Why You Need To Start Investing Now & How TF To Do It

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

4 Financial Tips From An Expert If You’re Struggling RN

This pandemic is a totally scary, unprecedented time in all aspects of our lives, including finances. Businesses are closing their doors, employees are getting furloughed or laid off, the stock market is plunging (or so I am told by my dad)—if we weren’t worried about our finances before, we certainly are now. During this heightened time of stress, many are struggling to figure out what they can do to ensure financial security. Our advice? Don’t check your 401(k) for a while… it’s only going to make you freak out even more. And to help put your mind at ease and give you tips on actions you can take to protect yourself, we spoke to Ken Lin, CEO of Credit Karma, about what you should be doing, and the types of mistakes to avoid.

1. Know Your Options

The situation we’re in is a weird one that no one saw coming (well, except the world leaders who were warned about it and tried to ignore the problem, thinking it would go away, but that’s neither here nor there). An important thing to keep in mind is that banks realize we’re in a f*cked up situation right now and may offer you a new plan in response to what’s happening. Lin advises to take matters into your own hands and “call your credit card issuer, as they may offer a hardship plan, which sometimes offer lower interest rates, smaller minimum payments and/or lower penalties.” I’m sure the last thing you want to do now is get on the phone and wait on hold, but you have the time, and it could help you a lot, so just do it.

2. Pay The Minimum Amount Due If You Can

If you aren’t getting paid your usual salary, your hours have been cut, or you’ve been laid off or furloughed, you may be freaking out about paying your credit card bill in the next few months. While it’s usually best to pay in full each month, Lin says, “during times of stretched income, try and pay just the minimum payment to help you avoid late fees or dings to your credit.” The good news is that issuers typically won’t report the late payment until it’s 30 days past due, so you may have a bit of wiggle room. Lin explains, “If you can make your payment before the 30-day mark, you may not have to worry about the late payment being added to your report.” So if you can afford to make that minimum payment, even if it’s a couple of days late, it can save you stress and may not incur late fees, but just make sure you double-check your credit card details.

3. Don’t Default To Swiping Your Credit Card

I don’t know who needs to hear this but STOP online shopping during quarantine… oh wait that’s me

— Linsey Meister (@linseyx5) March 25, 2020

You may want to make purchases on your credit card in order to make ends meet, but there might be better options out there. Lin advises, “If you’re looking for an alternative, often times personal loans will have lower interest rates than credit cards.” He also offers that before you swipe or open up an additional line of credit, you take note of the interest rate on your credit card and make sure you’re not accruing additional interest and fees.

4. Think Twice Before Taking Out A Payday Loan

Before you borrow any money, take a nice hard look at the fine print. Lin cautions, “Payday lenders tend to prey on those in desperate circumstances like these, and these loans can be the beginning of a long cycle of debt.” He advises holding off on these types of loans, as “a payday loan may carry unfavorable terms, including high fees and interest rates.” The best thing to do, he says, would be to look into other options available to you, such as emergency or personal loans.

We’re all feeling all kinds of emotions right now, but it’s important you take care of yourself, and part of taking care of yourself is making sure your finances are in check. Trust me, everyone is in the same boat. When in doubt, look into your options and talk to someone on the phone. There may be solutions there you haven’t thought were possible.

Images: Sharon McCutcheon / Unsplash; @linseyx5/Twitter

8 Hidden Monthly Bill Fees You’re Being Charged Without Knowing

Hello, class. Let’s conduct an experiment, shall we? By a show of hands, how many of you analyze your statements before paying your bills every month? Hmm… that’s funny. I don’t see any hands? It could be because I’m not actually looking at any of you right now, but if my unofficial calculations are correct, approximately 0.01% of humans break down their charges to see WTF they’re paying every month before they actually shell out their hard-earned cash. And companies have been taking advantage of this fact by ripping off their loyal customers for years and literal billions of dollars as they blissfully go about their lives with their auto-pay turned on and their bank accounts robbed. Well, not any longer if we can help it! Neatly organized by the type of bill, here are some of the dumbest hidden monthly bill fees that would REALLY piss you off if you knew about them… which you’re about to. You’re welcome. 

1. High Area Utility Usage And Delivery Fees

Did you know that if you live in a busy area, you’ll probably get a higher utility bill for OTHER people’s usage? Yup! Ken Pedotto, CEO of solar energy information and resources company Solar Simplified, says that we’re charged for things on our utility bills that are out of our control all the time, like “congestion caused by high usage in your area, administrative costs, new asset construction, etc.” Awesome. Some gas companies will even charge delivery fees on top of our regular usage rates. “The fact that they’re passing this cost of doing business onto the consumer in such a direct way is nuts. Just bake it into the cost and we’d feel a lot better,” says Kevin Panitch, founder of personal finance website Just Start Investing

But according to Pedotto, there’s an even worse hidden fee associated with using less sustainable energy sources. “In 2005, the U.S. Congress found that the effects of burning fossil fuels cost the United States over $120 billion. This ‘environmental cost’ is the most hidden fee of all—it isn’t even considered when calculating energy bills.” Deep AF, Pedotto. That was way deeper than I wanted to go here, TBH, but I guess the truth hurts. Good thing millennials are too broke to afford homes anyway! 

2. Landlords Overcharging For Their Own Profit

Wait, you’re rich enough to afford your own place? Congrats! As a successful adult, do you check what your monthly rent covers? Because Stacy Caprio of coupons and freebies site Deals Scoop warns that apartment complexes charge a set fee for “utilities” without truly breaking down the costs. “My apartment’s monthly plan is $85 a month for cable and internet, and they use Xfinity that charges a minimum of $29.99 a month for cable and internet packages… with no package that sits at $85 a month. I don’t even use cable, only internet, so I’m being charged way more than I should be in this instance.” SMH.

3. Renting An Internet Router Or Cable Modem

When you realize your Wifi was turned off and you've been using data all day pic.twitter.com/He0aYHmFo8

— Betches (@betchesluvthis) September 12, 2018

According to Teel Lidow, attorney and CEO of consumer advocacy company Radvocate, many internet service providers require you to rent their routers but don’t disclose that rental fee in their base rate. Jonathan, founder of finance site Centsibly Frugal, notes that some of these fees include HD technology fees, broadcast TV fees, regional sports fee, universal connectivity charge fee… basically nickel-and-diming us to death. “A cable/internet package of $80/month looks great until you realize that it actually costs over $100 when you add all of the mandatory fees.” 

Certain cable companies are NOTORIOUS for hiding fees. Helen Back, editor-in-chief of the cord cutting site Kill The Cable Bill, says that the price quoted when you sign up is almost never what you end up paying. “In fact, we put out a report last year showing that Comcast is pulling in as much as $2.64 billion a year charging customers for local channels they can get for free with an antenna.” OVER TWO BILLION DOLLARS A YEAR? Comcast, I don’t like to name names, but you definitely deserve to be put on blast. How can we fight this conspiracy? R.J. Weiss, Certified Financial Planner and founder of the personal finance site The Ways to Wealth, suggests buying your own modem for around $60 to skip extra rental charges every month.

4. Literally Using Your Cell Phone

I know I personally contact Verizon every other month to refund me for making up imaginary data overage charges, but that’s not what this is about. We’re getting charged more for just connecting to the damn phone network. Isn’t that, like, the whole point of the phone bill??? “In addition to paying for the data for the phone(s) on your plan, you are required to pay an additional $20 per month per device just to be connected to the network. On top of that, there’s an additional $3.56 on my monthly bill for “Surcharges,” but no explanation on what these charges are actually for,” adds Jonathan of Centsibly Frugal. THIEVERY.

Then there are people like Ashley Patrick, founder of Budgets Made Easy and The Money Mindset Podcast, who get overcharged for years without even realizing it. “I was being billed for service and 911 fees for three different counties and two states for over 10 years.” Her phone company only credited her back a year and a half once she discovered it. Whhhhaaaattt even goes on?

5. Bank Maintenance Charges

At this point my retirement plan is just banking on the fact that climate change will kill us all by 2030

— Betches (@betchesluvthis) February 15, 2019

Shannon McLay, founder and CEO of “personal finance trainer” company The Financial Gym, always sees maintenance fees on her client’s bank statements. “I’ve seen countless clients forget they have to maintain a minimum amount in their accounts to avoid a monthly fee up to $12. In the case of a checking account, this can be avoided by having your paycheck set to direct deposit.” Who knows this firsthand better than my MOM??? Lori Mandriota, the vice president and CFO of tree care company Platinum Industrial Equipment, signed up for a business account at a popular bank (*cough* Chase) but was never informed there would be a monthly fee of any kind. “Just recently we looked at our account online, and they’ve been removing $30 a month to ‘maintain’ our account. Hundreds of dollars later, we fought and finally got those charges removed.” Great job, ma! Good thing I didn’t learn my finance management skills from you.

6. Going To The Gym

It’s almost time for that “new year, new me” vibe! Let’s all sign up for the gym to get fit… and while we’re at it, let’s get charged some BS fees. “One thing people don’t realize is that on top of the monthly pricing, some gyms charge application fees, activation fees, and for those who sign up for the year-long plan but quit after five months? Cancellation fees,” says McLay. Cool. As if getting off our couch isn’t hard enough, this is our bonus punishment for trying to get fit.

7. Getting Print Bills Instead Of Electronic

And for the Ice Age dwellers who prefer paper statements instead of electronic ones, there are printing fees. “Since companies prefer you to have online billing, they’ve started introducing fees if they need to mail you a paper bill. Depending on the company, this bill can be substantial,” says Logan Allec, a CPA and owner of personal finance blog Money Done Right. To avoid this environmentally smart, yet still dumb hidden fee, he recommends making sure all of your bills are paperless. Save the environment AND your wallet? No-brainer.

8. Insurance “Agency” Fees

Me next month when the insurance company tosses me off my parents plan #26 pic.twitter.com/ch3BtVhcCH

— ⚖oddy (@IGotRedHair) November 8, 2019

WTF is an agency fee, you ask? Great f*cking question. “This is a fee that an agency charges on top of the commission that they’re already paid to service an account,” says Elena Thormahlen-Conforti, Vice President of Meridian Insurance Services. She claims these fees usually hide in the original proposal and don’t even show up as an additional line on invoices. “I deal with people who think they have a great rate elsewhere who don’t realize the true cost of their insurance. It’s infuriating, and frankly, a bit slimy.” Super slimy! Thanks for keeping us safe while you kill our wallets, insurance companies. 

Moral of the story? CHECK YOUR DAMN BILLS AND MAKE SURE YOU’RE NOT GETTING OVERCHARGED FOR STUPID SH*T EVERY MONTH. You deserve to keep the hard-earned cash you worked for. Don’t give it away to the corporations. Take the power (and money) back into your own hands. Me for President 2020! 

Images: Artem Beliaikin / Pexels; GIPHY (5), Twitter @betchesluvthis @IGotRedHair