Financial Goals | John J. Bowman Jr

Tag: Financial Goals

February 15, 2020

Four Easy Ways to Budget This Month

For some, creating and sticking to a budget is a simple task. For others, it’s a strenuous and seemingly impossible task. The temptation to eat out, splurge on clothes, and throw caution and cash to the wind can be huge, so it’s essential to find ways to stay on track. Here are four ways to create a budget that works and stick to it.

Meal Prep

In addition to various forms of outside entertainment, eating out is a considerable expense. Since most restaurants mark food up—sometimes as much as 300 percent—the only sure-fire way to save money on food is to cook meals at home. However, this is a lot more time-consuming and can be difficult for those without much cooking experience.

Take the time to plan meals, including the cost of ingredients, for at least a week’s worth of meals. Also, include the costs of snacks as well. One way to save on food is to buy in bulk. Look for items that can be purchased in larger quantities and divide up for later.

Set Up Autopay

Another way to stick to a budget is by setting up autopay. Instead of having to pay bills and charges every month manually, autopay lets budget-setters know what they pay and when. The same concept can also help track savings. Just have a set amount of money transferred each month into a savings account.

When it comes to paying utilities, look into budget billing. Customers pay a set amount for power and water. After a set time frame, they’re either refunded the difference or charged for any overages.

Entertain at Home

Simply put, going out is expensive. Everything from grabbing drinks to seeing a movie is expensive these days. Instead of breaking the budget, invite friends over and find ways to create a social atmosphere at home. Cocktails made at home cost half the price when ordered out. The same holds true for take-out. If your group wants pizza and a movie, rent a flick and make homemade pizza.

Track Success

Tracking success is a great motivator, so make sure you keep track of how much money you’ve saved over the month. After seeing positive results, you may feel even more motivated to stick to their budgets.

With a little planning, creating and sticking to a budget is easy. Since everyone has different needs, never compare budget planning. Finally, make sure that the budget isn’t so rigid that it’s impossible to follow. Just be sure to leave some wiggle room for the occasional splurge.

September 15, 2019

Personal Finance for College Students

You’re finally living on your own, attending classes and joining new clubs and organizations. In college, it’s easy to overlook personal finance when focusing on your studies, but proper money management is vital for a successful future. If you’re new to college and money management, here is some personal finance advice.

Consider Your Credit

Swiping a card is convenient, but that money has to come from somewhere. If you’ve fallen victim to overspending on your card, try to set up a system to evaluate your spending habits. Perhaps you could limit card spending and use more cash. Or, perhaps you need to change your card limit to dissuade yourself from making unnecessary purchases. In addition, you should keep track of when your credit card payments are due—missing those payments can harm your credit score, which can be difficult to improve later down the line.

Search For Perks

Many colleges and surrounding businesses offer benefits to students. From dining halls to student discounts, you’re bound to find ways to save money. For instance, shops close to your school may offer student discounts, allowing you to pay a set percentage less for meals and clothes. In the same vein, your school may offer textbook rentals as opposed to purchases, which can save money. Or, if you can find those books online at Amazon or from other e-commerce sites, you may be able to save bundles.

Build a Budget

Understanding and implementing a budget can have positive long-term effects. If you’ve struggled with overspending or other money-related issues, budgeting can be a huge benefit. Calculate the amount of income you’ll make in a given month, including rates for on-campus jobs, and figure out your expenses. You’ll want to save a percentage of that income and avoid going over it. The sooner you establish a budget and learn to stick to it, the sooner you’ll save money and build your personal finances.

Find a Job

Colleges often have part-time jobs available for even the busiest of students. From cooking in the dining hall to operating an office desk to providing prospective students with campus tours, student jobs abound in academia. Taking on a job for just a few hours each week can help you better understand time management while generating income. If you want to earn academic credit while you work, internships and work-studies can be a great use of your time. Plus, any campus job is a terrific resume-builder for your post-grad job search.

August 18, 2019

Tips for Financial Independence and Early Retirement

What do you consider to be “retirement age”? Perhaps early 60s or late 50s. What about 30s and 40s? The FIRE movement, which stands for “financial independence, retire early,” has gained traction with individuals as young as their 20s. The idea of working 9-to-5 jobs for several decades is an intimidating one, and FIRE offers the chance to work hard and, earlier than expected, play hard. However, FIRE is not an easy process, and it takes plenty of planning to truly retire early. Here are some considerations to take into account if you plan on retiring early.

Do Your Research

Monthly earnings from social security and pensions, costs of present and future healthcare concerns, and similar factors must be considered before an individual takes any steps towards early retirement. There are several complications, ones that often work against each other, to sort out during the planning phase of FIRE, but these factors help paint a picture of your financial future. Make sure you understand what FIRE really is, and what it means for you and your situation. In some cases, research may prove that early retirement isn’t the best option; rather, switching to part-time work or taking a temporary hiatus from work is better.

Speak With a Financial Advisor

Financial advisors often assist individuals experiencing drastic life changes, such as making a family or retiring. When it comes to the latter, financial advisors will examine whether a client’s current financial system sets a strong foundation for retirement. Additionally, financial advisors look to the future to predict potential issues. Taking all of this into consideration, clients and advisors can develop a plan to work towards that independence. While hiring a financial advisor does come at a cost, the benefits of receiving an expert’s advice and planning assistance can be a lucrative investment.

Don’t Rush the Process

A simple Google search can unearth a plethora of FIRE horror stories. A common trend in these tales involves early retirees jumping the gun and retiring before they’ve hit their financial goals. For some, this means retiring several years sooner than planned. While earlier-than-early retirement is enticing, it’s unwise to throw your financial goals out the window. Doing so means deviating from your financial plans, which in turn leads to increased risks of your independence returning to dependence. Remain patient and diligent as you work towards retirement, and avoid making rash decisions to save time—that won’t always equate to saving money.

Understand Your Drive

Why do you want to retire early? Is it to avoid unhealthy amounts of stress? Are you trying to spend more time with your family? Has a hobby become your life-long passion? A thorough understanding of the “why” behind your desire to retire early will help you figure out how to reach your financial goals. Anyone can say they want to have more free time. But what are you going to do with that free time? Take some time to introspect and figure out what drives you towards early retirement.

July 22, 2019

Why You’re Overspending (And How to Stop)

Compare your monthly income with your monthly spending. Do you notice a glaring discrepancy? Are your earnings in the red? Can’t figure out how you spent hundreds on groceries? You aren’t alone. Overspending is easy to do, and purchases can accumulate in the blink of an eye. Here are some reasons why you’re overspending and advice on how to stop.

You’ve fallen into a bad habit

Do you buy lunch at the deli down the street every day? This is just one example of a bad spending habit. It may be comfortable and convenient to make a daily or weekly purchase, but ten dollars per day, five days a week, four weeks a month equals $200 each month just for lunch.

The best way to remedy a bad spending habit is to ease yourself out of the habit. For the lunch example, try packing a meal most days each week, and only go out once a week or so as a special treat. You don’t have to quit anything cold-turkey, and easing yourself towards a better spending habit might inspire you to be more mindful of what you buy.

You ignore automatic payments

This one is easy to notice, especially if you subscribe to magazines and newspapers that clog your mailbox. Still, with the rise of streaming services and other digital subscriptions, you may not be keeping track of all the services you subscribe to. It’s easy to let automatic monthly payments slip through the cracks, but those payments are also an easy way to lose money.

Each month, carefully study your credit card statement. Write down the names of subscriptions you used during the month, whether that means watching a movie on Netflix or flipping through a copy of Sports Illustrated. Next to that list, write down the subscriptions you didn’t use. Unsubscribe from the ones that you didn’t touch. You’d be surprised how much money you can save annually just by paring down your subscriptions.

You haven’t disciplined your spending habits

It’s hard to find someone who hasn’t disciplined their spending habits. Whether you fall victim to impulse buys at the checkout line or fill your gas tank before it hits the halfway mark, everyone has a spending vice.

No two people have the same income, interests, and habits, which can make disciplining your spending habits difficult. The key is to figure out what you’re buying and why you’re buying it. It helps to break purchases up into categories, such as “loans,” “food,” and “entertainment.” Not only will this show how much you’re spending, but it will also reveal what exactly you’re spending your money on.

June 23, 2017

Finance Apps

Apps make everything easier, especially personal finance. If you’re like most people your day is usually busy, and you don’t always have the time to fire up your computer to check your bank statement. In fact, you might only check your finances once per week due to your schedule and responsibilities. Or you might be the sort of person who very rarely thinks about budget and spending. The good news is that there are many apps that can help you stay on top of your finances and track your money. Here’s a list of some of the top finance apps available.

Mint
I’ve written about Mint a number of times in the past. The site is so popular for a simple reason: it’s one of the best personal financial tools on the market. Mint’s app is just as useful as the site—if not more useful since all of the information you want to access is right there on your phone. The app gives you the ability to sync all of your accounts in one place so you know how much you spend each month. One of the most useful features is the alerts that you receive when you are close to going over your budget.

Level Money
After you enter your accounts and bills into the Level Money app, it will present set a monthly spending goal for you. Additionally, the app will give you recommendations on how much money you should save each month. The app updates in real time, so you can review your budget after every purchase to make sure that you’re on track with your spending and savings goals.

Digit
If you have trouble saving money each month Digit can help. You can connect your bank account to the app, and it will gain an understanding of your income and how much you spend on a regular basis. Once it has this information Digit will create a savings account and withdraw small sums of money from your checking account. Every month it takes into account how much you spend, so the amount that it withdraws is different each month. Digit’s savings account doesn’t earn interest, so in the long run, you should transfer your money to a better account. However, it’s a great place to start.

Goodbudget
Goodbudget gives users the ability to create “envelopes” for different categories. For example, you can create envelopes for food, entertainment, and bills. Then you decide the budget for each envelope. If you go over your budget, the app will let you know. Goodbudget doesn’t have all of the bells and whistles that Mint has, but it is a simple budget app that anybody can easily use.

May 24, 2017

Tips for Paying Off Student Loans

Debt is one of the biggest hindrances to financial health. Today just about everyone under fifty years old who has attended college has some sort of student loan debt. The more recently you went to college the more likely it is that you have student loans. This means that millennials are well acquainted with the real cost of attending college. Fortunately, it’s possible to pay off your student loans quickly. You just need to be smart about your payment strategy. To learn how you can eliminate your student loan debt, take a look at the below tips.

Larger Payments
The easiest way to pay off your loans quickly is to simply pay more money. When you pay more than the minimum payment your money goes after the principal balance faster. Some people make larger monthly payments while others choose to make payments every two weeks. Ultimately, how you decide to make larger payments depends on your financial situation. Keep in mind, though, that you shouldn’t put so much money toward your loans that you end up not having money for savings.

Automatic Payments
Most loan providers allow you to set up automatic payments. It’s a good idea to create an account where you can deposit money that gets automatically deducted each month. By keeping your loan repayment money separate from your regular checking account, you won’t be tempted to spend the extra money that you want to go toward your loans.

Extra Work
If you’re reading this and you’re still in school, consider finding a part-time job that will help you save money. Then you can use that money to pay your loans. After graduation when you work full-time, you can earn extra money by doing different small jobs. For example, if you make crafts you can sell them on Etsy. Or if you’re an artist you can sell your art on the side. You can take the money that you earn from your side job and apply it to your loans.

Be Smart
Ultimately, paying off your loans quickly comes down to a simple formula of saving money and applying it to your loans. If you want to save your money, though, you have to make the right decisions. Don’t needlessly waste your money every month. Create a budget; stick to it, and in time you’ll have extra money saved up that you can apply to your loans. While it’s true that you will need to make some sacrifices in order to pay off your loans quickly, in the end, you’ll be happy living a debt free life.

May 16, 2017

3 Ways You Can Save Money This Summer

During the summer there are many ways that you can overspend. When the weather is warm and inviting it’s difficult to stay inside. Plus, there’s a good chance that you want to purchase new clothes for the vacation that you planned. If you live in an area where it gets hot, then you likely spend a lot of money on your electric bill each month. However, it’s possible to save money and enjoy the summer months at the same time. Below are some of the simplest ways that you can save money during the hot summer months.

Staycation

Every family knows how expensive vacations can be. If you really want to save money, think about some of the ways that you can have an enjoyable staycation. Do you know anybody with a pool membership? Maybe they will let you and the family tag along for a day. Other ideas include the movies, miniature golf, or even a local amusement park if you want to go on rides. Eating out while on vacation is one of the most expensive aspects of the trip. You’ll save a lot of money just by cooking at home or packing your lunch if you visit an amusement park.

Turn Off the Air Conditioner

It might sound crazy, but turning off the air conditioner is one of the easiest ways to save money over the summer. Instead of blasting the AC every day think about using a ceiling fan instead and open up the windows. Obviously, in some situations (like during a heatwave) you should absolutely keep the AC running. However, on days when it’s not too hot or humid, don’t be afraid to turn off the AC, get a drink of something cool, and dress lightly. Then you’ll save money and stay cool at the same time.

Don’t Waste Water

If you want to save money over the summer, then be careful not to use too much water. One of the biggest wastes of water is lawn sprinklers. The possibility of drought is a real concern for many areas of the United States. Even if you don’t live in a part of the country that has experienced a drought, it’s still a good idea to put the sprinkler away. In most cases, it’s better to let Mother Nature take care of your lawn for the most part. If you must water your lawn, just make sure you’re not overdoing it.

August 5, 2016

How To: Setting Financial Goals

In order to attain a desired financial security and status, there is a great deal of planning that goes into it. This is where detailed financial goals come in. Goals allow you to set realistic end points and then develop an action plan to achieve them. Before you go setting goals there are a few things you need to consider. The steps below take you through the steps of how to create realistic financial goals that you can achieve both now and in the future.

Set Guidelines

Guidelines are the first step of setting your financial goals. Guidelines will keep you accountable, but also keep you from putting things out of your reach. There are a few parameters you will want to keep in mind.

First, be specific. Vague goals only muddle the process and will distract you.

Then, you will need to make sure the goals you set are measurable. If there is nothing to gauge your success of off, how will you know when you’ve gotten there?

Be honest with yourself. Set goals that are attainable. Lofty goals are great, but a lofty goal should still be possible with enough tenacity and planning.

Finally, have time constraints. If you do not set a deadline, nothing will get done. It’s in our nature to work harder for goals that have a reasonable, concrete deadline.

Identify Financial Goals

Now that you have guidelines in place, it’s time to think about what your goals actually are. What do you want to achieve? When identifying goals, ask yourself the tough questions about your finance to see where improvements can be made.

Here’s a few things to get your wheels turning:

How much would you need to save to stop working?
Are you happy with your spending habits or could you make a change?
Do you want to retire early? If so, what will you be comfortable living off of per year?

Once you have given your financial situation proper attention, it’s time to come up with goals. Your goals should range from short term to long term. Some goals should piggyback off each other. They will make a road map on your way one ultimate financial philosophy. For most people, this means financial independance.

Long Term vs. Short Term

Once you have a list of defined goals, you’ll need to label them long term goals or short term goals. Short term goals should be things you can achieve in a year. They will often be the stepping stones for long term goals. You will never be able to declare you’re debt free without paying off things like credit card debt.

Prioritize

Now that you have made a distinction between the goals that are more urgent than the others, we need to take it a step farther. Prioritize the short term goals in order of the most urgent and possibly damaging. If you have many credit cards that are maxed out, they are a financial burden and also detrimental to your credit score. Something of this nature will certainly be put at the top of the list.

Similarly, you will want to prioritize long term goals. If you have a goal that is going to take more aggressive measure of saving or investing to achieve, then this will be your top priority. Labeling each goals in an order of importance, will provide you will clarity and direction to achieve your goals.

Periodically Evaluate

Goals are set with the purpose of signaling when your hard work has paid off. Periodically check in on the progress you are making on your goals. If you are ahead of where you thought you would be – great! If you are behind, you now have the chance to work harder or reevaluate your situation. No matter what, it’s imperative to know where you are and how far you have to go.