Tag: John J. Bowman Jr.

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.

3 Things to Consider Before Investing in Stocks

As an increasing number of books, websites, and apps introduce the stock market to the general public, more people find the stock market to be accessible. Even though software and guides have streamlined the process, adequate research is essential for anyone hoping to get into the stock game. It’s crucial to keep numbers in mind, but nuggets of advice are equally important. Whether you’re a first-time investor or seasoned stock aficionado, the following three tips are important to keep in mind.

You have to set goals

Throwing your cash in random directions and hoping something sticks is the exact opposite of what a good investor should do. Look into the industries that interest you and seek out key players and up-and-coming competitors. Then, develop a strategy by deciding how much money you’ll invest total, and how much each investment will be. It’s best to start simple if you don’t have much investing experience, which means you should stick to regular investments and establish a well-researched foundation. Once you’ve started that foundation, give yourself a timeframe before you check on those stocks again—as you’ll see in the next section, obsessing over the numbers is going to hinder you.

You have to keep a level head

Billionaire investor Warren Buffett has maintained for years that the buy-and-hold strategy is the best option for any investor. Real-time updates cause dramatic fluctuations to the stock market. While sudden drops in stock rates are worrisome, a goal-focused investor should be safe, even if rates are down. This is especially key in the short-term, as split-second decisions can be dangerous for the success of an investor’s stock portfolio. A volatile market is one in which long-term negative changes come into play. A short-term downturn is not necessarily a cause for alarm.

You have to diversify your investments

Don’t just invest in a bunch of businesses from one industry. Check out a few industries and businesses of interest to you, and ask yourself whether they fit in with your overall goals and budget. A diverse portfolio reduces the overall effect of a downturn on your portfolio. This may not be doable early into your investing journey, but as your portfolio grows and your investing confidence improves, diversification is going to be important.

Common Financial Mistakes Many People Make

Common Financial Mistakes Many People Make

Rarely, does someone have a perfect financial history.  Mistakes in finance are common and it’s likely that most people have experienced them at one point or another.  The important thing is to figure out how to correct them, as they can tend to pile up and create somewhat of financial hardship.  However, don’t panic; with the right tools, you can easily change your financial habits. The following tips are a great guide and provide insight into the many financial mistakes people tend to make.

Too Many Monthly Payments

You may not realize it, but your monthly payments tend to add up, quickly.  Many people are seeking the “better” things in life, so they’re willing to tack on monthly finance payments to acquire the things they desire.  And while the monthly payments may not seem like a big hit at the time, the more you have, the more they tend to add up. Additionally, it’s not uncommon for people to have monthly payments that are more on the unnecessary side.  Consider the gym, for example. While for some, a gym membership is a great investment, for others, it may just be a monthly bill that isn’t regularly utilized.  Consider where your bills each month are going, and see which ones are actually necessary.

High Credit Balances

While credit cards may seem like a great way to get what you need, without having to see your bank account take an immediate hit, they can do more harm than good if they aren’t used properly.  Think of a credit card as borrowed money; money that needs to be paid back, and should be paid back in full to avoid any further charges like interest and late fees. The days of cash only are gone for many people, as credit cards are a regular part of today’s society.  Utilize your credit cards to purchases that you know you’ll be able to pay in full and avoid using them for everyday purchases that will increase your balance quickly.

Failing to Set a Monthly Budget

Budgeting your expenses on a monthly basis is a great financial habit to have; however, many people neglect to do this.  Without a budget, you’re freely spending your money without keeping track of where it’s going. By the end of the month, you’re left wondering where your paychecks have gone and why you aren’t able to contribute anything to your savings account.  

Falling Behind on Bills and Payments

Making late payments is an unfortunate, but common habit for many individuals.  Late payments can hurt your financial health in that you will likely get hit with late charges and increased interest payments.  Additionally, late payments can affect your overall credit score and lower it by a few points. Once this cycle starts, it can be hard to correct and break.  

Tips for Saving Money While Traveling Abroad

Traveling abroad is an ideal way to become more culturally sensitive and aware. At any stage of life, traveling abroad allows you to gain skills and experience that can benefit you professionally. The only downside to traveling abroad is that it may prove to be quite expensive. Here are some tips to help you save money while traveling abroad:
Credit Card

The first tip is to make sure that you have a credit card that is going to be able to be used in a foreign country. You are going to need to do some research before you do any traveling internationally since some credit cards offer better benefits than others. Be sure to look at the fine print to see if you will be charged a foreign currency transaction fee.

Contact the credit card company

Next, make sure that you inform the credit card company with all of the dates that you are going to be traveling abroad. This is going to need to be done at least a week before you travel. There is a high chance the credit card company will assume the international purchases are fraudulent and will freeze the account if they are unaware of your travel plans.

Travelers’ check

An often neglected tip is obtaining a travelers’ check. These can offer you a bit more of security if your credit card cannot be used in the foreign country or if your credit card is stolen.

Local Currency

Save some money by exchanging your cash into the local currency as soon as your arrive instead of doing it at the airport. Most airports  have a lo of different fees that they are going to charge you.

References

The final tip to saving money when you travel abroad is to make sure that you have created a reference list of the credit card companies. This should include all of their phone numbers.

Stay tuned for more personal finance tips.
Safe travels!

Welcome to College! Finance Tips for Freshman

The time has finally come! You are off to college and are beginning to experience many of the freedoms that go hand in hand with adulthood -no one telling you what to do, where you have to be, or what to do with your finances. However, as we all know, “with great power comes great responsibility. And how to properly handling finances is one of the greatest lessons you will ever learn.

Balance is key. It will be tough to juggle your schooling, new responsibilities, and financial freedom. So, here are a few tips to help make the transition a little bit easier.

Economics, accounting, investments, oh my!
One of the first steps in learning how to handle your new found financial freedom is to enroll yourself in some sort of finance course at your university. Depending on the knowledge you already possess, you can opt to enroll in a basic finance course or advance. It is suggest that no matter what you already know, you should begin with a basic course. In doing so your memory will be refreshed or you will learn:

Financial principles
Create and balance a budget
How credit card interest works
The best to ways pay off debt
How to be money savvy

These invaluable basic principles will assist you immensely in years to come.

Say NO to credit…for now
It’s difficult to receive those generous credit card offers in the mail and not be tempted to apply. DON’T! Using credit the wrong way will not benefit you in the long run and can possibly damage your credit in the long run. Before you apply for credit cards try:

Living on your own for a minimum of one year
Have experience successfully living within a budget you have set for yourself
Successfully demonstrate financial restraint

Did you say budget?
Yes, now that you are on your own it is essential that you understand how to properly budget your finances. Creating a budget is simple. All you need to do is:

Make not of your net income
Make note of your expenses (including rent, utilities, food, travel, laundry, etc.)
Add a miscellaneous section for recreational activities (movies, dinners, etc)

Pay close attention to your budget to be sure that you do not overspend. The whole point of a budget is to help you save money you do not necessarily have to spend.

The paths of your new found freedoms will take you on the most important journeys of your life. Embrace it all. Do not be afraid. Instead, Do your research and take your time. You are going to be just fine.