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Selfies vs Savings

selfies

When a guy sitting next to my table in a café and having his lunch takes a pic of his meal first and then another one of his very own self, I take it quite normally. And I am 101% sure he is going to either post it on Instagram or send it to someone via Snapchat or make it go online in some other way.  


It seems like we spend most of our lives in the quest for validation without even realizing it. Have you ever asked yourself why do we take selfies and post them online? Is this an act of expressing ourselves, or sharing our best moments with friends, or maybe trying to feel real and independent? I would answer Yes to all of these.

Selfies are a mainstream. And, like it or not, you are going to meet them in bulk when swiping your newsfeed. Because it is so damn easy to take a selfie and to show the world the better us, the happier and the more independent us.


This topic has intrigued me for a while and got me thinking. I realized how easy it is to use technology to showcase ourselves and to speak up. On the other hand, however, we might be facing a ton of problems like the huge student loan debt or the credit card debt that seem to never leave us alone. Maybe it’s weird how I try to find a connection between our selfie habits and saving habits. But it seems like we lack self-control when it comes to showcasing our saving habits and the way we control our finances. Why is it so easy for us to take a selfie than to control our finances?

 

In fact, numbers show that we spend more than we save. According to a study by Moody’s Analytics, our savings rate has dipped to negative 2% making us the only generation with a negative savings rate. And there could be millions of reasons why we cannot or do not want to save money. Some experts say it’s because the recession led the millennials to distrust the banks. Others argue that we don’t understand finance and that half of us do not grasp how pensions work. Yet up until the mid-1980’s Americans saved a significant amount of their earnings.

 

Really? Is controlling your finances so tough? Why do we use the power of self-expression through selfies but we hardly ever use the power of controlling our finances and making informed decisions?

 

I wonder how honest we are with ourselves when it comes to managing our finances. Could we be as much carefree and independent when it comes to showcasing our saving habits like we do it in the case of our selfies? How much of editing work would it take to make our finances look perfect? Think yourself. Would you rather post a selfie online than a graph of your monthly expenditure? Please share your opinions below. I am really looking forward to seeing what you think.

 

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How to get on the Same Financial Page with my Partner?

on the same financial page with your partner

Getting into a relationship is not easy. Getting on the same financial page with your partner can be way more difficult. So, this article is going be about how to manage your finances if you are no longer single.

“A dream you dream alone is only a dream. A dream you dream together is reality.”

― John Lennon

Many relationships usually start from shared dreams and beliefs. Let your dreams work for you. For example, a shared dream of having a baby can make you become more organized in respect of your finances.

The moment of change

This is a vital step to take. Only after you realize the need of change, you will actually be able to change yourself or something around you. After it, you might start reading blog posts like this or even personal finance books to understand the essence of things. And if so then you are on the right track. This I call the phase of personal enthusiasm. However, you should make sure you do not get stuck there. You need to share your enthusiasm with your partner too if you really want to get on the same financial page with them.

Basically, all you need to do is to ask them to just sit down and figure out where you are at in terms of your finances. Because, you know, it’s not only about having the desire to get something, it’s also about achieving it. For example, most couples are dreaming about a house. And, yes that’s cool! However, they need to unite their efforts to get one. At first, it might get really awkward to discuss money issues with someone you have always been sharing your romantic fantasies with. However, it’s not impossible either. You need to see where you are at the moment, what you want to get, and how you are going to get it. As soon as you make these three things clear, it will be way easier to start saving money or paying off a debt or whatever you need to do to achieve your long-term goals.

Being honest about everything!

Well, I mean it! Being honest about everything means sharing everything with each other. This also includes sharing bills, taxes, purchases etc. Being fully on the same financial page means to adopt a new policy of sharing information, worries, and even fears with each other. This will help you get rid of the “tactfulness” and start evaluating the situation in a more accurate way.

Drafting an action plan

As soon as you have set your goals, draft an action plan and start implementing it. I am not talking about merely creating a to-do list. I am talking about setting short-term goals that can be easy to achieve in limited time. You can consider doing the following things:

  • Build a strong emergency fund
  • Control how you spend so that you can pay off your debt more easily
  • Smooth out the bumps on your credit report and improve your credit scores

Well, hopefully, this article taught you that dreaming big is not that risky. The whole thing here is about honesty and the right mindset. As soon as you have these, you can achieve your long-term financial goals with your partner.

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8 No Bullshit Signs You are Financially Stable

financially stable

Most of our lives we spend chasing financial stability. But sometimes, it turns out we are already financially stable. So, what makes us stable? Following are 8 signs to help you figure things out.

  1. You use credit cards for convenience, not out of necessity

Many people with bad credit usually use credit cards, too. However, they use them as a way to extend their paychecks to buy things that they cannot afford. In contrast to this, financially stable people use credit cards mainly in order to make fast online purchases. Also, they might use a credit card just because the issuer offers rewards every time they buy something.

  1. You don’t give a f*ck if you lose your job

This is one of the strongest indicators that you are financially stable. Most of the people in the world depend on their salary. I mean, literally, they will get into a financial disaster if they lose their jobs. But, if you have an excellent emergency fund and you have pretty much money on your savings account. And you got a side business then you might not care at all if you lose your current job. That’s it!

  1. You are never late with your bills

Not only you are never late with your bills, but you sometimes even pay them ahead of time. This is not only an indicator of your wealth but also of your financial stability and respect of discipline. Additionally, you just hate the feeling of owing anything to anybody.

  1. People treat you as their financial advisor

One of the biggest signs you are a financial guru is when people come to you for financial advice. They often do this because they view you as someone who knows how to spend/save money.

  1. You constantly invest in your retirement

Many people do not contribute anything to their retirement. Others just add a little percentage of what they earn. But that’s not the case with financially stable people because they most often contribute a two-digit percentage to their retirement. The reason is that these people understand the importance of investing in retirement.

  1. You can afford to buy whatever you really want

This, however, does not involve impulse shopping. Instead, you just know what you want and you go out and buy it. Your finances are stable enough to enable you to do this.

  1. You do not have insomnia because of money

When you go to sleep at night, you sleep well because no financial matters bother you. People who are financially stable are happy due to their strong financial position. This does not mean that these people do not have any money worries at all. However, those worries are so minor that they cannot cause insomnia.

  1. You live beneath your means

You understand that becoming financially stable is not that easy. That’s why you prefer to earn more and spend less. That’s the main formula toward getting rich or at least being financially stable. Also, it is always a good idea to save money, make investments, and pay off the debt. If you develop the right mindset, you will be able to do all these things.

This was quite a short list of signs indicating financial stability. If at least some of them are present for you, then you are on the right path. It will take some effort, but believe me; your efforts will pay off eventually.

 

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Why Spend Money on Experiences, Not Things

spend money on experiences

Millennials are attributing less and less importance to homes, cars, TVs, and watches. Instead, they are showing more interest towards personal experiences. One reason why millennials spend money on experiences more than on things is that they view ownership differently. For example, young adults of the previous generation were placing more value in a car or a house.

While a lot of millennials’ motivation today is targeted towards creating authentic content for social media. According to the Harris Poll, most millennials are craving for recognition. For example, they are trying to get more experiences to be able to share them with their friends and followers.

This is the so-called FOMO – fear of missing out. It drives millennials to share experiences and to engage with people especially in social media.

The same Poll shows the following results:

  • Millennials cherish the time spent with the loved ones
  • Life events are a great way to create awesome memories
  • Millennials get a spirit of community due to events

So, maybe it’s a good idea to adopt this millennial habit of spending more money on experiences rather than things. Dr. Thomas Gilovich, a psychology professor at Cornell University says,

“One of the enemies of happiness is adaptation. We buy things to make us happy, and we succeed. But only for a while. New things are exciting to us at first, but then we adapt to them.”

The whole idea is that we get used to things and we become no longer excited about them. Let’s take a car purchase as an example. You buy a dream car and you are thrilled about it. But some time passes and owning that car becomes the norm. Some 1-2 years later, you will be longing for another car for sure. In other words, material things cannot provide us with permanent pleasure. They are good for a limited time only.

On the other hand, experiences can provide us with more lasting happiness because they become a part of our self. We identify ourselves as the accumulation of everything that has happened to us. And if you pay more money to get more awesome experiences, you will feel happier in the long run.

Life is about memories

Experiences shape memories, not things. At the end of your life, you are not going to remember how cool you were just because you had an iPhone 7 while others had the 6. Instead, you are going to remember what cool weekends you were having with friends and family or what awesome places you have visited during your vacations. Unlike things that you might devalue right after purchasing them, experiences provide longer lasting memories. Accordingly, they are more valuable than anything else. In other words, it’s a good idea to spend money on experiences rather than things and to see which one is more pleasurable for you. Share your opinion with us. Feel free to comment below.

 

 

 

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Why is Saving Money Always Such a Big Deal?

saving money

Even the wealthiest people sometimes are having a tough time saving money. Setting some money aside is really a big deal. For example, according to the 2014 Federal Reserve System’s report, approximately half of Americans did not manage to cover a $400 emergency expense. They had to either borrow money from somewhere or sell something. In fact, many U.S. citizens have ZERO savings.

According to another study carried out by the Transamerica Center for Retirement Studies, an average American does not have enough retirement savings. However, retirement planning is as important as saving money in general.

And if a person is still working, the good news is that they can manage to make an impact on how they retire. But the reasons behind not being able to save money can be different. For example, one reason is not being able to put a line between your wants and your needs. Your mind will justify your most simple wants and turn them into needs.

There are thousands of things that are competing for your money. These include clothes, utilities, devices, online purchases etc. It can be really difficult to figure out which of these items belong to the category of needs. And it will be equally hard to decide which must go under the category of wants. The bottom line here is to be able to control your spending habits and to spend less than you earn.

Actually, you are your own bank and you are in charge of controlling your funds. There are times when you just need to stop spending. Look at those natural savers. I am not talking about the people who are being cheap. I am rather talking about those who know what they need and what they can actually afford.

Another thing that may hinder your efforts of saving money can be your lifestyle. It’s almost normal for an average American to always rush somewhere. Being busy with family, work, community, you might forget to pay some bills or to take care of your finances. The expensive late fees will then stand in your way of saving money.

One more reason that you cannot save money may be that you just hate budgeting. If you are the type that thinks spending money helps release endorphins and feel cool, then maybe you should continue this way. Spending money or saving some is all about the personal choices you make. If you think you’ll save more when you start earning more, then it’s your choice.

How to save at least some money?

If, anyway, you think you need to save some money, these are the things you can do:

  • Keep track of your spending
  • Cut a few expenses
  • Automate your savings
  • Start really small
  • Contribute more to your retirement plan by adding say 2% every 3 months
  • Pretend it is a bill that you have to pay monthly

While there are so many reasons to not save, there are quite a few that are enough to make you start saving. One such reason is caring for your future. So, go ahead, save today, to enjoy tomorrow.

 

 

 

4 Easy Tips for Retirement Planning from Looma

retirement planning
Financial security is something everyone wants especially after they retire. But we need to think about retirement planning first. This will help us live happier days when we are no longer employed by someone or involved in a business. Studies show that an average American lives about 20 years of their life in retirement. Accordingly, preparing for retirement when you are still young and full of energy is the best option. Now that I might have convinced you that retirement planning is a must, let us see what you can do.

1. Keep your personal and business accounts separate

It might sometimes be difficult for an individual, especially a businessman to separate their business and personal accounts. However, this is a good thing to do especially from the perspective of tax planning. This roughly means paying taxes from your business account and saving money on your personal account.

2. Save for a rainy day or have emergency funds

You cannot do entire retirement planning if you do not have a simple emergency fund. An emergency fund is a money put aside in case of an emergency such as a job loss, a health crisis  etc.. Usually, this involves money that is enough to live on for a minimum of six months. In other words, your emergency fund should include all your basic living expenses.

3. Get rid of your debt

Just pay off that debt to be able to live in peace. Sometimes, you cannot manage to save for retirement along with paying a debt. Thus, it is often more reasonable to at least shrink your debt before you even start planning your retirement. Also, make sure not to get a new debt while paying off your credit card balance. Make sure you resist the temptation!

4. Save and again save money

Of course, trying hard to shrink the debt is a wise decision. However, do not forget about saving. Even some 10% of your monthly income can make a difference during your retirement. People also often try different retirement plans such as:
  • Solo 401(k) Contributions
This plan is designed for business owners and their spouses i.e. it covers them both. Solo 401(k) allows making up to 100% elective deferrals from earned income. The maximum annual contribution for the years 2015 and 2016 should be $18,000.
  • Simplified Employee Pension Plan
This plan is for the small and medium-sized business owners. It allows a contribution of up to 25% of the employee’s salary.
  • Savings Incentive Match Plan for Employees
This is another individual retirement account for business owners who have up to 100 employees. The owner should make a matching contribution of 3% for every eligible employee.

At the end

Managing your finances when it comes to retirement planning can sometimes be tricky. However, with flexibility, automation, and consistency you can get what you want in the long run. Work, plan, and save today, to enjoy life after you retire!

How to Achieve Financial Independence as a Woman? 

financial independence

Do you want me to tell you what the studies show regarding financial independence among women? Well, the numbers leave much to be desired. While the politicians of today say they are fighting for women to get equal pay with men, women still get less. Also, according to the Organization for Economic Cooperation and Development (OECD), women are less financially educated than men. Apparently, achieving financial independence should start with proper self-education and planning, for sure. Let’s see what we could do here:

Read, girl, read!

I know news about inflation and stock markets might not be the most interesting thing for you to read. Still, take your time to read at least a few pieces a day about saving habits and personal finances. Read those 33 ways of saving money or how someone has become a millionaire. In other words, look at best practices and try to adopt them.

He is not going to always be there for you

Sometimes, women are used to having their men do all kinds of financial stuff. Like, remember how many times you have calculated your household’s net income? But, ladies, I have got bad news for you. He is not going to always be there for you. Of course, it’s nice to have him around doing all that difficult stuff. But one day you might have to do this all by yourself. So, just bear this in mind and start preparing for the worst.

Earn it, and then save it

The golden rule of saving is to earn money first and to spend less that you earn. It’s sometimes really hard to cut costs of several things, say not to buy those Gucci winter boots. But remember that overspending is not your goal. Just try to make a list of the most necessary items and stick to it.

Invest in yourself

This one is again about education. But this time you just need to add more skills to your skill-set. Allocate some of your resources on gaining more knowledge and experience, boost your professional value. Then use your skills to market yourself and to become more successful in your career. Find a career mentor or a role model and try to reach out for them. Ask them questions directly. It is surprising, but successful people often take the time to share some really nice tips with their followers.

Go back, check, rethink

Having a financial plan in place is cool. But circumstances might change and the things once set can be useless. As a matter of fact, you need to be ready to reconsider and revise all your steps. Being flexible enough to alter a plan is as important as making it.

Now you know how to start achieving financial independence. I do not say it’s an easy path. But it is surely worth taking!