What happens when the breadwinner of a family of four suddenly passes away in an unexpected heart attack? In addition to emotional turmoil, the remaining family may face financial stress unless they have life insurance. One of the biggest benefits of life insurance is financial protection for loved ones.

While working in the financial services industry, I saw a very similar and unfortunate situation play out where the breadwinner of the family passed away suddenly.

Of course, there’s no replacement for a lost family member, but the money from life insurance helped the man’s wife and two young children have financial peace of mind. It gave them the space they needed to grieve. And that’s just some of the benefits of life insurance.

No one wants to think about their death, but it’s a part of life. Planning ahead with life insurance could help your loved ones overcome financial obstacles when you pass—and some policies can provide living benefits to you as well. Dive in to learn more about the advantages of life insurance and learn how to evaluate your life insurance needs.

Benefits of life insurance

You probably know how important life insurance is for women, but it’s still a good idea to understand the complex advantages and disadvantages of life insurance.

In most cases, the advantages of life insurance outweigh the disadvantages—by a lot. Let’s take a closer look at the distinct benefits of life insurance.

Help protect your loved ones

Life insurance is an important part of your estate planning checklist. One of the biggest advantages is the financial protection it provides your loved ones if you pass away.

Imagine what could happen to your family if you weren’t around to care for them. Depending on the situation, your loved ones could quickly fall into a bind without your financial support.

Unfortunately, that could lead to additional stress as they navigate an emotionally challenging time without you. With the financial support provided by insurance, your family can stay on track. Your thoughtfulness will continue to help provide for them while they grieve and beyond.

In addition, the payout from your insurance policy could help your family get ahead financially.

For example, your policy may be able to help cover the cost of college tuition for your children.

Peace of mind

Do you have dependents who rely on you to support their financial needs? If so, you may find it easier to see the benefits of life insurance, such as providing income replacement if you pass away.

You’ll protect your peace knowing that your family will be taken care of financially, even after you’re gone. The simple fact that your family will find financial help is enough to make anyone feel more comfortable.

It can cover funeral expenses

No one really wants to think about their funeral. But one of the leading benefits of life insurance is it can cover costly funeral expenses.

The median cost of a burial funeral in the United States is $8,300! That’s a lot of money that could help your family in their time of need.

Provide potential tax advantages

Some of the advantages of life insurance aren’t directly related to the payout of a policy. Namely, many life insurance plans offer tax benefits to policyholders and beneficiaries.

When an insured passes away, their beneficiary can receive a lump sum payout of the life insurance death benefit tax-free. Not having to pay taxes on a large sum of cash helps the money go further in covering expenses.

Policyholders can also get tax benefits from life insurance through tax-deferred cash value. Permanent life policies that include cash value components let policyholders save a portion of premium payments into a cash value account. The money in this account generally earns interest (or investment earnings) over time.

However, the policyholder doesn’t have to pay taxes on the earnings until they withdraw funds.

Build generational wealth

The most basic use of a life insurance policy is to provide financially for your loved ones after you’re gone.

For example, a policy might help replace your income so your partner can pay the mortgage and other ongoing bills well into the future.

However, you can also use a life insurance policy to build long-term wealth for your heirs—and generations to come. The right life insurance plan can provide the windfall needed to start the process of building generational wealth.

Generational wealth refers to assets that pass from one generation to the next. These assets continue to grow over time, providing each future generation with a larger financial safety net.

Let’s say you have a life insurance policy with a death benefit that could pay off your remaining mortgage balance with enough left over to invest. When you pass, your beneficiaries pay off the house.

Now, they have debt-free housing and can put more money into savings and investments. When they pass, their children inherit the house and a sizeable savings. The children rent the house for additional income and continue to invest their savings.

May offer living benefits

Many life insurance companies make it easy to tailor your life insurance policy to your needs through riders. Riders, also called policy endorsements, are optional coverage you can add to your regular policy.

Riders can increase the benefits of life insurance, but adding riders generally increases premiums. Insurance riders are most common on permanent life insurance, such as a whole-life policy.

Some of the most popular insurance riders are known as “living benefits.” Life insurance is designed to provide financial support to loved ones after you die, but living benefits riders let you use your policy while you’re still alive. Common living benefits riders include:

Accelerated death benefit

This rider gives the policyholder a portion of the death benefit if they’re diagnosed with a terminal illness and a shortened life expectancy, which they can use for medical bills and related expenses.

Critical illness

This endorsement pays the policyholder a lump sum payment if they’re diagnosed with a medical condition specified by the policy, such as cancer or heart attack.

Chronic illnesses

A chronic illness rider helps policyholders pay for caregiving costs if diagnosed with a chronic illness that impairs cognitive function or two or more activities of daily living (ADLs).

Long-term care coverage

This type of rider helps cover the cost of long-term care, such as living in a nursing home or assisted living facility.

Waiver of premium

This endorsement waives future premium payments if the policyholder becomes physically impaired or very ill.

Although less common, some term policies offer living benefit riders for policyholders.

For example, you may be able to add a terminal illness rider to a term policy.

Disadvantages of life insurance

Although there are many advantages, let’s dive into a few disadvantages to help you decide what’s best for your situation.

Certain policies are costly

In the long run, the benefits of life insurance are wonderful for your family.

However, some policies can get costly depending on the type of life insurance coverage you get. That’s why it’s important to evaluate your needs to determine what’s best for you and your family.

For example, I generally recommend that people looking for permanent life insurance consider universal life policies instead of whole life policies. That’s because whole-life policies can be more expensive when comparing premium dollars to benefits.

Discovering the advantages and disadvantages of life insurance can help you decide on coverage, which could save some costs. Be sure to do some research before getting a policy, such as understanding the difference between a term life policy vs whole life insurance policy.

Your age is also a factor in cost. For instance, the average term life insurance policy for a 25-year-old non-smoker is $31 per month, but if you’re 50, it’s $118.

Hidden terms or exclusions

Life insurance is complex and can be overwhelming if you don’t know what to look for when reading a policy. Some policies may have specific terms or exclusions of what’s covered that you’re expected to know.

For instance, some insurance carriers may deny you or the cost can be higher if you participate in dangerous sports like scuba diving or have health conditions.

This means if they do offer a policy, it will come at a higher price. Plan to review your policy with your agent so you understand precisely what it will cover if something happens to you.

Expert tip: Consider term life insurance at the minimum

Don’t think you can afford life insurance? Even if you don’t have a lot of assets or any dependents, a small budget-friendly life insurance policy, like term life insurance, could help loved ones cover your final expenses if you pass away. So take some time out to explore your term life insurance options based on your budget.

How life insurance works

Life insurance is a contract between you and a life insurance company. You promise to pay your premiums for the duration of the policy.

In return, your insurance company promises to pay the face value of your policy to your beneficiaries if you pass away while the policy is active. Your beneficiaries could be a spouse or partner, children, or even a charity organization.

There are also two main types of life insurance:

• Term life insurance policy
• Permanent life insurance (such as whole life or universal life insurance)

Term policies offer coverage for an agreed-upon term, such as 20 years. Your coverage expires at the end of the year.

Permanent coverage, on the other hand, provides insurance benefits for your entire life. Permanent policies include a cash value component, which lets you save up part of your premium in a savings account. Some permanent policies may even pay dividends.

Do I need life insurance?

Although there are clear benefits of life insurance, you may not think you need to pursue this path. Let’s look closer to find out if life insurance is in your best interests.

Do you have dependents?

If you have dependents who rely on your income, then life insurance is an easy decision. You should absolutely purchase a policy that will help protect your spouse and children if something happens to you.

If you don’t have any dependents, life insurance becomes a bit more complicated. While some people may wait until they are preparing for a baby or have children to take out a life insurance policy, there are benefits to getting one earlier than that, especially if you have a spouse who relies on your income.

Do you share financial obligations?

Beyond protecting your dependents, you should take measures to help protect anyone with whom you share financial obligations. Take a minute to consider any financial obligations that could become a burden to those you leave behind.

For example, many young, newlywed couples could benefit from life insurance, even if they do not have children. It’s especially true if they have a substantial amount of student loans or will need to lower credit card debt that requires two incomes to repay. If you left your spouse behind prematurely, could they comfortably afford the life you have built together?

Beyond shared debt between partners, you may have co-signed loans with another family member. Without life insurance, they could be put in a difficult situation if you left this world unexpectedly.

If you have a mortgage, life insurance can be a great way to guarantee your loved ones aren’t left with your debt if you pass away. I highly recommend a term life policy that covers the balance of your mortgage. Just make sure your term is at least as long as your remaining mortgage term.

Why shouldn’t I delay getting life insurance?

It’s easy to look at life insurance as another expense you don’t want to add to your budget. With that, it is tempting to put off purchasing a policy until it is absolutely necessary.

But if you delay it too long, it might be too late to help protect your family if something unexpected arises.

If you are looking to save money on life insurance, then you should move forward as quickly as possible. From a cost perspective, it makes more sense to purchase a life insurance policy while you are young.

In my experience working in life insurance, the cost increases significantly as you get older—even between ages 29 and 30! That’s simply because life insurance rates are often the cheapest when you are young and perceived to be very healthy.

Plus, it can be a better value for your money to purchase a policy earlier in life since you can typically lock in a lower rate when you are still young and in good health.

If you think your family could benefit from life insurance, now is the best time to act. Once you decide life insurance is a good choice for your situation, putting off the purchase could lead to higher rates.

Beyond the cost, delaying your life insurance could lead to dramatic consequences for your family if you aren’t able to finalize a policy in the event something happens to you.

Is it really worth having life insurance?

In many cases, yes! One of the benefits of life insurance is that there are many different types of policies to choose from. This makes it easy to find a policy that fits your needs and budget.

Life insurance can help your family pay expenses, cover funeral costs, and more without worry.

Do you gain money from life insurance?

Permanent life insurance policies feature a cash value component, which lets you build cash within your policy. You can use your cash value in many ways, including:

• Supplementing retirement income
• As an emergency fund
• Paying life insurance premiums
• Collateral for a loan

What types of life insurance are there?

There are several types of life insurance, but all fall into two categories: term life insurance and permanent life insurance. Term policies provide coverage for a specified amount of time, called the term. At the end of the term, the policy expires, and the insured is no longer covered.

Permanent insurance covers your entire life, providing you pay your premiums. Permanent policies also include cash value options to help you build cash savings from your premium payments.

Term insurance policies are generally less expensive than permanent policies.

Articles related to insurance

If you learned more about life insurance from this article, check out these other helpful reads about insurance!

• Do You Really Need A Million Dollar Life Insurance Policy?
• The Importance Of Life Insurance For Your Finances
• Term Life Insurance VS Whole Life Insurance? What’s Best For You?
• What Is Credit Life Insurance?

Get the benefits of life insurance to ensure your peace of mind

There are advantages and disadvantages of life insurance, but it is an excellent way to help protect your loved ones from financial stress.

With a life insurance policy, you can help protect your family from the financial repercussions of your passing. It can allow them to mourn in peace without wondering how they will be able to pay ongoing bills.

Even if you don’t have dependents or major assets, I recommend considering life insurance as a way to help cover your final expenses if you were to unexpectedly pass away.

Learn even more about life insurance with our completely free “Life Insurance 101” course! Don’t forget to tune into the Clever Girl Finance YouTube channel and Clever Girls Know podcast for more key financial tips!

The post The Benefits Of Life Insurance: Evaluating Your Needs appeared first on Clever Girl Finance.

There’s no rule that we have to make all our New Year’s resolutions on January 1! Infact, it’s never too early or too late to think about our goals for the year. Additionally, figuring out your yearly goals can be an ongoing process. So keep reading to learn what key goals everyone should have in place!

Setting goals for the year isn’t meant to lock you into a rigid mindset of success or failure. It’s simply meant to help you reflect on what you want out of life and create steps to achieve it over time.

That said, you can set yearly goals in any or every area of life. Here are 29 ideas for yearly goals for your finances, career, health, relationships, and personal development!

For your finances

Since this blog is all about finances, it makes sense to start with some yearly financial goal ideas! The best new goals for the year will depend on where you are in your financial journey, of course.

You might already have some of these money goals checked off the list!

However, it’s always good to see where you stand and update your goals if needed.

1. Build or replenish your emergency fund (One of the most important yearly goals)

An emergency fund is the perfect first financial goal to have because this is the savings that will allow you to live without a job or deal with other surprise expenses without going into debt.

The recommended amount for your emergency savings is to have 3 to 6 months of basic living expenses i.e. for food, housing, transportation, core utilities, etc. But if that seems overwhelming, I say you should work on saving your first $1,000 and build from there!

2. Create a monthly budget that ties into your yearly goals

Budgeting is also a foundational financial goal because this is what allows you to get a full picture of how much you’re making, how much you’re spending, and where there might be leaks in the ship.

There are a variety of different budgeting methods, so you should pick the one that appeals to you most. Try a percentage budget or a biweekly budget or monthly budget, depending on what dates you are paid.

3. Start a side gig for extra income

We could all use a little extra cash, whether to pay down debt, increase savings, achieve a financial goal, or retire earlier. No matter what it is, starting a side hustle can help you speed up your goal timeline.

Check out these ideas for how to make an extra $1,000 a month, like freelance writing and starting an online store. If you’re thinking more about starting your own business on the side, start learning how to start a side hustle.

4. Contribute more to your retirement accounts

There’s no rule that you have to wait until you’re 65 or older to retire. The sooner you start saving, the sooner you will have that coveted financial freedom within your grasp.

Haven’t started a retirement account yet? Here’s everything you need to know about how to start saving for retirement!

5. Try a no-spend challenge

Have you heard of a no spend challenge? It’s a period of time, usually a couple of weeks to a month, during which you eliminate all non-essential spending.

You’ll still pay for rent, gas, utilities, groceries, and other necessities, but this is a chance to identify bad money habits and find new (free) ways to entertain yourself.

In my opinion, it’s a fantastic and simple way to save money. You can start with a no-spend week and then work your way through an entire month without spending excess money.

6. Plan your financial goals

There are different kinds of financial goals. Some will be short-term, like saving for Christmas on a budget or vacations. And some will be mid term goals, like saving up a house down payment or paying off a car.

Others are your long-term goals—the big stuff like paying off a mortgage or reaching a certain net worth by a specific age. Resolve to outline your financial goals so you can start measuring your progress.

7. Cultivate good money habits

Like any other habit, good money choices take practice and repetition.

Prioritize saving, whether you’re just getting started or you’re flexing your saving muscles by increasing how much you put away each time. Stay diligent with debt management, paying it down, and avoiding future debts.

And, of course, drop those bad habits. Nothing will block the path toward your goals like persistent bad habits such as credit card debt or overspending.

To build your career

Since most people work 9 to 5, five days a week, it’s important that we enjoy what we do and set up career strategies and goals for the year. Here are some good goals to have and ideas!

8. Learn new professional skills (One of the most lucrative yearly goals to set)

Learning new things doesn’t end after graduating high school or college. It’s a lifelong process! Improving your current money making skills and adding a new skill or two to your arsenal keeps you engaged, passionate, and competitive in your field.

It prepares you for promotions and enables you to switch jobs more easily if your circumstances change.

As an example, here are some high-income skills to help bring in more of that money!

9. Apply for a promotion

Sometimes, promotions just fall into our laps. Other times, you have to be bold and ask for them! It might sound intimidating, but there’s a right way to go about it.

I recommend thinking about what value you’ll bring to the role, asking your manager or coworkers if they see areas for improvement, and letting the higher-ups know you’re interested and ambitious.

However, the conversation can be as simple as asking your boss what you need to do to get to the next level or asking for a raise.

10. Create (or update) your website and resume

So, if you don’t have a personal website yet, building one would be a great yearly goal. A website is your own professional “home” on the internet.

You can use it to introduce yourself, highlight projects you’ve worked on, write blog posts to demonstrate expertise on certain topics, let recruiters know how to contact you, and so on. Update your resume simultaneously (even if you have a job gap)!

11. Strive for a healthy work-life balance

Is “work less” really a valid career goal? Definitely! If you’re starting to feel burned out, your body and brain are telling you that what you’re doing is unsustainable.

When you spend all your time working, you’re taking priority away from other important areas of your life—because you only have 24 hours in the day.

Over time, burnout will start to affect your career performance, so it’s important to stop it in its tracks. Check out our article on why time and money are both valuable (and how to play the balancing act between them).

I’m very intentional about taking breaks when I’m working and I have specific times where I fully disconnect from work like on the weekends and when I’m on vacation.

12. Network in your industry

These days, you can’t just walk into an office with a resume, shake the manager’s hand, and walk out with a job. Submitting online applications doesn’t feel much better. No matter how great your cover letter skills are, it’s still hard to distinguish yourself from dozens (or hundreds) of competitors.

This is where the phrase “it’s not always what you know, but who you know” holds true. The more you use networking tips and meet people in the industry, the more connections you’ll have for career opportunities, referrals to new companies, professional mentorship, etc.

13. Invest in yourself as one of your yearly goals

You are your greatest asset, so you’re also your best investment. Pour into yourself so that you can pour into your future and help others.

Seek out education, either to deepen your expertise or broaden your perspective. Choose conferences, mentors, and projects that will boost your career (and earning potential!).

And don’t overlook the “softer” side of investing in yourself. Find a self-care routine that fits your personal needs and your budget. Prioritize your health and well-being.

Not only will this equip you to tackle your goals, but it will also save you time and money in the long run by preventing illness and burnout.

14. Have a job (or build a business) that meets your needs

Most of us work to earn money. So, you absolutely want your job to meet your financial needs and fund your financial goals.

There are many reasons women face salary problems that make it challenging to reach their goals. Course correct by seeking a promotion, negotiating a salary increase, or finding somewhere you’re valued better. Answer the question of how much money you want to make: is 100k a year good? 200k?

For many people, actually liking their job is also one of their basic needs. If you want to retire super young and are willing to grind through tough conditions in the short term in exchange for big bucks, that might be the right solution for you. But if you want a long, fulfilling career that also pays the bills, make it happen.

If you can’t find what you’re looking for in your current job or work environment, seek one that feels right. Or, if entrepreneurship is calling your name, start your own business from scratch.

For your health

You only get one body, so it’s important to take care of it and your mental health. Here are some good goals for the year.

15. Focus on fresh, clean eating

When life gets busy, eating habits are often one of the first things to falter. It’s so easy to swing by the drive-through on your way home and certainly not so easy to do a monthly meal plan, chop and prep ingredients, cook, and wash dishes.

But the food we eat does have a huge impact on our health and wellbeing, so even though it requires a little added time and thought, clean eating is a worthwhile goal.

A whole food plant-based diet works well for me; I love sites like BudgetBytes for quick, simple meal ideas I can whip up at home. Learn more about living a healthy lifestyle on a budget.

16. Spend more time in nature

The Japanese have a beautiful term—shinrin-yoku—meaning “forest bathing.” The concept is all about the many benefits we get from nature, both mental and physical. Forest bathing is as simple as wandering along a nature trail, breathing in the fresh air, and admiring your surroundings.

Time in nature lowers stress and lifts our moods. Check out the AllTrails or TrailLink websites to find hidden gems in your area!

17. Find an exercise routine you love

Ideally, you can combine this goal with the one above by finding ways to exercise in nature! You can go for a bicycle ride, jog on a nature path, do yoga in your backyard at sunrise, or take a fitness class in the park—the options are plentiful.

There’s nothing wrong with an indoor workout or hitting the gym, either. Of course, any kind of movement is amazing for our health, including managing anxiety and improving mood.

18. Practice good “sleep hygiene”

Sleep is another daily habit that drastically impacts our lives. According to the Sleep Doctor, skimping on sleep affects our energy, mental functioning, memory, and more.

According to the Sleep Foundation, sleep “hygiene” is a collection of behaviors and surroundings that help improve sleep.

Create a good routine that includes whatever helps you relax, whether that’s meditation, listening to a podcast or reading, or anything that brings you comfort. Tips include following a consistent nightly routine, turning off electronics 30-60 minutes before bed, and sleeping in a cool, dark, comfortable room.

To improve your relationships

There are few things more important than the people we share our lives with, so make sure to include them in your goals for the year.

19. Learn the love languages

The “five love languages”, discovered by Gary Chapman, aren’t an exact science, but they are a great way to start conversations with your loved ones about what makes them feel most loved and appreciated.

The main five are:

1. Words of affirmation
2. Quality time
3. Physical touch
4. Acts of service
5. Receiving gifts

Much relationship strife comes from simple relationship communication problems and not understanding what the other person needs. If your partner most values quality time, a cheap picnic in the park might mean more than a $1,000 necklace.

20. Practice positivity and gratitude (Essential yearly goals to establish)

Sometimes, we can get into the habit of taking the people in our lives for granted. They’re the ones you turn to when you need to vent about your problems and bad days…and while this is important, too much complaining can turn the relationship negative.

Whether it’s with your partner, your best friend, or a parent or child, make it a goal to regularly share why you’re grateful for them and always do your best to appreciate the little things.

21. Try new experiences together

Falling into a dull routine is another phase many relationships go through. Go to work, come home, make dinner, watch TV, sleep, repeat. Carve out time to mix things up a little by trying new activities!

It doesn’t have to be fancy, and you don’t have to leave your house. Check out these budget-friendly at home date ideas like a paint night or backyard campout. Involve the whole family in some of your ideas, too, with family night ideas.

22. Prioritize your friendships

As people age, their social circles can narrow, as everyone is busy with their families, jobs, and lives. Be intentional about not letting treasured friendships fade!

Your “circle of influence” impacts everything from your mood to your eating habits to your finances. Surround yourself with the right people and make an effort to see them, and you’ll reap the rewards.

I’ve found that one of the best ways to stay in touch with my friends is to make it a point to text or call them monthly. That way, we can catch up over the phone or make plans to meet for dinner or something later in the week.

23. Establish firm boundaries with yourself and others

Boundaries can be scary, but they’re necessary to accomplish your goals. Stay disciplined with yourself. 

Become your best advocate in every part of your life. Reflect on what you need and want. Once it’s clear to yourself, make it known to those around you.

For example, if your family, friends, or partner have different spending philosophies than you, but you know your goals, it’s easier to stand firm in your decisions. Learning to speak up for yourself on the job can improve how you feel about your work environment and might even move you closer to your career goals.

Keep your eye on your goals and know that healthy boundaries will get you there faster.

For your personal development

Lastly, here are some goals for the year to help make your life fulfilling and help you with figuring out who you really are.

24. Read a certain amount of books a year

Books hold an incredible wealth of knowledge, entertainment, and life advice. Depending on how quickly you read, make it a goal to read a certain amount of books per year.

For instance, try starting with one a month to see how it goes. You can choose fiction, nonfiction, or a combination! 

Check out our recommendations for financial literacy books, career, business, and personal development books.

25. Define your personal core values

When was the last time you sat down with yourself and thought about what’s actually important to you? This is your time to get a little existential.

What kind of person do you want to be? What traits do you admire in others? How will you cultivate those traits in yourself and practice them in the real world?

Grab a journal and start brainstorming. You can even use journal prompts for self discovery.

For example, you can jot down something like…

• Independence is important to me, so I want to get out of debt and learn more self-reliance skills.
• I value compassion, so I want to get involved with charities/animal shelters.
• I value adventure, so I want to make more time to travel and try new things.

Discovering and defining your personal core values can help you lead the life you want to live.

26. Outline your strengths and weaknesses

Along the same lines, make it a yearly goal to assess your own strengths and weaknesses.

For example, this can be professional skills, personal traits, or whatever else you want to self-evaluate. Start with what you’re good at.

Do you keep a cool head in a crisis? Do you have a natural affinity for numbers or words? How can you leverage those strengths in your life? Then, move on to self improvement ideas.

Are your communication skills a little lacking? Do you struggle with time management or self-discipline? Self-awareness is the first step to fixing a problem!

27. Limit social media & TV

Did you know that the average internet user spends 143 minutes daily on social media, according to Statista? That’s almost two and a half hours every day scrolling through posts and pictures you’ll barely even remember tomorrow!

However, TV is even worse, with the average American logging 168 minutes per day, claims Oberlo.

So, if you have issues with poor sleep or creativity, all that screen time is likely one of the causes, according to Harvard Medical School. Make it a goal to spend less time in front of screens this year!

Also, a social media detox can even be beneficial for your finances.

28. Start a new hobby

So, what will you do with all that extra time once you’re not spending it scrolling on your phone or plunked in front of the TV? Start a new hobby! Try out a whole bunch to see what makes you feel passionate and energized.

It could be an outdoor hobby like hiking or kayaking, an indoor hobby like baking or playing an instrument, or even a hobby that makes money like woodworking or photography.

29. Manage your time

Time is money, after all! Spend your time doing something productive or something you love. (It’s even better when the task ticks both boxes.)

Maximize any time spent on a side business to earn more in less time.

Focus on quality time with loved ones rather than keeping one eye on your inbox and one thumb scrolling on your phone. And yes, sometimes rest really is the most productive way to spend your time.

I’ve found that the main thing with time management is to make a plan and follow it.

For instance, plan out how many hours of your week will be free time and how many will be spent on reaching your goals.

Expert tip: Make your goals smaller for success

For my big yearly goals that I want to meet, it helps for me make them smaller. I break them down by month, by week, and, if necessary, by day and I’ve found this approach to be very effective.

To help yourself stay organized with tracking your goals, use a yearly calendar on your phone or a planner. Then you can break down your goals into smaller chunks throughout the year and achieve them slowly without overwhelming yourself. Be sure to track your progress. I like to pick a day of the week, like Sunday, to go over my progress.

How to set your goals

As you consider all of these goal ideas, you may wonder what is the best way to begin. Try these ideas to help you set and stick to your plans.

Create your goals in a logical way

As you map out your goals, there’s no perfect formula. You could use SMART goals (specific, measurable, achievable, relevant, and time-bound). Or you could set firm goals and work backward to determine how they will play out.

You could also focus on the big picture of how you imagine your life and then calculate what milestones will get you there.

Remind yourself why your goals matter

Without a very specific reason for completing your goals, you may lose motivation. To stay focused, I like to remind myself why my goals are so important.

For instance, if I want to save a six-month emergency fund, I need to define why that matters. Something like, “I’m saving a six-month emergency fund so I can have financial peace of mind and avoid living paycheck to paycheck.”

Come up with a sentence that explains your why and refer to it when you are losing focus.

What are some examples of 1 year goals?

Some 1 year goals are saving a specific amount of money, learning a language, or committing to a new fitness routine. There are lots of short-term goals like these to choose from.

When thinking about year-long goals, consider how much time you can devote to them, how much money they will cost, etc. Ensure you can complete them in that amount of time, or you may lose focus. And reward yourself along the way!

What are 3 main good goals to have?

When choosing 3 main goals, try choosing from 3 important categories, such as finances, family, and health.

Or, if you prefer, one for personal development, one related to your career, and one just for fun.

Once you’ve chosen your categories, choose a reasonable goal to complete in a fairly short time frame, such as 1 to 3 years.

For instance, save $10,000 in a year, pay off debt, hike 100 miles over the course of a year, get a new job, etc. Pick whatever makes sense for you and enjoy the process.

Are there any fun goals and what are they?

Yes, there are plenty of fun goals, and since you make your own goals, these are up to you! If you aren’t sure where to begin, I suggest considering your interests.

If you love reading fiction, make it a goal to read books from 5 authors that are new to you. Or, if you are interested in making a higher salary, complete a course that is fun and challenging for you to help further your career.

Some other ideas to consider are taking on a new hobby or saving up a vacation budget and traveling somewhere you’ve always wanted to go. The main point is to make a goal out of something you enjoy.

Articles related to goals

If you’re all ready to get started on your brand new goals now, read these posts next for more inspiration!

• Examples Of Financial Goals
• Financial Goal Setting For Success
• New Month New Goals: Ideas For Goals To Set Each Month
• How To Successfully Plan For The Year

Yearly goals are a great way to improve your life!

In practice, these yearly goal ideas will look different for everyone because we all have different lives, resources, and circumstances. Now, it’s up to you to figure out which goals for the year are most important to you and how you’ll achieve them!

However, setting financial goals should definitely be at the top of the list because getting your money right leads to wealth and success. Learn how to create the right financial goals with our completely free goal setting course!

The post 29 Yearly Goals Everyone Should Have! appeared first on Clever Girl Finance.

The truth is that many problems contribute to low black homeownership statistics and homeownership rates. Yes, inequalities and racial disparities exist in the housing industry. But improving the black homeownership rate is still important, necessary, and attainable. Let’s take a look at the statistics and what we can do about them.

Why is black homeownership so important?

Becoming a black homeowner and understanding black homeownership statistics is about more than just a home purchase. It’s about laying a foundation for building generational wealth. In addition to being one of the biggest wealth-building assets, it’s also the base for family and financial security.

Here are more specific details about why it’s absolutely worth striving for.

Black homeownership helps build generational wealth

Looking back now at how history is affecting the present, early Black Americans had tremendous difficulty purchasing land and homes in the United States. And unfortunately, this has impacted how easy it is to leave a legacy to future generations.

Passing down a home is just one way that black families can begin to build generational wealth. Without a house as a key asset, each generation must find other ways to acquire enough wealth to leave to their children.

Owning a home provides financial options

A home can be your main vehicle for building wealth and increasing and tracking your net worth. And net worth is a goal worth improving.

But sadly, single black women have one of the lowest rates when it comes to net worth. How can this be changed? One way to close this racial wealth gap is by investing in real estate.

So, what’s the draw of being a first-time homebuyer? Well, for one, you can build home equity which can provide you with more financial options in the future. And you can use this equity in numerous ways.

Perhaps to pay off debt, increase your savings, or invest? Current homeowners can even buy a new home of greater value.

Another way to increase your net worth is to keep your home so it appreciates in value. Its value will increase over time. With this in mind, a home can be one of the greatest methods of wealth creation.

Homes provide safety and community

The benefits of homeownership go further. Not only does owning your own home provide a foundation for wealth building, but it’s also important for families.

A home is a safe space where families can grow and is the cornerstone of communities. A neighborhood filled with homeowners rather than tenants will have pride in their property and the local area.

Black homeownership statistics

Now, let’s examine the numbers and percentages to see how homeownership, income, and other factors affect Black Americans.

Percentage of Black Americans who own homes

Recent data from Census.gov reveals some information about black homeownership statistics:

• In the United States, Black or African American homeowners accounted for only 7.9% of the population, while black renters accounted for 18.8%.
• White households reached a percentage of 73.1% homeowners, with renters at 50.2%.
• The other largest categories of homeowners were Hispanic Americans at 10.5% and Asian Americans at 4.7% for homeownership.

This list reveals significant differences in homeownership. There is a much higher percentage of white families who own their homes compared to black families as well as families of other races.

In addition, the amount of black renter households is much higher than those that own their home.

The data is cause for concern, but we will discuss ways to improve these statistics for Black Americans. Let’s take a look at other factors that affect homeownership rates.

Incomes and other factors

Income affects our everyday lives, including how high of a mortgage payment we can afford. Because of this, it’s crucial to know about income statistics.

According to Census.gov and their chart about real median household income, Black Americans make an average of $52,860 per year.

An average salary of approximately $53,000 may make it difficult to afford a mortgage, depending on circumstances and location. This salary is approximately $4400 a month before taxes, and the median monthly mortgage payment is over $2200, according to Bankrate.

Location also shows differences in black homeownership statistics.

For example, according to the National Association of Realtors (NAR):

• The states with the highest black homeownership rates are South Carolina, Mississippi, and Delaware.
• North Dakota, South Dakota, and Alaska had the lowest rates.
• Including Washington DC, 16 states rated homeownership as higher than 44%.

Why black homeownership statistics are disproportionately low

But black homeownership statistics are still incredibly low. Why? Let’s take a closer look at housing equity and the factors that contribute to the disproportionately lower rate of homeownership for Black Americans.

Lending biases and interest rate disparities impact opportunities for black homebuyers

Housing discrimination is a practice that impedes the ability to rent or buy housing. It also prevents people from getting a mortgage or other housing-related activities. Discrimination is based on race, religion, sex, and other identifying factors.

Redlining was a form of mortgage discrimination or bias. It allowed lenders to deny mortgage loans to people living in areas that African Americans densely populated.

The Fair Housing Act was passed in 1968 to make such practices illegal. Other efforts have been made to undo these years of discrimination in the housing market, such as the Home Mortgage Disclosure Act data, which promotes lending transparency.

However, the effects of these practices still exist. Even today, they still impact homeownership rates.

Another form of home-buying discrimination is the disparities in interest rates.

According to Housing Matters, black homeowners on average are charged a higher interest rate by mortgage firms than white homeowners due to risk based pricing with credit and loan-to-value ratios.

Additionally, African Americans are more likely to be denied a loan. Statista shows that black households have the highest denial rates for mortgages from 2019 to quarter 3 of 2023.

One reason for this may be a lack of information for first-time homebuyers. Black mortgage applicants may not always be aware of the various programs that exist to help them become homeowners. And this continues to put black families at a disadvantage when it comes to acquiring lending.

Disproportionate debt load within the black community

Something else that affects black homeownership statistics is Black American households also have higher debt than other ethnic groups. Specifically with the student debt crisis.

Black students take out the most student loan debt, according to Bankrate, when getting a bachelor’s degree. Bankrate also explains that this has quite an impact following graduation.

Four years after finishing college, black students have nearly double the quantity of student loan debt that white students have. However, this is mainly due to the differences in interest accrual and borrowing money for graduate school.

Debt directly affects home buying. Why? Too much debt could mean lenders decline your mortgage application due to the risk of default.

Debt makes it hard to gain the funding required to buy a home.

Additionally, wage gaps for minorities and women also negatively impact your ability to pay off debt. Again, this makes it more difficult for black borrowers to get a mortgage.

Lack of access to capital for a downpayment

When you buy a home, you need to put down capital as a down payment for the property. Usually, this means saving hard to create this down payment for your future home. But the ability to save enough depends on how much you earn.

And this is another area where Black Americans are at a disadvantage. The annual median wage of all US workers is $42,000, but 43% of black workers earn less than $30,000 per year, according to McKinsey research.

In addition, many families live paycheck to paycheck, unable to even save for emergencies. One study found that most Americans have less than $1,000 in savings.

The result? Some people struggle to earn enough to save for the down payment of a home.

Expert tip: Don’t be discouraged, you can own a home

With all the negative statistics around black homeownership, it can be discouraging to think about owning it a home but it is possible and black homeownership is rising.

That said, it’s important to start saving for your any required home downpayment depending on where you plan to buy and the type of mortgage you qualify for as a first-time homebuyer. The down payment for a home is usually a large expense, but don’t forget that there are also other costs and fees to save up for.

When I was considering a home purchase, I also thought about HOA fees, property taxes, and maintenance costs. These are part of homeownership, so be sure to consider them in your budget before looking to purchase a house. You’ll also need to consider moving costs once you purchase your home.

Steps to improve black homeownership statistics

Ongoing work continues to level the difference between black and white homeownership rates. But in the meantime, there are ways to make housing affordability more likely. Let’s take a look.

Focus on getting financial education

First, focus on financial literacy basics, including budgeting your income. Budgeting means creating a plan to save, reduce debt, invest for the future, and pay bills.

Need some support? Check out our Clever Girl Finance Roadmap. You can also take advantage of our completely free personal finance courses.

Work to reduce debt

As we’ve discussed, debt impacts your ability to purchase and maintain a home.

So before buying a home, work to reduce your debt using a tactic like the debt snowball method. Ideally, you’ll have zero, but if not, try to pay down as much as possible.

Lenders evaluate your debt-to-income ratio. They want to know how much you earn each month and how much of that goes towards paying down your debt. It helps them determine your ability to make your monthly payments.

So, if you have too much debt compared to your income, this could reduce your likelihood of getting approved for a loan. Or it could mean you cannot borrow as much as you need for the home you have your eye on.

If this is a problem for you, consider these debt reduction strategies for attacking your debt.

Begin to prioritize savings (not just for a down payment)

Now that we’ve discussed black homeownership statistics, take steps to secure your financial future before buying a home. Having money saved for emergencies and retirement is necessary for financial stability. So, prioritize this before thinking about saving for a down payment.

But saving on a tight budget can be difficult, so there’s no harm in starting small. Every little contribution you make is a step in the right direction, which eventually adds up. Once you’ve saved for emergencies and put money toward retirement, start saving for a house down payment.

Improve your credit

Unless you’re a cash buyer, you must take out a home loan to buy a property. And credit plays a significant role in getting a home loan.

If your credit score is low, improving it will increase your chances of getting approved for a loan. And better yet, you’ll be eligible for loans with better interest rates.

So, what does your credit score include? Lenders will likely look at several factors, such as your credit utilization, payment history, and credit history length, in addition to other factors like credit mix.

Before applying for a home loan or any other type of loan, it’s essential to know how credit works and how these factors impact your credit score. From here, you can regularly monitor your credit and take the necessary steps to improve your score.

Research the mortgage and lending process

It’s important to know what to expect in a real estate transaction. Loan applications and the mortgage process involve a lot of paperwork.

Be aware of the steps you’ll need to take before purchasing a home, as well as how much house you can comfortably afford to buy.

According to Rocket Mortgage, you’ll need to have information about your job history and what you earn, your credit, and more. They also explain that the process includes a preapproval, an approval letter, and making an offer on a home.

In addition, find out what the cost will be for a median-priced home where you’d like to live. Numerous costs are involved besides the typical home price, including home appraisal/inspection, the cost of furniture, etc.

What is the racial homeownership gap?

The racial homeownership gap refers to the differences between homeownership by race. For instance, there is a large gap between the number of white homeowners and black homeowners in the United States.

As of 2022, the homeownership rate for white homeowners was 75%, compared to 45% for black homeowners, according to the U.S. Department of the Treasury.

What are the barriers to homeownership for minorities?

Some of the barriers for minority home buyers include lender biases tied to higher interest rates.

In addition, income can also be a factor, as lower incomes do not allow potential homeowners to save up a large down payment. Black Americans on average have lower incomes, making saving difficult.

These factors can be daunting, but together, we can all advocate for fair practices with mortgages.

Furthermore, budgeting and consistent saving can help with being financially prepared for a home.

What are the benefits of black homeownership?

Some of the benefits include the ability to build wealth over time with your house as an asset, especially with home improvement, and the option to make rental income if you want.

A house also provides you with security. Once your home is paid for, it gives you a permanent place to live and contributes significantly to net worth.

Articles related to homeownership

If you learned something new from these black homeownership statistics, read these posts to learn more about home buying and finances!

• Should I Buy A House Now Or Wait?
• Is A House An Asset Or A Liability?
• 13 Personal Finance Books By Black Women
• Advice For First Time Homebuyers: How To Prepare

Black homeownership is within reach

The statistics may not seem promising. But the truth is that homeownership is still attainable for black families. Becoming a first-time buyer is an excellent goal to have. Owning a home provides a legacy to future generations and helps build the foundation for generational wealth.

So, if your ultimate goal is to purchase your home, don’t let black homeownership statistics scare you. We can and will close the black homeownership gap with the right education and tools.

What’s next? If you’re ready to purchase your first home, check out our free first-time home buyers course and you’ll be starting on the right path!

The post Black Homeownership Statistics And How Things Can Be Improved appeared first on Clever Girl Finance.

So many of us enjoy talking and dreaming about our goals, but achieving them is another issue. It’s exciting to think about the possibilities of what can happen when we accomplish new goals, but unfortunately, lots of us give up or don’t even get started. So in this article, I’m sharing 5 ways to achieve your goals: examples included. Remember that although achieving your goals is rarely easy, it’s totally worth it!

How to achieve your goals: 5 Key ways

These 5 ways to achieve your goals can apply to any part of life, including health, career, financial, and personal aspects. And in addition to strategies for financial goals and goal-setting , I’m also going to share some techniques for changing behavior or habits to help you make progress with your goals! Let’s get into it!

1. Set the right goals

The first of the 5 ways to achieve your goals is to focus on proper goal-setting. Too many of us set unreasonable goals, or we don’t have a plan for reaching them. Setting SMART goals is a top strategy for setting goals you can actually accomplish.

Use the SMART Goal method

In 1981, an article in Management Review coined the term S.M.A.R.T. goals. You’ve probably heard of them, and there have been a few variations of what the acronym should stand for. The guidelines are that your goals should be specific, measurable, attainable, relevant, and time-bound.

Here is how to use the SMART goal method to take action to reach your goals:

Make your goals specific

First of all, it helps to set very specific goals. Rather than something vague like “I want to start living a healthy lifestyle,” you need specific goals regarding what aspect of health you’re focusing on.

For example, say what healthy action you’ll take each day, such as riding your bike to work or drinking a certain amount of water.

Make your goals measurable

The “M” in SMART stands for measurable. (Other versions might use “meaningful” or “motivating,” but I prefer “measurable” because that’s been one of the keys for me in reaching my most audacious goals. 

If your goals aren’t measurable, how will you know if you’ve achieved them? You could continue reaching for something more, forgetting to celebrate yourself and your accomplishments. 

One of happiness guru Gretchen Rubin’s “Secrets of adulthood” is “You manage what you measure.” She also calls this the strategy of monitoring. I’ve found this to be quite accurate—if I decide my goal is to write 1,000 words a day, it’s easy to know when I’ve reached that goal. 

A measurable goal comes with clear numbers. Phrases like how much, how many, or how often may be applicable.

Make your goals attainable

Next, when designing your goals, it’s important to keep them attainable. That just means it’s within reach! Remember to be realistic about where you are in life. 

The key is to pick goals that challenge you but not so much as to be impossible. You can always set gradually more advanced goals, such as yearly goals, as you progress.

However, if you focus too much on a goal that feels light-years away, you might give up before you even get started.

My advice would be that it’s great to dream big, but when it comes to setting your goals that you can actively work towards now, try not to shoot too far.

In other words, if you’re a new college graduate, it’s great to dream of being a CEO or starting a business from scratch one day.

But it could take a few years, so you might start smaller, perhaps aiming to get your first promotion within one year.

Professional development goals, health goals, interpersonal goals, and other types can all benefit from focusing on what’s attainable. This isn’t to discourage you from aiming high but to ensure you’re close enough to your current goals to stay motivated.

Make your goals relevant

A fourth step in setting the right goals is to be sure your goals are relevant. They need to speak to you and be important to you.

It can be too easy, especially for women, to compare ourselves to others and center our goals around others’ needs and wants. 

If you don’t have a strong desire to accomplish something, there will come a day when you decide it’s not worth the effort. Giving up is too easy as it is—don’t make it harder by picking things you don’t care about.

For example, when setting financial goals, you have to dig deep and figure out what you truly want. Of course, getting out of debt is good for everyone. But what’s your “why?” What would becoming debt-free do for other parts of your life?

The same goes for achieving early retirement.  Retiring at 40 isn’t necessarily the goal for everyone.

If you pursue early retirement, you need strong motivation. Make that goal relevant by figuring out what you’ll do when you’re retired.

Will you volunteer at a homeless shelter? Travel the globe? Write a book? Clarify your goals to fit your personality.

Make your goals time-bound

A final step in the SMART goals framework is to give a time limit on your goals. Doing this simply offers healthy boundaries so you know how much effort you need to put in and for how long. Getting 30 minutes of cardiovascular activity every day for 30 days may be one example. 

Setting goals on different timelines is useful when making time-bound goals. By setting mid-term goals, for example, you can tackle different levels of accomplishment than with short-term or long-term goals.

It also goes hand in hand with the “attainable” part of SMART goals. Setting goals with different timelines can help you hone in on what’s attainable in certain periods of time. Another way to look at this is by setting benchmarks—smaller steps along the road to your ultimate goal. 

Don’t set too many goals

When utilizing these 5 ways to achieve your goals, remember to limit the number of goals you have! Along with using SMART as a guideline to help you set goals, you’ll improve your chances of success by limiting the number of goals you set.

Have you ever written a to-do list as long as your arm? That kind of pressure can be overwhelming, so it’s good not to set too many goals at once.

If you aim to lose 30 pounds, buy a house to rent out, plan your cousin’s wedding, and write and publish a book all in the same three-month period, guess what? You probably won’t get it all done.

Of course, we all fill many different roles every day. But if you want to know what’s slowing you down, one possibility is overzealous goal setting. You get frustrated and can’t focus enough to accomplish those goals. 

Like Dave Ramsey’s Baby Steps can break down financial goals, you can increase your odds of success by focusing on one or two big goals at a time.

Limiting how many objectives you focus on at a time can make it easier for you.

Focus on process goals instead of product goals

You can set the right goals by focusing more on “process” than “product.”

In other words, many of us might say, “I want to raise kids who become honest, hard-working adults.” That’s great—but it’s a product.

Could you break that down into “process” mini goals? Perhaps focus on their age now and the daily steps you could take to help them become the amazing adults you know they can be one day.

Process goals emphasize what you’re in control of right now. You can control your actions, but you can’t always control how your circumstances go. (For example, Don’t say you’ll lose 20 pounds. Instead, you can decide how much to exercise or set dietary preferences.) 

2. Keep track of your progress

Recording and tracking the progress we make toward our goals helps us get closer to achieving them. Often, we do better with things we write down, which is why it’s one of the top 5 ideas for achieving goals!

Write down your goals

Whether you write them in your private journal or on a sticky note you place above your desk, the act of writing down goals is useful. Writing them forces you to clarify your goals, and you can revisit them regularly to see how you’re doing.

When writing these goals, be sure to write them out in full. If possible, include all of the aspects of SMART goals.

State goals publicly

Many of us benefit from sharing our goals in public. It gives you some outer accountability. Even if the people you share it with won’t care, the very act of stating the goal to someone else can make it more real to you.

You could tell a group of friends about your fitness goals or discuss your financial goals with a family member.

Find an accountability partner

You might move closer to goals with an accountability partner. Maybe you pick one friend, and you text her every day to tell her your step count for the day. (Make sure she knows what your goal is!)

Share your goals on social media to achieve them more easily

Another strategy for achieving goals is to post them on your social media. You know you’ll get responses from friends or followers that might be encouraging. You don’t have to talk daily about these goals on Instagram, but posting your progress weekly or monthly could be helpful.

Monitor your progress

Monitoring your progress is essential when you’re setting goals. After all, if you don’t track what you’ve done, how will you know when you’ve achieved your goal?

This step is what we discussed earlier in the “measurable” part of SMART goal-setting.

Choose a method to monitor your progress and keep track of your efforts and the benchmarks as you pass them.

Monitoring your progress is important, whether saving for a family vacation, tracking spending through a budget, or keeping a list of all the money mindset books you read each year.

3. Stay focused on the goals you’ve set

Staying focused is next on our list of 5 ways to achieve your goals. A singular focus is important for any important goal or dream. Don’t let distractions or discouragement drive you away from achieving what you want to do. 

Keep learning through educational resources

Books, podcasts, newsletters, and other resources can help you stay focused. Anything that helps you learn more could propel you to persevere and achieve your goals.

If you really want to learn a musical instrument, you need to take lessons, practice, and think about that instrument—a lot. That education can help you maintain focus.

Make visual reminders as a way to achieve your goals

Having a goal means having a vision, right? You need to envision a different life, whether in terms of family, career, health, or something else. You might even want to try out vision board ideas.

Put visual reminders of your most important goals everywhere. You can stay motivated and focused when you see notes, artwork, or photographs that remind you of your goals.

Ask for help

Sometimes, we need others to remind us what we’re working for. Talk to your spouse about picking up extra slack with the kids, or ask a friend to remind you of your career goals when you get discouraged. 

For me, the goal of writing and publishing a novel meant I needed to find a critique group. Now, I trust the three fellow writers in my group to give me the feedback and encouragement I need. 

Talk to business mentors

When working towards a big career goal, a professional mentor can have a great impact. Talk to your business mentors when you start to veer off course. Ask them what strategies helped them reach the goals you’re hoping to achieve.

4. Create an environment for success

Environment plays a huge role in our success in building habits and achieving goals. Build your environment for success!

Make it easier to do tasks you want to do

James Clear, the author of the best-seller Atomic Habits, writes a lot about making your environment support your habits. Make it easier to change habits—there’s no prize for struggling. An example he gives is if you want to practice a musical instrument, place it in the middle of the living room.

For example, to save more money, automate your finances. Automation is awesome. It takes the decision out of your hands, so you only make that saving decision once, and it remains your daily routine until you cancel it.

Both of these examples make it easier for you to do something positive for yourself.

Make it harder to do things you want to avoid

The reverse is true: you can improve habits by making bad habits harder. Make them inconvenient or difficult, and you won’t do them as much. It can help you stay on the path to achieving your goals.

For instance, to save money, you can switch to an all-cash envelope system for a few months, and leave your credit cards at home. Not having credit cards with you makes spending inconvenient.

5. Plan for obstacles and failure

That’s right, I said you should plan for failure! We’re human, so we should expect some level of failure or major obstacles along the way. Here is how to use failure as a step to success so you won’t give up on yourself.

Decide how you’ll deal with setbacks

It’s almost guaranteed that your journey won’t be smooth sailing all the way.

Whether you’re hoping to achieve millionaire status, launch a business, find the best way to get out of debt, or any other goal, planning ahead for setbacks can help you succeed.

You can decide in advance what your response will be in certain situations.

For instance, if your goal is to make $500 fast and save it in a month, but you come up $200 short, don’t throw in the towel. Look at your budget and your earnings and make a game plan for how to save more next month. (Or, adjust the goal if necessary—there’s zero shame in that.)

What you don’t want to do is quit on yourself after your first setback. Mistakes and failures are part of life. 

Learn from failure

It is one of the hardest things to learn and one of the most valuable: failure is a great teacher. We all need to learn how to fail and deal with potential obstacles.

Failure is actually an important part of how you can become great. Thomas Edison famously said of his numerous attempts at inventions, “I have not failed. I’ve just found 10,000 ways that won’t work.”

By reframing the way you think about failure, you can start to see it as a tool you need to succeed. It’s a great way to achieve your goals, no matter how difficult they seem.

Expert tip: Don’t get discouraged

Goal-setting can be just as overwhelming as it is fun but you can break down your goals to be manageable. This means that whatever your goals are, you need to take the right path and one that works for you, to reach them. Get your life organized and focused so that you know the tasks to do to make step-by-step progress. 

Remember that the most worthwhile goals will likely include some frustration, but that doesn’t mean the end! You have to push through setbacks and trust the process, and you can achieve more than you think. 

Examples of ways to achieve your goals

As you consider some of the ways to implement your goals, take a look at these examples of 5 ways to achieve your goals from different areas of life. 

Lift weights three times a week for six months

Here’s an example of a fitness goal. It’s clear, measurable, and even time-bound. It focuses on your actions rather than an outcome you can’t control. 

Eat 9 fruit and vegetable servings daily

Another specific and measurable goal would be to eat nine fruits and vegetable servings every day. You can get more nitty-gritty if you like, but that’s a good general guideline to aim for if you don’t have enough produce in your diet. 

Send pitches to one potential client each weekday

If you’re building a business and need to find new clients, here’s a great goal for you. Decide to send a pitch to one new potential client every weekday (for a month or even indefinitely). It gets you in a habit that pushes you to grow your side hustle or full-time business.

Save $10,000 in one year

A financial goal like this one can help you reach other financial goals, like being able to buy a newer car. Figuring out how to save $10,000 in a year is something measurable and time-bound. Make it easier with an accountability buddy to stop you from making an impulse purchase when necessary.

Take your kids to the park twice a week 

Let’s shift gears to look at a family-oriented goal. If you have kids, might set the goal of taking your kids to a local playground twice a week. Again, it’s specific and reasonable (but if that’s not a reasonable goal, pick something that works for you). 

Work on your new side business for three hours weekly

If you’ve dreamed of starting your own business but can’t find the time, determine if there are a few hours when you could work on it. Don’t expect to make five figures immediately, but you can make real progress even with just three hours a week dedicated to your business. 

Read for 20 minutes a day

Here’s another goal that you might set to help you learn or relax. Making your goal attainable (20 minutes isn’t a huge amount of time) helps strengthen your commitment. Plus, you aren’t saying how many pages or books you’ll read because that can lead to frustration if you choose a difficult book. 

Spend a summer in Europe in five years

Maybe you’re like me and dream of spending long periods of time in Europe. I might put photos of the country I want to live in all over my home, computer, car, and phone. Making a vision board is a fun way to stay motivated as well. 

Pay off all credit card debt within two years

Many of us struggle with paying off credit card debt. Looking at what you owe and choosing a reasonable time period for paying it off can help you reach that milestone. 

Practice morning affirmations

Perhaps you’re dealing with a lack of self-confidence, and you’d like to improve that. A great way to improve self-talk is to try morning affirmations that remind you to believe in your abilities. 

What is stopping you from achieving your goals?

To determine what’s stopping you, start by thinking about the challenges you face every day. You might have trouble because of the following:

• People who doubt your potential
• Not enough hours in the day
• Low self-confidence (try these confidence building exercises!)
• Uncertainty on how to achieve your goals
• Financial limitations (read about breaking the cycle of poverty)

Millions of articles and thousands of self help books exist that can teach you the best ways to find success. You’ve likely heard a few of them, but if you’re serious about making progress for real, then try setting SMART goals and staying focused.

What is the first step towards achieving a goal?

Before you can achieve a goal, you need to identify your goal.

Personally, I know I won’t be able to figure out any of the next steps without first knowing what I want to achieve. And that opportunity to work towards a goal needs strong motivation. 

Thinking carefully about what you want to accomplish will help you determine the best ways. You don’t just miraculously save a huge down payment for a house without preparation. You need to identify that goal and then take steps to reach it.

Articles related to achieving your bgoals

If you found these step-by-step instructions for winning with your goals helpful, check out these other posts!

• How To Set Goals For A Small Business In Order To Grow
• 6 Reasons Why Failure Is The First Step To Success
• New Month New Goals: Ideas For Goals To Set Each Month
• How To Be Smart About Money: 5 Ways

Leverage these tips and examples of how to achieve your goals!

The great thing about goals is that they can always keep evolving as you do. After all, we never really stop learning, so why wouldn’t our goals change along the way? Implement just a few ways to achieve your goals, and you’ll be unstoppable.

So, what are you waiting for? Take charge of what you really want, set yourself up for success, and start progressing toward your goals today!

The post 5 Ways to Achieve Your Goals With Examples To Motivate You appeared first on Clever Girl Finance.

No one cares more about your financial well-being than you, so having a personal financial plan is important. Knowing how to make a financial plan will allow you to save money, afford the things you want, and achieve long-term goals like saving for college and retirement.

This probably won’t come as a surprise, but everyone’s money plan looks different. If you’re wondering what makes a solid financial plan or even “what is a financial plan?” you’re in the right place.

In my opinion, money planning is critical, especially financial planning for women.

We all want to be financially independent and build wealth. Deciding to embark on the journey toward financial independence is a big deal!

It marks a fresh beginning with our money, and it means that we’re setting out to accomplish something that can change our lives for the better.

In this article, I’ll explain everything you need to know to plan for your future (I follow these same steps for my own finances).

So keep reading, and get ready to take some action to kick-start your own solid money plan.

What is a financial plan?

It’s simply a structured approach to reach your financial goals. It details your current money situation and financial system, including investing, saving, retirement, and estate planning.

In addition to these key elements, you may also choose to include milestones that you’ll reach along your financial journey to help with your long-term success.

So, what is a financial plan, in simple terms? It’s simply a long-term, organized approach to money management.

Create a list of things to plan for

Let’s start by creating a list of things you’ll need to have or build on your journey to financial security. These items below are essential to your money plan (Click the links below to delve deeper into each!):

• A monthly budget to help you keep your expenses below your income
• A debt reduction strategy and spending plan (using your budget)
• An understanding of all your bills and their due dates
• A fully-funded emergency fund
• A plan to start saving for retirement
• A diversified portfolio of investments
• Multiple sources of income
• Savings for the other things you want (e.g., your short, mid-term, and long-term goals)
• The right types of insurance coverage (Life, health, disability, home, etc.)

Now that you are aware of what to plan, let’s get into exactly how to create your financial plan.

How to make a financial plan

Below, you’ll find twelve steps for how to make a financial plan. These steps will cover all the basics to help you get started. Keep in mind that your plan is unique to you, so feel free to customize it as necessary.

1. Write down your financial goals

Having financial goals is the foundation for your financial success. After all, you have to know what you want to do to accomplish it.

However, when setting goals, you want to ensure that they are well-defined and prioritized accordingly.

It’s great to have big, lofty goals! But be sure to break them down into smaller chunks. That way, you’ll not be overwhelmed by the task and can easily measure your progress.

Your financial goals include anything from getting a new job with higher earnings to paying off student loans, car loans, and credit card debt. What’s important is that you know your priorities.

Evaluate your money situation

As you create your goals, knowing where you’re at with money is important. You should take time to understand your relationship with money and what you’d like to do differently.

You should also go over the numbers.

For instance, I might ask myself about my money: how much debt do I have? What does my savings account look like? And do I have any money invested?

Getting answers to these questions will help you know where to start.

2. Make a budget

Budgeting is a key part of how to create a financial plan that works. Without knowing exactly how much money you have coming in compared to your total outgoings, it’s impossible to save for the future or make smart financial decisions.

A budget must work for you, which means finding a method that suits your circumstances. The 50/30/20 rule, or the cash envelope system, or zero-based budgeting are all popular ways I recommend budgeting.

To create my budget, I go over my bank statements to make a list of all my regular outgoings. Then, I group the expenses into lists of “needs” (housing, utilities, groceries, travel, etc.), “wants” (shopping, leisure, and entertainment), and “savings.”

Next, I’ll total up my income. Income includes any interest or property rental income I might receive in addition to my monthly salary.

Then, I’ll take away my monthly expenses from my income and see if I have any money left over or have a shortfall. If it’s the latter, I ask myself, where can I make cuts?

Now you have your monthly budget, you can realistically use your money plan to set targets for the future.

3. Start an emergency fund

It’s also really important that one of your goals includes a plan to deal with emergencies. You want to make sure you are prepared to weather a storm. Otherwise, you’ll just end up in debt again.

Your emergency fund should have enough money to handle at least a few months of expenses and more if you want. Make sure the amount is something you’re comfortable with and that it will help you if something unexpected happens.

4. Pay off debt

When you make your money plan, be sure it includes a debt management system and a plan for paying off debt. Sadly, you can’t really kick-start your financial future if you’re carrying a ton of debt.

Between sky-high interest rates, large minimum monthly payments, credit card balances, and the damage lots of debt can do to your credit score, you’re better off prioritizing paying your debts.

Create a debt pay-off strategy and be patient but consistent. Work towards being able to say, “I’m debt-free!”

5. Track your spending

A master plan for your money should be an accurate representation of your finances, which means accounting for exactly where your money is going.

My favorite way to track my money is using an expense tracking sheet or app such as You Need A Budget. I can manage my money easily and access my finances anywhere and anytime.

You do need to commit to logging your purchases regularly, though, so an app or sheet may not work for you if you don’t like admin work!

A pen and paper or a budget planner will work just as well! The important thing is that you track every purchase you make and use the information you find to cut spending and improve your finances. Remember to adjust your budget accordingly!

6. Invest your money

If you are serious about building wealth and want to know how to make a financial plan, you’ll need to put your money to work, which is where investing comes in.

However, before you invest any money, it’s important to have clear objectives. Think about the reason for the investment, when you’ll need the money, and what your risk tolerance is.

Investing is a long-term activity, so you have to commit to it if you want to see your money grow.

Worried that you’ll need your money in the short term? Well, that’s what your savings accounts are for. Put aside your emergency savings and money for your short-term goals (i.e., the money you’ll need in 5 years or less).

You also want to ensure you have a basic understanding (at minimum) of any investment you make (e.g., the stock market, real estate, or small business). You should also understand investment terms.

Your investment plans should be part of your monthly budget, where you allocate a certain percentage of your income toward your investment goals.

7. Get the right insurance

After working so hard to earn your money, the last thing you want is an unplanned occurrence to wipe you out. Insurance is essentially your backup plan, protecting your assets in the event a life circumstance occurs that requires a large amount of money to resolve.

I make sure my insurance coverage includes health insurance, auto, disability, life, home or rental, and business insurance.

Basically, I want to protect anything of major importance and high value to ensure that I (and my loved ones) are protected financially.

Having the right insurance can turn what could otherwise be a major disaster into a mere inconvenience.

8. Create a plan for retirement

To have the lifestyle you dream of in retirement, you need to plan adequately for it.

You’ll need to determine how much you will need after retiring from work, considering inflation with your retirement income, and how you plan to save and invest for that period. Opening tax-advantaged IRAs (individual retirement accounts) helps you get more from your savings by paying less tax.

While retirement might seem like a lifetime away, it’s never too early to start! Preparing for retirement is how to make a financial plan that will enable you to live life on your terms when the time comes!

9. Plan for taxes

Yup, taxes! Taxes are annoying, but they’re certainly not going away anytime soon.

So, make sure your long-term income projections include taxes. Avoiding tax planning can impact your cash flow in a major way.

In addition, you definitely want to look into tax-saving investment options and stay up to speed on any relevant tax deductions you can apply to help you save money on tax payments.

You can consult a tax accountant, financial advisor, or robo-advisor to help ensure your tax system is adequate. You should also check out our blog post on how to reduce your taxable income!

10. Create an estate plan

Estate planning is not something many people like to think about, but it’s essential! It allows you to determine exactly what happens to your assets after you are gone.

It involves listing out all your assets, creating a will, and making it accessible to the people who need to have access to it. A financial planner or an estate planning attorney can help you set things up correctly.

This is an important part of my financial plan because I intend to transition generational wealth to my children.

11. Review your plan frequently

Once you have your money plan outlined and churning along, it’s important to review it frequently. Then, make the necessary adjustments if your goals or the circumstances around your life change.

For instance, maybe your insurance needs to change, or how risk averse you are changes, or you get married or have kids. At a minimum, you want to check your overall financial system at least every six months.

I find that when I check in frequently, it’s easier to deal with unplanned life occurrences, bounce back from setbacks, and accomplish my financial goals.

Example of adjusting your plan as you go through different life stages could be as follows:

• Young adult: Ages 18 to 25 is a great time to focus on saving as much as possible and reducing debt to prepare for the next stage of your life.
  
• Foundations and family: Between ages 26 to 45 you may decide to become a homeowner and a parent in this phase. Now is a good time to try to generate more income or cut unnecessary expenditure as new expenses come in.
  
• Retirement: Based on the age you plan to retire, it’s time to enjoy your hard work and savings efforts. Plan out what withdrawals you’ll need to make from your nest egg on an annual basis. At the same time you’ll want to ensure the money you don’t need to spend keeps growing.

When drafting your financial plan, don’t forget to factor in your aspirational needs such as vacations and car loans. Whilst life doesn’t always go to plan, it’s important to be as financially prepared for events as possible to avoid getting into debt.

With each financial plan review and life stage, you can also speak with a financial advisor for specific guidance if you feel the need to do so.

12. Stay the course, avoid overspending and learn from your mistakes

Your journey to financial independence won’t always be easy. There will be some tough days, weeks, and even months.

Have a solid financial plan, be disciplined, and avoid overspending. You’ll find out how great you’ll feel when you really make a concerted effort to stick to your budget.

As you work on your finances, you may still make mistakes with your money, and that’s okay. Sometimes, you might be unable to resist the urge to buy something that isn’t in your immediate budget. And sometimes, you will feel like ripping your entire money plan to bits because it just doesn’t seem fun.

However, as long as you keep your reasons WHY you want to be financially free in focus and try to rebound quickly from your mistakes, you’ll do just fine.

It’s all about assessing your mistakes, understanding why you made them, and making a plan to avoid making them again. Then, you’ll need to take those lessons and apply them to your future success.

Expert tip: Consider your needs for each life stage

In my opinion, financial planning for different stages of your life is the smartest move you can make. During your life, there will be changes to where your money is spent and your financial interests and goals, and it’s important to consider these carefully. You may find that instead of rent prices you start thinking about mortgages and how to get one.

For example, when I was in my 20s, my main goal was to reduce my debt to improve my chances of being approved for a mortgage. But now I’m a homeowner in my 30s, I want to make sure that I am financially stable for my children and their future by making smart money-related decisions (that means no more blowing money on clothes that I don’t really need!).

Determine the type of financial plan you need

Part of learning how to make a financial plan is determining what type of plan you need. Don’t think it’s too early or too late to organize this. Quite the contrary—now is the PERFECT time to start!

Make a plan for yourself if you’re single

If you’re single, it’s important to establish goals and systems that not only help you meet your immediate money needs but that ensure your future self will be taken care of.

A big mistake is assuming you’ll meet someone who will care for you and deal with the finances in your relationship.

If your relationship status changes or you get married, you’ll be well-equipped to plan your finances together if you already have things in place for yourself.

How to make a financial plan for your marriage

If you are married or have a significant other, you need to manage your finances as a team.

Discuss your budget and money goals and make financial decisions together. Understand where your money is going and how much money you have in savings and investments.

Should you have joint accounts or separate accounts?

Having joint accounts is great for finances in marriage, but I also believe in having your own personal savings accounts. As women, it’s important for us to build our own sense of security and have “our own” money that we bring to the table.

But don’t feel like you need to keep your personal accounts secret. Remember, marriage and committed relationships thrive on openness and honesty.

Tips on how to frequently review your financial plan

Now that you know how to make a money plan, here are some tips to help you check up on your goals.

1. Establish a routine

Allocate some time each week or, at minimum, once a month, unfailingly, to do a financial checkup.

Make it a coffee date with yourself, or put on some nice music, grab a warm cup of tea at home, and spend some time checking in on things. It’s a good idea to set a reminder on your calendar so you don’t forget this check-in.

2. Set and review your financial goals

If you haven’t already, it’s important to lay out your short and long-term financial goals, so you know exactly what you are working towards with your money.

As time progresses, you want to make sure you review and reassess your goals to make sure they are still things you want to accomplish and that you are on track to meet them.

3. Reconcile your bank accounts and bill payments

Check your bank account debits against any bill payments you previously scheduled or sent out. Make sure any pending bills or debt repayments have been paid or scheduled.

Compare your receipts against your credit card transactions and confirm the balance. Do a budget review and compare your actual spending to your budget. Once a month, establish your budget for the upcoming month. 

4. Review your savings and investments

If you have automated your finances and are set up to make transfers to your savings or investment accounts, check in on them. This would also include any automatic deposits you have set up for your retirement accounts, etc.

If you don’t have automation set up, make or schedule your manual transfers to your savings and investment accounts, and be sure to check and make sure the transactions went in successfully.

Also, plan to review your overall investment portfolio to rebalance and diversify as needed, or try automatic rebalancing. Be sure to review your fees too!

In addition, bonds are good options to add to your portfolio if you’re risk-averse.

5. Review your insurance policies

You also want to ensure you have the right insurance for your life. Which includes health, auto, disability, home, personal property, and business, as well as understanding the importance of life insurance, etc.

Set a reminder for twice a year where you sit down and evaluate the costs of your various policies and shop around to see what else is out there.

6. Check your net worth

Your net worth can almost be described as the thermometer used to measure your financial health, and you want to keep track of it, including your net worth by age.

Your main priority should be to pay off as much debt as possible, starting with your high-interest debt. Then, grow your assets, and your net worth will grow over time.

It’s also important to track your net worth over time to ensure you are in line with your long-term goals and financial objectives that you’ve set out to accomplish.

Many people start out with a negative net worth, but as they work on improving their finances, given time and the continued practice of good financial habits, this will change.

Reconciling your accounts and planning your finances ensures you are aware of everything happening with your money and that you are on the right path to accomplish your goals.

Questions to ask when you review your financial plan

Some questions to help you along with the process could include:

1.  What steps did I take this past month that got me closer to my goals?
2.  What things happened that have put me further away from my goals?
3. Was my spending in line with my personal core values?
4. What money mistakes have I made in the last month?
5. Why did I make them?
6. Are my financial goals still realistic?
7. What big expenses are coming up soon?
8. Is my emergency fund fully funded with 6 months of expenses based on my current basic expenses?
9. Am I saving enough to retire comfortably according to my decided retirement plan amount?
10. Am I meeting my other short-term savings and investment goals?
11. Am I on track with my savings for my children, including 529 plans?
12. What steps can I take to ensure I have a better month next month?

Tip: Keep a journal where you answer these questions and then review your past entries every few months. It’s a great way to stay motivated, especially as you see the progress you are making over time. If you stay committed to improving your finances, you WILL see progress.

What is a financial plan using an example?

Take a look at the example below for inspiration. Use it as a starting point and edit it to suit your unique financial situation and life goals.

A good financial plan should include details of your:

• Monthly income
• Monthly expenses
• Savings
• Debts
• Assets
• Investments
• Insurance
• Retirement strategy

Example financial plan

Emma is in her early 20s and wants to become debt-free in the next year.

• $4,650 monthly income
• $4,000 monthly expenses
• $250 monthly contribution to a savings fund
• $250 monthly debt payments ($3000 total debt)
• $0 assets
• $0 investments
• $100 monthly insurance fees
• $50 retirement savings

By reviewing her expenses, Emma has realized that she can save $250 a month by cutting out takeout coffees, eating out, and swapping to a lower-cost grocery store. This means that she can achieve her debt-free goal in 6 months instead of 12 while still contributing to her savings!

Is a financial plan the same as a budget?

No, a financial plan and a budget are two very different things.

Knowing how to create a financial plan is a tool for managing long-term finances (5, 10 or 20 years), whereas a budget organizes your money in the short term, usually on a weekly or monthly basis.

What they both have in common is the need to be regularly reviewed and updated to make them as effective as possible. A money plan and better budgeting complement each other, so use both to truly take control of your finances, both now and in the future.

Personal financial terms like financial planning and budgeting can be confusing, especially if you read conflicting information in the media. But it’s important to know their correct meanings so you can use them the right way.

What is a full financial plan?

A full financial plan is a detailed breakdown of your current situation, goals, and the step-by-step actions to achieve them. Its purpose is to help you understand your circumstances, which is the first step everyone needs to take before making positive changes.

Your plan should be a physical document so everything is written down. Depending on your preferences, it can be a hard copy or an electronic copy. The important thing is to have your money objectives in one document rather than separated into many different files.

The easiest way to get started is to gather information from all your financial accounts into one document.

When building your plan, remember to customize it to your unique finances and personal needs. There’s nothing wrong with using an example to get you started, but it needs to reflect your life accurately so it can help you plan ahead.

For example, don’t overlook the odd cash withdrawal for a soda. Instead, factor it into your full money plan because it could help you highlight areas of unnecessary spending!

Articles related to planning your finances

If you found this information about money organization and planning helpful, these other posts offer more ideas!

• How To Create A Strategic Financial Planning Process For Yourself
• Example Of A Financial Plan To Help You Create Yours
• How To Create A 5-Year Plan For Financial Success
• How To Create A Financially Sound Plan For Yourself!

Create a solid financial plan and it will help you become financially successful

Learning how to make a financial plan customized to your goals can help you attain them! Remember, this is your journey, not anyone else’s, so having a plan to succeed with your finances is super important.

I completely believe that planning ahead for the life you desire is 100% worth it. As you create a system that works and learn how to manage your money, feel free to leverage our free financial courses!

The post 12 Steps To Creating A Solid Financial Plan For Yourself appeared first on Clever Girl Finance.

Learning how to make a money vision board can be incredibly helpful for financial management. When it comes to goals, the adage rings true: “Out of sight, out of mind.” But if you take the time to create a vision board, you’ll constantly be reminded of your goals.

As cited in Verywell Mind, vision boards can improve success and mindfulness. For this reason, creating one can help us stay focused on working toward our financial goals.

What is a vision board?

A vision board is a collage of pictures and phrases that depict things you want to accomplish in your future. It’s a visual representation of your hopes and dreams. Its purpose is to serve as inspiration and motivation for working toward your goals.

Being able to see exactly what you want to accomplish gives you something to work toward, rather than just letters on a page. After all, even though there’s still value in writing your money goals down, seeing is believing!

I personally create a money specific vision board every year to keep me focused on the money goals I want to accomplish.

Why is a money vision board a good idea?

If we think about it, most goals are connected to our finances in some way. Our dream house, car, and vacation will require money. Having a money vision board can help us stay focused on attaining those things.

A money vision board is a great idea because it’s designed to visualize your intentions for money. Whether it’s how to save money, paying off credit card debt fast, or increasing your income, your ideas can be put into visual form.

Financial vision boards often utilize charts (such as a savings goal thermometer) to track progress. So if your vision is to become debt-free, you may include a debt payoff tracker on your financial vision board.

When it comes to saving money, I love coloring in my savings thermometer as I cross each savings milestone that I’ve set for myself. Just seeing this visualize reminds me of the progress I’m making.

Using a vision board to achieve your money goals

Using a vision board for your financial goals is no different from any other goal. The whole point is to create a physical representation of what you want to accomplish. If you’ve had a hard time handling money in the past, perhaps this fun exercise will help keep you motivated.

Plus, building a board for your money can easily be integrated into your financial planning process. As you develop a plan, simply create a board to go with it.

For example, you can think of it as the final seal on your list of money intentions. Here are some steps that I personally use and find helpful. You can leverage them to bring your vision board ideas to life:

1. Decide on a physical or digital vision board

There are several different ways to make a vision board.

For example, you can go the old-school route by cutting out words and images from old magazines, this is my format of choice. Or you can make a digital one using an online graphics tool, like Canva. Both options are free and/or very affordable, so it just depends on your personal preference.

Here’s what you’ll need to create a physical vision board:

• Poster board or cork board: Though most vision boards are pictures glued to a poster board, you can also use a cork board and tack images instead.
  
• Old magazines: You’ll use magazines to find pictures, phrases, and other visual inspirations that represent your goals. They’ll need to be old because you’ll be cutting things out. You may be able to grab old editions of magazines from your local library or convenience store for free or at a reduced price.
  
• Your affirmations or inspiring quotes: These are words, phrases, and sentences that inspire, motivate, and help you focus on what you can achieve.
  
• Images from online: If you can’t find old magazines, you can always find inspiration online. You can print out images that you find suitable.
  
• Glue or tacks: You’ll need to glue or tack your pictures to your poster or corkboard. I recommend a glue stick if you’re using glue.
  
• Scissors: You will cut out images to add to your board, so have a pair of scissors handy.

Here’s what you’ll need to create a digital vision board:

• Powerpoint, Keynote, your Notes app, or a graphics app like Canva
• Digital images
• Affirmations or inspiring quotes

2. Write down your financial intentions before you start

Your intentions will be your foundation. So, the second step in figuring out how to make a vision board is to write down your goals.

These goals should be very clear so that you know exactly what you’re trying to accomplish and how you’ll accomplish it. One way to do this is by using the SMART goals method.

This goal-development method teaches you to create specific, measurable, attainable, realistic, and timely goals. When you have SMART goals, you can easily see what you’re working toward.

For example, my financial goal may be to “save $10,000 for emergencies by Dec 31, 202X.” This goal is very specific; its success can be measured; it is realistic for me, and it has a timeframe.

Since this goal has a very clear description, finding a suitable visual representation will be easy.

No matter what your financial objectives are, it’s important to clearly define them and write them down on paper before you start getting creative and building your money vision board.

3. Consider including charts and graphs

Whether creating a digital or a physical vision board, you want to choose pictures and words that motivate and inspire you.

But don’t forget about numbers! Including charts and graphs alongside the visual elements on your vision board can help make it even more specific to your goals.

Now, when you’re putting together a financial vision board, you may also include money savings charts. Money savings charts are charts that help you with tracking savings for specific goals.

For instance, if one of your intentions is to pay off debt, you could include a debt payoff coloring chart that tracks your progress. Every time you make a payment, mark it on your debt payoff chart—and watch your vision board become your reality!

These charts come is several different styles and formats. You can even design your own. My favorite money chart is the thermometer format.

4. Place your vision board somewhere you can see it every day

The point of creating a vision board is to have visual inspiration for the goals that we’re trying to accomplish.

That said, your board needs to be in your vision literally. In other words, you have to put it somewhere you’ll see it every day!

So think: What place do you most frequent in your home? That’s exactly where your vision board should be.

Put your board in a place where you can see it every day. That way, it’ll serve as a daily reminder to continue working toward your vision.

Consider places like your bedroom, office, or even your refrigerator door. You can even take a photo and make it the screensaver on your mobile phone or computer desktop. I have mine as my phone screensaver and also in my home office.

Additionally, now that you’ve created your vision board, take a moment to review it. Is there anything that you want to add? Do you feel motivated?

If you haven’t already, add phrases and money affirmations that align with your goals.

5. Stay motivated by hosting a vision board party

We all know that there’s a lot of temptation to spend and, thus, a lot of temptation to stray from our money intentions.

So, to help yourself stay motivated and on track, consider hosting a party.

Gather friends together who are also focused on improving their personal finances. You can spend the day together outlining your goals, cutting out pictures, and creating your vision boards. Then, you can check in with each other monthly to follow up on your progress.

Believe it or not, this sense of accountability can go a long way in helping you achieve your goals. As Forbes explains, “…accountability groups can positively impact task performance and academic performance.”

6. Track your progress with a money journal

Creating a board for money goals is a great way to get inspired and energized to start working towards your long-term financial goals. But over time, it’s easy to lose some of this initial momentum.

One way to help yourself stay on track with your personal finances is to start a money journaling habit.

Money journaling is more than just writing down what you spend and save each month. It’s also a place to take notes on how you feel about your spending and saving, your thoughts on your finances, and your observations on your goal-tracking.

Don’t think journaling is worth the extra step? One study discovered that those who write their goals are 42% more likely to actually accomplish them.

7. Edit as you go

Another way to track your progress toward your financial goals is to edit your money vision board.

We already talked about adding money savings charts. But if you’re not a facts-and-figures person, there’s still another way you can track your progress visually on your board.

For example, suppose you’ve added three goals: 1) Pay off credit card debt; 2) Start emergency fund; 3) Open retirement account.

Every time you meet a goal, you can draw a big green checkmark next to it. For one, drawing this checkmark will probably feel satisfying. (You know that feeling of crossing an item off your to-do list?)

Plus, it’ll be another visual reminder that you are making progress on your goals—which will give you more motivation to keep going.

8. Consider creating multiple vision boards

If you have a lot of different financial goals, making more than one vision board may make sense.

Here are a few different ideas:

For example, suppose one of your goals is to save up for a down payment to become a first time homebuyer. That could be the subject of one board, where you’ll include pictures of your dream house and inspiring quotes about homeownership.

At the same time, you might have another financial goal to spend less each month by adopting minimalism. On this vision board, you can focus on minimalism.

Write down minimalist quotes to remind yourself that less is more, and you don’t need to buy that new dress this month. You can also include a chart where you list all the things you wanted to buy but didn’t to congratulate yourself on your willpower—and keep up the good work!

Vision board ideas

If you are still stumped on what to include in your vision board, you can always find inspiration on sites like Pinterest. Doing a quick Google search will also lend some examples as well. Remember that your vision board is unique to you, so only use them as inspiration.

Travel example

Here is an example of a financial vision board I created several years ago. At the time I was on my debt-free journey. I also wanted to save money, overcome budget challenges, and budget effectively so that I could travel the world.

As you can see, I included phrases like “saving money,” “debt-free,” and “budget” on my money vision board as a reminder of what I was working toward. I also included flags and cutouts of different countries I wanted to visit once debt-free.

If you have a keen eye, you’ll notice that debt-free is crossed out and that there’s a checkmark beside the word budget. There’s also a year under the flag for the United Kingdom. That is because I was able to actually accomplish these things!

After getting on a budget, I could pay off debt, save money, and travel abroad. There are still several flags and countries that don’t have a year below them, which means it’s still something that I’m working toward.

Though this board is several years old, I still keep it nearby as a reminder of the things that I still want to accomplish financially.

Debt-free & savings example

If your goal is to become debt-free, here is a debt-free vision board example. As you can see, this board includes images of someone cutting up a credit card and a savings goal of 26%. This is a very vivid representation of their financial goals.

First home example

Need some inspiration for buying a house for the first time or even your dream house? Here’s my latest board that includes images of home elements I plan to have.

The board also includes images and a phrase related to money. That’s because I’ll need to have money saved and a plan of action to achieve this new financial goal.

Investing & early retirement example

Are you interested in retiring early? Check out this simple vision board.

Investing and retiring early often go hand in hand. That’s because if you can invest strategically, you can withdraw from your investments to retire early. Learn more about what it means to achieve early retirement.

As a reminder, these examples are all meant to inspire you. Find what motivates and inspires you when creating your board.

Expert tip: Keep a positive money mindset

It’s clear that building a vision board can play a big part in helping motivate us to work towards our money goals. But don’t forget to approach it with the right financial mindset.

After all, learning how to create a mindset of financial abundance can help you realize your dreams.
Whether you want to save a certain amount of money, retire early, buy a house, etc., a mindset of financial abundance helps you remember that the goals on your vision board are achievable—and that with the right planning and action, you can make them come true.

How do you format a vision board?

There are several different ways to format a vision board, but the first step is to always clearly define and set your short and long-term goals.

You can do this digitally, with a Word document, a spreadsheet, or just your Notes app. Or you can go old-school and just start writing on a blank piece of paper with a pen. You can even get creative and color-code your money intentions with a marker.

After you know what your goals are, find images and words that align with them, and add them creatively to your board. It’s all about creating something that’s to your liking visually so that when you look at it you feel inspired and motivated. So tap into your inner artist!

You can also find great vision board photos and examples on sites like Pinterest or watch YouTube videos on how you can create a vision board.

What questions should you ask yourself when creating a financial vision board?

Creating a financial vision board isn’t just about cutting out pictures of things you want to buy. Instead, you need to take the time to sit down and really assess your personal finances and your goals.

You can ask yourself questions as they related to your financial goals. For example, ask yourself:

• Do I have debt I want to pay off? How quickly do I want to pay it off?
• Do I want to build an emergency fund? How much do I need to save?
• I want to save for my children’s college education with a 529 plan; What would that cost?
• Am I saving enough for retirement? How do I bridge any gaps?
• How do I adjust my retirement strategies to retire at 50 instead of 65?
• What does my dream home look like? What views do I want to see from the windows?

Questions like these can help you get clear on what you should place on your vision board.

Articles related to having a plan for your money

If you know that having a vision board will help you with your money, these other posts will also inspire you!

• Changing Your Perception Of Money
• Motivation For Saving Money: 12 Top Tips!
• 10 Money-Savings Charts To Save More Money
• Examples Of Financial Goals

Knowing how to create a money vision board can help you improve your finances!

Money vision boards are an extremely valuable tool for helping you reach your financial goals. They’re also a fun exercise, and you can get as creative as you want when making your own.

The truth is that merely writing your goals down and visualizing them won’t automatically help you achieve them. You must also do the necessary (sometimes hard!) work and hold yourself accountable.

The best way to do that is to surround yourself with others working toward similar goals. You can even get an accountability partner to work alongside side you.

If a community is what you’re missing on your financial journey, then check out the Clever Girl Finance courses and community. Here, you’ll find the resources and accountability you need to be successful with your money.

The post 8 Tips To Make A Money Vision Board appeared first on Clever Girl Finance.

One of the common ways to manage multiple credit cards and pay off debt quickly is by doing a credit card balance transfer. Are you wondering, “How do balance transfers on credit cards work?” or “What is a balance transfer?” Find out more here!

How do credit card balance transfers work? A balance transfer is when you move your balances from one or multiple credit cards to another card.

The new card offers a much lower interest rate, usually for a fixed period. Typically, you’ll find balance transfer offers advertised at a 0% introductory interest rate.

So, how do balance transfers on credit cards work to help you pay off debt? Well, a balance transfer can help you with saving money interest-free while paying off your credit card debt.

But it’s also a huge trap people fall into! This is because credit card companies offer balance transfers and the associated incentives as a way to make money.

How do balance transfers on credit cards work with credit card companies?

Balance transfers seem like one of the advantages of using credit, right?

However, some people may not pay off their transfer balances before their introductory rate expires. That allows the credit card companies to charge interest based on the agreement you made with them.

This is because, after the introductory period, the interest rate on your balances can be much higher than the 0% you paid before. These details can be pretty easy to glaze over.

The psychology of credit card balance transfers

The biggest reason people may not pay off even the best balance transfer credit cards? Because they get comfortable seeing the “new” lower interest rate, and they think they now have more time to pay.

I can’t tell you how many people I’ve spoken to who slow down on their debt repayment because they think a balance transfer is saving them money. Yes, you might have a lower interest rate but it’s still compounding on your debt. This means even though your interest rate is lower, if you slow down paying your debt or extend the time to pay it, you might actually not be saving anything in the long run!

In addition, many people end up increasing their balances through new spending. They think that, now that they’ve reduced their interest, the debt will be much easier to pay off.

How to do a credit card balance transfer the right way

It’s important to know the details of the card you are considering and how to transfer your balance correctly. Check out how to do a transfer!

1. Create a payoff plan

What is a balance transfer good for if it doesn’t help you pay off debt?

In other words, you need to make sure you can pay off your balance in full before the introductory period expires. Have you calculated how much you’d need for your monthly payments to pay off your balance in full by the expiration date?

You may run your calculations and find that you can’t pay your balance off in full before the introductory period ends. It might actually cost you more money in the long term if you make that balance transfer.

Create a debt reduction strategy and payoff plan to ensure you know exactly how much money you need and how long it will take to pay off your balance. Also, keep in mind that you usually can’t use a balance transfer to pay off your student loans.

2. Be aware of the balance transfer fees

Another question to consider is, “How do credit card balance transfers work as far as fees?” Many balance transfer agreements require you to pay a percentage of your balance as a processing fee. It will usually be anywhere from 3% – 5%.

So it’s important to ask yourself whether the fee is worthwhile (will you still save money?). If you choose to do a balance transfer, look for a card with no fees for the transfer and no annual fees.

In addition, in my opinion, it should have a 0% introductory period of at least 12 months (in which time you can work to pay off your balance).

3. Check your credit score before you apply

The most important thing to do before applying for a new card is to check your credit score and credit report. To qualify for the 0% annual percentage rate (APR), you will need to have a good or an excellent credit score. Otherwise, you may get declined.

Checking your credit score first will save you from applying for no reason. Improving your credit score can help you qualify for loans with better interest rates, saving you a lot of money!

4. Request a credit card transfer

Once you’ve decided that you want to go ahead with the credit transfers, you’ll need to send in an application to the credit card issuers. Often, a new credit card application will include the transfer request as an option.

You can also do this online or on the phone.

Before making any changes, read the fine print with the new card you are applying for.

5. Wait for the transfer to complete

Once you’ve submitted your application and requested a balance transfer, you’ll need to wait for the operation to complete. The time it takes for the balance to transfer will depend on the credit card company. Don’t forget to continue paying your balances in the meantime.

In most cases, it takes five to seven business days, but it can take several weeks to complete.

6. Do not continue to charge purchases

Just because your new credit card has a 0% APR doesn’t mean it’s time to hit the mall. Charging up purchases only adds to your debt, so it’s important to stop buying. It can also prevent you from paying off the balance before the introductory rate matures.

What is a balance transfer good for if you add more debt to your cards? Use this card for exactly what it’s for—to save you money on high interest and get out of debt for good!

Expert tip: Beware of interest rates

Balance transfers on credit cards work by offering promotional interest rates. When applying for a balance transfer, carefully consider the duration of any promotional interest rates offered.

While a 0% APR offer is enticing, I suggest having a plan in place to pay off the balance before the promotional period expires.

By creating a realistic repayment schedule and sticking to it, you can take full advantage of the promotional rate without getting caught off guard by higher interest charges once the promotional period ends.

Remember, the point of a balance transfer is to lower your debt, not get into more debt!

Alternatives to a credit card balance transfer

If you’ve decided a balance transfer isn’t financially beneficial, or you can’t qualify for a 0% APR, there are alternatives to a credit card balance transfer.

Pay off your balance in full on your current card

Remember, the credit card companies are not doing you any favors! Offering balance transfers is a strategy they use to make the maximum amount of money possible on interest. And for the most part, they always win.

If you feel like doing a balance transfer will be more trouble than it’s worth, don’t do it. The short-term gratification of a 0% interest rate that will inevitably lead to you paying more interest over time is not worth it if you won’t be paying off your balance in full before that 0% interest rate is gone.

The surest way to win is to buckle down and figure out the best way to get out of debt as aggressively and quickly as possible.

Clever Girl Tip:

If you choose to do a balance transfer, don’t run up new debt on your old or new credit card. Remember, the whole point of doing the balance transfer is to save money on interest payments. By doing this, you can pay your balance off faster.

Also, ensure you don’t miss any payments or pay late, as this could void your 0% interest rate. At least make your minimum payment, or try to pay off as much as possible each month.

Ask for a lower rate

Depending on your credit and relationship with your cardholder, you may be able to get a lower rate. They may be offering a promotional rate as well. It never hurts to ask.

Call your card issuer and ask if you qualify for a reduced rate based on your credit history and relationship.

Apply for a personal loan

You may wonder, “Should I do a balance transfer or apply for a personal loan?” People opt for a personal loan to consolidate their credit card debt because they will have a fixed rate for the life of the loan rather than trying to pay it off before the promo rate matures.

This is a good option only if the rate is lower than the rate of your current card.

For instance, if your credit card rate is 23.99% and you qualify for a personal loan with a rate of 7.99%, then it would make sense to consolidate your debt. It could save you quite a bit of money in interest if you do it right.

Remember, you still need good credit to qualify for an unsecured loan. And you still want to consider all the fees involved to make sure the new rate really makes sense for you.

Some people opt for a secured loan, such as a home equity loan, to pay off credit card debt.

However, I advise that you try other avenues to prevent risking your home as collateral.

Should I do a balance transfer?

You should only do a balance transfer if it benefits you financially i.e. it will save you money, not cost you more. That’s why it’s essential to create a debt payoff plan and know the balance transfer cost.

One other benefit of a balance transfer is it may simplify your finances by allowing you to bundle all of your payments into one.

Again, you only want to transfer your balance if you can pay it off before the rate increases. Otherwise, it’s best to get rid of debt with another method.

Will a balance transfer hurt my credit score?

A balance transfer to an existing line of credit won’t hurt your credit score, but if you apply for a new line of credit, it could impact your score.

In general, you should use a balance transfer to reduce your debt, which in turn could increase your score by reducing your credit utilization ratio.

The lower your utilization ratio (your credit limit relative to your debt), the better it is for your credit score. That’s because your ratio makes up 30% of your credit score.

Is it a good idea to do credit card balance transfers?

A credit card balance transfer can be a good idea if you have a lot of high-interest debt and can take advantage of lower rates.

However, it can also worsen the situation by giving you access to even more credit card use. If used effectively, then a balance transfer can help pay off debt.

But use a balance transfer with caution and look for alternatives to get out of, and stay out of, debt.

How does a balance transfer work on a credit card?

When you move a balance from one credit card to another, you generally want to do so to take advantage of a lower interest rate or a promotional offer. When you decide to do a transfer, you send in your application.

Once approved, the issuer will most likely pay off the balance of the old card and then transfer the debt. Then, you’ll have to start paying off your debt on the new card.

What happens to a credit card after a balance transfer?

After a balance transfer, the balance of your old credit card will be paid off, which reduces or eliminates the debt. Your old card will probably remain open.

You can then either keep and use it or close it yourself. If you keep it open, limit any new purchases or try a no spend challenge to not increase your debt further.

What is the downside of a balance transfer?

The downside of a balance transfer is it doesn’t get rid of your debt, it just transfers your debt from one issuer to another. You may also have to pay a balance transfer fee, usually charged as a percentage of the transferred balance.

In addition, any promotional rates offered are usually temporary, and the real rates can be very high. And if your old credit card stays open, you may be tempted to use it again and get further into debt, defeating the whole purpose of a balance transfer.

Articles related to paying off debt

You’ll love reading these other posts if you learned more about credit cards and debt payoff from this article!

• Can You Pay A Credit Card With A Credit Card?
• How To Get Out Of Debt On A Low Income
• Should You Use A Home Equity Loan To Pay Off Debt?
• 27 Tips For How To Pay Off Credit Cards Fast

Be cautious with balance transfers

So, how do credit card balance transfers work best for your finances? When they can be paid off within the 0% interest rate promotion.

However, be cautious with balance transfers, no matter how great they sound.

It’s very easy to get sucked into a balance transfer card for rewards and cash back features but then rack up more debt because of the no-interest mentality.

The key is to make it work in your favor! That’s why it is vital you figure out your debt payoff plan before applying for the card. You can pay off your debt with or without transferring your balance by changing your money habits and learning how to use credit cards wisely.

The post How Do Balance Transfers On Credit Cards Work appeared first on Clever Girl Finance.

The term personal finance ratios might give you flashbacks to math class, learning various formulas, equations, and ratios. Back then, if students looked like they were zoning out, your teacher might have told you “pay attention, this will be useful to you later.” Well, this time, you don’t have to wait—a lot of the equations below will be useful to you right now!

Let’s learn more about what ratios are and fourteen of the top money ratios you can use today!

What is a personal finance ratio?

In mathematical terms, a ratio is essentially a way to compare two numbers. Since finance is all about numbers, that can come in handy in many ways especially when making financial calculations!

You can use ratios to keep track of many different aspects of your financial situation—from cash flow to savings to tips for retirement planning and more.

A traditional ratio is expressed as a divisible number, but some of the ones below use multiplication or subtractions instead.

Ultimately, just think of it as a way to track your money and how you use it. Keeping a record of your money ratios can also illuminate how these numbers change over time.

14 of the most useful personal finance ratios

The best way to explain the ratios is just to start showing you examples! So below, we’ll explain how to use each one and why they can be helpful to your journey.

1. Monthly cash flow ratio

Monthly expenses divided by monthly income

The monthly cash flow formula helps you understand what percentage of your income is dedicated to your monthly expenses. Think about the cash flow ratio as how much cash flows in vs flowing out.

Start by adding up all your regular income from jobs, side gigs, investment income, etc. You can use a gross figure or your actual take-home pay (aka net income) after taxes.

Then, create or refer to your spending journal or a budget template or tool to see how much you spend every month. Don’t include savings or investments in your spending calculations (that has its own personal finance ratio)! Everything else is fair game: necessities, car payments, fun money, gifts, monthly debts, etc.

If you spend around $2,000 monthly and make $2,500, your cash flow ratio would be $2,000 / $2,500 = 80%. It tells you that 80% of your income is spent on expenses.

2. Savings ratio

Monthly savings divided by monthly income

This is basically the flip side of the one above. Instead of telling you how much you’re spending monthly, it tells you your savings rate.

Include all kinds of savings here. Whether you’re putting money in a savings account, your company’s 401(k), your personal IRA, an investment account, or even setting aside physical cash, it qualifies.

Using the same monthly numbers as above, let’s say you’re putting the rest of your money ($500) towards savings and investments.

Your monthly savings ratio would be $500 / $2,500 = 20% savings rate. You can also do the same to find your annual savings ratio. That way, you can decide if you want to save more to live better or if the amount you save makes sense.

3. Emergency fund ratio

Essential monthly expenses x 6

An emergency fund exists to protect you in the event of unexpected expenses or job loss. It’s money you want to keep easily accessible so you can use it as soon as needed.

As a full-time freelancer, I’ve had months where I have a ton of clients and projects, as well as months where business is a little slower. My emergency fund gives me peace of mind that I won’t be in a dire situation if my work schedule changes.

Since the common wisdom is to save 3-6 months of expenses in your emergency fund, this ratio reflects that. Simply multiply your essential monthly expenses by 6 to come up with your target for a fully stocked emergency fund.

When I say “essential,” I mean you might be cutting out some of your “fun” budgets for this one. Just include the things you can’t live without (housing, utilities, food, health insurance, etc).

Our example person may normally spend $2,000 a month, but let’s say that they can pare down their essential expenses to $1,500. $1,500 * 6 = $9000 would be the target for their emergency fund.

Keep this money in an interest-bearing account—ideally, a high-yield savings account. That way, it will remain accessible whenever you need it, but the interest will help you grow your money while it’s there! 

4. Liquidity ratio

Liquid assets divided by monthly expenses

The liquidity ratio is one of the personal finance ratios closely tied to your emergency fund since they both revolve around the idea of liquidity. Put simply, liquid assets refer to (A) cash or (B) other financial assets you can quickly convert into cash.

Money in a checking, savings, or money market account is highly liquid. If you have savings bonds you can cash in any time, they’re liquid.

If you have stocks, bonds, index funds, and other “cash equivalents” or other highly liquid investments that you can easily sell on the market, they would qualify as liquid, too. (However, their value fluctuates more, so it’s not a stable number).

Of course, you can’t just sell your house on a whim for quick cash, so that’s a great example of a non-liquid asset. Money stored in retirement accounts is also illiquid since withdrawals are subject to lots of rules and take time.

Once you have these figures, running the liquidity ratio formula will reveal how many months your liquid net worth could support you. So for someone with $20,000 in liquid assets who spends $2,000 a month, it’s $20,000 / $2,000 = 10 months of covered expenses.

5. Debt-to-assets ratio

Total liabilities divided by total assets

Now we’re getting into some potentially less fun territory: a couple of debt ratios. Don’t be scared if your numbers are higher than you’d like at first. It’s all part of your debt reduction journey!

If you don’t know where you’re starting from, you’ll just be stumbling around in the dark, hoping your debt will be gone one day.

You may also hear the debt-to-assets ratio called a solvency ratio. (Typically, “solvency ratio” is a term used for companies more often than individuals.) It’s a way to see whether you can pay off your debts by selling your assets.

Start by adding up your college loans, any consumer debt like credit cards, personal loans, car loans, and whatever other kind of debt you carry.

Then, calculate the value of your key assets, including all savings and investment accounts, paid-off vehicles, and personal valuables.

If you have $10,000 in total liabilities and $40,000 in total assets, you have $10k / $40k = 25% as much debt as assets.

Is a house counted as an asset or liability?

What about your home? Is a house an asset or a liability? It’s both! Unless your mortgage is paid off, you have equity in your house and debt at the same time.

Homeowners can choose whether or not to add their remaining mortgage balance as debt and home equity as an asset in this ratio. 

Keep in mind that since mortgages are the largest loans most people will have in their lives, including it can make your ratio seem skewed. If you like, you can run the numbers with and without the home factored in to see the difference.

6.  Debt-to-income ratio

Annual debt payments divided by annual income

This is one of the personal finance ratios that will help you figure out how much of your income is being funneled toward your debts each year. 

To start your equation, look at the debts you gathered above. But this time, add up your yearly payments towards each of them.

One exception is that if you’re a homeowner, it’s best to exclude mortgage debt from this equation—that’s a surefire way to kill your ratio! (Plus, housing payments fall more into normal expenses than debt payoff.)

Next, you’ll divide your annual debts by your annual income. Normally, people use their gross income rather than net income for this calculation. Include any income from side gigs and alternative sources as well.

As your debts shrink, the result of this ratio will, too! But if you’re adding new debts or paying things off too slowly, compound interest might increase your debt payments and, subsequently, this ratio.

Someone making $15,000 in annual debt payments while earning $50,000 a year is paying $15k / $50k = 30% of their income to their debtors.

For companies, a similar ratio called the “debt servicing ratio” helps lenders assess a business’s debt repayment ability.

7. Net worth ratio

Total assets minus total liabilities

The net worth ratio is going to be short and sweet! Grab the same numbers you used in #5, but instead of dividing, we’ll simply subtract.

Assets minus liabilities help you calculate your net worth! It’s motivating and fulfilling to watch this number grow over time.

$40,000 assets – $10,000 liabilities = $30,000 net worth.

8. Debt to net worth ratio

Total liabilities divided by net worth

This is very similar to the debt-to-assets ratio.

However, you aren’t just comparing total debt to total asset value with this one. Instead, you’re comparing your debt to the net worth figure from #7—where debt has already been subtracted from your asset value.

The ratio is meant to help you determine how much debt you’ve taken on relative to your net worth.

If your ratio is over 100%, you may feel over-leveraged and struggle with payments. The lower the result, the more comfortable you’ll feel with your debt levels.

$10,000 liabilities / $30,000 net worth = 33% debt to net worth ratio.

9. Housing-to-income ratio

Monthly housing costs divided by monthly income

You’ve probably heard some advice for spending a certain percentage of your income on housing. In the past, the rule of thumb number was 30%. Now, there’s a slightly more detailed model called the 28/36 rule.

The first part (28) means you should aim to spend no more than 28% of your income on your total house payment, including taxes and insurance.

The second part (36) adds your mortgage payment to all your other debt payments and recommends that this total not exceed 36% of your income. It’s effectively the same thing as your debt-to-income ratio from #6 (but a mortgage-inclusive version).

The 28/36 rule is a way to help you weigh whether your home purchase would put you in too much debt.

For instance, if a potential home purchase would bump you too far over the 36% debt-to-income figure, you might want to look at cheaper properties. Otherwise, you run the risk of becoming house poor!

If you’re spending $1,000 a month on housing while making $3,500, you’re spending $1k / $3.5k = just about 28% on housing.

10. Needs/wants/savings budget ratio

50/30/20, 60/20/20, or other

Want a personal finance ratio that gives you a quick guide on dividing your expenses? There are several ways to do this.

Usually, the simplest methods involve breaking down your expenses into needs, wants, and savings. Needs are everything you can’t live without, wants are the nice-to-haves, and savings are what you put aside for your future.

The 50/30/20 rule

One common budget ratio is called the 50-30-20 rule. In this formula, 50% of your income goes to necessities, 30% is reserved for discretionary income, and 20% gets saved.

Let’s see how this might work for someone who makes $3,000 a month. The 50/30/20 ratio would mean $1,500 goes to needs, $900 to wants, and $600 to savings/investments.

Other percentages

All of these numbers can be tweaked depending on your situation.

So if you’re spending 60% of your income on necessities, you might want to aim for more of a 60 20 20 breakdown or even the 70-20-10 budget.

11. Retirement ratio

25x your annual expenses

Ever find yourself asking, “Can I retire yet?” Once you stop working, you want to be confident that your savings and investments will be able to continue funding your life.

It’s a tried-and-true method for understanding what you need in retirement. It’s also based on something called the 4% rule, which refers to the idea that a retiree can safely withdraw 4% of their savings each year with little risk of running out.

Calculating your retirement expenses

Look at your current annual expenses and try to figure out if they’ll be higher or lower in retirement. Perhaps you’ll have a paid-off house by then and eliminate rent/mortgage expenses.

On the flip side, you might want to try full time traveling or have extra for medical care. It never hurts to pad the numbers, but the 25x expenses formula is a great place to start.

Someone who spends $50,000 a year would ideally want $50,000 * 25 = $1.25 million to retire confidently.

12. Credit utilization ratio

Sum of credit card balances divided by total available credit

Your credit card utilization ratio helps show how effectively you manage your available credit. High utilization could signify that you have an unhealthy reliance on debt. 

Utilization is also a big factor in determining your FICO credit score, so it’s worth paying attention to if you’re trying to improve your credit. Understanding and managing this ratio can positively impact your creditworthiness and financial well-being.

Figuring out your credit utilization 

To calculate it, take the current sum of your revolving credit account balances and divide it by the total credit limits across all your accounts.

A lower credit utilization rate helps your credit score. Avoid going over a 30% credit utilization ratio—keeping it at or below the 10% range is ideal. Focus on paying off outstanding debts and limiting the balances you carry from one month to the next. 

Consider a scenario where your credit card balances amount to $2,000, and your total credit limits across all cards are $10,000. The credit utilization ratio would be $2k / $10k = 20%. This indicates that you’re using 20% of your available credit. 

The good thing about utilization is that it essentially changes every month. Even if you have a high ratio for one month, you can pay down your balances and return to a low utilization in no time.

13. Student loan debt to starting salary ratio

Total amount of student loan, divided by expected starting salary

College is notoriously expensive. And unless you know how to get a full ride scholarship or have a college fund, it can be hard to stare those student loan offers and interest rates in the face and ask yourself, is it worth it?

The debt-to-salary ratio provides a simple guide for college students and their families to help answer this question. Will your degree be worth the debt in the long term?

This formula helps you determine the maximum loan amount to borrow for a particular degree program.

How do I tell if my college degree will be worth it?

Since you can’t predict the future, it’s impossible to calculate the exact ROI (return on investment) for a college degree. But you can look at the job market in your target field and determine what starting income you can expect after graduation. Websites like salary.com can help with this research.

Your results will also help you plan a realistic debt repayment schedule for your college loans. As a rule of thumb, students should limit their debt-to-starting-salary ratio to less than 100% to repay the loans over approximately a 10-year period. (Of course, interest rates can affect the exact timeline.)

So, let’s say you take out $30,000 in loans, and your anticipated starting income is $50,000. The debt to starting salary ratio would be $30,000 / $50,000 = 60%. The result indicates that your debt would be 60% of your expected starting salary, which is relatively conservative and reasonable.

On the other hand, borrowing $60,000 for a degree that leads to an average starting salary of $30,000 does not make as much financial sense. That would put the ratio result at 200%—double the recommended amount.

No matter what your degree costs, enroll in our free student loans 101 course bundle to ensure you clearly understand how they work.

14. Loan-to-value ratio

Remaining mortgage amount on a property, divided by its appraised value

The loan-to-value (LTV) money ratio is a crucial metric in the realm of real estate financing. Lenders reference this ratio as a part of the mortgage approval process. They also consider it for refinancing and home equity line of credit (HELOC) applications. A low LTV is good because you owe less on the loan.

Whether you’re a current homeowner or a prospective first time home buyer, this personal finance ratio will be relevant to you.

How the LTV ratio works for new home buyers

If you’re buying a home, your initial LTV will depend on the size of your house down payment. Let’s say you put 20% down on a house valued at $200,000, so your down payment is $40,000 and your mortgage is $160,000. 

That makes your LTV ratio equation $160,000 / $200,000 = 80%.

If you only put 10% down, you’ll be left with an LTV of 90%. Higher LTVs on new home purchases can come with additional costs, like higher mortgage interest rates and private mortgage insurance (PMI). 

The larger your down payment is, the smaller your LTV will be, and vice versa. Saving up at least a 20% down payment will get you the most favorable terms.

How the LTV ratio works for homeowners

For current homeowners, the LTV represents how much equity has built up in your home, i.e. how much of the mortgaged property you own. This figure also determines whether you can refinance at a lower interest rate or access a home equity line of credit.

Your LTV will decrease as you pay your mortgage, but it can also change if your appraised property value changes. 

In some cases, LTV can increase if a property’s market value drops. It can happen if there’s property damage (e.g. from flooding) or a recession hits. But it’s much more common for your LTV to decrease as your real estate value grows, which is a beneficial change.

Let’s say you bought our example home when it was valued at $200,000. After five years, you still owe $125,000, but your property value has appreciated to $250,000. That new value is the figure you’ll use for the ratio: $125,000 / $250,000 = 50% instead of $125,000 / $200,000 = 62%. It’s like getting extra equity for free!

Expert tip: Consider money ratios within the context of your life

Okay, you’ve just gone through a lot of math—take a breath! Now is the time to remember these math equations are most insightful when you put them into context. A single ratio isn’t going to provide a comprehensive view of your financial health. 

You should never feel bad if some of your ratio results are above or below the ideal numbers. You don’t have to live and die by money ratios! They’re just a guide, and there’s always room for exceptions and flexibility based on your unique situation. 

Maybe your desired college degree doesn’t come with an amazing starting salary…but it’s a field you’d love working in, with great future growth opportunities. Don’t rule it out because of a math equation.

Consider them all within the context of your personal core values, needs, and goals to make them work for you.

Why are personal finance ratios important for you?

These ratios are great ways to distill tried-and-true financial wisdom into simple formulas that anyone can use.

If you want to know whether your savings are on track—there’s a ratio for that. Curious if you’re spending too much on housing? There’s a ratio for that.

Knowing your financial numbers can help you improve your life

Furthermore, keeping a record of these numbers lets you reflect on where you came from. As you learn new frugal life hacks, you can pare down your expenses and improve your cash flow ratio.

As your income grows and you pay off debt, those debt ratios shrink in front of your eyes while your net worth swells.

They’re some satisfying little equations that give you another way to track your finances and set new goals.

What are the most important ratios for money?

Finance is a highly individualized journey, so the importance of specific ratios can vary based on individual circumstances and financial goals. But in general, there are a few ratios that everyone should be paying attention to.

The emergency fund ratio is one of my top recommendations for the beginning of your financial journey. Life can throw curveballs at anyone, anytime.

Having at least six months of expenses squirreled away helps give you a runway to figure things out if you get laid off, need to pay for a surprise home or car repair, etc.

I’ll also highlight the savings ratio, which includes traditional savings and investments. Savings are essentially your key to the future. They put all your goals in reach, whether it’s buying a house, paying off your loans, or early retirement.

What is a good debt to net worth ratio?

A good debt to net worth ratio strikes a healthy balance between leveraging debt for wealth-building and avoiding excessive indebtedness.

You might think it’s best to strive for no debt.

However, while that may be a worthy goal for some people, it isn’t always the case. In some situations, debt can be a tool to help you better your financial health. 

It ties into the concept of types of debt, like good debt vs. bad debt.

For example, student loan debt or business debt can help you earn more money throughout your lifetime. But credit card debt will eat your income with its high-interest rates.

You can think about it in terms of these ranges:

• Safest range: A ratio below 50% is generally considered healthy—indicating that your net worth is at least twice your total debt. 
  
• Moderate range: Ratios between 50-100% can still be manageable, depending on the situation. Evaluate the types of debt you have, its purpose, and whether it contributes to your overall financial well-being.
  
• Cautionary levels: Ratios exceeding 100% indicate that your total debt surpasses your net worth. It signals a higher level of financial risk, so proceed carefully and ensure you have a solid debt repayment strategy.

Articles related to organized finances and financial literacy

If you’ve added these ratios to your financial toolkit, you’ll love these reads!

• The 23 Best Financial Literacy Books
• Financial Freedom Vs Financial Independence: The Difference
• 7 Financial Literacy Basics We All Need To Know
• How To Manage Your Money: 19 Tips To Do It Right

Calculate your personal finance ratios!

Now it’s officially your turn!

In order to start crunching the numbers, you’ll need some key pieces of information in front of you. The main things you’ll need include:

• Total annual income
• Total monthly income
• Total debts/liabilities
• Monthly expenses (broken down by category)
• Total asset value
• Liquid asset value (aka cash or things you can quickly turn into cash)
• Credit limits on your cards
• Real estate value (for property owners)

Once you have these figures in front of you, the rest is just plug-and-play. You can recalculate these personal finance ratios as often as you want—say, once a month, once a quarter, or once a year—to stay on top of your personal financial plan. Over time, if you stay the course, you might even learn how to become wealthy!

The post 14 Most Useful Personal Finance Ratios And How To Apply Them appeared first on Clever Girl Finance.

Do you know someone who takes the bus to work, makes their own lunches, and never takes luxurious vacations? Or perhaps you have a neighbor who lives in a modest house, drives an average car, and cuts their own grass? We all know people like this, and we might even be people like this who’ve achieved stealth wealth!

Most of us probably make assumptions about people based on their spending habits and what they seemingly have or do not have. That’s a mistake because it doesn’t account for those around us who have built wealth quietly.

What is stealth wealth? Is it something you should aspire to?

That’s just what we’re going to talk about here! Read on for the benefits, signs, and secrets of stealth wealth that you can adopt in your own financial life.

Stealth wealth meaning

What is stealth wealth really? It means having a lot of money but not flaunting it. It means keeping the (large) amount of money you have a secret from everyone, including your friends and family.

People that do this don’t necessarily hide their wealth to be deceitful, they just don’t feel the need to show it off. That’s why it’s difficult to tell the “stealthy wealthy” apart from everyone else.

The benefits of stealth wealth

Why would you want to practice this? There are some real benefits to hiding your true net worth from the rest of the world, including:

Make real connections

There are many reasons why stealth wealth can benefit your relationships.

First, as much as you might try, it can be difficult to maintain a friendship when one person has quite a bit more wealth than the other. By concealing how much money they have, those with money essentially close the (perceived) wealth gap.

Friends won’t feel pressured to keep up with expensive nights out or dinners they can’t afford, and you can stick to doing things together that fit within both of your budgets.

Second, money can get in the way of genuine relationships. You might wonder if someone is friends with you because of your money and what they can get from you.

By taking money off the table, you’ll be more certain that whoever you surround yourself with is there for you, not because you’re rich.

In addition, you won’t have to think so much about setting boundaries in friendships with people who may care too much about your money.

Live a happier life

Many wealthy people get caught up in spending lavishly to show off how much they make. But spending money on material things doesn’t necessarily make a person happier.

Instead, you can look for happiness within yourself.

Not only that, but spending too much money can cause a lot of stress. By cutting back on luxuries you don’t even want, you can learn how to save money fast and lower your stress.

Instead of trying to keep up with everyone else, those who practice stealth wealth spend their money on things they truly enjoy. Whether that’s experiences or material possessions they want, it doesn’t matter.

What matters is that spending money on what you want, rather than what you think will make you look good in front of others, leads to a more relaxed and happy life.

Financial security

Those who are financially secure no longer have to worry about money. Imagine the peace of mind you’d have, knowing that you have enough in your savings and retirement accounts to fund your lifestyle forever.

One of the hallmarks of stealth wealth is living below your means, which can ultimately lead to financial security.

Stealth wealth signs

Those with this type of life usually live a traditional middle-class lifestyle despite all their money. There are, however, some stealth wealth signs that you can look out for if you are curious to know if someone is rich or not.

Even with these signs, it might still be impossible to tell the difference between stealth wealth and average wealth! Some possible stealth wealth signs include:

They talk about money in a healthy way

Those with money talk about it as a way to learn or develop new ideas. They don’t brag about how much they have, and even more telling, they don’t talk about what they don’t have, either.

You’ll never hear someone with stealth wealth boasting about their income or their appreciating assets. Likewise, you’ll never hear them complaining about being in debt or unable to afford something they want.

Why not? Because they are debt free and they can afford whatever they want.

Those with wealth don’t show off on social media

The stealthy wealthy value privacy and don’t flaunt their money on social media, ever. Mostly, they don’t acquire things to show off.

But, even if they do decide to spend on a fancy dinner or lavish vacation, they don’t feel the need to tell the rest of the world about it. They leave that kind of posting to those seeking attention and trying to show off the wealth they might not even have.

They seem “average”

Another stealth wealth sign? Don’t look for a flashy sports car or giant mansion. Instead, those who understand the true stealth wealth meaning appear average.

They drive average cars, have regular jobs, and seem just like the rest of us. They understand that buying an expensive car or house doesn’t make you rich; it just makes you look it.

Secrets of the stealthy wealthy that you can use in your own life

You can’t just decide to have stealth wealth one day. Like most things, it requires dedication and financial planning to achieve. But, you can take the secrets of the stealthy wealthy and incorporate them into your own life to get your financial house in order.

Here are various ways to do that – and, who knows, you might decide that you’d like to be “stealthy wealthy” one day, too!

1. Avoid lifestyle inflation

More money can appear in your bank account in so many ways. Perhaps you got a raise (congratulations!). Or, maybe you switched jobs and got a nice salary bump along with it.

No matter how you come into it, the more money you have shouldn’t mean the more you spend.

Lifestyle inflation – increasing your spending as your income increases – is something that those with stealth wealth actively avoid. While you could be tempted to spend more as you make more, it’s not the way to become truly wealthy.

Those who know the secrets of wealth know that avoiding lifestyle inflation is one of the key ways to grow their assets and become financially secure.

2. Don’t try to keep up with the Joneses

Just because a friend or neighbor got a shiny new toy (car, house, or gadget) doesn’t mean you need to get one, too. Keeping up with others’ spending only causes financial troubles. If you want to become wealthy, focus on yourself, not others.

Whenever you are tempted by emotional spending or buying something because someone else has it, take a moment to reflect on whether you truly want it. If you do, it’s ok to purchase it.

Those with stealth wealth don’t restrict themselves fully, but they only purchase things they need and truly want. They aren’t influenced or pressured by others or by trying to keep up appearances.

3. Be intentional about your spending

Society tends to regard wealthy people in two ways; they either spend frivolously or live like a miser. To join the rank of millionaires, the popular advice is to save every dollar and only spend on basic necessities. Not exactly enticing!

I learned that wealthy people are neither irresponsible nor stingy with money when I worked as a nanny for many households in an old-money neighborhood.

Instead, they practice living on less by being smart with their money. They spend on things that make them happy and cut anything that doesn’t.

For instance, one of my bosses has a total of zero designer handbags but is a proud owner of a rare diamond. Another client asked me to bank my hours and pay me bi-weekly to avoid bank fees.

You don’t have to give up everything you enjoy to build wealth. But you need to be clear on what you want and be intentional about your spending.

4. Diversify your assets to achieve stealth wealth

Another secret of the wealthy? They don’t keep all of their money in one place. And they definitely don’t keep it all in a checking account!

Instead, they diversify their assets and strive to build multiple income streams.

The wealthy invest in the stock market (in various asset classes), bonds, and real estate. On top of that, they might even have a business or two.

If you want to steal this secret, one of the best ways is to create a plan for your future self through investing.

5. Build generational wealth

Those focused on quiet wealth building are also focused on building wealth for their families for many years to come.

They know the importance of building generational wealth – wealth passed down from generation to generation. This means they typically don’t spend money on material possessions or experiences that don’t last.

Instead, they focus on growing their wealth over time. They invest in the stock market, build businesses to pass down and create estate plans.

Everything they do with their money is with an eye toward security for themselves, their kids, their future, and future generations.

6. Be generous in private

Just because they don’t flaunt it doesn’t mean that those with stealth wealth hoard all of their money. Many wealthy people are extremely generous, but they do so in private.

Whether it’s paying for a family member’s education or donating to a cause they care deeply about, they do it all without making a public display of it.

If you want to practice stealth wealth, start by giving quietly when you can. You’ll still reap the same benefits and can avoid some drawbacks of giving, like loaning money to family or friends when you aren’t comfortable with doing so.

7. Build a classic wardrobe

For subtle wealth, think timeless wardrobe, otherwise known as “stealth wealth fashion“, “quiet luxury’, or “old money aesthetic.” 

Ditch trends and achieve quiet luxury with pieces that never go out of style. Look for understated and logo-free garments.

In addition, choose high-quality materials that will last, like leather, cotton, or linen.

Build your classic wardrobe with everyday staples like t-shirts and jeans. You’ll also be able to mix and match outfits if you go for neutral pants and jackets.

Fill your closets with timeless fashion pieces that you can use for years.

8. Be careful of the car you drive

When you finance your car, you’re paying interest for an asset that’s losing value over time. (Also, read about the pros and cons of refinancing a car.)

The wealthy understand this. That’s why even ultra-rich people like Jeff Bezos and Warren Buffet choose reliability over luxury regarding cars.

With rising inflation and high-interest rates, there’s no better time than now to opt for safe, reliable, budget-friendly cars.

Besides, owning a car has added car expenses. So, make sure you factor in the cost of gas, insurance, maintenance, and repairs when buying a car.

9. Know what’s going on with your money

What gets measured gets managed, right? You cannot build wealth without actively trying to find simple ways to increase your income and manage your spending.

It may come as a surprise to you, but even billionaires pay attention to their money. They may not be the ones creating a biweekly budget or expense report, but they have someone they trust doing it.

Many who grew up in households where money is a source of stress mistakenly think that being a rich person means never looking at your finances and spending however you want. But it’s not. The first secret to quiet wealth building is knowing what’s going on with your finances.

10. Practice humility

Humility is understanding that you are not better than others, no matter what you accomplish or how much money you have.

Living a simpler life, even when you have lots of money, comes from the realization that you don’t have to prove yourself to anyone and that other people are not your competition.

That’s another secret we can learn from those with stealth wealth. As a practice, ask yourself: “Do I want this even if nobody ever knows I own it?” whenever you want to buy something extravagant.

11. Stealth wealth meaning: truly believing that fancy things don’t make life worth living

Lastly, those who are truly wealthy understand that material things and fancy vacations aren’t what makes life worth living.

They may have started their wealth journey by not buying things they wanted to save or by passing up opportunities to spend on things they really wanted. But since they have fully embraced being quietly wealthy, they don’t feel the need to buy these things anymore.

They have found other ways for fulfillment. That’s one of the biggest blessings having money can give a person. Not only do you have financial security, but you’ve also learned to want less, appreciate the little things and what you have, and be happy with who you are.

Expert tip: Follow your own path to achieve stealth wealth

You can get clues from the stealth wealth signs others exhibit to build this type of life for yourself. First, get clear on who you are, what you value most, and how you want to live your life. Very importantly, to build a strong financial foundation, you need to know what’s going on with your money.

Learn from people who accomplished what you’re trying to achieve. Success and wealth don’t just happen. You need a plan, the determination to put your plans into action, and the clarity to follow the path.

The world will keep telling you what you should be doing and how. But as long as you stay true to yourself and your values, you’ll reach your goals and achieve financial security.

What is meant by stealth wealth?

Stealth wealth meaning is defined as living simply and quietly maintaining your wealth without making obvious displays of your affluence.

I personally prefer to think of it as being free from the money worries plaguing society because one does not need to keep up appearances to look rich.

Instead, they build wealth quietly and smartly without flashy money displays like fancy cars, mansions, or designer items and clothes.

What are subtle signs of wealth?

People with wealth very often live a minimalist, quiet luxury lifestyle. Most of the time, their wealth is hidden in fat bank accounts, and they invest smartly in robust investment portfolios, or in multiple properties.

To know who these people are, you can look out for stealth wealth signs. For instance, they might wear for high-quality clothing and accessories with little to no visible logos. Many people at this level of wealth also live in comfortable, well-maintained homes.

Some drive nice cars, travel, and own luxurious items but without announcing to the world what they have or don’t have. You’ll also notice that the wealthy pursue knowledge and ideas for self improvement.

They spend time, money, and effort to learn more about the world or themselves. Lastly, people who achieve financial freedom are happy and content. Because of this, they can be incredibly generous.

What are the benefits of stealth wealth?

If you build wealth quietly, you’ll have peace, safety, and security. These are the key benefits of stealth wealth.

When only a few people know your true financial situation, you don’t have to keep up appearances to maintain an extravagant lifestyle. You’re also safe from the unwanted attention of people with bad motives.

Additionally, you can live quietly without the pressure to outdo others in pursuing and doing more. In turn, you have less stress, and you set yourself free to enjoy your life.

You’ll have more energy and time to focus on what makes you happy, whether that’s family, business, hobbies, or making a difference in the world.

Articles related to wealth building

Has this article got you interested in wealth building? Check out these posts to find out more!

• Rich Vs Wealthy: 3 Key Differences Between The Two
• How To Build Wealth In Your 20s In 9 Steps!
• How To Build Wealth In Your 40s
• 6 Secrets Of Self Made Millionaires You Need To Know!

Leverage the secrets of stealth wealth to improve your financial future!

Becoming quietly wealthy isn’t about hiding money or being stingy. It’s being strategic and living life on your terms. Start your journey to financial freedom by incorporating some of the practices above.

Now that you’ve discovered the answer to “What is stealth wealth”, are you ready to take some of these secrets and use them to boost your own finances? Find out more about wealth accumulation and more money secrets!

The post Stealth Wealth: 11 Ways To Leverage The Secrets Of The Wealthy appeared first on Clever Girl Finance.

When you don’t know exactly what you want, how will you know when you have it? That problem is precisely why it’s so important to gain an understanding of what you want in your life. Getting clarity to achieve your life’s goals is possible.

Sometimes, you can find yourself feeling lost in life, drifting along. Maybe you have some clue about what you want to achieve, or maybe you feel completely aimless.

It’s crucial to figure out what you want to focus on since that’s the first step towards achieving it one day. You may be searching for clarity in relationships, your career, your health, or any number of life aspects. 

If you’re unsure how to find clarity, consider the key tips in this article. But first, let’s discuss why having a clear purpose is so important.

Why getting clarity in your life is so important

“If you aim at nothing, you hit nothing.” Shang-Chi and The Legend of the Ten Rings

While you might technically be able to shoot a crossbow while blindfolded and hit something, it’s hardly a recipe for safety. You could end up completely missing the mark.

Yet many of us approach our career goals, physical and mental wellness goals, relationship goals, and all other goals this way.

If you don’t have a clear target in mind, how will you aim to hit anything? As my ten-year-old begins learning archery, he’s finding out that a clear target is essential to success. Here are some of the reasons focus in your life is so important.

Clarity helps you know what you want

First of all, clarity often refers to a distinct vision of the future. If you just have a hazy picture in your mind of what you want to do in life, it can be next to impossible to end up in the right place.

Try to figure out some answers to the questions: What do I want to do? And who do I want to be?

Do you want to be a stay-at-home mother for a few years to soak up more time with your little ones? Or build a six-figure salary or business from scratch? Maybe you want to renovate a century-old farmhouse with nothing but YouTube and your bare hands.

Whatever your goals (obviously, you probably have many), deciding what you want is the first step toward achievement. It’s okay if you feel some confusion at first. Taking some time to identify your true passions and hopes is how you can find clarity.

It also helps you recognize what doesn’t matter 

It’s not only essential to know what you want but to know what you don’t want or what doesn’t matter. It’s all part of intentional living. 

When you find yourself drifting through your days without much to show for them, take some time to recognize what is and is not important. Think about the things you devote most of your time to—do they truly matter to you?

Oftentimes, we end up spending a lot of our time on things we don’t really care about. Maybe we sign up for too many committees at work or the kids’ school or we get pulled into a project that isn’t our passion.

While we can’t get out of all unpleasant tasks or things outside our comfort zone, we can be more mindful. Figure out what tasks are sucking your energy without any purpose, and try to delegate them or give them up completely.

6 Practical steps to achieve clarity

Essentially, getting clarity about who you are and what you truly want is about priorities. What matters most, and what can you let go of?

Since your time is limited, try these practical steps to bring understanding to your days and your life. This will also help you achieve your goals in life.

1. Create space to discover new ideas and goals

A great first step towards getting clarity is to simply make space for it. Sometimes, the most aimless times in our lives are when we get too busy to think or pause.

We all need some breathing room in our lives to help us discern what we’re getting right and what we can do better.

Try these tips to avoid going through the motions for weeks or months.

Instead, you can make time for getting clarity in your life.

Set aside regular time for reflection 

Maybe you’re the kind of person who’s always going full speed, and it’s hard to find focus that way. We all need to reflect on how things are going to figure out what needs to change.

You can try these ideas for “Wellness Wednesday,” like taking a rest day or turning off technology for a set period of time. Check out blogs and books that help you. 

If you’re a woman who thinks, “There’s no way I can just take a break,” then you need a break more than anyone!

Just start as small as you need to. Pick a regular weekly or daily time for reflection on your life and goals.

You may try meditation, but don’t be scared off by that term. Reflection for you may mean focusing on a particular goal or looking back on how each day or week went. 

There are probably a lot of little pockets of time in any given week when you could carve out a few minutes or an hour for reflection. Or if you’re craving major “me time,” make a plan for a lazy weekend to recharge and find focus.

Leverage journaling

Journaling can be an excellent tool when looking for clarity. Writing in a journal helps us to process what’s happening in the here and now, dream about the future, and reflect on the past. Journaling is a great form of self-care.

There are many benefits to journaling, like keeping track of your progress, increasing your confidence, and finding inspiration.

Once you’ve carved out a slice of time every day or every week, you may use journaling during that time. Whether you write long paragraphs, stick with short sentences, or use bullet journaling, get your thoughts down on paper.

If you’re unsure where to start, check out these 60 journal prompts for self discovery. I bet you’ll discover a ton about yourself if you’ve never had a journaling practice before, and that focus will help you achieve your goals.

Declutter to create physical space

In addition to creating mental space, you may also want to spend time clearing out physical space. If you need motivation to declutter, imagine how much the stuff in your home could add stress and confusion to your mind. 

Why not start by clearing away some things that aren’t serving you? Try emptying out one drawer or closet, discarding what’s unnecessary, and reorganizing with only the essentials. 

One of happiness guru Gretchen Rubin’s key tenets of happiness is that “Outer order contributes to inner calm.” Even if you don’t think clutter bothers you, you may be surprised to see how a cleaner home or office helps you.

2. Seek clarity through relationships

Relationships are a great resource for getting clarity. As important as your beliefs are, the people in your life can offer amazing insight into who you are.

Friends can help you see yourself more clearly 

In addition to spending time journaling and reflecting on your own, take some time to listen to your friends. Whether through a weekly Zoom call, an in-person lunch date, or even text messages throughout the week, friends can help with getting clarity.

Unfortunately, you may have been burned in the past by unsupportive friends. Those painful experiences may have led you to shut yourself off from true friends. Seek out the ones who can help you see who you are and determine your next life steps.

Whatever life circumstance you’re unclear on, dear friends can give advice. They can often see past your blind spots, those areas where you can’t see your talent as clearly as others.

Perhaps a friend will remind you of something you loved to do when you were younger. A relative could help you envision new possibilities for the future.

Don’t forget to set boundaries in your friendships. You’re still in the driver’s seat; you’re just asking friends to help you along.

Spend time with people who challenge you 

You can find focus by paying attention to who you’re spending time with. Maybe you have a trusted friend who doesn’t always tell you whatever you want to hear.

But her advice is always given with your best interests at heart. That’s the friend you want to keep close! She can definitely help you with how to find clarity in your life and choices.

Beware of toxic friends, though. When I say to seek out those who challenge you, I mean only people who love you and can give you insight into yourself.

Consider talking to a sister, old friend, grandmother, cousin, coworker, you name it. People who challenge you may push you out of what’s comfortable or easy. They can help you make a decision to take the risk—but not a foolish one.

A true friend can help you decide which risks are worth taking to better your life.

3. Getting clarity is easier with healthy habits

As you’re thinking through these steps, remember the healthy habits you’re in charge of building for yourself.

It can seem so simple, but we all neglect self-care and healthy behaviors at times. Healthy actions are foundational habits.

Get plenty of sleep 

One essential component of a healthy lifestyle—which impacts your focus and your life—is sleep. Developing a better sleep routine is perhaps the most important aspect of creating a self-care week (which you’ll hopefully follow with a lifetime of self-care).

Getting enough high-quality sleep can improve your attention and concentration, along with memory, the ability to solve problems, creativity, how we process emotions, and judgment, according to The Sleep Foundation.

Don’t all of those aspects also sound important to getting clarity in your life?

Too many of us are sleep-deprived. If you’re not sleeping enough, try giving yourself a regular bedtime and stick to it. Other good sleep hygiene habits include leaving your phone out of the bedroom and turning off screens an hour before bedtime.

Eat a healthy diet 

Eating a well-balanced diet is also crucial to being happier and more productive. You can find focus more often if you’re fueling your body with good things that help you function properly.

It’s not easy to follow an eating clean meal plan or even avoid overeating or eating in response to stress.

Try making a few small changes, like switching from soda or alcohol to water or adding a vegetable to each meal. I’m not yelling at you here—eating healthfully is a lifelong struggle for me, and each day’s choices make a difference. 

Every small decision to do something good for your body can help guide you to the next healthy choice.

Move more 

And, of course, in the trifecta of healthy habits, add “Move more!” to your list of things to do. Physical activity is a way to invest in yourself.

Exercise will help you strengthen physically, but it also has mental health benefits. Getting clarity may be easier if you make exercise a part of your day.

Exercise can help you with weight management, brain health, and anxiety reduction. If you’re unsure of what exercises are a good fit, try them out until you find some form of movement you love and will do regularly.

Perhaps you’ll love yoga, hiking in the woods, Zumba, softball, weight-lifting…you get the idea.

If I’m working from home, I sometimes pause to do a few push-ups or walk around my yard. That small break lets my mind wander from other tasks, and when I return, I’m more able to concentrate and solve problems.

Meditation can be a useful habit

If you’ve never tried meditation, you could give it a try. Take advantage of free apps like Calm or YouTube channels on meditation for quick and easy ways to get started.

I’ll admit that I’m a total newbie to meditation, but I try it occasionally to help me settle my mind. Plenty of people will tell you that when learning how to find clarity, it can be a great strategy. 

4. Focus on your priorities so you can accomplish what’s most important

Clarity is another way of defining your priorities. Figure out what matters the most to you, and chase hard after those things. Everything else is secondary.

You might determine that your family is your number-one priority (most people believe that). And, of course, you have to spend time on work, relationships, health, and other goals.

Define your goals and how long they’ll take

You can have long-term goals as well as mid term goals and short-term goals. Focus first on the overarching top goals, then break them down into manageable parts of life.

You might read goal-setting blogs to get some inspiration if you’re unsure how to set goals. First, try to keep your goals manageable and be sure they’re within your control. 

It’s best not to set goals like “Write a bestselling book” because whether your book sells isn’t something you can control. But goals like “Write 500 words per day” or “Join a writers’ group” are manageable and don’t rely on external factors. 

Don’t be afraid of big hairy audacious goals, either! Consider these major life objectives that you won’t reach in a few weeks or months but that can inspire you to buckle down and make progress. 

Determine why you want to achieve those goals

As you work on gaining clarity, you’ll need to think through your “why.” If a certain goal comes to mind, such as “Save $5,000 in 3 months,” think of concrete reasons why you want to do that. 

The reasoning behind this is simple. Achieving goals isn’t always easy, and gaining an understanding of why a goal matters to you will help you when the going gets tough. 

Get really specific about your why. What will you feel like when you accomplish this goal? How will it change your life or your family’s future? 

For example, if you are saving a down payment, envision the kind of house you’ll purchase one day. If you dream of taking a month off next summer, picture the fun activities you’ll be free to do during that time. 

You can keep your goals in mind by writing them down in a prominent place, learning how to create a vision board, or sharing them on social media. Along with the goal, include images or words about how achieving it will make life better. 

Say no to things that don’t serve your primary goals 

You’ll want to start saying “no” to some things. If an activity doesn’t help you reach your most precious goals, perhaps it’s time to give it up. 

Once you’ve focused on what matters, you’ll learn how to say no. You don’t have to do it all! Keep that in mind when a task could derail you from achieving your major goals. 

You may even need to say no to things that are good in theory but simply don’t serve you at this time.

For example, while I’m writing a novel (my lifelong goal), I have to say no to other activities that might be fun, like pottery classes. 

A financial example is that if you’re working to get out of debt, you’ll need to say no to a lot of spending. After working on your budget and debt, you can focus all your income where it needs to go—paying off debt. 

5. Don’t wait for perfect clarity before starting

“Don’t let perfect be the enemy of the good.”

That quote has been attributed to Voltaire and restated by many wise thinkers. It reminds me that it’s more important to start than to have everything figured out.

Beat procrastination for good

So many times, we procrastinate on getting things done because we fear we won’t do them perfectly. Maybe you’ve had that experience with a major life goal. You build it up as so important that you’re paralyzed and don’t start.

When you put off doing what matters most out of fear or anxiety that it won’t be perfect, you don’t go anywhere. Meanwhile, time passes, and suddenly, you notice you’re in the same position as a year or ten years before. Don’t wait forever!

Start with baby steps

A good strategy for finding out what you want is to start small. While reflection is important, sometimes you need to start with a baby step. 

For example, you might feel that what you really desire is to study for a new career. But if that career requires years of study and a ton of money, don’t let that discourage you from trying. Start with one class or internship, then see how it goes from there. 

There’s a lot to be said for improving by 1% daily. Know that mini goals can be beneficial, too, and sometimes you need to take one step before the next one becomes clear. 

6. Experiment and adjust your goals periodically

Going hand-in-hand with starting imperfectly is the plan that you’ll adjust your goals over time. You can learn how to create goals for today, start working on your goals, and find that those goals don’t exactly fit what you want.

That’s okay! Life is an experiment, and you get to try things, fail (or change your mind), and try again. The important thing is to stay consistent in reaching for your goals.

Learn and change a little every day

Every day in your life, you can grow and change a little bit. You might use these tips to inspire change in your life. Use your experiences, continue to evaluate your life and find clarity for the present moment, and make adjustments as you go.

It’s not easy, but this can open your eyes to when it’s time for a change. Certain phases of your life will require more focus on your career, while others may be more focused on family. Life doesn’t stay the same year after year, and you won’t either. 

Changing your goals isn’t a failure

You need to realize that after making progress, your goals may shift over time. It’s important to accept this as a part of the process. 

I’ve read a few blogs about people who tried traveling full time, maybe in an RV or overseas. Sometimes, they loved it, but others found they were ready to return home after a few months. Those people didn’t fail, though!

There’s nothing wrong with taking a big leap and discovering the outcome wasn’t what you’d hoped. You’ll learn to live consciously and make adjustments.

Expert tip: Take the time you need to find direction

If you find yourself flailing or struggling to reach meaningful goals, it’s worth it to spend time getting clarity in life. Most of us face periods of confusion, when we either pursue too many goals at once or we feel aimless without a goal. By using these tips for better overall health and satisfaction, you’ll find yourself gaining focus in all areas of life.

Your life is too important to coast without specific objectives at the top of your mind, so use clarity to make your life plan. Remind yourself that you bring unique gifts to this world, and by understanding how to use those gifts, you can more quickly make your impact on the world. 

What does it mean to seek clarity?

If you’re unsure of how or why to seek clarity, think of it as finding a focus in life. Whether you feel lost in general or only in a specific area, you can figure out what you really want. 

You may look to inspirational blogs or self-help books for women to help you with your ambitions. Other ways to find focus include talking to loved ones, clearing out clutter from your home, or trying something completely new. 

It’s an ongoing process of self-discovery. It helps ensure that you aren’t simply coasting through life, which could lead to regret down the line. 

How do you find inner clarity?

There’s no one right answer for how to find inner clarity. Perhaps you’re seeking to focus on what you’re most gifted to do for a career. Or you’re unsure whether it’s time to move on from a painful relationship. 

Finding inner clarity requires you to dig deep and look inward. If you want more direction in your life, you must sit and think for a bit. Whether this means you simply sit down somewhere with a journal or try walking in the woods, get quiet. 

No one else can really tell you what you need or want. So don’t be afraid to be alone with your thoughts and figure out your goals. 

How can I get clarity fast?

Not to be a downer, but there may not be a quick solution for clarity. Of course, it would be great if you tried meditation once, and within the first five minutes, you experienced a lightning bolt of clarity. 

However, there’s a good chance that finding focus won’t happen fast. Just be open to whatever comes to your mind, and be willing to change as you learn and grow.  

One good way to focus fast is to create physical space. Clear your desk, for example, before you sit down for goal-setting. The absence of random papers could help you focus your mind. 

As you gain guidance on what you really want, you can also start trying the best manifestation methods to help you get there. 

Articles related to getting direction for your life

If you found this information about gaining direction for your life interesting, check out these other great posts!

• How To Find Your Why!
• Less Is Better! 7 Reasons Why Less Is More
• How Intentional Living Can Change Your Life
• 15 Practical Steps To Make Today A Good Day

You can live with clarity and purpose!

Finally, don’t be afraid to pursue what you really love.

That’s likely one of the hardest parts of achieving clarity: realizing what you want but then finding the courage to go after it. You may not struggle with confusion, but the belief that you deserve what you want. 

Remember to listen to yourself as you go through each day, and you’ll find the focus to keep working toward achieving your goals.

If you decide on financial goals to pursue, you can try out our free online finance courses.

The post 6 Steps For Getting Clarity To Achieve Your Life’s Goals! appeared first on Clever Girl Finance.

You’re likely reading this article because you’re interested in the differences between the way poor vs rich people think and act. You’d probably like to apply the habits of the rich in your own life, right? Well, one thing stands out – it starts with a rich mindset.

If you’re serious about becoming successful, then you need to understand the difference between rich and poor mentality. As you study the lives of wealthy people, you’ll notice one consistent theme: a growth mindset.

One of my favorite quotes of all time is from Dale Carnegie. “Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all.”

Having a rich mindset is ultimately about self-growth and persevering until you reach your desired outcome. The best place to begin? Understanding the rich vs poor mindset.

Ready to learn what sets apart the rich mindset vs poor mindset? Let’s dive in!

The difference between rich and poor mentality

If you’ve spent any time on social media such as Instagram, Facebook, and YouTube, you’ve no doubt seen people posting content about their incredibly lavish lifestyles. For some, the images are real. But for others, behind the scenes, there’s a lot of debt, poor credit, and zero savings.

In the extremely popular and captivating book The Millionaire Next Door, authors Thomas J. Stanley and William D. Danko studied millionaires over several decades. Do you know what they found? Most millionaires aren’t living out in Hollywood. 

Most millionaires are right in front of you – living in your neighborhood, driving that second-hand Toyota, and sporting the iPhone from 5 years ago.

There are so many lessons to learn from everyday millionaires. They’re business owners who’ve built their empires from the ground up, women and men who’ve maintained their old lifestyles while building real assets and using a rich mindset.

It’s important to realize that the truly rich often won’t flaunt it.

Additionally, it’s partly why they continue to increase in wealth. They’re not giving into consumption by buying the latest gadgets or the most expensive items. Instead, they’re building assets.

This is a key differentiator between rich vs poor people. Living in luxury can be one of the habits of the poor mindset.

But becoming rich is possible with the right mindset, and there are many more wealthy people out there than you might imagine. These are people who have built wealth quietly using a stealth wealth approach.

What is a poor mindset?

On the other end of the spectrum, you have a significant number of people stuck in a poverty mindset. Poverty and being poor are complex. The environment, exposure, and life experiences can keep someone trapped in this poverty mentality.

It can be difficult to overcome this.

However, you can carve your way out by deciding to adjust your thinking with the power of mindset. So, what are the thought patterns that can hold you back from becoming wealthy?

A poor mindset believes things will not change

Poor mindset convinces people that their circumstances are fixed and that living paycheck to paycheck is the best they can do. They have a lot of negativity and think that there’s not much they can do to improve their circumstances. It’s a big difference between rich and poor mentality.

An attitude of poverty believes overcoming challenges is impossible

Someone using habits of the poor mindset believes that what life has thrown them has never been seen before and their challenges are impossible to overcome. This way of thinking may also cause them to feel judgment towards those that are rich.

What this person fails to realize is that everyone goes through rough patches. Oprah didn’t rise to where she is without facing major personal and professional challenges.

Instead, she has a wealth mentality. Below, we’ll walk through certain habits that wealthy people have that set them apart from the rest.

13 Rich mindset habits to start emulating now

Now that you know the difference between the rich vs poor mindset, let’s get into specific rich mindset habits that you can start working on today.

1. Rich people always have a vision

Before you hit the ground running, ask yourself this: what is your vision? Jonathan Swift said it right when he said, “Vision is the art of seeing what is invisible to others.”

Do you have hopes and dreams you’re constantly thinking of achieving? Is your vision big beyond what you think you are capable of today? Will what you see for yourself change your life, the life of your family, or your community in the future?

If all you see is where you are today, challenge yourself to build a vision. Once you do, realize it’s not a one-and-done affair.

Instead, it’s an everyday process where your mind dreams further of what’s possible, and then you follow your dreams. The rich are persistent and keep working towards their vision and goals; a huge difference between the rich mindset vs poor mindset.

2. Rich people have productive routines

Netflix, YouTube, and TikTok have been dominating the entertainment scene of late. Millions of hours are viewed each day. While it’s great for them, it does little for you – and the wealthy know this. Most rich people are more productive with their time.

People with money are intentional. They have routines. And they understand that you don’t just wake up as a diligent individual out of nowhere.

When we talk about routines, we don’t just mean waking up at 5 am every day. That’s only a tiny part of it.

Instead, we’re referring to the overall environment the wealthy put themselves in.

Rich people are intentional about the friends they keep. They pay attention to what they feed their minds. And they put themselves in environments where success is most likely.

Routines consist of all these components – time, environment, and habits.

For example, when you need to work from home, do you stay in bed? You probably end up getting much less done. Having a designated workspace will get you much further ahead.

Basically, create a life that makes success inevitable and eliminates obstacles that could stop you from achieving your goals. The reliability of a routine can help you succeed. The wealthy know this and are intentional about having a consistent billion dollar morning routine.

3. A rich mindset is results-driven

Rich people focus on outcomes. They take full responsibility by setting goals and achieving them.

In addition, they aren’t building routines for bragging rights. No one is waking up at 5 am, so they can post about it on Instagram.

No. People with money are focused on the results and will commit to doing what it takes to achieve them.

Routines alone will improve your quality of life. But they won’t do anything for your bank account. Routines coupled with focused action will yield results.

So, what’s the best way to achieve results? Know what you want. When you have a clear idea of what the end goal is, it will be so much easier to work back and figure out what it takes to get there!

4. Rich people admit when they don’t know

Guess what makes you a smart person? Admitting what you don’t know and knowing how to ask meaningful questions.

The rich know this and are on a constant search for knowledge as part of their rich mindset. So, if you’re learning from a mentor, ask smart questions for informational purposes.

Learn in regards to the challenges they are facing, understand what they are trying to achieve, how they are planning to achieve their goals, and what they’ve learned from past experiences.

Listening always pays off. Gather intel on best practices, new opportunities, and potential challenges and solutions. Use this skill when learning, negotiating, exploring, or networking – basically every human interaction you have!

5. People with a rich mindset don’t work for money

You heard that right. The wealthy work to learn. Poor people often work for their next paycheck.

Reasons for working is a huge difference in the rich vs poor mindset.

You see it all around you. Poor people end up working from paycheck to paycheck, barely making ends meet. Rich people, in the meantime, grow their skills and abilities and continually rise up the ranks.

6. Rich people have mentors

Life is all about relationships. You’ve heard the saying before, “Your network is your net worth.” It’s true.

But that doesn’t mean you should go out there and dump your friends. Instead, it means you should broaden your circle.

Once you make money the end goal, you’ll be stuck working for it without growing in your talents and abilities to boost your income.

However, if you work to learn, you’ll be well on your way to success.

You see, those with wealth connect with other people. They identify stars in their field, study them, and through a leap of faith, make that connection.

It all goes back to your vision.

Who inspires you? What do you admire about them? What do you hope to learn from them?

And it doesn’t just stop there. A rich mindset asks how you’ll make a connection with that person. To connect with anyone you’d like in the world, you have to serve them first.

Understand their world and figure out how you can add value to them. They’ll be much more receptive to mentoring you once you’ve built a relationship.

7. Rich people always look out for opportunities

Shark Tank is a fascinating show. Every week, handfuls of entrepreneurs stand before the sharks and pitch a new idea. Some of them are wild.

Would you ever imagine a sponge in the shape of a smiley face making millions of dollars? Or a toilet stool that makes bowel movements easier, revamping how people handle their business? Scrub Daddy and Squatty Potty did just that.

Their founders were visionaries who saw opportunities in the mundane day-to-day activities of life.

Not seeking to improve things is one of the habits of the poor mindset. But not someone with a rich mindset.

A rich person always seeks to improve upon what’s out there – and there’s always room for improvement. Both in good economies and bad.

Past recessions birthed companies like Airbnb, Venmo, and Uber. Recessions and times of economic uncertainty create some of the greatest comeback stories you can ever imagine. It’s times like these where differences between people with rich vs poor mindsets stand out.

8. Rich people believe in abundance

In the rich vs poor mindset, there’s often one core belief that holds poor people back. It’s a belief that resources are limited, also called a scarcity mindset. It’s a belief that if my neighbor Jane succeeds, then there’s less room for me to succeed.

It can often lead to resentment and an assumption that rich people only look out for their own interests. To a person with a poor mindset, resources are always scarce.

People with money, on the other hand, believe in abundance.

You’ve succeeded? Great! Who else can, too?

Wealthy people know there’s plenty to go around. They do not engage in an “us vs. them” mentality. They focus on providing as much value as they can to as many people as they can. That’s their formula for success.

Zig Ziglar summarized it well when he said, “You can have everything in life you want if you will just help other people get what they want.”

9. A person with a rich mindset learns how to manage their finances

No one is born knowing how to manage their money. Sure, some people are born into families where good money habits are modeled well for them. But for the majority of us, that’s not the case.

Rich people know this and are proactive in managing their finances. A rich person has a budget.

A wealthy person has learned how to invest in the stock market. A successful person made it a priority to get out of debt.

Beyond that, the rich understand how to use money to their advantage. Instead of racking up thousands of dollars in consumer debt, rich people will leverage it to start a business if they need to. They use debt to build, and they pay it off responsibly.

10. Rich people are not afraid to fail

Rich people are not afraid to fail because they know failure leads to success. They’re not afraid of trying something new. They see a problem, and they are quick to think of solutions to it.

No one has 100% accuracy with finance and investments. Sometimes, you just have to take a calculated risk.

Failure and setbacks don’t worry them because they have not failed as long as there are life lessons to learn. They are willing to go out on a limb sometimes, at their own risk, because they want to improve and try to be more successful.

You’ve certainly achieved wins in the past, but you’ve probably also had things not go according to plan before those wins. Look back at each of them, and you’ll notice the lessons you learned in order for you to get to the point of success.

11. Rich people focus on the long-term

There are two different perspectives in life: those who focus on what’s in front of them and those who think about the big picture.

People with a rich mindset don’t just think about what’s going to happen tomorrow or even over the next year. They think about what is going to happen in the next 20 or 30 years. The rich realize that things take time, including building generational wealth.

For example, a rich person knows that forgoing the latest smartphone model and instead investing that money in a retirement account will be better for them in the long run. Sure, that money might be off-limits until they hit 59-and-a-half. But they know that even if it’s not accessible right now, it’s helping them build long-term wealth.

And thanks to earning compound interest, the longer they wait, the more money they’ll have in the end.

12. The rich take care of their health

People with a rich mindset have a different way of thinking when it comes to things like health and taking care of themselves. They know that while working hard will pay off in the end, it won’t if it’s at the cost of their health.

That’s why rich people make sure to prioritize living a healthy lifestyle. That means eating healthy, exercising, and regularly going to the doctor. But it also means focusing on mental health.

If you have a negative mindset and are struggling with your psychological health, it can be difficult to focus on other things like making money and building money habits. So, focusing on a positive way of thinking and mental health can help you succeed.

13. Rich people understand the value of investing

Another one of the differences is that rich people understand the value of investing. Putting aside money into an IRA or some sort of retirement savings every year might not seem like the most exciting use of your money, but it can be one of the keys to building wealth.

How? When you invest money, whether it’s in the stock market, real estate, or another type of investment account, you’re making a long-term bet that your money will grow in value over time.

People with a wealthy mindset understand that investing can pay off, especially if you start investing at a young age. That’s because the longer you invest, the more time your money has to compound and earn you even more cash.

Expert tip: You can change your perspective

If you want to start building wealth, you need to develop a rich mindset. By focusing on how you approach and think about things, you can turn your perspective around from being negative to positive.

Instead of thinking about what you can’t do or why you can’t increase your savings, think about the things you can do today. Use the resources you have available to you and start building the right habits and your mind will change.

How do you go from a poor mindset to a rich mindset?

If you want to go from a poor mindset to a rich mindset, focus on improving yourself and how you think about things.

For example, practice gratitude with a daily gratitude list, meditate, and surround yourself with people who are positive. Make sure to set clear goals and gain as much knowledge as possible.

What is the difference between a broke mentality and a poor mentality?

A poor mentality is a mindset where you believe that opportunities are limited and that money should never be spent. In addition, you believe you shouldn’t take risks, and if you do have success, it’s temporary.

A broke mindset is when you don’t know what’s important to focus on when it comes to money. You might spend your paycheck on the consumption of things you don’t need, then complain that you are not able to save or invest.

Both of these mindsets can be changed, and you can begin to think positively about your life and finances.

How do you know if you have a rich mindset?

If you think that being wealthy is possible and are focused on building value over the long term, then you may have a rich mindset.

Likewise, if you find yourself already practicing investing, managing your money, and recognizing opportunities, then you likely are on the path to having the right mindset to build wealth.

Articles related to having a rich mentality

If you want to know more about how to change your mindset and become wealthy, check out these posts next!

• How To Get Rich From Nothing!
• Rich VS Wealthy: 3 Key Differences Between The Two
• How To Stop Being Poor: Breaking The Cycle Of Poverty
• 11 Key Ways To Improve Your Money Mindset

Develop your rich mindset to become wealthy!

Now you know the difference between rich and poor mentality. Becoming rich is not hard, but it does take time and effort.

You just need to start cultivating habits that will get you there and understand a rich mindset vs poor mindset. Practice habits that will make you wealthy, not habits of the poor mindset.

Like many before you, you too can become a millionaire. It won’t happen overnight, but with consistent and diligent effort and a good mindset, you’ll be well on your way to achieving wealth.

So, I’ll leave you with these questions: What is your vision? Where are you going? Who do you want to be? 

Today is a great time to start developing your rich mindset and working towards your goals.

To learn new things about habits and finance, listen to our podcast, Clever Girls Know. Or check out these financial books for even more information about money.

The post Rich Mindset Vs Poor Mindset: How To Develop A Rich Mindset! appeared first on Clever Girl Finance.

By the time we’re adults, we’re inundated with information about the importance of goal setting. If you’re a goal-setter, you’ve undoubtedly seen how goals can transform your life. So why not impart some of that wisdom on the teens in your life by helping them set goals for teenagers?

Goals for teenagers are just like goals for adults. They are the key to success in finance, school, the future, relationships, and personal development.

If you’re raising a teenager, are involved in a teen’s life, or are one yourself, read on for some goals for teens that will help guide them (or you!) into adulthood.

Why are goals for teenagers so important?

When you’re a teenager, adulthood, and responsibilities can feel ages away. But it’s never too early to learn how to set goals and achieve them. Doing so can help teens in so many ways. Here are some benefits.

Builds a goal-setting habit

People who make goal-setting a part of their lives are the most likely to achieve their dreams. I personally love goal setting. One way to develop this habit is to start early.

Teens who learn to keep commitments to themselves through building a goal-setting habit can carry that habit into adulthood and will succeed in whatever they pursue.

Teaches the value of dreaming big and taking action

The first step in goal setting is dreaming and contemplating all that could be. Setting goals at a young age teaches teens the value of dreaming big and also taking action to pursue those dreams.

Once they see what is possible when they set their minds to it, they’ll learn that they can accomplish anything.

Builds confidence and self-esteem

One way to combat low self-esteem and also boost confidence is to set and achieve goals.

As teens start to accomplish goals, they’ll begin to see what you’re capable of. Then, they’ll begin to feel confident about their abilities.

Teaches independence

Most teens are at that stage where they long for independence, but they don’t quite have it all figured out yet (not that adults do, either!).

Setting goals is an excellent way for teens to learn how to take ownership of their lives and decisions. They can learn to achieve what they choose to achieve, not what others tell them they have to do.

Gaining this type of independence is a very empowering thing to learn.

Where to start with setting goals for teenagers

The best place to start with goal setting for teenagers is to brainstorm! Once you have some ideas, you can start setting short-term goals for teenagers and work your way up to setting long-term goals for teenagers.

Make a list

I always find it easier to get organized when I make a list. Sit down and come up with a list of things you want to accomplish. If you’re stuck, ask someone to share their own goals as inspiration.

Once you have a list of goals, it’s best to narrow it down to a couple of goals to focus on at a time. Having a specific goal will make it easier to achieve.

A good way to do this is to keep a running list of goals so you never run out of ideas or forget things you want to do. You can also start a yearly list of goals.

For now, keep your focus on just a few at a time. Consider starting with one or two short-term goals for teenagers. This way, you (or your teen) won’t get overwhelmed with a seemingly never-ending to-do list of goals, which really takes the fun out of it.

Take action to complete your goals

After you have a goal or a couple picked out, learn how to take action on those goals. SMART goals for teens are a great place to start. SMART is an acronym for goals that are specific, measurable, achievable, relevant, and time-bound.

Need some ideas for important goals? While nothing beats a brainstorming session, here are some of our favorites:

Goals for teenagers: Your finances

Let’s start with ten goals for teens that are all about learning to manage your finances and set yourself up for future financial success.

1. Get a summer job

Making money is one of the most empowering things a teenager can experience. If you aim to get a summer job, you’ll be one step closer to the independence many teenagers crave.

You’ll also learn valuable skills along the way, such as searching for a job, applying for one, crafting a resume, and interviewing.

Additionally, having a job at a young age helps build a strong work ethic. 

2. Set up a budget

Learning to budget before leaving home is an essential life skill, and my advice is to start budgeting immediately. Setting up a budget will help you take control of your finances and understand what you make, spend, and can afford. 

Additionally, having a budget will help prevent you from going into debt in the future.

3. Save for a big purchase

Have your eye on a new laptop for college? Perhaps you want to buy a prom dress that costs more than your parents have budgeted for.

Whatever the item is, a great long-term goal for teenagers is to save for a big purchase ahead of time. If you do this, when the time comes to buy the item, you’ll have saved up enough and will be ready to get it.

One of the key aspects of SMART goals for teens is that the goal is time-bound. By choosing a date you want to purchase the item (e.g., two weeks before prom), you’ll have a precise end date to work toward.

4. Start a side hustle

Side hustles are not just for adults! Some common side hustles for teens include dog walking, babysitting, or blogging, all of which can help earn you extra cash.

Setting the goal of starting a side hustle is a great way to set the stage for continuing that practice later in life.

5. Learn how to use a credit card

Many adults don’t know how to manage a credit card responsibly. One of the reasons? They never learned.

Therefore, an excellent long-term goal for teenagers is understanding how credit cards function and making responsible choices with one.

6. Open a savings account

Where should you put all of your hard-earned money? A savings account is the perfect place!

Open up a savings account instead of keeping your cash in a checking account. You’ll learn how to review your statements, how interest works and become more responsible with your money along the way.

7. Try a no-spend challenge

Spending too much? Perhaps spending so much time on social media has tempted you into buying things you don’t need.

One way to curb your spending is through a no-spend challenge.

One of the most helpful short-term goals for teenagers is not spending any money for a specific amount of time. Try it for a month and see if you can do it!

8. Understand and apply for financial aid

Is college in your future? Then, you’ll want to understand how financial aid works.

While higher education is expensive, setting a goal to understand how financial aid works will greatly help you in the future.

Focus on figuring out what student loans are available and how to apply. Additionally, you can learn and start applying for other resources, like scholarships, to help you reach your college goals.

9. Open a retirement account

Retirement might feel ages away (and it is), but that doesn’t mean you can’t start saving for it as a teen. I’d recommend starting to save as soon as possible.

Understanding retirement savings and opening up an account is a great long-term goal for teenagers and will make your life easier as an adult.

Most young adults don’t even consider retirement until many years later. Seeing the magic of compound interest at a young age will blow your mind!

10. Start an emergency savings account

Lastly, emergencies can happen to anyone, even teens. Another critical financial goal for teenagers is setting up an emergency savings account.

It’s one of the best ways to prepare for an emergency and protect yourself financially.

Goals for teens: Your future

Whether it’s next year or ten years from now, setting goals for the future can be extremely helpful for teens. For instance, here are some great goals for teenagers and their futures.

1. Figure out a post-high school plan

The first step toward figuring out your adult life is deciding what you want to do after graduating from high school. Maybe you want to attend a four-year university or community college or go straight into the workforce.

Whatever it is, set the goal of deciding what you want to do. Having a goal will stop you from doing something that someone else wants you to do, not what you want for yourself.

2. Achieve a certain grade point average

Are you looking for a relatively short-term goal? A common and great SMART goal for teens is achieving a certain GPA.

Earning good grades can be especially important if you want to pursue college. To achieve this goal, start small. Focus on improving your grades for a semester. Once you’ve started improving, you can focus on achieving better grades for the year or your entire high school career.

3. Talk to adults about careers you’re interested in

Would you want to be a marine biologist one day?

A teacher? A pharmacist? A novelist?

Whatever it is, there’s someone likely doing just what you think you’d like to do. Make it a goal to reach out to someone in a career you’re interested in.

Talking with different professionals will give you a head-start and put you on the right path to understanding what goals you want to set for your career in the future.

If you’re unsure where to start, your first step can be talking to a career counselor to get an idea of which careers best suit you. 

4. Shadow someone in a job you might like

Want to take it one step further? Why not ask one of those people you talked to about their career if you can shadow them for a day on the job?

You’ll learn first-hand what a job entails and get some insight into whether it is something you’d like to pursue.

Knowing what the future holds can be great motivation for achieving your other goals, like improving your grades or getting a part-time job.

5. Create a resume

If there’s one thing you’ll need in the future, it’s a resume. No matter what your post-high school plans are, having a resume ready is a crucial step to take.

Set the goal of preparing one. If you don’t have any work experience, you can start your resume by creating a list of your achievements. Your resume can consist of anything from volunteer work, being the captain of the football team, or other extracurricular. 

Putting together a resume as a teen will help you build a stand-out resume for the future, and increase your chances of getting a job interview in the future.

6. Take care of your belongings

A very future-thinking thing to do is to take care of your belongings. Think about a new item you recently purchased or were gifted. For example, maybe you were gifted a designer handbag, a new phone, a new pair of shoes, or a new tablet.

How are you taking care of those things? Do you have the proper protective wear? Does a particular item you have need routine cleaning or maintenance.?

Vow to treat your things with respect, and you’ll see how much longer they’ll last and how much money you’ll save since you won’t have to replace things you’ve lost or broken constantly.

7. Figure out what your dream life would cost you

Do you have big dreams and aspirations? Of course you do!

Do you know how much those dreams will cost you? Maybe not.

Instead of waiting until you’ve reached some point in the future, my advice is to figure out how much your ideal life will cost you today. By thinking about this now, you’ll be able to financially plan for your future all that much more accurately.

8. Learn to speak up in class

Speaking up in class can be intimidating. But school is also a relatively safe space to build public speaking skills.

While using your voice more in class may not seem like an audacious goal, it can help you become confident enough to speak your mind in different areas of your life. Not only will this skill help you stand out from your teachers, but it can also help you in your future career.

9. Register to vote!

Voting is one of the most powerful ways to have your voice heard. Register to vote as soon as you turn eighteen (or, in some states, even before that big birthday).

Registering to vote works well if you’re looking for SMART goals for teens since it is specific, measurable, attainable, relevant, and time-bound.

10. Keep a running list of goals to work toward in the future

While you can’t accomplish all your goals at once (there isn’t enough time in the day!), you can keep a list of life goals. 

Keeping a running list will help you stay focused and aid in your personal growth as you get older. Also, having a list of financial goals can be very useful as you get older and start making more money.

You’ll never run out of ideas if you always jot them down when they come to mind.

Goals for teenagers: Relationships

Relationships are the key to a fabulous and fulfilling life, from friends to family to romantic partnerships. That’s why it’s a great idea to set some goals around relationships, for example:

1. Eat dinner with your family once a week

Teenagers have some of the most hectic schedules out there. But that doesn’t mean you can’t make the time to eat a meal with your family once in a while.

Why not try eating dinner with your family once a week? You’ll be out of the house soon enough, so take advantage of the time you have left living with your family.

2. Plan a family trip

Does your mom always plan family vacations? You’re old enough now to have a say in it. And I bet your family will appreciate the help with planning!

Make it your goal to plan the next trip from start to finish. Research destinations and flights, develop a budget, find places to stay, and book activities.

Not only will you take on a big task for the family, but you’ll also learn many new skills along the way.

3. Start a new family hobby

Family time doesn’t have to be dull! Why not try something new together?

There are endless hobbies – from outdoor hobbies like hiking to indoor hobbies like baking – that you can do as a family.

4. Have a family game night

Another way to spend time as a family? Break out a traditional board game and have a weekly (or monthly) family game night!

This goal will help bring your family together and is a lot of fun.

5. Do a service project with friends

Community service is one of the most impactful ways a teen can give back to their community.

By doing a volunteer project with your friends, you’ll reap many benefits together, like higher self-esteem and helping those less fortunate.

6. Spend time with childhood friends

Most people have a friend or two from childhood with whom they’ve drifted apart.

If you have someone like this in your life, someone you once shared great times with but who you have lost touch with, try reconnecting.

Make it a point to schedule time with this friend at least once every two months. There are many free and fun things to do with friends on the weekend.

7. Make a new friend from a different social circle

Friendships with people who are different is one way to open your eyes to other perspectives.

If you tend to stick to the same type of friends, a great goal is to try to make a new one outside of your usual peers.

8. Learn what a healthy romantic relationship looks like

Whether you’re in a romantic relationship or not, your teenage years are the perfect time to learn what a healthy relationship looks like.

By understanding what a healthy relationship looks like when you’re ready for one, you’ll be more empowered to stand up for yourself and only accept the best. With this understanding, you are more likely to have emotional security and a better sense of happiness in your future relationships.

9. Find an adult you can open up to

An adult who understands you is one of the most valuable resources you can have as a teenager. While it could be one of your parents, an older sibling, or another family member, it doesn’t have to be.

Find a teacher, a community leader, or a boss–someone you admire and feel comfortable sharing with.

10. Become a supportive friend

Knowing how to be a supportive friend and set boundaries is a quality that will serve you for your entire life. When you show up for your friends, whether it’s cheering them on at their soccer game or being available for a late-night phone call, you’ll strengthen your bond.

Just remember that support should go both ways – your friends should be there for you when you need them, too.

Goals for teens: Personal development

Personal development isn’t just for someone in a crisis. Everyone can benefit from looking inward and working on themselves.

For instance, here are ten personal development goals for teenagers:

1. Read a non-school book over summer break

During the school year, teens are inundated with reading and homework. Summer break is usually a welcome time away from all of that work.

But that doesn’t mean putting down all books. Take this opportunity to read something fun just for you. No book reports are required!

Reading a no-school-related book can help you discover topics you never knew you were interested in. 

2. Find a cause you care about and volunteer

Don’t wait until you’re an adult to find a cause you’re passionate about! Teens can also make a huge difference in the world.

Choose an organization or a cause you feel strongly about and spend time learning about it and volunteering your time.

3. Start a journaling practice

Journaling is one of the simplest ways to clear your mind and a great way to practice self-care. Teens have a lot of emotions, and it can be hard to express them.

You can use journal prompts to get started or open up a blank notebook and let your thoughts flow. Journaling is one of my favorite things to do, as I find it very helpful for my mental health.

4. Start a meditation practice

Another excellent way to focus the mind? Meditation is one of the most beneficial long-term goals for teenagers. It can help you clear your mind, and protect your internal peace.

You’ll create a more profound sense of calm by taking just a few minutes out of your day to focus on mindfulness.

Starting a daily meditation practice is an excellent goal for teens who are experiencing anxiety or have lots of stress in their lives.

5. Learn how to cook a complete meal

Most teens still live at home, but soon enough, you’ll be out on your own. Which also means you’ll have to find your own food.

Instead of relying on take-out or pre-packaged meals, cooking your own food, even if you dislike it, is healthier and a great way to save money. Bonus points for serving that meal you’ve mastered at your next family dinner!

6. Learn a new skill

Learning a new skill is a classic goal for teenagers and adults alike. The reason?

Learning something new, like an instrument or a card game, engages the mind, builds confidence, and has many other mental health benefits.

7. Try out for a sports team

Is there something you’ve wanted to try out for but haven’t yet? It doesn’t matter whether or not you make the team (not even Michael Jordan made his high school basketball team right away!).

Set the goal of just trying to see what happens and what you learn from the experience.

8. Complete a non-school project

It can sometimes feel like everything you do is for school. But not all SMART goals for teens need to be centered around accomplishing something for school or your college resume.

By completing a non-school project, like building a treehouse or getting a yoga certification (really, the possibilities are limitless!), you’ll gain confidence and have fun doing something just for you.

9. Learn how to make and take care of your appointments

Someone has made dentist appointments, haircuts, and everything else for your life. Soon, though, you will be responsible for all of those appointments!

With the help of the adults in your life, try to take responsibility for these. For example, call the dentist and make your next appointment, write it down on your calendar, and practice being in charge of your life.

10. Create a morning or evening routine

Teens are old enough to take ownership of their own mornings and evenings. It can be empowering to start your day how you want to instead of haphazardly or rushed.

Create a morning or bedtime routine to structure your day and get more of what you want done!

Expert Tip: Teenagers should create goals around the things that excite them

Teenagers are often focused on the now. As result, creating goals for the future might seem overwhelming or unimportant to adolescents.

To help them get excited about goal setting, focus on creating goals around things they are already interested in. Once they’ve achieved a few simple goals, they’ll feel more motivated to achieve bigger and more long-term goals.

What is a SMART goal for a teenager?

A specific, measurable, achievable, realistic, and time-bound goal for a teenager can be around academics, extracurriculars, or sports. For instance, a SMART goal could be getting a 3.5 grade point average or straight A’s for an entire semester.

Other non-academic goals include joining the varsity football team in your third year of high school. There’s also starting a new club for the second semester or making a new friend outside of your social circle before school ends.

What are 5 smart goals examples for teenagers?

Teenagers have many options when setting SMART goals. They can focus on financial goals such as getting a summer job, saving enough money to buy a new phone, or learning to make money independently. Financial goals are also helpful in supporting teens in gaining financial literacy.

If you have teenagers who want to focus on things outside of school, they can create a SMART goal around hobbies. Examples of these goals could be to learn to play the piano by the end of the year or learn to ride a skateboard in six weeks.

When it comes to creating long-term goals for teenagers, examples of SMART goals are getting accepted into a four-year college, earning $1,000 by the end of high school, or meeting with a childhood friend once a month.

What are some long-term goals ideas for teenagers?

Long-term goals for teenagers are great because they help keep teens focused on the future. Long-term goals can be about getting into a specific college, saving a certain amount of money for graduation, learning to invest, or learning a foreign language. 

Other long-term goals for teenagers can be to:

• Start their own business
• Save for retirement
•  Start a specific career
•  Reach 100% attendance
•  Buy a used car
•  Save money for prom
•  Get your driver’s license

Articles related to goal setting for teens

If you’re looking for ways to help the teen in your life become financially savvy, these articles will give you advice and guidance.

• Financial Literacy For Teenagers: Key Money Tips For Teens
• The Best Investments For Teens And How To Start
• Budgeting For Teens: How To Get Started
• 47 Great Business Ideas for Kids!

Setting goals for teens can lead to a bright future!

There you have it! Forty important goals for teenagers to have.

Whether you decide to set SMART goals for teens or take another approach, setting goals from a young age helps to set a mindset of success.

Choose a goal from the list above, or come up with one of your own and see how powerful goal setting can be!

The post 40 Important Goals For Teenagers To Have appeared first on Clever Girl Finance.

We all love cash value, so it seems like a no-brainer to have cash value life insurance. But how does cash value life insurance work, and is it a good idea? Get a better understanding of this type of life insurance and whether it’s the best choice for you or not.

Well, let’s talk through it. Even though the importance of life insurance cannot be overstated, a cash value policy may not be what you expect. It’s likely a lot more expensive than you thought, too.

In this article, we’ll go over what cash value life insurance is and how it works. We’ll also explore cash value life insurance pros and cons.

Our goal is to help you understand it so you can make the best life insurance decision for yourself!

What is cash value life insurance?

It’s more than basic life insurance coverage. It’s a type of life insurance policy with a savings account attached to it, called the cash value component. As you pay premiums, you fill your cash value account.

Most cash value insurance policies are permanent life insurance. Permanent insurance means the policy lasts for your lifetime or as long as you pay the premiums.

How does cash value life insurance work?

In general, cash value policies work like any other life insurance policy. You pay a premium to the insurance company. In exchange, your loved ones receive the death benefit payout from the life insurance company when you die.

In addition, it allows you to save in a cash value account. The insurance company deposits a portion of your premium payments into your cash value account.

Whether through interest or investments, the hope is that your cash value will grow over time, which can be a motivation for saving money. The cash value decreases the insurance company’s risk because they use the money to offset the death benefit when they pay it out.

Or, you can use the cash value as extra cash savings for yourself.

How you build cash value

Insurance companies use your premium payments for three things:

• The cost of guaranteeing the death benefit.
• Administrative costs of the insurance company.
• Your cash value account.

You only receive a portion of your premium amount in your cash value account. The exact portion of your premium that goes toward cash value will vary depending on the type of policy you have.

How your cash value grows

Cash value grows differently for different types of permanent policies.

In addition to your premium contributions, your cash value account might grow in a few ways:

• Interest earnings from fixed interest rates
• Interest earnings tied to an index
• Earnings from investments in securities

The amount you can earn in a cash value life insurance varies based on a few factors, most importantly, what type of policy you choose.

Modified endowment contracts (MEC)

Surprisingly, you can put too much money into your cash value account. Overfunding your cash value account above legal tax limits turns your policy into a modified endowment contract, or MEC.

A MEC still works like life insurance on the insurance side—your beneficiaries will receive the death benefit when you die.

However, MECs come with tax implications. While you receive tax benefits from cash value life insurance, MECs do not.

Once the IRS relabels your policy as an MEC, there’s no way to convert it back to regular life insurance.

Types of cash value life insurance

You have a few options when choosing an insurance policy. Knowing the features of each can help you decide.

Whole life insurance

What about a term vs whole life insurance policy? A whole life insurance policy is different from a term policy in that it lasts your entire life.

It has the same premium for the policy’s life, and the insurance company sets a set rate of return on the cash value. Most policyholders earn around 1.5% for guaranteed cash value, claims Consumer Reports.

Universal life insurance

Universal life policies are more complicated than whole life because you have flexibility with the premiums and coverage amounts. As long as you cover the minimum premium for the death benefit, you can pay more or just the minimum amount each month.

If you have extra money, you can pay it toward your universal policy and invest it in the cash value. You can also have your premiums deducted from the cash value when your cash value reaches a certain point.

Variable life insurance

If you want more than a ‘savings account’ for your life insurance’s cash portion, variable life offers investment options, such as stocks and bonds. It’s riskier because there’s no guarantee your cash value will appreciate (it may decrease). But the reward is often much more significant.

Expert tip: Use the cash you earn

Your beneficiaries typically won’t get any cash value left in your policy when you pass away. As you get older, you might want to use more of your cash value so less goes back to the insurance company.

Whatever you do, make these funds part of your financial planning process so you know what you’re going to do with the money.

Cash value life insurance versus term life insurance

Cash value life insurance is not the same as term life insurance. They have the same premise – a death benefit that pays your loved ones when you die, but that’s it.

Term life insurance doesn’t have a cash value and will lapse after a certain timeframe.

For example, a 10-year term policy expires after ten years. If you’re alive (that’s a good thing), the policy expires.

Finding the best term life insurance is great if you want coverage without a lot of expense, but it doesn’t grow your savings.

Some insurance companies allow you to convert it to a permanent policy or renew the term. You’ll also likely pay more for coverage, though.

Pros and cons

There are benefits of life insurance with cash value and downsides. Understanding both sides helps you choose the right policy.

Let’s take a closer look at cash value life insurance pros and cons to see if it’s right for you.

Pros of cash value life insurance

• It lasts for your lifetime. As long as you pay your premiums, your beneficiaries will receive the insurance’s death benefit.
• You may use the cash value to cover your premiums after years of paying premiums.
• You can borrow from the cash value and/or withdraw funds from it to use while you’re alive.
• The money grows tax-deferred. You don’t incur a tax liability until you withdraw the earnings.

Cons of cash value life insurance

• The premiums on a cash value life insurance policy are much higher than term life insurance policies.
• The fees can be high. You may find less costly ways to invest the extra money you pay toward your life insurance.
• Cash value policies are often hard to understand. Some people buy them without fully understanding what they’re buying or investing in.

Who should and shouldn’t apply for cash value life insurance?

Like any financial decision, whether this insurance is right for you or not depends on your situation. Young families usually stick with term life insurance policies. They are predictable and cover families when they have the least money available for a crisis, such as death.

A term policy can cover events such as a mortgage, children going to college, or providing a surviving spouse with income.

Cash value policies are more expensive, but they provide another outlet for investing. If you’ve maxed out your retirement contributions in your 401K and/or IRA, a cash value policy may make sense. 

You should also make sure you’re secure in all other areas of your financial life. 

Do you have an emergency fund? Have you paid off all consumer debt? If you have disposable income you’re looking to invest, then a cash value policy may make sense.

5 Ways to access your cash value life insurance

You can’t walk up to an ATM and withdraw the cash value of your life insurance policy. You may only access the cash in one of these five ways:

1. Take out a loan against the cash value

Once you accumulate a cash value, you can take out a loan. The insurance company determines the terms, and yes, you’ll pay interest. Even though you pay this interest to yourself, it’s still a cost. 

If you don’t pay the loan back, the insurance company decreases the death benefit dollar-for-dollar when you die.

2. Make a partial withdrawal

While you can’t get the money from an ATM, you can partially withdraw some of your policy’s cash value. It leaves your policy intact but decreases the total death benefit.

3. Surrender the policy

If you’ve decided you no longer want the policy, you can surrender it. You receive the cash value, and the policy ends.

However, you won’t get the full amount of your cash value account. The actual amount you’ll receive is called the cash surrender value. The surrender value is your cash value balance minus taxes or fees.

Most insurance companies charge surrender fees to cancel policies before your death. You’ll also need to cover any income tax liabilities incurred from withdrawing earnings.

Your loved ones no longer have a death benefit, but you also don’t have to pay premiums.

4. Sell your policy for a life insurance settlement

Some brokers offer a life insurance settlement, which means they offer to settle your life insurance for a lesser amount. If your policy is worth $100,000, they’ll offer a payoff that’s less than $100,000. Settling may provide you with more than surrendering the policy, but if you settle for more than the total premiums paid, you’ll owe taxes on the capital gains.

5. Pay the premium with the cash value

If your cash value is high enough, you may use the cash to pay your premiums on your permanent life insurance policy. You may find this helpful if you’re struggling financially.

What can you do with the cash?

The cash is yours to do what you want. The life insurance company doesn’t tell you how to use it or approve your intended use.

Remember, when you take the cash, you decrease or surrender the death benefit. If you intend to leave your loved ones with a legacy, support a loved one financially, or want to help your family with your estate costs, invest the cash somewhere. They’ll be able to access it when you die.

What life insurance is best for cash value?

Any permanent life insurance policy that has a cash value component can help you build savings.

In general, whole life policies tend to grow slower than universal life or variable life policies due to the fixed interest earnings.

The best earning potential comes from a variable life insurance policy.

However, your money is not guaranteed in a variable life policy and could lose value.

Is cash value whole life insurance worth it?

Whole life insurance could be worth it, depending on your life insurance goals. A whole life policy is often expensive.

But, whole life coverage generally guarantees your cash value earnings thanks to fixed interest rates. If you’re looking for guaranteed growth of your cash value savings, whole life might be worth it.

Can you cash out your cash value life insurance policy?

Yes, there are a couple of ways to cash out your life insurance policy. The first is to take a loan against your cash value balance. You’ll pay interest on the loan, and if you don’t pay it back before your death, the insurance company will decrease your death benefit.

You may also withdraw cash from the account, which also lowers the death benefit. Finally, you can surrender your policy.

However, this means your policy is no longer in effect, and you’ll generally have to pay a surrender fee and taxes on the money.

Articles related to life insurance

If you found this article informative, you’ll love reading these other posts about various types of life insurance!

• The Importance Of Life Insurance For Your Finances
• Term Life Insurance VS Whole Life Insurance? What’s Best for You?
• What Is Credit Life Insurance?
• Do You Really Need A Million Dollar Life Insurance Policy?

Cash value life policies are worth considering but you should think about all your options

A cash value policy has its benefits, but only in certain situations. If you haven’t maxed out your tax-advantaged retirement or you still have debts, investing your money in those areas may provide a greater return on your investment.

You may wonder, “Do I need a financial advisor?” Consider talking with one about your options (and understand how does cash value life insurance work) before finding a policy. They can help you better understand your options and get life insurance quotes to meet your needs.

The post How Does Cash Value Life Insurance Work? appeared first on Clever Girl Finance.

A living trust gives your estate direction, ensuring your loved ones handle it as you wish. Trusts can also help seamlessly pass the trust’s assets to your heirs by avoiding probate court. While trusts seem confusing and complex, they aren’t as complicated as they sound. With the right help, you, too, can open a trust and protect your assets, and this guide will give you a crash course on living trusts as an estate planning tool.

The basics of a living trust

If you’re wondering, “How does a living trust work?” a trust is a legal document that holds your assets, such as real estate, cars, and investments. It helps protect your assets during your lifetime and beyond. The trust takes ownership of the property, but you generally still retain control over your assets.

Your trust documents also help outline your wishes for your assets after you pass away. You can use the trust to specify exactly how you want your assets distributed.

When you die, your trustee is responsible for distributing the assets to your named beneficiaries according to the terms of the trust.

Two types of living trusts

You have two options when setting up a living trust agreement: a revocable or an irrevocable living trust. Let’s explore how each type works and why you might choose one over the other.

Irrevocable living trust

An irrevocable living trust is a sort of trust that can’t be changed.

Even as grantor or trustee of the trust, you cannot change or terminate it—without exemption. Once an irrevocable trust is in place, you give up the ability to modify it.

Thus, irrevocable trusts are less common for obvious reasons.

Why people opt for irrevocable trusts over a revocable trusts

But why would someone opt for an irrevocable trust over a revocable one?

There are three main reasons:

• You want to minimize estate taxes through a life insurance trust or annuity trust.
• You have a disability and need to shelter assets and income to avoid losing federal benefits.
• You want to protect your assets from creditors.

Revocable living trust

The revocable living trust gives you—as the grantor and named trustee—the power to make changes while the trust is in effect.

A revocable trust is the most common type because it allows you to maintain control of your assets. As trustee, you can amend trust directives as needed, including dissolving the trust if necessary.

Just know making changes or canceling a revocable trust isn’t easy. You’ll still have to deal with a ton of paperwork and jump through administrative hoops. Still, it is technically possible to change or cancel a revocable trust.

How does a living trust work?

When you open a trust, you transfer your assets into the trust. You no longer ‘own’ the assets once you put them in the trust – the trust owns them.

However, you can retain control of your assets by naming yourself a trustee. Most people also name a successor trustee should they die or have the incapacity to manage the trust.

The successor trustee’s job is to act on your behalf and distribute the assets per your instructions when you die. You can also name specific conditions the beneficiaries must meet before receiving their inheritance.

For example, you might require that your children reach a certain age or complete college to receive funds.

Setting up a living trust: How to get started

Many people skip this because they’re unsure how to get started. Although the process is tedious, it’s often not overly complicated.

Your trust can be ready to go in six steps:

1. Contacting estate attorneys
2. Selecting assets for your trust
3. Picking a successor trustee
4. Naming beneficiaries
5. Signing the trust agreement
6. Transferring assets into trust ownership

1. Contact an estate planning attorney

Can you set up a living trust by yourself? Technically, yes.

However, your trust needs to follow certain state laws and regulations regarding trusts. Without extensive legal knowledge, setting up a trust on your own could be a bad idea.

Instead, get in touch with an estate planning attorney who specializes in living trusts. An attorney may come with a larger price tag than drafting the trust on your own, but you’ll know it’s done right.

In addition, attorneys can provide valuable insight into the formation of your trust. Your attorney will make clear to you the potential impact of setting up your trust a certain way. They’ll also help you work through other aspects of your estate planning checklist.

For example, your attorney can help you determine if a revocable or irrevocable trust makes the most sense for your needs.

2. Determine the assets for your trust

The next step to creating your trust is to determine what assets you want in the trust. Common assets you might put into your trust include:

• Real estate, such as real estate investments or your home
• Financial accounts like non-active bank accounts or non-retirement brokerage accounts
• Non-qualified Annuities
• Life insurance (read about the importance of life insurance)
• High-value personal items such as fine art or expensive jewelry

You shouldn’t put retirement accounts in your trust. Adding retirement accounts to a trust requires withdrawing the funds from the accounts.

A withdrawal will likely result in income taxes on the funds. The better option is to name your trust as a beneficiary on the retirement account.

3. Choose a successor trustee

Your successor trustee is the individual who takes over as trustee after your death. Choosing a successor is an important step because this person will eventually take control of your assets through the trust.

Your family situation will play a big role in your successor trustee.

For example, parents of minor children generally choose their preferred guardians. If the parent dies while the children are still young, the guardian gets access to assets or funds to help cover the living expenses of the children.

4. Name your beneficiaries

The beneficiaries of your trust are those who will benefit or receive the assets owned by the trust.

You can choose any beneficiaries you want, including friends, family, or even charities. Think about who you want your assets to go to, especially if you’re funding an irrevocable trust.

Many people list their children as beneficiaries to help build generational wealth.

5. Sign the living trust document

Signing is the easiest part of the process.

Once your lawyer has drafted the trust documents, you can review them and make changes as needed. When you’re ready, you’ll sign the trust in the presence of a notary public. Your attorney or one of their associates will likely be licensed as a notary.

6. Transfer assets and fund the trust

Funding the trust isn’t as simple as making a bank transfer or signing a form. You must rename all assets in the trust’s name to officially put them in the trust.

This process generally requires a fair amount of paperwork and might take a while to complete. (Learning how to declutter paperwork prior to this can be helpful!)

Say you want to put your house in your trust, for example. You’ll need to make the trust the new owner by changing the property’s title. Doing this requires signing a new deed for the trust property.

Additionally, you’ll need to notify your city or county of the change, which could require a small title transfer fee.

Pros of a living trust

A living trust is one of the most useful estate planning tools to protect your assets. Let’s look at some of the benefits.

Avoids probate

If you die without a trust, your estate goes into probate. The probate process is the legal process of reading and executing a will. The probate process also appoints an executor of your estate to distribute your assets.

Probate can delay when your beneficiaries receive their inheritance. It can also be time-consuming for the executor, who must oversee everything.

A living will, however, bypasses the probate process.

Avoids anyone contesting your wishes

Even the most close-knit families can get ugly when inheritance is involved, and family financial problems could cause concerns. Challenging a will is common, but a trust lowers the risk.

Contesting a will involves petitioning the probate court. Trusts skip probate, so it’s more difficult to contest. Challengers of a trust must prove you were not of sound mind—or were coerced—into setting up the trust and funding it, in addition to a couple of other reasons, claims Smart Asset.

Trusts create privacy

The probate process becomes part of the public record. That means anyone could see how much money you’re giving to heirs or what assets you have to give.

On the other hand, trusts aren’t public records. No one will know how much you left to your beneficiaries. Taking this route also reduces the risk of someone targeting your family or loved ones based on their inheritance.

Cons of a living trust

There are plenty of reasons a living trust is a good idea, but are there downsides?

As with most things, yes, there are drawbacks.

Trusts are costly

There’s no way around it: a trust is going to cost a chunk of change to set up. You’ll need to hire an estate lawyer to help you draft and fund your trust. You might also have to pay title transfer fees to move assets into your trust’s name.

All in all, you can expect to pay between $1500-2500 in the USA, according to Contracts Counsel, to draft a living trust. The more complicated your needs or assets, the more you may have to pay.

Inconvenient to make changes

A revocable living trust may offer some flexibility, but it’s still difficult—and likely expensive—to make changes. You’ll need to contact your lawyer to sell, add, or modify assets in the trust.

Even something like refinancing your home requires your attorney to remove the asset from the trust before you can make changes to your mortgage. Then, you’ll also have to pay your attorney to re-title the asset back into the trust.

Administrative work is hefty

Setting up a trust takes a lot of consideration. You have to determine what assets to put into the trust, who will be your successor trustee, and who will be your beneficiaries.

Additionally, putting your assets into a trust means renaming the assets. For many things like your house, bank accounts, and investments, it means a lot of paperwork and potentially some fees.

Expert tip: Consider a joint trust if you’re married

Married couples can set up an individual living trust for each spouse or create a joint trust with shared assets.

Joint trusts are less complicated to set up and could make it easier for a surviving spouse to access assets.

When you are putting your financial goals and financial affairs in order, make sure to consider this simpler approach.

Who are living trusts best for?

A living trust is best for anyone who wants control over their estate. It’s not just about managing who receives your inheritance upon your death, but rather managing your estate to avoid probate and put a 3rd party in charge of certain assets until all beneficiaries satisfy any conditions you set.

Suppose you’re concerned about your estate going through probate. If your estate goes through probate, it may take more time for beneficiaries to receive their inheritance. Not to mention that anyone could potentially challenge your estate.

On the other hand, a living trust could prevent your estate from going to probate at all.

Living will and trust: What’s the difference?

A living will and trust both have to do with your estate, but the similarities end there. The importance of a will should not be overlooked, but a living trust is equally important.

Here’s what you must know about the differences between a living will and trust:

A last will goes into effect when you die

A will doesn’t control your assets when you’re alive, even if you’re unable to make your own decisions. A living trust, on the other hand, manages your assets from the moment you open and fund the trust.

You are the trustee while you’re alive (if you choose to be), and your successor trustee takes over when you cannot manage your estate.

A will typically goes through probate

Even a will with specific instructions for distributing assets will likely go through probate. The probate process typically holds up the distribution of the estate. Probate also usually has court fees and costs associated with the process.

A living trust doesn’t have to go through the probate process.

A living will is a public record, whereas a trust is not

Since the probate process is public, your will is public. This lets anyone see what you’re leaving to your beneficiaries.

A living trust is a completely private agreement. Anyone not listed in the trust would not have access to the documents.

What is the point of a living trust?

The point of a living trust is to improve the efficiency of distributing your assets after your death. Trusts avoid probate, making it easier for your trustee to distribute assets to your beneficiaries according to your wishes.

What is the downside to a living trust?

The biggest downside of a living trust is the cost and the paperwork involved in creating it. Complicated trusts may cost several thousands of dollars to create. You also have to go through the paperwork and time to retitle your assets in the trust’s name.

What is the primary purpose of a living trust?

The primary purpose of a trust is to create a smooth distribution of your assets upon your death.

Additionally, trusts give you the ability to specify how assets are to be used.

For example, you might require your minor children to turn a certain age before they receive ownership of assets in the trust. It helps to teach financial literacy for kids to your children so they have a good foundation for handling money in the future.

Articles related to trusts and estate planning

If you now have a better understanding of trusts and what they do, read these articles next for more information!

• What Is A Revocable Trust And How Does It Work?
• What Is An Irrevocable Beneficiary?
• The Importance Of Estate Planning And Having A Will In Your 30s
• Key Steps To Get Your Financial House In Order Now

Next steps: Create your own living trust

A living trust helps organize and protect your estate. Understanding the process of funding and managing the trust is important. Having a trust ensures you can determine what happens with your estate when you’re alive and have peace of mind that your successor will handle it how you planned upon your passing.

Make sure you have a good financial planning process for each part of your finances, including retirement and investing. Also, consider other important aspects of your finances that will help you prepare for the future, such as saving an emergency fund.

The post What Is A Living Trust And How Does It Work? appeared first on Clever Girl Finance.

Life insurance is one of those things that we kind of know we need, but many of us don’t want to deal with getting it right away. Sometimes, it’s hard to even think about because, for many people, the whole idea is just plain scary. However, we can’t downplay the importance of life insurance, how life insurance protects our finances and family, and how much peace of mind it can give you.

Perhaps you feel like you are young and have plenty of time, or you even feel like, if something happened to you, there would not be any major financial impact. Or maybe you can’t decide what insurance type would work best for you.

Well, if you’ve ever felt any of the above, this article is here to help you understand the importance of life insurance and how to ensure you are covered. Let’s get into it!

Benefits of life insurance

Life insurance is not something to be afraid of at all.

In fact, having life insurance is protection for you and your loved ones that can minimize or potentially eliminate financial distress.

And it’s something you want to seriously consider, especially if you have kids or dependents or hold assets like a home.

There are seven main benefits of life insurance:

1. Financial safety net for you and your family
2. Creates generational wealth
3. Covers final expenses
4. Replaces income after a death
5. Provides a tax-free death benefit
6. Customizes protection and living benefits
7. Supplements retirement or other savings

Let’s dive a little deeper into the importance of life insurance and why it’s a good idea for you.

1. Financial security for your family

The main benefit of a life insurance plan is to provide financial protection and peace of mind to you and your family.

When you have a life insurance policy, you can be sure your family will be taken care of, even if you pass away. While it’s not fun to think about, knowing your family is protected can help take a weight off of your shoulders.

That peace of mind and relief is enough of a reason to get life insurance for many people, especially if you have children.

2. Builds generational wealth

Yup, life insurance is one way in which people transfer their legacies and create generational wealth.

Having life insurance is a foundational element when learning how to make a financial plan.

When you pass, your assets go to your heirs. So, a life insurance policy can be a major asset to pass on to your children or other dependents.

But keep in mind that you don’t need to have a million dollar life insurance policy. Having enough to cover what you bring to your family is a good start.

3. Covers your final expenses

Funerals and other end-of-life costs are expensive. Depending on your final needs, your family may have to pay thousands of dollars to put you to rest.

Part of the importance of life insurance is that it’s a great way to cover funeral expenses and help you out with what to do when a loved one dies. Your beneficiary can use the proceeds of your life insurance policy to cover the final costs you may have.

4. Replaces lost income

Do you bring in income to your family? Additionally, what would happen if they suddenly lost access to your income?

Life insurance addresses this issue by replacing lost income when a family member dies. These funds can be essential to helping your loved ones cover day-to-day living expenses.

Additionally, life insurance benefits could help cover big life expenses for your beneficiaries, such as college tuition.

5. Tax-free inheritance for your heirs

Did you know life insurance has tax benefits?

For example, in general, most life insurance payouts are tax-free for beneficiaries. So your heirs will simply receive a lump sum payout without paying income tax on the money.

For instance, let’s say you have a $500,000 policy and pass away. Your beneficiary would receive $500,000 in cash without paying income or estate taxes on it.

In addition, think how far that money could go toward their short and long-term needs and financial goals, which really shows the importance of life insurance!

If you are wondering if your life insurance payout will be tax-free, refer to this helpful tool from the IRS.

6. Access living benefits with riders

Your beneficiaries aren’t the only ones who can benefit from your life insurance policy. Policyholders can use riders, also called endorsements, to customize their policy with living benefits such as:

• Long-term care
• Disability income
• Guaranteed insurability
• Critical and chronic illness riders to cover medical bills

Be aware, however, that adding endorsements to your policy generally increases your premium payments.

7. Supplement retirement savings with cash value

Specific types of life insurance can help you build wealth even while you’re still alive.

For example, permanent life insurance policies like a whole life policy have a feature known as cash value.

Cash value life insurance is a type of savings account with interest, and it’s tied to your life insurance plan. Part of your insurance premiums go into the savings account.

You can use the money in the account as extra savings, such as a boost in retirement.

Additionally, some policies let you use cash value to pay ongoing insurance premiums once you reach a certain value.

Expert tip: Don’t wait to buy life insurance

The earlier you get life insurance, the better. In fact, life insurance premiums tend to be lower the younger you are. If you wait until you’re older, you may pay more in premiums.

In order to save money and be sure your finances are covered, It’s a good idea to get life insurance as soon as possible.

The cost value of all you do and how insurance ties in

As a mom of two small children with a small business, I have a huge impact on my family’s financials. And it’s not just tied to the money I bring in with my business. It’s also from the cost of all I do in my household.

One day, I sat down to really calculate the cost value of all I do for my family, and I was surprised. Shocked even.

I added in all my jobs. They include:

• Watching and teaching my kids (Job title: babysitter/teacher).
• Cooking for my family (Job title: chef).
• Cleaning my home (Job title: housekeeper).
• Driving my kids around (Job title: car service).

If I were to hire people to do all of these things that I currently do for my family, it would cost me over $70,000 a year!

That alone would have a huge financial impact if (God forbid) something were to happen to me. And I didn’t even include my other annual financial obligations, for instance, my kids’ education expenses or our household bills and mortgage.

Life insurance is a non-negotiable for me for this reason. My 20-year, $500,000 term life insurance policy will help ensure my family is protected financially and can help to cover several years of the loss of my value and income.

My husband also has a life insurance policy in place as well since he also contributes substantial income to our family. If you are the primary female breadwinner or the only breadwinner, then putting yourself in this scenario makes having life insurance even more critical for you.

Life insurance and your long-term goals

What are some of the biggest long-term financial goals you currently have?

Personally, I’m saving for retirement and my kids’ college education through 529 plans and custodial accounts. I have a vision of exactly how I want to retire, as well.

In addition, similar to the gift my parents gave me, my husband and I have decided that we will be paying for our kids’ college education in full, wherever they choose to go. (As well as imparting financial literacy for kids to my children).

But again, if something were to happen to me, these goals could very well be thrown out the window if both my spouse and I don’t have a life insurance policy in place.

It could mean a difficult retirement for me or my spouse and student loan debt for my children. All scenarios I don’t want, and that’s why I recognize the importance of life insurance, in addition to my savings and investments, as a safety net.

Make the process of getting life insurance simple

The truth is life can be hard, and unexpected situations happen.

However, it’s better to have a plan in place than face the unknown unprepared. One key element of your plan should be getting life insurance.

The good news? It doesn’t have to be a complex process.

Term vs. permanent life insurance

The first place to start would be to determine whether you need term vs. whole life insurance that includes a cash value.

Term policies are life insurance that expires after a set number of years, known as the policy term. At the end of the term, the policy expires, and you no longer have coverage.

Typical term lengths range from 10 years to 30 years or more. Some term policies have conversion riders that let you convert your policy to permanent life insurance.

Permanent life insurance works as it sounds: it lasts your whole life as long as you keep paying premiums. While permanent coverage tends to be more expensive, you may find the additional cash value and other benefits to be worth the cost.

Determine coverage needs

Once you know if you want term or permanent coverage, you can figure out how much coverage you need. There are many life insurance calculators available online to help you estimate your needs.

You can also reach out to a local life insurance company or agent for advice on your coverage options. They’ll be able to help you calculate a death benefit amount and discuss any riders you might need.

Compare coverage options

Be sure to shop around to compare policies and rates before you make a final decision. I recommend getting at least three life insurance quotes from different providers before signing up. Getting multiple quotes for similar policies will let you compare costs side-by-side.

You should also do due diligence on the life insurance company. Try Googling the insurance company and reading online reviews. The last thing you want after you pass is for your loved ones to have to deal with a difficult life insurance company.

Apply for coverage

So, you’ve found a life insurance policy and are ready to sign up.

First, you’ll need to fill out an application. Many policies will also require a medical exam to determine your risk level. Some policies, such as online term life insurance, offer coverage without a medical exam.

After your exam is done, the life insurance company will determine your risk rating. The better the risk rating, the lower your premiums. Generally, young, healthy people pay the least in insurance premiums.

Sign your coverage and put it in force

Once your insurance application is approved, you’ll receive a copy of the policy and a form to sign. Be sure to carefully read the policy to make sure you’re getting the coverage—and premium payment—you agreed to.

What is the most important use of life insurance?

The most important use of life insurance is to provide financial support for your beneficiaries after you die. Financial support might mean paying a child’s college tuition using life insurance proceeds.

Or, your life insurance policy could help cover the loss of your income if you’re the sole breadwinner in your family.

No matter how the funds are used, life insurance is there to help ease the financial burden of your death.

What are 3 things life insurance covers?

Life insurance coverage protects your family from financial hardship after your death. The importance of life insurance can be broken into three categories:

1. Covering the daily or future needs of your loved ones.
2. Building generational wealth for your descendants.
3. Providing living benefits for you as you age.

What are the pros and cons of life insurance?

While there are many good things about life insurance, there are also drawbacks. Take a look at some of the pros and cons to help you find a policy that’s right for you.

Benefits of life insurance

The pros of life insurance include:

• Financial protection for your family
• Customized coverage to fit your needs
• Easy access through online life insurance companies
• Rounds out an estate plan
• Builds wealth for future generations
• Protect your peace of mind

Cons of life insurance

The cons of life insurance include:

• Expensive for older adults or those with health conditions
• Cash value may not provide a huge nest egg

Articles related to life insurance

If you found this article about life insurance helpful, read these informative posts next!

• Term Life Insurance VS Whole Life Insurance? What’s Best for You?
• What Is Credit Life Insurance?
• How Does Cash Value Life Insurance Work?
• Do You Really Need A Million Dollar Life Insurance Policy?

Don’t overlook the importance of life insurance

Ultimately, the importance of life insurance is to provide peace of mind that your loved ones will be taken care of. And thanks to the internet and new technology, it’s easier than ever to get coverage in almost no time at all.

Whatever your financial situation, life insurance protects you and your loved ones. Other great things to consider for financial security include building an emergency fund and investing regularly for the future.

The post The Importance Of Life Insurance For Your Finances appeared first on Clever Girl Finance.

What is a bounced check? It’s one of those terms that a lot of people have heard, but not as many can explain. And the impacts of a bounced check can seem equally mysterious!

Of course, it’s important to understand all of these things, so you can avoid being put in a messy financial situation. Whether you’re the writer or depositor of a bounced check, it can have impacts on your finances.

So much in life is unexpected, but a bounced check doesn’t need to be one of them. In this article, we’ll answer questions like: what is a bounced check? What happens if a check bounces after I deposit it? How can I avoid writing a check that ends up bouncing? Let’s start learning!

What is a bounced check?

A bounced check, also known as a “rubber check,” is essentially a check that cannot be honored by a bank. This typically happens when the account holder has insufficient funds to cover the amount of the check.

Less commonly, a check can bounce if the check writer tells the bank to “stop payment” on it—even if there is enough money in the account.

When someone writes a check, they are essentially instructing their bank to transfer a specific sum of money from their account to the recipient’s account.

However, if there isn’t enough money in the account to fulfill this request, the check bounces. In turn, this can lead to a cascade of consequences for both the payer and the payee.

Bouncing a check is not always intentional. It can happen for various reasons, such as an unexpected expense, a miscalculation of available funds, or a delay in depositing money into the account. While these situations can be genuine mistakes, they can still carry financial repercussions.

What happens if a check bounces?

Your check can bounce when the amount in your checking account is less than the value of the check amount you wrote. If the receiver tries to cash or deposit your check before there’s enough to cover the full amount, the check will bounce due to “non-sufficient funds” (NSF).

When you write a check that bounces, you’ll probably be a bit embarrassed. While it’s not always your fault (maybe an automatic withdrawal happened before an automatic deposit cleared), you’ll still have to deal with the consequences. 

Let’s look at a few potential things that can happen.

Possible fees

One of the most immediate drawbacks of a bounced check are the fees that come with it.

Non-sufficient fund fee (aka NSF fee)

A non-sufficient funds fee is exactly what it sounds like. A financial institution charges an NSF fee when a check cannot be honored due to insufficient funds in the account. Normally, this type of returned check fee applies to the account holder who wrote the check.

Each state decides the fees owed for check payments that are returned for lack of funds. These “recovery costs” generally range from $20 to $40. Most of the time, you’ll pay a flat rate, but a few states base the fee on a percentage of the amount of the check.

Fees for non-sufficient funds are like a bad chicken-or-egg scenario. If you wrote the check and truly don’t have enough money to cover the cost, then with the new fees, you can go into debt over not being able to pay. That makes it even harder to right the wrong and pay the original amount you owed.

Merchant fees

In certain cases, merchants may charge additional fees for bounced checks. These fees are imposed to compensate for the inconvenience and potential costs incurred by the merchant when a payment does not clear. 

$30 is the average bounced-check fee from merchants. That said, in most states, they’re allowed to charge up to $40.

Overdraft fees

If you don’t have enough money in your account, but your bank covers the check for you instead of bouncing it, you may face an overdraft fee instead of an NSF fee.

When an account holder attempts to make a payment that exceeds their available balance, the bank may cover the difference through overdraft protection. This service is designed to prevent declined transactions due to insufficient funds.

However, this service often comes with a price—the overdraft fee. This fee applies when the account balance goes below zero, and the bank extends credit to cover the transaction.

Overdraft fees can also come into play if you deposited a bad check and didn’t realize it. You may assume you have more money in the account than you actually do, because the check bounced. Then, you might accidentally overdraw your account and incur a fee.

Some banks offer overdraft alerts or allow customers to link their accounts to savings to prevent overdraft situations.

Impact on your credit report & banking relationships

While your primary credit report will likely remain unaffected by your bounced check, some “alternative” checking account reporting companies, like ChexSystems or Telecheck, might ding you.

As a result, banks can deny your request to open a checking account if you have any red flags from these companies. In this case, be sure to ask for the report to make sure there aren’t any errors. You can also ask for a free report if you receive an “adverse action” notice, which the bank has to provide you if they turn you down.

Since a negative banking history may make it more challenging to open new accounts, it can also make it hard to build credit.

In the case of a loan payment, a bounced check is a bigger deal and could affect your main credit score. When your check bounces, it means that the transaction technically never went through. Unless you tried to pay early, that likely means you either missed a monthly payment or were late.

This unpaid balance could get you in trouble with a collection agency, which might report you to the credit bureaus. This is a fast track to lower credit scores.

Late payments will stay on your record for seven years, which can affect other loan eligibility and even insurance rates. Your top priority should be to get back on track with your original payment schedule.

Potential legal action against you

In addition to your credit score, debt collectors could mean bad news legally. Just like the recovery fees, each state determines the legal action you may face. You could be dealing with civil or criminal charges, ranging from a misdemeanor to a felony.

With civil charges, you’re in store for even more fees. (Remember that horrible cycle of being charged for having no money? It gets worse.) You might be able to avoid these charges if you can plead your case to the recipient before they file a lawsuit.

If you don’t reach them in time or they aren’t sympathetic to your situation, you’ll probably have to pay legal fees for yourself and them, as well as additional penalties.

In a criminal case, even higher fees might be in your future, along with a mark on your permanent record. In extreme cases, you might even go to jail. Usually, the amount of the check determines whether it is prosecuted as a misdemeanor or a felony. 

If someone is threatening you with criminal charges, be sure to seek legal counsel before things escalate.

Expert tip: Always negotiate fees

In some cases, banks (or merchants) may be willing to waive certain fees associated with bounced checks, especially if it’s a rare occurrence.

Contact them, explain the situation, and inquire about the possibility of fee waivers. Be gracious and understanding, even if they aren’t able to accommodate you this time.

Establishing a good rapport with your financial institution can lead to more favorable outcomes in lots of situations. Whether it’s waived fees, higher credit limits, or a better rate on a loan, it never hurts to get in touch and ask!

Steps to take if you bounce a check

Discovering that a check you wrote has bounced can be a stressful situation, but it’s essential to approach it with a proactive mindset.

In this section, we’ll outline practical steps to take if you find yourself in the unfortunate circumstance of having a check bounce. 

1. Contact the person you wrote the check to (and the bank) 

It may feel like an uphill battle, but you need to take fast action. Contact your bank and the payee (the person you gave the check to) as soon as you realize the check will bounce or has already. Make sure you’re all on the same page—that you’re going to make things right as quickly as possible.

2. Deposit funds as soon as possible

Deposit funds into your account as soon as you’re able. Decide if you can pull from a different account or even borrow from a loved one. Speed is key here. If you’re lucky, you’ll be able to deposit enough funds before the check officially bounces.

If you have multiple bank accounts at the same financial institution, you might also be able to arrange for your bank to pull money from your savings account in the case of insufficient funds in your checking account.

Note: An electronic transfer or check deposit might be immediate, or it could take days to hit your account. To be extra safe, bring cash to your bank branch in person.

3. Figure out what you’ll owe in fees

Next, figure out how much you’re going to owe in returned check fees. Work to bring your account current ASAP to avoid any additional fees.

While you’re at it, look into overdraft protection to avoid facing this situation again. With this protection, your bank will cover the amount of your bad check (up to a certain amount). Then, you’ll simply pay the overdraft fees to the bank, rather than suffering any additional processes or penalties.

The overdraft fees might even cost you less than bounced-check fees without protection, which you would possibly owe to retailers and your bank.

How to avoid having a bounced check

With technology speeding up the exchange of funds, you can no longer write a check and cross your fingers that the recipient will wait a few days to get to the bank. After all, they might just snap a picture from their phone to deposit it!

That said, if you realize after writing the check that you’re not in the clear, consider reaching out to the person or business and asking for a bit of a grace period. They may be willing to wait to process the check until you can refill your account with funds.

However, the best line of defense is good personal finance habits from the get-go. Here are a few tips that can help you avoid writing a bounced check in the first place.

Create a budget

Plan, then plan some more. Map out recurring expenses and income. Leave a cushion for unexpected costs. (You might not know the amounts and causes, but you can bet on something unforeseen popping up. Pencil that in.) Your budget is a useful framework to keep you in line with your priorities and means.

Build up your savings  

In your budget, consider how you can make room for savings. Every little bit helps and it adds up over time. Focus on building up your emergency fund and rainy day fund.

Your savings will help you avoid a crisis that sets you up for writing a bad check. It’s so reassuring to have money to fall back on when things go awry.

Balance your checkbook 

Keep your checkbook in check by setting money dates with yourself, and potentially your partner if you share bank accounts. Balancing your checkbook is especially important if you use a debit card or share an account with someone because your account balance may be different from when you last looked.

You need to have a handle on what’s going out and what’s coming in to see if your budget and savings are on track.

What happens if I deposit a check that bounces?

If someone else wrote you a check that bounces, it means the funds will never settle, or “clear,” in your account. 

The money might show up temporarily (depending on your bank’s procedures for pending deposits), but it will leave your account once the check officially bounces. Sometimes, the bank will also charge you a returned check fee or impose other penalties for depositing the bad check.

Your bank may notify you about the bounced check, but they are not required to. It’s important to monitor your own accounts to make sure the funds from a check clear in your account. This way, you can also protect yourself from spending money you don’t actually have (hello, overdrafts!).

Do you still get paid if a check bounces?

No, you won’t get paid if a check bounces. Since the money from a bounced check will never clear in your account, the person who wrote it will still owe you the money. They’ll need to send another payment—whether this is a new check or a different form of money transfer.

If you deposited a check that bounced, get in touch with the person who was trying to pay you. Hopefully, they’ll work with you to resolve it quickly. In a worst-case scenario where they refuse to reissue payment, you might have to pursue legal action.

Do bounced checks affect your credit?

What happens if a check bounces as far as your credit is concerned? Whether you were the payer or payee, can it ding your score?

The good news is, bounced checks themselves do not typically appear on credit reports. Credit bureaus primarily focus on credit-related activities such as loans, credit card payments, and debt collections. 

However, as we touched on earlier, the consequences of bounced checks can indirectly affect credit scores if they lead to a damaged banking relationship or other financial problems.

In extreme cases where a bounced check remains unresolved, the payee or the bank may take legal action to recover the funds. If the matter escalates to collections or court, your credit score can suffer significantly. 

To protect your credit, it’s crucial to address bounced checks as soon as you can.

Planning will help you avoid having a bounced check

Living within your means is important for your financial and mental health. So when times are tight, be extra sure you have the funds before writing a bad check. When your check bounces, it costs you more time, money, and energy in the long run.

Even if you work hard to avoid having non-sufficient funds in your account, accidents can happen. If a bounced check leaves your checkbook, don’t despair! Be proactive in handling the aftermath as quickly as possible, resolve the situation, and move forward with renewed confidence.

The post What Happens If You Have A Bounced Check? appeared first on Clever Girl Finance.

Do you ever feel like your life isn’t quite as put together as you thought it would be? Don’t worry; you aren’t alone. And while there’s some comfort to be had in knowing that you aren’t behind your peers in getting your life together, it can still feel disheartening. Well, it’s not too late to achieve that vision you had in mind!

Most of us had a vision of what adulthood would look like. We would have a stable job, plenty of disposable income, a beautiful home, and maybe a somewhat glamorous champagne lifestyle.

Well it’s still possible and you can start making the changes you want by telling yourself, “I’m getting my life together,” and then by following this “get your life together” checklist to make it happen!

Getting your life together in 18 steps

If you’re ready to get your act together starting today, here are 18 simple steps to get started!

1. Make a list of your current circumstances

To decide what you want your future life to look like, it’s important to first acknowledge the present.

If your life isn’t exactly where you hoped it would be, then it might feel easier to ignore your current circumstances. But you can’t make meaningful change without taking a hard look at where you are today.

First, make a list of your current circumstances in each area of your life. Areas you might make a note of include:

• Your current job
• Home
• Finances
• Love life
• Friendships
• Hobbies
• Health and fitness
• Your religion or spirituality

Your list should include everything you want to improve on!

2. Decide which parts of your life you’re happy with (and which you aren’t)

The next step in getting your life together is deciding which of your current circumstances are exactly where you want them to be and which aren’t.

First, go through the list of your current circumstances and indicate which ones you’re happy with. This part is easy since you don’t need to make any meaningful changes there.

The harder part is going through your list and highlighting the circumstances you aren’t happy with.

Sure, it might be hard to see just how many parts of your life aren’t where you want them to be. But now that you’ve identified them, you can create a simpler life by making a plan to change them and get your act together.

Also, know that acceptance of where you are now is a huge step towards your personal growth.

3. Set specific goals

Once you know what areas of your life you’d like to change, you can start setting goals to improve them.

When you’re setting goals for yourself, especially financial goal setting, try to be as specific as possible. It’s not enough to just decide you’re going to get your finances in order.

Instead, you should set specific financial goals such as starting a budget, saving $1,000, or paying off your credit card debt.

Set one or two specific goals for each area of your life. Try to have short-term and long-term goals for each aspect that you’d like to improve.

Some areas might seem more difficult than others. After all, how do you set specific and quantifiable short-term goals for your relationships? Well, in that case, you could aim to have a coffee date or phone call with one friend each week.

Once you decide on your goals, make sure to write them down. A study by Dr. Gail Matthews shows that you’re 42% more likely to reach the goals you set if you write them down, according to Inc.com.

For an extra boost of motivation, write them down and place them somewhere you’ll see them every day.

Also, don’t forget how powerful positive morning affirmations can be. So, telling yourself, “I’m getting my life together” or “I have my life together” can have a huge impact on accomplishing your goals!

4. Start small when trying to get your act together

You can’t get your act together all in one day.

Rather, you have to start small. As you decide what changes you want to make in your life, break them down into small, bite-sized pieces.

Sure, knowing how to save $10,000 is a great goal. But it’s not one that most people can achieve in just a few months.

Instead, set a goal for how much you want to save each week, month, or paycheck.

Similarly, start small when it comes to changing your habits. Let’s say one of your goals is to get in better shape. If you currently don’t exercise at all, then it’s not sustainable to set the goal of working out six days per week. You’ll burn out pretty quickly that way.

Instead, start with one or two days. When you’re consistently sticking with that, then you can add another day or two. Getting your life together can be accomplished by getting 1% better every day!

5. Organize your physical space

A huge part of getting your life together is getting organized. Often, a disorganized physical space can make you feel disorganized in other areas of your life. Imagine waking up in the morning and having a hard time finding your keys because your kitchen is cluttered.

Suddenly, you’re late for work and have higher stress the rest of the day. And not only is your stress higher at work, but you might even be dreading going home, knowing that you’ll have to deal with the clutter.

Decluttering your life might not seem like it will make a difference when it comes to your finances, your health, or your relationships.

But you’d be surprised just how much you carry that stress and disorganization into other parts of your life. So, make sure you don’t skip this step. Try reading organizational blogs to help you.

6. Find the right tools to help with getting your life together

A big part of getting your life together is finding the right tools to use along the way. No matter what goal you’re trying to reach, there’s probably a tool designed to help you get there. Here are a few examples:

Habit trackers

A habit tracker is an app that helps to create new positive habits. You set up the habits you want to work on and schedule how often you want to do each one. Then, the app reminds you of your habits and allows you to track them.

Budget apps

There are plenty of budget apps designed to help you reach your financial goals. You can find different apps based on your budgeting style, the goals you’re trying to reach, and more.

Or try the best budget templates! Budgeting your money is a big part of self-care and getting your life together!

Fitness trackers

For someone with health and fitness goals, a fitness tracker is a perfect tool.

First, fitness watches can help you track your steps and workouts. Next, fitness tracking apps allow you to track calories in and out.

Project management tool

For anyone starting a business or working on another big project, a project management tool like Trello or Asana can help you get your act together. It allows you to create specific tasks, assign them to different people, and create checklists of items to do along the way.

Journal

If your mind is what’s holding you back from reaching your goals, then journaling self care might be just the tool you need.

Studies have shown that journaling can have significant impacts on both your physical and mental health. It can decrease stress, decrease your chances of getting sick, and more.

7. Make a plan for your money as an essential part of getting your life together

One of the most important steps on the get your life together checklist is making a plan for your money!

Money is the number one source of stress for a large majority of people. It beats out politics, work, and family as a source of stress and has even more significant impacts on younger generations.

Whether or not your goals are financial in nature, knowing how to make a financial plan is crucial to your well-being. Hence, getting your finances in order can go a long way toward helping you get your act together.

8. Get your act together by minimizing stressors

If there’s something in your life that’s stressing you out, it can have a negative impact on many different parts of your life. Let’s say you have work stress.

Like many people, you might bring that stress home with you at night. It can then affect not only your work life but also your relationships, health habits, and more.

To start reducing stress in your life, make a list of everything in your life that causes you stress. Are there any on the list you can eliminate entirely?

You may find this is the case for expensive subscriptions or social obligations that add more stress than they’re worth. It could also mean planning ahead for major life events.

Other stressors you simply won’t be able to eliminate. Examples of these include toxic people at work and family members. And while you can’t eliminate these stressors altogether, you can identify changes you can make to reduce the stress.

9. Find a mentor

If you have big career goals that you haven’t reached, then a mentor might be the perfect way to take your life to the next level. A mentor can give you career tips or advise you on business goals, introduce you to people in the industry, and work as a sounding board as you come up against career stressors.

Wondering how to find a mentor? Think of people in your network who have offered you advice in the past. Mentorship can be a formal arrangement — at times, even a paid one. But it can also be an informal friendship with a friend in your industry.

10. Create routines for getting your life together

Routines are the backbone of success. When you have routines in place, you no longer have to rely on willpower to stick to your positive habits and reach your goals.

Think about a habit that comes naturally to you, like getting dressed in the morning or brushing your teeth. You don’t have to remind yourself to do those things. They’re a part of your daily routine schedule.

You can use those same systems to create other healthy habits and take better care of yourself. Want to commit to going for a walk each day?

Find the time when you can do it at the same time each day. It will become a part of your routine, and you’ll eventually find that it just comes naturally to you.

11. Identify bad habits

Being a human being makes you a creature of habit, even if those habits don’t really serve you. A key step on the get your life together checklist is identifying your bad habits. If we’re being honest, we can all admit that we have some bad habits in our lives that are holding us back.

Whether it’s staying up late at night watching television, overspending on things you don’t need, or something else, it’s likely affecting other parts of your life.

As a first step, sit down and make a list of bad habits that might be holding you back in certain areas of your life. Then, come up with strategies to reduce or eliminate them.

For example, set boundaries for yourself on how late you stay up at night. If you tend to overspend on home decor regularly, then pamper yourself and add it as a line on your budget so it’s accounted for.

12. Implement the one-minute rule

Do you ever have those tasks that are on your to-do list for days, weeks, or months, and yet you never seem to get to them? We’ve probably all experienced something similar in the past.

One simple strategy coined by Gretchen Rubin is called the one-minute rule. This rule states that if something can be done in one minute or less, you do it immediately.

Setting this rule for yourself helps clear up your to-do list from all of those small tasks that create a mental burden. This can be a great step to help you with getting your life together!

13. Change your mindset

You might be surprised to hear that if you aren’t reaching your goals, your mindset might be one of the most important things holding you back.

If you find yourself regularly talking down to yourself or telling yourself that you won’t reach your goals, then there’s a good chance that you won’t.

But if you adopt a positive mindset and truly believe you can reach your goals, then you might find it easier to do so.

14. Create a gratitude journal

It’s easy to spend your time focusing on the things that are going wrong in your life. And when you’re working on getting your life together and making big changes, it’s natural to focus on the negative things.

Unfortunately, this can also drag you down emotionally and induce anxiety. It can cause you to feel like everything is going wrong.

A gratitude journal is an excellent way to focus on the positive and appreciate the little things in your life. Each day, sit down and write down three things in your life that you’re grateful for.

Aim to pick out three different things each day. They can be as big as your family and friends or as specific as a delicious meal you enjoyed that day.

As you write down what you’re grateful for each day, you’ll find that you naturally become more optimistic and start looking for things to be positive about. Try these journal prompts for self discovery if you don’t know where to start.

15. Take action towards getting your life together

It’s easy to say, “I’m getting my life together,” set goals and write down steps you can take to reach them, but it’s a totally different thing to take action and actually complete those steps.

Starting working toward a new goal is often the hardest step. When you want to save $1,000, those first few dollars are the hardest because you’re not in the habit of saving. When you decide to start working out, those first few workouts are the hardest because you’re not used to working out.

The sooner you take action after setting your goals, the quicker you can get past that first difficult step. Once you’ve started, you’ll find that your momentum helps you keep going. A great way to do this is to focus on challenging yourself to get just a little bit better every day.

16. Track your progress

Once you decide what changes you want to make in your life, it’s important that you track your progress.

Otherwise, you might never realize whether you’re on the right track. As a result, you might find that you never get closer to your goals.

Tracking your progress helps to ensure that you’re on track with your goals. It also helps to motivate you as you see yourself progress. There are plenty of tools out there designed to help you track your progress and stick to your goals and habits.

17. Practice mindfulness to know how to get your life together

Balancing a career with family and other obligations can get so busy. If every day is pure chaos from the moment you open your eyes, make sure to add practicing mindfulness to your list.

Mindfulness has many benefits that include getting rid of negative thoughts, improving your overall well-being, and boosting your enjoyment of life. Luckily, there are many resources to help you get started with practices like meditation and deep breathing.

Check out apps like Headspace, Calm, or Insight Timer for guided sessions and tools to help you incorporate mindfulness into your schedule.

18. Ask for help if necessary

Sometimes, all you need is a little help. Whether you’re looking for advice or emotional support, talk to someone you can trust. They could be a friend, family member, colleague, therapist, or mentor.

Seek professional advice or consider therapy if you’re struggling with anxiety, depression, or any other mental health issues. You don’t have to go through this alone. That’s why asking for help is also an important step on the checklist.

Expert tip: Take it one step at a time

As you set out to make changes in your life, remember to focus on small changes. Whether you have a small hill or a steep mountain to climb, small steps can get you there.

It is easier to reach your goals with incremental, sustainable actions than grandiose moves that will leave you burnt out and back to where you started. Working through the steps on your checklist will most likely take months or years.

So, be patient with yourself, check back often, and celebrate every progress you make along the way.

What does it mean to get your life together?

To get your life together means to take back control of your life so you’re not derailed by every stressor that comes your way.

It’s a beautiful place to be – to have organization and stability over most areas of your life. It doesn’t mean life is perfect. But that you are prepared and you can deal with life as it happens.

What is the best way to get your life together?

The best way is to follow lay out the series of steps you need to take and begin finding strength to face the challenge head on.

Start with your list of current circumstances, what you’d like to achieve to make you happy, and then break out your specific and actionable goals. You already know there are aspects of your life you want to change.

Decide you will do it and start today. Set a schedule to sit down and make a list of the areas of your life you want to improve on and go from there.

What do I need to get my life together?

The good news is you don’t need to purchase anything to get your life together, you only need to want to change your life. You may need a pen and paper to start and some free apps along the way, but nothing expensive.

As you work through determining what will truly make you happy, laying out your goals and taking intentional action, be open to possibilities and use the power of mindset to stay positive. Stay committed to your goals and ask for help when you need it.

Articles related to getting your life together

If you learned a lot from reading about how to get your life together, check out these posts next!

• Daily Habits To Improve Life: A Good Habits List To Work On Now!
• 12 Steps For Creating The Life You Love
• Starting A New Life Of Improving Your Finances
• How To Rebuild Your Life After A Financial Downturn

Getting your life together is possible!

Getting your life together feels impossible at times, but it doesn’t have to be. There are plenty of steps and self improvement ideas you can take to make small changes and bring you a bit closer to your dream life.

You may not be able to control everything in life, but this get your life together checklist will help you focus on the things you can control.

Take action today by enrolling in our completely free financial courses to work towards your new goals!

The post 18 Steps For Getting Your Life Together Starting Now appeared first on Clever Girl Finance.

The idea of building a home might seem like a dream come true because you can fully customize the space. But buying a home already built also has its benefits, like being move-in ready right away. You may find yourself wavering between the two as you consider costs, so is it cheaper to build or buy a house?

Although you may want to build your dream home, you need to consider the cost of building.

In some cases, buying a house can make a lot more sense.

There are many things to consider when building, such as building materials, labor shortages, and the plot of land you buy.

On the other hand, purchasing a home means you need to consider the layout of the house and potential repairs.

How do you choose? While there are many factors to think about either way, including the real estate market, we’ll discuss which option is cheaper, as well as the advantages and disadvantages of each. And remember, loving your home is totally possible, whether you build or buy!

Is it cheaper to build or buy a house?

In some areas, it might be more affordable to build a home, but in most, you’ll find it is cheaper to buy an existing home.

According to an article from Bankrate with data from the National Association of Realtors, the median cost for an existing home in the United States, not one you are building, is $375,700 in 2023.

However, U.S. News reported on data from Real Estate Witch that the median cost of building a house in 2023 is $446,000, which doesn’t include the cost of purchasing the land.

Based on this, it is cheaper to buy an existing home than to build one.

However, you may find that these numbers vary quite a bit in your own situation. There are several states where building a home is much cheaper than the median listed above, according to GoBankingRates.

Price to build a home

As discussed earlier, the median cost to build a new house is currently nearly $450,000.

However, remember that the cost to build a house will vary based on your location and the materials you choose. But this number is a good ballpark to consider.

Expenses to consider when building a home

Before you consider navigating the home-building process, take some time to estimate all of the expenses. Is it cheaper to build or buy a house? Considering your location and the cost of materials can help.

Here are the expenses you’ll need to keep in mind.

Although some seem obvious, others fall into the category of hidden costs that you might not anticipate. A budget calendar can be useful in helping you prepare for each cost at the right time.

Structural

The basics of the home don’t come cheaply. Some structural expenses include framing, building the walls and roof, and the foundation.

Of course, you don’t want to skimp on these items because they create the basic integrity of your home.

With building vs buying a home, you’ll have the ability to customize the layout of the structure, as well.

Interior finishes

Choosing your interior finishes can be a fun part of building a house. The flooring, drywall, etc., are part of the interior finishes.

Building your own home allows you to pick out everything to meet your specific tastes.

Instead of compromising with what’s available, you’ll get to make the choices. But there will be extra costs that go along with this.

Mechanical

The mechanical aspects of a home are usually hidden if they are done right. You don’t want to have to think about your plumbing or electrical systems. But you’ll need to pay for proper installation throughout your home.

Kitchen

The kitchen is often a significant expense – perhaps even the most expensive room in the house. You can easily spend thousands on a kitchen installation.

Installing a kitchen will cost at least $5,000 and up to $125,000, according to HomeAdvisor, so you can see that expenses range quite a bit.

Bathroom

Bathrooms are another area of the house that can push the total cost of building a home higher than you anticipated.

On average, adding a bathroom costs $5,000-$35,000, according to Angi.com. Depending on how many bathrooms you have in your home, this can be a significant cost.

Engineer

An engineer might be involved with your house building to ensure your new home is structurally sound. But you’ll have to pay for their services. Remember that an inspection of your new home with a structural engineer can cost 1 to 5% of your construction expenses, explains Today’s Homeowner.

Land

Of course, you can’t build a home without buying a piece of land. Depending on your location, this could be a major cost to build a house.

You might consider how to buy land cheap, but there will still be a cost.

Permits

Permitting is a cumbersome part of building a home. But unfortunately, it cannot be avoided. Building permits cost varying amounts, ranging up to a couple of thousand dollars or higher, so be prepared.

Renting until the home is ready

As you build a home, you cannot live in it.

In fact, without the basic amenities installed, you likely won’t be able to move in for several months. With that, you’ll likely need to rent a place to live while the home is completed.

Paying rent while paying for a home to be built can be taxing for any budget. But if you live in a high-cost-of-living area, you’ll find this an especially burdensome expense.

Ensure your budget can handle this double payment without sacrificing financial wellness before moving forward with a home build.

DIY or hiring professionals

Although it’s essential to consider your expertise before attempting any work on a home, you may choose to DIY some aspects and hire professionals for others.

If you happen to be a professional builder, electrician, plumber, etc., you may save some money by doing some of the work for the house on your own.

However, if you don’t have the know-how, you will need to hire someone, which is an additional cost.

Consider what projects in your home you can do and what you need to hire someone for with the cost of building a home.

Price to buy a home

The median cost to buy a home, as previously discussed, is about $375,000.

However, this price can differ greatly depending on where you live. So it’s important to look at the prices of homes in the area you want to live in.

You will also need to consider additional factors besides buying the home.

For example, are you planning on doing any remodeling or additional landscaping? That’s an added expense.

Do you want to add on to the house? Consider it in your house-buying budget.

Expert tip: Compare the actual costs of buying vs. building a home

Although it is cheaper on many occasions to buy an existing home, you should never take averages as a fact for your own situation.

Instead, price the cost of building vs buying in your own location. Make a list of every expense, from a construction loan for building to home inspections and realtor fees. Then compare the two prices to see which option is better for you.

Advantages of building a home

Building a home customized for your family can be a great idea. First, let’s explore the advantages of building a home.

Fewer people are looking to buy land

When buying a lot, you may not have as much competition. Although, it depends on where you are buying, what state, what is nearby, etc. Many factors affect the value of land.

You make decisions about landscaping

With a new build, you’ll have the opportunity to choose what landscaping you do for the outside of the house, including trees, grass, gravel, etc. This can be a big benefit, especially if you want something specific, like a yard that saves water.

Lower maintenance costs

Due to the newness of the home, you likely won’t have as much maintenance to handle in the near future.

After all, you’ll have all new appliances, a new roof, etc., which can be cost-effective upfront. You’ll still need to repair things in your home over time, but you are likely to have several years before anything significant breaks or needs to be changed. You’ll have time to set up sinking funds for home repairs and add money.

Choose unique features for the home

You can pick out everything to suit your needs and wants. From the number of bedrooms to the kitchen countertops and the flooring, a custom home can be exactly how you want it.

You may also choose to use more or less expensive materials, which can affect the overall price of the building.

Disadvantages of building a home

Of course, there are drawbacks, too. Building a home can be exciting, but there are things to be aware of. A few include:

Cost

Typically, the building costs for a home are more expensive. Plus, hidden costs can put stress on the budget of the homeowner before they even move in.

Although you may not be able to know in advance about every single expense, it’s vital to know all the high costs of buying a home and know what to expect before deciding.

In addition, you may want to have extra money set aside for things that you didn’t plan for to avoid being in over your head with debt.

Paperwork

There are also many additional things to consider, such as getting a building permit, a construction loan, and other paperwork that can be daunting and stressful. It’s a lot to keep track of, and it can be a challenge.

Difficulties with management

Building a home has many moving parts and pieces. With that, you’ll likely run into some stressful situations along the way.

With a new construction home, you may deal with problems like an unreliable contractor, appliances or other materials not arriving on time, etc. Issues like this can cost time and money.

Advantages of buying a home

Buying a home has its ups and downs too. And answering, “Is it cheaper to build or buy a house?” isn’t the only thing to consider.

Although you won’t have as many decisions to make regarding the actual home construction, there are still other things to think about.

Let’s start with the advantages:

Faster move in

Once you close on a home, you can likely move in right away instead of waiting for builders to finish up. Everything is already built and set up in the house, so you won’t need to factor in extra months of waiting if something gets off track with the building process.

Although you must consult with the sellers about when you can move in, it may be faster than when you are building.

Affordability

If you’re considering the pros and cons of building vs buying a home, existing homes are generally more affordable. Of course, you will still have the upfront costs of a real estate agent and a down payment, but there are other expenses buyers can avoid, like labor costs for building.

Because of this, buying an existing home can be one of the best money moves.

Ability to make changes

Although you aren’t building from scratch, you can choose to update areas of the home that matter to you.

For example, you could splurge on a new kitchen without going through the entire home-building process.

So you’ll be able to move in and have somewhere to live, but you can still make the house suit your needs.

Established landscaping

You won’t have to spend anything if your existing home has a green yard. It can be nice to buy a place where the landscaping is already done, and you don’t need to pay landscapers to add grass and trees to the space or spend time doing it yourself.

Of course, all of this depends on the particular home that you buy. And you may choose to make changes to the yard after purchase.

Disadvantages of buying a home

Although it may sometimes be considered an easier process, buying an existing home isn’t without its setbacks. Here are the downsides to buying a home:

Less energy efficient

Older homes tend to have some energy inefficiencies, which can present problems. With a newer home, energy efficiency can be considered before building occurs and factored into the upfront costs.

More maintenance

You might have to fix more things when you move in.

But if you buy a newer home that is only a few years old and doesn’t have a lot of maintenance issues, you can possibly save on costs for a time, which can help.

It’s important to consider any home maintenance or new things you may need to buy before closing on a home.

Replacing and removing old features of the home

You may also need to consider features that need to be replaced, such as wallpaper or carpeting, or you may need to get rid of lead paint, etc. Anything extra you don’t add to the costs initially can present budget challenges later.

Cheapest and most expensive states to build a home

The cost of building a home is not the same in every state. In some places, the costs are much lower than in others.

According to Today’s Homeowner, some of the most expensive states to build include Hawaii and Massachusetts, both costing over $400,000, but the least costly include Mississippi and Arkansas, both costing less than $300,000.

So, as you can see, the location that you build in can be a huge part of determining whether building a home is affordable or not.

Is it cheaper to buy land and then build your house on it?

While it can be less costly to buy land and build your house on it in some cases, the opposite will often be true. It all depends on location and timing when it comes to whether it is cheaper to buy land and then build a house on it.

There are many variables to consider. For instance, was the land bought years ago when prices were different? That can change the cost to build a house. How much will it cost you to build the house at today’s prices? Is building cheaper than buying an existing home or more expensive? These are ll factors to consider that will affect price the price of building a home.

That said, the cost of land plus the build will likely be more costly than purchasing an existing home.

Is it a good investment to build a home?

It can be a good investment to build a home, depending on your reasons and if it makes financial senses and/or saves you money. For instance, you might have a unique living situation where building a home to your specification would work best for you.

If you plan to live in the home long term, it can be a good investment knowing you’ll be there long enough to pay down your mortgage and build up the equity in your home. You may also be able to sell it in several years for much more money.

However, buying an existing home can also be a good investment, depending on your situation. You could consider doing renovation work to customize the home to fit your specific needs.

That said, if you don’t have the funds to build without creating a lot of debt stress, then no, it isn’t a good investment at the time.

Articles related to building or buying a home

If you enjoyed finding out is it cheaper to build or buy a house, you’ll love these other articles!

• How To Buy Land Cheap: Everything You Need To Know
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• Renting Vs Owning A Home: Is Renting A Waste?
• How To Save Up For A House Down Payment

Is it cheaper to build or buy a house: consider all your options first

Ultimately, you’ll have to decide what matters to you most with building vs buying a home. Although it can be cheaper to buy an existing house, many factors can affect price, in addition to thinking about your preferences.

Do you crave customization? Or are you looking for an affordable and simple housing solution? Either way, you’ll need to get your financial house in order to move forward.

Not sure where to start? Check out our free foundational courses to build a bright financial future.

The post Is It Cheaper To Build Or Buy A House? appeared first on Clever Girl Finance.

With all the resources online, it can be easy to overlook financial literacy books. However, books allow you time to reflect as you read.

Because they’re long-form, books are a great way to dive into topics you care about. That said, you can use some of the best finance books to achieve financial wellness. Check out this list!

We have put together a great list of personal finance books to help you get the knowledge you need. Additionally, these books will help women take control of their financial situations.

Financial literacy basics

Before we talk about the best books to help you, let’s discuss what is financial literacy.

Financial literacy is essentially is knowing how to make smart money choices and decisions. The more you know about money, the more you’ll feel confident and stable in your financial situation.

The three basics to practice for financial literacy are earning, saving, and growing. Earning involves simple money management, such as budgeting and debt management. Once those foundations are established, you can focus on other aspects, such as saving an building an emergency fund. Once you’ve built good savings, you can focus on growing your money through investments. 

While these concepts may be simple, much effort is required to navigate the different areas of financial literacy successfully. Fortunately, our list of books can help you learn and master new skills regarding your money.

Why reading financial literacy books is helpful

A basic understanding of financial literacy will set you on the right track for financial stability. However, if your long-term goals are to be more secure with your money and gain financial freedom, then books are necessary.

Financial literacy books go into the details, give examples, and better explain financial literacy concepts. In addition to providing helpful information, many books offer real-life insights and guidance from finance professionals. Books can help you humanize, simplify, and apply the different concepts of financial literacy.

23 Top financial literacy books

That said, here are 23 of the best financial literacy books you should check out. Note: These financial literacy books are linked via affiliate links that help us grow Clever Girl Finance! Please see our disclosures for more information.

1. Clever Girl Finance: Ditch Debt, Save Money, and Build Real Wealth by Bola Sokunbi

Clever Girl Finance’s Founder, Bola Sokunbi, has spent her career helping women achieve financial independence. In Clever Girl Finance, Sokunbi focuses on the three personal finance pillars money-savvy women must master.

Bola is a self-made money expert and finance influencer who shares real-world examples from her own life.

In addition, she also shares proven financial wellness processes. They include how women can leave debt behind, start saving, and invest in ways that build wealth for the rest of their lives. These ideas make it one of the best financial literacy books you can read.

The book aims to teach and empower women. It helps them identify their needs, challenges, and relationships with money. There are also stories from other women’s journeys that make financial security feel accessible.

2. Get a Financial Life: Personal Finance in Your Twenties and Thirties by Beth Kobliner

Written by financial journalist Beth Kobliner, the Get A Financial Life financial literacy book is for millennials wanting to explore their financial prowess.

Today’s young adults are faced with managing their money through societal challenges. We’re in the age of student loan debt and a nationwide housing crisis.

So Get A Financial Life gives concrete, actionable tips. The book promotes healthy financial habits that will benefit readers now and in the future.

3. Real Money Answers for Every Woman: How to Win the Money Game With or Without a Man by Patrice C. Washington

Patrice C. Washington draws from her own experience with student debt and overspending. She shares how women can dig themselves out of bad money habits in Real Money Answers.

Using a Q & A format, Washington covers how to truly own your finances. Additionally, she covers building credit, buying a home, and negotiating higher pay.

Whether readers are new to money management or need a financial reset, Washington’s advice shows how freedom comes with financial security

4. Broke Millennial: Stop Scraping By and Get Your Financial Life Together by Erin Lowry

Broke Millennial shows that being young doesn’t mean you have to be broke. It’s among the best financial literacy books for women who want to become better with money.

Erin Lowry writes in a relatable style that encourages action in readers. In fact, her philosophy is “Get Your Financial Life Together” (#GYFLT).

So beyond the budgeting and debt repayment basics, Erin dives into the mindset and a practical approach. For instance, if you’re planning a life with a partner and controlling your money habits in social situations.

5. On My Own Two Feet: A Modern Girl’s Guide to Personal Finance by Manisha Thakor and Sharon Kedar

Co-authored by Harvard Business School graduates and investment experts Manisha Thakor and Sharon Kedar, On My Own Two Feet provides a roadmap for money management.

Thakor and Kedar guide their readers through all the personal finance basics, from spending and saving habits to big-purchase goals and safeguards. With the aim of relieving money stress, this book is packed with useful advice.

6. You Are a Badass at Making Money: Master the Mindset of Wealth by Jen Sincero

Motivational writer Jen Sincero dedicated this book to the internal work needed to earn and grow the money you deserve. Therefore, it’s useful for entrepreneurs, freelancers, and women wanting to negotiate their salaries.

You Are A Badass focuses on the psychology of money. It identifies and addresses the barriers to earning that you’ve created in your own head.

In addition to humor and moxie, each chapter uses personal anecdotes of transformation. And there are self-reflection exercises for you to reach your earning potential.

The book is for anyone with a financial scarcity money mindset who wants to feel abundant with their money.

7. The 21-Day Financial Fast: Your Path to Financial Peace and Freedom by Michelle Singletary

This financial literacy book by Michelle Singletary is perfect to read if you need a clearly defined game plan for finance.

The 21-Day Financial Fast takes you through a three-week spending hiatus (except for essentials). In addition, it gives you time to address bad spending habits. Also, the book helps you create a plan for paying down debt and prepare for future expenses.

Michelle recognizes that money can be a source of stress and limitations. Consequently, this 21-day “fast” promotes financial peace and freedom.

8. Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence by Vicki Robin and Joe Dominguez

Vicki Robin and her co-author, Joe Dominguez, have sold over one million copies of this book.

Your Money Or Your Life teaches you to have agency over how you feel about and deal with money. You’ll work through a nine-step program. Robin explains everything from mindfulness and decluttering to side hustles and money conversations.

The book focuses on intentionality in your spending and investing. In addition, it explains how to make your money work for you and the world around you. So, much of the book’s content ties into Robin’s background in the sustainable living movement.

9. The Feminist Financial Handbook: A Modern Woman’s Guide to a Wealthy Life by Brynne Conroy

The Feminist Financial Handbook uses a feminist lens to approach personal finance.

We live in a society controlled by whoever can pay. Brynne Conroy argues that women can create a more fair world by building their own wealth.

It draws from stories of women of varying races, sexual orientations, abilities, and financial situations. Conroy provides motivation and resources to achieve personal success.

10. Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required by Kristy Shen and Bryce Leung

Quit Like A Millionaire was written by married couple Kristy Shen and Bryce Leung. It’s absolutely on the list of the best financial literacy books for wealth building. Both authors are champions of the FIRE (Financial Independence, Retire Early) movement.

Basically, this unique approach advocates for retiring at any age. You do this by spending less and investing. Shen uses a numbers-driven system that readers can adapt to live life on their own terms and grow rich.

In addition, you can do this away from day jobs and standard retirement savings. Find financial freedom with the money lessons in this book.

11. We Should All Be Millionaires: A Woman’s Guide to Earning More, Building Wealth, and Gaining Economic Power by Rachel Rodgers

We Should All Be Millionaires offers a powerful perspective on becoming rich. Rachel Rodgers shares ideas for earning more money. In addition, you’ll find advice for shifting your mindset about wealth.

Overall, it’s a refreshing look at why and how to be successful as a woman today.

12. Clever Girl Finance: Learn How Investing Works, Grow Your Money by Bola Sokunbi

Bola Sokunbi’s second book goes beyond everyday money management. Instead of focusing on budgeting and saving, it demystifies the investment world.

Likewise, it’s just as approachable as her first book. Learn How Investing Works guides novice investors to take action toward long-term financial gain.

Sokunbi also gives examples of the difference between making money and building wealth. In addition, she includes pitfalls to avoid and knowledge to use to become a successful investor.

Even on a modest salary, readers should feel confident enough to grow a nest egg for the future after reading this book.

13. The Black Girl’s Guide to Financial Freedom: Build Wealth, Retire Early, and Live the Life of Your Dreams by Paris Woods

If you are tired of feeling broke, The Black Girl’s Guide to Financial Freedom will help you craft a plan to build wealth. Based on the author, Paris Woods’s personal experience, it outlines a simple path to creating financial freedom for yourself.

After years of working in education, Woods figured out her wealth-building blueprint without changing careers. As a result, she wrote a book to show you how to do the same.

Although the focus is on Black women, this book will resonate with women of all ages, especially young professionals just starting their careers.

14. Women with Money: The Judgement-Free Guide to Creating the Joyful, Less Stressed, Purposeful (and, Yes, Rich) Life You Deserve by Jean Chatzky

In Women With Money, readers are encouraged to use money to build a more relaxed life that aligns with their values. It includes an organized system that helps you think through how you view money. In addition, you’ll learn to use your money to make strides toward the things you want most in life.

It features incredible research and sound advice. Jean Chatzky reminds us what money is really about.

15. Get Good with Money: Ten Simple Steps to Becoming Financially Whole by Tiffany Aliche

If you want to live your best money life but need a system to help you, this book is for you. Tiffany Aliche explains in a 10-step plan how to assess, organize, and control your money. In addition, she shares her own money mistakes and recipes for success.

Get Good With Money advises those new to finance. You’ll learn all the basics and the best way to structure your money.

16. Rich Dad Poor Dad: Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki 

Author Robert T. Kiyosaki uses his book, Rich Dad, Poor Dad, to tell his life story about how he learned to manage money well and build wealth. Based on Kiyosaki’s experiences growing up with his real dad and his friend’s wealthy father, the book highlights different perspectives on acquiring wealth.

The book focuses on risk management, investing in assets, and the importance of learning. Since it was published 20 years ago, Rich Dad, Poor Dad has become the #1 book in personal finance.

17. The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley, Ph.D., and William D. Danko Ph.D

The Millionaire Next Door will help you re-evaluate your spending habits and look at wealth obtaining and retention in a new way. The books show how greed or the need to demonstrate wealth can lead to financial disparity.

Written by Thomas J. Stanley and William Danko, who help you to see the benefit of saving for the long run. While many people may think there are secrets to getting rich, The Millionaire Next Door shows you that being rich is more about managing your money well than having a lot of money.

18. Think and Grow Rich: The Landmark Bestseller Now Revised and Updated for the 21st Century By Napoleon Hill

Think and Grow Rich was published in 1937, and in its updated version, it shares the classic insights from the original version with newer information. Author Napoleon Hill spent 20 years interviewing wealthy and successful people and sharing their wisdom.

Still, one of the best finance books because it focuses on mindset, staying focused on your goals, and surrounding yourself with people who help you grow. The book isn’t as direct as other financial books but includes timeless lessons you can use throughout your life. 

19. I Will Teach You How to Be Rich by Ramit Sethi

Author Ramit Sethi teaches readers how to save money and have the freedom to spend money on desired things. This New York Times Bestseller will give you a realistic approach to saving money. 

Reading I Will Teach You How to Be Rich, will help you take responsibility for your current financial situation and confidently move forward. In addition, it’ll help you start investing with very little money. 

20. The Intelligent Investor Rev Ed.: The Definitive Book on Value Investing by Benjamin Graham and Jason Zweig 

Benjamin Graham is a wealthy and famous investor whose book will teach you how to invest and think like an investor. The Intelligent Investor focuses on essential aspects of investing, such as diversifying and knowing which stocks to invest in and which to avoid.

With the revised edition, you still get Graham’s advice but with commentary from journalist Jason Zweig on today’s market. The book benefits anyone looking to make investing a part of long-term financial plans. 

21. Money Out Loud: All the Financial Stuff No One Taught Us by Berna Anat

Author Berna Anat called herself the financial hype woman. In her relatable and practical book, Money Out Loud, she simplifies personal money management, making it less scary for the average person.

Anat breaks down how to successfully and efficiently create a budget. But what makes Anat’s book a page-turner is that she takes serious money topics and makes them fun. Her book also tackles significant issues, such as how the wealth system is designed to keep many people from reaching financial success.

It’s a book that will have you feeling inspired to use money in a way that can help make the world a better place.

22.  The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime by MJ DeMarco

In MJ DeMarco’s book, The Millionaire Fastlane, he challenges conventional ways of obtaining wealth. He criticizes the traditional methods of relying on the stock market, relying on your savings or 401K to be rich. Ironically, he calls most conventional forms of wealth building the slow lane. This book emphasizes that if you continue on those paths, it’ll take years to acquire the wealth you desire.

Instead, DeMarco”s book introduces valuable insights into the different and faster ways of obtaining wealth. He helps readers reach their financial goals faster without sacrificing their free time or giving up buying Starbucks every day.

23. Money: Master the Game 7 Simple Steps to Financial Freedom by Tony Robbins

In his book, Money Master The Game, Tony Robbins takes financial advice straight from millionaires and shares it with average people. Over ten years of research was put into this book, along with the wisdom and guidance from wealthy professionals such as Warren Buffet, Ray Dalio, and Jacke Bogle.

The book includes the original transcripts to get the full knowledge and experience. In addition, Money helps you to create practical goals around your finances.

Expert tip: Read books related to your financial situation

While there are many bestselling financial books to choose from, it’s crucial you select the book that is right for you.

Consider your financial situation and the goals you want to achieve. Ask yourself which book will help you reach the success you desire. Just because a book is popular doesn’t mean it’s the right book for you.

What books do I need to read for financial literacy?

The best financial literacy books are often bestsellers, such as ” I’ll Teach You How to Be Rich,” ” Rich Dad, Poor Dad,” and our very own “Clever Girl Finance” book series.

In addition, the best financial literacy books should focus on different aspects of budgeting, saving money, money management, and investing. It’s best to choose books with practical advice and relatable content.

Where do I start with financial literacy?

The first step is understanding what financial literacy actually is. Reading the definition of the term is a great start, but to really understand, it’s best to read articles or watch videos on the topic. Once you understand what financial literacy is, you can start expanding your knowledge and applying what you learn by reading financial literacy books.

By reading financial literacy books, you gain a better understanding of the concept and are able to incorporate different elements of financial literacy into your life.

What are the 5 pillars of financial literacy?

The five pillars of financial literacy include earn, spend, save, borrow, and protect. Earn involves understanding how you make and understanding your gross vs. net income. Spending focuses on how you spend your money and is tied to budgeting. Saving focuses on saving money, such as having an emergency fund, a retirement, or a sinking fund.

Borrowing money is expected. Often, you borrow money for student loans or with credit cards. However, with financial literacy, you are paying attention to how much you are borrowing and making sure you are making regular payments on what you owe. Financial literacy helps you to borrow money in a responsible and manageable way.

Lastly, there is protection, which means you protect the money you’ve earned. Protection can look like monitoring your accounts regularly or having some insurance for your investments.

What is the best book to read on finance?

Determining which is the best book to read on finance can be tricky. While bestsellers such as our very own “Clever Girl Finance: Ditch Debt, Save Money And Build Real Wealth” are a great option, or classics such as “Think and Grow Rich” are also helpful, the best book to read on finance depends on different factors.

Overall, the best book gives practical advice that can be applied to your situations and has insights from professionals. Usually, books that successful people highly recommend are some of the best books to read on finance.

Related articles on financial literacy

• 10 Lessons To Learn From Everyday Millionaires
• How To Get Rich From Nothing!
• Rich Mindset Vs Poor Mindset: How to Develop a Rich Mindset!
• How To Become A Millionaire (It’s Simpler Than You Think!)
• 7 Financial Literacy Basics We All Need To Know

Start reading these top financial literacy books today!

Money management is different for every person because everyone’s lifestyles are different. Whether you are in your 20s with some debt or married and have an investment portfolio, it’s up to you to make an effort to succeed.

Fortunately, reading some of the best finance books and careful planning will help you reach financial freedom and independence.

Knowledge is the first step to taking charge of your journey. As you work on achieving financial wellness, consider joining the Clever Girl Finance book club and free financial courses.

The post The 23 Best Financial Literacy Books appeared first on Clever Girl Finance.

Many of us are guilty of having a scarcity mindset when it comes to money, which holds us back from achieving financial abundance. You might believe that there isn’t enough money to go around or that you have to work extra hard for every penny you earn. But changing your mindset about money can improve your life in huge ways.

You might be constantly stressed out and worried about your finances. But what if you could change your money mindset? What if you could adopt a financial abundance mindset instead?

In this article, we will discuss why developing a mindset of financial abundance is important, the true meaning of financial abundance, and tips for how to achieve it!

Financial abundance meaning

For some people, the word “abundance” might bring to mind images of money overflowing from safes or lavish shopping sprees on luxury items. But true abundance is so much more than that.

It’s about having everything you need and then some. It’s about making life easier and living with plenty, without concern about money or where your next meal is coming from.

When you have more abundance, you’re able to pursue authentic living and be true to yourself. You can afford to do what you love, and you have the resources to help others in need as well.

You’re also able to enjoy life’s simple pleasures and not be burdened by financial stress or worry. Money is attracted to you as a result!

In addition, financial abundance is a state of mind characterized by thinking positively about money and believing that there is enough money for you as well as everyone else.

Now that we’ve covered the financial abundance meaning let’s dive into why developing this mindset is so important!

Why is adopting a financial abundance mindset so important?

If you realize that you currently have a negative mindset and it’s limiting your financial success and money goals, then it might be time to learn how to change your life.

Of course, changing your mindset isn’t something that could be done in a matter of seconds. But with a little bit of work, you’ll be surprised at the benefits it could bring into your life.

Here are some of the things that can happen when you begin to think in a more positive way:

Leads to less financial stress

It’s probably not too surprising to learn that money is a huge cause of stress for the majority of Americans.

Not having enough money is definitely stressful, but what if you could change the way you think about the situation? When you adopt a financial abundance mindset, you start to see money in a different light and begin changing your perception of finance.

You stop worrying about having “enough” and instead focus on creating wealth and abundance for yourself. Which can lead to less financial stress and more peace of mind overall.

Improves your morale and confidence level

Financial abundance isn’t just about having lots of money. It’s also about feeling confident and capable when making decisions around money matters, both big and small.

When you adopt an abundance mindset, you’re more likely to make decisions that could lead to increased earnings potential and high-income skills because you know that even if things don’t go as planned, you’ll be able to weather the storm.

Also, having a positive relationship with money can improve your morale and overall outlook on your financial life.

Allows you to dream big and trust the process

When you have a positive mindset around your finances, you’ll begin to believe that achieving money abundance in your life is 100% possible. Having this kind of confidence and belief in yourself will allow you to dream big, set goals, and work hard to achieve them.

Also, when you know that achieving financial success in life is inevitable for you, you won’t worry during the process. Instead, you trust that everything will unfold perfectly in the end.

Scarcity mindset vs. abundance mindset

So do you have a scarcity mindset or an abundance mindset? These two mindsets could not be more different.

With a scarcity mindset, you see the world as a place where there isn’t enough for everyone.

On the other hand, with an abundance mindset, you see the world as a place of unlimited resources, and you can start planning to succeed along with everyone else. To achieve financial abundance, it’s so important to shift from a scarcity mindset to an abundant one.

Here’s how you can recognize a scarcity vs abundant mindset:

Won’t share knowledge vs. shares knowledge freely

People with a scarcity mindset are often afraid that others will take what they have. And because of this fear, they tend to hoard information and knowledge to themselves to feel like they’re in control.

But people with an abundance mindset know that there is enough for everyone! So instead of hoarding knowledge, they share it freely without hesitation or concern.

Fears change vs. embraces change

In a scarcity mindset, someone might fear change because it means that something is going to be taken away from them.

On the other hand, in an abundance mindset, people embrace change because it means there will be more opportunities and financial success for everyone.

Thinks small vs. thinks big

In a scarcity mindset, people tend to think small. They focus on the problems they face and see little opportunity to overcome them.

And if you don’t believe in your own ability to create the life you want, you can limit your own potential by choosing not to follow your dreams.

In an abundance mindset, you look for solutions that are out of the box. You take risks and think big because you believe that anything is possible!

Focuses on costs vs. focuses on results

The scarcity mindset is all about focusing on costs and results in a zero-sum game where there are only so many resources and only so much can be accomplished.

The abundance mindset, on the other hand, is all about seeing the world as full of possibilities with no limits on what amazing outcomes and results can be achieved. The power of mindset can change so much!

8 Key tips to help you create a mindset of finance abundance

Many of us think that we’ll never have enough money, and so we live our whole lives in fear of the future. And because we don’t believe it’s possible to succeed financially, we never even dare to try.

But if you begin to develop a financial abundance mindset and start to understand the financial abundance meaning, you’ll start to see that there is actually enough money in the world for everyone.

You’ll also realize that not only can you avoid living a wasted life, but you are worthy of living an abundant life just as much as anyone else. Essentially, it’s a mindset of possibility and opportunity! (Be sure to check out our list of best books about money mindset!).

Here are 8 ideas to help you change your mindset about finances:

1. Eliminate your negative beliefs about money

If you want to achieve success in your finances, you need to eliminate your money blocks and negative beliefs about money. Start viewing money as a tool and something that can help you create the life you want.

When you change your mindset about money, you open yourself up to new possibilities and allow yourself to see all the wonderful things that money can do for you.

So, how do you go about changing your mindset? Start by recognizing your limiting beliefs about money.

Then challenge your negative beliefs. For example, ask yourself why you believe that money is the root of all evil or that money is only for greedy people.

What evidence do you have to support this belief? Is there another way of looking at it? Once you have challenged your negative beliefs, focus on the positive aspects of money.

For instance, what can money do for you? And how can it help you achieve your goals?

Here are some common negative beliefs about money that could be stopping you from achieving financial abundance:

• Rich people are greedy and corrupt.
• I’ll never be rich enough.
• It’s impossible to make money in today’s economy.
• You have to be born into wealth to succeed financially.
• Money can’t buy happiness.
• You need a lot of money to start investing.
• You can only make money through risky investments.
• It’s impossible to get ahead without working hard.
• Financial security is a myth.

Once you know what your negative money beliefs are, start to remove them from your mindset.

2. Stop comparing yourself to others

Comparing yourself to others can be mentally exhausting and often makes you feel miserable about yourself. And yet we do it all the time without even realizing that this bad habit is robbing us of our peace of mind.

Comparison can make us feel negative emotions such as envy, isolation, or a lack of confidence, which can force us into a mindset where only lack exists. The more we compare ourselves to others, the less room we have for original thought.

And without original thought, we can’t create freely. Financial abundance requires creativity, and so does anything else worth achieving in life. So never compare yourself to others and start taking inspired action instead.

3. Develop a growth mindset

Having a growth mindset means that you believe intelligence and abilities can be developed through dedication and hard work.

When you have this type of mindset, you will always be learning and expanding your horizons to search for opportunities to increase your wealth.

Also, a self growth plan and growth mindset are important to keep you motivated even in tough situations. Since you believe that you’re capable of achieving anything you set your mind to, you won’t give up as easily as those with a fixed mindset.

4. Recognize the power of your thoughts

The thoughts you entertain on a regular basis play a significant role in how successful you are financially. If you want to achieve abundance, you need to recognize the power of your thoughts and take steps to align them with your financial goals.

Your thoughts create your reality! Think about this.

If you tell yourself that you’re a failure every single day, would you be motivated or inspired to take action and change your life? Probably not. What you think influences the way you feel and the way you act.

So if you think about money problems all the time, that’s what you’ll experience. But if you focus on the positive aspects of wealth and abundance, you’ll find it easier to manifest those things in your life, especially if you use the best manifestation methods.

5. Use financial abundance affirmations

Financial abundance affirmations can help you achieve your financial goals by changing and eliminating your negative mindset about money. When you start to think positively about money and wealth, you will be more likely to take actions that lead to financial success.

So if you are having trouble maintaining a positive attitude about money, try repeating financial abundance affirmations every day.

For instance, instead of saying, “I am broke,” you would say, “I have an abundance of money!”

You might be surprised how your whole financial situation could transform just by shifting your mindset! Check out our post on 55 Financial Affirmations to get you started!

Here are some positive affirmations about money that you can use every day:

• I have all the money I need, and I will continue to increase my income.
• I’m great at managing money.
• I will be a millionaire one day.

6. Express gratitude

Gratitude is one of the keys to unlocking your full potential for wealth and happiness. When you’re grateful, it’s easier to stay positive and enjoy what you have now as opposed to focusing on what you don’t have.

When you wake up in the morning, take a few minutes to think about all of the abundance in your life and be thankful for it. Or try out the 30 days of gratitude challenge.

You can even write down a list of things you’re grateful for in the notes section of your phone or in your diary. Here’s what it could look like:

I’m thankful for:

• The fact that I have a roof over my head.
• All of my family and friends continue to love and support me each day.
• The money in my bank account that’ll help me buy groceries this month.
• My healthy body.
• The beautiful view from my balcony.
• The clothes on my body keep me warm each day.
• My comfortable bed.
• The fact that I’m still alive and breathing!

7. Realize your current financial situation is temporary

If you try to think about your current financial situation as temporary, you may be able to stay motivated and achieve financial abundance in the future. Why? Because once you see your present difficulties as transient instead of permanent, they won’t seem so daunting.

Then, maybe change isn’t so difficult or impossible after all. A shift in perspective could also help you find some peace with your current circumstances by reminding yourself that there is a light at the end of the tunnel and that you will get through this.

8. Give back to the community

When it comes to developing a financial abundance mindset, one of the most important things you can do is give back and find nice things to do for people. Giving back doesn’t just help others, it also helps you to develop a more positive attitude towards money and wealth.

It teaches you to be grateful for what you have and to think beyond yourself. When you’re focused on what’s important, it becomes easier to let go of negative thoughts and emotions that can block your ability to achieve financial or money abundance.

Expert tip: Surround yourself with people who think positively

If you really want to change your financial mindset for the better, then make it a point to spend time with people who will encourage you with your goals. Positive thinkers and people who are financially successful themselves can help you a lot!

Learn from them, ask questions, and talk about your ideas. You’ll feel more connected and it helps when others are cheering you on.

How do you get financial abundance?

In order to get financial abundance, it’s important to start with your mindset. You must believe that you will succeed and that you can become wealthy and achieve your goals.

But beyond mindset, it’s important to also make a plan and get to work. Whether that means working extra hours, looking for a new job, or learning about investing, making these changes and starting your financial planning process will help shift your perspective.

What does financial abundance feel like?

Financial abundance feels like having all you need and knowing that you’ll have the money and resources you need in the future. You also feel thankful for the many blessings you have. This drives contentment. (A daily gratitude list can help with this!)

It means that you feel a sense of peace about your finances, and you know that your goals are not only possible but will become your reality.

Is abundance the same as wealth?

No, abundance is not the same as wealth. Wealth means having a lot of resources and money. Abundance means you have what is needed and more, but it is more of a mental state that goes beyond just money.

While wealth can refer specifically to money, abundance is more focused on gratitude and understanding that whatever you need financially and in your life will be made available to you.

What is the mantra for financial abundance?

There isn’t only one mantra for financial abundance. Rather, there are many, and you can choose whichever ones resonate the most with you.

You might start off using some of our mentioned affirmations to help you get to the right money mindset. But you can also come up with your own that are specific to your goals.

For example, “I will make a six-figure salary in the next year” or “I have plenty of money for all of my financial needs.”

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• Scarcity Vs Abundance: Do You Have A Scarcity Mindset?
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Create a mindset of financial abundance!

Mindset is everything, especially when it comes to financial abundance. If you want to achieve success in any aspect of your life, you have to start off by believing that you can!

Once you see that it’s possible for you to have what you want in life, you’ll become motivated to bring that vision into your reality. This is why knowing how to make a vision board and saying financial abundance affirmations work so well for many of us.

So if you’re not currently seeing success in your financial life, it might be helpful to work on the way you think about money. By developing a financial abundance mindset, you can open up your heart and mind to new possibilities that’ll allow you to finally achieve your financial goals.

The post How To Create A Mindset Of Financial Abundance appeared first on Clever Girl Finance.

Women and investing is a topic that doesn’t get mentioned often enough, but it is extremely important. Women’s financial plans are unique, so their investing strategies should be, too. Find out more about women and investing, and discover ideas for creating your own investment plan.

Women investors are doing great financially, proving that women are equipped with the skills needed to be successful investors. More women are taking charge of their finances by creating a financial plan and working towards building wealth.

Women make fantastic investors, keep reading to learn why. Plus get five key tips for how women can invest smartly!

Why women investors are amazing

There are a lot of things that set women and investing apart. And women can have great success with investing because of the unique way they view finances. For example:

Women approach investing with a cautious mindset

Women sometimes approach investing with a different mindset than their male counterparts. They tend to be more careful when considering investments.

Although action is necessary for investing, this cautious approach can pay off and help women make great financial choices.

Another thing that makes women great investors is that they don’t spend too much time trading. The Motley Fool explains that men tend to trade a lot more frequently than women, and that this contributes to their investments not doing as well. Women, on the other hand, tend to trade less and have better results over time.

They make fewer emotionally driven investments

Another key differentiator between men and women in investing is emotion. It may be surprising, but men can be more emotional about making investments than women.

In a survey, Adam Hennick of Hennick Wealth Management found that men who make a higher income are more likely to buy stocks based on a gut feeling at 13.7%, whereas women are less likely to do this at 7.5%.

Making a hasty emotional decision when it comes to investing often leads to regret, and it’s better to take the time to research to be sure you have the best chance of financial success.

Women give their investments time to grow

According to an analysis by Fidelity, female investors are starting to invest when they are younger, for example, between ages 18 to 35, women are opening a brokerage account by age 21 on average.

The older generation tended to wait longer to open a brokerage. It was also found that millennial women are investing outside of their retirement more often than previous generations.

This is great news because investments that are made sooner have more time to grow, and more investing beyond retirement may also be beneficial. All of this can result in more wealth for women.

5 Tips for how women can invest smartly

Before choosing an investing platform, investment products, or financial assets, consider how you can be sure that you are investing smartly. These 5 ideas will help you achieve your goals.

1. Set financial goals

If you are going to invest your money, then you want it to grow. And you probably have a good reason!

For instance, you might be thinking of retirement savings, long-term goals like saving up for a house or saving for vacation, irregular expenses, or education costs.

When making investment decisions, setting financial goals can allow you to know how much money you need to set aside. So think about how much money you want to make over how many years.

To start, try to think of 1 or 2 big long-term goals and then maybe a short-term goal or two. Then consider how much money you need for each.

After that, determine how long the money needs to stay invested. Having all of these numbers in front of you and knowing your goals can make it much easier to start the investing process.

For example, you may want to save $1 million by the time you retire and suppose that’s in 30 years. Now that you have that larger number, you can break it down by how much you want to save each year and then each month.

2. Research

Rather than simply choosing the first investments that come along, it’s important to form an understanding of how your money will be invested.

According to the Motley Fool, you should understand investing metrics and both types of stock analysis when researching stocks, in addition to looking at trends and management when you research the stock companies, and researching other important information.

Above all, don’t make a decision about your money without first thinking it over and doing your due diligence.

3. Understand your risk tolerance

Not everyone is comfortable with the same amount of risk for their money. When it comes to women and investing, you need to know if you are more risk averse or if you prefer to take more risk in favor of a potentially higher return. 

If you are risk averse, you might prefer safer investing routes like CDs or high-interest savings accounts.

However, while it is important to try to minimize risk, know that just keeping your money in savings accounts is unlikely to help you become wealthy.

Find more information about investing and become comfortable with the idea. Then you may find that, while investing does have risks, it isn’t as scary as it seems.

On the other hand, if you are okay with a lot of risk, you may choose to invest in single stocks in hopes of a high return.

However, just because there could be a high return on something doesn’t mean there will be. Another option could be investing with index funds, which invest in multiple things like bonds and stocks. Mutual funds are another good option.

As you can see, there’s a lot to consider with risk tolerance. You also need to take into account things such as personality, your age, and how long you plan to keep the money invested. These things could make you more or less risk averse.

4. Have a strategy and diversify

Before you make your investment choices, be sure to have a plan and diversify your investments.

An investment strategy involves the values you use to determine the investments you make, which ultimately lead to you reaching your money goals. You’ll need to take into account some of the things that were mentioned above, like how risk averse you are and what you plan to do with your money.

Diversifying means you choose several different investments, so you don’t have all of your money invested in one type of asset, and then you are likely to see more consistent returns.

Considering your values and strategy, in addition to diversification, is important for your investment portfolio and your future. You might consider an all weather portfolio, which will help you diversify without being overly risky.

5. Seek professional guidance

Imagine jumping into a huge decision like a career change or a big move without asking for any advice first. You probably wouldn’t do that – so don’t invest without getting some guidance.

Reading and research is a good way to begin getting guidance. You might ask other people you know who are savvy investors to give their advice, as well.

Consulting financial professionals can also be a smart choice, but be careful of fees. They may not be worth it in some cases.

The main point is that you don’t want to begin investing without knowing what you are doing to some extent. Although you don’t need a degree in finance to get started, understanding basic information and getting your questions answered is important.

Expert tip: Don’t rush the investing process

Whether you think that investing is difficult or you feel like you understand it pretty well, it pays to take the time to learn more.

Rather than jumping into new investments or opening accounts, first research, read for informational purposes, learn investment terms, and talk to others to get investment advice.

Don’t wait too long, but taking a few weeks or months to find out more about the basics and be sure of your investment choices is well worth it.

Why are women investors important?

Women investors EW important for their own futures and others. Not only are many women the female breadwinner for their families, but they have big financial goals and dreams to accomplish!

Women need to be great investors for their own futures and their families and to create greater awareness for others about what women are capable of with money.

And since women are not as confident in their investment knowledge, according to Morning Star, it’s vital that women learn all they can about finance and investing. Not only will this help their own futures but also the generations of women who will invest in the future.

If women today can make a huge impact, then they will likely increase confidence for other women about women’s wealth and what they can do financially.

How do women invest differently than men?

Not only are women more likely to be careful investors and make fewer changes to their investments, but they also care about investing in things that benefit other women.

For example, women investors more often invest with women entrepreneurs than men do. Women care about helping other women to succeed, and they’re willing to use their money to make this happen. Which can help to create a better financial environment for all women in the future.

Who are some popular women investors?

Some popular women investors include Barbara Corcoran, Mellody Hobson, and Melinda Gates.

Barbara Corcoran has a net worth of approximately $100 million, and she made a large portion of her money from her real estate company, as well as her investments with Shark Tank.

Mellody Hobson is the co-CEO of Ariel Investments, of which she owns 40%, in addition to owning a large portion of J.P. Morgan Chase and Starbucks shares. Ariel Investments manages over $17 billion in assets.

Melinda French Gates’ net worth is around $10.1 billion, and she received $2.4 billion worth of stock after her divorce from Bill Gates. She is also co-chair of the Bill and Melinda Gates Foundation.

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• 10 Habits Of Successful Women
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• 25 Side Hustles For Women That Make Real Money

There’s a bright financial future for women and investing!

The one thing women investors can improve on is their investing confidence! It’s apparent that women are amazing investors and can be very successful in reaching their financial goals. Women’s ability to invest wisely sets them up for a secure financial future.

You can be an amazing investor, too! It’s all about educating yourself and getting the right financial advice to get you on track towards your money goals.

Are you ready to become a successful woman investor? Increase your financial literacy by enrolling in our FREE investing course bundle to learn how to grow your money and achieve financial success!

The post Women And Investing: 5 Key Tips For Women Investors appeared first on Clever Girl Finance.

Are you looking for tips on how to declutter paperwork? You are in the right place! Individually, paper doesn’t take up a lot of space, but once you start accumulating more and more of it, it can begin to feel overwhelming.

Do you waste time searching through paper piles and old bills? Sorting paper, looking for that one document you need? If so, it’s probably time to declutter your paperwork and clear out your space.

Read on for our best strategies on how to declutter paperwork. This will help you eliminate the stress and overwhelm covering your kitchen table, filing cabinets, desks, and whatever other spaces in your home have turned into paper clutter zones.

What causes paper clutter?

Paper clutter is often caused by junk mail and paper statements, papers from your kids, school forms, pay stubs, recipes, paper coupons, or sentimental paper items. For example, if I sign up for paper mailing from my bank, then I’ll get a paper statement every month and end up with a pile of old bank statements.

In some cases it can be caused by feeling like you may need the information later on, only to add it to a pile that you promise to sort through later. But chances are when you think of sorting paper, you get overwhelmed and it continues to pile up.

Why is it important to declutter paperwork?

Decluttering your life has so many proven benefits. These benefits hold true for decluttering paperwork, too. The main benefit of sorting paper and documents is to your overall mental health and well-being and for your family’s benefit, in the case of an emergency.

Decluttering papers minimizes stress and improves your mental health

Not only does decluttering clear your mind, reduce stress, and improve focus, but it also gives you back your time.

How many instances have you wasted endless amounts of time searching for the one bill you were supposed to pay? Or your kid’s field trip permission slip? Or that wedding invitation you need to RSVP to?

Once you declutter and develop a system for maintaining a clutter-free state, you won’t have to worry about those stressful, time-wasting searches anymore. Your space and mind will be clear to focus on what’s actually important, not on looking for lost slips of paper.

Decluttering papers keeps your organized for your loved ones

While nobody likes to think of it, there may come a time when your loved ones will need to access your records on your behalf. People who are incapacitated or have passed away still have bills to pay and important documents in their names.

By decluttering papers, particularly your financial documents, you will make it so much easier for others to help you.

Just like how purchasing life insurance helps you put the right plans in place for your family, decluttering your paperwork can bring the same peace of mind.

Sorting your papers can put you at ease and help your loved ones deal with your important documents in the event of an emergency.

How to declutter paperwork and stay clutter-free in 7 steps

It’s time to begin learning how to declutter paperwork. We’re not talking about decluttering a stray paper here or there; we’re talking about getting rid of a lot! When you’re ready to get to work, here are the six steps to take to declutter paper:

1. Create a plan and make time to declutter paperwork

It might be tempting to declare that you are fed up with your paper mess once and for all and immediately start tossing paper.

That might get rid of the surface-level stuff, but it’s not a good long-term solution to decluttering papers. Instead, prepare before you begin the process. Preparation looks like this:

Gathering any tools you need

We recommend getting a paper shredder for sensitive documents like old bank statements and three cardboard boxes or file folders to separate your papers in (more on that next).

If you don’t want to buy a paper shredder, look into where you can take your sensitive documents, like a FedEx or local store that will shred them for you.

Setting aside the time in your schedule to go through everything

Sorting paper is best done in one fell swoop if your schedule allows. You might need an entire afternoon (or more), so intentionally choose a day where you can devote enough time to decluttering, so you don’t start and fail to finish.

 Get in the right mindset

Often overlooked, the right mindset is crucial for success when decluttering papers. You might think of paperwork as just old bills, but it’s so much more than that. Papers can be sentimental, too, and some of those things can be hard to let go of, such as old family recipes.

That’s why it’s essential to get in the right mindset to declutter before you begin. Prepare yourself for discarding things and letting go of the past.

A great way to start this is to get clear on your end goal. Perhaps it’s to have a calm workspace or more control and understanding of your finances.

Whatever it is for you, understand your underlying goals for decluttering and remind yourself of those goals while you’re going through the process. It will be so much easier to stay motivated and let go of what you no longer need if you have those goals top of mind.

And, remember, as the decluttering guru Marie Kondo writes, the goal when decluttering papers is to get rid of almost all of your paperwork.

While you will keep some paper, the default expectation should be that you will get rid of the majority of your paperwork when decluttering.

Going into the task with the expectation that you will discard almost everything is key to following through and keeping only what is truly necessary.

2. Gather all of your papers in one place

Now, you’re ready to sort some papers! First, gather every piece of paper you have. That means bills, receipts, cards, letters, artwork, loose sheets of paper, post-it notes, and anything else lying around.

Go through your junk drawer (you know you have at least one!) and your office and dig up every last bit of paper in your home. You’ll probably be surprised by just how much paper you have hiding around.

Once you’ve gathered everything up, spread out your paperwork on a large surface like a dining room table or even the floor if that’s the best space for you.

3. Sort your papers

Next, it’s time for the most time-consuming piece of the process: sorting paper. To declutter paper the right way, grab your three boxes or file folders and label them recycle, shred, and keep.

Recycle

Everything that’s trash, like expired coupons, recipes, paper coupons, school forms, and letters you’ve read and are ready to toss, goes into the recycle bin. If it’s not essential, you aren’t using it, and you don’t need it, then get rid of it. You can also create digital copies for items that you may need in the future or that you’d like to hold onto for sentimental reasons.

Shred

Anything with sensitive personal information, like your name, address, social security number, or account numbers, goes into the shred pile. That might include old bank statements, some school forms, and pay stubs. You’ll shred everything at the end, or will take that bin to a store to have it shredded for you.

Keep

Whatever you plan to save gets placed in the keep bin. If you’re doing it right, you won’t have that much to keep! And, you’ll have even less after you complete the next step of going digital.

Be sure to create a simple storage system where you can easily access these document. Also having an at-home safe is a good idea. (Note: This is an affiliate link, which means if you buy from it, we may earn a small commission which helps us grow! See our disclosures for more detail).

4. Declutter paperwork by going digital and paperless where possible

Once you have sorted your paperwork and have decided what to keep, determine what you need an original of and what you can digitalize. Anything you’d like to keep a copy of but don’t need the original of, you can scan and toss.

If you don’t own a scanner, head to a local copy store or FedEx and you can do it there. Once everything is scanned, be sure to label it properly so you can find it when needed and back up the files.

Going forward, there are many ways to limit the amount of paper that comes into your space. For one, you can sign up to receive electronic bills and can pay them online, instead of receiving and sending them in the mail.

This will greatly reduce the amount of paper that comes into your house, and the amount of paper you need to digitalize!

5. Choose and implement a storage strategy

Lastly, decide on a storage strategy for the papers you intend to keep. How you do this depends on what type of paperwork you have.

For example, some people have extensive medical files and need to keep their records easily accessible to take them to and from appointments. For them, it would be a good idea to create a medical binder to keep track of everything.

Most people have some important financial records that they would like to keep. If you are one of them, you might want to look into a filing cabinet with labeled file folders to store all of your essential financial paperwork, including things like wills, tax returns, and marriage or birth certificates.

Whatever works for you, save figuring it out for the end. Just don’t forget about it, or your recently decluttered paperwork might become a mess once again before you know it!

6. Choose a space for incoming paper

In my home, the biggest paper clutter culprit is mail. From catalogs to magazines to bills and everything in between, the paper can pile up in a matter of days. A simple solution I decided on was to choose a landing spot to drop off the mail and other odds and ends.

I find that if I keep this kind of paper clutter limited to one specific spot, I’m more likely to notice when it’s starting to pile up, and more likely to sort through it before it builds up.

7. Take care of paperwork immediately

Still getting paper bills? Instead of opening them, throwing them into a drawer, and forgetting about them, take care of them right away. When your child arrives home after school with new artwork?

Decide right then and there whether you want to place it on the fridge for display, scan it for posterity, or get rid of it (maybe after they go to bed!).

When you address your paperwork right when it enters your home, it’s less likely to build up and become a problem. Make sure to unsubscribe from services you don’t use, like magazines and catalogs and instead opt for digital copies.

Expert tip

When decluttering paperwork, only keep the documents you are absolutely need to use on a regular basis or that give you joy. If you’t use it, get rid of it. Leverage the “recycle”, “shred”, “keep” approach to help you as you go through your paperwork.

Questions to ask yourself while sorting paperwork

So, you’ve read the six steps outlining how to declutter paperwork and you’re ready to get to it. If you’ve ever tried decluttering before and stopped, it’s probably been because you hit a roadblock.

The most common problems people face while decluttering papers are the inability to decide whether to keep or toss something and having trouble getting rid of sentimental items. What’s a declutterer to do when they reach such an impasse?

The best way to move forward when you’re stuck is to ask yourself the following questions:

1. Will I need this information again?

Keep the paper in question only if your answer is a firm yes. If it’s a maybe and you still don’t want to get rid of it, scan it and then toss it.

2. Will I be able to get this information again if I get rid of it now?

If you can access the information again, either by reaching out to someone, pulling your records online or by any other manner, let it go. Chances are you won’t need it again, but if you do, you know you can get it.

3. Is this information still valuable to me?

This question helps the most when dealing with things like manuals or guides. Do you really need to keep outdated training materials from an old job? Probably not.

4. Do I have other similar things?

This is the best question to ask when sorting through sentimental items. Perhaps instead of keeping every picture your kid drew in third grade, choose your favorite and discard the others.

When you’re decluttering papers, what should you keep?

Before you start decluttering, it’s good to have an understanding of what documents to keep, what to shred, and what to recycle. Here are some guidelines you can follow:

What to toss vs. shred

You can safely toss anything that doesn’t include any personal information. Things like scrap paper, junk mail, catalogs, old receipts, product manuals that you can find online, and expired coupons can go right into the recycling bin. You should shred anything that has sensitive information.

What to shred vs. keep

So you’ve decided something is sensitive enough that you can’t just throw it away. How do you decide whether to shred something or keep it?

When it comes to deciding what to keep, probably the most important category of documents is your financial documents. Some documents, like a record of your paid-off mortgage, should be kept forever.

Others, like tax returns, should be kept for at least seven years. A good rule is that you should keep the record if the contract or matter is active. Otherwise, use your best judgment when deciding whether to shred it or save it.

How do you clean up years of paper clutter?

If you want to clean up years of paper clutter, be sure create time in your schedule. Then you can start by first organizing your paper by what to recycle, what to shred and what to keep. Make a pile of the paperwork you need to take action on, then another for paperwork you need to keep, another to shred, and a final pile to recycle. In general you should keep certain documents, like your tax returns, up to seven years, whether in paper or digital form.

How do I stop hoarding paperwork?

The best way for me to stop hoarding paperwork was to switch to paperless billing, statements, receipts and notices. Most places allow online bill pay and paperless statements.

Be sure to opt for digital receipts and statements to prevent the paperwork from piling up and prevent you from sorting paper later on.

What is the fastest way to declutter paperwork?

The fastest way to declutter paperwork is to throw out everything you don’t need. Only keep the most essential documents, like birth certificates and social security cards. Make sure to shred and recycle the rest. You can also scan documents that you may need in the future and keep them backed up on the cloud.

How can I store sentimental papers?

We recommend storing sentimental papers in a nice keepsake box or album or even make a scrapbook. Try storing them in a place that brings you joy, such as a coffee table or bookshelf where you can go through them often, rather than letting them collect dust.

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If you enjoyed this article on decluttering paperwork, check out this related content:

• Financial Record Keeping: How Long To Keep Financial Records?
• Bills Piling Up? What To Do When You Can’t Pay Your Bills
• How To Establish A Daily Gratitude List Routine
• A Checklist For Moving Out Of State Broken Out By Timeline

Now you know how to declutter paperwork. It’s your turn to get to work!

The bulk of decluttering paperwork can be done in a day. Once you’ve taken these steps to declutter, you’ll have a clearer space and mind.

You’ll probably never go back to a life full of paper clutter again! But, if you do, know that you can always take another day, address the chaos once again, and start over fresh.

As you learn how to declutter paperwork, also take the opportunity to find out more about how to simplify your finances and your home. We offer plenty of great articles to help you get organized with your money and your life.

The post 7 Steps To Declutter Paperwork Including Financial Documents appeared first on Clever Girl Finance.

Not all bank accounts are set up with your best interests in mind. Your current bank account might come with high monthly fees, present no interest-earning opportunities, or have a clumsy interface that makes it difficult to manage your funds. All of these are perfectly valid reasons why you might want to know how to close a bank account.

If you’ve decided to part ways with your current bank, closing down your account is an essential part of the process. With that in mind, we will explore how to close a bank account today. 

How to close a bank account

Closing a bank account should be a simple process. After all, it’s easy enough to open a bank account. Why shouldn’t it be easy to close it?

Speaking from personal experience, shutting down a bank account isn’t a simple one-click process. Instead, it takes several steps to close an account properly. 

If you are closing an account, below is a step-by-step guide to follow through the process. 

1. Transfer your funds to another bank account

The first step of the process is to move your funds over to another bank account. For some, this means moving your funds into an existing account in an effort to consolidate your financial life.

But for others, this means opening an entirely new bank account. This depends on your answer to the question, “How many bank accounts should I have?”

If selecting an entirely new bank account, take some time to find the right fit for your situation. You don’t want to get stuck switching bank accounts again anytime soon. A few things to look for include any account fees, minimum balance requirements, and also accessibility. 

When you have the new bank account set up, you can transfer your funds from the existing account into this new account. 

2. Move all recurring payments to a new bank account

Once all of your funds are transferred, it’s time to let everyone who sends you money know about the change. If you have any automated payments coming to your bank account, make sure the person paying you has your new bank account information. 

For example, you might need to change your recurring payment information from your investment account or if you get money from any unique side hustles. 

3. Update your direct deposit information

When finding out how to close a bank account, you still need to make sure you can get paid as usual.

If you are paid for the work you do by direct deposit, it’s critical to let your employer know about your new bank account. Usually, this part of the process is as simple as filling out a new form with your company’s Human Resources department. 

Other sources of directly deposited funds, like government benefits, will also need to know about this new bank account. If you aren’t sure who should get this information, comb through your bank statements to find out who deposits money into your account automatically. 

4. Update your direct debit information for any automated bills

You might be someone who has decided to automate your finances. If you take advantage of automatic payments for any of your bills, you’ll need to update the payment information with your new bank account. 

Start by making a list of all of your automatic payments. Then work through the list methodically to avoid missing a bill provider. 

Some common recurring payments to consider include mortgage payments, rent payments, student loan payments, credit card payments, streaming services, utility bills, insurance payments, and also car payments. 

5. Wait a full month

It’s easy to miss an automatic payment. Instead of moving forward with your account closure immediately, wait a full month to confirm that nothing has slipped through the cracks. 

During this month, monitor your original bank account for any transactions. If you forgot about a particular recurring payment, you’ll have the chance to update it. Also, make sure your paycheck hits the right account. 

Once all pending payments have cleared your account, you can move forward with closing your account confidently. 

6. File paperwork to close the account

Most banks require you to fill out a form in writing to close your account. Not only will you need to submit the written form, but you’ll likely need to sign the document.

In some cases, your bank will require you to sign the document in front of a notary. 

While some banks may allow you to close your account entirely online, others require you to make a visit to your local branch. 

7. Get a confirmation

When you submit the paperwork to close your bank account, ask a bank representative for a written document that confirms the account closure.

If the bank account pops up on your radar in the future, you’ll have proof that the account was closed with your permission. 

Expert tip

When it comes to closing a bank account, be prepared for stalling tactics. I went through the painful process of closing an account at a major bank. It wasn’t a smooth process. Although the bank tried to stall at every turn, I eventually got the account closed. 

As you navigate the process, be confident in your decision. Don’t let the bank try to sway you into staying. After all, there is a reason you are making this switch. 

Can you close a bank account online?

Some banks and financial institutions will allow you to close your bank account online. It might be as simple as submitting a form through your bank’s online platform. 

But other banks, specifically large institutions with a brick-and-mortar presence, are likely to require an in-person component to closing your account. 

Do you have to pay a fee for closing a bank account?

If you close your account within 90 days, you might encounter an early account closure fee. But in general, you shouldn’t expect to pay a fee for closing your bank account. 

If you are encountering a fee to close your bank account, it’s further proof that it’s time to part ways with your bank. Working with a bank that nickels and dimes you at every turn usually isn’t a good move for your financial situation. 

What to do before closing your account?

If you’ve decided to close your bank account, evaluate why you want to make a switch. Simplifying your finances is a very valid reason. But if you only have one bank account, ask yourself why you don’t like the one you currently have.

Maybe you don’t like the high fee structure. Or perhaps you want to tap into higher APYS. Whatever your reason, look for a bank that presents a solution in your new bank account. 

Is there a negative to closing a bank account?

The process of closing your account might not be enjoyable. But the end result is usually very positive.

You’ll walk away from a potentially fee-riddled account. And you’ll hopefully step into a new bank account that offers you more bang for your buck. 

Articles related to closing a bank account

If you enjoyed reading about how to close an account, you’ll love these articles!

• How Do Banks Make Money?
• The Different Types Of Bank Accounts
• What Do I Need To Open A Business Bank Account?
• How To Close A Joint Bank Account

Understanding how to close a bank account can help you with your money!

It’s possible to close your bank account in a few simple steps. Tackle each step with patience to move through the process with the best results.

While it’s not a process you can complete in one click, it’s still worth pursuing if you want to switch up your banking situation. As you move forward, carefully research your other banking options.

When you find a bank account that suits your needs, initiate the closing process on your current account. Doing this will help you to experience greater financial wellness and also keep your financial house in order.

The post How To Close A Bank Account The Right Way In 7 Steps appeared first on Clever Girl Finance.

Homeownership is often one of our biggest goals in life — to ditch landlords and rental apartments and put down roots in our own homes. However, the housing market and financial concerns can quickly put a damper on the dream of homeownership. It’s no surprise a lot of us are asking, Should I buy a house now or wait?

Unfortunately, there’s no one answer to that question. Buying a house is a very personal decision. What makes sense for one person might not work for another.

Keep reading to better understand your financial situation so you can make an informed decision when choosing to buy a house — or wait.

Should I buy a house now? What to think about before buying

Buying a house is a big undertaking, both financially and emotionally. There’s a lot of research, paperwork, and money that goes into the process.

What you need to do to buy a house

Whether you’re an experienced homeowner or buying your first house, the process usually looks like this:

1. Organize your finances and check your credit score.
2. Determine how much house you can afford and what you want in your home.
3. Save for a down payment.
4. Research mortgage loan options and get a pre-approval.
5. Research neighborhoods, schools, transportation, and other factors for your ideal home.
6. Start shopping for homes in your desired area.
7. Make an offer on a home.
8. Get an appraisal and home inspection on the home.
9. Finalize your mortgage and secure homeowners insurance.
10. Close on your new home, including paying closing costs.

These 10 steps might look simple on paper, but the whole home-buying process could take months. That doesn’t mean you shouldn’t buy a house though.

Reasons to buy a house now

Still, a lot of people go through the process every day, and there are plenty of reasons to buy a house now, including:

• Securing a great rate on a mortgage.
• Saving a significant down payment.
• Planning to buy at the end of your lease.
• Rent increases are beginning to outpace homeownership costs.
• You’re planning to live in the home for many years.
• You want to start building generational wealth.

Before jumping into homeownership, ask yourself a few key questions to get a better idea of whether or not you’re ready to buy a house.

Have you done your research?

I mentioned it before, but it’s worth saying again: home buying involves a lot of research. Here are just a few of the things to think about as you start looking at homes and asking yourself, “Should I buy a house now or wait?”

• Do you have a specific city or neighborhood where you want to live?
• Have you considered the local amenities, like parks, schools, restaurants, and grocery stores?
• What is crime like in the area? Would you feel safe living there full-time?
• What’s the commute like?
• Are you planning to live in the home long-term?
• Will you rent it out if you move?

Doing your due diligence now — well before you get into the buying process — can potentially save you a lot of headaches in the future.

For example, you stumble upon what you think is your dream home, but you don’t know a lot about the neighborhood. You decide to jump in with an offer anyway, only to find out after buying the house that it takes over an hour to get to work due to traffic.

In this case, a little research on travel times and distance to your office would have saved a lot of time and money.

The local market

The research continues once you know where you want to live. Now, it’s time to look at the housing market in the area. You’ll want to know if it’s currently a buyers’ market or a sellers’ market, as this can affect housing prices.

In addition, you should consider the current pricing trends in your area and local and state tax rates. Prices that are much higher or lower than usual could indicate a shift in the desirability of the area.

Taxes will also play a role in the price of homes in the area. Even if you buy a home below market value, high tax rates could leave you house poor with a monthly payment you can’t afford.

Unexpected costs of home shopping

Though it’s likely to be the biggest expense, the purchase price of your new home is far from the only cost of buying a house. Many first-time buyers are surprised to learn of the unexpected costs, so be sure you know how to save up for a house first.

First, there are several immediate fees and expenses you’ll have to cover, usually on closing day. This includes closing costs and fees related to your mortgage loan. Closing costs tend to be around 3-6% of your loan amount — which can add up quickly.

For example, you may have to pay a loan origination fee to the mortgage company simply to get your loan. This fee helps cover the administrative costs of underwriting and processing your loan.

Likewise, you’ll likely have a title search fee, which could cost a few hundred dollars. This fee pays for the title company or an attorney to search for any liens or legal problems with the home you want to buy.

Other costs may not be immediate expenses, but you’ll still have to pay them. Homeowners’ insurance and property taxes, for example, could be a large expense to buying a home, depending on where you live. Usually, these costs are rolled into your monthly mortgage payment.

Do you plan to be at the location for several years?

You may consider waiting to buy if you’re planning on moving again in a year or two due to the time and costs of purchasing a house.

On the other hand, if you plan to be at the location for several years (such as 5 years or more) you’re likely to make up mortgage interest and also closing costs. Then homeownership could make sense for you.

How’s your credit score?

Your credit score acts as a snapshot of your financial responsibility to lenders, and the higher your score, the better. You’ll increase your approval odds when applying for mortgages. Checking your credit score is essential when buying a home.

A higher credit score also often means you’ll get access to better mortgage rates. While a single percentage point might not seem like much now, paying an extra 1% in interest will add up throughout a 30-year mortgage.

Getting your credit score in shape can be a big help to lower the overall cost of buying a home.

If you don’t know your score, you can start by getting your free annual credit report. Your credit report shows your snapshot score, as well as more details about your borrowing and payment habits.

Even if you’re planning to wait to buy a house, monitoring your credit score regularly is a good idea. This can help you spot — and fix — fraud or mistakes on your credit report.

Have you saved for a down payment?

Most home buyers don’t purchase the full cost of their home immediately. You usually need a down payment, which is a lump sum of money you’ll put toward the initial purchase of the home.

The bigger your down payment, the less money you have to borrow using a mortgage. This means you’ll start your homeownership with more equity in your home.

The “standard” down payment is 20%, but not everyone is able or wants to put down a full 20% of the purchase price of a home.

For example, if you’re buying a $400,000 home, a 20% down payment is $80,000. This might be an unreasonable figure for your buying timeline.

The good news for homebuyers with smaller down payments is that there are government-backed loan programs that can help you get a home. Common loan programs include:

• FHA loans
• The U.S. Department of Veteran’s Affairs loans (VA Loans)
• USDA Rural Development loans

Making a smaller down payment could help you get into homeownership sooner rather than later. However, putting less money down on a home purchase has its drawbacks, such as:

• You’ll have less equity in the home to start.
• Low down payment loan programs often have strict borrowing rules and income limits.
• You may not qualify for the best mortgage rates or loan products.

If possible, it’s generally recommended to learn how to save up for a house down payment as much as possible before buying.

Can you afford a mortgage with your current expenses?

A key step in the mortgage process is getting a mortgage pre-approval. This is a letter from a lender stating they’ve approved you for a mortgage at a particular interest rate and loan amount.

Before you apply for the full amount of your preapproval, consider the monthly cost of your mortgage payments. This includes homeowners insurance premiums and property taxes.

However, the preapproval amount isn’t the same thing as how much house you can afford. Many preapprovals give buyers a bigger loan than they would realistically be able to handle each month.

You also need to consider your existing expenses. While you’ll probably drop your monthly rent when you move into a home you buy, you’ll still have most — if not all — of your other expenses.

For example, if you have a lot of student loan debt, a high car insurance rate, or an auto loan. These recurring expenses will cut down on the monthly cash flow you have available for a mortgage payment.

Can you afford repairs or renovations?

Finally, a home doesn’t stop costing you money when you buy it.

In fact, a lot of homeowners start finding problems only after they’ve moved into the home. Even small repairs can add up to a lot of cash over time, which may have you questioning, “Should I buy a house now?”

This is why it’s important to have a healthy emergency fund and budget for savings, even after buying your home. If you can keep your monthly expenses low enough to fund your savings, you’ll find it easier to tackle unexpected expenses.

For instance, shortly after my husband and I bought our current home, the gas fireplace stopped working. The repairs cost over $2,500 and were unexpected. Luckily, we had the savings and cash flow to cover the cost without affecting our other financial obligations.

Reasons you might wait to buy

Buying a house is exciting. And it’s often seen as the top financial goal you can reach. But not everyone’s ready to buy a house.

For many people, it makes sense to wait to buy a home. Check out some of the reasons you might want to wait before buying.

Not much real estate inventory

As mentioned before, being in a seller’s market can cause housing prices to go up. If the area where you want to buy your home doesn’t have a lot of homes for sale, you’ll probably pay more than you like.

Additionally, you might feel like you have to settle for a home you didn’t really want because that’s what was available.

Or, you can wait until the market tips back toward a neutral or buyer’s market. This means there’s more inventory on the market.

In turn, you’ll see lower prices and have more options when picking your dream home.

Home prices are likely to go down

It might not make sense to buy a home if you know prices are likely to drop within the next few years. In 2022, for example, home prices hit a record high. In turn, home sales dropped.

With higher prices (and increased interest rates), fewer people decided to buy. And that’s often a pretty good strategy.

In your research, you’ll probably look at historic home prices in your area.

Although prices may steadily rise over time, a sudden spike could be a sign to wait out inflated prices. If you can keep renting for a couple of years, you give yourself more time to save for a down payment, and you’ll likely get lower home prices.

Saving for homeownership

A home purchase is one of — if not the — biggest single purchase you’ll ever make. Most of us aren’t regularly spending hundreds of thousands of dollars at one time. And while you’ll probably pay the cost off over many years with a mortgage, it’s still a giant financial obligation.

Sometimes, the best thing you can do for your financial situation is to simply wait to make that big purchase. Many people choose to delay homeownership to give themselves more time to save up for a down payment.

In addition to a bigger down payment, waiting to buy can usually help you save up extra for unexpected costs like closing costs, necessary repairs, and things like new furniture.

Working on your credit score

Remember, a higher credit score usually gives you a better chance of mortgage approval and access to lower interest rates versus someone with a lower credit score.

You might want to put off buying a home so you have time to clean up your credit report and increase your credit score.

Let’s say you have a lot of debt and have missed a few payments. A mortgage lender might be wary of approving a loan and a reasonable interest rate due to past payment history.

Instead, you take a few years and focus on the best way to get out of debt and start making on-time payments each month. As a result, your credit score starts going up. When a lender sees your history of on-time payments, they’ll feel more confident lending money to you.

Expert tip

A house is a long-term financial agreement, so it’s best to ask yourself a lot of questions first, do research, and take your time.

If you feel rushed to buy a house, it’s likely not a good time to buy, regardless of what the housing market is doing.

Consider your personal situation when buying a house

Should I buy a house now or wait?

Ultimately, that’s the question you have to ask yourself. And the only way to answer it is to look inward. There’s no magic answer on when’s the best time to buy a house because everyone’s financial and housing situations are so different.

Of course, that doesn’t mean you should rush off to buy or put off buying because it seems complicated. Instead, take the time to think about your situation:

• Why do you want to buy a home?
• Are you happy with your current housing situation?
• Are you anticipating changes to your housing?
• Can you realistically afford a mortgage, homeowners insurance, taxes, and unexpected repairs?
• Will you be approved for a mortgage?
• Could you improve your credit score or down payment before applying?
• Are home prices in your area reasonable?

Going over these questions can help you decide if buying a home now or waiting a while is the right choice for you specifically. You can also learn a lot about your personal home-buying preferences by asking others about theirs.

For example, ask your friends, family, and neighbors why they did or didn’t buy a home.

Why I bought a house at the peak of high prices

To give you a better idea of how personal home buying can be, let me share my story. My husband and I bought our current home right around the peak of the home price spike — late spring 2022.

On paper, it probably made a lot more sense to wait to buy a home once prices came down.

Additionally, the housing inventory was low, so we didn’t have a lot of options.

Still, buying made the most sense for our situation:

• We were moving halfway across the country from Idaho to Iowa unexpectedly for my husband’s job — both in rural areas with low inventory.
• Our Idaho home’s value had doubled, and we had significant equity in it.
• We have two cats and one high-energy dog.
• We also have several utility trailers and a UTV, and need space to park three large vehicles.
• We qualified for great rates on a mortgage.

Home inventory was low, but finding a rental property that could fit all of our stuff (plus our pets) was essentially impossible. We would have had to rent a house to fit the outdoor equipment and vehicles. In addition, it would have to allow pets and have space for our dog to run around.

With what was available for rent and how much we had for a down payment, the cost of renting would’ve ended up being more than a mortgage. So we started on our moving out of state checklist and began looking for a home.

We also happened to find a house that fit our style, space needs, and budget.

Although we purchased the home at a likely inflated price, our large down payment and great mortgage rate mean it made the most sense for our current financial situation.

Should I wait to buy a house in a recession?

There’s been a lot of talk in recent years about an impending recession and how to prepare for a recession. Whether we’re about to enter one or not, you’re probably wondering how a recession can affect home buying.

For many people, buying a house during a recession is a risky move. Job stability might be shaky, leading to uncertainty about your monthly income. Would you be able to cover your mortgage if you lose your job?

Likewise, your down payment and emergency savings may not be as strong as they are outside of a recession.

For example, you have your down payment in an investment account to help it grow. If we entered a recession, the market is likely to go down. Suddenly, your down payment isn’t worth as much as it was before.

On the other hand, someone who is financially stable might find a recession to be a great homebuying opportunity. Home prices tend to drop during recessions. If you have a lot of savings and recession-proof jobs are available, a recession could be a great time to get a good value on your dream home.

If I can afford the house payment, should I buy a house now?

Not necessarily. Just because you make enough money to afford a house payment each month doesn’t mean that you’re ready to make such a large purchase. Also, consider if you have money for a down payment and savings for repairs and expenses.

Should I wait until the market crashes to buy a house?

The truth of the matter is that no one can predict exactly when the next housing market crash will be. Plus, there are always deals to be found in the housing market if you are patient and flexible with your search. Waiting for a housing crash should not be the sole decision you base your home purchase on.

For instance, you’d need to ensure you are financially prepared, you’ve identified a location to move to based on research and it all works for the timing of your life.

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• How To Go About Buying A House To Rent Out
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• Advice For First-Time Home Buyers: How To Prepare
• House Hopping And How It Impacts Your Finances!

The right time to buy a house is when you’re financially ready

Answering the question, “Should I wait to buy a house?” is a difficult thing to do. The only person who can tell you if it’s the right time to buy a house is yourself. Avoid rushing into the decision one way or the other to clearly determine if the house is an asset or a liability.

You don’t want to accidentally wind up with a house you can’t afford. You also don’t want to miss a good opportunity because you decided to wait without thinking it over.

Before you make your decision, carefully consider your financial situation and financial goals, including your savings, credit score, and career aspirations.

You should also think about your long-term house goals and research what’s going on in your local market. This will help you make the right choice for you and your family.

The post Should I Buy A House Now Or Wait? appeared first on Clever Girl Finance.

When we think of someone being rich vs wealthy, we might think it’s the same thing but it’s not. For some reason, the words rich and wealthy are often incorrectly used to describe the same thing.

The two words might seem like synonyms, but they are completely different. It’s hard to spot the difference, but being rich and being wealthy are not equal. So, let’s dig into the difference between rich and wealthy.

What does it mean to be rich?

Being rich means having a lot of money or a high income. It comes down to how much cash you have in your bank account. But just because you’re rich, doesn’t mean you are wealthy.

In fact, being rich can often mean that you are spending a lot of money. It can also mean that you have a lot of debt e.g. high-interest credit cards, car payments, personal loans, etc,

It doesn’t matter how much money you have if your expenses are higher than your income. Being in debt is definitely not something to aspire to!

People who are rich might drive a fancy car, live in an amazing house in the best part of town, or have a high-paying job, but it comes at a cost. If you make $200,000 a year but spend $225,000 a year in expenses, you might seem rich because of your high salary, but you’re on your way to going broke.

As a matter of fact, plenty of celebrities have gone broke, some because of their rich lifestyles which lacked sustainability.

What does it mean to be wealthy?

When it comes to being rich vs wealthy, being wealthy means not only having enough money to meet your needs but being able to afford not to work if you don’t want to. It’s about amassing assets and making your money work for you. In other words, it’s having a significant net worth.

Wealthy people don’t necessarily own the latest gadgets or cars or throw lavish parties. What they do have, is a lot of assets, such as real estate, investments, cash, and financial stability. They think about building wealth, not owning more possessions.

For example, if your monthly expenses are $5,000 per month, and you have $30,000 in savings, then you have about six months’ worth of wealth. If you invest that $30,000 and you end up with $5,000 a month in investment revenue, you are wealthy.

And when asking “What is the difference between rich and wealthy”, wealthy people have money habits that are something to consider. For example, wealthy people choose to be cautious about expenses and plan out their finances.

The most wealthy people in America are often business owners. Elon Musk, Jeff Bezos, Bill Gates, and Warren Buffett are all worth multi-billions. (Fun fact: Buffett is considered a frugal billionaire!).

Despite his massive wealth, he still lives in the Nebraska home he bought in 1958 for $31,500 and didn’t switch his $20 flip phone for an iPhone until 2020.

What is the difference between rich and wealthy?

So, what is the difference between being rich and being wealthy? Well, there is a bit more to being rich vs wealthy than how much money you have in your bank account.

1. Net worth

It’s possible for someone who makes less than a rich person to actually be wealthier than a rich person with a fancy car and the latest fashion designs. The best measure of a person’s wealth is their assets and debt.

In general, a wealthy person will have a large net worth. A rich person might have a high income but if they have a lot of debt, their overall net worth will be low or even negative.

2. Expenses

Rich people tend to spend a lot of money, but wealthy individuals save and invest most of their money. Wealthy people might have a lot of money, but they don’t spend it all in one go.

And they certainly don’t use debt unless it’s for a very clear purpose, such as an investment in a house.

3. Investment

Rich people don’t necessarily adjust their lifestyle to ensure future wealth. They might buy the latest gadgets or increase their lifestyle inflation instead of investing.

A wealthy person saves as much money as possible and invests it in assets. That might mean buying real estate or investing in the stock market. Regardless of how they invest, wealthy people know that in order to grow their wealth, they need to turn their cash into assets and create a high net worth. They focus on making this a sustainable lifestyle.

Expert tip

The quickest way to become wealthy is to pay off your debt. That’s because debt can eat into your disposable income, making it harder for you to save and invest.

Prioritizing your debt repayment by paying more than the minimum and finding ways to earn more to pay off additional debt is key. Don’t forget to put aside emergency savings while you do this.

How to become wealthy

Now you know the difference between rich vs wealthy. So, if you want to become wealthy, there are a few things you can do to get started. Don’t just focus on how big your paycheck is.

You also want to avoid schemes that sell you ideas to get rich quickly. Instead, follow these steps to eliminate debt and have the right mindset when it comes to amassing wealth.

Keep track of your net worth

Your net worth is what determines your wealth. If you want to become wealthy then you should keep track of your net worth. The higher your net worth, the more wealth you have.

You can track your net worth using a net worth calculator or by deducting your liabilities from your assets. In other words, the things you own minus the debt you owe. If you have a lot of debt, try to pay it off to increase your net worth score.

Save 10 to 15% of your paycheck every month

The first step to becoming wealthy is to save a portion of your paycheck every month, no matter how much or how little you make. Always set aside at least 10% to 15% every month.

You can set up your bank account so that a portion of your paycheck is deposited directly into your savings. It’s an easy way to save without even needing to think about it.

If you struggle with saving, try a savings challenge, or look at your budget and find out where you can eliminate expenses.

Pay off debt, starting with high-interest debt

So another of the key differences between being rich and wealthy is being debt-free. If you want to be wealthy, you need to be debt-free in order to have financial freedom. Focus on paying off your debt, starting with high-interest loans such as credit card debt.

Find out if it makes sense to refinance your student loans or mortgage for a better interest rate. You can also look into things like student debt forgiveness. Make becoming debt-free your number one priority!

Invest as soon and as much as you can

One of the quickest ways to grow your wealth is to invest it. Of course, investing comes with its own risks, but there are plenty of options available.

You can use an automated service like a Robo-advisor, get investment advice from a broker, or invest in things other than the stock market, like physical assets.

No matter what you do, do something, even if you start investing a small amount of money! You can even put your money in a high-yield savings account to accrue interest until you’re ready to invest it.

Make your money work for you. Remember investing is one of the main differences between being rich vs wealthy.

Don’t splurge on unnecessary expenses

The key to growing wealth is being frugal and living within your means. In fact, you should live far below your means so that you can invest your extra income and savings. Your spending habits are a huge part of a wealth mindset.

That means resisting the urge to buy those designer jeans or buying the latest iPhone model when an older model will work just as well. Be smart about what you spend your money on and only buy the things that you not only need, but that will also last in value.

Think about your long-term financial goals and assets

What is another difference between being rich and being wealthy? Long-term goals and assets. Growing wealth is a long-term commitment. It’s not something that happens overnight.

It could take you years to build up your wealth and that’s okay. When things get tough, remember your long-term goals and why you chose to try to become wealthy in the first place.

Long-term wealth requires really thinking through how your purchases and investments today will affect you in the future. That means that the difference between being rich and being wealthy is that wealthy people spend time growing their income streams and investment portfolio and building up passive income, in order to make their future the best it can be.

Build passive income streams

Another way to build up your wealth is to build passive income streams. Passive income is money you receive without having to go to a day job. For example, dividends from your investments, or rental income from real estate.

Wealthy people often do not have to work traditional jobs because they make income in other ways. With passive income, you can earn money no matter where you are, even if you’re out on the beach.

Is wealthy considered rich?

Being wealthy and being rich are two different things. Being wealthy means being financially independent and having a large net worth. When you’re rich, you have a high income but you could also have a lot of debt so it doesn’t necessarily mean you are also wealthy.

How much money is wealthy?

There’s no set dollar amount that defines someone as wealthy, as wealth is determined by how high your net worth is.

However, according to a wealth survey by Charles Schwab, most Americans consider being wealthy as having a net worth of at least $2.2 million, but most people who say they feel wealthy have a net worth of $560,000.

Can a person be rich and wealthy?

The answer is yes. You can be rich and wealthy, although the two terms are slightly different. If someone has a high income, then they are often considered rich. If that person also has other revenue streams and a lot of high-value assets, then they would also be considered wealthy.

Related articles on becoming wealthy

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• How To Get Rich From Nothing!
• Rich Mindset Vs Poor Mindset: How to Develop a Rich Mindset!
• How to Track Net Worth Using a Net Worth Calculator
• 9 Key Tips To Live Richer In Life

Wealth is a mindset: Improve yours starting today!

So, what is the difference between rich and wealthy? When it comes to rich vs wealthy, being wealthy doesn’t start with a huge wallet full of cash.

Wealth starts with the right money mindset. Save a portion of your income, focus on becoming debt-free, and invest early and often.

If you want to be wealthy, you need to always think about your long-term goals.

Do you want to retire early? Own a few houses? Travel?

When thinking about wealth, don’t just focus on your income, but focus on building up your investments and assets to last you a few lifetimes. Your financial plan is key to wealth building.

The post Rich VS Wealthy: 3 Key Differences Between The Two appeared first on Clever Girl Finance.

How many times have you heard that hard work is the key to success? Probably a lot, and it’s true! Hard work is key to success, and it’s for a variety of different reasons.

But before we dive into our reasons why being hardworking is the key to success, let’s talk about why it matters!

Why does working hard even matter?

Well, simply said, hard work leads to success. I’m living proof of that.

Several years ago, I knew I needed to make a change that would require me to work harder than I had ever before. I wanted to move back into management in the nonprofit sector.

One of the issues I was coming across in my career change was not having a bachelor’s degree. I had an associate’s, which was great for where I was but not the next step.

For the next two years, I dedicated myself to getting my bachelor’s while continuing to work full time. It was HARD. I worked from 7 am to 4 pm as a teacher then went to class every weeknight from 6 pm to 9 pm.

I did my homework when I could during breaks and I leveraged time blocks. On Saturdays, I would write an essay instead of hanging out with friends. And on Sundays, I spent the whole day catching up on sleep and prepping for the week ahead.

During those two years, people knew me as a hard worker. I had to be in order to be committed and dedicated for two years!

As a result of my reputation, several job offers found their way to me post-graduation. Because of this experience and others, I believe that hard work is key to success.

5 Reasons why being hardworking is the key to success!

I already shared my story with you and now I’m going to share why hard work is the key to success and how it can pay off in your own life.

Not only will hard work get you appreciation from others and more opportunities, but there is also a lot of personal growth that results from it. Here are the reasons why you should work hard!

1. Hard work motivates and rewards you

Being a hard worker is rewarding. When we work hard, we can see our success and achievements. And the whole process of hard work can be a reward in itself that can help you become a better person and keep you moving in the right direction.

Success isn’t everything, but seeing how far you’ve come is motivating. Especially with big projects such as going back to school or working hard to snag a promotion at work.

2. Hard work shows you are dependable

Another reason why being hardworking is the key to success is because it shows you are dependable. When you’re someone people can count on, people will keep you in mind. After all, why not?

People will start to talk when you’re known for working hard in your field. At the workplace, people might start asking you to be on their team or want your help to oversee any projects they may need assistance with.

If you own your own business, your products, and/or services could become the first choice for your customers because of your dependability.

People want someone who’s going to get things done on their side, and based on your hard work, they’ll know who to call. People wanting to work with you is an excellent example of how hard work leads to success!

3. Hard work shows commitment

For myself, when I decide on a path for myself and work hard to get there, I’m committed to that goal. This means I might have to say no to anything that comes up that does not align with my purpose or path.

Saying no to things that don’t serve you and staying focused while working hard shows commitment. Your commitment is what is going to help you succeed in the workplace and/or in business.

Choosing to be dedicated to your work can have both financial and career benefits, so it is worth it.

4. It helps you develop self-discipline

Hard work means that you are able to develop your self-discipline over time. Procrastination can set you up for failure when trying to achieve the simplest tasks.

Giving in to distractions can lead to idleness, but the opposite is true, also. When you are focused on being a good worker self-discipline will follow. It’s another reason why hard work is key to success!

And in addition to discipline, you can gain other good qualities such as patience and persistence. The character quality of self-discipline can also be useful for sticking to your financial and personal goals.

Be sure to check out our list of best books on self-discipline!

5. The harder you work, the quicker you get ahead

You already know by now that hard work pays off. The harder you work, the faster you get the results you want. But working hard doesn’t always mean that you’ll be able to get everything you want on the first or even second try.

You have to be patient and trust that hard work leads to success. What you put in now will get you ahead later.

Expert tip

Hard work matters but it’s also important to work smart! I’m a big fan of working smart, because that way I’m not wasting time, I’m able to identify opportunities and can effectively take action toward my success.

5 Key tips to embrace hard work because hard work is the key to success

Now that you know why hard work is key to success, here are some tips for working smarter, not harder.

1. Keep a log of your accomplishments to keep you motivated

I have ADHD, but even without a disability, it’s hard to remember everything you do so that you can be acknowledged for it later on via a promotion or raise.

By printing out emails as they come in or jotting down the results of projects or even compliments you receive you can create documentation of all of your accomplishments.

For me, having all of my achievements at hand made it that much easier to go back to my boss to ask for a promotion when I felt I had earned it.

A hardworking person can earn more money or move up in their career as a result of preparation and strategic actions like logging their accomplishments.

2. Post professional updates on social media

Sometimes your hard work leads to success but other times may go unnoticed. While that can be frustrating, know that you can fix that by sharing your accomplishments on social media.

LinkedIn is an excellent professional tool that’s free. So if you aren’t already utilizing it to its full potential, we have a Clever Girl Finance LinkedIn Course that’s completely FREE and can help.

By sharing your professional updates on a consistent basis with your network, people will keep you in mind the next time an opportunity with your name on it presents itself.

Plus you’ll gain momentum to continue as you see your accomplishments growing, proving that being hardworking is the key to success.

3. Set SMART Goals

Commitment is an excellent characteristic for anyone, but it’s easy to commit to the wrong thing if you don’t know where you’re going. Having goals can help you not only make new things into habits but also keep you focused.

Consider setting SMART Goals based on your to-do’s to get you further with your career and finances. SMART goals are Specific, Measurable, Achievable, Relevant, and Time-Bound.

When you know how to set the right goals, you’ll know what to focus on with laser precision and you’ll achieve them much faster. Hard work is key to success, especially when you focus on what you want to accomplish.

4. Gamify your results and treat yourself

Maybe it’s the ADHD I mentioned above, but one of the ways I’m able to hit my commitment goals is to make them into a game with a fun reward at the end. For me, it’s hard sometimes knowing that I have to do something repetitive, like working out.

I know I should work out and that it’s good for me. But having to do it week in and week out sometimes gets overwhelming. And that can be with anything you need to commit to and work hard on.

But making your goals into a game may give you a greater degree of satisfaction when you do well and help you get rid of bad habits and replace them with better ones.

So break down your commitment into smaller, more manageable steps, and then treat yourself at the end. For example, if I need to work out four times a week, I will give myself $10 extra spending money to have fun. How else am I going to fund my gardening hobby?!

5. Plan out your schedule and utilize time management

I mentioned above that I’m able to stay committed by “gamifying” my results, but my other secret to getting ahead with hard work? A good old-fashioned paper planner!

When you’re working hard, it’s hard to balance everything and even harder to keep track. Time is limited, which is why time management is your friend, and many successful individuals operate this way.

Make a list of everything that you need to do every week. Then sit with your planner and figure out how you’re going to schedule your week.

Only when we see our week in advance can we plan properly. You can also take advantage of time blocking to make sure you get things done.

By using a planner, you can manage your time to get ahead quicker while still taking time for yourself and other important things when they come your way.

Who said, “Hard work is the key to success”?

“Hard work is the key to success” is quite a popular saying that doesn’t have just one source. It is commonly attributed to Vince Lombardi, and John Carmack, amongst others.

What are the key points for hard work?

When it comes to hard work, the key is to have a vision, create specific goals to get there, and then take intentional ongoing action to make progress.

Setbacks are inevitable but as long as you pick yourself back up and consistently keep doing what you need to, even if it means stepping out of your comfort zone, success is inevitable.

Articles related to achieving success

If you enjoyed this article on how to achieve success, check out this related content:

• How To Keep A Commitment To Yourself To Achieve Your Goals
• I Am Broke! 10 Reasons Why And How To Do Better
• Women & Money Survey: The State of Our Finances
• 7 Simple Habits To Improve Your Self-Discipline
• 17 Best Books On Self Discipline

In the end, hard work is key to success!

When you’re a disciplined person, people know it. No one will ever question what you do because they know you are reliable, dependable, and committed. Plus your hard work will pay off in dividends as you start to see results in achieving the goals you have set for your life.

Being hardworking is the key to success, so don’t feel that it’s a waste of time. You can work hard by practicing perseverance, sharing your success stories, and continuing to avoid laziness. Keep your eyes on the prize and keep striving!

The post 5 Reasons Why Hard Work Is Key To Success! appeared first on Clever Girl Finance.

What influential women do you have in your life? Whether it’s your mom, best friend, favorite female celebrity, or influencer, there’s no doubt that it’s important to have women in our lives that we can look up to and learn from.

Find out what the habits of successful women are and how to make them part of your life!

Good habits set the tone for the way you choose to live and are essential for living a healthy lifestyle and also well-being.

Here are 10 habits of successful women and also a look at the daily routine of a successful woman.

It’s time to get inspired. You won’t want to miss these!

1. Set goals and achieve them

Successful women know what they want and, more importantly, how to get their hands on it.

Start by writing your goals down, no matter how small or big they are.

In six months’ time, what would you like to have achieved? What about a year or 10 years from now? Describing your goals in detail and visualizing them with images can really help motivate you to meet them.

Create an action plan

Every goal should be SMART (specific, measurable, attainable, relevant, and time-bound). You’re much more likely to achieve goals that have these characteristics because they give you a sense of direction.

Now that you’ve got your goals, it’s time to work out how you’re going to get there. An action plan is such a good way to capture the steps you need to take and keep an eye on your progress. Digital or paper form is good for writing them down, whatever works best for you.

Celebrating when you’ve achieved each goal is really important. It’s a great way to acknowledge your efforts, and being proud of what you’ve achieved puts you in the correct mindset for your next win. You’ve got this!

2. Believe in yourself

Ask any successful woman what the key is to achieve great things, and they will tell you it’s believing in yourself. Know what you’re worth and be confident in your abilities.

But how do you believe in yourself if it doesn’t come naturally to you?

Spend time with supportive people

Surround yourself with positivity and affirmations for self love. Ditch negative relationships and focus on the people that make you feel good.

In addition, build a network of like-minded people that thrive off positive energies.

You’ll be seriously impressed by what you can achieve just by believing in yourself.

Share what you learn

Sharing what you learn with other people is another great way to strengthen the belief you have in yourself. We all have something that we are skilled at and also passionate about. Why not help others learn a new skill and take pride in your abilities at the same time?

Ultimately, believing in yourself comes down to looking after your mind, body, and soul, only making decisions that you are comfortable with.

3. Say no sometimes

Saying no gives us the power to choose how we best use our time and where we focus our energies. The habits of successful women can help teach us the value of saying no.

It can feel like it’s impossible to say no, especially if you’re used to saying yes all of the time! But successful women know how to say no to opportunities that are unfair, don’t match their values, or if they simply don’t have enough time for them.

Why? Because it enables us to value ourselves and our time more and stay true to what’s important.

Practice your skills to improve

Saying no is a skill, and it does get easier with practice. Here’s how you can say no effectively:

Remind yourself why you’re saying no

Before you turn something down, it’s worth reminding yourself why you’re doing it to show confidence.

Be courteous yet assertive

Use firm words such as “No, I can’t at the moment” or “I don’t have the time currently”.

Don’t make excuses or apologize

Instead, provide a brief explanation if you feel it’s needed and move on.

Practice saying no

Start with small refusals, such as a coffee with a co-worker, to help build your confidence.

The above tips apply whether you’re saying no to a new work opportunity or even just saying no to a play date that you don’t have time for.

And remember, don’t feel guilty for saying no to something! Saying no to anything that goes against your personal core values frees up more time for the things you want to do – there’s not enough time for both.

4. Make time for self-love and mindfulness

To be successful, first, you need to take care of your own needs. This means maintaining both your physical and mental health.

Easier said than done? We hear you.

Creative ways to prioritize yourself

How does a successful woman include self-care and attitudes of mindfulness in her busy life?

Well, regular exercise and eating well are the first steps. Scheduling alone time into your week also allows you to reflect on you and your goals.

If you’re struggling for time, you can combine exercise and meditation to give you that much-needed time to yourself.

Self-care can be as simple as a morning walk to enjoying a cup of tea and reading a chapter of your book. You might even try a self care week!

Successful women also reward themselves with their desires when they meet their goals. Rewards could be anything from a full-body massage to a weekend away with the girls. It’s a healthy way to look after your mind and body whilst celebrating your wins and motivating you to achieve your next one.

These easy-to-adopt habits will help you prioritize self-care without making it feel like you’re adding to your to-do list.

5. Always have a backup plan

Sometimes things don’t happen the way we want them to, and that’s ok!

One of the most admirable habits of successful women is having a plan B. Things can go wrong.

Let’s say you don’t get the job that you really wanted, for instance. Or your car breaks down and needs emergency repairs.

Having a backup plan can get you back on your feet quickly and make you stronger than ever. A good example is to have a plan for the year, with extra ideas in case things change.

Make plans for finances, career, and life

To protect your career, always keep your resume updated with all your skills and experience and utilize your network of co-workers. When the unexpected happens to your finances, an emergency fund will protect you from debt.

Having a backup plan in life can provide feelings of safety and security, allowing you to live without stress and achieve great things. With patience, planning, and hard work, you can achieve anything.

6. Be comfortable with failing

Failure can make a person stronger. In fact, women have proved that failure is the path to success time and time again.

Failure causes us to have to start over and try again. Continuing to value hard work is key to success, as well as being resilient.

Successful women know how to cope with failure, and the good news is that adopting this habit is easy with our top tips.

Embrace your emotions

It’s ok to feel hurt, angry, and sad when something doesn’t go to plan. A good way to move on is to accept your feelings and also allow yourself some time.

Don’t worry about what other people think

You can’t control what other people think, so don’t waste your energy on it. Instead, take pride in your ambition and dreams, do what’s right for you, and learn from the habits of successful women.

Be kind to yourself

Beating yourself up about a failure will only make you feel a million times worse.

In addition, if a friend was experiencing a setback, what would you say? Follow the same advice for yourself, and you’ll soon bounce back from any unplanned event.

Instead of fearing failure, understand that failure is the first step to success.

7. Know when to accept help and say thank you

Our purpose in life isn’t to do everything alone.

Powerful women happily admit that they need help and that there’s no shame in asking for it. In fact, it shows courage, confidence, and resourcefulness.

Think of asking for help as one of your confidence building exercises. Asking and accepting help protects us from stress and burnout and can also increase our productivity and allow us to smash our goals.

Communicate honestly to connect with others

Need more reasons to start asking your support network for help? It’s also a lovely way to connect with fellow female leaders who share similar goals and values as you.

Once you’ve decided that you need some help, think about the best person to ask and how you might ask them. Be polite yet direct in your request, and don’t be disheartened if they say no. Chances are you will have other willing volunteers in your friend circle.

Remember to give back when you can and add this support to your daily gratitude list. Women helping women is a force to be reckoned with!

8. Strive for personal development

Enhancing your skills and experience has so many benefits for women, so never stop learning because life never stops teaching!

Aside from learning new things, you may also find that your mood improves too. As you improve yourself and your life, you naturally become happier.

Personal development also puts you in a great mindset to deal with change and evolve, and it’s one of the good work habits to learn.

Personal development takes many forms. You don’t need to commit a huge amount of time or money, either.

For example, here are some enjoyable ways that smart women add personal development to their busy lives.

Ask questions

Everyday life presents us with opportunities to learn without much effort. Try asking more questions during the conversations you have and see how much you can learn.

Read more

A great way to add personal development to your daily routine is by setting time aside for reading. You’ll learn something even from reading for just a few minutes a day, for example, check out these self help books for women!

Use a dictionary

When you find a word that you don’t know the meaning of, instead of skipping past it, look it up. This is a super simple way to enhance your vocabulary.

Sign up for newsletters

Receiving manageable information in the form of an electronic newsletter is also a good way to learn more. Plus, they are a free resource!

9. Don’t compare yourself to others

It’s hard to avoid comparison when we are constantly faced with images of inspiring women on social media, but it can make you feel insignificant, and that’s not healthy.

Badass women know that trying to be like someone else is self-destructive and unproductive. Nobody is you, and that is your specialty. So never compare yourself to others!

Try adopting these habits so the next time you start comparing yourself to others, you know how to stop doing it.

Start a gratitude journal

Most of us forget to pause and consider what we appreciate in our own lives. It’s a good way to remind yourself about what you have achieved and also motivate you to meet your next goals.

A gratitude journal forces us to look at the positives and find happiness in the little things. Or why not try a 30 days of gratitude challenge?

Compete with yourself

When somebody you know reaches their goal, use it as a chance to look at your own rather than feel jealous. Take a look back at the progress you’ve made and what you need to achieve to meet your next milestone.

Celebrate other people

A proven way to stop comparing yourself to others is to focus on their achievements and join in with their celebrations. So, when your friend gets a promotion, be happy for her instead of questioning your own career.

In addition to learning to celebrate yourself, be happy for the people in your life when something goes well for them.

Now you’ve got the techniques from the habits of successful women to stop worrying about what others are doing, so you can focus on your own game.

10. Accept the past and move on from mistakes

It’s human nature to make mistakes. It’s also essential for your future to know how to let go and move on.

Every successful woman knows that making mistakes are proof that you are trying, and it allows you to learn from them and become a stronger person. So don’t dwell on guilt or regret, instead, reflect, learn, and let it go.

Here are habits that will make letting go and moving on easier.

Look for the positives

When things don’t go to plan, remind yourself that the way you’re feeling is temporary. It might be a challenge to learn how to stay positive in a negative world. However, it is possible.

How can you turn something negative into a positive?

For example, if a new business opportunity falls through, what can you learn from it? If a relationship has been affected by a decision you’ve made, how can you resolve it? You might just find better things are just around the corner!

Create distance

Distracting yourself from a mistake is one of the best ways you can move on from it. Put your energy into something new or take some well-deserved me-time. Obsessing over a setback will only make your mood worse and won’t help you to move on.

Focus on what’s next

Life is full of exciting opportunities. One of the most admirable habits of successful women is looking to the future. Take the time to remind yourself what’s important. What path do you want your life to take?

Expert tip

As you can see, the habits of successful women are all about working hard and having confidence. And something to remember that will help you create great habits is to always be working towards financial goals as well as your professional, and life goals.

Making a budget, mapping out the next few years of your career, and deciding what big goals you’d like to reach in the next decade are great places to start.

The daily routine of a successful woman

Want to be successful? A good work-life balance is key. Let’s look at what a typical day in the life of a busy, modern woman looks like.

Morning

• 6 am: Wake up and drink a glass of water
• 6.15 am: Meditate
• 6.30 am: Shower and get dressed
• 7 am: Eat a healthy breakfast
• 7.30 am: Set your goals for the day with a cup of tea/coffee
• 8 am: Household chores
• 8.30 am: Go to work

Evening

• 6 pm: Finish work
• 6.30 pm: Self-care and exercise – yoga
• 7 pm: Have dinner
• 7.30 pm: Switch off social media
• 8 pm: Do some stress-relieving hobbies or take some social time
• 9 pm: Relax – read or enjoy a hot bath
• 10 pm: Get a good night’s sleep

Adapt the daily routine of a successful woman above to suit your individual needs, commitments, and lifestyle.

5 inspirational women we can learn from!

Women that show us it’s ok to make mistakes are great to draw knowledge from.

You’ve probably heard of the names listed below, but here’s a reminder of why they are so great!

1. Mother Teresa

Mother Teresa is a role model for selflessness. She was compassionate and recognized the value of giving to others.

She changed the world by giving to charity and also inspired hundreds of thousands of other people to do the same. Mother Teresa proved that you’ll have a fulfilling life if you stand by your values.

2. Kelly Holmes

Kelly was the first British woman to win two gold medals at the same game. She’s also an inspirational global speaker, award-winning author, and advocate for wellness, fitness, and mental health.

Her charity, Dame Kelly Holmes Trust, supports disadvantaged young people to use the skills of world-class athletes.

3. Oprah Winfrey

Oprah is a great role model for women that want to become leaders. She had a tough childhood and worked hard to achieve her dreams, earning her a reputation for being the most powerful woman on the planet.

Oprah’s determination has shown us that anything is possible.

4. Marilyn Monroe

“A wise girl knows her limits, a smart girl knows that she has none.” – Marilyn Monroe

Marilyn was an advocate for femininity, still inspiring women to be bold. The famous bombshell achieved so much in her life, showing us that anything is possible.

She also believed that you’re the happiest when you are true to yourself.

5. Michelle Obama

Former first lady Michelle Obama is, without a doubt, an incredibly inspirational woman. Her work and books have taught us to go for our dreams and not to sell ourselves short.

Michelle’s book, Becoming is a must-read for working moms who want to have a family and a career. She shows us that it’s absolutely possible!

What matters most for success?

Being determined and undistracted from your goals will take you far.

When you decide to do something, make a plan to get there, and don’t give up until you are able to accomplish what you wanted to. Determination is the essential factor that helps you get the results you want.

How do you create unique successful habits?

Start with the 10 habits listed here, and then find a way to apply them more directly to your own life.

For example, instead of just believing in yourself in general, make it personal by believing in your ability to make 100,000 dollars a year. Add your unique goals to your habits to remind you of why they matter so much.

How do you stick with your good habits when you want to quit?

Set up a system in advance to help you when you feel tired or unmotivated.

For instance, understand how to break down your habits into smaller mini goals, reward yourself often, and stay focused on the big picture.

When you’re tempted to give up, you can fall back on your systems and your habits until you feel more motivated.

Posts related to habits of successful women

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• Daily Routine Examples For Financial Success

Adopt these habits of successful women to enhance your life!

The women we choose to surround ourselves with shape our lives and the decisions we make.

It’s important to recognize a successful woman but also know how to be one! The habits of successful women can help you be the best version of yourself.

Discover more ideas about enjoying the life you have and other self-improvement ideas!

The post 10 Habits Of Successful Women appeared first on Clever Girl Finance.

Do you want to truly take charge of your day and create more opportunities in your life? Well, it all starts with planning. Yes, I know learning how to plan your day for success might sound dull, but trust me, it's the secret sauce for success!

 

Table of contents

• 1. Go to sleep a little earlier and then wake up refreshed
• 2. Set an alarm
• 3. Set clear and specific goals
• 4. Prioritize tasks
• 5. Create a to-do list
• 6. Schedule your day
• 7. Try time blocking
• 8. Break tasks into manageable chunks
• 9. Eliminate or delegate non-essential tasks
• 10. Perform a quick budget check
• 11. Incorporate buffer time
• 12. Review and reflect
• 13. Adapt and stay flexible
• Expert tip
• Common pitfalls to avoid
• An example template
• How much time should planning take?
• What is the ideal method for planning your day?
• How can you determine what the most important tasks are?
• Related articles for how to plan your day
• Knowing how to plan your day for success can change everything!

When you plan your day effectively, you set yourself up for greatness, paving the way toward achieving whatever big hairy audacious goal you have for the day.

From optimizing your sleep routine to effective task management, unlock the secrets to a successful and fulfilling day. Get ready to supercharge your productivity and also achieve new heights of success.

So, let's dive in and discover 13 tips to plan your day like a boss!

1. Go to sleep a little earlier and then wake up refreshed

Let's kick off with the foundation of a productive day—getting enough sleep.

Now, I can already hear the collective gasp from all the night owls out there. But trust me, it's worth it.

Sleep routines help with productivity and energy

Waking up refreshed does wonders for your productivity. You're giving yourself a head start before the world wakes up.

By establishing a consistent sleep schedule that allows for ample rest, you'll wake up energized and also ready to tackle the day ahead with gusto.

2. Set an alarm

We all need a little nudge to wake up in the morning, especially if hitting the snooze button is your superpower.

So, when it's time to rise and shine, set an alarm.

Tricks to wake up on time

But here's the trick: opt for a gentle alarm tone or use the gradual wake-up feature on your trusty alarm clock or smartphone. Let's avoid those jarring, heart-pounding sounds that make you jump out of bed in panic mode.

And here's a sneakier tip: place your alarm away from your bed.

That way, you won't be tempted to hit the snooze button and then crawl back under the covers. It's all about outsmarting the sleep monster, my friend.

3. Set clear and specific goals

Starting your day with a sense of purpose that reflects your personal core values is crucial.

It's like putting on a superhero cape and channeling your inner Wonder Woman.

Stay motivated and organized

So, take a few precious moments each morning to define clear and specific goals that align with your long-term aspirations. Then, consider what you want to achieve: acing that presentation, launching unique side hustles, or mastering your financial journey.

You'll feel a surge of motivation and a clear sense of direction when you have well-defined goals. It's like setting the GPS coordinates for success.

4. Prioritize tasks

Ah, the art of prioritization. Imagine Marie Kondo stepping into your to-do list and then decluttering it with joy.

Here's a simple yet powerful tip—prioritize when considering how to plan your day effectively.

Do urgent and critical tasks first

Determine the most critical and also urgent tasks that will impact your goals most. You know, the ones that move the needle forward and make you feel like a total rockstar.

By focusing on what truly matters, you'll progress toward your aspirations purposefully and efficiently.

5. Create a to-do list

The trusty to-do list. It's a loyal companion that keeps you on track and helps you conquer the world. Make it your best friend.

Add everything to your list and then prioritize

Create a comprehensive list with all the tasks you need to tackle. Then, jot it down on paper, use a snazzy digital tool, or unleash your creativity with color-coded sticky notes.

The choice is yours!

Just remember to organize the list based on priority and also allocate realistic timeframes for each task. Crossing items off your list is ridiculously satisfying, trust me. You'll feel like giving yourself a high-five every time you accomplish something.

6. Schedule your day

Now it's time to get structured.

We're talking about developing a schedule that outlines specific time slots for different activities and tasks.

Choose a scheduling method and stick to it

Whether you prefer a fancy planner or a digital calendar, find a system that works for you and stick to it like glue. You'll sail smoothly through the day when you allocate time to each task.

You'll have a personalized itinerary for your own epic adventure.

7. Try time blocking

Time blocking, my friend, is a game-changer. You're creating little sanctuaries of productivity in your day. And if that isn't motivating enough, remember the value of time and money and how much of both you could be saving by time blocking.

Use time blocking for each activity

Block out dedicated periods for focused work, meetings, breaks, and self-care. By assigning specific time slots to different activities, you'll maintain focus and, in addition, make sure you have ample time for essential tasks.

Your days become a well-orchestrated symphony where each instrument plays its part in perfect harmony.

8. Break tasks into manageable chunks

Sometimes tasks can feel as daunting as climbing Mount Everest. But fear not!

I have a trick to make them more manageable as you learn how to plan your day.

Make tasks smaller to help you accomplish them faster

When encountering a large or complex task, break it into smaller, more manageable sub-tasks. Taking one step at a time, celebrating your progress as you complete each sub-task.

Trust me, progress breeds motivation, and before you know it, you'll have conquered that metaphorical mountain.

9. Eliminate or delegate non-essential tasks

Not every task that's on your to-do list is a superhero-worthy mission. Some are more like sidekicks that can be delegated or even eliminated.

Understand what each task requires

So, take a moment to identify tasks that don't align with your goals or can be handed off to others. You'll have more time for the tasks that truly have the most significant impact on your success in life.

10. Perform a quick budget check

Oh, money, the eternal dance partner in our lives. As part of your daily planning routine, including a quick budget check is essential.

Steps to check your budget fast

Review your finances and ensure you're on track with your goals. Then, identify any unnecessary expenses that can be trimmed and make adjustments to avoid any budget challenges.

Being mindful of your financial situation helps you maintain focus and reduces stress throughout the day. Make your money work for you.

11. Incorporate buffer time

Life loves throwing surprises at us, doesn't it?

That's why you must include buffer time in your schedule—a safety net to catch you when unexpected interruptions or delays pop up during the day.

How to add some extra time to your day

So, when crafting your schedule, account for those little curveballs that life throws your way. Having some extra time, you can adapt to unforeseen circumstances without derailing your entire day.

12. Review and reflect

Before you shut off for the day, take a few precious moments to review what you accomplished and reflect on your progress.

Celebrate and evaluate for tomorrow

Take time to celebrate yourself, acknowledging the small and big wins.

This reflection allows you to identify what worked well and what could be improved. So you can fine-tune your planning process and make adjustments for future success.

13. Adapt and stay flexible

Remember, while planning is crucial, staying flexible is equally important when considering how to plan your day for success.

Things happen, and sometimes our plans need to be adjusted.

Stay open to changes in plans

Embrace those twists and turns, be open to tweaking your plans when necessary, and seize the day with a spirit of adaptability.

After all, flexibility is the secret ingredient to conquering any obstacle that comes your way.

Expert tip

The most important thing to remember with how to plan your day effectively is to simply think ahead. Rather than just considering what you'll do in the next hour, also think about the next day, next week, and even next month.

In addition, get rid of any activities that are a waste of your time, and try new organization methods that save you time.

Common pitfalls to avoid when you plan your day

Now that we've covered some fantastic tips let's address a few pitfalls to avoid.

Even the most organized among us can stumble into these traps, so keep them in mind as you plan your day.

Falling into the procrastination trap

Procrastination can be a sneaky little devil, tempting us with distractions. But fear not! Break tasks into smaller, more manageable steps.

It's easier to tackle small bites rather than a whole feast.

You can also try productivity techniques like the Pomodoro Technique, which involves short bursts of work interspersed with timed breaks, or try these 7 ways to overcome procrastination.

Overloading your schedule

You're ambitious, and that's awesome.

However, avoid overcommitting and cramming your schedule with a million tasks. Instead, be realistic about what you can accomplish in a day. Leave room for unexpected tasks, or simply give yourself a breather.

Remember, quality over quantity.

Neglecting self-care

Self-care is non-negotiable.

Include self-care activities like self care Sunday, breaks, and downtime in your daily plan. It's crucial to recharge and maintain a healthy work-life balance.

Take time for yourself, whether it's taking a walk in the park, a short yoga session, or indulging in your favorite guilty pleasure.

Failing to prioritize

Not all tasks are created equal.

Consider each task and score 1-5, 5 being the most important or urgent. Prioritize accordingly. Allocate time and energy to tasks with the most significant impact on your goals.

Stay focused on the big picture.

Ignoring personal energy patterns

We all have energy patterns throughout the day.

Some people are morning birds, while others are night owls.

Identify your peak energy periods and schedule challenging or important tasks. Then, maximize productivity by aligning tasks with your natural energy levels.

Not reviewing and reflecting

Remember to hit that pause button at the end of the day.

Take time to assess your progress. What worked well? What could be improved?

By reflecting on your day, you can make adjustments for future planning and continue growing.

An example template of how to plan your day effectively for success

Now that we've covered the tips and pitfalls, let's put it all together with an example of a well-planned day:

6:00 AM: Wake up refreshed and energized

6:30 AM: Set clear and specific goals for the day

7:00 AM: Prioritize tasks and create a to-do list

8:00 AM: Block time for focused work on the most important task

10:00 AM: Take a short break, stretch, and recharge

10:15 AM: Attend a team meeting

11:00 AM: Complete smaller sub-tasks related to a larger project

12:30 PM: Enjoy a well-deserved lunch break

1:30 PM: Delegate non-essential tasks to team members

2:00 PM: Perform a quick budget check and make necessary adjustments

2:30 PM: Incorporate buffer time for unexpected interruptions

3:00 PM: Tackle another important task

4:30 PM: Review and reflect on the day's progress

5:00 PM: Adapt plans for the next day if needed

6:00 PM: Wrap up work and transition to personal time

How much time should planning your day take?

Planning your day should be a fairly quick activity. When you're deciding what tasks to do and making your schedule, try to stick to a 10-15 minute routine. Otherwise, the planning is too complicated.

What is the ideal method for planning your day?

There are many ways to plan your daily life, from calendars and apps to to-do lists. Choose the planning method that makes the most sense for you and is also easy to follow.

How can you determine what the most important tasks are?

When you prioritize tasks, consider what is important and cannot wait until tomorrow, and do those things first. Then prioritize what is the next most important, and so on.

Related articles for how to plan your day

• How To Create The Ideal Day For Your Life And Finances Every Single Day
• How To Successfully Plan For The Year
• Daily Routine Examples For Financial Success
• Essential Life Planning Tips For Success

Knowing how to plan your day for success can change everything!

And there you have it! Planning your day effectively is the key to unlocking your full potential.

Implementing these 13 tips and avoiding common pitfalls creates more life opportunities.

So, grab that planner, and start paving the way to success one day and week at a time. You've got this!

And remember, planning your day is a great way to start prioritizing yourself, and it can also help you learn about how to manage your money.

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Money mindset exercises are a must when you’re setting up financial goals because, without the right mindset, it’s near impossible to make positive changes in your life. Regardless of where you are on your financial journey, these practices help you stay motivated. Let’s keep you on track and ready to achieve your goals with abundance mindset exercises!

What are money mindset exercises?

Money mindset exercises are practices that you do to change how you think about money and wealth. Because your perception of money impacts the way you earn, save, and spend it. All of which affect how you manage your finances and build wealth.

Since childhood, you were surrounded by beliefs, judgments, and ideas about money. Not to mention that your own experiences with money influenced how you view it too.

Whether you consciously think about your understanding of money or not, you carry these notions and judgments with you. And they show up in how you manage your finances.

Abundance mindset exercises help you discover and examine your beliefs about money. Then, you can look closely at the ways you earn, save, and spend your dollars to see how these beliefs are driving your actions.

Why do you need to do money mindset exercises?

You can learn to think differently about finances by changing your mindset. Rewiring the brain is a fascinating process called neuroplasticity. Basically, it’s using attitudes of mindfulness to redirect thoughts and change habits.

Financial mindset exercises help you become aware of your thoughts and redirect them. When you practice mindfulness and change your habits, you use new parts of the brain. That’s when the rewiring happens, and you create new pathways in your brain.

The task of building wealth is a long and winding road, especially if you grew up without money and are a member of a marginalized community. These mindset exercises can help you stay motivated. Because a huge part of the challenge is staying in the right abundance mindset.

Money mindset exercises to try

Money is a tool that humans created to make exchanging goods and services easier. But because we need it to survive and thrive, we’ve attached emotions and beliefs to it.

Unfortunately, those emotions and beliefs tend to run the show, whether we are conscious of them or not. The good news is you can redirect your thoughts with abundance mindset exercises. Check them out!

1. Look to the past

Being aware of what you tell yourself about money is a great start. Once you get those thoughts out, you can use money mindset exercises to shift them to the positive.

Start journaling to find out what you truly think about money. If you’re having difficulties identifying your limiting beliefs about money, remember they came from somewhere.

So, thinking about where you got them from is also a good place to start. Did they come from the way your family talked about money, teachings from church, or your own experiences?

Similarly, think about times when you felt shame, guilt, or disappointment around money. When do these feelings show up in your adult life?

For instance, do you feel guilty wanting more money – getting a big promotion or making more money in your business? Why?

When you’ve gotten your thoughts down on paper, it will be easier to see what you need to change.

2. Examine your current money situation

The challenge of financial mindset exercises is that you can only see if they’re working if you’re also taking action. That being said, you cannot improve a situation if you don’t know what’s going on.

If you’ve been avoiding looking at your credit card statements or bank accounts, now is the time to do that.

Likewise, you can’t create a budget that will work for you if you don’t know how much money you’re earning or spending.

For that, you may want to start a spending journal. The goal of which is to help you identify your spending habits and where your money is going. A spending diary will also show you where you can improve.

Basically, you need to look over your finances and see what is going well and what needs improvement. This may include habits for saving, spending, investing, or a combination.

3. Practice compassion for yourself

Since money is a huge part of our survival, we see every financial mistake as wasting money. Although that may be true in some situations, that’s not always the case.

Some mistakes are necessary for us to learn lessons and grow as a person. So if you’ve been berating yourself for past money mistakes, it’s time to stop (and maybe try some confidence building exercises to help)!

Forgive yourself and shift to money mindset exercises instead. Four ways to practice self-compassion are to take care of your body, write down your feelings, be positive towards yourself, and add mindfulness to your life.

4. Be grounded in gratitude

When you’re grounded in gratitude, you’re saying that you’re content with life. But you’re also happily anticipating more good things to come. That’s why it’s one of the best abundance mindset exercises.

Oftentimes, we only feel grateful when we get the big goals we’ve been working on, like a promotion, a new car, or a house. Of course, there’s nothing wrong with celebrating the big wins.

But those can be few and far between. It’s also unsustainable to keep chasing success and material satisfaction to feel grateful.

Practice money mindset exercises by being grateful for the small things every day. When you start with the small things as part of your daily gratitude list, you’ll always have something to be thankful for.

Be grateful you opened your eyes as you get out of bed. Be grateful you have running water as you take a shower or brush your teeth. Find more ways to be grateful in our 30 days of gratitude challenge!

5. Make a list of how you want money to show up in your life

Make a list of the things that make you happy and light your soul on fire. It doesn’t matter if you think they’re outrageous, and they’re never going to happen in a million years. Write down everything you would like to have and experience if money is no object.

Then, make another list of practical financial goals you want to achieve in the next 30 days, 3 months, and 3 years. Maybe you want to build up your emergency fund or start sinking funds for a family vacation or purchase.

Make a plan for each of your goals. Figure out how much money you need to save and how much you can truly afford to put away each month. Update your plan each month to check on your progress.

How about the first list you made? Pick one and make it your big hairy audacious goal.

6. Keep showing up for yourself

One of the most effective money mindset exercises is showing up for yourself relentlessly.

This happens when you read abundance mindset books and learn about how to invest for your financial future. Or, if you’ve been dealing with chronic debt, showing up for yourself is getting help to tackle your debts once and for all.

Showing up for yourself may not be the same every day. But you do it when you journal, meditate, and say positive money affirmations.

Listen to personal finance podcasts, read blogs, and watch YouTube channels to learn how to stay positive in a negative world. Call your bank to negotiate your interests or join a savings challenge.

No one can do this for you. So, show up for yourself every day, tirelessly.

Expert tip: Become conscious of your thinking

Having the right money mindset is all about being conscious of your thinking and choices. In addition to learning from your past and present money situations, you also need to balance this with compassion for yourself and an understanding of where you want to be in the future.

Money mindset questions to ask yourself

Being intentional with your thoughts means knowing what they are and where you got them from. So, here are some money mindset questions to ask yourself to figure out your beliefs about money and wealth.

How was money talked about in your family?

The way you think about money and react to it can be tracked all the way from childhood. Be patient with yourself if you can’t remember much. Answer these additional questions to get started.

Did your parents talk openly about money? What feelings did they express in these conversations – anxiety, anger, excitement, etc?

If your family didn’t talk about money, how do you feel about discussing your finances as an adult? In your life now, can you see similarities in how you feel, talk, and handle money the way your family did?

What are your experiences with money?

Needless to say, your experiences with money impact how you manage it today.

For instance, if you never got what you wanted as a kid, you may be the adult with money spending problems who spends everything you earn. It’s as if you’re trying to make up for all the times you didn’t get what you asked for.

As you look back and try to connect your money habits to your past, you will not always get such a clear-cut explanation. But spend time thinking about it and see what comes up.

What common beliefs about money have you heard a lot about growing up?

Perhaps you’ve heard, “Money is the root of all evil,” or “Money doesn’t grow on trees,” or “You have to sacrifice to make money,” etc. Are these phrases familiar?

You’ve probably heard them before, along with; “to serve God means you can’t want more money,” “the only way to make lots of money is to go to college and have a secure job,” or “you can’t make money doing what you love.”

Which ones of these are you subscribing to? Have you thought about whether they’re true or not?

Find out what money myths you believe and explore some common beliefs about money that may be harmful to your financial well-being.

How do you view poor people?

Continue your exploration by considering what you think about poor people.

Some common views about poor people are they’re bad with money or have bad money habits, they’re not trying hard enough, and they just want a handout.

Do you share the same opinions? If you experienced poverty, do these ideas align with your experience?

How do you view rich people?

It’s fascinating how the poor and rich are represented if you think about it. Because the rich aren’t described favorably either. Some popular views about rich people include they’re greedy, they don’t work hard, and they just got lucky.

The thing is, would you be excited to work towards your goal of being financially sound if you see rich people as selfish, entitled, and demanding?

Some of us have judgments and beliefs about money that we’re not even aware of. And doing money mindset exercises helps you uncover these narratives that may be holding you back from achieving your financial goals.

What do you actually believe about money?

Some of the beliefs we hold onto from childhood and painful money experiences may not be rational. But they drive the way we earn, save, and spend money nonetheless.

Look at your answers to the money mindset questions and relate your answers to your financial situation now. Can you spot patterns in your life, such as you can’t get out of debt?

Take some time to identify money values that you agree with consciously but you do the opposite of in your life.

For instance, do you spend all your money as soon as you get it, even though you want to save? Or maybe it’s the opposite – you restrict yourself from spending on luxuries and necessities even if you can afford them.

Identifying your actions and beliefs can help you to align them in your life.

What is the best type of money mindset?

The best type of money mindset is one that allows you to continually grow and improve. Rather than staying stuck with negative beliefs, you can constantly try to make your mindset align with what you truly think.

How do you instantly make your mindset better regarding money?

A great way to instantly improve your mindset is to believe that no matter how far you have to go, you are capable of achieving your money dreams. Even if your finances don’t look the way you want, keep telling yourself that you will find a way to change it, and then look for ways to do just that!

How do you continually practice an abundance mindset?

Whenever you catch yourself repeatedly thinking negative things about money, remind yourself of something positive instead. For example, instead of worrying about debt, be proud that you made a budget this month.

More money mindset articles

If you liked reading about money mindsets, check out these articles next:

• 11 Key ways to improve your money mindset
• How to use money journaling: Improve your mindset and your finances
• How to stop worrying about money
• Rich mindset vs. poor mindset: How to develop a rich mindset!

Money mindset exercises can improve your finances and life!

Changing the way you think about money for the better can only help you. In fact, it may help you build wealth for yourself and generational wealth for your family!

Whether you start with answering money mindset questions or looking for ways to think more positively, do one of the money mindset exercises today! And then, do them again and again and again until it’s easy to believe that you’ll achieve financial wellness. Cheering you on!

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