One year ago, perennial personal finance expert Suze Orman was doling out her tough-love financial advice, including haggling with creditors for lower interest rates and delayed payments.
But now? She’s changing her tune.
“We’re out of options. You can’t call your creditors. They’re done … So you have to generate less expenses and somehow find more money. That’s the goal here,” says Orman.
Finding more money is a tall order, to say the least. Amid the runaway pandemic, the government has gone bust with a record-breaking $572 billion debt and an economy in free fall with nearly 11 million and counting unemployed.
It’s grim and apocalyptic AF. The Pantone 2021 color is a red called That Bitch 2020 Isn’t Over Yet (just kidding, but it literally is gray). And on kitchen tables across America, the bills are piling up — that is, for those lucky enough to still have a kitchen table.
“The eviction moratorium is over,” Orman says. “Very shortly, unless it’s extended, the student loan payment moratorium is over, the mortgage payment moratorium is over, and now you have got to pay your car payments and your car insurance and your life insurance. All of those moratoriums where you had months where you did not have to pay any of those bills, now you do.”
It’s seriously daunting. So, what’s a broke-ass betch to do?
“You have to live below your means but within your needs,” Orman advises. “If you are finding yourself in a situation where you have no money coming in, you’re living off unemployment, and you can’t wait until the stimulus check gets there, then you’re going to have to make some very, very hard decisions in your life.”
Don’t Use Your Stimulus Check For Back Rent
Orman says fans have been sending her pictures of their empty fridges.
“If you are waiting for that stimulus check and you don’t have another penny to your name, I would go and buy canned food with it. I’m not joking. At least if you bought canned chicken, canned salmon, you can feed yourself and your kids. At least project two months’ worth of food for yourself and your family and take care of that and take that one concern off the table.”
If you do owe back rent, Orman says do not use your stimulus to pay it. With no end to the pandemic in sight, you’ll need as much cash reserves as possible. If you can, she suggests moving back in with Mom or Dad, a sibling or a friend until you can get back on your feet.
“If you do not have a job, and you don’t know what you’re going to do, sorry everybody, you have to move out.”
If you’re fortunate enough to be on the other end of the financial spectrum, and your finances are in order, Orman says, be selfless. “If you have a paycheck coming in, you’re relatively secure, you have an apartment, you have food, and you have your next-door neighbor or a friend or a relative, and they’re about to be evicted, they can’t keep their electricity on because it’s been shut off in the middle of winter — help them.” That might be a tall order coming from a country of people who won’t even put a piece of cloth over their face to save lives, but hey, we can dream.
Don’t Take A 401K Loan
Thinking about tapping your 401K for a hardship loan in 2021? Orman says, “Never.” The CARES Act that allowed Americans to withdraw up to $100,000 penalty-free and take up to three years to repay the income tax has expired, so you’ll have to pay your withdrawal back pronto. Plus, in case sh*t really hits the fan, your 401k is protected from bankruptcy.
“If it’s between taking money out of your 401k to get you by, and all you have is enough for one month at most, and you don’t have any prospects on the horizon, I would much rather see you claim bankruptcy now for your credit card debt, and all your debts — except student loan debt, obviously — and be able to keep your 401k money intact and not have any debt. Which is why you want a Roth IRA, because if you had a Roth IRA now and you needed money, you could withdraw it penalty and tax-free.”
Don’t Forget About Saving
Pre-pandemic, Orman said an 8- to 12-month emergency savings is crucial. Today, she says a three-year stash is necessary. It’s a lofty goal for those living hand-to-mouth, but starting somewhere, with any leftover money, is still a start. Orman says she’s partnered with Alliant Credit Union to incentivize people to save $100 in a high yield savings account every month. At the end of 12 months, the credit union will reward brand-new account holders who have a $1,200 balance with a $100 bonus.
Don’t Bank On Student Loan Forgiveness
It remains to be seen if President Biden will succeed in his plan to cancel $10,000 of student loan debt for every borrower. “You have to get that this is not a done deal,” she says. “You should continue to do exactly what you can do and act as if is not going to happen. If you’re out of work, just pay as you go, or do an income-based repayment program. Just don’t go into default.”
There’s also an IRS loophole to be aware of. “Don’t be afraid that the amount accruing gets added to the back end of the loan. If nothing changes in 20, 25 years, if you owe more on the student loan than what you’re technically worth, you’re insolvent, and the IRS will most likely forgive it.” Adds Orman, “If you’re making money, you want to be on the standard repayment method.”
Do Consider A Career Change
These tough times are as much about survival in the present as they are about making smart pivots to safeguard yourself financially in the future. Orman says that the pandemic wiping away jobs shouldn’t be your only worry. In case we didn’t have enough to be anxious over, there’s also the threat of artificial intelligence replacing human workers, further destabilizing the gig economy.
“You have to take this time to reimagine yourself, to recreate yourself. And what can you do? Who can you become, where you cannot be replaced by artificial intelligence or a robot? What can you do to create yourself so that you never find yourself in this position again? Because you’re going to have to make the decision. Do you do a temporary fix and just get anything that brings in money? Maybe. But at the same time, what can you do to make this be a permanent fix so that this couldn’t happen to you? Not because of the pandemic, but because of the onslaught of the technological revolution that will absolutely do away with jobs in the future.”
When in doubt, Orman says saving is the name of the game. So, chill with the online shopping. (No, you don’t need the new SKIMS collection.) Paying your bills on time will keep your credit report happy. And stash your cash, in a high yield savings account, preferably. Bottom line, even if you haven’t worn pants in months, you’d better tighten your belt.
Images: Annie Spratt / Unsplash
HerCapital’s mission is to empower women to invest in their future. Through virtual events and an online knowledge base, we hope to help women with money management all while building a community of strong women who lift each other up. Click here to check out our website and follow us on our Instagram @her.capital!
Ahh, the holidays. Michael Bublé on blast, holiday drinks at Starbucks, and Christmas party hookups (we’re kidding, please stay in). The holidays will look pretty different this year with ‘rona still rampant, but regardless of how you spend it, gift-giving with friends and family is probably still on your mind. Now, we know retail therapy is real, and let’s just say 2020 is giving us even more reasons to want to fix our problems by buying things we don’t need. But before you start maxing out your credit cards and landing in that pool of tears and regret (like you did after you drunk-texted your ex, oops), make sure you’re not falling into one of the following traps this holiday shopping season.
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Mistake #1: Not Setting Your Budget Beforehand
Before you buy anything, be sure to get organized and craft your budget. Start planning out your holiday shopping by making a list of every single person you’re planning on buying a gift for and how much you are willing to spend for each of them. Then remember to include white elephant gifts, potential travel expenses, or (virtual) office parties. And of course, smaller expenses like wrapping paper, shipping fees, and decorations. They’re small, but they add up! Once you’re done making your budget, stick to it! Impulse-buying is real, we get it, but you do not want to end up spending more than you can afford. This especially applies to people who recently entered the workforce and started making money. We know it’s tempting to go all-out and splurge once that paycheck hits, but be sure to slow your roll and think savvy!
Mistake #2: Buying Gifts Last-Minute
Like that presentation you need to work on for tomorrow’s meeting (we see you procrastinating on Betches, girl), you will not be on your A-game if you wait until the last minute. Retailers know that shopping tends to spike closer to the end of the holiday season, and they often raise prices because they know buyers will be willing to drop more. To make matters worse, if you don’t shop ahead, many items may be out of stock or otherwise unavailable, which could lead you to settling with higher-priced alternatives. You don’t want the stress of having to rush to finish up your holiday shopping. Start hunting down deals right now! (Bonus: It gives you an excuse to procrastinate at work, just saying.)
Mistake #3: Overspending On Credit
If you haven’t started saving up for this holiday season, it might be tempting to just swipe your credit card and deal with the expenses later. But patience, young padawan. You do not want to end up drowning in exorbitantly high interest rates and fees or to ultimately take a hit to your credit score. It’s noble and generous to give extravagant gifts, but do not jeopardize your financial health for the sake of it! Remember that handmade gifts and sentimentality (self-care craft night, anyone?) can be just as appreciated as store-bought gifts. If you do take on debt, set strict goals to pay it off by January or February of next year—do not let those interest rates accrue!
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Mistake #4: Splurging On “Great Deals”
So you’re perusing stores looking for gifts, and you see it. 50% off the MOST FETCH handbag you’ve ever seen. Or free shipping if you spend just $10 more. Or even 10% off if you apply for a store credit card. It always feels like an opportunity we just can’t pass up! I get huge FOMO when shopping for deals, and we’ve all been guilty of spending extra when we really thought we were spending less. Retailers know how to take advantage of human psychology, and they push just the right buttons to make us buy things that we don’t really need, or even want. So this holiday season, ask yourself if you would still buy the item if it was full-price, or if your money would be better served elsewhere.
Mistake #5: Impulsive Buys
Now if you’re like me (I have definitely bought a dress because yes, I totally saw myself wearing it while eating a pain au chocolat in a cafe by the Eiffel Tower like Emily), you have also totally shoved that dress in the back of your closet, only to collect dust. Impulse-buying because we think we need the item makes us vulnerable to overspending and maxing out on our holiday budget. Stick to the 7-day rule: if you like something, think about it over the course of the week, and then act on it! You will be surprised to see how much your opinion can change when you’re out of the spending mindset.
Mistake #6: Sh*tty Gift-Giving Strategies
Like any good investment (read more on investing here), the best gifts aren’t necessarily the expensive ones—they’re the ones with high value. Before you buy a gift for someone, ask yourself: is this something they need and will use daily, or will it just end up being re-gifted? Have you taken a look at their Pinterest boards, or any of their wishlists? The best gifts are useful and high-quality; think tickets to an art museum your BFF is dying to go to (after COVID ofc!), or a standing desk extension for WFH. And also, if you are tight on cash this holiday season, consider doing a gift exchange with family, setting maximums for gift exchanges, or just planning a virtual get-together instead. Normalize that money talk!
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Mistake #7: Not Shopping Savvy
As you’re shopping for gifts, don’t take prices at face value; do your research and compare prices across retailers. Now more than ever, it’s easy to automate your deal shopping by adding a couple of browser extensions like Honey or Rakuten. Like any potential cuffing season bf/gf, be sure to shop around and compare prices before you commit! Don’t leave money on the table.
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Mistake #8: Not Planning For Next Year
If you’re like me and are just waiting for 2020 to be f*cking over, start off next year on the right foot by determining how much you will need for gifts the next holiday season. Establish a small fund early on and divide it into months, so it’s easier to manage. It’s also worthwhile to throw that moola into a high-yield savings account or a brokerage account early to earn some bank without breaking a sweat!
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And that’s it! Best of luck with the holidays! We hope it’s not too stressful. If you want more tips like these, comment below, check out our website here, and follow us on Instagram @her.capital!
Images: Ben White / Unsplash; @her.capital / Instagram
If you’re a having a bit of a WTF moment right now because you’re a REAL ADULT paying taxes and bills all by yourself, you’re definitely not alone. Entering the finance world can be pretty scary because it is guarded by toxic finance bros and confusing terminology that seems to be an entire language on its own. So if you clicked on this article, you’re probably thinking that you’re just a beginner trying to get your feet wet, but honestly, you’re one step ahead! The HerCapital team is here, and we’re going to show you that money can be easy and approachable, by introducing you to 10 basic financial terms that you need to know.
1. Compound Interest
Ever heard the phrase “time is money”? Well, whoever coined that phrase (no pun intended) definitely knew what they were saying because in financial markets, time literally equals more money! Compound interest is the interest an investor earns on their original investment and all the interest that has been earned from the interest added up over time—essentially it’s “interest on interest.” The effect of compounding becomes especially powerful with time, which is why it is advised to invest early, even if it is with a small amount.
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2. Federal Reserve
If there’s anything quarantine can be remembered by, it would probably be Dalgona coffee, wearing PJs to our zoom meetings, TikTok binges, and all that hubbub about the Federal Reserve. Wait…who…what? The Federal Reserve—“Fed” for short. Serving as the bank’s bank, the Federal Reserve is responsible for setting monetary policy for the United States and maintaining the overall stability of the economy through altering money supply and interest rates. Through the sh*tstorm of COVID-19, the Federal Reserve is the one behind the scenes supporting households, small businesses, and government, through actions like lowering federal funds rates (the interest rate at which banks borrow and lend money to each other) and encouraging banks to lower lending requirements so they can give more money out to borrowers.
Inflation is the rate at which the general level of prices for goods and services is rising or decreasing, even when the quality of said products is constant. Today, most central banks set inflation target rates at 2%. During the Great Depression, inflation rates were negative over a long period of time, which meant that prices were dropping like it’s hot! Sometimes this happens because people hold off on buying goods, in turn hurting the economy in the long run since there is limited economic activity. On the flip side, positive inflation can be troublesome as prices of goods increase dramatically—imagine that $2 coffee doubling to $4 in a year; that would not be great for your budget.
4. FICO Score
We personally would never go on a sketchy Tinder date without going on an FBI-esque investigation and going down the rabbit hole of weird 2014 Facebook photos. When it comes to credit, it’s pretty similar. By ranking consumers on how likely they will be to pay off their credit obligations, FICO scores help lenders make informed decisions on whether or not they will extend credit. Scores range from 300 to 850 and baked into this score are elements like how much you currently owe, your payment history, and the length of your credit history. The higher your score, the higher your creditworthiness, and people with higher scores often have an easier time securing loans and seeing benefits in their terms and interest rates. Ah, if only spotting red flags in people were that easy.
P.S. In case you are wondering, the name comes from the Fair Isaac Corporation who created the score.
5. Individual Retirement Account (IRA)
If there’s anything everyone in the world can agree on, it’s that we f*cking love free money. So think of IRAs as piggy banks that let you set aside money for retirement, where your contributions grow with interest and you don’t even have to lift a finger. Traditional Individual Retirement Accounts (Traditional IRAs) let you deposit pre-tax income to a retirement account where that money grows tax-deferred until you take it out for the golden years. Roth IRAs, on the flip side, are not tax-deductible (meaning you deposit after-tax income), but you can still make contributions as long as you are earning an income and withdrawals are tax-free. A key difference between the two is that you cannot deposit into a Roth IRA if you earn too much (>139k if single and 206k if you are married)! To open a Roth IRA, you need to find an institution (banks, brokerage companies, federally insured credit unions, and savings and loan associations) that has IRS approval to offer this type of account.
6. Capital Gains
Like the term itself describes, capital gains are the gains (income) that stems from the sale of an asset, such as financial investments or real estate. If you hold the underlying asset for less than a year, the capital gains are taxed at the same rate as your income. This profit is typically taxed at 20% or less for long-term assets i.e. assets held for longer than one year.
Now, while putting your money in a savings account is better than just parking it under your mattress, you could honestly get so much more by putting your money into securities, tradable financial assets used to raise capital for governments and corporations both privately and publicly. Traded in financial markets, securities include stocks, bonds, and options, all varying in definition and ownership. What you really need to know, though, is that investing in securities typically comes with a higher yield, which means more bang for your buck, literally. Read more about them on our website.
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Get moving and start investing! 😏💸💪🏻 When you do, diversification is key. Today we’re simplifying some basic investment vehicles by relating them to common workouts 🧘🏻♀️🏋🏽♀️🚴🏼♀️ Investing will give you the #financialfreedom to treat yourself to your favorite workout classes, so what are you waiting for? #HerCapital ✨🌸💥
8. Financial Statement
If you’re an investor, you have probably heard of people screaming to buy the “hottest stock” of the moment. But you might wonder, what’s the hype? That’s where financial statements come in. Financial statements clear the noise and get to the down-and-dirty realities of a company’s financial performance. They are written records of all business transactions and activities, reporting elements like profit and losses, liquidity, and assets. The four main financial statements are the balance sheet, income statement, statement of shareholder’s equity, and cash flow statement. So when you invest, be sure to do your research, comb through those statements, and make an informed decision.
9. Asset Allocation
There are appropriate times to be risky and times to play it safe. Just like in life, you might want to try out that piece in your closet that you never, ever wear, but if you’re cutting bangs after a fresh heartbreak we’d tell you to slow down a little bit. When it comes to your financial plans, asset allocation is all about understanding and tolerating your risk and wisely choosing where to put your money. Different asset classes react differently in the economy, thus you can create your own mix that caters to your needs, time horizon, and goals. And take the time-tested tip to diversify, diversify, diversify!
10. Bull & Bear Markets
Within the financial world, the terms bull and bear markets refer to the general sentiment about the markets. A bull market is a sustained period where prices for securities are on the rise, often driven by optimism, investor confidence, and high expectations. On the flip side, a bear market is a period of contraction, characterized by falling prices. It generally occurs amid investor pessimism and shaken confidence and is often accompanied with an economic downturn, such as recession. I guess you could say that investors find this time to be unBEARable… sorry.
And that’s it—the 10 financial terms everyone should know. Wasn’t too bad, right? If you have any more questions or are looking for more resources, you can drop a comment here, or check out our HerCapital website and Instagram @her.capital. We’ve got lots of stuff for our community of badass women invested in their financial futures like you.
Images: Sharon McCutcheon / Unsplash; @her.capital / Instagram
Even though more womxn are working and earning higher salaries than ever before and breaking glass ceilings all over the damn place, we’re still behind when it comes to retirement and investing—yet we live longer than men do. So what gives?
Well, a lot of the womxn I know in my life feel like they have time to wait, they can invest later when they have more available cash, after they save for a wedding, or after they pay off student loans or credit card debt. Or it’s just not that important right now. Even worse is my biggest pet peeve: that they can rely on their spouse’s 401(k). In other words, they’re contributing to their spouse’s retirement for THEIR future. Well, I’m here to tell you that in most cases, you’re wrong.
You need to be investing what you can, right now. Not only for your future self, but for your present self. So you can change things in the world, literally put your money where you mouth is (or values are), and invest in ESG or SRI stocks (aka, socially, environmentally, and ethically conscious investments). Plus, if you walk away from a marriage or a relationship, you need to have your own damn money to fall back on. Yes, you can have a healthy relationship while still prioritizing your own financial well-being.
And if you’re over there thinking you’ve got it all figured out because you have a good chunk of money in a savings account, kudos. Money in savings is a GREAT first step, but even in the highest interest savings account you can find, your money is still worth less with each passing year. The only way to combat that decreased buying power is by investing that money in something that beats the rate of inflation (which has been an average of 3.22%/year).
First, I’m going to define a few important terms I’m going to use throughout this article:
Compound Interest/Compounding Returns: Interest/returns paid on both the principal balance and on accrued interest/gains.
Retirement Accounts (SEP IRA, Roth IRA, 403b, 401k, Traditional IRA, etc): A plan for setting aside money to be spent after retirement. For the purposes of this article, the retirement accounts I refer to are all qualified retirement accounts per the IRS. Some of them help you pay less in taxes now (SEP/Traditional IRA 401k), and some help you pay less in taxes later (ROTH). For these accounts, you can’t take your money out without incurring a 10% penalty before the age of 59 ½. This is to incentivize you to keep your money in here, and not touch it until you’re actually retired (and also why I recommend also having savings accounts and non-retirement investment accounts).
Investment/Investment Account: A type of account that is post-tax, doesn’t have any long-term retirement benefits, but money can be withdrawn at any time, regardless of your age.
Inflation: A general increase in prices and fall in the purchasing value of money.
Why You Need To Invest
We’re going to talk about compound interest here for a minute. One of my strongest beliefs is that you should get retirement and investment accounts set up first, followed by a savings account. That’s because your retirement and investment accounts will generally give you an 8% average return over a 10-year period.
Now we’re going to do some math (I know, but trust me, it’s important).
If you’re 25 and invested $5,000 now, contributed $100/month to retirement for the next 40 years, and retired at 65, you’d have somewhere around $470,467.71. If you waited until you were 30, invested $5,000 and contributed $100/month for 35 years and retired at 35, you’d have $310,851.00. That’s a difference of almost $160,000, and the amount invested only decreased by $6,000 (5 years of $100/month).
Even crazier, if you’re 20 and invested $5,000, contributed $100/month for 45 years, and retired at 65, you’d have around $708,271.99!!
So when I tell you that compound interest is important and that investing something now is better than investing a larger amount in a few years, trust me on it.
How To Invest
Invest in yourself and your future right now, even if it’s only five dollars a month. Something is better than nothing, and like I talked about above, compound interest is your friend when it comes to taking care of your future self.
If you have a retirement plan offered through a job, you can start now by:
Opening a retirement (or multiple) accounts (if you don’t have access to one through a job).
If you have one through your work, you want to contribute to both a ROTH and regular option. ROTH contributions help future you with taxes, and regular/traditional pre-tax options help you with taxes.
If you’re self-employed or don’t have a retirement plan offered through a job, you can start now by:
Opening two types of retirement accounts: a ROTH and a Traditional IRA (or a SEP IRA if you’re self-employed).
You want to open and contribute to both types of accounts because post-tax ROTH contributions help future you with taxes, and regular/traditional pre-tax contributions help you now when it comes to taxes.
Whether you have a retirement plan offered through your employer or not, I recommend splitting your pre- and post-tax contributions 50/50, so if you can set aside $50/month for now, I’d send $25 to a ROTH and $25 to a Traditional account. I also recommend opening an investment account, then a savings account. I like Ellevest and Betterment.
That’s it. Your step-by-step guide to starting investing today (in like 15 minutes). You’re worth it, and the world needs more womxn investing and taking control of their financial future.
Images: Startup Stock Photos / Pexels
Adulting is hard af. You don’t have someone to make your lunch for you every day or clean up the house. You need to take out the trash yourself, and don’t get me started on paying the bills. In 2019, the state of our personal finances has drastically changed from when our parents were young. Sometimes for the worst, but sometimes for the better. Alexa von Tobel, the founder of Inspired Capital and New York Times bestselling author, sums up the six biggest financial trends in her new book, Financially Forward: How To Use Today’s Digital Tools To Earn More, Save Better, and Spend Smarter, out now. She lays out where we’re losing money (oy vey) and how we can save more (thank the lord). Her book is a much-needed reality check, and can teach you how to not be broke by the time you reach 50. (And it isn’t just about cutting back on the drinking. I hope.) Here are the top six finance trends and advice outlined in von Tobel’s book, and how you can use those trends to your advantage.
Trend #1: We’re Living Longer
Shop Betches But How Do You Save $ Tank
It’s no shocker that we are living longer than 50 years ago. Science (and my killer wrinkle-reducing night cream) tends to do that. While only 12% of the population was over 65 in 2000, it is estimated that 20% of Americans will be 65 or older by 2050. She says, “the majority of us underestimate the average life expectancy. This may sound like no big deal, but underestimating how long you might live can also mean underestimating how much money you’ll need to live comfortably after you retire.” So while you may think investing in those designer shoes is fine now, think about when you’re 75 and homeless. At least you’ll have cute shoes, right?
Living longer also means that we’re retiring later. The average life expectancy for an American woman is 81.1. So while some people retire at 65, a study by Northwestern Mutual found that 38% of people wait until they are in their 70s. Additionally, von Tobel says that “the idea of a completely work-free retirement is a bit of a myth for today’s retirees.” Just think of those cute old people working as greeters at Walmart.
Advice: Build your financial plan with the assumption that you will live well past 65. Alexa recommends assuming you’ll live to 95. But if your family members have lived to be over 100, assume you will too and plan accordingly. Also, consider the idea of working part-time once you retire.
Trend #2: Family Structures Are V Different
Our families are no longer the 1950s sitcom version of the average American family: husband and wife. picket fence, 2.5 kids (WTF is 2.5 kids?). But how are our families changing? For starters, we are getting married later. In the 90s, women and men would get married, on average, at 24 and 26, respectively. Although my great aunt never fails to remind me that she had already had four kids at my age, Americans are now waiting until their late 20s to get married. Similarly, “DINK” Status is very much a thing (dual-income, no kids) since people are shacking up before getting hitched. According to the Bureau of Labor Statistics, “combining your finances with a second earner leads to more money in the bank.” Well, no duh. The thing is, not only do you have more money in the bank, but you tend to save money as well (just under $7,000 a year). Anyone down to move in with me and we can split the savings?
But on the costlier side of our changing family structures, there is the cost of raising children. In 2015, the cost of raising a child from birth to 17 (not including college), was about $233,000. That doesn’t even factor in if you need costly treatments to help you get pregnant. For IVF, costs have sky-rocketed from 10 years ago, increasing by $3,600 for one round of treatment, according to Jake Anderson-Bialis, co-founder of FertilityIQ. That means a single round of treatment usually costs more than $10,000. However, most people do two or three treatments, which drastically increases the price. Finally, there is the concept of the “Sandwich Generation,” aka you might end up living with or financing your kids and your parents at the same time. Joy.
Advice: Speak openly with your family about costs. Before your parents are too far down the rabbit hole (sorry), discuss what savings they have for long-term care. Make sure to keep all these different family-related costs in mind when you’re figuring out savings. The best rule of thumb is always to plan ahead.
Trend #3: Our Earning Potential Is Flexible
Have you ever gotten an urgent message from your boss late at night to do something before the next morning? Or gotten a call to come into work early? Hate to break it to you, but this is the new normal. The majority of jobs are no longer a basic 9-5. And for many people, holding one job just doesn’t cut it anymore. 40% of independent workers have a side hustle to make some extra cash for savings or for a big purchase, like a house. Others (16%) do it out of necessity. Then there are the “free agents” like freelancers or Uber drivers. 30% are in this field because they like the flexibility, while others want a full-time job but are using this as their primary income at the moment.
Advice: Use side hustles to your advantage. Figure out what you want and use the flexibility of part-time work to reach your goals easier and quicker.
Trend #4: Our Career Paths Are Fluid, And Sabbaticals Are In
What’s great about our generation is that we are indecisive have the flexibility to change career paths if we are unhappy or want different opportunities. On average, those who graduated college from 2006 to 2010 have held twice as many jobs as people who graduated between 1986 and 1990 did in the same amount of time. But people aren’t just changing companies, they are also changing entire career paths. According to von Tobel, there is “no such thing as it being ‘too late’ to pursue an entirely new path.”
Like those adorable matching sets every girl on Instagram wears during the summer, sabbaticals are in. Think of it as an “adult gap year”. It’s all about increasing your learning, and whatever other BS your university guidance counselor told you about your year abroad. But while taking an extended vacation may seem like the best thing ever a load of crap, employers are getting on board. Hear me out. Over a three-year period, those who took more than 10 vacation days were 31% more likely to get a bonus or raise compared to those who took fewer than 10 days off.
Advice: If you’re deciding on whether to take a job, check out the company’s policy with regards to taking time off work. You should also plan ahead with your finances if you’re able to. If you can, allow yourself the funds to take that time off work.
Trend #5: Everything Is On-Demand
Our lives today are all about instant gratification. I’m not going to lie that I don’t get annoyed when my Uber takes longer than 5 minutes to arrive or my Amazon Prime package doesn’t come the next day. Patience is non-existence. While 22% of people shopped online in 2000, 80% shop online today. Crazy. Since nothing is off-limits, there is tons of competition, which keeps the prices (fairly) low. The best part of having everything accessible to us? Saving money. As someone who loves a good deal, being able to compare prices of the same product at different stores is the best feeling. Like, sex is cool, but saving $50 is better.
Advice: von Tobel says that while this is great, impulse shopping is dangerous. So beware.
Trend #6: Forget Ownership. Sharing is Caring
If I told my mom that I was staying in a stranger’s house when I traveled Europe last year, or regularly get into randos’ cars, she would have a heart attack. But today, Airbnb and Uber are the new normal. These services allow us to save money by sharing stuff and make money by letting others borrow it. And who needs a car in a busy city when you basically have your own chauffeur? These services allow us to cut down on what we have (Marie Kondo is so in and von Tobel approved) and save $$$. You also can stream movies and show online, instead of buying DVDs (or VHSs … yikes) and even borrow clothes instead of buying a dress you’ll wear once.
Advice: Keep on sharing!
For more of Alexa’s financial advice, pick up a copy of Financially Forward: How To Use Today’s Digital Tools To Earn More, Save Better, and Spend Smarter, out now.
Images; Giphy (5)
I first realized I needed to improve my credit score when trying to take advantage of the 20% off discount I could get by opening a GAP credit card. I thought “sure, I want these jeans and I would like them to be cheaper.” Turns out credit cards don’t totally work that way, because you can only get a credit card if you have a credit history, and you can only have a credit history if you get a credit card (among other ways, but that’s the easiest). It’s kind of like how you need job experience to get a job, but nobody will hire you without experience. For the record, at age 19 I had no credit history and no chance of getting a discount on those jeans.
I’ve come a long way since then, and I have learned quite a bit on my journey from credit-less to Credit Karma user to about-to-get-some-free-shit-from-magical-rewards-points. First of which being: don’t waste a credit check on a pair of mediocre jeans from the GAP. I’m not saying I’m an expert, and this is Betches not like, the Financial Times, but I do hope that I can share some relatable wisdom for those of you that don’t know what a credit score is, still use your parents’ credit card, or didn’t realize you can literally get paid to shop (see cash back card below). Because building credit and then deciding which cards to get once you’ve built that shit is harder than finding a quality photo of Kylie Jenner’s baby bump.
Step 1: Build Some Credit
It’s hard af to get your first credit card (see GAP story above), but it’s not impossible. Unfortunately, most starter credit cards require a deposit, will have a low credit limit, and will give you absolutely no rewards. But life is rough and we all gotta start somewhere. So if you are a total credit newbie, or have to crawl yourself back up from a shitty credit score due to overdue student loans, here are some decent options:
Capital One Platinum Card: No annual fee, and you can get an increased credit limit if you behave (read: pay that shit on time) during your first five months.
Discover it Secured Card: This ish requires a deposit, but you can get cash back on purchases and it helps you build your credit as long as you are responsible (again, pay that shit on time).
P.S. When I say “pay that shit on time” I mean ALL that shit. None of this “minimum payment due” crap—it’s is a trap. Pay your full balance whenever it is due or you will buried in interest, debt, and shitty credit for the rest of your life.
Step 2: Get Some Rewards
Turns out the benefits of credit cards extend far beyond the ability to spend more money than you have in the bank (I am by no means encouraging this behavior—seriously, don’t do it. But it is a thing). You can get free flights, hotel rooms, and free money (sorta) just by buying things with your credit card and paying it back on time. So once you have built up some credit, you should throw your debit card away, shred your cash, and get in on one of the rewards cards below, because it’s basically like getting paid for your responsible shopping habit.
Straight-Up Cash Back Rewards
Chase Freedom: You get $150 cash back when you spend $500 in the first three months. It’s basically like a buy 2 get 1 free situation.
Bank of America Cash Rewards: This card has no annual fees, you get 1% cash back on all purchases plus 2% at grocery stores and wholesale clubs and 3% on gas for your first $2,500 in purchases each quarter. And if you deposit your cash back into a Bank of America account, you get a 10% bonus. That’s right—literally free money.
Chase Sapphire Preferred: Get 50,000 points to redeem on travel when you spend $4,000 in the first three months. So like, buy an expensive plane ticket, and then get some points to help make your next plane ticket less expensive.
Airline Specific Cards: If you fly the same airline on a regular basis, you should probably be working those mileage points. Southwest, Alaska, and United all have credit card options, and if you have United’s rewards credit card, maybe they will let you keep your dog alive.
Amex Starwood Preferred Guest: Earn enough points and you can get free nights at fancy-ass Starwood hotels (The W, St. Regis, etc.). Plus, this one is a pretty purple color and I always felt like having an American Express card means you made it in life.
Step 3: Swipe Responsibly
Whatever card you end up getting, even if it’s not one of the above credit cards, fucking pay your bill on time. Because none of the rewards from credit cards are worth it once you start getting charged interest. Set up auto pays, write it in your calendar, do whatever you need to do to pay off your balance IN FULL each month. And remember that every time you apply for a card, your credit score takes a hit (it’s a vicious cycle, I know. Life, again, is unfair). So please don’t go apply for every card on this last and say Betches told you to, because we sure as hell didn’t (and the credit bureaus aren’t gonna care).
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If you have been rolling your eyes and tuning out every time your Reddit-user friend has talked about Bitcoin for the past few years, it might be time to start paying attention. The
invisible money digital currency is now worth over $16,000 (yes, really), and is increasing in value faster than the Kardashians can reproduce. This time last year, one Bitcoin was worth $759. Today it is worth $16,000+. That’s like your Sacagawea dollar being worth $1 million…or something. So if that Reddit friend is single, you should probably consider him a viable dating option, and if you wish anything you owned could turn that kind of profit, you should probably stop buying shoes and start investing in cryptocurrency.
So how does a betch get some of that friend’s Bitcoin money? Here is a quick guide to wtf it is and how you can jump on the crypto train.
WTF is Bitcoin?
Unlike a physical coin that is stored in your car’s cupholder and worth absolutely nothing (parking meters don’t even want that shit anymore), Bitcoin is a decentralized currency that is stored on the internet and worth thousands. It’s not tied to a government, which means while Trump decreases the value of the dollar by being a terrible and entirely incompetent president, smart people all over the world are turning to Bitcoin and its cryptocurrency protégés to protect the future of the world’s economy.
Where TF Does Bitcoin Come From?
Bitcoins live on the blockchain, a magical place where information is shared but can’t be falsified (aka a world without identity theft or The Fat Jewish), and they are created by developers who mine for coins online. It’s virtual mining for engineers, so they get rich instead of the black lung, Pop. It’s harder to mine a Bitcoin than it is to print a Benjamin, so again—worth more than the dollar. (TBH, I don’t totally get this part, but I also don’t know where “the internet” or my need to listen to the new Taylor Swift album comes from—I just know that it’s real and has seriously improved my quality of life.)
WTF Can I Use It For?
Wtf do adults use their Google stock for? To rub it in Yahoo! stockholders’ faces and to put money in something that will actually gain value over time (your savings account ain’t doing the trick, honey). You can also book your next vacation on Expedia or buy your next couch on overstock.com and say, “This hotel room only cost me 1/30th of a Bitcoin,” or something equally obnoxious.
Should You Fucking Buy It?
I’m a Betches writer, not a finance expert, but if you weren’t lucky enough to have a techie boyfriend give you Bitcoin as a breakup gift when it was worth $300 like I was, it might be a bit late to invest. Shit’s at an all-time high, and some think the Bitcoin bubble is about to burst—but if your FOMO is stronger than you are fiscally conservative, you can get in on the game here.
I Can’t Fucking Afford That!
Yeah, me neither. Lucky for us, cryptocurrency (not unlike the LBD) isn’t going out of style, and new and improved versions are popping up all the time. So if you caught the crypto bug, or you want to play with your money like This is Us plays with our emotions, may I suggest putting Ethereum on your Christmas list. It’s like Bitcoin but arguably smarter and at $457 a piece, definitely more affordable (P.S. its value has grown over 6,000% in one year).
Think of it this way: Bitcoin is Beyoncé today and Ethereum is Beyoncé of Destiny’s Child. Sure, everyone worships her now, but it’d be a lot cooler if you knew she would be queen back when she was asking if we could pay her bills.
Images: Christine Roy / Unsplash; Giphy (5)
It’s not chic to talk about money if you have money, but it’s also very unbetchy to get ripped off. You’re so lucky you have us, because we did the research on things you’re overpaying for. I know, we’re such a good friend. Like did you know that when you buy tampons you have to pay a luxury tax on top of regular sales tax? As in, using a tampon is like a luxury. Yes, we know we’re so blessed to not be pregnant every month, but calling tampons a luxury is a stretch. Anyways, here’s the top five ways the fuckboys of big businesses are ripping you off. Just because you hate doing work doesn’t mean you don’t deserve to keep all the money you (didn’t) work (that) hard for, so hang on to your cash and stop overpaying for shit.
Remember when Venus first came out and we were all singing the catchy song from the commercial? Those bright pink and blue razors were so pretty we didn’t even notice that we were being charged more for razors than men. Literally, we are paying for pretty colors—the nickname for it is “the pink tax”. Female razor costs a few dollars more than men’s almost always, and the only difference is the way they are marketed. Even though they’re not as cute, most men’s razors work better because they’re designed to get rid of bros’ hair and bros just have thicker hair. So even though it might feel like you’re showering at a frat house, you should buy a man’s razor and stop paying more for a shitty pink one.
This one kills us too. Saving up for your first Kelly Bag was a rite of passage, like getting your period or dating your first older bro. But the truth is, even with the nicest leather and hand-stitching or whatever, you’re still paying way too much for handbags. Just the idea of having to own dozens of bags because you can’t wear the same one everyday is something that bros don’t even have to worry about. They literally put their shit in pockets, which we could do if we weren’t so skinny that pockets don’t work for us. But even though our figures are too tight for storing keys, wallet, phone on, we could potentially still own considerably less purses than we do. According to this bro blog, a genuine leather bag on the high end costs $100-$150. Which we laugh at because that wouldn’t even buy a clutch at an accessible brand like… ugh, Coach. Anyways, you’re paying too much for bags. Like you could own several cars if you stopped buying bags. But you’re not going to, obvs, and we totally understand—just maybe consider buying a few cheap ones.
3. Dry Cleaners
Your dry cleaner charges more for betches than bros. Like if you bring the exact same shirt to a dry cleaners but one is a female version and one is a male, the female one will cost twice or even three times more. Dry cleaning companies claim that it’s because the female shirts don’t fit in their machines, but the truth is women will pay the higher price for clothing care and men won’t. So to combat this institutional sexism, try having your boyfriend or dad drop off your dry cleaning and feign ignorance when they ask if it’s a women’s or men’s shirt. IDK, worth a try. This BS goes even deeper than cleaning clothes, though. Men’s clothes are priced lower than women’s in general. Plus we shop way more than men so we’re buying at least twice as much shit on a regular basis. Ugh, we feel used. At least female models make way more than male models, so we get a win there.
If you’re a betch that procrastinates as most of us do, you probably end up paying more for your airline tickets because you book them closer to when you need them. If you really want to get a good deal on airline tickets, you need to set flight deal alerts on websites that do that, so someone tells you when the flight you want to your destination is lowest. Like, you can get round trip tickets from LA to New York for under $300 but you have to know when to look for them. You can also go to Europe for $500, but you’ll probably end up ordering your tickets on the wrong day of the week and pay twice as much. There’s no need to spend so much on traveling. Even if you have the money, you should be saving it for the trip itself.
5. Everything at Whole Foods
Whole Foods is basically a day club if you think about it. There might not be a doorman letting people in, but if you’re not wearing the right clothes (aka like you just came from yoga or SoulCycle), you’ll still feel out of place. Bananas at Whole Foods cost an average of 99 cents a pound, while they cost 70-80 cents everywhere else. You’re paying way too much for everything at Whole Foods. Like, a lot of the shit they have there is the same supplier as other grocery stores in the neighborhood. If you want fresh fruit and vegetables, go to the farmer’s market. Actually, there is one thing Whole Foods has going for it, and that’s the cheap La Croix you can buy there. You can get a pack of La Croix for $3 at Whole Foods. But other than La Croix and the possibility of running into your ex, there aren’t a lot of great reasons to keep getting your shit from there.
Read: A Definitive Ranking Of The LaCroix Flavors