Each spring, come tax time, we have the opportunity to take stock of how much we’ve made, how much we’ve spent, and overall, how we’re doing with our money. If, as the saying goes, “Money talks,” – what is its message to you after this year’s tax season has come and gone and tax returns have been signed sealed and delivered?
Maybe money is urging you to start an emergency fund; invest more in your 401K; cut back on take-out; or do a much-needed kitchen remodel. Or maybe money has a far more profound question for you…how does your relationship with money reflect the way you value and care for yourself?
In her book, Women & Money: The Power To Control Your Destiny, financial guru, Suze Ormansays paying attention to money is a critical part of our self-care. “We have to develop a healthy, honest relationship with our money,” Orman explains. “How we behave toward our money – how we treat it – speaks volumes about how we treat and value ourselves.” Orman also notes that money is an important part of self-empowerment. “If we aren’t powerful with money, we aren’t powerful period,” Orman says.
So how do you care for yourself by caring for your money? Do you have a “healthy honest” relationship with money? Do you feel empowered when it comes to your finances?
For many women, a “healthy, honest” relationship with money is still a work in progress. The Financial Behaviors & Experience Among Women Study, conducted by Prudential in 2014, found that the women surveyed had not been actively seeking to expand their financial literacy. The study’s findings highlighted the fact that women felt they were no more comfortable or informed making big financial decisions than they had been a decade earlier.
Amanda Steinberg, author of Worth It: Your Life, Your Money, Your Terms and founder of Daily Worth, says that gender roles can play a part. “As women, many of us were raised to believe that finances should be a man’s job,” Steinberg notes. “Men approach finances as if it should be their responsibility, while women hesitate because we’re not so sure it’s a good thing to get involved.” Steinberg identifies the biggest hurdles standing between women and financial confidence as guilt and shame, and Camille Gaines, of the website Financial Woman, agrees. “Guilt and shame play out as avoiding our money, underutilizing our skills, and giving away our power around money to the men in our lives,” Gaines says. “The first step to confidence is knowledge.”
Lack of knowledge plus anxiety around money can keep women stuck and often embarrassed about reaching out for financial advice. It’s been humorously bandied about that women would rather discuss their weight or sex lives than talk about money, and the findings in the Money FIT Women’s Study bear that out. The study, published by Fidelity Investments in February 2015, found that eight in 10 women avoid conversations about money because the subject is “too personal” and they feel “uncomfortable” when the subject is broached. The majority of women in the study felt that money was a “taboo” subject – which makes sense, since so many of us were taught that it was “gauche”/ “not proper etiquette” to talk about money as we were growing up.
It may seem daunting to start wading into what seems like an ocean of financial do’s and don’ts, but Amanda Steinberg suggests starting small. “Money can get a bad rap, so start reflecting on how you think about and language money,” Steinberg says. “Maybe there’s a belief that ‘money is evil’, or that there’s ‘never enough’. Think about your opinions about money, and ask yourself, ‘Are these beliefs serving me, or should I reconsider them?’”
Our beliefs about money, often planted at an early age, can have a profound effect on how we view and handle money in our adult lives. In next week’s post we’ll continue the ‘Money Conversation’ with tips for excavating down to the heart of your beliefs about money and abundance.
The 52 Week Money Saving Challenge and Special HackARTICLE BY WHITNEY HANSEN
If you’ve spent any time on Pinterest searching around for money saving tips or money saving challenges, I’m 99.9% certain you’ve come across the 52 Week Money Saving Challenge.
It’s fun, fairly easy to implement and helps you save $1,378 in 1 year.
For most people, $1,378 is a lot of money. If you are just starting your financial life out, that basically becomes your starter Oh Shit Fund. If you are past your Oh Shit Fund, you can use that savings to help you pay down debt. Or this can be used as extra savings to help you travel the world.
Whatever your goals are, almost $1,400 can go a really long way.
HOW IT WORKS
The whole goal of the 52-week money saving challenge is to keep it so simple that anyone can save money. When you first begin the challenge, you start at week 1.
During week 1 you transfer $1 to your savings account.
Then, as the week’s progress, you’ll transfer the same amount in dollars as the week you are on. For example, during week 5 you’ll transfer $5.
Told ya this is easy!
The cool thing is by the end of the challenge, you will have saved $1,378! That’s a nice chunk of change, right?
A lot of people criticize this savings challenge. Isn’t it better to take equal amounts of money every month and put that automatically in savings?
Yes. And no.
If you are the kind of person who would much rather see the same, consistent amount of money go into your savings account each month and never worry about it again, the 52 weeks money saving challenge may not be the right challenge for you. If this is you- just take $1,378/12 and schedule an automatic savings transfer of $114.83 to your savings account once a month.
But if you are the kind of person who loves to gamify your finances and find a lot of joy in the challenge aspect, then this is a ton of fun and gets really exciting towards the end. Keep in mind that if you started this challenge in January, you’re looking at saving quite a bit of money around the holidays which can cause some potential problems.
HOW TO AUTOMATE THIS CHALLENGE
If you are trying to manually remember to save that money every single week, you might not actually do it or it might get a bit cumbersome that’s why I like to hack this method through automation.
I haven’t tried to do this with my bank, mostly because it seems like a giant pain in the butt.
And, thankfully, you don’t have to.
There are lots of apps that can help you increase your savings, but my personal favorite for this type of challenge is Qapital.
Qapital is a free app, that allows you to set up rules for your financial life. For example, one of the pre-set rules you can use is the 52 week challenge. All you do is link your current checking account with Qapital and it will pull the correct amount of money for each week that you are on. It’s so easy to do!
I’m currently saving for a trip to Machu Picchu. The idea of exploring around this world wonder makes me so anxious and unfortunately, it’s not a cheap trip. I anticipate needing $2,000 for the trip.
I set up a savings with Qapital, selected the 52 week challenge AND the roundup rule (every purchase gets rounded up to the nearest dollar with the roundup being saved) and I just watch the account grow.
I started this in 17 weeks ago and am currently sitting at $249.42. The best part of this is I really don’t miss the money at all. It has not had a negative impact on my life in the least bit and stacking the rules is helping me hit my goal of $2,000 for Machu Picchu even more quickly.
- Try Qapital out today, make your first deposit and we both get $5 deposited towards our savings goals
MY PERSONAL QAPITAL ACCOUNT
You can select your background picture to be something that inspires you. Apparently, I think a ridiculous llama is inspiring. Haha!
But you can really do some cool money challenges with Qapital like setting a budget for eating out of $50 per week and if you come in under budget, it will automatically save the difference. I suspect I’ll cover that in a future post or video.
ALL IN ALL
The 52 Week Money Saving Challenge can be a great way to help you save more money, achieve your financial goals, and start to become a master saver. It takes time to build up a really big savings account, but if you use apps like Qapital or just schedule automatic transfers from your bank account to your savings account, you’ll start to see progress soon!
Take action today and good luck with the money saving challenge!ARTICLE BY WHITNEY HANSEN
Wealthy Mindset Series #2 Wealthy Money Mindsetarticle by rennie gabriel
“Your income will be the average of the five people you spend the most time with.” – Jim Rohn
1. The importance of who you hang around with.
If you hang around people who struggle to earn a living, it is likely your income will be similar. If you hang around people who earn hundreds of thousands of dollars per year, it is also likely your income will be similar. And it STARTS with who you hang around with, and not the other way around.
Here is another quote I often use: “Of the billionaires, I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.“- Warren Buffet
I did not want to hang around jerks, and many years ago I realized that if I wanted to create wealth I needed to hang around people who earned far more than me and who had a net worth far larger than mine. Guess what? How they think and their attitudes rubbed off on me. I saw opportunities where before I saw blocks. I looked at how to effectively grow my business, how to create large dollar contracts and more. Who you hang around with is one of the keys that open the door to more wealth.
2. Money terms like interest versus earnings and the cost of money.
There are so many terms the wealthy use when they talk about money, and the first thing to understand is that the wealthy do not think it is rude to talk about money. They will not hesitate to talk about the cost per square foot to build a new house, or the best interest rates on savings, or the appreciation they earned from a stock, or how their broker might have found an Initial Public Offering (IPO) for them. Another point is that if you do not have an understanding of money terms, you cannot participate in the conversation. Here are just a very few things you should understand:
- Interest is what a borrower pays a lender for the use of money. If you deposit money in a bank, you are the lender and the bank is the borrower. In this environment, the bank will pay you about 1% to borrow money from you. (This is a typical savings account.) If you borrow money from the bank, they are the lender and may charge you 6-10% interest. The difference between the 1% they pay on savings and the 6% they charge on a loan is called the “spread,” and this is how they make a profit.
- The cost of money refers to borrowing money to invest, whether in other stocks, a business, real estate or whatever. The point is that more money should be earned than the amount of interest you pay. This is the cost of money, also called the cost of funds. If you borrow money at 4% and you’re able to invest it, or loan it out at 10%, then you’re the one earning the spread, and your cost of funds is 4%. You do not have to put money in the bank to earn interest. This is available through peer-to-peer lending, trust deeds, tax liens and other financial instruments like bonds.
- The term “earnings” is often confused with interest by people who do not know money terms. If you own a stock or a mutual fund, it may pay a dividend and grow in value over time. If you receive a 1% dividend and it grows in value by 8% over a one year period, the total earnings would be 9%. This is not interest, but total earnings. 1% is income and 8% is appreciation. If you see that a mutual fund or stock returned 22% over a one year period that could all be appreciation, with no income and has nothing to do with interest.
There are so many more financial terms, I could write a whole booklet: Compound interest versus simple interest, debt coverage ratio, capitalization rates, amortization, depreciation, present versus future value, discounting, puts, calls, margin accounts, on and on. If you want to know more, just send an email to me here.
In the next article in the series, we will cover how the wealthy use questions instead of making statements when they hear familiar information.
To your prosperity,
RennieLearn more about rennie gabriel