Category Archives: Money

How to Stop Comparing Your Finances to Everyone Else’s

I recently read The Millionaire Next Door by Thomas J. Stanley and William D. Danko (which I highly recommend), and one of the biggest themes I walked away remembering was the concept of ignoring others. That’s not to say that being wealthy requires you to treat others unkindly. Rather, the process of true wealth requires you to quit comparing your finances, purchases, and achievements to those around you.

If you consistently find yourself jealously eyeing your neighbor’s new car or wishing you could make as much money as your older sibling, most financial gurus would agree that you’re holding yourself back. Not only is envy an ugly color for everyone, but it’s also a distraction that prevents you from making achievements of your own.

It’s impossible to totally ignore the success of others, but everyone should try to steer clear of coveting what others have. Not sure how you can possibly do that with others flaunting their good fortune in your face? Here a few tips.

1. Spend Less Time on Social Media

Although you might not think that Instagram, Twitter, Facebook, and other social media platforms have any bearing on your financial habits, they actually do. Every time you see a picture of some celebrity driving their brand-new car or a friend going on an expensive vacation, you’re asked to compare your finances to theirs.

Furthermore, social media actively encourages us to spend money and engage in compulsive buying. Your apps are constantly influencing your buying decisions, even if you don’t realize it.

According to The Next Millionaire Next Door , most millionaires spend 2.5 hours or so each week on their social media accounts. That seems drastically low when compared to the whopping 2.5 hours per day that most average users engage in. Perhaps their dedication to accumulating wealth discourages them from wasting time, or perhaps their ability to disengage from social media plays a role in their financial success.

2. If You Need to Compare, Look at Your Past Versus Your Present

Sometimes, comparison is necessary and healthy. For instance, it’s extremely smart to keep track of your finances so that you can see how far you’ve come in 10 or even 20 years. From now on, when you feel tempted to compare your success to that of others, consider comparing your current financial situation to your previous ones. Have you made progress? Where have you grown? Where can you continue to improve?

You’ll find that self-evaluation is much healthier and productive than envying those around you. Not only will it force you to better your finances, but it will also give you an appreciation for how far you’ve come over the past years.

3. Realize That Shiny Toys and Grand Lifestyles Don’t Equate to True Wealth

The average American household is at least $5,700 in debt. Together, all of the consumers in the country carry a staggering $1.003 trillion in credit card debt. Chances are, when you look at that friend who just bought a glittering new Mercedes, he didn’t pay for it in cash. Don’t assume that having the latest gadgets or the biggest house equates to a high net worth. For all you know, those people you envy are knee-deep in loans they’ll struggle to pay off for years.

What It All Boils Down To

Building wealth has nothing to do with the success of your neighbor or the failure of your coworkers. True wealth comes from dedication and self-control. Remind yourself of that when you start to covet the belongings and lifestyles of those around you. Reign yourself in and focus on your big goals, not what others have.

5 Shopping Rules We Should All Live By

In America, shopping isn’t just a hobby; it’s a way of life. Many people maneuver their schedules around attending sales, organizing their many purchases, and browsing for their next must-have item.

This mentality around shopping is partially what led The United States to be the number one largest consumer market in the world. Although that’s not entirely a bad thing, it has contributed to the mounting credit card debt held by many families and individuals.

If you’re hoping to get your shopping under control so that you can become more financially responsible, here are five shopping rules you should always abide by.

1. Buy What You Actually Need

People who love shopping are excellent at convincing themselves that they need that new purchase they’re eyeing. However, more often than not, we don’t really need that new pair of black boots or an updated version of our favorite device. What we mean by “need” is that we really want the item.

The sooner you learn to differentiate between need and want, the better off your bank account will be. Plus, you’ll fill your house with fewer impulse purchases and more important items.

2. Learn to Tell When Something Is Truly a Good Price

Just because a product is discounted doesn’t mean it’s actually a great price. Sometimes, stores will even markup their prices significantly so that their sales seem more impressive than they really are Before you label any purchase as a great deal, pull out your cell phone and see if the prices online reflect that belief. In today’s day and age, you can often find a better price on Amazon or even eBay.

Additionally, don’t assume that buying something just because it’s discounted is smart. If you don’t really need or love the item, then it doesn’t matter how steep the discount is; it probably isn’t worth it.

3. Consider How Often You’ll Use the Purchase

You know you love that designer shirt on the hanger, but how often will you really wear something that fancy? Learning to recognize items that won’t be worth their price is a huge part of becoming a smart shopper. Personally, I like to equate prices with the potential number of uses to determine worth, especially when it comes to clothing. For instance, if I won’t wear a $30 shirt at least 30 times, then I put it back on the rack.

4. Distinguish Between Purposeful and Impulsive Shopping

Because so many of us view shopping as a hobby, the line between shopping for fun and for a reason often becomes blurred. You need to learn to recognize the signs of impulsive shopping in yourself. The more you spend without purpose, the more you’ll want to spend tomorrow and the day after. Think about your purchases carefully and avoid indulging just because you can.

5. Splurge on Things You Love, But Only Rarely

One thing people might be surprised to hear me say is that splurging is a good thing, but only on rare occasions. For example: I think that purchasing a $150 pair of sunglasses that will protect your eyes for many years is a better choice than spending $10 on three different pairs of cheap sunglasses. You might not agree, but the important thing is to recognize when you think splurging is worthwhile and when it isn’t. You can only splurge every few months or so, so make those expensive purchases count.

In today’s world of high-spending and countless shopping options, it’s easy to get swept up in a consumer-driven world. By following these five simple (but effective) shopping rules, you’ll shop more purposefully and prevent yourself from needlessly spending money. I’ve been following them for years, and they’ve made a world of difference in my financial and mental health.

5 Steps You Need to Take ASAP If You Lose Your Wallet

No matter how careful you are, you’ll likely misplace your wallet at some point. Maybe you’ll leave it behind in an Uber, or perhaps someone will steal it. Regardless of how you lose your possessions, it’s imperative that you take these five steps as soon as possible to minimize the damage and secure your assets.

1. Call Your Banks Immediately

Although you might have lost everything, including your cash and your driver’s license, the most dangerous lost item is actually your debit card. Thieves can quickly use your debit card to access your bank account and withdraw large sums of money, and unfortunately, those funds might not be replaceable.

Call your bank as soon as you realize your wallet is missing and have them cancel your lost debit card. They will issue you a new one and take note of any attempted uses of the old debit card. ID cards and other wallet contents are replaceable, but the contents of your bank account might not be.

2. Request New Credit Cards

Credit cards are less dangerous to lose since they don’t provide thieves with direct access to your checking account, but they still need to be secured. After you’ve finished protecting your debit card, call any credit card companies you have an account with and have them send you a new card.

Fortunately, if a thief does use your credit card before you can report it missing, you will only be responsible for a small portion of the unauthorized purchases (usually around $50). Still, you should secure your credit accounts as quickly as possible to prevent complications. Some credit companies even allow you to freeze your account online as soon as you misplace the card.

3. Freeze Your Accounts With All Three Credit Bureaus

One concern about losing your wallet is that anyone who finds it could piece together your identity with credit cards, driver’s licenses, and other forms of identification. This means that your personal identity could be at risk. The Federal Trade Commission reports that roughly  9 million Americans experience some form of identity theft each year, so don’t take the concern lightly. 

To prevent someone else from impersonating you and applying for credit cards or other big purchases (home loans, apartments, etc.), freeze your credit accounts with the three big bureaus: Equifax, Experian, and Transunion. Then, if anyone attempts to fill out an application with your information, the credit bureau will block them from securing funds in your name. It used to cost money to freeze your account, but luckily, the process is now free to everyone. 

4. Report and Replace Your Missing Driver’s License

Because your identity at risk, it’s smart to report your driver’s license as missing to the police department or local DMV. You may also want to look into an identity theft protection program that will alert you to fraudulent actions and help you replace items you’ve lost.

To replace your missing driver’s license, you’ll need to visit your state’s department of motor vehicles. Some states will allow you to apply for a replacement online while others will require you to come to a DMV location.

5. Download an App to Monitor Transactions

There are dozens of personal finance apps on the market that are designed to help you track and approve every transaction made on your debit and credit accounts. For instance, with an application like Mint, you’ll see every charge on your cards. This is especially important after your wallet has gone missing; if anyone makes a fraudulent charge, you’ll know right away.

When you lose your wallet, time is of the essence. Don’t hesitate to start making important phone calls and freezing accounts. These actions could prevent you from serious problems like lost funds and identity theft, so take them seriously.