80.

2. Credit Karma

If you want to improve your credit score, you need to find out what it is — and be able to track it regularly. One of the best ways to do this is by signing up for a program that offers a free estimate of your credit score every month.

Credit Karma is a service that does just that. Once you sign up for a free account, you can check your credit score whenever you want, see all your debts in one place, and monitor hard inquiries on your credit reports. You can also get information on reasons your credit score has gone up or down, and steps you can take to fix problems or avoid having your credit score drop in the future. (See also: The 5 Things With the Biggest Impact on Your Credit Score)

Finally, you can sign up for alerts that will let you know any time a new account is opened in your name. This can be helpful for avoiding identity theft.

3. Mint

Mint is a service that offers to help you manage your money so you can "get more out of your life." The website does this by offering a free credit score along with budgeting and bill-paying tools.

Once you sign up for a free account with Mint, you can see all your finances in one place, including your debts, your spending transactions, and your bills. You can also monitor your investments and use the app's tools to set budgets and find creative ways to spend less.

While many of these features are aimed at helping you control your finances and boost your net worth, having a place to monitor your debts and keep track of bills should inevitably help you improve your credit score over time.

4. Debt Snowball Calculator

If you're deep in debt and ready to dig your way out, one popular method to consider is the debt snowball method. This debt repayment scheme recommends you to first throw as much money as you can toward your smallest debt while making minimum payments on your other debts. Once you pay off the smallest debt, you move on to the next-smallest debt until all your debts are gone.

This sounds simple enough, but it's hard to map out a debt snowball plan and know how long it will take you to become debt-free without any tools. The most helpful debt snowball calculator we've found is offered via Financial Mentor. This calculator lets you enter all your debts and respective interest rates, then offers a comprehensive month-by-month plan showing exactly how much you'll pay on each debt every month.

As your debt is paid off and you continue making on-time monthly payments, your credit score should slowly rise.

5. Debitize

Debitize is an app that links your credit card with your banking account. Every time you make a credit card purchase, the service withdraws that amount from your checking account and holds it in an FDIC-insured bank account. At the end of your billing cycle, the funds are used to pay your credit card bill in full. The result is that you can use credit as if it were debit. This lets you earn credit card rewards without risking you'll charge more than you can pay off.

One of the most important factors that dictates your credit score is your credit utilization ratio — how much you owe in relation to your credit limits. Eliminating debt from your life can have a marked impact on your credit score due to the fact it will lower your utilization to zero.

With Debitize, you can avoid debt, earn rewards, and take advantage of important consumer protections offered by credit cards. Best of all, the basic version of this app is free.

6. YNAB

YNAB (You Need a Budget) is a comprehensive budgeting app that can help you pay down debt, improve your credit, and build wealth. This tool helps users create their own "zero-sum budget," which is a type of budget that requires you to give each dollar you earn a job and live off your last month's income.

This app comes with comprehensive budgeting software and tracking tools that can help you stay on top of your expenses and manage your bills. Ideally, you will use the app to become more intentional with your spending and pay down debt. As your debt decreases and your credit utilization ratio drops, you may also see an improvement to your credit score.

While you can try YNAB free for 34 days, you'll pay $6.99 per month to use the app thereafter. In exchange for the fee, you'll get automatic bank syncing, free online money workshops, support seven days a week, and debt paydown tools that can help you reach your goals faster.

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This article is from Holly Johnson of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Money Moves to Make Before Applying For a Credit Card

Dan Rafter — Mon, 04 Jun 2018 09:00:16 +0000

You're ready to apply for your first credit card. Or, maybe you simply want to add another card to the rotating deck of plastic in your wallet. Whatever the case, there are certain money moves you must make before filling out an application.

Adding a credit card to your name might seem like a small thing, but a credit card carries tremendous weight. It can be either a useful tool for building credit — or, if misused, it can lead you straight toward high-interest debt. It all depends on how you use that card and if you're financially prepared for it.

To get yourself off on the right foot, here are some important money moves smart consumers must make before applying for a credit card — whether it's their first or their fifth.

1. Do some budgeting

Don't have a household budget? It's time to make one. Have one? It's time to review it to make sure that it accurately reflects the money you are earning each month and the dollars you are spending.

Getting a new credit card could tempt you to make purchases that you can't afford to pay off in full each month. This will lead to you carrying a balance on your cards from month to month. With interest rates on credit cards being so high, this balance can grow out of control quickly.

Make a household budget listing the income you earn each month and the expenses you face. Expenses should include fixed costs that never change, such as your car bill, mortgage payment, and student loan costs. It should also include estimates for expenses that aren't the same each month, such as your utility bill or grocery bills. And don't forget to budget for discretionary expenses such as restaurant meals and entertainment.

If you have a budget, study it to make sure that it accurately reflects how much you spend and earn each month. If you rarely meet your budget, adjust it. Once you have an accurate budget in place, you'll know how much you can charge on a new card and still be able to pay it off each billing cycle. (See also: Build Your First Budget in 5 Easy Steps)

2. Check your credit reports

If you want to qualify for the best cards — with generous rewards programs and low interest rates — you'll need a solid credit score. Before you apply for a new card, do some research on your credit. (See also: Best Credit Cards for Excellent Credit)

You are entitled to one free copy of your three credit reports — one each maintained by Experian, Equifax, and TransUnion — every year. You can order these reports at AnnualCreditReport.com. Once you've done this, review them carefully. They will list how much you already owe on your credit card accounts, car loans, student loans, mortgage loans, and other forms of revolving credit.

They'll also list any late or missed payments up to seven years old. Other financial missteps, such as bankruptcy filings or foreclosures, will also be listed on your reports if they are not older than seven or 10 years.

If there are mistakes on your reports, contact the credit bureaus to let them know. And if your credit report is filled with late payments and high balances, you might want to take some time to pay down your other debts and build a history of on-time payments before applying for a new credit card. (See also: How to Read a Credit Report)

3. Order your credit score

Your credit score is another important number to know when applying for a credit card. This number gives financial institutions an instant look at how you've handled your credit in the past. A low score indicates that you have missed payments or other negatives on your record. A high score indicates that you have a history of paying your bills on time and keeping your debt under control.

You can order your credit score from any of the national credit bureaus. Expect to pay about $15 or so for your score. You might even have a credit card that shows your credit score in your monthly statement.

If your score comes in low, it again might be a good idea to pause your search for a new credit card. Build that score up by making on-time payments and paying off your existing credit card debt. This will boost your odds of qualifying for the best credit cards. (See also: I Checked My Credit Score in 11 Places — Here's What I Learned)

4. Pay off your existing credit card debt

You shouldn't be adding a credit card to your collection simply because you're running out of available credit on your other cards. This will only tempt you to make more purchases that you can't afford and lead you deeper into a cycle of debt.

Instead, work on paying off the credit card debt you already have. Don't apply for a new card until you've gotten your existing credit card debt under control. (See also: The 7 Best Credit Card Debt Elimination Strategies)

5. Build your savings

Financial experts recommend that everyone have an emergency fund of cash to help them pay for life's unexpected expenses — everything from a furnace on the fritz to a car that needs a new transmission. If you don't have an emergency fund, you might find yourself needing to turn to credit cards to pay for such emergencies. And that will only make your debt grow.

Before you apply for a new credit card, build an emergency fund. That way, you'll be less tempted to use your new card to pay for urgent big-ticket items such as a new water heater or an emergency brake repair for your car.

How much should you have in this emergency fund? It's generally recommended that you have enough to cover six months' to a year's worth of daily living expenses, though you may need more or less depending on your unique circumstances. (See also: 5-Minute Finance: Start an Emergency Fund)

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Spring-Clean Your Debt

Denise Hill — Mon, 02 Apr 2018 08:00:07 +0000

Spring is in the air. Most people use the first blooms of the season as a signal to begin the process of spring cleaning; out with the old to make room for the new.

The same thought process should be applied to your finances. While you are in the mindset of minimizing, organizing, and cleaning out the old, you should capitalize on this mood as it pertains to your debt. Take the time to give yourself a money makeover and tidy up your financial life by shedding lingering debt. Here are the steps you can take to do it.

Take stock

An important part of getting and keeping your finances in shape and eliminating debt is organizing them. Start by taking a realistic look at where you are financially and exactly what you owe.

First, evaluate your debts.

Make a list of outstanding consumer debts, not including your mortgage (credit cards, car loan, student loans, personal loans, etc).
Write down the total amount due for each debt and the interest rate.
Add up your total consumer debts (with the exception of the mortgage).
Write down the minimum payment for each debt and calculate how long it would take you to pay off the debt making only the minimum payment.

Once you have your debts organized, it's time to evaluate your budget.

Make a list of all of your non-consumer bills for the month (utilities, cable, groceries, pet expenses, gas and transportation, internet, cellphone, gym membership, Netflix, etc.).
Using the figures from three months' worth of bank or credit card statements, tally up how much you spend eating out, on snacks, clothes, entertainment, and other miscellaneous items. Don't forget happy hours, movies, trips, salon visits, and hobbies.
Create categories of nonessential bills based on how you spent your money. For example, your categories could be dining out, grooming, clothes, entertainment, hobbies, etc.

Once you everything written down and sorted out, it's time to play a game of what if. Look at the total of what you owe and figure out how much of your budget is being consumed by consumer debt. If it's over 30 percent, you need to seriously commit to bringing that percentage down.

Next, calculate how much you could save in six months if you had no consumer debt. What if you had half your current debt? How would it change your life if your total consumer debt was zero?

Lastly, look at all of the nonessential things that are eating away at your money, such as dining out, grooming, or needless shopping. Pick one or two of those categories and see how much you could save if you eliminated that expense. For example, what if you stopped eating out for a month and maybe cut your own hair or gave yourself a manicure in lieu of paying for it? How much cash could you free up?

The goal of this exercise is for you to see where your money is going and take responsibility for it. It is also to show you the opportunity costs. If you changed just a few key things, you could eliminate your debt in no time and change your financial future. (See also: 6 Common Debt Reduction Roadblocks — And How to Beat Them)

Create a debt reduction plan

Now that you've gone through sorting through your finances and playing what if, it's time to start ridding yourself of the unnecessary financial weight. The easiest way to do this is by using the debt snowball method. With the debt snowball, you simply list your debts from largest to smallest. You then aggressively work to pay off the debt with the lowest balance first, while paying the minimum payments on the others. Once you've paid off the first debt, you move to the next smallest debt. Rinse and repeat. (See also: 6 Secrets to Mastering the Debt Snowball)

The plan itself and the logic behind it is pretty basic. You begin with the lowest balance instead of the highest interest rate in order to help you build momentum and get a quick win. Winning is motivating. Losing sucks. Pretty simple stuff, right?

The tricky part of expedited debt repayment is finding the extra money in your budget to apply to your debt. And that can be tough to do when you're living paycheck-to-paycheck. Go back to the list of expenses you made and figure out what you can cut and where you can scale back.

From there you need to create a realistic zero-based budget that reflects your true spending habits. With a zero-based budget, you give every single expenditure a name, subtract them all from your income, and if you end up with more than $0, every extra dollar goes to your debt elimination plan. (See also: 5-Day Debt Reduction Plan: Pay It Off)

Plan something fun

If you have committed to doing the things outlined above, it is imperative that you also plan to do something fun. You need to pause from time to time during the debt repayment process to celebrate how far you've come. It should be something you enjoy and can pay for with cash.

Take a day trip somewhere. Treat yourself to a nice, modestly priced pair of shoes. Get your hair done or spend the day at a reasonably priced spa. Try not to look at this pause as a waste of money. The goal is to practice spending in a controlled manner on things that have meaning to you, and most importantly, that you can afford.

These pauses will help you to establish a healthy and productive relationship with your cash. Money is a tool and it should be respected and handled wisely. You should use your purchasing power to provide for your needs and a few of your wants. (See also: Yes, You Need "Fun Money" in Your Budget)

Handling finances is a mental and emotional activity. By going through these steps, you are forced to face your spending choices while addressing your connection to material possessions. This process will help you hold yourself accountable and set you up for a successful jump-start to your debt reduction plan.

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This article is from Denise Hill of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Manage Money When You Hate Thinking About It

Mikey Rox — Tue, 27 Mar 2018 09:00:11 +0000

Love it or hate it, money matters. I've found that many people with consistent financial issues actually fear money and hate thinking about how to manage it. They don't know what to do with it, how to spend smartly, how to save wisely, or how to set financial goals that help hold them accountable to themselves.

If you fall into that category, help is here. Start picking up the pieces of your broken-down budget with these tips on how to get your dollars and cents in order — even when you dread it.

1. Automate everything

The more bills you put on autopilot, the less you'll have to think about what needs to go out and when. The key to this system working properly is keeping the required amount of money in your account so it's there on the due date. If you don't have the funds, you'll overdraft, which not only defeats the purpose of this simplification, but also puts you in an avoidable debt situation.

Almost all your bills can be automated these days. Christy Rakoczy, personal finance expert with Student Loan Hero, details how.

"Set up automatic bill pay to pay off your credit cards each month, and to pay utility bills, mortgage, rent, and other fixed expenditures. Other than checking your account balances once in a while, once you've automated everything, you should never need to think about money again. All your money will go exactly where it needs to and you'll know the cash left over in your checking account is for spending."

And bills aren't the only things you can automate. If you dread facing your retirement accounts dead-on, automate those, too.

"If you have a workplace 401(k) plan, talk to HR about setting up automatic contributions if you aren't already contributing," Rakoczy says. "You should contribute at least enough to get your employer match, but ideally as much as 10 to 15 percent of your income. If you don't have access to a 401(k), you can set up an IRA and make automatic contributions to that account as soon as your paycheck hits your bank account."

Once you've got your retirement accounts and bills automated, set up automatic transfers to other savings, such as an emergency fund, a vacation account, or an account to save for a house down payment. Whatever your goals are, have a dedicated account to save for them and move money automatically into that account each month. (See also: How to Use "Bucket Budgeting" to Overhaul Your Finances)

2. Enlist the help of apps

There's no shortage of personal finance and money management apps available to you — some more user-friendly than others. If you're having trouble tracking your cash flow, maybe it's time to give one a shot.

Mint, Personal Capital, and Intuit Turbo are just a few of many available tools that can help you track and manage things like upcoming bills, low balances, or unusual spending so you never miss a payment or spend more than you have. If you aren't someone who checks their bank account regularly, these reminders can help you stay on budget and know exactly where your money is going and where you need to cut back. (See also: These 5 Apps Will Help You Finally Organize Your Money)

3. Establish a "same place, same time" schedule

I'm a creature of habit, and if something isn't on my daily schedule or logged in my calendar, it probably won't be accomplished. Same goes for you, I bet. Rather than trying to manage your money and expenses as they come in, consider setting up a time when you know you'll be free and clear to "meet with your money" on a weekly, biweekly, or monthly basis.

Student Loan Hero personal finance expert Miranda Marquit sticks to this strategy to stay on top of her finances.

"Once a week, on Sunday evening, I take 15 minutes to scan my accounts and make sure everything is in line," she says. "Also, on the last Sunday of the month, I take an hour to reconcile my accounts. Because I have my bills and savings goals automated, all I have to do is check in. In total, I spend less than two hours a month managing my money. As long as my priorities are covered with automatic means, and I verify everything's where it should be, there's no real need to think about it a whole lot."

4. Stick to an all-cash system

I racked up a decent amount of credit card debt as soon as I turned 18 because I had no idea what I was doing. Happens to the best of us. But what I took away from that experience is that if I didn't have the money in my bank account for something nonessential, I had to live without it. That was the only way I was able to dig myself out of debt — sticking to an all-cash system and just saying no.

This could work for you, too. Once all your bills are paid, take out a budgeted amount of cash for what you might want and guide your spending based on those limitations. This tactic will also allow you to see money physically leave your hands, which is a proven deterrent to spending versus debit and credit cards where swipes mean nothing and can get out of hand before you know it. (See also: Is an All-Cash Diet Right for You?)

5. Adopt the 50/20/30 rule

Even if you despise managing money, it's important to implement spending parameters to keep yourself on track and avoid overspending. If you don't like the all-cash method, try a different approach, like the 50/20/30 rule.

"Spend only up to 50 percent of your after-tax income on essentials, such as housing; 20 percent on financial priorities, such as debt repayments and savings; and 30 percent on wants or lifestyle choices, such as dining or entertainment," advises Natasha Rachel Smith, personal finance expert at TopCashback.com. "By adopting a simple yet powerful rule, you can manage your money more effectively." (See also: How to Manage Your Money — No Budgeting Required)

6. Set a 10 percent total-income savings goal

If you regularly save 10 percent of your income, no matter how much you earn, you will always have the confidence of knowing you are living within your means. It will also pave the way for other financial milestones, such as saving for the down payment on a house or starting a college fund for your kids.

This may sound like an intimidating process, but it doesn't have to be. Carla Dearing, CEO of online financial wellness service Sum180, breaks it down further.

"Think of saving 10 percent as the way you empower yourself to make ongoing investments in your financial health, year after year," she says. "This is more easily achieved than you might think. Simply set up automatic bank transfers for the beginning of every month. By doing this, money you have earmarked to save is transferred from your checking to your savings account without you having to lift a finger and before you have a chance to spend it on something else."

7. Hire a financial planner

If you're someone who balks at the mention of money management, but also has enough disposable income to farm out the task, consider hiring a financial planner. They'll take the dirty work off your hands — for a fee — and provide advice on how you can make the most with what you have. Certainly you shouldn't spread yourself too thin by bringing a planner on board, but if you have extra money to invest in yourself, this is a good start. (See also: 3 Reasons to Be Picky When Hiring a Financial Planner)

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Money Fights Married Couples Have (And How to Avoid Them)

Emily Guy Birken — Tue, 13 Feb 2018 09:30:08 +0000

When a couple first gets married, while the newlywed glow is still bright enough for strangers to see, it can seem as if nothing can ever get in the way of true love.

But if you fast forward a few years, many couples will find that money has a seriously unpleasant effect on that love. Whether you are shouting at each other over a credit card bill, or living in chilly silence because of one spouse's financial decision, you may wonder why your love for each other is not enough to smooth over the jagged edges of your money disagreements. (See also: 8 Steps to a Blissful Matri-Money)

According to a 2014 poll by Money Magazine, money is the most common reason married couples fight, ahead of household chores, togetherness, sex, snoring, and what's for dinner. These financial fights often seem to follow similar patterns, no matter who the spouses are, how much they make, or where they live.

That means it's possible for married couples to anticipate common money fights, and avoid them altogether. Here's what you need to know about four of the most frequent money arguments, and how you and your sweetheart can avoid them.

1. Disagreements over spending

It's a tale as old as time. One of you is a spender, and the other one is a natural born saver. When the spender comes home with brand-new gadgets and gizmos galore, the saver is likely to blow a gasket. What ensues is an argument about who is a buzzkill and who is irresponsible.

How to avoid this argument

Many individuals make the mistake of avoiding this argument by simply not telling their spouses about their spending. Money Magazine's poll found that a full 22 percent of spouses have spent money that their partner doesn't know about. But while keeping your spending secret might keep the peace for the moment, such secrecy causes much bigger problems down the road.

Instead, couples should commit to having separate fun money funds. This is a great way for each of you to make purchases the other might see as unnecessary, without it becoming an issue.

As long as you and your partner can agree on a budget amount for important-to-me purchases, this strategy will allow you to buy stuff that matters to you without having to fight about it with your spouse. (See also: 5 Money Conversations Every Couple Should Have)

2. Power struggles over money

In many relationships, one partner will believe he or she has the last say on financial decisions. Often, this comes about because of who is the higher earner, although these types of power struggles can also be rooted in beliefs about who is better with money — either because of gender stereotypes or the couple's specific relationship history.

Unfortunately, these sorts of power struggles can really undermine the love between a married couple. When one partner wants to be the ultimate financial authority in the relationship, his or her actions can negate the equality between spouses, which can foster resentment and anger.

How to avoid this argument

It's important for spouses to recognize they are both on the same team when it comes to their money. To do that, they need to start viewing all income as "our money" and all decisions as "our decisions."

If the power struggle stems from the fact that one spouse brings in more money, one way to view things more equally is to sit down together and make a list of what you each do for the overall health of the relationship.

This is a peacekeeping tactic that many marriage counselors advise for dealing with housework squabbles, but it works just as well for dealing with money imbalances. Once the higher-earner sees that the other partner does all the grocery shopping or laundry or airport drop-offs, it can help to put the high income in perspective. The high-earner would be keeping less of their income if each of those nonfinancial contributions by the low-earner had to be contracted out.

If power struggles are rooted in a belief that one person is better with money, consider what would happen if either one of you died. If only one spouse takes care of the marital coffers, the other one will be vulnerable in the event of widowhood. Thinking through these kinds of worst-case scenarios can help spouses recognize the importance of each partner having financial responsibility and buy-in on financial decisions. (See also: The 7 Worst Money Mistakes Married People Make)

3. Reactions to risk

Opposites often attract, particularly when it comes to risk tolerance. Often, the risk-averse, better-safe-than-sorry type and the risk-loving adrenaline junkie fall for each other, because Mr. Safety grounds Ms. Risky while she helps him expand his horizons. Unfortunately, these love matches can cause friction when it comes to financial decisions.

For instance, one spouse may want to invest their savings into the business she is trying to get off the ground, while her husband would prefer to keep that money safe in the bank in case the business fails to launch. Such a couple might find themselves arguing over whether or not he believes in her, and whether or not she cares about his financial anxiety.

Even couples who are both on the same page when it comes to the relative importance of a steady paycheck can strongly disagree about how much risk they are willing to accept in their investments. If he wants to chase returns with every no-fail promise of a tin mine in Bolivia, while she is happier to leave it all in CDs, savings accounts, and maybe a bond or two, there will be some serious fights about the future of their money.

How to avoid this argument

The best way to calm the fears of a risk-averse spouse is to make sure there is an upper limit to the amount of money that will be "risked." For instance, an entrepreneurial spouse might promise to invest no more than 20 to 25 percent of their savings into the new business, which will give some room for growth while also providing the cushion that the other spouse needs to keep from breathing into a paper bag.

Similarly, having a plan of action for investments can help a couple navigate their differing risk tolerances. Such a plan could design asset allocation that will mitigate risk and encourage growth — and potentially leave a small percentage available for the more speculative investments that will please the risk-taker in the couple. (See also: 5 Painless Ways to Manage Money With Your Partner)

4. Disagreements over helping family

One of the toughest arguments between couples happens when a family member asks for money. Whether it's a one-time request because of a truly difficult situation, or it's a family member who regularly wants to borrow money from you, this can cause major stress for a couple.

Often, these types of fights go further than just disagreements about the money — they can become arguments about each other's families and each spouse's expectations of dealing with them. Many a spouse has spent a few nights on the couch because of a loan to a family member.

How to avoid this argument

The best way to avoid this kind of disagreement is to talk about it ahead of time. After you have been asked for money or have already given money to a family member is a bad time to hash out how you each feel about family loans. In particular, the issues you need to agree on are these:

Can you consider any money you give to family in need as a gift rather than a loan?
If it has to be a loan, can you agree to have a legal loan document written up to make sure you are reimbursed?
What is the maximum amount of money you are willing to give or loan to family in an emergency?
Is there a maximum number of times you are willing to help the same family member?
Are there nonfinancial ways you can offer to help if giving or loaning money is not in the cards?

Getting on the same page on these issues before a relative asks for money can help ensure that your bond with your spouse stays strong, no matter how often your shiftless cousin Lenny asks for a couple hundred dollars. (See also: The 16 Cardinal Rules of Loaning Money to Friends and Family)

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

6 Financial Skills to Master Before You Graduate

Kentin Waits — Mon, 12 Feb 2018 09:00:06 +0000

With graduation only months away, you can finally see light at the end of the tunnel. After four (or more) long years of study, you're well-prepared to embrace adulthood, independence, and professional success.

But are you really? Before you don that cap and gown, make sure you know the ABCs of personal money management. It could be the most important course you'll ever take. Here are the financial skills to master before you graduate.

1. Basic budgeting

If you can't build and stick to a basic budget, you risk having your life divided into a series of stressful 30-day cycles. Bills may be late, savings an afterthought, and credit cards could become an absolute necessity. Avoid this bleak fate. Set up a practice budget using the envelope system or get acquainted with online money management tools like Mint. (See also: Build Your First Budget in 5 Easy Steps)

2. Living within your means

Consistently spending more than you make is the cornerstone of bad financial decision-making. You'll have no surplus money to invest. You'll rack up credit card debt (harming your credit scores in the process). And, you'll live in a constant state of stress. Create a realistic budget, stick to it, and don't pad your lifestyle with easy credit. (See also: How to Escape the Paycheck-to-Paycheck Cycle)

3. Paying your bills on time

Credit scores affect everything from interest and insurance rates to employment. And once your score is damaged, it can take years for it to recover. Protect your credit scores, avoid late fees and penalties, and keep the bill collectors away by paying your bills on time, every time. It's a fundamental part of being an adult. (See also: Here's What to Do if You Can't Pay Your Bills On Time)

4. Using credit responsibly

Ready for my best Dad impression? "Credit is a tool, not a toy." But Dad is right. Using credit responsibly means controlling impulses, only charging what you can pay off at the end of every month, and not confusing your credit limit with your budget. Seriously — credit abuse destroys the financial lives of countless families every year. Choose to be different. (See also: 12 Habits of Highly Responsible Credit Card Users)

5. Negotiating

The unsung hero of personal finance, negotiating is a skill that can save you thousands of dollars over your lifetime. Imagine paying full price for every car and every house you buy. Or worse, imagine not knowing how to respectfully push back on the first salary offer a potential employer makes. Launch into adulthood from a position of power; know how to negotiate with confidence.

6. Setting goals and saving for the future

Financial skills are a means to an end. Determine what kind of relationship you want to have with money, exactly what you want to achieve financially, and what level of discipline and attention it will take to turn your goals into your reality. Save with that plan in mind — and save without interruption. In short, apply the same level of dogged determination to your financial life as you applied to your education. The rewards will be just as great. (See also: 5 Money Moves to Make the Moment You Graduate)

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This article is from Kentin Waits of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

These Are the Best Credit Card Strategies for Married Couples

Jason Steele — Fri, 05 Jan 2018 09:30:10 +0000

Every couple has to come up with a way to manage their money. Some merge their personal finances and manage them as a single household, while others choose to have separate accounts. Either way, couples need to find with the best way to manage their credit cards.

The basics of credit cards and marriage

A credit card issuer doesn’t care that you are married. It will look at your personal credit report and credit score when making the decision to approve your application for a new credit card or to increase your line of credit. In fact, you are able to report your household income when applying for a line of credit. This allows nonworking spouses to apply for credit card accounts in their own name, so long as they have a reasonable expectation of access to their spouse’s income for the purpose of repaying the debt. (See also: 7 Credit Card Application Tips for Getting Approved)

Managing finances separately

If you and your spouse are managing your finances separately, there are still several strategies you can take to get the most from your credit cards. First, it’s a good idea for each of you to have credit cards in your own name, and pay for them with funds from your individual accounts. This will allow each to enjoy the convenience and security of a credit card, while building your own credit history and credit score.

If a couple is managing their finances separately, and one spouse occasionally needs to make purchases on behalf of the other, then they should each make the other spouse an authorized user on at least one credit card they each hold. Authorized cardholders can make purchases with their credit card, but are unable to redeem rewards or make changes to the account. And the primary account holder will always be responsible for repayment of any charges made by any authorized cardholders, including a spouse.

Managing your finances together

When a couple manages finances together, it offers them opportunities to achieve their goals more efficiently. For example, if a couple is trying to pay down their credit card debt, then they can transfer their balance to the credit card that has the lowest interest rate, regardless of which spouse is the primary cardholder. This is especially helpful if one of the credit cards has a 0% APR balance transfer offer. Let’s say, for instance, that Margie has a high credit score and a card with a 0% APR offer. Her husband Bernie has a low credit score and his only credit card has a $5,000 balance that he’s paying off at 20% interest. It makes sense for Bernie to transfer his balance to Margie’s card and then pay off the balance before the promotional period ends.

When a couple has no long-term credit card debt, they will probably be interested in maximizing the rewards they earn from their credit cards. In this case, couples can use several strategies to earn the most points, miles, and cash back from their credit cards. First, both spouses can apply for the same credit card when it offers an exceptional sign-up bonus. Even if the card charges an annual fee the first year, it may be worth paying to get the bonus.

Alternatively, you may decide the fee is not worth paying twice. In this case, you could still get some of the same benefits that two separate account holders get by making one person the primary cardholder and the other an authorized user on that account. This allows both to receive the additional rewards offered by a premium credit card, without having to pay the annual fees twice. Why pay for two of the same cards that offer, for example, three points per dollar spent on restaurants, when you can just pay for one account that both spouses can use?

Another reason this is a good strategy is that spouses can often share the extra perks of a single credit card account. For instance, if an airline credit card offers a free checked bag, it usually applies to several traveling companions on the same reservations. So there would be no reason for both spouses to have the airline credit card for use when traveling together. Also, some cards that offer airport lounge access extend it to the cardholder and any traveling companions.

Managing credit card accounts

One way that couples can keep track of their credit card accounts more efficiently is to have just one person manage the accounts. Whichever spouse takes over that duty can pay the bills, track rewards, and make decisions about opening and closing new accounts. This avoids the possibility of failing to pay a bill that they thought the other was taking care of, or paying the same bill twice.

One of the benefits of marriage is the efficiencies inherent in living together, sharing resources, and dividing responsibilities. By employing the best credit card strategies, couples can get more out of their credit cards than they ever might have been able to on their own.

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How to Pull Your Small Business Out of a Cash Crunch

Elaine Pofeldt — Thu, 28 Dec 2017 09:31:05 +0000

You're working around the clock. So why are you short of cash? For a lot of self-employed people and small business owners, the answer is poor cash flow. Even if you're making a great living on an annual basis, there may be periods where the money flowing into your business slows to a trickle.

Fortunately, there's a lot you can do to prevent a cash crunch and get out of one if you're short of funds. Here are the steps you can take.

Vet clients carefully

We all love making sales, but closing a deal is only helpful to your business if you can collect the money you've earned in a reasonable period. If someone wants to hire you for a big project, suggest working on a small project together first and then build from there.

Use the small project to test how quickly the client pays you. If someone takes 90 or 120 days to close a $500 invoice, imagine how long it will take to get paid for a $10,000 gig. You may be better off working for another client, instead. Your bills are generally going to be due monthly and there's no way around that. (See also: 8 Ways Freelancers Can Make Sure They Get Paid on Time)

Diversify your client base

If you are a contractor dependent on just one client, you're very vulnerable to a cash crunch if something goes wrong in the payment process. Should that client hit a slump and postpone paying you, it will be easy to run out of money. "If you want them to pay you on time, you're at their mercy," says Bob Shoyet, CFO of Melillo Consulting in Somerset, New Jersey.

Although you don't want to spread yourself too thin, adding just a few more clients will give you income security you don't have with just one or two.

Let a third party handle client payments

Another way to reduce the risk of late payments is to onboard some of your clients to a freelance platform such as Upwork. Although Upwork will take a cut in your pay, it offers options for you to get paid for completed projects every Wednesday, twice a month, monthly, or quarterly — and takes on the task of collecting the payments from your clients.

Another option is Freelancer.com, which offers a feature called the Milestone Payment System. It requires clients to pay you at predetermined points as you hit certain project goals. Payments are made securely within the site, which can be a benefit too if you're worried about checks getting lost in the mail.

Negotiate contracts carefully

Ask for a substantial deposit on projects upfront with progress payments along the way if this is customary in your industry — rather than billing for the whole project on the back end. If you do retainer work, invoice for payment at the beginning of the month, rather than at the end, with a due date of a week or 10 days after that. Very small businesses really aren't in the position to finance projects for their clients, so make sure you're doing that as little as possible.

If you work in a field where it's not common to ask for a deposit and clients tend to take more than 30 days to pay — as is often the case with big companies — consider offering them a discount if they pay you early. "Companies do take that into consideration," says Shoyet.

Some of my own freelance clients require vendors to use an electronic payment system called Coupa to submit invoices. They have set up their accounts so vendors can access a pulldown menu that includes an option to offer a discount if the client pays earlier than the standard 60 days.

If you do offer a discount, make sure to record the dollar amount of the discount as an expense in your accounting software, Shoyet says. (See also: 5 Ways to Build Business Credit When You're Self-Employed)

Finish projects on time

Getting into a situation where you have a lot of projects that are in the middle of the completion process and not many that are finished can lead to long periods where you can't submit many invoices — and have little money coming in later. When you're planning your weekly schedule, look for ways to bring as many projects as possible to the finish line while still doing a great job. Even finishing a few small projects can give you a lifeline. The more quickly you finish a project, the sooner you can send an invoice.

Stay on top of invoicing

When you offer 30-day payment terms to a client, the 30 days start when you send the invoice. If you're routinely waiting a week or two after completing a project to invoice, you'll be postponing the day you get paid.

No matter how busy you are, set aside at least an hour or two a week to submit invoices so you don't fall behind. If you just can't find the time, consider hiring a bookkeeper to help you keep your books and submit invoices for you. A very small business should not require more than a few hours of help a month, and this modest investment could save you from having to borrow later. (See also: 5 Free Accounting Tools for Freelancers)

If your clients are willing to pay you electronically, that can speed up payments. The popular accounting software programs QuickBooks and FreshBooks let you accept both ACH payments and credit card payments. I prefer to use ACH to avoid credit card processing fees, which can add up on large projects. But if you're working with a client who may have cash flow issues, paying the credit card fee may be a good investment in protection against receiving a seriously late project payment.

Follow up

Sometimes, when I've checked on an unpaid invoice, I find out it has been lost in a client's inbox. The sooner you figure out that this happened — and follow up in a cheerful manner — the better.

If you send your invoice as a link from QuickBooks or FreshBooks, you can see whether an invoice was "viewed." Sent it as a PDF? Use your email functions to see if the email was read. If an invoice was not viewed, mention to your client that it's showing up as "unread" and ask if he or she would prefer that you send it in another format. There might be an issue that is causing it to get lost in Inboxland and hold up your payment.

Put a safety net in place

Make sure you have at least one credit card for your business and, ideally, a line of credit with your bank, too. You don't have to use them, but it's good to have them set up for an emergency — particularly if have a payroll for your business. If your credit is good and you are not maxed out on debt, many banks can help you get a business credit card quickly. (See also: 10 Smart Ways to Get a Small Business Loan)

Know where to turn for quick cash

What if you're in a crunch now? Make one last attempt to collect seriously late invoices that you've just about given up on. Try reaching out to the company's accounts payable team, instead of your original contact.

Also consider putting your receivables to work for you. Fundbox, one service that has been picking up traction, will allow you to borrow up to $100,000 against your receivables and repay the loan over 12 or 24 weeks. To work with Fundbox, you need to use one of the invoicing platforms the company works with — Clio, eBillity, FreshBooks, Harvest, InvoiceASAP, Kashoo, Jobber, PayPal, QuickBooks, Sage One, Xero, and Zoho.

Borrowing this way isn't cheap, but if you have urgent bills to pay or need to make payroll, it may be necessary. Then, once you're out of your crisis, take some time to put better systems in place so the cash starts flowing more evenly. You'll enjoy your business a lot more that way.

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This article is from Elaine Pofeldt of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

The Secret to Better Money Management May Be in Your Past

Sarah Winfrey — Mon, 20 Nov 2017 09:30:10 +0000

It's easy to feel out of control with your money. It happens to the best of us. But whatever the reason you're feeling this way, it's important that you regain your footing and, maybe even more importantly, that you regain your feeling of control. After all, if you don't think you can fix the problem, you probably won't even try.

Your first line of defense is financial education. It will help you understand what actions you need to take to get back on track. But there's another tool that could boost your motivation to carry out those actions. A recent study by scientists at Creighton University shows that harnessing nostalgia can help you get in touch with your feelings, which you can use to regain control over your finances.

The power of nostalgia

The Creighton team carried out an experiment. Dr. Brad Klontz, along with his fellow researchers, divided study volunteers into two groups. One half attended a standard financial literacy presentation where they learned about saving money. The other half was told to bring an item (or a picture of an item) that they considered nostalgic.

The latter group was led through exercises to help them come up with positive feelings and memories tied to their objects or photos. They were asked to name these emotions, identify the values that went along with these emotions, and understand how these same values formed the basis for their future savings goals.

Over the next few weeks, the "financial literacy" group saved 22 percent more than they had saved before. That, in and of itself, is a significant number. But the "nostalgia" group saved 67 percent more — three times more than the control group. It would seem nostalgia and the emotions that go along with it have a lot of power when it comes to how we handle our money! The researchers theorized that the powerful emotions associated with the nostalgic object provided a deep, positive incentive for saving. Participants were able to make direct connections between saving money and the things they value most in life.

Harnessing nostalgia for yourself

If you are feeling out of control with your money, here are some steps you can take to engage your emotions via nostalgia and get back on track.

1. Find an item that has nostalgic value to you

This can be anything, as long as it is important to you. It can be an item from childhood, something passed down from a family member, something you found, or maybe something you purchased on vacation. If you don't have an item that fits the bill, go through old photographs until you find one that is especially meaningful.

2. Think about how you got that item and why it's important to you

Remember the moment you found or received the item (or took the photograph). Think about the people you were with or the poignancy of the moment. To the best of your ability, take the time to actually relive the moments in your life that have made this object or photo so important to you.

3. Name the feelings that go along with that item and your memories of it

Giving your feelings names can help them feel more concrete, rather than abstract and ethereal. When they are concrete, they are more useful to you as you continue this exercise. It is perfectly fine to have multiple feelings about your object. For instance, something your grandfather passed down to you may make you feel excited, because he chose you for this item, but also loving because of the relationship you had with him.

4. Identify the values that underlie these feelings

Once you pinpoint your feelings, you can identify the values that provide their foundation. If something came from a grandparent, it may be tapping into your value of close family ties. Something that reminds you of childhood could be important to you because you value wonder and joy and you haven't felt those things in a long time. An item from a trip could be important because it reminds you that you value excitement and adventure.

5. Connect these values to a financial game plan

When our finances are out of control, most of us know what we need to do to get them in line again. However, it's hard to find the motivation to do that when we feel hopeless and helpless in the face of financial stress. Connecting our values to the actions we know we need to take can help us find the motivation to actually tackle them.

Think about those values you identified. If you value the safety and security of a stable home, that can motivate you to do what is necessary to provide financial safety and security in your own home. If you value adventure, it can motivate you to make the changes necessary to get your money under control now, so you can afford more adventures later. If you value joy, spend some time thinking about how you will feel when you are out of your financial hole.

It's never too late to take control of your money. When you harness the power of nostalgia and emotion, you may find yourself making and sticking with financial decisions that you have struggled with before. This, in turn, will help you make even stronger decisions until your money is completely under your control again.

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How to Manage a Family Member's Finances Long Distance

Carrie Kirby — Wed, 08 Nov 2017 08:30:18 +0000

When I lived in Chicago, an elderly relative who lived nearby named me as her financial power of attorney. By the time she needed my help, I had moved to California. But I didn't have to pass the responsibility on to her second choice. I was able to help my loved one from across the country with only a few obstacles.

With online banking, a change of address form, e-sign software, a telephone, and the occasional help of a local notary or banker, you should be able to do everything needed from a distance to keep an ill or elderly person's financial life rolling. (See also: 6 Things You'll Encounter When Taking Over a Loved One's Finances)

Here are some of the things that helped.

Advanced preparation

In my case, the relative had named me both financial power of attorney in case she became incapacitated, and as successor trustee for her revocable living trust. (A revocable living trust is an estate planning tool that people can set up to make this transfer of responsibility seamless both in incapacity or after death.) These two provisions were extremely helpful, when the time came, in allowing me to access and manage her accounts.

Another thing you could encourage a relative to do to get their financial life in order would be to gather any stock certificates they own and transfer them to a brokerage firm, preferably one that offers online access. And if they have records of the date they purchased investments, they should show you where they keep those records or send you copies. If you have to sell the investments on their behalf, you will need this information to establish the cost basis.

An ally that lives close to the relative

Although I lived far away, my parents lived in the same town as our relative. Because of this, they were the ones who physically went through our relative's papers, with her permission, when she needed to move into an assisted living home. My parents provided me with all her paperwork so I could find out what accounts she had and what bills were coming in. Their status as locals also helped them gather recommendations for an estate sale company to dispose of possessions she'd no longer need and a real estate agent to sell her home.

An open relationship with the relative before they become incapacitated

At first, I wasn't acting on behalf of my relative in an official capacity, but just helping her out. For instance, when a CD matured, I would arrange for her banker to call her at her assisted living home to get her verbal permission to roll it over or buy a different CD. I helped her set up online accounts for her banks, and then together we used the bill pay function to get her phone bill and rent set up on autopay so she wouldn't have to write checks anymore. This period allowed me to ask her questions and make sure I knew about all her investment accounts, her assets, and how she liked to manage them.

If you have to take over, an in-person visit helps get things started

When she did become incapacitated, I was able to visit the town where she lived and go to her local banks in person to show the bankers her trust naming me as successor trustee, the power of attorney, and my own identification. The banks then put my name on her accounts, so from that point on, I could call them with questions or move her money as needed without her permission. Also, an attorney informed me that as her trustee, I could reimburse myself for my travel expenses from her account when I had to do business on her behalf.

One great thing about visiting in person at this stage is that the local bankers gave me their cards, and henceforth if I ever had a problem, I could call them directly instead of going through the phone tree. They remembered me, and some of them even remembered my relative, which I think improved the service I got.

Talking to hometown bankers in person also helped me understand the process better. When I needed to get my name on her brokerage accounts without local offices, I had a better idea of how to make it happen. When you can't go to the financial institution in person, you may have to go to a local bank to get a stamp called a medallion on an application to change the account ownership. This is like visiting a notary, in that the medallion holder is indicating that they checked your identification and you are who you say you are. However, a notary can't give you a medallion stamp — it has to come from a medallion holder. Call any local bank to see if they have one who can help you.

Stay in communication with caregivers

It's easy to put bills on autopay, but it's also important to verify that purchases you make on your relative's behalf are really reaching them and are needed. For example, I set up a standing order on Amazon for supplies my relative needed at assisted living. But sometimes when conditions changed, no one would tell me, and I'd end up wasting money on a product she hadn't used in months. In retrospect, I would have kept in closer communication with staff at her assisted living facility to keep abreast of her product needs.

Work with real estate agents and other professionals who use online documents

It's certainly possible to sell property from across the country by signing paper documents and faxing them, but it's a lot easier if the agent you work with simply sends you a link that you can e-sign on your computer.

Keep an eye on statements, especially if your relative still has a checkbook

For awhile after I took over her finances, my loved one still wrote the occasional check, usually to her church. Although I asked her to let me know when she wrote one, she always forgot. Knowing this, I made sure to keep a buffer of cash in her checking account to prevent overdrafts. If your loved one's check writing habits change suddenly, or you're worried they could be taken advantage of, it's probably time to get the checkbook out of their hands. (See also: How to Protect Elderly Loved Ones From Financial Scams)

Check your relative's credit report regularly

This is something you should do when you first start handling a loved one's finances, and periodically after that, especially if you live far away and wouldn't know if someone shady has been calling or visiting your relative. If you have been named power of attorney, you can request the credit report by writing to a credit bureau and including a copy of the power of attorney.

Take care when sharing account information among family members

In a lot of families, more than one person might share the responsibility for handling a loved one's finances. In my case, my parents received her mail and deposited checks at her local banks until I set up all her accounts as direct deposit.

Because of this shared responsibility, we sometimes had to share account numbers or her Social Security number with one another. We made sure not to transmit this information in an insecure way, such as email, but instead would call one another to read an account number over the phone.

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Get Smart About Money With These 18 Free Online Courses

Dr Penny Pincher — Tue, 03 Oct 2017 08:30:11 +0000

A growing number of leading business schools and universities are offering free personal finance courses online. Why not take advantage of these sophisticated resources to grow your knowledge and take your finances to the next level? (See also: 10 Places to Get Free Personal Finance Classes)

These free online courses are sometimes known as Massive Open Online Courses (MOOCs). Many are either based on university courses, or actually are the same university courses that have been offered to paying students on campus. Although you will not get credit toward a degree for taking a free class, you can certainly learn a thing or two that will help you manage your finances and become a better negotiator, entrepreneur, and investor. (See also: 8 Cheap Ways to Continue Your Education Without Going Back to School)

1. Finance for Everyone: Smart Tools for Decision-Making

This introductory personal finance course through the University of Michigan covers the basics of personal finance, teaching frameworks and methods that will better equip you to make sound everyday financial decisions.

Time commitment: 6 weeks, 5–6 hours per week.

2. Behavioral Economics in Action

Offered through the University of Toronto, Behavioral Economics in Action teaches students how economics drives consumer decisions and how to develop tools that lead to better financial decisions.

Time commitment: 6 weeks, 4–5 hours per week.

3. Personal Finance

Purdue University offers Personal Finance; Improve your money management by improving your understanding of key personal finance concepts such as investments, credit, and insurance.

Time commitment: 5 weeks, 3–4 hours per week.

4. Analyzing Global Trends for Business and Society

The Wharton University of Pennsylvania offers an online course on learning to understand global trends, including how you can use that knowledge to make better financial decisions and investments.

Time commitment: 7 weeks, 3–4 hours per week.

5. How to Start a Startup

With Stanford University's video course How to Start a Startup, you'll learn the fundamentals of launching a new business; including how to develop product ideas, make sales, market products, and hire your first employees.

Time commitment: 1,000 minutes of video.

6. Stocks and Bonds: Risks and Returns

Another Stanford video course, Stocks and Bonds: Risks and Returns covers the basics of stocks and bonds, including how value is established, what affects market prices, and what you actually get when you buy a stock or a bond.

Time commitment: Self-paced.

7. Finance Theory I

Finance Theory I, offered by the Massachusetts Institute of Technology, teaches you how the economy and capital markets work, including an introduction to complex investment instruments such as derivatives and options.

Time commitment: Semester-length course.

8. Retail Fundamentals

Learning how retail works can give you an advantage as a consumer. This course from Dartmouth covers the basics of how businesses select inventory and set prices to maximize profit.

Time commitment: 4 weeks, 3–4 hours per week.

9. Economics of Money and Banking

This course from Columbia University teaches the basics of banking and monetary policy and offers insight into the financial crisis of 2007–2009 from the perspective of financial institutions.

Time commitment: 13 weeks, 5 hours per week.

10. Introduction to Negotiation: A Strategic Playbook for Becoming a Principled and Persuasive Negotiator

Negotiating effectively is one of the most effective ways to get ahead financially. This course from Yale promises to "help you be a better negotiator" by teaching tactics and tools to reach a better deal.

Time commitment: 9-week course.

11. Personal & Family Financial Planning

Personal & Family Financial Planning from the University of Florida teaches the fundamentals of personal finance and money management including budgeting, credit, and taxes.

Time commitment: 9-week course.

12. Investment Vehicles, Insurance, and Retirement

Khan University's Investment Vehicles, Insurance, and Retirement course teaches the basic principles that will allow you to grow your money through investments and protect your money through insurance.

Time commitment: Self-paced.

13. Securing Investment Returns in the Long Run

In the course Securing Investment Returns in the Long Run through the University of Geneva, you'll learn about active vs. passive investing and how to evaluate the performance of your investments to achieve good long-term returns.

Time commitment: 4 weeks, 1–3 hours per week.

14. Fundamentals of Personal Financial Planning

Fundamentals of Personal Financial Planning from UC Irvine aims to teach you how to set and reach your financial goals by improving your knowledge of personal finance.

Time commitment: 30 hours.

15. Free Online Personal Finance Course

This personal finance primer from the University of Arizona will teach you how to navigate the perils of today's consumer economy by mastering personal finance principles.

Time commitment: 15 hours.

16. Econ 252: Financial Markets

Become a smarter investor with this economics course from Yale, which aims to help you understand the inner workings of financial institutions such as banks, insurance companies, and securities markets.

Time commitment: Semester-length course.

17. New Venture Finance: Startup Funding for Entrepreneurs

If you are thinking about starting a business, New Venture Finance: Startup Funding for Entrepreneurs from the University of Maryland will help you figure out how to fund your venture.

Time commitment: 3–5 hours per week.

18. Marketing in a Digital World

Marketing in a Digital World, from the University of Illinois at Urbana-Champaign, will teach you how digital tools are revolutionizing the way products are bought and sold, and how this is providing unprecedented advantages for consumers.

Time commitment: 4 weeks, 6–8 hours per week.

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