One of the most frequently asked questions by investors is what is the average return of the S&P 500? According to a number of sources, the average annual return of the S&P 500 since its inception in 1926 is around 10%. However, it is important to note that this figure is an average and there have been years where the return has been much higher or lower than this figure.

Understanding the S&P 500

The S&P 500 is one of the most widely used benchmarks for the U.S. stock market. It is a market-capitalization-weighted index of 500 large publicly traded companies in the United States. The S&P 500 index is often used as a proxy for the overall performance of the U.S. stock market.

What is the S&P 500 Index?

The S&P 500 is an index of 500 large-cap companies listed on major U.S. stock exchanges. The index is weighted by market capitalization, which means that companies with higher market values have a greater impact on the index’s performance.

The S&P 500 index is often used as a benchmark for the U.S. stock market because it provides a broad representation of the performance of large-cap U.S. stocks. The index includes companies from a variety of sectors, including technology, healthcare, and financials.

How is the S&P 500 Index Calculated?

The S&P 500 index is calculated using a market capitalization-weighted formula. This means that the value of each company in the index is multiplied by the number of outstanding shares, and the resulting values are added together to determine the total market capitalization of the companies in the index.

The index is then calculated by dividing the total market capitalization of the companies in the index by a divisor. The divisor is adjusted periodically to account for changes in the number of shares outstanding, stock splits, and other factors that could affect the value of the index.

The S&P 500 index is updated regularly to ensure that it accurately reflects the performance of the U.S. stock market. Companies are added or removed from the index based on changes in their market capitalization and other factors.

Investors often use the S&P 500 index as a benchmark for their own investment portfolios. By comparing the performance of their portfolios to the performance of the S&P 500 index, investors can get a sense of how well their investments are performing relative to the broader U.S. stock market.

Historical Performance of the S&P 500

Average Annual Return of the S&P 500

The S&P 500 is widely regarded as one of the best indicators of the overall health of the U.S. stock market. Over the years, it has provided investors with a reliable source of long-term investment returns. According to MacroTrends, the average annual return of the S&P 500 from 1928 to 2022 was approximately 10%, including reinvested dividends. However, it is important to note that the S&P 500’s average annual return can vary widely from year to year. For example, in 2020, the S&P 500 had a total return of approximately 16.3%, while in 2018, it had a total return of -4.4%. Therefore, it is crucial for investors to have a long-term investment horizon and not get caught up in short-term market volatility.

Long-term Performance of the S&P 500

Over the long term, the S&P 500 has provided investors with significant returns. From 1928 to 2022, the S&P 500 had an average annual return of approximately 10%, including reinvested dividends. However, there have been periods of significant market downturns, such as the Great Depression of the 1930s and the Global Financial Crisis of 2008. Despite these downturns, the S&P 500 has always rebounded and continued to provide investors with long-term returns. For example, after the Global Financial Crisis of 2008, the S&P 500 had a total return of approximately 32% in 2009 and continued to provide positive returns in the following years. Investors who have a long-term investment horizon and can tolerate market volatility may find the S&P 500 to be a reliable source of long-term investment returns. However, it is important to note that past performance is not indicative of future results, and investors should always conduct their own research and consult with a financial advisor before making investment decisions.

Factors Affecting the S&P 500 Return

Market Conditions

The S&P 500 return is influenced by various market conditions, including supply and demand, investor sentiment, and geopolitical events. The supply and demand for stocks can affect the prices of the companies in the index, which in turn affect the overall performance of the S&P 500. For example, if there is a high demand for stocks, the prices will increase, resulting in a higher return for the S&P 500. Conversely, if there is a low demand for stocks, the prices will decrease, resulting in a lower return for the S&P 500.

Investor sentiment can also affect the S&P 500 return. If investors are optimistic about the future of the economy and the stock market, they are more likely to invest in stocks, which can lead to higher returns for the S&P 500. Conversely, if investors are pessimistic about the future of the economy and the stock market, they are less likely to invest in stocks, which can lead to lower returns for the S&P 500.

Geopolitical events can also impact the S&P 500 return. For example, if there is a trade war between two countries, it can affect the prices of the companies in the S&P 500 that do business with those countries, which can impact the overall performance of the index.

Economic Factors

Economic factors can also affect the S&P 500 return. These factors include interest rates, inflation, and corporate earnings. Interest rates can impact the borrowing costs for companies, which can affect their profits and ultimately their stock prices. Inflation can also impact the S&P 500 return, as it can erode the value of the dollar, which can lead to higher prices for goods and services and ultimately lower profits for companies.

Corporate earnings are a key driver of the S&P 500 return. If companies in the index are making higher profits, their stock prices are likely to increase, resulting in a higher return for the S&P 500. Conversely, if companies in the index are making lower profits, their stock prices are likely to decrease, resulting in a lower return for the S&P 500.

Investing in the S&P 500

Investing in the S&P 500 is a popular way to gain exposure to a diversified portfolio of large-cap U.S. stocks. The S&P 500 is a market capitalization-weighted index that includes 500 of the largest publicly traded companies in the U.S. across a range of industries.

How to Invest in the S&P 500

There are several ways to invest in the S&P 500:

• Buy individual stocks of the companies in the index
• Invest in mutual funds or exchange-traded funds (ETFs) that track the index
• Invest in index funds or ETFs that track the S&P 500

Investing in individual stocks can be risky and time-consuming, as it requires researching and analyzing each company. Mutual funds and ETFs that track the S&P 500 offer a more diversified approach to investing in the index. These funds typically have lower fees and are easier to manage than investing in individual stocks.

Benefits of Investing in the S&P 500

Investing in the S&P 500 can offer several benefits, including:

• Diversification: The S&P 500 includes a variety of companies across different industries, which can help reduce risk and volatility in a portfolio.
• Historical Returns: The S&P 500 has historically provided strong long-term returns, averaging around 10% per year over the past century.
• Low Fees: Investing in index funds or ETFs that track the S&P 500 typically have lower fees than actively managed funds, which can help increase overall returns.

Risks of Investing in the S&P 500

While investing in the S&P 500 can offer several benefits, there are also risks to consider:

• Market Volatility: The stock market can be volatile, and the value of investments in the S&P 500 can fluctuate significantly in the short term.
• Concentration Risk: Because the S&P 500 is market capitalization-weighted, larger companies have a greater impact on the index’s performance. This can lead to concentration risk if a few companies make up a significant portion of the index.
• No Guarantees: There are no guarantees in investing, and past performance does not necessarily predict future results.

Conclusion

The average return of the S&P 500 is an important metric for investors to consider when making investment decisions. While the average return of the S&P 500 is 10% over the long term, it is important to remember that not every period in the market is average and not every investor’s portfolio is average.

Investors should consider their own investment goals, risk tolerance, and time horizon when deciding whether to invest in the S&P 500 or other investments. It is important to remember that past performance is not indicative of future results and that investing always involves risk.

While the average return of the S&P 500 is an important metric, it is not the only metric that investors should consider. Other factors that investors should consider include the current market conditions, the performance of individual companies within the index, and global economic trends.

The post What Is the Average Return of the S&P 500? Understanding the Long-Term Performance of America’s Most Popular Stock Index. appeared first on Wealth Bytes, the content owner.

With the government raising rates, inflation at an all-time high, and consumer prices going out of control, it’s really hard to even think about investing and saving for retirement. I mean grocery prices are up about 12% since the start of this year and continue to rise every month it seems.

It’s hard to make ends meet for some, especially those who rent and are seeing massive rent increases.

So, when it comes to investing, should you sell now or wait it out?

This information is purely informational. I am not a financial advisor and do not give out personal investment advice.

The Best Time to Invest is Now

I’m sure you’ve heard this before, right?

The best time to invest is now and I used to laugh about that. I also used to time the market to “buy the dips”, but then realized you never can properly time the dips.

But I do believe that if you are not investing, you have little chance in reaching retirement with the money needed to live comfortably. How much you invest is completely up to you though. You need to weigh your risks and diversify your money.

Important – if you are near retirement, then you should consult with your financial advisor as investing now might cause you to lose more of your upcoming nest egg.

Make sure you have a good emergency fund, can pay all your bills, and then take some of that leftover money per month and invest in the markets.

Should Your Keep Investing In a Down Market?

In my opinion, I would definitely keep investing when the stock market is down. History has shown us over all the decades that the market does return a positive percentage, but we have several big down years. Not everything is up and up like the past few years before this year (2022).

Here is a good graph for you of the S&P 500 and you can see the ups and downs of the market, but historically, it’s returned close to 10% annually.

Even with all the ups and downs, I do think it’s smart to keep investing when the market is down. You can’t win buying high and selling low and it’s extremely important to disconnect your emotions from investing. You invest based on math and keeping your emotions out of it. It’s hard to see your portfolio lose $30,000 in one day like mine did last week, but I keep the course and keep investing. I have faith the market will turn around in a few years and hopefully the money I invest now will grow exponentially.

To keep my life simple, I invest in index funds that track the markets. I rarely do single stocks as I like the diversification the index funds and ETFs give me.

So, in short, I think you should keep investing when the market is down as this is your chance to “buy low” and hopefully when the time is right, you can “sell high” and enjoy the profits.

But personal finance is personal, so you have to do what is within your risk tolerance.

The post Should I Keep Investing When the Stock Market is Down? appeared first on Wealth Bytes, the content owner.

Even professional investors rely on investing tools to determine when to buy (or sell) an investment. The following recommendations can help you create an online investing toolkit to examine your current portfolio and pick future investment winners.

After all, most people don’t become a millionaire through good luck. Whether you’re a DIY investor that wants to begin buying individual stocks or you want to stick with index funds, these investing tools will boost your investing confidence instead of trading on emotion.

Best Investing Tools for Beginners

These tools are going to be for DIY investors that like to make your own investments. Whether you make every investment decision, or you want the help of an online advisor to manage your portfolio, the resources below can benefit any investing strategy.

Motley Fool Stock Advisor

There’s a good chance you’re not a full-time investor, but you don’t want to pay an advisor to manage your account. This is where Motley Fool Stock Advisor comes into the picture. You can get expert investing advice without spending a small fortune to receive it.

Each month, you get two new stock recommendations from brother Tom and David Gardner that you can buy to earn long-term gains. If it looks like one of the recommendations doesn’t look like it’s going to outperform the market for the next three to five years, Stock Advisor tells you when to sell.

With each recommendation, you get a detailed analysis of the potential upside and risks with each stock.

Stock Advisor also makes it easy to buy your first stocks or add to your current portfolio. Their recommendations are broken down into two separate categories:

• Starter Stocks
• Today’s Best Buys

There are 10 starter stock recommendations that Tom and David believe are excellent investments for any portfolio. These are time-proven companies that earn steady returns. Stock Advisor recommends investing in three of these companies first.

After adding a starter stock recommendation, you can choose a Best Buy. These stocks have more growth potential but can be more volatile, so you need to buy and hold for several years to realize their full upside potential.

I subscribe to Stock Advisor and think it’s well worth the $99 annual fee for beginner and experienced investors. It’s arguably my favorite online investing tool because of its large database of research, podcasts, and investing idea articles.

Personal Capital

Personal Capital is a free investing tool that you can use to monitor your portfolio performance. They have an extensive investment checkup tool that compares your current portfolio holdings too your target portfolio to determine these two factors:

• Is your portfolio adequately diversified?
• Are you too aggressive or passive for your investing strategy?

This checkup is especially useful when you invest with two different brokerages. For example, my employer’s 401k account is with Vanguard, but my personal investment accounts aren’t. Personal Capital analyzes my holdings with each brokerage to make sure I’m on track. When I need to rebalance my portfolio, Personal Capital quickly tells me where I’m overweight and underweight.

Besides a portfolio checkup, you can also use Personal Capital to track your daily spending and your total net worth. And, you can create savings goals, if you need some digital motivation to stash some cash for your short-term expenses like a family vacation or buying a new car.

Blooom

Your 401k might be where most of your investment portfolio is located. Blooom performs a free portfolio checkup and can optimize your portfolio to choose the best fund options within your retirement plan.

Maybe you currently invest in a target date retirement fund for its simplicity. This could be the best option in your retirement plan, but you won’t know for sure unless you get a second opinion.

Blooom integrates with the following types of retirement plans:

• 401k
• 401a
• 403b
• 457
• TSP

By using Blooom to manage your retirement account, you can focus on your day job and the folks at Blooom do what they’re best at, investing. If you don’t have the time to manage your portfolio adequately or you tend to invest based on emotions, Blooom can put their expertise to work.

Betterment

If you’re a fan of index funds and don’t have the time to routinely rebalance your portfolio or adjust your stock to bond allocation, Betterment is one of the most efficient “robo-advisors.”

Betterment is very user-friendly and includes the following features to optimize your investment performance:

• Automatic Rebalancing
• Tax-Loss Harvesting
• Fractional Investing (Can buy partial shares of ETFs so 100% of your money is always invested)
• Tax-Coordinated Investing

Picking the investments with the best income potential is one aspect of being a successful investor, but you don’t want to lose all your investment gains to fees and taxes.

When you have your IRA and taxable brokerage account at Betterment, they will automatically put the higher-taxed assets in your IRA and the lower-taxes investments in your non-retirement account. This strategy minimizes your tax bill so you can invest more of your earnings for more compound interest.

Betterment also offers fractional investing that puts your entire investment to work and your portfolio is instantly diversified. If you were to buy the same ETFs through your regular brokerage, you need enough cash to buy a full share. Either your money sits on the sidelines earning minimal interest or you only buy a single fund which can be especially risky if it only invests in one sector of the market.

Recommended Article: You can also use other free investing apps to maximize your returns too.

Investopedia

There are many reasons to use Investopedia.  Beginner investors and experienced investors can use their many educational articles to learn about any investing concept. They also have a free stock simulator that lets you “paper trade” $100,000 to test investing strategies. And, you can also track your portfolio performance and add potential investments to your watchlist too.

Investopedia also offers an online learning academy with video-based courses. Some of the course titles include:

• Investing for Beginners
• Fundamental Analysis
• Become a Day Trader

These courses can be beneficial for beginner investors that are just beginning their investing career and experienced investors that want to expand their skill set and complete advanced trades.

Acorns

Maybe you like the concept of investing your spare change. Every time you use your credit or debit card, Acorns rounds up the purchase and invests the difference. Although you won’t get rich by using Acorns, you’ll probably invest more in a year than you realize.

When you shop online, you can also get cashback rewards that Acorns will invest in addition to the purchase amount roundup.

Morningstar

Morningstar is the leading research platform for ETFs and mutual funds. A fund’s Morningstar rating is the “gold standard” for most professional and individual investors. You can use Morningstar research to track the following information:

• Performance for the past 10 years
• Top Holdings
• Risk Measurements
• Dividend and Capital Gains Distribution History

Depending on which brokerage you use, you may also be able to access the advanced Morningstar research there too.

Seeking Alpha

Another free resource you can use to get the latest market news and investment opinions is Seeking Alpha.

Personally, I subscribe to the daily Wall Street Breakfast email that includes a summary of the most important headlines and trading news. I scan it to stay abreast with the latest domestic and international financial news that impact the broad market and stocks that I either own or are on my watchlist.

Before researching an investment, you can also read the for and against argument to buy or sell a stock or ETF. This research can also be valuable, so you can decide if the investment is fundamentally sound or faces future challenges that aren’t disclosed in a hot stock tip elsewhere.

Additional Tips to Become a Successful Investor

Having the best investing tools is a huge advantage to be a successful investor, but there are a few other tips you should follow as well to minimize your investment risk.

Always Diversify Your Portfolio

You should always hold a diversified portfolio to limit your downside risk. Nobody can accurately time the market, so you should never put all your eggs in one basket. The best investing strategy is to buy a combination of domestic and international stock and bond investments of different sized companies.

Many brokerages will create target portfolio recommendations for you by taking an investment profile quiz. Or, you can also use the Personal Capital investment checkup tool too.

Once you determine your target portfolio allocation, you can use the above investing tools to find the best investments to fit your portfolio.

Make Regular Investments

Another popular strategy, called dollar cost averaging, is to add small positions to your current holdings each month. You invest the same amount of money each month regardless of the current share price. Dollar cost averaging helps remove the emotion from investing so you don’t try and time the market and maybe never invest at all.

This strategy is easiest with mutual funds in your 401k, but you can also do it with commission-free ETFs in your individual accounts too. Paying a monthly trade commission for several stocks and ETFs can be expensive, and its money that can’t be invested.

When you only have a small amount of money to invest each month, you can use an investing app like M1 Finance or Betterment to buy partial shares of multiple funds without paying a $4.95 commission for each ETF or stock you add to.

Hold Your Investments for At Least a Year (Strategic Asset Allocation)

Most, if not all, of your portfolio should be held in investments that you plan on holding for at least a year. When you sell investments, you’ve owned for at least a year, you qualify for the long-term capital gains tax which means you keep more of your investment income.

More importantly, buying assets you plan to hold for at least three to five years means you’re not trying to time the market. You invest in companies and funds that can provide long-term wealth instead of trying to ride a trend to make a quick buck. If you buy at the peak of a trend, you’re going to earn less than early investors and you can lose money if an unexpected downturn happens.

Being able to buy low and sell high means you need to be prepared to hold an investment for several years before the stock reaches its full earning potential. After all, buying low means you’re investing in a company or fund that’s trading at a discount to its current market value or future market value.

For example, many people thought investing in Apple a decade ago wasn’t the best idea. Ten years later, they were the first company ever to reach a $1 trillion market value.

Past Performance Doesn’t Predict Future Performance

Also, remember that just because a stock has performed well over the recent past doesn’t mean it’s a guaranteed winner for the next 10 years. Therefore, it’s essential to have a diversified portfolio, so you have exposure to every market sector.

Using the market insights provided by investment sites like Stock Advisor help you make informed investing decisions by investing in companies with the potential to outperform for the next three to five years.

Summary

Investing can be a reliable way to build long-term wealth if you diversify your portfolio. Using the recommended investing tools gives you an advantage because you can quickly identify the best investment opportunities with the least investment risk.

What investing tools are most important to you? What other investment advice do you practice to become a successful investor?

The post 8 Best Investing Tools to Become a Successful Investor appeared first on Wealth Bytes, the content owner.

Have you heard about the magic penny before? What about turning one little penny into over $10 million? No?

Well, before we go on to talk about this magical penny, let me ask you a simple question and I want you to answer it honestly.

Would you rather have $1 million or one penny doubled every day for 31 days?

I’m going to bet that 95% of you are going to pick the million dollars. Heck, that’s quite tempting isn’t it. To have one million dollars in cash just sitting there waiting for you. Oh, it gives me goosebumps.

The other 5% of you would pick the penny doubled and I applaud you. Why?

Because it’s the right answer. You’re thinking with a long-term view over the the immediate gratification view. I used to be a part of the 95%, but I’ve since changed my thought processes ever since I got out of consumer debt.

Some of you are probably shaking your head thinking that a penny is worthless. I think someone called it a pocket weight at one point in time. I hate getting and carrying around pennies, but if I can get one to double in value per day for 31 days, then I’d love me some pennies.

Before you head over to the “x” button in your browser, let me show you some simple math that makes the penny so enticing. I’m going to show you the simple concept that has changed my mind about saving and investing my money. I’m going to show you what compound interest is all about. Some have called it the eighth wonder of the world. I would consider it as well after doing the simple math around it. Compound interest really does rock my socks off!

How One Penny Turns into $10 Million

When I first heard about turning $0.01 into over $10 million in just one month, I thought it was crazy. My head was spinning just trying to figure it out. The math didn’t work in my head. Now, I heard about this trick a long time ago, but never talked about it on this site. I’ve spoken about compound interest before, which is why investing and saving is so worth while. It’s really the only way I will be able to retire. It’s the only way for most people. Compound interest is helping me retire people!

[clickToTweet tweet=”Would you take $1 Million or $0.01 doubled every day for 31 days?” quote=”Would you take $1 Million or $0.01 doubled every day for 31 days?” theme=”style6″]

It wasn’t until I actually put this little math conundrum down on paper (OK, it was Excel) that I truly see how it works.  Here is the background. If you could double $0.01 every day for one month, what would you get?  You’re probably thinking just like me and saying “not much!”  It’s hard to comprehend this little equation. I noticed another site some time ago ask if you would rather take $1,000 each day for one month or double $0.01 everyday for one month. Most people would take the $1,000 per day!

I just upped the money to $1 million to make it even more enticing. More people would take that $1 million and run with it. It’s just too tempting and it’s an amount most people couldn’t fathom having in their possession. A few years ago, I would’ve done the same thing.

Want to guess what you would have if you double $0.01 everyday for one month?  Let me break it down…

Do you see that up there?  Yes, $10.7 million when you take $0.01 and double it everyday for a month. Wow, that’s the real power of compounding interest. This is the same thing that powers investments and savings in general.

Now, let me speak some truth first. This little math trick is to just show you the real power behind compound interest. You won’t find any investment or savings account that provides you with 100% returns. That would be unrealistic and you shouldn’t focus on that. It just won’t happen!

Related: Start investing today with Betterment for as low as $25!

I show you this because I know and speak with people regularly who don’t understand compound interest. They don’t think investing is for them or don’t have time to start. I get a little cringe in my neck every time I hear it. I get that cringe because I used to be that way. “I’ll save tomorrow” was a statement that came out of my mouth on a regular basis. The same thing goes with investing. I didn’t know how to do it and it sounded like something only the one percent could do.

Well, I was wrong folks. I was way wrong!

This little math lesson isn’t to get your hopes up, it’s to get you to understand that holding money for a long period of time can reap great rewards. Too many of us are focused on instant gratification, but if you’ve never talked to a lottery winner, then you’d might not know that it usually ends in failure.

Let’s Check Out Some Real Numbers

OK, I know the math up there looks great and you might be irritated that this isn’t some get rich quick scheme. As noted, I put this together to show you how compound interest really works. It’s how investments gain value over time and how people can retire with money in the bank.

To show you some real numbers might make this a little more real for you. Let’s start with $100. You can start a Betterment account for $100 (actually less) and start investing with a long-term strategy in minutes. I’ve been with them since 2012.

If you were to invest starting with $100 and you contribute $100 to your investment account per month, how much do you think you’d have after 20 years? Seems like a long time, doesn’t it? Remember, investing and compound interest work best over the long run, so it’s not a short-term game to play.

What if I told you, with those numbers, you’d save $57,732 by just starting with $100 and adding $1,200 per year. That is very doable for most people.

The graph gives you a little visual break down on how this works, but the 8% rate of return is very doable. In fact, over the last 30 years, the S&P 500 has averaged a 10.7% return. Yes there are ups and downs, but that’s why we invest for the long run. So, when people say you can’t get 8% returns, it’s just not true. Tell them to look at historical averages of what has already happened.

Here is the amortization break down for you for each year and how much interest you receive. As your balance increases, so does the interest you earn.

Not bad for just $100 starting out and $1,200 per year. Who wouldn’t want to earn $33,632 in interest over 20 years? Without compound interest, much of your saved money will do nothing. If you don’t invest it, it won’t go anywhere and it won’t beat inflation. Just remember that.

What if we bumped up the monthly contribution to just $150? Just another $50 per month. How will that change the equation?

And just like that, with an extra $50 per month ($600 per year), you could have over $86,000 in your account with the same rate of return and only starting with $100. That’s quite a nice leap there. In this equation, you’re earning over $50,000 in interest alone. I’ll take that any day!

Everyone Should Save and Invest

I say this because I mean it. I think everyone should save and invest. It doesn’t matter how much money you make, there is always a little something you can put aside. Don’t think so?  Well, take a deep look into your expenses as you might be over paying for a service or buying stuff you don’t actually need. Too many people live paycheck to paycheck and don’t know how to get out. You get out with will power, smart money management, and using the power of compound interest to your advantage. Help your money make money for you. That’s what everyone should do!

Related: I manage all my finances with a free Personal Capital account. It’s the best thing since sliced bread!

I know many of you think it can be hard to save money, but usually priorities are mixed up when that comes into play. Too many focus on wants over needs. Instant gratification drives our purchase decisions because we can’t think of the long term. We want it now and don’t want to wait. Maybe we can blame Amazon for that!

I recommend Betterment for beginner investors because I know and use it. If you’re more advanced, then check out TradeKing, Scottrade, or Vanguard.

While you can’t expect earning a hot 100% return, investing is how I’m charging ahead toward retirement. The S&P 500 has averaged around 10% annual return for the last 30 years. While there are some ups and downs (that’s normal), the average return is 10%. You can’t get that in a savings account. It won’t happen these days. If you never started investing, then you can learn more here. I would recommend starting with a retirement account, such as a Roth IRA. Retirement is important and investing is how you get there! Just imagine earning 10% on your money every year for the next 30 years. That can be empowering! That’s compound interest my friends!

If you’ve never invested before or aren’t sure how to do it, that’s OK. We have you covered for all age groups. Just pick where you fit and see how easy it really is…

• Investing in your 20s
• Investing in your 30s
• Investing in your 40s
• Investing in your 50s
• Investing in your 60s and retirement

Well, there you have it. That’s how you can turn one penny into over $10 million in a month. It’s the power of compound interest and I love it! Sometimes it’s hard to comprehend something we don’t truly understand. Most people, including myself would say this is impossible and it doesn’t work, but the Excel sheet up there says otherwise. I wasn’t a believer for a long time. I didn’t really care about anything but my bank account balance. I was foolish and shortsighted. I didn’t long term. I was just focused on now. I’m lucky enough to have figured it out in my twenties. Others may not be so lucky, but it’s never too late to start stashing away money for retirement. Trust me, it’s never too late!

What do you think about this little math problem? Did you think it was possible?

The post Can You Really Turn $0.01 into $10 Million? appeared first on Wealth Bytes, the content owner.

The new year is here and I’m sure you’re ready to get started on your resolutions. Typically people are focusing on their weight, especially after two holidays of eating good food. I know I could lose a few pounds after this holiday break. More importantly, some are focusing their goals on their finances and I applaud those people. A new year is a great time to look over your finances and see where you can improve. You might even start a nice budget to rock this new year!

If you’re in debt, this could be the year you get out of it. You might not be able to pay it all off, but set a goal to pay off 10%, 20%, or more. Do what is reasonable for you and your situation, but create a goal to kill your debt in the new year.

If you’re on a savings kick (like me), then see what you can do in order to save more this upcoming year. I’ve always had a goal to get to 50% saving rate, but I’m not sure how I’m going to get there. No matter what, saving money is extremely important. It’s hard to survive if you’re not saving any money. Trust me, I used to be in over $75,000 of debt and I didn’t save a dime. Luckily I paid it off and saved over time. I’m now a saver who loves it. Join the club this year!

Ever since I started this blog, I gathered some of the best personal finance bloggers together at the end of the year to share some awesome personal finance tips with you. Some have been in debt. Others invest like champions, and some grow their wealth like the best of them. I followed many of these bloggers when I was in debt and looking for tips to get out.

Today, I’m sharing 39 tips from other personal finance bloggers to help you get in the right mindset for the new year. These tips will revolve around a few topics I hold near and dear. We will focus on credit, debt, investing, making money, saving money, and wealth management. There are some tips which don’t fit in these categories, so I also created an “other” category as the tips are great and can help you.

My Financial Tip

Before we get to the other tips, I wanted to share my own, which is actually from my father. When I quit my job earlier this year to run my WordPress support company and this blog, this is what he told me to get me to take the leap.

You can either be an entrepreneur or you can work for one

That little phrase was powerful and got right to the point. My father was the one who said it to me in hopes to push me over the fence when I couldn’t do it myself. It helped me understand that I could do this. The people we work for all started their businesses, so why can’t I? Yes, it’s scary, but it can also be very worth it. If you’re on the fence in the upcoming year about going out on your own, I hope this little tip helps you get onto the side of the fence which benefits you.  Do you want to own your business or do you just want to work for someone? Answer this question before you take the leap. Trust me, it helps!

Credit | Debt | Investing | Making Money | Saving Money | Wealth Management | Other

One thing I’ve learned over the years is how important credit can be to your finances. While some thing having a good credit score and report is only applicable when buying something, that is no longer the case. Landlords can look at your credit, so can potential employers. You might not be able to get a cell phone contract and much more with poor credit. Yes, having a good credit score is very helpful in the long run. If you need to get a loan, having a good score will ensure you pay the cheapest rate over time. You can get low rates on car loans, home loans, and much more.
Related: Get your free credit score with Credit Sesame
Your credit score/report is very important and something you should follow. Beyond your credit profile, these tips will talk about credit cards. Yes, I used to have credit card debt, but I use my credit cards for every purchase. I pay them off each month and enjoy the rewards. I’ve traveled for free with credit cards. It works, but only if you’re responsible!
Lee Huffman of Bald Thoughts said:

Take advantage of all the benefits your credit cards have to offer. There are often great perks which make it easier to earn miles and points faster so you can travel better, more often.

Read more on Bald Thoughts

Follow Lee on Twitter | Facebook | Pinterest

Jim Wang of Wallet Hacks said:

Remember to check your credit reports every year. Ideally, stagger your checks at each of the three bureaus so you get a snapshot throughout the year. I call it the Waterfall Method and I check my Experian credit report in January, my Equifax sometime in May, and my TransUnion report around October.

Read more on Wallet Hacks

Follow Jim on Twitter | Facebook | Pinterest

As noted, I clawed my way out of $75,000 of debt. There was more than $50,000 of credit card debt alone, so when I talk about debt, it’s very personal. I know what it’s like to be in debt and how i affects you emotionally. Trust me, debt sucks the big one!

If you’re looking to fight debt, please check out some of the articles I have around the topic. These can help you understand more about your situation and how you react to debt. Don’t be like me and turn a blind eye to it. It only makes the problem worse. I only woke up after I realized my minimum monthly payments were as much as my mortgage. That was eye opening for me. It hurt, but it was the wake up call I needed to make a change. Hopefully one of these tips can be your wake up call.

Joseph of Peer Finance 101 said:

Don’t wait to be debt-free before you start investing for your future. Pay off your high-interest debt but start putting a little away for retirement as soon as possible. Your contributions to retirement accounts are tax-deductible so worth more than you may think, especially if you start early.

Read more on Peer Finance 101

Follow Joseph on Twitter | Facebook | Pinterest

Jeffrey Trull of Student Loan Hero said:

Paying off your student loans early has many benefits, including saving money and being able to focus on other financial goals. But simply making extra payments isn’t the only strategy you can use to pay off student loans faster. Here are 14 different strategies, which I’ve rated on how effective each are. Pick and choose which work for you, and watch your student loan debt disappear!

Read more on Student Loan Hero

Follow Jeffrey on Twitter | Facebook

Brian Brandow of Debt Discipline said:

I think the biggest challenge people face when trying to get out of debt is the mental piece. You have to prepare yourself mentally and emotionally for the change in your money behavior and habits to be successful. Once you get over that hurdle figuring out the math is easy, most of personal finance is common sense. Focus on a goal, a “why” for making the change and it will become easier to make the short term sacrifice for the long term goal of being debt free.

Read more on Debt Discipline

Follow Brian on Twitter | Facebook | Pinterest

Jackie Beck of The Debt Myth said:

If you want to get out of debt, the #1 thing you can do is to stop borrowing. That sounds a little captain obvious, but it’s a critical step that so many people miss, and it was key to us paying off over $147,000 in debt.

Read more on The Debt Myth

Follow Jackie on Twitter | Facebook | Pinterest

Natalie Bacon of Financegirl said:

If you are in student loan debt, commit to getting out of debt as fast as possible. Create a plan — in writing — where you pay off your student loans. Saving and investing won’t solve your financial problems if you’re in debt. Make debt repayment your priority.

Read more on Financegirl

Follow Natalie on Twitter | Facebook | Pinterest

Candice Marie of Young Yet Wise said:

If your debt isn’t moving it could be because you’re only paying the minimum amount. When you only pay the minimum amount it’s hard to see any progress. You could also have too many money goals that you’re trying to accomplish at once. So you’re trying to put a few drops of water over 7 different buckets instead of pouring a whole gallon of water over 1-2 buckets at a time.

Read more on Young Yet Wise

Follow Candice on Twitter | Facebook | Pinterest

Jason Butler of My Money Chronicles said:

If you have a lot of debt please make a payment even if it is small. Every payment counts. In time they add up. Your debt will eventually get smaller.

Follow Jason on Twitter | Facebook

For years, I only invested in my 401(k) through my employer. I didn’t know much about investing and didn’t focus on it until I was out of debt. That was a huge mistake. I missed out on some good returns during the 4 years it took to pay off my debt. I’m still kicking myself to this day. It wasn’t until I got a Betterment account when I started to take investing a little more seriously. Now, I have a Betterment account, and a few accounts at other online brokerages.

Investing can be scary for some who don’t understand it, but it’s basically using the power of compound interest to your advantage. Yes, you can lose money when you invest, but the market has a good, positive return on average over the last 30 years. Focus on the long term and don’t get flustered with short term dips. Also, never put all your eggs in one basket.

Hopefully, these investing tips will help you make the decision to start investing for yourself in the new year. It’s a great time to start and you can do it with less than $250!

Julie Rains of Investing to Thrive said:

Learn how to use financial functions of spreadsheets — so you can do your own calculations instead of relying on other people to figure stuff out for you. Start small, learning how to calculate your monthly payment on a loan and then move to projecting the future value of your retirement account contributions.

Read more on Investing to Thrive

Follow Julie on Twitter | Pinterest

Joseph Hogue of Peer Finance 101 said:

Don’t try to ‘beat’ the stock market by playing the trading game. Trading in and out of stocks will only lose your money in fees and taxes. Playing the amateurs’ game and avoid making the big mistakes will put you ahead of the average investor every year.

Read more on Peer Finance 101

Follow Joseph on Twitter | Facebook | Pinterest

Doug Nordman of The Military Guide said:

I hate to have to say this, but fewer than half of the servicemembers in the U.S. military have even signed up for a Thrift Savings Plan account (the military version of a 401(k))– let alone contributed to it.
An awesome personal finance tip for more than half of the military would be:
Sign up for the TSP and contribute to the L2050 fund! After your service, you can still access the funds penalty-free with a little advance planning.

Read more on The Military Guide

Follow Doug on Twitter | Facebook | Pinterest

Rachel Hernandez of Adventures in Mobile Homes said:

When it comes to real estate investing, you make money when you buy—not when you sell.

Follow Rachel on Twitter | Facebook | Pinterest

Those who read this blog know that I quit my job this year. I had a good job for almost nine years and I got up and left it. Why? I wanted to focus on something I built and this blog and my service business were came out of me wanting to make more money. I’m a huge fan of earning more money with side hustles and building something for yourself.

While it was scary to quit my job after so long, it was time for me to move on and try my hand at entrepreneurship. While owning a business is not for everyone, that doesn’t mean you can’t work on the side to earn more and pad your existing income. Making money can change your life as it certainly has mine. I started out small, but then tried more and more things to earn more. Yes, you can try to get a raise, but those increases are finite. I want ways to make more that have no ceiling. That’s what I like to do!

Take some time to read over our great articles on making more money. You can start earning in just one weekend. The amount you make is up to how much effort you put in. If you want to make money with blogging (like I do), then head over to my very detailed “how to start a blog” guide and get to it!

Remember, you can either be an entrepreneur or you can work for one!

Kate Dore of Cashville Skyline said:

Not expecting a raise in the New Year? Maybe it’s time to consider picking up a side hustle. There are countless ways to earn extra money from the comfort of your home. And your side hustle may even turn into a new full-time career!

Read more on Cashville Skyline

Follow Kate on Twitter | Facebook | Pinterest

Kylie Travers of The Thrifty Issue said:

Stop with the excuses. Anyone can make extra money. Don’t focus on what you lack, instead look at all the ways you can make extra money either from home, doing what you already do or in odd hours. Life isn’t so 9 – 5 anymore. Find a need and fill it!

Read more on The Thrifty Issue

Follow Kylie on Twitter | Facebook | Pinterest

Tai Stewart of Saidia Financial said:

Mystery shopping is a great way to not only make a little extra money on the side, but get services that you use regularly for FREE! Oil changes, lunches, dinners, banking services and more can be paid for through mystery shopping, and you can also receive income from it.

Read more on Saidia Financial

Follow Tai on Twitter | Facebook | Pinterest

Stefanie O’Connell of Stefanie O’Connell.com said:

Increase your income. You can only save so much, but your earning potential is UNLIMITED!

Read more on Stefanie O’Connell.com

Follow Stefanie on Twitter | Facebook | Pinterest

Louis DeNicola of Saveful said:

Don’t worry if more money than you expect is withheld from your bonus, it isn’t taxed any more than your standard pay. Special withholding rules might mean you don’t receive as much of the bonus as you’d like right away, but you’ll get what’s owed to you when you file your tax return.

Read more on Saveful

Follow Louis on Twitter | Facebook | Pinterest

Zina Kumok of Debt Free After Three said:

Saving and investing is great, but creating passive forms of income is an important – and underutilized – tool. This year I’ve started to think about ways to make money passively, which too few people consider a possibility. Whether it’s launching a product or buying a rental property, find some way to incorporate passive income in your life.

Follow Zina on Twitter | Facebook | Pinterest

Who doesn’t want to save more money this new year? I know I do. I love seeing money flowing into my saving and investment accounts. It’s a great feeling considering back in 2012, the money was still flowing out of my accounts into the banks hands for my credit card repayments.

I’m a saving addict and I think it’s a good thing. No, I’m not a cheapskate, but I do appreciate how I use my money more than I ever have before. Ever since I’ve jumped into blogging, I’ve learned about saving methods like using a savings bucket system. That was cool, but what changed my savings was when I found Digit. This is a free service that will save for you based on your spending habits. It’s awesome and I recommend it to anyone who wants to save more, but aren’t sure how. Try it out, it’s free!

Saving money isn’t just about putting money in your bank account, but also finding ways to reduce your expenses. I’ve switched away from Verizon in order to save. I cancelled cable years ago and haven’t looked back. These are simple things you can do in order to save money. Look over some of our articles on more ways to save money each and every day. You might be stunned on how much you’re leaving on the table!

Aaron Crowe of Add Vodka said:

Start college savings fund for child at birth. Contributing automatically each month is the easiest way to amass enough money to help your child to go to college.

Read more on Add Vodka

Follow Aaron on Twitter | Facebook

Jacob Wade of I Heart Budgets said:

Clothing too expensive?

Solution: Plan a “Clothing Swap”. Invite your friends over to bring in clothes they want to get rid of. All clothes are setup in the home like a clothing store, and for every item you donate, you can pick out an item to bring home. Get everyone together to “shop” the clothes they want. Free wardrobe update for everyone. Do this every 6 months to keep your style fresh.

Read more on I Heart Budgets

Follow Jacob on Twitter | Facebook | Pinterest

Kate Horrell of KateHorrell.com said:

Look into vision insurance if you wear glasses or contacts. I just purchased vision insurance for my family and it saved me $400.

Read more on KateHorrell.com

Follow Kate on Twitter | Facebook | Pinterest

Lance Cothern of Money Manifesto said:

My favorite way to save money is to do so in a way that saves me money every month. Personally, that meant switching our cell phone providers from a big name to a discount provider. We chose Republic Wireless, but there are many options out there depending on your needs. Most will save you a decent amount of money every month over the big four major cell phone companies, some up to hundreds of dollars per year.

Read more on Money Manifesto

Follow Lance on Twitter | Facebook | Pinterest

Aja McClanahan of Principles of Increase said:

64% of American’s don’t have $1,000 for an emergency. I would say that your first order of business should be saving. Don’t just save money, develop a habit of what I call “aggressive saving.” Learn to make saving second nature and watch your financial situation change for the better!

Read more on Principles of Increase

Follow Aja on Twitter | Facebook | Pinterest

Elizabeth Colegrove of Reluctant Landlord said:

Make your every day housing expenses a side hustle. 1) Rent out your spare rooms. 2) Rent out you house instead of selling it when you transfer or trade up. 3) By a multi-plex live in one unit and rent out the others. 4) By house with a in law suite and rent it out. 5) Turn any of the units from a standard rental into a vacation or executive rental.

Read more on Reluctant Landlord

Follow Elizabeth on Twitter | Facebook | Pinterest

Jackie Cummings Koski of Money Letters said:

Shop around for the best prices on RX medications. This has become a very competitive market in the past year or so. Don’t assume that using the prescription plan with your health insurance is always the cheapest. Use generics, use coupons (I’ve seen some as much as $25 in savings) and take advantage of free medications when possible. Grocery stores Meijer (Midwest) and Publix (Southeast) both offer free antibiotics.

Follow Jackie on Twitter

Le’Chester Williams of Investing Dollars and Cents said:

Find ways to make your money work more for you. To cut down on entertainment costs I join organizations at nominal costs usually under $100 that provide me with hundreds of dollars worth of entertainment for the year. Choose not to pay for access to your money, by finding a bank or credit union with atm reimbursements and interest payments. Also if you are able to delay the gratification of making purchases you can invest your funds and pay for things with your earnings.

Follow Le’Chester on Twitter | Facebook

This is definitely an area where I need to do better and I’m going to use the new year to set up goals to do better here. Wealth management is so important and encompasses more than just money. It includes all of your assets as well.

If you’re not sure how to handle your wealth, then it might be good to check out a financial advisor to assist you. Look at the XY Planning Network to find a fee-only advisor to help. I’d also suggest you set up a free Personal Capital account in order to get a bigger picture of your money and financial situation. I’m a huge fan and started using Personal Capital years ago. It’s my go-to tool when looking over all of my finances and seeing how my wealth is doing. The best part is it’s completely free to use.

Look over these tips and start working on your overall wealth management as I plan to do in the new year! Let’s do this together.

Valerie Rind of ValerieRind.com said:

Sign a will and other end-of-life documents. Don’t leave your grieving family with a financial mess to clean up if you die intestate (without a will).

Read more on ValerieRind.com

Follow Valerie on Twitter | Facebook

Christine Odle of Rockin Beeby said:

Anytime you have the opportunity to physically swipe a plastic card, switch to paper money! This reduces over spending dramatically. Long term you will save more money for the rest of your life.

Read more on Rockin Beeby

Follow Christine on Twitter | Facebook

Aaron Hatch, CFP® of Woven Capital said:

Stock picking might be exciting, but the line between exciting and scary is very narrow. There’s a huge downside if today’s hot stock turns out to be tomorrow’s bad buy. For a sound financial future, keep investments a little boring — in other words invest in a well diversified portfolio of low-cost investments.

Read more on Woven Capital

Follow Aaron on Twitter | Facebook

Cliff Pendell of JRC Insurance Group said:

Layering life insurance coverage can save you thousands of dollars. For example, let’s say you have a $600,000 mortgage for 30 years. Your mortgage balance will decrease overtime, decreasing the amount of life insurance you need as you get older. To save money, you can purchase two $300,000 policies for 20 and 30 years and your mortgage will still be protected.

Read more on JRC Insurance Group

Follow Cliff on Facebook

Natalie Bacon of Financegirl said:

Before you can build wealth and create the financial freedom you want for yourself, you need to get on a written financial plan. Set financial goals and commit to a specific financial plan whereby you track your progress over time. Without a written plan, it will be very hard to achieve financial success.

Follow Natalie on Twitter | Facebook | Pinterest

Not every financial tip I got fit into the the categories above, but instead of just dropping them, I wanted to place them in an encompassing “other” category. These aren’t specific to the other categories, but they are still important for you to read over. There is even a great tip in there about not loaning your parents money. It’s quick and painless, but makes a good point. Unless you’re very careful, loaning money to family members can get nasty really quick!

Hui-chin Chen of Money Matters for Globetrotters said:

If you have scouted all the great personal finance tips year after year, but never really were able to implement any of them and turn you life around, you should know that you don’t need more information. What you need is a coach that can knows what tips work on you and keep you accountable.

Read more on Money Matters for Globetrotters

Follow Hui-chin on Twitter

Valerie Rind of ValerieRind.com said:

Don’t loan money to your parents.

Read more on ValerieRind.com

Follow Valerie on Twitter | Facebook

Thomas Nitzsche of Clear Point Credit Counseling said:

When facing a major home repair, understand and exhaust all your options – especially if you have poor credit or a tight budget. This can include non-loan options such as grant and IDA programs as well as financing options like credit unions and peer lending.

Read more on Clear Point Credit Counseling

Follow Thomas on Twitter | Facebook | Pinterest

Chris Huntley of Huntley Wealth said:

While just about every personal finance expert in the U.S. agrees you should avoid whole life insurance and buy term instead (and invest the difference), a staggering 66% of all individual insurance policies purchased per year are whole life. The problem with whole life, from a consumer’s perspective, is it’s confusing. It has two benefits, life insurance and supplemental retirement income, which makes it difficult for consumers to separate the benefits to see if they are getting a “good deal” on both. Therefore, if you’re shopping for life insurance and being pitched whole life (or currently have a whole life policy), compare the cost to a 20 or 30 year term policy, and discuss your decision with a financial planner, rather than just your insurance agent.

Read more on Huntley Wealth

Follow Chris on Twitter | Facebook | Pinterest

Jason Dana of Term Life Advice said:

When shopping for life insurance, beware of only getting quotes from captive agents (agents who work exclusively for one insurance carrier such as State Farm or New York Life agents). An experienced, independent life insurance agent can literally save an insured hundreds or thousands per year, since they are able to “shop the market” to get you the best deal.

Valerie Rind of ValerieRind.com said:

Forget about New Year’s Resolutions to pay off debt or invest more or stick to a budget. It’s too overwhelming and you’re likely setting yourself up for failure. Instead, focus on one small thing you can do in January 2016 to improve your finances.

Follow Valerie on Twitter | Facebook

The post 39 of the Best Financial Tips to Start the New Year in 2023 appeared first on Wealth Bytes, the content owner.

If you are even halfway serious about trying to get out of debt or simply want to spend $100 less a month, one of the first steps you need to take is monitoring your monthly spending. Before you think that the only way to track how much you spend is to pay for a monthly app– so you go further into debt before getting out of debt– think again! There several options available that help you monitor your finances for free.

Pen and Paper

The “old-fashioned” way might be the best way to track your spending. All you need is a piece of paper and your favorite pen or pencil. At the end of each day, write down every purchase you made from the $1 coffee on the drive to work to the $100 electric bill you pay once a month.

After tracking your spending for 30 days, you should have an accurate estimate on how much you spend in a regular month. Take a few minutes to categorize your spending so you know how much you will spend for your utilities, cell phone, cable tv, savings, and dining. You might even catch yourself asking, “We spend that much?”

DIY Spreadsheets

If you want to upgrade to the 21st century, you can also make a free spreadsheet with Google Sheets or Microsoft Excel. Both programs also offer premade templates that are free to use and are already built to track your spending. All you must do is choose the style you like best.

Google Sheets might be the better option for making your own spreadsheet because it’s free, and you can update date with any device that has an internet connection. Microsoft Excel has more capabilities but, you must have Microsoft Office installed to use Excel which can cost $70 a year to install on one device.

Personal Capital

Personal Capital is probably the most user-friendly app when it comes to tracking your spending and calculating your net worth. In a matter of seconds, you can connect your bank and investment accounts. You can also manually input information including the value of your house, cars, and any cash spending you do on a monthly basis.

After linking your accounts, Personal Capital will track your spending and income in real-time. They present all their information in easy-to-read graphs, will send email weekly spending reports, and, you can even create savings goals to calculate how much money you need to set aside every month to accomplish your financial dreams.

Another reason I like Personal Capital is that they don’t make their money from credit card, bank account, or loan applications. Yes, you can pay Personal Capital to invest for retirement, but, this service is optional and their financial monitoring tools are completely free!

Mint

Another popular free financial program is Mint. It’s produced by Intuit, the developers of the premium Quicken budgeting software. If you want to use a program that can also double as a tool to make a monthly budget because you don’t even know where to cut your spending (even if you already track your spending), Mint is probably your best option. Also, you can use Mint for free monthly bill pay.

To use Mint, the app must be able to connect to your bank account or investment account. You cannot manually input any information as you can with Personal Capital.

Exact

Exact Finance is a brand-new free money management tool that will be launching in the very near future. You can expect Exact to be a mixture between Personal Capital and Mint in terms of capability. Your transactions from your linked financial accounts will upload to Exact and you will be able to access reports that track your spending and saving history.

The real value in Exact can be the ability to project your future spending and saving trends. If you want to get out of debt and want a plan, Exact makes it possible to exactly predict how soon you will repay a specific loan (or all your loans) based on your current financial habits. Exact also lets you enter hypothetical variables to see how an increased savings rate or salary increase, as two examples, can affect your debt payoff plans.

Wally

Wally is a 100% mobile-based app and is only accessible through your iOS or Android cell phone or tablet. Since more households are increasingly ditching their desktops and laptops, the mobile device requirement might not be a restriction. Here are four reasons you might choose Wally:

• Compare your income to expenses
• Create spending and savings goals
• Snap pictures of receipts to remember “why” you made a purchase
• No in-app advertisements

Wally is potentially the most comprehensive app available if you want the “complete picture” of how you spend your money. The ability to take pictures of your receipts is also a nice touch as we have all had to scratch our head from time-to-time after looking at our credit card or debit card statement a month later and trying to remember what we purchased.

YNAB

One of the best paid budgeting programs is You Need A Budget (YNAB), and, it’s free for college students. You read that right! Students can enjoy YNAB for free for their first 12 months. After that, they receive a one-time 10% coupon and then pay the regular subscription price ($50 annually) for subsequent years.

Even if you are not a student, you can get a full-access 34-day free trial to YNAB. This can be enough time to help you make some basic adjustments to your spending and to determine if you can monitor your finances with a free app or need the extra assistance of a premium program like YNAB. Even if you do decide to go with YNAB for even your first year and can gradually transition to a free app like Personal Capital once you get a handle on managing your money, that’s great too as you now have more control over your money.

Summary

To improve your financial quality of life, you might not know how to take the first step. Tracking your spending is an excellent starting place, and several excellent programs let you begin your journey to financial freedom FOR FREE! Since there are several free apps to choose from, you should have no problem finding one that makes improving your financial situation enjoyable and possible.

The post 7 Free Ways to Monitor Your Money appeared first on Wealth Bytes, the content owner.

Not everyone has the money to start investing, or so they think. Did you know you can invest with just a few dollars each month or even just spare change?

Do you want to build a small nest egg by investing a few dollars at a time? Then you should consider one of these micro-investing apps. Investing your money increases its earning potential compared to only keeping it in a savings or checking account.

The Best Micro-Investing Apps

We tried to put together an awesome list of the best micro-investing apps out there right now. There are so many and more and more keep coming onto the market. Let’s be honest, this is a great thing for consumers and those wanting to invest their money. Before, you had to have at least $500 to start investing, but now you can do it with just spare change. The investment landscape has changed and these investing platforms are a key to that change.

Micro-money apps have become very popular recently because they make it easy to build a small nest egg without changing your spending habits. If you are already using one of the best free micro-saving apps and want a higher rate of return, you should consider these easy-to-use investing apps to boost your income.

Acorns

Acorns is the largest and most popular micro-investing app. By linking your debit and credit cards, Acorns will round up the purchase amount and invest the difference. Every dollar is invested in one of five ETF portfolios based on your risk tolerance.

They also have a different spin on cash back rewards with their Found Money shopping portal that allows select retailers to invest a percentage of your proceeds in your Acorns account.

It costs $1 a month to use Acorns. Once your account balance reaches $5,000, you pay 0.25% of your account balance each year. Students with a .edu email address can also use Acorns for free for up to four years.

Try Acorns

Stash

With over 30 different investment portfolios, Stash can make it easy to invest in a portfolio that matches your dreams and beliefs. They have customized portfolios that focus on clean energy, social media, and travel providers to name a few. This can be a great option when you want to invest in specific industries but do not have the money to buy individual company stocks.

You get to decide how much you want to invest every month and all trades are free. To get started, you will need to make an initial $5 investment and the recurring fee is $1 per month. When your account balance hits $5,000, Stash will charge you a 0.25% annual management fee instead.

Stash is also rolling out the Stash Retire feature that allows you to invest in a Roth IRA allowing your investments to grow tax-free for retirement.

Try Stash Invest

Robinhood

Robinhood is the first completely free app for trading individual stocks. There are no account maintenance fees or trade commissions. If you want to trade options or have access to after-hours trading, you will have to pay $10 per month. For the average investor, you will never pay a dime with Robinhood.

Even though Robinhood is completely free, there is a small price to pay. Robinhood is mobile-only and doesn’t offer investment research or portfolio advice. This app is the cheapest way to buy an individual stock, but, you will probably still want to hang onto your traditional brokerage.

Robinhood doesn’t buy or sell fractional shares, if you want your entire contribution invested at once, you will need to choose one of the other apps from this list.

Try Robinhood

Clink

Clink will invest in six different Vanguard ETFs based on your risk tolerance. Clink allows you to link your checking account and contribute a set amount every month, or, you can also have Clink withdraw a certain percentage of each dining and shopping purchase by connecting your credit or debit card.

It costs $1 a month to use Clink with an account balance of $5,000 or less (0.25% after that). Existing Clink users can still use the service for free if they signed up before July 1, 2016. If you happen to be one of these privileged customers, keep your Clink account open.

Try Clink

WiseBanyan

WiseBanyan lets you trade ETFs for free and bills itself as the first free financial advisor. There are no monthly account fees or trade fees. Currently, the only fee is for their optional tax-optimized investing add-on.

To get started, you only need $1 to invest and invest in an ETF portfolio based on your risk tolerance. Like the other micro-investing apps mentioned here, all contributions purchase fractional shares that make it easy to turn a penny into one million dollars.

If the idea of free ETF trades sounds appealing, WiseBanyan will be your cheapest option from this list.

Try WiseBanyan

Betterment

While you might think of Betterment as a place to stash your primary investments since it’s technically a “robo-advisor,” you only need a $1 to make a trade. Betterment might be your best option on this list because there are no trade fees and you get a better bang for your buck with a feature-rich platform.

You get to choose how much you want to invest every month and Betterment will invest it all in an ETF portfolio. The annual account fee is 0.25% of your account value and you get automatic portfolio rebalancing and tax harvesting for that price.  Plus, you also get access to their financial experts and customer support team.

If your spouse joins Betterment, they will analyze both of your portfolios to pick the investments that will generate the lowest tax bill. While investing is one of the best ways to make money, you don’t want those gains to be eaten up by taxes. This is another way Betterment can save you money with every trade and maximize your profit.

You will need to schedule automatic contributions or make one-time contributions.

Try Betterment

Wealthfront

Wealthfront is another robo-advisor app that is similar to Betterment. But, the first $10,000 ($15,000 if you use this link) you invest is managed free. While you can save money in management fees, Wealthfront requires an initial minimum of $500 and you cannot trade fractional shares.

This might not be the best option if you only want to invest your spare change because of the initial account requirements and lack of fractional shares, but you do get portfolio rebalancing and tax-optimized investing for free.

Try Wealthfront

Summary

As you can see, there is an app for every investing style. And, some even make it easy to fund your account with every purchase you make. Consistent investing is the secret to building wealth and these micro-investing apps are another tool you can use to make money.

The post The 7 Best Micro Investing Apps You Need to Try appeared first on Wealth Bytes, the content owner.

You have finally reached the light at the end of the tunnel! It’s time to retire and enjoy the fruits of your labor. As you near retirement, there is another batch of money mistakes to avoid so you can afford to remain retired. By using your experience from your working years, you should be able to avoid these common money pitfalls.

Those in your 60s and near or in retirement have to be a little more careful than those who are younger. Money can’t be used so aggressively without consequences unless you’ve planned well in the younger years. Money mistakes are common when you get older, just as they are for those in their 20s, 3os, 40s, and 50s.

Let’s hope you’ve planned well enough to reach retirement with your savings intact and your wealth growing. If not, maybe we can help you with a solution to the common money mistakes that can happen in your 60s and during retirement.

Aggressive Investing

Pitfall: You invest like a 20-year-old with aggressive stock investments. One sharp downturn can erase years of investment gains you plan to live on soon.

In your final working years and retirement years, it is important to switch to a balanced investment strategy that holds no more than 60% stocks. As you near your 70s, you might even consider holding up to 70% of your investments in bonds and fixed income assets that are less volatile.

Solution: A general rule of thumb for determining your asset allocation is to subtract your current age from 120. That number is the percentage of stocks you should hold. For example, if you are 65, you would hold 55% stocks following the “120 rule.”

You can also speak with a financial advisor at Betterment or Personal Capital and they will automatically rebalance your asset allocation to match your age and risk tolerance too.

Miscalculating Monthly Expenses

Pitfall: Retirees do not realize their monthly expenses can rise in retirement as employee benefits cease.

When you are still working, your employer pays for a portion of your monthly health care premiums, life insurance, and other benefits. Your share of the healthcare premiums is pre-tax in addition to your 401k contributions and lower your taxable income.

After you retire, you can be hit with a double-whammy of very few tax deductions and increased insurance payments. And, you will also have to begin paying taxes on your tax-deferred 401k and IRA withdrawals.

Depending on your state of residence, your pension and Social Security benefits can also be taxed as regular income.

Solution: Your HR department might offer a retirement planning workshop that you can attend. Otherwise, it can be worth your time to use a retirement planner with Personal Capital or your brokerage.

Spending Too Much

Pitfall: Retirees go on a “spending spree” because they are used to being able to work to rebuild their bank account balance. In retirement, your primary income is passive income. Overspending can ultimately lead to outliving your retirement savings.

It can be easy to overspend if you plan on extensive traveling, currently live paycheck to paycheck, or have credit card debt. Retiring debt-free can also help reduce your monthly expenses in retirement.

You might also consider trimming your current monthly subscriptions by switching your cable plan to DirecTV Now or Sling TV. And, Trim can also analyze your spending and cancel subscriptions you no longer use.

Solution: To avoid burning through your retirement cash, you can adopt the 4% retirement rule. By only spending 4% of your retirement savings each year, studies have shown that many retirees will not outlive their retirement nest egg.

Drawing Social Security Too Soon

Pitfall: It is possible to begin receiving Social Security payments at age 62. Your payment can increase if your delay your draw date and reduce how much you withdraw.

If you can retire before the full Social Security retirement age of 66 years and two months, it is possible to begin receiving early payments. The downside is that your payments can be several hundred dollars less each month. By transitioning to a part-time job or living off your pension and 401k/IRA contributions until you turn 66, can yield a large payment that can make it easier to make ends meet in retirement.

Solution: Wait as long as possible to start withdrawing Social Security to maximize your monthly payment. In the meantime, try to max out your 401k and IRA contributions and don’t forget about the catch-up contributions.

Required Minimum Distributions

Pitfall: When you turn 70 1/2, you will need to begin making Required Minimum Distributions (RMDs) on your tax-deferred 401k and IRA contributions. Even if you are not ready to withdraw the money.

Whether you have started to withdraw from your 401k or IRA accounts yet or not, federal law requires you to begin withdrawing money when you turn 70 ½. Your brokerage will send you a notice stating the withdrawal amount. You need also be responsible for paying any capital gains taxes on these withdrawals.

Solution: To avoid these RMDs, contribute to a Roth 401k or Roth IRA in your remaining working years as these types of retirement accounts are funded with post-income tax dollars. Uncle Sam has already claimed his share and isn’t concerned when you withdraw your Roth dollars.

You can also use an RMD calculator to project your minimum distribution amount. Talking with your tax professional can help you determine how these distributions will affect your tax bill.

Not Having a Hobby

Pitfall: After working long hours for several decades, retirees suddenly stop working and do not enjoy retirement due to a lack of activity.

One benefit of retirement is that you are no longer required to work because you can afford not to. But, that doesn’t mean you shouldn’t do anything at all. Retirement is meant to be fun and enjoyable. Keeping busy doing the things you love will keep you happy and potentially add years to your life.

Solution: If you don’t have one already, find a hobby. A hobby can be as frugal or expensive as you make it. You might even consider getting a hobby that makes money.

Summary

Retirement is exciting and nerve wracking at the same time because of the transition. By planning for retirement, financially and mentally, you will be able to avoid the money mistakes encountered by others in their 60s. The transition to retirement is much easier if you can retire debt-free, minimize your monthly expenses, and save as much as possible in tax-advantaged retirement accounts.

The post 6 Money Mistakes You Need to Avoid in Your 60s and Retirement appeared first on Wealth Bytes, the content owner.

Five years ago, we were able to pay off the last of our credit card debt. I can’t believe it’s been 5 years since that last payment was sent and we were credit card debt free! Really, time has been flying by. We’ve done a lot of stuff since breaking the chains of debt, and I’m excited that we’ve been able to do it.

My wife and I are living a much better life sans consumer debt (minus our mortgage). In fact, we’ve been able to save over $180,000 in cash since then. BOOM!

It took four years of our life, but we were able to prevail. I stand in front of you today completely credit card debt free. Yes, I was someone who racked up a lot of credit card debt (add on top the over $25,000 in consumer loans) and only paid attention to the minimum monthly payment.

My head was in the clouds and I was just enjoying the ride. Credit cards made spending easy and a little fun. I didn’t have to worry about paying it all back. It was someone else’s money, right?

It wasn’t until I realized our minimum monthly payments were higher than my mortgage payment. That’s when it was time to get serious. It was time to smack back that debt and live a more financially sound lifestyle. The game was on and the debt was going to lose!

How We paid Off $50,000 of Credit Card Debt

There are many others that might have more or less credit card debt, but we all got into it for one reason.  We spent way more than we made.  Simple and to the point.  There might be many “reasons” why we get into debt, but it all boils down to spending more than one makes.  It doesn’t matter if it is due to compulsive spending, medical bills, emergencies, or anything else.  If you spend more than you make, then you will be in debt.

I have written a few times about why we got into debt.  There were many reasons, but it all boiled down to spending more than we were bringing in.  I built a business, funded it with credit cards, bought a Jetski, and funded vacations on credit. The business failed and the Jetski broke down. All I had to show for those were the monthly payments of debt.

I loved credit and it loved me. Unfortunately, our relationship was destined to fail.  Credit cards allowed me to get things that I couldn’t afford and charge it to my future self.  If I had known what I know now, I wouldn’t have gotten my first credit card in college.  I would have taken the time to learn more about credit and use it in a wiser fashion.  I can’t take back what I did with credit, but I can use that failure to teach me what not to do.

Luckily I learned from my mistakes and am not scared of credit at all. In fact, I use it regularly, but in a wiser fashion. I know what I’m doing now and haven’t paid a dime in interest since paying off the credit card debt.

Here are the steps we used to pay off the $50,000 and the $25,000 in consumer loans. Yes, over $75,000 in debt we crushed in four years. It’s possible and hopefully these steps will help you get there.

Step 1 – STOP Spending Money Without Thinking

This one may sound easy, but it is by far the hardest.  You have to figure out why you are spending so much money.  I was spending in order to fund my business, along with just buying things that I didn’t need.  I was purchasing to satisfy my wants.  It is time to figure out the difference between wants and needs.  I took a hard look at my finances and realized that I needed a change.  I shut down my profitable online business, stopped eating out, cut our cable, and created detailed grocery lists.  I took my lunch to work every day as a way to eat better and save a lot of money.  These are the things that I did to stop spending money.  Beyond paying your regular bills, you need to figure out where the rest of your money is going and cut off the spending.  It may be harsh, but it is important.

If you haven’t done so already, I highly recommend signing up for a service like Personal Capital or Mint.com. Seriously, both of them changed my financial life. While I started out on Mint, I moved to Personal Capital because it was easier to use and didn’t have all these ads irritating me. It even did a much better job at bringing in my investments (yes, I had them even while in debt!).

Step 2 – Pick Your Debt Payoff Method

Once you figure out how to stop spending money, then you need to choose a debt payoff method.  There are quite a few to choose from, but the two main ones are the Debt Snowball and the Debt Avalanche.  If you want to know the difference, then check out my snowball versus avalanche breakdown.  I chose the Avalanche method because it made mathematical sense for me (key note there!).  I used my emotions to get into debt, but I wanted to take them out of the equation.  By using the Avalanche method, I was able to save thousands of dollars worth of interest payments.  That was my emotional win.

[clickToTweet tweet=”My emotions got me into debt, which is why I used math to get me out! #debtavalanche” quote=”My emotions got me into debt, which is why I used math to get me out! #debtavalanche” theme=”style6″]

To be very honest, it doesn’t matter which method you choose. The only way you will get out of debt is if you choose a method. There are no winners here by choosing one over the other. If you choose something, you’re a winner! Remember that and move forward. I’ve even seen people start out with one method and switch. You can do it month by month. Just start today!

Step 3 – Stay on Target and Focused

Welcome to the next hardest step.  Paying down debt is not easy and it will usually take some time.  We all don’t have the luxuries to just pay off our debt in a couple of months.  It will most likely take years.  It took me 4 years to pay off my credit card and consumer debt (around $75,000).  It took longer than some, because we saved along with paying down the debt.  We worked hard to make sure we stayed on target.  There are so many temptations that occur in everyday life, but you have to understand your goal.

Do you want to be buried in debt or would you rather have financial freedom?  I chose financial freedom.  Don’t be afraid to tell your friends or family that you can’t do something because you can’t afford it.  You may not want to irritate your friends or family, but these are necessary changes.    If they love and respect you , they will understand. Paying off debt is about you becoming a better person and more financially stable.  You have to do what ever you can to stay on target.  I made some simple changes along with harder changes to make sure I stayed on my debt payment plan.

Step 4 – Make More Money

You can only save so much, so there might be many times where you just don’t make enough money to accelerate your debt repayment.  There are quite a few ways to make more money besides your full time job.  I made money by selling things on Craigslist, selling on eBay, taking surveys (yes, this can work), starting a blog, and freelancing on certain projects via Upwork.  I worked hard each and every night to make a little extra cash that I could throw on my credit card payments.  You have to think outside of the box when you are paying down debt.  Think of something that you are good at and go see if you can make money from it.  Don’t spend money to start a side business though.  That would be unwise.

If you can’t think of ways to make extra money, then check out our making money section. This has articles about different ways to earn extra money. Here is our best and biggest money making post with over 100 ways to make extra money.

We can break a few of these ideas down for you as well into these great money making articles…

• 6 side hustles you can start for free
• 10 ways to earn extra cash in college
• 7 simple ways to make money in one day
• 7 unusual ways to make easy money
• 7 interesting ways to pay down your student loan debt
• 5 innovative ways to make money with your car

Step 5 – Learn How to Save More Money

As you can probably imagine, I wasn’t much of a saver when I was in credit card debt. Actually, that mindset happened before, but credit cards and spending just pushed savings to the back burner. I didn’t care about saving money. I was having the time of my life. I really wish I knew then what I know now. It hurts to realize what you did to yourself with your needless spending.

Just look at the power of compound interest. Goodness that’s some powerful stuff. I realized I was leaving money off the table for  myself later down the road and for emergencies in general. I wasn’t saving much for retirement, wasn’t investing, and wasn’t socking away cash for emergencies. I was doing it all wrong. I had to teach myself how to save money.

Fast forward some years, I’m still stashing cash for emergencies, I’m investing, and saving for retirement. I brushed off the “scared of investing” vibe and opened an Betterment account in 2012, a month after the credit card debt was gone. It was the best decision I’ve made with regards to investing. They make it so easy a caveman can do it (haha, Geico!). I’ve recommended that service to anyone that will listen. You can also check out WealthFront as they are a great alternative to Betterment.

It seems we really make saving money much harder than it needs to be. I have an entire section on this site dedicated to it. Saving money is really not that hard. We just have messed up priorities. We can’t differentiate between wants and needs and that needs to stop. Once I stopped using “need” for everything, I realized I could do without so much more and keep more money in my pocket. It’s all a mindset people. Change it and your financial freedom will follow!

Step 6 – Celebrate Your Successes

Here was my most important step and one I think everyone should partake in.  Since we know that spending money is very emotional, then we have to create celebration moments.  I took the emotional aspect out by using the Avalanche method, but you can’t take it out entirely.  So, in order to make sure that I stayed on my target, I created celebration steps.  During times in my debt repayment, I would celebrate when I paid off debt to reach a certain level.  If I paid off $5,000, I would go out and celebrate with my wife.  Now, I wouldn’t go on a spending binge, but I would go out to eat and have a beer.  I paid for that in cash, so I wouldn’t add it to my credit card debt, but it was important.  Any time I would reach a new milestone, I would celebrate.  This step kept me so motivated and allowed me to keep my head up.  Debt likes to keep you down, so you have to make sure you figure out ways to keep your head up.

Step 7 – Continue Your Financial Education

One of the biggest motivational wins for me was when I started branching out and learning more about money. Before, I know how to make money and I surely knew how to spend it, but it wasn’t until I dug deep and learned how money affected me that I changed my financial life. It’s been three years since I paid off my last credit card, but I’m still learning. I have learned how to start investing and found some cool brokerages to use. I’ve found new tools to help me save (like Digit) and keep me abreast of my money (Personal Capital). I’ve found better savings products than just the typical bank.

Related: Hate bank fees? Here are 12 banks offering free checking accounts.

The key is to never stop learning. While the concept of money is pretty cut and dry, there is always something out there to learn. Heck, there are over 800 articles on this site going through the different aspects of money. I will never stop learning and if I think I’ve learned it all, then I know I’m doing something wrong. If you don’t know something about a financial product you are seeking, then take the time to sit down and educate yourself. That’s the only way we can change our financial future. Knowledge will always be power!

Alright everyone, now you have seen how we paid off my $50,000 worth of credit card debt, plus another $25,000 in consumer loans.  It was a long journey and a very hard one at that.  I don’t wish debt on anyone, but it has taught me a lot about myself and how I handle problems.  We took the debt by the horns and rode it right out of our life.

One thing that makes me different is I’m not afraid of credit cards anymore and in fact, I use one for all of my purchases. It’s not about being scared to use credit, but knowing how to use it wisely. It wasn’t the credit card’s fault that I used it, it was my own. I picked it up, I swiped it, and I didn’t pay it off. This debt was on me, but I fixed the problem.  I know you can as well.

Do you have debt? If so, what is a step that you think is important to get out?

The post 7 Easy Steps We Used to Crush Credit Card Debt appeared first on Wealth Bytes, the content owner.

As you enter your 30s, you have probably experienced the transition in life from a single, carefree college grad to getting serious about your future by “settling down” to start a family and paying your dues at work to get the next promotion. While you hopefully avoided these money pitfalls in your 20s, there is another batch of money mistakes to dodge in your 30s!

Sound money management is not always easy when you want to start a family, grow in your career, and still enjoy the money you work so hard for. There will be choices you need to make that can affect the short term and long term viability of your money. While these aren’t comprehensive, here are six money mistakes you need to avoid when you’re in your 30s.

Not Saving For Emergencies

Pitfall: Too many Americans, regardless of age, can barely afford a small emergency.

During your 20s, you might have focused on paying off your student loans or maintaining a social life. If you changed jobs recently, you probably had to dip into your savings to pay the bills during the transition. The adage that life is full surprises still rings true. Do your best to prepare for life’s curveballs.

Solution: Make a plan to save at least $500 in a separate bank account that you only use for unexpected emergencies. BBVA is a good place to open a fee-free bank account. If you already have $500 saved, great, try to bank up six months of monthly expenses. After you have built your emergency fund, invest your extra income.

Not Saving Enough for Retirement

Pitfall: Studies show only 58% of Millennials are saving enough for retirement.

Millennials, the age group now entering their 30s, are a mixed bag when it comes to investing. Those who have started saving for retirement started at age 23 and others that have delayed saving stated they plan to start at age 33. And, 60% of Millennials have less than $10,000 saved so far.

Solution: When it comes to investing, your greatest asset is time. Take small steps like matching your employer 401k contribution or contributing 10% of your income to an IRA if you do not have access to a 401k plan. Using a service like Personal Capital makes it easy to track your net worth and calculate exactly how much you need to contribute every month to reach your retirement and non-retirement goals.

If you need to start investing, but aren’t sure how to do it, check out services like Betterment or WealthFront. These investment services make it much easier and easy for those who don’t want to worry about all the lingo and just want to invest.

Overemphasizing Graduate School

Pitfall: More and more young professionals are pursuing a graduate degree when the advanced degree isn’t required.

Millennials are the most educated generation in American history as an increasing number earn undergraduate and graduate school. What many might not realize is their graduate degree might be focused on the wrong specialty for their long-term career aspirations. Or, a graduate degree only yields a small salary increase despite costing as much as $100,000.

Solution: Advanced degrees are required for certain career fields like law, medicine, and science. It can even be required for certain business and technology positions. Know why you want to go to graduate school. Contemplate if the career rewards are worth the investment of time and money. Can you continue working and earn a similar salary without having to go back to school?

Not Talking About Money with Your Spouse

Pitfall: Couples get married and know very little about financial habits.

This money mistake applies to all generations entering a relationship. Before you tie the knot, take the time to talk money goals and spending habits with your loved one. Money issues are the third leading cause of divorce.

Solution: Having a successful marriage is more complex than money management, but, merging finances can be a challenge at times in the early years of a relationship. Make financial goals together and have regular conversations about monthly spending and bills. Managing joint finances can take years to perfect, so be patient and be willing to make compromises if you both view money differently.

Not Having Life Insurance

Pitfall: While most adults live a long, decade-spanning life, surprises do happen that take away a parent unexpectedly.

While nobody plans to die early, you need to prepare for the unexpected. If you are the primary income earner and were not to come home tonight, could your family survive the transition financially? If not, you might consider purchasing a low-cost term life insurance policy to help your family in this time of mourning. The best insurance policy is the one you never have to use and term life is an affordable “financial hedge” for your family if the unexpected happens.

Solution: Purchase a term life policy for you and your wife. Policies can start at $20 a month for $50,000 worth of coverage for a 20-year term. You can purchase additional coverage for a slightly higher monthly premium. Ensure you have enough coverage to cover any outstanding loans (i.e. mortgage, student loans) and money to cover several months living expenses if your wife needs to find a new job to fill the income gap.

Check out Haven Life or Policy Genius for great places to find insurance. Both offer the ability to apply right online and they streamline the process for you.

Keeping Up With the Joneses

Pitfall: Many households have high amounts of consumer debt and live outside their means.

Maybe you grew tired of living like a poor college student even after you landed a full-time job. After repaying your student loans, you decided it was time to finally splurge on yourself by buying your dream car, a sports boat, or taking exotic vacations every year. If you are like most people, you have to borrow money to “keep up with the Joneses” and most, or all, of your disposable income goes directly to the bill collectors.

Solution: Make it a goal to be free of consumer debt by 40. It’s possible by living within your means and saving for large purchases instead of immediately walking into the finance office to fill out a loan application. You will be much happier and less stressed knowing you don’t have to keep working a monotonous job because it is the only one that pays you enough to pay the bills every month.

If you have a home mortgage, this one change can save you $22,000 in house payments! Think of all the other things you can do with $22,000 besides giving it to the loan company because you keep doing what’s “normal.”

Summary

Life starts to get a little more serious in your 30s as you have more responsibility placed on your shoulders at home and work. By focusing on living within your means and having a plan for the future, you can accomplish anything, financially and mentally. Just remember that the single greatest asset you have is time. You still have decades to make up for any pitfalls you might step into on the journey known as life.

The post 6 Money Mistakes You Need to Avoid in Your 30s appeared first on Wealth Bytes, the content owner.