This week: holiday money stress on marriage, 10 hottest metro markets, 4 ways to rewire your money management, holiday scams
As the holidays continue to unfold into another season of spending, the stress meters seem to elevate the closer we are to ringing in the new year. But how does the chaos of Christmas shopping impact our close, personal relationships? The numbers are alarming. According to a recent poll, six out 10 Americans blamed holiday shopping for their marital conflict and family strife.
So, what’s really contributing to the shopping stress?
The holiday spending hangover.
It’s best to have a budget in mind and create a holiday expenses guideline before you begin a shopping spree. Understanding what is really available to spend will help to instill a shopping plan, which could mean less stress at the checkout line. But how many people actually adhere to a proper, holiday budget?
- 23% do not create a budget.
- 24% actually draw up a budget with spending limits.
- 53% have a budget but says it’s not set in stone.
‘Tis the season to swap out old spending habits for new ones.
Holiday advertising can become a tantalizing swirl of headlines screaming for our attention. People see roughly over 5,000 ads per day, so it’s important to know what’s on the label before we buy. Here are some big spending traps to watch out for:
Financing. Shoppers who finance their purchases rather than pay for them in cash will feel the financial effects after the decorations come down. In fact, 69% of the people polled said they ended up paying more than expected when they jumped on the zero percent financing deals.
Store credit cards. The “discount” can be a bit deceiving. Some retailers interest rates can approach 30%. (HInt: BrandSource, Big Lots, Piercing Pagoda, and Zales have the highest interest rates for their store cards.)
Deferred interest products. These zero percent interest programs can come at much too high a cost, especially if you haven’t paid your balance in full after a set period.
Credit card cash advances. The average cash advance rate is about 24% and these cash advances are usually subject to a higher rate of interest than the rate that applies to the purchase.
Extended warranties. Additional warranties really rack up the cost of your purchase. Most of these pricey items will not break within the period covered by the contract.
Layaway programs. Putting down a deposit on a costly item and making a series of installment payments may sound like a good idea at the time, but beware of the service and cancellation fees.
Doorbuster sales. Discounts are great, but overspending can lead to some serious debt. Remember your budget and don’t cave into every hot deal you come across.
Finances affect everyone and yet how many people are actually taught the art of effective money management? More money does not mean fewer problems: some celebrities have transitioned from making millions to filing for bankruptcy.
The fact is, people are struggling with their finances because money management skills have not been taught. Now is the time to switch our mindsets around money from scarcity to prosperity. Here are 2 big tips to upgrade your money management skills, regardless of your level of financial education (or lack thereof) in finances.
Schedule Banking and Budgeting Time
Allotting time throughout the week to sit and look at your numbers is a small way to make a big difference in your relationship to money. Even putting an extra hour into your banking, budgeting, and savings could make an impact on your ability to regain control of your future in finances. Plot out each week and determine exactly how much you can afford to spend on transportation, food, utilities, and fun. It’s important to get a ballpark figure of your range of expenses and think about how much money should go into your savings account. Pro-tip: There are apps that can help you move your money out of the bank account each week to pay bills automatically. You will have fewer financial stresses over unpaid bills. If you put your budget on autopilot it will rein in your tendency to overspend.
Don’t run. Face your debt.
Sadly, the average student loan debt is around $49,042 per household and the average American mortgage debt is about $172,806. Massive debts are not disappearing because they are not being confronted. Make a list of what you owe to banks, credit card companies, friends, family, and even unpaid parking tickets. Write down the interest payable on the loans and minimum payments and make sure to know exactly when the monthly payments on each debt are due. Once you confront the reality of your debt, you might want to reach out to your creditors to explore the possibility of renegotiating your interest rate. Pro-tip: Pay off the highest interest rates first – it helps to free up more money that you can use towards other debts.
Looking to settle down in the right neighborhood? Finding the right places to live in a crowded housing market can be a downright challenge. With fewer homes for sale, potential buyers need to get more creative about making a notable bid. If you are in the market, start your homebuying journey on the right foot and watch for these top 10 metropolitan cities with the lowest vacancy rates:
- San Jose-Sunnyvale-Santa Clara, California: 0.23% vacancy for residential properties.
- Fort Collins, Colorado: 0.24% vacancy for residential properties.
- Lancaster, Pennsylvania: 0.26% vacancy for residential properties.
- Manchester-Nashua, New Hampshire: 0.31% vacancy for residential properties.
- San Francisco-Oakland-Hayward, California: 0.34% vacancy for residential properties.
- Provo-Orem, Utah: 0.34% vacancy for residential properties.
- Madison, Wisconsin: 0.39% vacancy for residential properties.
- Fayetteville-Springdale-Rogers, Arkansas,Missouri: 0.39% vacancy for residential properties.
- Vallejo-Fairfield, California: 0.39% vacancy for residential properties.
- Austin-Round Rock, Texas: 0.42% vacancy for residential properties.
Launching a new business can be a complicated getup. The fact that the average American only has $1,000 in savings adds to the aggravation of getting a business started with loads of debt. (U.S. households have an average of $17,000 – $137,000 in debt.) So how does one actually start a new business without maxing out credit cards or even applying for a business loan? Here are 4 money management tips to help you get on the road to a better business endeavor:
Spend within your means.
Becoming a successful business owner means you have to be willing to sacrifice immediate wants to better save for your financial future. The belief that short-term sacrifices will result in long-term gain is a powerful mindset to carry along. Understand that the accumulation of wealth does not come from spending it as soon as you get it. Simply put, debt and loans do not equal wealth.
Save (a lot) more than you spend.
Keep it simple: plan to save as much as possible. Control your spending and keep your savings out of sight while you build your brand. Pro-tip: keep a two-month runway in your business bank at all times.
Pay off your debts. Forget about borrowing.
Borrowing huge sums of money on a regular basis is not a smart move. Rather, it’s a move that’s all-too-common and supports the fact that Americans owed nearly $1 trillion in credit card debt back in 2015. As Warren Buffett noted, “if you’re smart, you’re going to make a lot of money without borrowing.”
Don’t just leave your money in the bank.
Almost all banks and brokerages give you similar insurance but through different providers. Banks can give you insurance for up to $250,000 in cash from the FDIC, and brokerages have the same coverage through SIPC. With brokerages, you can trade stocks, bonds, and funds without sweating about someone stealing your money.
The holiday shopping season can be filled with a frenzy of big-name sales and catchy advertising. As the preference for easy online sales overrides the traffic-filled car drives to the mall, consumers have to be on the lookout for scammers who want to steal your data and money. Before you click “order”, take a look at these 5 tips to protect yourself online this season:
Beware of mobile device purchases.
Shopping on your mobile device browser may seem harmless, but scammers often create fake websites with URL lookalikes from legitimate stores to lure in consumers and trick them. Because mobile browsers have a much shorter address field, consumers may not see the full URL on their phone, making it harder to detect spam. Pro-tip: use the merchant’s native apps and make sure you download them from the official app store. Do not download apps from web links or code.
Watch out for fake apps.
Unfortunately, there are fake apps with malware that can steal your personal information and even lock the device until you agree to pay a ransom. There are also apps that prompt users to log in using their Facebook or Gmail accounts which can reveal your personal info. Watch out for apps that ask for access to your contacts, text messages, stored passwords, or credit card information. If it’s not a brand you know, think twice before downloading it. Pro-tip: Poor grammar in the description highlights is a dead giveaway for mobile malware campaigns.
Look out for questionable email links.
Avoid clicking on links in an unsolicited email, even if it looks like a great deal. Sadly, the link may lead you to a fake website that tries to lure you to enter your credit card information.
Secure network connections are a must.
Verify that the website you are visiting has a valid HTTPS connection with a lock symbol. HTTP connections are vulnerable to attacks and scammers can steal your credit card information by monitoring your HTTP network traffic. Never give your credit card info unless they are in a secure online portal.
Make online security a good habit.
Be mindful of the way you shop online to protect your sensitive information from spammers. Get creative about passwords and use them on every account. Don’t forget to use two-factor authentication and password managers to help keep track of multiple logins.