Student loans can seem like such a dirty word, especially if you’re just starting out and not accustomed to paying toward them each month. The large amount of money you owe can seem daunting and impossible to ever tackle, but it’s possible to pay off student loans without going broke!Read More
That’s right, there’s actually bad debt and good debt. While it’s helpful to avoid any type of debt, sometimes that simply isn’t possible, and sometimes, debt can help you in the long run.Read More
Do you find yourself counting the days until your next payday right after you just got paid? Well, you're not alone. In fact, over 38 million Americans are living paycheck to paycheck.Read More
Saving for the future is a little bit like the game Chutes and Ladders. You inch ahead steadily and then – Oh, no! – One misstep and you drop back three levels.Read More
What’s the dirtiest word in personal finance?
Debt is a no good, rotten thing to be avoided at all costs, right?Read More
Money can be a killer. Actually, it’s more of an accessory.Read More
Money and friendship are like a volatile chemical compound. When things are balanced, everything is cool. If not – look out. The resulting reaction can blow up the friendship and/or damage someone’s finances.
It can be difficult to hang with friends whose financial circumstances are significantly different from your own. If you are the “poor friend” it’s easy to feel left out and resentful when the rest of the gang heads to the hot new restaurant or ski resort while you’re stuck at home digging change out of the sofa to do laundry. Those feelings can tempt you to overspend and take on debt to keep up with your stacked buds.
Being the “rich friend” is tough, too. If you have more resources than your crew you may feel pressure to pick up the entire check, help a struggling friend, or skip an activity you really enjoy because your pals can’t afford it. And you may start to wonder, in the face of passive-aggressive comments and constant taking, whether these really are friends.
But it doesn’t have to be that way. True friendship transcends all sorts of differences and obstacles – race, culture, distance, age. It can survive income disparity as well.
Here are some tips for preventing the most common money-related problems.
Be authentic. Be honest and upfront with yourself and your friends about your financial situation, objectives, and strategy. You don’t have to bust out pay stubs and a spreadsheet, just be honest about this one facet of your identity. If money is tight, or you are currently saving for a long-term goal, say so. True friends will accept and admire your honesty and self-discipline. Pretending you can run with the bigger dogs is a dead-end strategy that will fail as soon as your cash and credit run out.
Conversely, if you’re doing well, don’t deny it. Again, no need to hand out copies of your bank statements, just quietly acknowledge your blessings if and when the topic of money comes up. Speaking of which…
Don’t talk about money. When Madonna released her very graphic book, Sex, the megastar was more than happy to chat with reporters about the intimate details of her, ahem, romantic life. But she always refused to talk about her money. While critics mocked Madonna for that, she understood something important: It does no good to talk to other people about your financial situation.
Remember that in your relationships. There’s just no need to discuss money or gossip about who makes how much. Look, if Jake is a social worker and Katie is a cardiologist, the gang knows everything they need to about their respective circumstances.
Be respectful. If a friend can’t afford to join you for a golf weekend at the site of last year’s U.S. Open, be understanding. No teasing or mocking. Decide what’s most important to you -- golfing with your buddy or playing that particular course. Maybe play an in-town public course with him, and head to your dream course with another friend next month.
If you have successful friends, chain-up that green-eyed monster. Totally uncool to walk through her place commenting on what things must have cost. And no “Bill Gates” nicknames or referring to her as “my rich friend Amanda.”
Don’t feel obligated or entitled. Think very carefully about lending money to a struggling friend. That often ends badly – both financially and emotionally. Even offering to help can hurt the relationship by making your friend feel lame and dependent. Speak up when you think people are taking advantage of you. Leave that check right there in the middle of the table and say, “I’m not getting this one.”
Never assume wealthier buddies can or should pick up the check – literally or figuratively – just because they have more resources than you. They are friends, not sugar daddies.
Be upfront. A great deal of discomfort and awkwardness can be avoided by speaking up early. If you can’t afford to go clubbing this weekend, suggest other less-expensive activities for the gang. As soon as you get to that expensive restaurant, request separate checks, so you have total control over your expenditure.
Be realistic. If money regularly comes between you and better-off friends, you may need to reconsider the viability of hanging out with that old gang. After all, as Broadway producer Elizabeth Marbury noted, ““The richer your friends are, the more they will cost you.”
Credit card debt......it's a pain in the butt that can burn your finances to the ground. But, the fact is, most Americans use – and too often over-use – credit cards. This you? If what’s in your wallet includes a credit card or two, here are some tips for getting and keeping your balances in check.
Don’t carry the card. Keep your cards tucked safely at home unless you have a specific plan to use it. This helps avoid impulse buys and reinforces the idea that credit must be used carefully and purposefully.
Auto pay your bill. Late monthly payments are a killer. They can result in late fees, an increased interest rate or even a reduction in your credit score. Avoid late fees by arranging to make at least the minimum monthly payment on auto pay. If you decide against that option, be sure to make your payment well in advance of the due date. Mail the check several days in advance. Find out how long on-line payments take to post, and make your payment with time to spare.
Ask for a better rate. You miss 100% of the shots you don’t take. If you are an established and good customer – i.e., you use the card regularly, and pay on time – call and ask for a lower rate. You could see a reduction of 1% or more. Remember that credit card companies are in a competitive industry. They’d rather hold on to an existing customer than recruit a new one.
Consider transferring your balances. Moving your balance to a lower-rate card could save you hundreds of dollars per year, but only in the right circumstances. Don’t transfer a balance unless you plan to pay it off before the new card’s low introductory rate expires. Read the fine print on the new card offering. It’s possible that being late with one payment could send that enticingly low rate into the stratosphere.
Make Your Payments Bi-Monthly – Credit card issuers typically charge interest on a daily basis. By submitting half payments twice a month, you will pay less interest over time and lower your balance sooner. This method is most effective on large balance, high-interest rate cards.
Pay with points. Your credit card may allow you to apply rewards points towards paying your bill. If so, use them to supplement your monthly payment.
Be careful opening –or closing -- accounts. Don’t apply for credit cards you don’t need. Asking for too many cards will lower your credit score. On the flip side, don’t close existing accounts. For reasons known only to the Credit Gods, closing a credit account can also lower your credit score. In fact, once you get an account balance to zero, you may actually want to make a small purchase now and again (and pay it off that month) to prevent the credit card company from closing your account due to inactivity.
Properly employed, credit can be a powerful tool for accomplishing your goals. Follow these rules and you’ll minimize the downside of credit card debt until you can make it go away.
Still have questions?
Disclosure: This information is provided to you as a resource for informational purposes only. It is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.
So, it’s time to dump that car your parents pawned off on you in college and get your own whip. You’ve got a down payment saved up and your eye on a couple of sweet rides. Excellent. Now comes the adulting piece: How should you pay for your new wheels?Read More