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3 Ways To Make Money And Your Relationship Work

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Imagine almost never having a money-related argument with your S.O.. Sounds too good to be true, right?  But here’s the good news: it’s not nearly as impossible as it sounds.

We often joke that the majority of what we do at Stash is therapy - and it's not far from the truth. Whether we are working with individuals or couples, we do more than just teach people what to do to be smarter with their money - we teach them why.

Because, if you don't understand the why, you probably won't stick to the strategy and will likely end up being your own worst enemy. It's one thing if you stand in the way of your own success, but it's quite another if you stand in the way of someone else's. And that's often the path couples are on when they come to us - even though they don't know it.

That said, it's almost never their fault. Here’s why:

Studies show that our attitudes and habits around money are formed in our early years, and mostly inherited from our parents. Given that you and your S.O. grow up in different households, it's reasonable to assume that you may not start out on the same page when it comes to your finances. But considering that financial differences are often cited as a reason for divorce, we think that working towards getting on the same page with your money is a good #couplegoal.

Around 40% of Stash clients are couples - life partners, newlyweds and even newly engaged. And we see it all - couples with only individual or only joint accounts, disparate income levels, vastly different student loans balances, and more often than not, contradictory money archetypes (the saver, the spender, etc.) - opposites attract, right?

Does any of this sound familiar? If so, you’re not alone.

Read on for a few ideas that will undoubtedly help you and your S.O. get on the same page with your money.

Bear in mind, as with all financial advice, it’s never one size fits all so it’s important to take into consideration what stage your relationship is in among other things. This isn’t exactly the kind of thing you bring up on a first date. But by the time you guys are discussing a future together…it’s probably worth talking about. So let’s get down to it.

1. Think Of Yourselves As A Team

I’ll let you in on a little secret - you work as a team. It’s really that simple. If you’ve decided to merge your futures together - why not your finances?

It's often surprising to us that we have a much easier time visualizing ourselves as a team in other areas of life besides money. We plan to raise children as a team and face difficult life events including losing parents as a team, but the fact is: when it comes to our money, working as a duo is not inherently instinctual. Rather than splitting hairs over who earns more and how to divvy up household expenses, start thinking of yourselves as a team.

Sometimes we come across couples who have been married for years but maintain individual checking accounts and still Venmo each other for rent. There's a better way:

The easiest method to execute this is to have your paychecks direct deposit into a joint checking account, we call it your money hub. It’s true, this can feel very uncomfortable at first and may even require a transition period, but shifting your mindset from “I” to “we” will help you get on track for your goals faster and more efficiently.

With this in mind, assets and liabilities belong to the household rather than to the individual. Instead of viewing it as “his/her student debt”, how about "our student debt"? At first glance, you might think this sounds incredibly unfair, especially if the loan decision pre-dates you. But what’s your end goal? Strange that combining assets and liabilities can feel so uncomfortable, yet most of us argue that pre-nups are terribly unromantic. Standing against the latter but for the former just doesn’t make a whole lot of sense.

2. Have The Goals Conversation

The first step in becoming a team is to talk about your goals. Most long-term relationships start because two people decide that they have a similar idea for what they want their future to be like. And oftentimes, when couples fall apart, it’s because they decide they don’t share a similar vision for the future.

The goals conversation is a major part of the Stash Plan® process because without a destination in mind, it’s hard to know if you’re headed in the right direction. Also, we don’t believe in saving for the sake of saving. Giving purpose to your savings (a.k.a. saving up for that trip to Portugal next year) can be a major motivator to stick with the program.

The majority of financial disagreements stem from seemingly inconsequential day-to-day spending decisions that tap into one person’s fear that those decisions are jeopardizing larger financial goals. If we discuss our goals first, it’s easier to hold each other accountable and more importantly, point to what’s at stake if we’re off course. So dream together and start thinking of your short, mid and long-term financial goals. But don’t just think about them, write them down and back into what you need to do today to be on track. We believe this is a vital step for any successful relationship – business or personal.

A very important part of this exercise is to prioritize your goals. How important is a goal to you? How important is it to your partner? A massive disconnect regarding priority level may signal that further discussion is required or else disappointment and mismanaged expectations will likely ensue.

3. Automate Your Success

The majority of the time, one person is leading the charge with household finances. Oftentimes we call this person the CFO (chief financial officer). They make sure the bills get paid on time and usually end up being “the nagger”. The other person, the naggee, is usually passive by choice or lack of interest or time. Either way, we’ve seen this system cause problems because as adults, we rarely like being told what to do – especially by our S.O. For that reason, among others, we are big fans of automation.

It’s the 21st century, you can and should automate your financial life. Most of us tend to procrastinate doing the things that are good for us and saving money is no exception. Left to our own devices, we usually procrastinate our savings goals until it’s too late (hello credit card!). But once you and your S.O. are thinking like a team and have decided on some goals, automation is your best friend. It ensures you are making progress without any need for the nagger to interfere 👍

Wondering how to automate your finances IRL? Here an example:

You’re planning to take a trip to Mexico in eight months. You anticipate needing $2,000 to cover all expenses. Step one, open a joint online savings account (CapitalOne 360 and Ally are two of our favorites), nickname it “Mexico” and set up an automatic transfer of $250/mo so that you are working towards your goal without even breaking a sweat. This system works for pretty much anything from saving for a wedding/honeymoon to planning for a baby to stashing away for retirement.

Should You Borrow From Your 401(k) For Your Wedding?

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Quick refresher: your 401(k) is an account provided by your employer in which you can save money for retirement. That amount you choose to save gets the advantage of being tucked away before you pay taxes on it. This is a great deal because if you want to save $10,000 in a year, you have to earn no more than $10,000. Whereas, if you wanted to save $10,000 a year into your savings account, you’d have to earn $12,500 (assuming a 25% tax rate) of which $2,500 would disappear in the form of taxes. That in and of itself, makes your 401k a great place to save. Another common perk is that your employer may choose to match a portion of your contribution, which we also suggest maximizing (a.k.a. take all the free money you can get).

Today, we are talking about whether or not you should take a loan from your 401(k) for your wedding or other non-essential emergencies. To cut to the chase: we are highly against taking a 401(k) loan unless you are in a dire situation and even then only as a last resort i.e. you have no other savings or borrowing options and are potentially staring bankruptcy in the face. Yes, that dire.

WHAT IS A 401(k) LOAN?

A 401(k) loan is an option to borrow money from your 401(k) (usually 50% of your balance up to $50,000). You repay the loan over a period of time, typically 5 years, via payroll deductions (no doubt convenient). You also pay interest on the loan which goes into your 401(k) as after-tax contributions. Yes, after tax - erasing the pre-tax benefit typically associated with 401(k) contributions. But that’s nothing compared to the other ways in which you’ll pay a price.

...BUT I’M JUST BORROWING FROM MYSELF

In theory, you are borrowing from yourself but, and this is a big BUT…in doing so, you create a chain reaction of negative consequences that are very hard, if not impossible to overcome. That is why, if advised properly, people who tap their 401(k) will only do so as an absolute last resort. The danger emerges because the massive disservice caused by a 401(k) loan is not immediately apparent, making it pretty easy to ignore.

THE REAL COST OF A 401(k) LOAN

When you borrow from your 401(k), you’re not really borrowing from yourself, you’re robbing your future self *cue dramatic sound bite*. Here are a few of the costs:

You lose free money: While repaying your loan, it’s likely you won’t be making new contributions to your 401(k). If your employer matches, you will miss out on all those contributions and can never get them back. This could cost your tens of thousands of dollars over the life of your contributions. 

You are double-taxed: Whether or not your 401(k) loan is subject to double taxation is a highly debated topic. Here’s how we see it. Technically only your interest is taxed twice (once upon contribution and again when you use the money at retirement). But that’s not to say you won’t lose the benefit of a tax-deferred contribution in the first place if you tap your 401(k) for a loan. In researching this (it made our heads spin), the conclusion was that you’re no worse off taking a loan from your 401(k) (FROM A TAX PERSPECTIVE) than if you take a loan from anywhere else, but you are better off (AGAIN, FROM A TAX PERSPECTIVE) not taking the loan in the first place. Yeesh - the semantics of it all - ain’t nobody got time for that.

You give up growth/compounding: Okay, this is the one that really bothers us. You’ve likely heard us harp about how time is the most important thing to help your money grow. We often tease that we don’t like taking on clients in their 40s because we don’t like delivering bad news - we are cheeky bastards! But the truth is the only way to make up for lost time in the market is to save more…which becomes more painful the longer you wait.

You may have to pay it back immediately: The typical repayment on a 401(k) loan is 5 years, but if you leave your job early or get fired, you usually have 60 days to pay it back. And if you can’t? The remaining balance is immediately subject to taxes and penalties - way to get kicked while you’re down.

Your tax bill may go up in the meantime: While you’re paying back your loan, you probably aren’t able to contribute new money to your 401(k) and therefore aren’t able to shelter any of your current income from taxes. That means, your tax bill will likely go up doing the loan repayment period.

You’re setting up bad habits: 1 in 2 people who borrow from their 401(k) become serial borrowers. Now listen, all of our clients will tell you that we think your wedding is as important as you do, but so is starting married life off on the right foot - especially when it comes to your finances. After all, your wedding is one day, but marriage is a lifetime. We advocate for working together as a team to come up with more reasonable solutions like postponing your wedding to save up for the amount you need or starting a side-hustle to bring in the additional funds faster to pay for the wedding of your dreams. 

YOUR 401(K) IS NOT FAST CASH

Bottom line, your 401(k) is specifically designed to help you save for retirement. Thinking of it any other way (including to purchase a home) is counterproductive to your retirement savings efforts and very unfair to your future self - who will pay the real price. It may sound harsh to say, but if you want to be a H.E.N.R.Y.™, you have to start thinking like one. So before you think of tapping your 401(k) for non-essentials, make sure you've exhausted all other sources of liquid savings you can go to first.

If you’re SUPER disciplined (and we don’t make this rec lightly) you could even consider a 0% credit card AS LONG AS you have a foolproof plan for how to pay it back before the teaser rate ends. And word to the wise, never borrow the max amount you’re eligible for - it’s a slippery slope.

If you think you’re a H.E.N.R.Y.™ and might be ready for more tailored advice, book a complimentary intro call so a Stash expert can learn more about your situation and what you’re looking for.

Is Social Media Wrecking Your Wealth Potential

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Have you ever felt like you were living two lives - your real life and the one conveyed by your social media profile? In the digital age, we all admit (even if only to ourselves) that our online personas are the ones we curate to perfection. And why not? Everyone from our friends to our relatives to our future employers are watching. It’s quite natural to want to put our best foot forward and in doing so, we create a version of our lives that’s meant to be engaging, inspirational, and let’s not forget, aspirational. Who doesn’t want to be seen as aspirational?!

But what’s at stake? What are the real costs? At first glance, this may not seem like this has anything to do with your finances, but hang with us as we discuss whether or not social media is wrecking your wealth potential.

No One Wants To Hear A Shitty Story

Life is hard, expensive, and often unfair - but you wouldn’t know it by scrolling through your social feed. Those images tell a totally different story. You may not even realize it, but we’re all telling a story through our social feeds. And as you probably agree, no one (including you) likes a shitty story.

Even though most of us are not poppin’ bottles several nights a week, it’s easy enough to make it look like we are. Thanks to social media, we’ve been able to take the “let’s not and say we did” mentality to the next level. We’re not implying that any of us are intentionally falsifying our life, but we have gotten very savvy (very quickly) at figuring out what garners us double-taps and follows and what does not - and we post accordingly.

The concept of portraying “the good stuff” is not new. Across most industries, from Hollywood to retail, we are being sold the lifestyle we want, not the one we have. Publishers show us a better life - an alternate reality from our own (which helps them sell ad space). And now, thanks to technology, we all curate versions of our lives that are worthy of publishing. We choose the moments to share, and then we apply filters, stickers and jealously-inducing geotags to enhance those moments for our “anxiously awaiting” audience.

Whether you’re the content creator or content consumer, the undeniable by-product of the social media scroll is a subtle but nagging feeling to keep up. Said another way, if you are buying the fabulous stories your friends are selling, it’s likely that you are keeping up with a version of their lives that is not a true representation of their reality. And it can end up costing you...big time.

The Struggle “To Keep Up” Is Real

In our role providing financial advice to hundreds of hard working, high earning H.E.N.R.Y.s™ around the country, we are intimately familiar with their spending patterns and habits. A recurring theme that comes up in conversations is the tendency to feel the need to keep up with the lifestyles of their friends. Clients tell us that they feel pressure to act rich while simultaneously working to become rich. We get it - none of us want to compromise. We want it all, or at the very least, to make it look like we have it all. It’s one thing when you see a celebrity doing something unattainable, it’s a whole different thing when you see your friend on a month long vacation in Thailand - WTF happened to their job?!?

People look a lot richer on social media than they actually are.

If your friend who happens to be a struggling actor can make even his life look glamorous, what’s wrong with you?

It’s easy to succumb to the belief that the lifestyle our friends portray on Insta are their real deal 24/7 life. And being bombarded by tempting images has a subliminal effect on our behavior, namely our spending habits. We feel like we should buy that pair of shoes, or book that vacation, because everyone else is. And if we can’t do it, it makes us feel inadequate, or even depressed. What we fail to remember is that it’s HIGHLY PROBABLE (we speak from experience) that those lifestyles are artificially supported by a credit card.

Fact: credit card debt is not debt if you pay the balance off at the end of the month.

Debt usually happens when you buy something you can’t afford. Harsh, but true. If you purchase a luxury on a credit card because you’re using the credit card as free money - you’re on a slippery slope, friend.

Being Fabulous is Lucrative for Some – Not All!

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We agree that keeping up with the world around us is expensive. But it can also be lucrative. If you find yourself at the crossroads of being a great storyteller with an attentive and sizable following you may be on the cusp of something known as a micro-influencer. A micro-influencer is defined as someone with around 30,000+ followers. Brands pay these influencers to advertise their products to their audiences. And they pay them well. What’s crazy is that these micro-influencers are so good at positioning the products that sometimes you can’t even tell the posts are “sponsored.” Whether it’s the revolution of Like to Know It for the fashion bloggers, or sponsorships through larger companies like Target, there surely is money to be made in the social media game. If this is your reality and you are able to pull in $5,000 or $10,000 a month on sponsorships – then you’re probably a H.E.N.R.Y.™ and should give us a call!   

However, if you have less than 50k followers (and most of us fall into that category!), it can be risky to invest too much in the Insta façade. It’s not something we talk about much and it’s certainly not a new concept, but keeping up with the Joneses (or the @joneses) is having a profound impact on our ability to get rich. And unless you are a micro-influencer getting paid to post, it’s likely that your audience cares much more about their own cohesive and perfectly on-brand Insta feed than what’s posted on yours. So while you are paying your own way for the little (or huge) luxuries for the sake of an aesthetically pleasing photo, it’s probably hurting your wallet more than it’s helping your image.

...it’s likely that your audience cares much more about their own cohesive and perfectly on-brand Insta feed than what’s posted on yours.

Splurge Wisely and Grow Your Wealth Potential

Those picture-perfect luxuries (Lauderée Macarons ft. a bottle of Veuve Cliquot, a hot-off-the-runway outfit, a private cabana at a Las Vegas pool party) add up - quickly. And we aren’t saying that you can never enjoy these splurges, because believe me, we love a colorful cocktail on a rooftop bar just as much as the next H.E.N.R.Y.™. But spending wisely now will make you happier, and ultimately wealthier, in the long run. If you’ve got an item or a trip you want to splurge on, then by all means, plan it, save for it, and spend away! The danger with social media comparison, and the subsequent lifestyle creep, lies in spending for the sake of spending – or for the sake of social media recognition. Reckless spending leads to bad money habits than can sabotage your wealth potential. Racking up consumer debt, avoiding your bank account, and inflating your lifestyle are all toxic for your future wealthy self.

Avoiding the Social Media Spending Trap

Before making a purchase, ask yourself “would I be doing this if social media didn’t exist?” Or - if you couldn’t tell a single person about the item you’re going to buy or the trip you’re about to take, would you still spend the money?

Consider the money you’ve spent simply #forthelikes – could you have put that cash toward something more tangible? Like paying off a student loan, or a new DSLR camera, or tickets to a show?  

At Stash, we advocate for living the lifestyle that you want (luxuries included!), but most importantly, a lifestyle you can afford. Avoid social media-induced spending in the short-term and don’t wreck your wealth potential for the future. Today's #digitaldetox may help you chip away at tomorrow's downpayment.

What You Need To Know About The Equifax Breach

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On September 7th 2017, Equifax announced that it was hacked back in July of this year. As a result, the personal data of 143 million Americans was compromised. Sadly, this going to happen more and more in today's digital world.

The unfortunate truth is to assume you were affected but if you'd like to check for sure, you can do so here.

What To Do...

Some of you may be thinking of freezing your credit which is an option. That said, there will likely be a cost involved. A free tool which you might want to consider is CreditWise (Learn More). It's offered through CapitalOne Bank but you don't need to be a CapitalOne customer to use it. 

It has many features including an alert system so that if there is any activity, like someone opening an account in your name, you will be notified immediately. The other company to use is LifeLock but there will be a cost involved there, too. Equifax is also planning to offer complimentary credit monitoring and identity theft protection from a 3rd party provider for all affected people, but opting in may affect your rights. To keep on top of the most up to date information, it's best to check in with Equifax's site directly.

Our 3 Favorite Money Apps of 2017

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In our books, these deserve a spot on your home screen.

It's no surprise that technology is changing our lives in every way imaginable. We can video chat with relatives across the world, book a SoulCycle class and order groceries (just kidding, order Seamless) all with the apps on our phone or tablet.

The number of personal finance apps that have popped up in the last year are hard to count. There are good ones and there are great ones. All aim to help us simplify the management of our finances because we have better things to do with our time than spend it managing our budgets (read: why budgeting doesn't work). Here are three of our favorite money apps of 2017 (beware: some of them sound too good to be true!)

There's an app for that!

1. DEBITIZE

Alright, here’s that scary word: credit card debt. A recent study shows that individuals under age 35 have an average of $5,808 in credit card debt.

Quick Math: Assuming you pay the minimum, it would take you 3.8 years to pay off that balance and cost you an additional $1,912 in interest. Racking up an additional $2,000 in expenses is totally avoidable. You have much better things to spend your money on than credit card interest.

Debitize is a free online tool that helps you build your credit score without taking on the risk of going into credit card debt. You start by hooking up your checking account and any credit cards that you’re using. Then, as you start making purchases, Debitize moves money from your checking account and uses the money to pay off your credit card bill for you. By moving the money out of your checking account (on a daily basis) it helps you keep track of what's left to spend. And you don't even have to lift a finger. That means it'll be a lot more obvious if you're spending money you don’t have. Handy, right?

2. DIGIT

Saving money is a tricky thing. For most of us, it's an afterthought - a.k.a. whatever's left over at the end of the month. The problem is that there's almost nothing left over. Or if we are able to save, we usually end up having to move some of that money back into our checking accounts to pay bills. Enter Digit. Once Digit is hooked up to your checking account, it's super smart algorithm monitors your cashflow and sneaks money away from you a few dollars at a time. We swear you won't miss it. 

While, there's been a lot of controversy over Digit because earlier this year they decided to start charging for the app, it continues to garner rave reviews from it's users. If you fall into the category of "there's never any money left over to save" we suggest you try Digit.

3. CREDITWISE

Making any major purchases soon? CreditWise is an AWESOME (yes, it deserves all caps) tool made available through CapitalOne Bank but you do not have to be a CapitalOne customer to use it. The app does several things but our favorite is that it allows you to simulate how certain actions may impact your credit score, like not paying your bills on time, closing a credit card or applying for a mortgage. We love this because there's always been a veil of mystery around credit scores and how they are calculated.

Also, CreditWise acts as a credit fraud monitoring service because it has built-in alerts anytime your credit report changes. So if someone tries to apply for a credit card with your name or changes the address associated with any of your accounts, you'll know immediately!

We love CreditWise to understand what makes up your score and to find helpful ways to take action to improve it.

5 Budget Friendly Breakfasts You Can Take To Go

This post may contain affiliate links. Please read Invibed's disclosure for more info.

Two truths about breakfast: you shouldn't skip it and you shouldn't spend a lot of money on it. Budget friendly breakfasts are easier than any other meal because breakfast ingredients are typically less expensive — and most people are okay with keeping the same few options in rotation (less risk of wasted food). If you're like me, you may even eat the same thing most days.

So what's on the menu? Here are five of my favorite budget friendly breakfasts and (bonus!) they are all portable so you can take them to go. #GottaGoBye


1. Overnight Oats

Oatmeal is an amazing item to have in your kitchen if you want to eat better and save money. As a great source of iron, protein, and fiber, oatmeal is super nutritious — and it is also super cheap! The downfall? Preparing a bowl of oatmeal takes a little time and effort and it's not exactly portable. Overnight oats are awesome because they give you all the benefits of oatmeal without any of the struggles.

You can whip them up the night before, then just grab-and-go in the morning — yes, you can totally eat them cold! I also love how diverse overnight oats are. You can make so many different combinations by just swapping out a few ingredients. You can keep it simple and just follow the list below or go all out and come up with a delicious combo like these PB&J Overnight Oats from Spinach for Breakfast. As far as budget friendly breakfasts go, overnight oats are definitely one of my favorites.

Ingredients you'll need:

Oatmeal

Fruit

Milk

Nuts or Nut Butter

Extras (Chia seeds, cinnamon, flax meal, etc.)

2. Egg Muffins

Kind of sounds like your favorite fast-food breakfast — but it definitely isn't. Egg muffins are basically the result of putting eggs in a muffin pan to create cute mini frittatas (and unlike their similar sounding counterpart, they are actually healthy). If you love scrambled eggs in the morning but in no way have the time or energy to actually make them, this is your solution. You can make egg muffins ahead of time and then microwave for 30-seconds before you're ready to eat.

Like overnight oats, you can also come up with tons of different combos depending on what you like. In this recipe by Spend With Pennies, she uses turkey sausage, onion, peppers, and cheese and also suggests a spinach and feta version.

To make your egg muffins, preheat your oven to 350 degrees F, spray a standard-sized muffin pan* with cooking spray, and divide your ingredients (vegetables, cheese, or meat) into each cup. Then in a bowl, mix your eggs and seasonings and pour the mixture into your cups. Bake for 22-25 minutes, let cool, and refrigerate until breakfast time.

Ingredients you'll need:

Eggs

Vegetables, Cheese or Meat

Cooking Spray

Seasoning

3. Homemade Protein Bars

I've said some mean things about protein bars in the past and I'm going to stand by those statements. While some varieties of protein bars make a great meal replacement when traveling or on the go, most are super pricey and packed with sugar. An easy alternative is to make your own protein bars!

When making protein bars at home, you control exactly what goes in them so you can limit the sugar — and save a lot of money. Again, you can put pretty much any variety of nuts, dried fruit, oil, nut butter, and sweetener you want. These No-Bake Hemp Seed Bars are #goals.

Ingredients you'll need:

Nuts

Seeds

Coconut Oil

Maple Syrup

Nut Butter

4. Smoothies

Smoothies are easy to make but annoying to clean up. Invest in a single serve blender (I use the Magic Bullet Blender*, $39.88, Amazon) and that issue is instantly resolved. There is a “max” line so I know how much good stuff I can get in, I lock it in place (you don't even have to hit blend), and in seconds my smoothie is ready. I remove the bottom/blade and quickly rinse it off. I'm out the door with a balanced breakfast in hand and no mess left behind.

My go-to smoothie is frozen fruit, a handful of spinach, vegan protein powder, almond butter and unsweetened almond milk. If you want some smoothie inspo, check out Be Well By Kelly's Fab Four Smoothie or pick up her book “Body Love“*, $19.03, Amazon).

Ingredients you'll need:

Fruit

Milk or water

Greens

Protein Powder

Nut butter or coconut oil

Flax or chia seeds

5. Yogurt Parfaits

These look so pretty it's only human to assume they take a ton of time to construct. Plus when you see them in coffee shops they are like $5 so it's understandable why a parfait never really made it to your list of budget friendly breakfasts.

In reality, you can put one together in less than a minute for less than a dollar. I know (#mindblown). All you need is a container of plain yogurt, granola or cereal, and fruit. If you want to add a little something extra, you can top your parfait with chopped nuts, coconut flakes or cacao nibs.

Out of all the budget friendly breakfasts here, this is probably the easiest to make. All you do is grab a mason jar* and layer cereal, yogurt, and fruit. Repeat until full. Take a picture. Post on Insta (#Invibed).

Ingredient's you'll need:

Yogurt

Granola or cereal

Fruit

Why Celebrities Go Broke

While this isn't exactly new news, a recent water cooler conversation about Johnny Depp's financial distress led us down a bizarre internet rabbit hole - where multi-millionaires go broke. And when we surfaced for air, it occurred to us that celebrities are just like H.E.N.R.Y.s™. We're all human and equally vulnerable to becoming victims of lifestyle creep.

WHAT IS LIFESTYLE CREEP?

As H.E.N.R.Y.s™, the good money has likely just begun to kick in. We are in the period of our life that financial people call our "accumulation years". Incomes are going up, bonuses are getting larger, and titles are becoming fancier. As we develop more experience and skill in the work we do, we are compensated accordingly.

As we earn more, we can spend more. And we should. But we should also be saving more. If we continue to live PTP (paycheck-to-paycheck) we will inevitably become victims of lifestyle creep: when our lifestyle increases in lockstep with our income, thereby trapping us in the PTP cycle.

OTHER FAMOUS PEOPLE WHO WENT BROKE

According to a 2009 Sports Illustrated article, 78% of National Football League (NFL) players are either bankrupt or are under financial stress within two years of retirement and an estimated 60% of National Basketball Association players go bankrupt within five years after leaving their sport.

Ever wondered why Billy Joel still plays Madison Square Garden night after night? For the love of entertaining? He wishes! Our favorite piano man plays because a few poor money moves have him tinkling those ivories for the cash. If only it was Easy Money.

Other famous people include MC Hammer, Toni Braxton - 2 times, 50 Cent, Meat Loaf, Francis Ford Coppola (the guy who created The Godfather) - 3 times, and the list goes on.

IT'S NOT ABOUT HOW MUCH YOU MAKE

By now it's probably pretty clear that how much you make has little to do with your ability to save and/or go broke.

We've done the math... 5-figure earners, 6-figure earners, and even 7-figure earners all have a chances to sit on millions or go broke. 

The Art Is Not In Making Money, But In Keeping It
-Proverb

WHAT ABOUT HIS TRUSTED ADVISORS?

If you book a session with a personal trainer and fail to show up, it's likely your results will be lackluster. Similarly, if you go to the gym and then go home and eat cookies every night, your progress will reflect it.

No one can know for sure if Johnny's management team did everything they could to help him avoid this situation so we'd rather not get into the legal muck of it. But their side of it is that they made multiple attempts to discourage him from his lavish lifestyle.

Bottom line - choose an advisor you trust and one that you'll listen to!

THE SOLUTION

Most people convince themselves that, "when I'm making $10,000 more, $20,000 more, etc. then I'll start to save, invest, travel [insert goal here], etc". But from what we've seen, it's likely you won't.

So before you fall into the trap of living a life you can't afford, set up some automation around your short-term and long-term goals. Read more about whether you're living a life you can't afford, here.

SHORT-TERM

-Set up an auto deduction from your checking account on a monthly or bi-monthly basis into a savings account that DOES NOT sit at the same bank as your checking account. Keep it "out of sight, and out of mind".

LONG-TERM

-If you aren't working with a financial pro who has helped you decide how much you should be contributing to retirement, opt in for the automatic annual percentage increase. Most 401(k) plans offer this option and it's a good way to systematically increase your savings in lockstep with your income bumps.

At Stash, we almost never say "no".  Our clients are rewarded for taking action and prioritizing their financial life early on. Do yourself a favor and start automating your financial life as soon as possible. 

 

Be Better With Money Today By Doing These 6 Things

As soon as you decide that you want to be better with money, you should start making changes. I'm a big believer in momentum and I know that (at least personally) most of us tend to prioritize the things that we have already started over the things that we “want to do” in the future. In other words, if you don't start now, who knows when you actually will? I wanted to get in better shape for a year but it wasn't until I signed up for a monthly membership at my boxing gym that I started working out again. That first step of just signing up made my goal a reality. If you want to be better with money, do something today to start changing your behavior and shifting your money mindset. Not sure where to start? Here are six things you can do today that will improve your financial situation and the way you think about money.

1. Open an online bank account

If you could pay $144/year or make $21/year, which would you choose? You'd want to earn that $21, right? So ditch that mainstream bank and switch to an Internet-based bank instead. Big banks have to pay rent for all of their physical locations, which means they have less money to pay you in interest and they typically charge you more fees. Internet-based banks, on the flipside, don't have to pay for brick and mortar locations and are able to pass those savings along to you. On top of that, FDIC insurance makes both types of banks equally safe for deposits up to $250k. Back to our example, one of my clients had a savings account with a $2,000 balance. She was being charged a monthly maintenance fee of $12 ($144/year) just to keep the account open and was only making a pathetic 0.01% APY in interest. We switched her account to an Internet-based bank that doesn't charge any monthly fees and has an interest rate of 1.05% APY. So instead of paying $144/year just to have a savings account, she is now pocketing $21/year in interest. If you're interested in making the switch, two of my favorites are Ally Bank and Synchrony Bank. Both currently have an interest rate of 1.05% APY and don't charge any monthly maintenance fees for savings accounts.

rsz_lee-campbell-191016-768x512.jpg

2. Start investing. 

If you're not investing, you're actually LOSING MONEY.

The average historical rate of inflation in the U.S. is more than 3%. That means the price of everything you buy will double every 20 years or so. If you want to maintain your purchasing power, you need to grow your money at a rate that's higher than the current inflation rate. Investing is the most common way to do it.

But where do you start? Thanks to technology, roboadvisors make it really simple and easy for anyone to start investing. They'll ask you a series of questions and based on your answers, they'll decide what you should invest in and they'll actually do the investing for you.

Two of my favorites are Betterment* and Wealthfront*. They both have a solid track record in the industry and have sleek apps that make it effortless to check on your investments. If you need help deciding between the two, here are factors that could help you make your decision.

 

Betterment

  • Cost: They charge a 0.25% annual fee for all balances ($12.50 per year on a $5k balance)
  • Account Minimum: No minimum balance
  • App Store Rating: 4.5 Stars
  • Key Feature: Goals-based Investing



Wealthfront

  • Cost: They will manage your first $10,000 for free and there's a 0.25% annual fee after that
  • Account Minimum: $500
  • App Store Rating: 4.5 Stars
  • Key Feature: Tax Efficiency

 

The exception: If you have high-interest credit card debt. In most cases, I'd suggest clearing out any consumer debt before starting to invest. Create a realistic repayment plan for paying off your credit card debt and then revisit investing later.

I always say, investing isn't for everyone and you have to earn the right to invest. Plus all personal finance decisions are just that– personal. Never assume generalized advice is the best fit for you. As part of our Wealth Coaching Program, we help our clients create and maintain a personalized debt repayment plan and let them know when it's a good time to start investing. If you want to learn more about what we do here at Invibed, you can always schedule a free consultation.

3. Create a designated emergency fund or f*ck it fund. 

The first step here is to open the account. Ideally, your emergency fund should be held in an entirely separate account at a different financial institution than where you do your day-to-day banking. There will be times when you're tempted to spend your emergency fund cash, and making it inconvenient to access will force you to think before you spend.

Now, set up an automatic deposit. Even if it is just $5/month. You need to get in the habit of paying yourself. Savings shouldn't be an afterthought at the end of the month. If saving doesn't come easy to you, don't feel bad about it. 47% of Americans have less than $400 in savings — but there is really no excuse for that.

If you want help saving money for your emergency fund, sign up for a service like Digit* or Qapital* that will automatically transfer money from your checking to your savings depending on your available balance and spending habits. Now you are saving and don't even have to think about it.

4. Cut out one expense from your life.

I am sure that there are many expenses you could do without, but let's start with one.

“I need everything.”

Really? I don't think so. Log in to your checking account or look at your statement and go through your transactions line by line. You like ALL of that stuff? Everything you purchase you use? The things you spend your money on are bringing great value to your life?

Cancel that subscription box that has more *meh* items in it than great. Cancel your ClassPass and start taking the free classes at your gym. Stop eating Chipotle 5x a week and go to the grocery store and buy some rice and beans.

There is one thing in your life that you can change that will free up some of your money to put towards something you value more (or need, like that emergency fund!).

5. Find a way to increase your income. 

Do you feel that your current salary is allowing you to live the lifestyle you want and prepare for the future? If the answer is no, then you need to find a way to increase your income.

This may be possible to do with your current employer. Are you overdue for a raise? Is there a higher level position open that you could apply for? It is completely possible that you could increase your income by simply asking for a raise or qualifying for a more advanced role. It is shocking, but less than half of working Americans ever ask their employer for a raise.

If you have just started working in your current role or have recently received a raise, asking for more money or applying for a different position within your company may not be appropriate. You also may be a freelancer or work for yourself. If this is the case for you, you will need to be more creative.

I usually suggest a side hustle as a first step to increasing income. Side hustles can range from driving for Uber a few hours each week to starting an e-commerce business.

Once you have decided the way in which you are going to increase your income, write it down on a piece of paper. Then write down what you need to do to achieve that and give yourself a deadline. For example, if you're going to ask for a raise, you need to prepare for that meeting. Your paper may look like this:

Ask for a $5,000 raise by July 31st.

  1. 1. Provide my performance report
  2. 2. Be prepared to discuss three major accomplishments I have had in the past 12 months
  3. 3. Set up a meeting with my manager

6. Think of a savings goal. 

If retirement or buying a house doesn't excite you, what does? I guarantee that whatever your goals are, they require money. Some goals require more money than others. A good exercise to do is to imagine your life in 10 or 20 years. If money was no object, where would you be? Who would you be with? What would you be doing?

From now on, when you are saving money, think of that goal. Not about the money. The money is just the tool that is making the life you want a reality.

 

How else can I be better with money? 

You've just learned six things you can do to be better with money now. If you're ready to know more, you'll find some great options on our Wealth Coaching page. Our eCourse teaches you everything you need to know about money in 5 hours through short video lessons and worksheets — great for my personal finance DIYers.

Our Wealth Coaching Program takes it one step further, bundling full access to our eCourse with all of our coaching services. As one of our clients, we create a fully customized Financial Game Plan for you (aka a 20-page report that covers your current financial situation and how to achieve all of your goals), send you monthly progress reports, track your net worth weekly, and answer all of your questions along the way. If you are looking for a full financial makeover and advice at an affordable price, you'll love our program.


*This is an affiliate link and Invibed may be compensated if you make a purchase after clicking through our links. Read the original article on Invibed.com.

Top Money Tips By Decade

In personal finance, many analogies are made to fitness and working out. In developing these generational money tips, we came up with another one. If you get into the habit of working out when you're young, it's a lot easier to maintain those good habits later on in life. Similarly, one of the most beneficial components to finding success with your money, is to start early and develop smart habits sooner rather than later.

So the first tip...

is for all of us, regardless of what generation we're in. Start yesterday! That's probably nothing you haven't heard before but whether you chose to put this piece of advice into action is what make a difference - no surprise, right?

Even if you're in a paycheck to paycheck situation, there are little ways (many of which involve the help of free financial apps) to slowly begin to develop smarter money habits. As they say, where there's a will, there's a way.

While all of these tips can be applied in your 20s, we've broken them out to provide you with additional focus and narrow in on the top things you should be paying attention to decade by decade.

IN YOUR 20s...

BUILD YOUR EMERGENCY FUND

-3 months worth of fixed expenses must be set aside before you can start to make your money work harder for you.
-Conventional finance wisdom says 6 months, we say 3. H.E.N.R.Y.s™ are HUSTLERS, this is your FIRST line of defense, not your only line of defense.
-Not having an emergency fund is a sure fire way to end up in debt.

GET A CREDIT CARD

-Don't think of credit cards as free money. Think of them as a smarter way to spend the money that you already have.
-Use your credit card as if it's a debit card that debits once a month (when you pay the bill in full and on time).
-Paying your credit card off more frequently, helps to build your credit score. Instead of paying it off once a month, pay it off every week or every other week #ficohack
-If you don't trust yourself to spend less than you should, use a free tool like Debitize that can help you stay accountable with using your credit card.

PRIORITIZE ANNIHILATING YOUR DEBT

-Work up to 20% of your net paycheck going toward paying down student loans and credit card debt. 
-Lower your interest rate by looking into refinancing. If you use this link to refinance, SoFi will deposit $300 into your checking account. We pass on the entire referral fee to you!
-With your debt paid off or under control, you can start working towards more fun goals.

IN YOUR 30s...

START THINKING ABOUT YOUR GOALS

As you probably figured out in your 20s, saving for the sake of saving doesn’t work. If you don’t tie your savings to a goal, you’re just going to move your "savings" back into your checking account and use it to pay bills. Save with goals in mind. What are you saving for? A down payment? A safari? A new couch? Whatever it is, set up a separate savings account for each goal and NICKNAME EACH ACCOUNT!

MAX OUT FREE MONEY

If you aren’t already maxing your employer match, you’re leaving free money on the table. If your situation is too tight to be putting away more, that’s fine, but don’t leave any free money on the table.

Ex. A 30-year old making $60k and stashing 3% into a 401(k) can grow to be around $310,000.

If our employer matches 100% of that 3%...you’re now looking at around $620,000!!!

IN YOUR 40s...

HAVE DIFFICULT CONVERSATIONS WITH YOUR PARENTS

Have they planned enough for retirement? Have they updated their estate plan?  Have they refreshed their will (to include grandkids…) etc.?

As the quote goes, "the best time to plan is before you need a plan". You don’t want to be caught off guard. A lot of our clients use the Stash Plan® as an excuse to bring up these sometimes awkward conversations.

WORK WITH A PROFESSIONAL

At this point in life, you’re probably going to want to seek professional guidance because you probably have a bit of catching up to do.

And to that end, the same way some of us need a personal trainer to help us stay accountable to our fitness goals, some of us may need a money trainer to help us stay accountable to our finance goals. When you're in your 40s, you don't have time to waste so hiring a professional to help you get and stay on track can be a smart investment.

Recently we sat down with the crew at SiriusXm's Wake Up With Taylor show to discuss our top money by the decade. Click here to listen.

 

 

How I Fell Back in Love with Saving Money

By Korrie Martinez. Co-founder of Invibed

By Korrie Martinez. Co-founder of Invibed

Saving money was something I loved when I was younger but lost sight of in recent years.

I started “seriously” saving money when I was maybe 12 years old. My grandpa revealed he had about $1,000 in savings bonds for me that he had purchased when I was a baby, and I could cash them in if I wanted to. As a twelve-year-old, he might as well have said he was giving me a million dollars because I was completely convinced I had just become rich.

Maybe most kids would have wanted to spend that money on something awesome, but I didn't. Partly because he played the reverse psychology game like a pro, saying, “You could open a savings account and keep that money… but I am sure there is something you'd rather buy.” Buy?! Lose my fortune?! There was no way.

MY GRANDPA AND I (1991)

MY GRANDPA AND I (1991)

Opening my first savings account

 

We went to the bank and opened a savings account together. I was too young at the time to manage my own account so my grandpa signed on as my custodian. We deposited the money from my savings bonds and that was that. I was officially in love with saving money. From the fancy lobby to walking up to the counter and talking business, I felt like a totally made adult and I loved every second of it.

When holidays and birthdays would come around, I would put any cash I was gifted into my savings account. My grandpa also gave me a $25 *allowance* each month that I would deposit (he still does to this day!). Every month we would look at my statement and I would marvel at the balance, watching that number grow.

I wasn't just saving money to save, though. I was saving for a house. Even at twelve years old I knew that saving money wasn't saving money, it was working towards a goal. Growing up I always lived in a condo and after my parents got divorced, my brother and I hopped around a lot. I don't think I ever felt like I had my own home, and I knew once I was a *real* adult I wanted to buy my own house.

At sixteen, I got a job working as a hostess in a restaurant. I was paid about $3 an hour and was tipped out cash by the waiters each night (usually $40-$100). I made decent money but I was a teenager, so let me tell you — I had a lot of expenses: gas for my car, clothes for every occasion, Egg McMuffins before school and sushi buffets on the weekend. I practiced moderation at the time by spending my cash tips and saving my paychecks. I was only working about 20 hours a week so my paychecks were small but I usually deposited over $100 a month.

By the time I was twenty I had saved over $5,000.

Then life happened.

MY GRANDPA AND I (1998)

MY GRANDPA AND I (1998)

Temptation is real and real life is expensive

 

My dad's side of my family is from Spain and it was always my dream to go there. I decided I would do a study abroad program which would help me meet my language requirement in school and also allow me to fulfill my dream. My family was encouraging but weren't about to foot the bill. They were already paying for my school and said living in Spain wasn't included in that room and board package.

I remember feeling completely crushed and desperate. I had to go to Spain.

So I talked with my grandpa and we decided to empty my savings account so that I could go. He said encouraging things like, “It's your money” and “You can always start over.” Since I was spending the money on a study abroad program and not shoes or something frivolous, I guess he thought my decision was more responsible than reckless.

But part of me couldn't help mourning the loss of my dream house that was about to go from having a $5,000 down payment to a big, fat zero. Not to mention, that was eight years of savings. It was bittersweet but Spain it was, and at the time I believed my grandpa was right. I could always start over.

Looking back, I don't regret my decision. I didn't blow the money on more makeup and froyo, or the countless other things that I spent my money on in college. Going to Spain was a goal of mine, and although that money was being saved for a different goal, it still went somewhere pretty special.

ME IN CADIZ, SPAIN (2008)

ME IN CADIZ, SPAIN (2008)

Did I ever start over?

 

Yes and no. I've ridden a similar roller coaster called “Saving and Spending Money” ever since. Historically, I'd go through periods of time where I would be really diligent about saving and then would drain my account for some kind of adult-related expense (or more usually, a trip of a lifetime).

Recently though, things have changed. My friend Dani (CFP™, ultimate Wealth Coach and fellow Invibed co-founder) has put personal finance back on my radar and I've started saving again with my twelve-year-old dream in mind: owning my own home.

Although my balance is smaller now than it was when I was 20, watching it grow is bringing back some familiar feelings. I really do love the feeling of saving money, and I think it's the kind of thing where you just don't get it until you do it. I promise once you get started, you're going to feel more in control and also have a better perspective in regards to your job. My grandpa always reminds me, “Pay yourself first,” and if you're not, it's only natural to feel like you're working for nothing.

DANI AND I IN NEW ORLEANS FOR HER BACH WITH OUR COLLEGE ROOMIE ANGELA (2015)

DANI AND I IN NEW ORLEANS FOR HER BACH WITH OUR COLLEGE ROOMIE ANGELA (2015)

Tips for saving money that really work

 

I've struggled with saving money as much as anyone, so when I say these things *really work*, I mean they've worked for me and I think they will work for you too.

 

  • Start small. Saving money is mostly habitual. Once you start saving a couple dollars a day, or week, or month, it'll become routine and you won't think it's such a big deal. Don't be worried about the amount you can save, focus on the actual act of saving. Once you discover that you CAN save money, you will.

 

  • Keep your money safe from momentary lapses in judgment. If you can automatically transfer money from your savings account to your checking account, it's likely that you will. I prefer having a savings account at a separate bank than my checking so I'm not as tempted to dip into it. Online banks are also awesome because they feel even farther away and offer better interest rates. Ally and Capital One are both good options.

 

  • Have a goal. Listen to twelve-year-old me, okay?! You need motivation. Which is why savings goals are so important. You should have more conservative goals (like saving for an emergency) but it's also important to have fun goals (like going on a vacation). You might not be able to afford a $2,000 vacation today, but if you start saving $165 each month now, next year you will.

 

  • Have a savings account for each one of those goals. If you are saving for separate things (such as that emergency fund and dream vacay), don't keep that money in the same account. Separate your savings into different accounts and name them accordingly.

 

  • Regard extra money as money to save. Remember when I told you that when I was a hostess in high school I saved the money from my paychecks and spent my cash tips? My paychecks were almost an afterthought when I looked at how much money I was making. That was because I would get my paychecks just twice a month and tips were distributed the day after a shift. It was easy to save the money from my paychecks because it felt like “extra money”. Regard any “extra money” in your life (such as a raise or bonus, money earned from a side hustle, or cash gifts) as money to be saved, because you already know you can manage just fine without it.

 

Saving money can help you feel more secure, afford the more expensive things in life, and improve your relationship with working and money in general. What are your favorite ways to save and how have you overcome the obstacles that are trying to crush your goals?

New Job? 3 Things You Can Do With Your Old 401(k)

When you leave or change jobs, you can no longer contribute to your 401(k) account. That doesn’t mean you should cash out and call it a day. In fact, that’s not a good idea for a few reasons. In addition to annihilating your retirement savings, you lose the benefit of allowing that money to grow tax free (which can add up to 10s or even 100s of thousands in the long run). You will also face a tax bill on those assets and be penalized an additional 10%.

As a quick refresher, a 401(k) is a type of account in which you can choose to save part of your paycheck for retirement directly through payroll deductions. These accounts are provided to you by your employer and are a great way to automate retirement savings.

When you hit your 30s, if you’ve had a few job changes, it’s likely you have a couple old 401(k)s still floating around. It’s not uncommon to forget about what you have or where it is. Even if you’re using an aggregator like Mint.com to keep track of things, it’s good to know your options. When it comes to what you can do with your old 401(k)s there are three main things you can do. Leave it where it is, roll it to your new employer’s retirement plan or roll it into an Individual Retirement Account (also known as an IRA). Let’s take a look at each.

Leave It Where It is

This is our least favorite option. Because 401(k) plans are administered by a 3rd party (the plan provider) on behalf of your employer (the plan sponsor), there is usually an additional layer of fees on the account. Also, in most 401(k) plans, the investment choices are limited to a small selection of the investing universe. These options are not always the best possible ones. Finally, if you have more than one old retirement plan, it becomes very hard to keep track and make sure the investments are all working together. Multiple passwords and websites to keep track of mean you’ll likely forget about or neglect to take care of the account.

Move It To Your New Employer’s Plan

We love the idea of consolidating all your old 401(k)s into one account. Your new plan will give you the option to roll (move) your old plan into your new one. One thing to keep in mind is that if your new employer offers a match, it will not apply to or affect the old assets being rolled in. As we discussed earlier, your old money once invested, will be subject to that additional layer of fees charged by the 3rd party administrator. And you’ll likely still be stuck with limited investing choices.

Move It To Your Own Personal IRA

An IRA (Individual Retirement Account) is a type of retirement account that you open for yourself, rather than with your employer. There are no taxes or penalties to move your money from a 401(k) to an IRA. You can open up an IRA at a variety of financial institutions and roll ALL old plans into this single account. Good To Know: once you contact your old employer and they cut a check from your old 401(k) you have 60 days to deposit it into your IRA to avoid any taxes or penalties. A big benefit is that you will now have the entire investing universe to choose from, making it much easier for you to manage the investments and risk profile. Just like a 401(k) you can’t touch this money until you’re 59 ½ and you receive the benefit of tax-deferred growth (as the money grows in the account, you don’t pay taxes on it).

What is a 401(k) Rollover?

When you contribute money to a retirement plan, certain rules prevent you from accessing those funds until later in life, usually age 59 ½. If you try to access the money sooner, there are taxes and penalties to pay. In order to avoid any such negative consequences, you’ll want to do a rollover which means you move the money from one qualified account, like a 401(k) to another qualified account, like an IRA, within 60 days. A properly executed rollover won’t trigger any taxes or penalties.

If you need help deciding which option is best for you, the Stash Plan™ can help!

 

 

 

How To Go From Hungry To Rich

By Dani Pascarella. Co-founder of Invibed

By Dani Pascarella. Co-founder of Invibed

I worked on Wall Street for years, where I managed money for super wealthy clients with at least $25 million in the bank. Now as a Wealth Coach at my company Invibed, my clients are a little different. I help millennials manage their money. Spoiler alert: none of them are millionaires…yet.

A lot of my clients feel like there’s no means to an end. Regardless of whether or not they have student loans or a good salary, they feel like they’re just getting by and they are hungry for more.

Truth is, you can hustle your ass off but your chance of becoming a millionaire just from your grind is rare. Most millionaires don’t become rich just from working hard at their 9 to 5. They don't inherit their money either–80% of millionaires in America are first generation.

They commit to serious lifestyle changes, set concrete goals, and tap into additional streams of income. If you want to make the changes to go from hungry to rich, here's what you need to do:

1) Get a side hustle

A good first step to increase your net worth is to get a side hustle. This basically means you take a few of your “free time” hours and turn them into earning hours. Whether you walk dogs on your lunch break or tutor online in the evenings, you are capitalizing on your skills in a profitable way outside of your career.

2) Generate passive income

There are only 24 hours in a day and you need to sleep. Even if you kill it all day, it’ll probably never be enough to make you rich. You need passive income.

Passive income is money that you receive on a regular basis without having to put in much effort. Owning rental properties or a blog that generates advertising revenue are two popular ways to make your money work for you, even when you’re not working.

3) Start investing

People who don’t invest either think it’s too risky or just don’t know how.

Let’s start with the first excuse. Investing is not always risky. The S&P 500 has had an average annual return of about 10% from inception in 1928 through the present.

And you know what’s riskier? Keeping wads of your hard-earned cash in a savings account. Right now, our country’s inflation rate is higher than the interest rate your bank is paying you, so if you’re not investing, you’re automatically losing purchasing power.

Another common reason is just not knowing where to start, but with today’s new services and technologies, it’s okay if you don’t know how to invest. I work with my Wealth Coaching clients to determine the amount of money they can safely invest, and refer them to the best apps, roboadvisors, and money managers for them based on their preferences.

4) Lower your overhead

Stop living like you’re already rich. I get it, you’re out of school and you finally have that big boy/girl paycheck. But rather than spending every cent you earn, you should be spending smart. Not to mention this is the one time in your life when you can totally rough it, and it’s socially acceptable. Take advantage of that. Eat eggs for dinner, drive your shitty car into the ground.

Some of my most successful clients opted to move back in with mom and dad after college so that they could pocket their entire paycheck and use that money to invest or start a business. Not the ideal long term solution, but a smart short term one for sure.

Even billionaire Elon Musk decided to live on just $1 per day when he was younger. Knowing that he could live off of such a small amount of money helped him figure out that he’d be okay no matter what career path he chose. Seeing how little of your paycheck you actually need to survive is empowering and actually eliminates stress.

5) Understand your spending habits

You work hard for every dollar you earn. Don’t you want to make sure you’re spending it on things that actually add value to your life?

I analyze the spending habits of each of my Wealth Coaching clients, and they are usually shocked to see how much money they spend on things that don’t matter to them.

Small purchases that seem innocent at the time, like that massive “I’m hungover” Seamless order or those subscription services that you pay for but rarely use, can really add up.

Yes, budgeting does take time, but you’ll feel a lot richer when you’re spending your income on stuff that actually matters to you.

6) Focus on your goals

For most people, making smart money decisions feels like a sacrifice. They think of all the things they can’t do or buy.

That’s why the very first thing I do with my clients is get them to develop a goal-focused mentality. From there, every single money move they make is tied to a specific life goal. This is a game changer because what once felt like sacrifice now feels like progress toward the things they most want to achieve.

7) Re-evaluate your friendships

You’re the average of the five people you spend the most time with, and that applies to net worth too.

If your friends are focused on becoming future one-percenters, you’ll probably become one as well. If your crew is racking up credit card debt at the bar every weekend, you’ll likely wind up in the same boat.

Choose the people you spend your time with wisely. A friend who was really fun to party with in college may not be the best person to surround yourself with if you want to build an amazing life as an adult.

Should You Be Buying Bitcoin?

If your asking yourself this question, the answer is probably "no". There is an old investing adage that whenever an investment becomes news-worthy or you get that feeling that you are missing out on a great opportunity, it's probably time to run!  Said another way, when everyone is buying you should be selling and when everyone is selling you should be buying. That's easier said than done. Unfortunately, our brain tricks us into acting the opposite - we get excited, we feel we are missing out and we don't want to be left behind. It creates euphoria and we always end up buying on emotion rather than logic. As we've said before, emotions and investing don't mix.

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Recently, we started getting more calls on what we think about these cyrptocurrencies like Bitcoin. Whenever clients start calling us and asking if they should buy something, it's almost always a red flag that the investment may be getting a little too expensive. With that said, let's talk about what Bitcoin is and if it makes sense for you to buy it. 

What Is Bitcoin

Bitcoin or similar cryptocurrencies like Litecoin, Ethereum are what are known as digital currencies. They don't involve traditional banks, their value is not determined by governments, and they provide for anonymous transactions (for the most part). They aren't printed or minted like the traditional dollars or coins we think of, instead they exist in a digital format (think 0s and 1s) and are traded electronically.

Recently, speculators who believe that cryptocurrencies may have profound implications for business and commerce have driven the price of Bitcoin to over $2,200. The technology that drives Bitcoin, known as the Blockchain, is already starting to show signs of having an impact on all kind of things on the global exchange, besides currency. For example, there are signs that it will impact how we identify ourselves - social security numbers, passports, and even bank account numbers may seem pretty archaic in a few decades.

Does It Have A Place In Your Portfolio 

Whenever you are buying something with the thought or feeling that "I could make a lot of money on this quickly," it's a good idea to take a step back and realize that you are not making an investment. You are making a bet. No different than going to Vegas and putting it all on red - you should gamble accordingly - ONLY with what you are prepared to lose. 

Currently, Bitcoin has over five times more risk than the S&P 500. Despite it being digital, the currency is not very liquid - it's hard to buy and sell quickly. Meaning, when the price starts to go down, watch out! Everyone will be trying to sell their Bitcoins and there won't be enough buyers. This will lead to further decline in the price. The average investor (not an institution) will have a hard time getting their sell order to go through as the price will continue to drop. Recently, the price dropped $300 in 1 hour!

How Much To Invest

With that said, if you want to gamble with the potential of striking it big on Bitcoin, we suggest doing it in a way that doesn't affect your overall financial picture. For our clients, we normally evaluate this on a case by case basis and at most, allow them to use no more than 3% of their total portfolio on these speculative "gambling" trades. There are also safer a.k.a. more diversified ways to invest into the digital currency theme. For example there is an ETF (Exchange Traded Fund) Symbol: ARKK that has around a 7% position in Bitcoin along with a lot of other companies in the fund, too. If your hell bent on being invested in Bitcoin, this might be a good way to get exposure but if things go the wrong way, at least you have exposure to a lot of other companies that will help to diversify your position and mitigate your losses. 

 

DISCLAIMER

All information, data and opinions contained on Stash Wealth's site are for educational, illustrative purposes ONLY. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. This information is not an offer to buy or sell or a solicitation of an offer to buy or sell any security, product, service or investment. The opinions expressed in this site do not constitute investment advice and independent advice should be sought where appropriate. Where quoted, past performance is not indicative of future performance.

6 Awkward Conversations About Money You Need To Have

By Korrie Martinez. Co-founder of Invibed

By Korrie Martinez. Co-founder of Invibed

Money can be as taboo to talk about as religion or politics — but why? Yes, we are all financially flawed in some way. Yes, there is a stigma that money defines you. Yes, it feels really personal to have conversations about money.

But why does that stop us? There are plenty of things that are equally as revealing and uncomfortable that we openly discuss. Like our weight, our sex life, and our mental health, to name a few. We let our guard down in hopes of finding solitude in others’ responses, or gaining advice that can improve our current situation. Having conversations about money is awkward, but doing so leads to the same result as any other confession. A burden is lifted, and we find solutions.

Here are six awkward conversations about money you should have that you may not want to, but should. Like, soon.

1. Your parents

I recently read a post Erin from Broke Millennial wrote that posed the question, “Are you your parents’ retirement plan?” It definitely struck a cord with me. I’ve seen firsthand children being left with the emotional and financial responsibility of caring for their parents. And it’s not easy, or cheap.

As millennials, most of our parents are nearing retirement. What plan do they have in place to support themselves for the next few decades? It might feel like you’re overstepping by asking, but if it comes from a place of love and responsibility, I think your parents will understand.

Ask them how they envision retirement, and how they plan to pay for it. You’ll also want to find out if they have a living will, medical power of attorney, life insurance and long term care insurance.

If talking about the possibility of your parents getting sick or needing an aid seems pessimistic or very gloom doom, I totally get it and sort of agree. But at the same time, I know for certain that not being prepared when hard decision making is needed is worse. It's much easier to muscle through a difficult conversation than deal with these questions in the middle of an emergency.

2. Your siblings

If your parents divulge that you are in fact their retirement plan (or if their lack of plan insinuates they are going to need you more than they think), you need to take action. If you have siblings, that action should include them. As a team, you need to discuss your savings plan. How much can each of you set aside to help your parents in retirement? How will the burden be distributed among you? Who can handle what? Will you each hold onto your own contribution, or will you pool the money into one account?

Remember, this isn’t a blame game. You may be disappointed in your parents because they didn’t plan as they should. You may think the oldest sibling or the sibling with the biggest salary should just handle it themselves. Try not to create rifts and think of this as a team effort. Also be grateful you know what you know now, so you can plan for the future rather than react to it later.

3. A professional

A few years ago I was diagnosed with a rare skin disorder that left me with some pretty nasty scars. I fought myself for years about it, never totally accepting the change in my appearance or how it affected my confidence and emotions.

Finally, after some nudging, I went and spoke with a counselor. Getting an outsider’s perspective allowed me to see my situation much differently and gave me a safe place to completely communicate my concerns. Suddenly my fears didn’t seem so scary, and I learned easy, actionable ways to build back my confidence.

A financial professional, whether it be an advisor or a Wealth Coach, is similar in that they can address your concerns and provide you with a game plan to achieve your goals. We often think we can handle things ourselves. (Even with my scars, I always felt like eventually things would get better or I would figure things out.) But sometimes we just need help, and a professional in that field can be the key to seeing real progress.

I'm not saying you can't learn about personal finance on your own. But having conversations about money with someone that has the education and certifications to advise you on interest, investments, home and student loans, taxes and more can be a huge game changer. Don't let stubbornness or the awkward idea of sharing with a stranger stand in your way of getting the help and guidance you need to stop stressing about money and take action.

4. Your sigother/bf/gf/fiancé/husband/wife

Is there a right time in a relationship to have a real talk about money? No, but the sooner the better. If you see yourself sharing a life with this person, it’s important to know if you are financially compatible.

There are a few layers to money in a relationship. One big one is spending habits. If you are a savvy saver and your sig other is a big spender, conflicts can arise. That doesn’t mean you can’t find a middle ground, such as a Reverse Budget™ (where you save first and then spend as you please) or setting up a fun fund (putting a percentage of your earnings in an account for dates, vacations, etc.). But you do need to have conversations about money that address each other’s spending habits. If they are different, you need to determine how (and if you’re willing) to comprise.

Another big topic is debt. Do either of you have any? You need to be honest with each other about student loans or credit card debt. If you end up living together or getting married, these payments will effect what you can afford. Having debt isn't a crime, so don't be afraid to ask if your partner does or admit that you do.

Goals are also an important layer to cover. What are you saving for? You may agree on saving but not for the same things. The old, “Where do you see yourself in five years?” is an indirect way of finding out if your financial goals are aligned.

5. Your friends

Having conversations about money with your friends can feel like torture — especially if the convo is about you not having any. There is often guilt associated with admitting you need to spend less, and then following through with it.

A good tip is to lead with a goal. No one wants to say, “I’m broke.” Instead, tell them why you are cutting back. Are you trying to pay your student loans off faster? Buy a car? Afford an upcoming vacation? Let your friends know why they won’t see you throwing back drinks at the bar or out to sushi for awhile. It’s easier for people to understand that you are trying to achieve something, than understand why they aren’t a “priority” in your new budget.

Once you’ve explained your current situation, offer more affordable alternatives for spending time together. This will solidify that your changes are about your financial goals, not your friendship. You may even motivate them to get more serious about money as well.

6. Yourself

Talking to yourself about money isn’t weird, I promise. You may have even heard of a money blueprint already. Basically it requires you to take an honest look at how you want your life to be. Everyone has different goals and those goals determine your money blueprint.

Yours may be to get married, buy a house and have kids. Your best friend’s may be to travel as much as possible, as soon as possible. You and your best friend have very different money blueprints because in order to meet each of your goals, you will need to save, budget, and invest much differently.

Once you’re set on what your financial goals are, you need to figure out how you’re going to stay accountable. I’m a big advocate of writing goals down, and revisiting them weekly or daily. However often you need a reminder or renewed motivation.

Our money mindset is sometimes a predisposition, whether our parents, community or media influenced it. If we want to change our behavior, do something different, or strive for a lofty goal, it is going to require dedication. Having a talk with yourself about what you want and how you’re going to get it is one of the awkward conversations about money we all need to have.

The Money Truths Of Becoming Rich

It's likely that you're reading this because you want to pick up some quick tips or habits that will help you on your way to financial freedom. After all, that is why we all want to be rich, right? For the freedom (no matter how your define it). But what if we told you that you already know the secrets to being rich. When you think about it, they're pretty obvious actually. While most of us intuitively know what to do, we get tripped up because we never actually do it.

Here's a quick rundown to remind you of what you already know ;)

Becoming Rich Truth #1: Don't Waste Time

In most cases, becoming rich doesn't happen overnight. Money grows (compounds) with time. That's the first truth and unfortunately the rest of them are just as unsexy - which is why most of us flat out ignore them.

When you're making good money, it's very easy to push off the important financial decisions. But the sooner you start planning for your future, the less you'll have to compromise on that future.  Even if you feel like you're living paycheck to paycheck, you have to try to start putting money away - a little bit goes a long way - especially when you're young. An app like Digit can really help.

Back of the napkin calculation: Every dollar invested at age 25 equals about $16 dollars at retirement but if you wait 10 years to get started, every dollar invested gets you only half as far. Start now.

Becoming Rich Truth #2: Avoid Lifestyle Creep

Have you ever said to yourself "as soon as I'm making more, I'll save more, do more, travel more, etc." but then a few years go by and you're making more but you don't have much more to show for it? The money still feels like it's disappearing and maybe your lifestyle's gone up a bit but it's hard to measure. That's lifestyle creep. 

The danger here is that once you're used to the higher income, it's hard to give it up. Cutting back is painful. But if you get into the habit of recalibrating your savings whenever you have a pay bump, you'll get to upgrade your lifestyle and upgrade your savings which will keep you on track to accumulating serious wealth.

As your income goes up, two things should happen, you should upgrade your lifestyle, but also upgrade your savings. An easy and automatic way to do this is to set your 401(k) to increase each year by 1%. As you get raises, some of the additional money will come to you and some will go to your future before you have a chance to get used to living off of it.

Becoming Rich Truth #3: Don't Spend Money You Don't Have

Obvious, right? But how many of us are carrying credit card debt that we don't pay off at the end of the month. According to a recent study, Millennials range between $5-8k in credit card debt, depending on age and household income.

Most of us aren't quite sure if we are living a life that we can afford. Read more about whether you're living a life you can afford here. But a surefire way to stall your progress towards becoming rich is to spend money that you don't have. There are two main ways to grow your wealth, either earn more or spend less. The greater the difference between those two, the faster you become rich, period.

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A final thought. At Stash, we remind clients that there's a monumental difference between "acting rich" and "being rich" and it's important to delineate between the two. While you're on your way to becoming rich, if you're doing everything we've outlined, you shouldn't have to feel like you're compromising. It's our goal to help you keep your lifestyle (the one you can afford) today while planning for the future. 

We often joke that we don't love taking on clients in their 40s because we don't like delivering bad news. That's not to say that 40-somethings can't have it all, it's just a little bit harder, but still possible.

So while your friends are blowing money they don't have, try to remember that you're setting yourself up for the good life in a much more sustainable way. 

Cheers!

How To Handle An Inheritance Responsibly

10,000 Americans turn 65 each day - a very matter of fact reminder that while it's not pleasant to think about, our parents are getting older. And with their inevitable aging and eventual passing comes the possibility of receiving an inheritance. Many of us find ourselves in this situation much sooner than we would like. But the fact remains that for many of us, this will be our reality. Studies show that millennials (individuals born between 1980 and 2000) are poised to inherit 30 trillion dollars over the next 30 years. The money is coming to us, but are we prepared to handle it responsibly? 

If there is one thing we hear from almost every single client who's received an inheritance, it's that they don't want to waste the money. They want to do something meaningful with it - something that honors the loved one who has passed and quite frankly, we couldn't agree more.

POOF! IT'S GONE.

Get this, studies show that most people blow their inheritance within five years!! Considering this is the exact thing most of us are trying to avoid, it's a perplexing phenomenon. So here are some tips to consider when you want to be responsible with your inheritance.

YOUR FIRST CALL

Most articles end by recommending that you should talk to a professional. We begin with it and here's why.

You don't know what you don't know. A Financial Planner is a great place to start. Make sure they are a fiduciary which means they have to put your interests first! With your new, sizable bank balance, you will quickly become prey to the large investments firms who will want to take your money and invest it or worse sell you high-commission financial products (read: annuities).  More than likely, those will not be the best decisions for you. By working with a Financial Planner that charges a flat-fee, you can feel comfortable knowing that they are addressing your situation in an unbiased manner. At Stash we say,  "investing for the sake of investing is just gambling". You need a plan to help decide how to allocate the funds. You’ll also want a planner who can address any tax implications of receiving the inheritance.

DON'T RUSH

When you receive an inheritance, you will likely be in an emotional place. And emotions and money are two things that NEVER mix well. You should be weary of any financial professional who pressures you into make snap decisions. Finding someone who is willing to answer all your questions and provide the necessary education to help you make good decisions is what you're looking for.

CREATE A GAME PLAN FOR THE MONEY

The point of working with a Financial Planner is to begin to lay out some goals for the money. They will help you think through the various goals you may have. You might start by thinking about setting yourself up with a rock solid financial foundation. Maybe part of the inheritance can go to establishing an emergency fund. Maybe some can go towards paying down credit card debt or high interest student loans. Once your foundation is set, you might think about putting some of the money towards your future security (i.e. retirement). Once your short and long term goals are properly addressed, we recommend you start thinking about mid-term goals like buying an apartment, starting a business, planning for your family and even donating to charity.

The best part about doing it this way is that once a financial planner understands your current situation and your goals,  you will have peace of mind knowing that they are directly you in accordance with your priorities.

A FINAL NOTE

While we highly advocate taking your time before making an decisions, try not to avoid making decisions. Because of how jarring the emotional aspect to receiving an inheritance can be, people often make the mistake of not doing anything at all. Some feel it’s not right for them to make changes to the investments ("my grandfather used to work for UPS and so I wouldn't feel right to sell the stock") - which leaves them with investments that were selected for someone MUCH older than them and in a completely different financial situation. Doing nothing is almost as irresponsible as wasting it away. Take your time, but then take action! Being responsible means not ignoring the decisions that need to be made.

We are here to help.

 

**Stash Wealth offers a fee-only financial planning service called the Stash Plan™. Learn more.

Are You Living A Life You Can Afford?

Image source: Elle UK

Image source: Elle UK

You’ve heard us say it before…if you’re in your 20s or 30s and you get your [financial] sh*t together now, you WILL be a millionaire – a multi-millionaire in fact! All day, every day, we show H.E.N.R.Y.s™ how to turn their income into serious wealth without giving up the things they love to do today. More often than not, getting on track with your finances involves little to no compromise, especially when you’re young. But there’s an exception to this rule.

Every so often, we come across an individual or couple that’s living a lifestyle beyond what they can comfortably afford. They suffer from something we call lifestyle creep and it’s usually not a huge shock when we bring it to their attention.

SIGNS OF LIFESTYLE CREEP

1) A credit card balance that you can’t pay off at the end of the month.

2) Little to no savings relative to your income and cost of living.

How does this happen? Usually it doesn’t happen overnight. Lifestyle creep is like aging, you don’t notice it along the way.

But The Joneses Are My Friends

You know the Joneses. Their Facebook walls are covered with photos of them taking exotic trips and eating out night after night. Sometimes you wonder “how the hell do they have that kind of money?” From our experience, even if you aren’t hanging out with them all the time, you feel some level of pressure to keep up. It can be insanely expensive to have them as friends – but we aren’t suggesting you drop the Joneses from your social calendar. We are, however, suggesting you think twice about how they influence your decisions because in the end, lifestyle creep only hurts you – not them.

"I can't be seen with “poor” friends"
-Someone named Jones

What You Don't Know About The Joneses

The Joneses are victims of lifestyle creep themselves. We can say, without any hesitation, that the Joneses have very little in savings and have a credit card balance that they don’t pay off in full at the end of the month. The Joneses haven’t thought about tomorrow – they are living for today. And when tomorrow rolls around, they won’t be prepared. It’s up to you to decide if being prepared for the future is important to you. There’s no magic or shortcut. The key to being prepared for tomorrow is planning today.

How Do I Know What I Can Afford?

When they come to us, most of our clients think they’ll never be good with money because they are bad at budgeting. We’ve said it 1000 times, budgeting doesn’t work – it’s not how you get ahead. The secret is to save first! To reuse an overused Stash quote:

““Don’t save what’s left after you spend, spend what’s left after you save”
-Warren Buffet”
-Stash Wealth x 1000

We call it the Reverse Budget™ | Save First, Blow The Rest. Once you figure out what you’re saving for, you’ll know how much you need to save and where. What’s left, is yours to spend - that’s how much you can afford. A general guideline is that 20% of your income should be going towards the future – short, mid, and long-term goals. 80% of your income is yours to spend on life. From that 80%, you have to figure out rent and everything else. If you’re still living paycheck to paycheck, you may not be able to hit the 20% guideline right away, but it’s something to work towards!

Getting Back On Track

Do you have a sneaking suspicion that you might be living a life you can't afford? It’s not too late to change course. A good way to start is to figure out where your money is going. Don’t gloss over that last sentence. Yes, we know...you know where your money is going and there’s no place to cut back. Humor us and take one week and write down everything you spend. Even if you’re right and there are no surprises, it’s a good way to get reacquainted with your lifestyle and it will come in handy down the road when you are trying to look back to see if you are a victim of lifestyle creep.

Also, it gives you a really good read on how much you need to be earning to support your lifestyle. There are really only two ways to get ahead, earn more or spend less. Earning more is a lot more fun.

Getting back on track isn’t painless but it’s a lot less painful then setting yourself up for a lifestyle of compromise because you didn’t take the time to do the hard work now.

Good luck and we are here to help!

A Simple Guide To Traveling More

Pretty much without fail, the one goal that every H.E.N.R.Y.™ includes in their Stash Plan™ is to "travel more". Traveling seems to be a non-negotiable for our generation. Say what they will about us but unlike those who came before, we prioritize experiences over things and travel is at the heart of those priorities. We are less about accumulating stuff and more about accumulating memories (especially instagrammable ones!).

Last year, the place to make memories seemed to be Thailand. Most clients went there or were planning to go there. While on our various meetings, we got to hear plenty of the do's and a few of the don'ts. "Chang Mai was better than Bangkok," "Eat the street food," "Spend time on the beaches", "Save time for the temples..." what were we talking about again? Oh yes, travel is a very important goal!

If you've worked with Stash, you know that we are all about helping you achieve your goals, especially the fun ones like traveling more and upgrading your lifestyle. Here are some of our simple but surefire ways to ensure you can step away from your busy life every once in awhile and transport yourself into the destination of your choice - so hop on Instagram for inspiration and start making a list!

Set Up A Designated Account

At an online bank (we like CapitalOne360) open up a savings account specifically for your travel savings. Do not commingle this money with your Emergency Fund. At CapitalOne360 you can have up to 25 savings accounts (for free), not that we'd recommend that many.

Nickname it

Studies show that if you're savings account is nicknamed according to what you're saving for (i.e. travel fund), you're much more likely to stick to the plan. Not all banks will let you change the name of the account, but most online banks will. And we say go one step further and change the name of the account to match your destination. So if this year's big trip is to Hawaii, nickname the account accordingly. It's so much easier to resist dipping into your savings when you know that you're essentially robbing yourself of Mai Tais in Maui.

Auto-save

If you try to plan to save what's left over after you pay your bills, nothing ever will be. The trick is to save first. If you want $3500 per year to splurge on travel, set up an automatic transfer from your checking account to your new travel savings account either once a month ($291) or once every 2 weeks ($185). Whatever's left over is your spending money for the month.

Accumulate Rewards Points

Last year we wrote a piece for Refinery29 that got a lot of flak and I mean, A LOT...just check out the comments! The piece was about why you should never ever use a debit card. We advocate that monthly purchases should go on your credit card. Now we aren't saying to spend more than you can afford to pay off each month, but we are saying that if you're going to spend your money anyway, you might as well do it in a way that earns you rewards points. Not to mention fraud protection, price protection and an opportunity to build your credit score.

Use this savings account framework for other priorities too, like an emergency fund, holiday gifts accounts and even a new baby fund. Don't leave your travel opportunities up to chance. Set the money aside in an automated fashion and you'll never have to wonder when you'll be able to afford your next big trip.

Life is short and there are so many places to visit! Where are you going next.

How To Trade Your Closet In For Cash

Spring is officially here and even if you have ample closet space and don't have to deal with swapping out your wardrobe for the season (unlike us city dwellers), it's great to get into the habit of going through your closet from time to time (we recommend Spring and Fall). We aren't suggesting some Feng Shui or other minimalist philosophy; just simply taking a few moments to let go of stuff you don't want or need.

For those of us who have been doing this for some time, we can attest to the fact that decluttering is beneficial to your mind and your wallet. Most of us hang on to stuff much longer than we need to...no, you won't re-wear that bridesmaid's dress. Yes, you can let go of the denim skirt you bought in high school from Abercrombie. 

Some Benefits Of Purging Your Closet

1 - TAX BENEFIT. Clothing donations translate into tax savings via the charitable contribution deduction.

2 - LESS WASTE. Cleaning out your closet means you'll only be keeping what you wear and recycling the rest.

3 - INSTANT SAVINGS. Selling your higher-end pieces means extra cash to donate to a cause of your choosing or use to buy new stuff (alternatively might we suggest topping off your emergency fund 😎  ). 

How T0 Manage Your Closet Overhaul

DONATE WHAT'S IN GOOD CONDITION

If you use a closet storing service like The Box Butler, they will happily take your old stuff and make the donation on your behalf - make sure they send you a receipt to prove the value of your donation.

The old faithfuls like Salvation Army and GoodWill are other options. 

TIP: Consigning and Donating are the not same thing

As far as taxes go, an accountant can help you decide how much is too much to claim to avoid being flagged for an audit but we've seen clients write off as much as $5,000 in donated value - that's approximately $1,250 back in your pocket!!

"What if my stuff is too old (read: holes) to donate?"

Animal shelters are often willing to take your torn and tattered pieces. Also, some kids programs (like arts organizations) will take old clothes because the condition doesn't matter as much for their purposes.

SELL WHAT'S IN GREAT CONDITION

Okay Stash, where am I going to find the time to post and manage an online store of all my old stuff??! Using a 3rd party site is a great option. And even though they take a cut, you make more than you would if you did nothing. One of our favorites is Linda's Stuff - they take more brands than Tradesy and TheRealReal, but those are good options if you want to trade up an LV piece or the Chloe bag you had to have in 2015.

MAINTAIN THE VALUE OF THE REST

Considering the cost of the things we buy, one attempt at washing a "dry clean only" item could mean dollars down the drain. While we all try to find areas to cut back, dry cleaning shouldn't be one of them. It's not worth risking damage to a $100 top to save $4.50 on dry cleaning - only to be out another $100 to replace it.  You don't need to be an expert in finance to know that's a bad trade!

We recently learned about a new place for those special pieces or things you only get dry cleaned once or occasionally (winter coat, leather pants, wedding dress, etc.). Madame Paulette is based in NYC - but you don't need to be from NY to use their services. Their client list includes the millionaires and billionaires of the world but they offer affordable dry cleaning services for the rest of us, too! They handle everything from laundering to restoration to preservation (think how to best store your wedding dress after your wedding day!).  

 

Signs You're Ready To Share Accounts

For most of the people we talk to, the number one frustration with money is keeping track of it all. Multiple checking and savings accounts leads to a lack of clarity on what’s coming in and what’s going out. The number of accounts only doubles when you’re in a relationship which leads to the question of consolidation. When it comes to money management, consolidation is a very important tool and one of the first things we look at when we create a financial plan.

Today, we wanted to touch on some of the signs that you might be ready to merge checking, savings and even credit card accounts. We'll start by saying that it’s a very personal decision. Even if you qualify as “ready” based on the signs below, it's equally important to feel emotionally ready to make this decision.

For some of us, it’s a very scary decision – scarier even than making the decision to move in together! For others, it’s not that we’re opposed to the idea; we’ve just never seen the benefit or maybe we’ve just never gotten around to it. Opening a joint account can lead to all kinds of efficiencies and benefits, some of which we highlight below.

Signs you’re ready for a joint credit card

When you get to the point that you’re doing more things together than apart, it’s a good time to discuss a joint credit card. I knew a couple that was married for a few years and still maintained separate credit cards that they used whenever they were together. The thing is, they were always splitting the bill 50/50. Once I explained that a joint card for joint expenses would yield the same result with better clarity of their overall financial picture, a joint card seemed like a no-brainer. There are so many time when an expense pops up when you can’t split the bill – i.e. filling the car with gas, buying groceries, etc. Having a joint card and a joint checking account can really help to manage household expenses. It’s much easier to know how much you’ve spent or how much is left to spend, when it’s all in one place. Let’s discuss checking accounts next.

Signs you’re ready for a joint checking 

Our clients, we’ll call them Sara and Marc, had been married for three years and they were still venmo’ing each other for rent. We promise you, there’s a better way!

When you move in together, it’s likely that you will have a few new bills to split. Cable, internet, groceries, electric, etc. We encourage clients to have some of their paycheck direct-deposited into a joint account to manage household expenses.

Sign you’re ready for a joint savings account

One of our favorite conversations at Stash is the “goals conversation”. As your relationship progresses, you’re naturally going to start talking about joint goals or planning for larger expenses together. A trip to Mexico, a new couch for the apartment, maybe even dare we say….a wedding. Having a joint savings account is a great idea when you start saving for shared goals.

At Stash, we encourage couples to share accounts when they are ready. And it’s not just about being ready but also about setting expectations and ground rules with the person you’re going to be sharing accounts with. There is no right or wrong decision here, it’s more about efficiency and viewing yourself as a household (i.e. team) instead of an individual.