Does this remind you of yourself?

You save up a bunch of money, and then when something great comes along, you start spending all your savings. Yes?

Your not alone

In fact, many end up spending most if not all of their childhood savings between the ages of 18 and 22.

I am guilty. It's okay though... as long as you have a backup plan.

For instance, I am travelling at the moment... well studying and travelling. I am studying at Lincoln University in Canterbury, New Zealand. If I stay on campus, I barely spend any money... but as soon as I get off campus and start sightseeing, my money starts to disappear.

Before coming to New Zealand, I allocated a bank account which would (hopefully) be enough to last me the four months that I was studying for in New Zealand. No, I am not rich... I have just been organizing my money into different categories for many years. I'm twenty years old... I don't have a ton of money, but if you start early, it's amazing how much money you can save... especially if you save for a GOAL. When you save with a goal in mind, you end up focusing more on saving (in order to achieve that goal) rather than just to see numbers rise in an account that says savings account... instead, I recommend having the bank label it based on the goal you have.

I also recommend opening up bank accounts with different banks. So when you are saving for your travel budget, you go to TD Ameritrade. When you are saving for Retirement (start now!) you go to Chase. When you are saving for a car, go to Wells Fargo. This way, you have an image in your mind of which bank is for which purpose. At your age, you may want to constantly go to Wells Fargo when you gather a few extra bucks. Once in a while you may visit TD Ameritrade because it's fun to travel. But rarely, or even never will you visit Chase. Visit Chase... ask an adult!

The one's that tell you to not worry about it most likely do not have enough money to retire... and therefore, it is up to you whether you want to listen or not. But wouldn't it be great to start early, and retire early... as early as 35-40 even! I've seen it happen... these people didn't make a million dollars a year, they just started saving early... seriously. Knowing that you don't need to work would be the best feeling in the world... even better if you continued working because you can finally enjoy what you do, and not have to worry about paying the bills... bills are so stressfull! Stress kills, therefore avoid all of that by 
S  T  A  R  T  I  N  G    N  O  W. 

Your backup plan requires that you visit TD Ameritrade, Wells Fargo and Chase evenly. If you keep them close to equal... then when it comes time to travel, and if you don't have enough in that account, you can evenly distribute withdrawals from Wells Fargo and Chase (depends). If you have it all in one, you are more likely to spend it all. If you have multiple accounts, it will 'feel bad' to go broke in all your accounts, so it will force you to spend wisely... trust me, this 'secret' works!

Plus, when you return from your travels, like myself, you will come home to two accounts which have some dough in them ($10 in the Wells Fargo and $20 in the Chase. Seriously, try this out, it really works! Remember, I'm not getting paid for this... I'm doing this on my own time to help YOU out.)

MB

Top Financial Moves To Focus On In Your 20's

BE RICH.

START NOW

I know you want your smart phones, Ipads, Ipods, Laptops and the latest edition of everything... or maybe you don't...

You only live once, and your only young once... I know!

You don't have to give anything up... you can still live your younger years having fun, and possibly not working your life away... since we have the rest of our lives to work, right?

BUT

Do not forget that one day, you will be saying, I should have started saving when I was younger... so why not just start now? Just do it... take your risks when your young, risk not going to a party, saving $20 and throw it into your Roth IRA. (What's this... go to your local bank and they will be more than happy to tell you all about it... seriously, they will be extremely happy that your making the best decision of your life!) You'll get bored if I explain it here. But before you go, grab a job and start making some money, you'll need a job if you want to open a Roth IRA.

Do you think it's too risky to get a job during school? Do you not really need a job... well even if you don't need the money, grab a job, not only will you be helping out your future, but you may even see your grades rise! Studies show that often, students with part-time jobs perform better in school than those who don't... this is becasue of the communication skills you gain. (Of course this is not always true, for me it is though).



Follow These Three Steps:
(Remember, I'm doing this extra work, on top of school work, for a reason! Trust me. )

1) Plan

To get where you need to be in life, it's best if you have goals. With your goals, comes a plan. If you intend to meet your goals without a plan, you can compare it to driving a car without a steering wheel.

What do you want in your future? (Write it down, and read it over 5 times)

Try short term first (3-5 years)... medium (5-15 years) and then long (20 plus years)

Dont be afraid to budget.

2) Live within your budget

If you find yourself saying, I really cannot afford it, but I only live once... just let it go. Of course this depends on the situation and whether we are talking about an Ipod or a college Text Book. Go for the Text Book.

If you live within your means (and enforce it), you will find that over the next several years, that you have saved up/saved thousands of dollars.

You've got enough stress within your life, and not to mention school. Do the hard work now, save, and when you are older, you can live your life without an added financial stress.

3) Make your budgeting and saving a permanent habit... that doesn't mean you have to be 'cheap'

Always have at least $500 in your bank... nope, no arguing (except for certain situations), it's mandatory, and certainly not impossible (for the most part).

Try and eventually have at least three months of 'emergency' cash in your bank.

Once you've got the emergency funds situation dealt with, you can start dividing you monthly savings to go towards some other goals (vacations, first home, new car). The amount of savings depends on your salary. I would say three quarters of your salary going to savings would be fantastic... though this is almost impossible at points... when your in your lower 20's, this should not be a major problem.


In the next blog post, I will discuss Investing and paying down debt. But for now, focus on these three major issues.

 

Stock Traders and People interested in the Stock Market!

*WARNING*

During these economic down turns, those who really understand how the stock market works will normally start to buy in at this point. Perhaps waiting a couple more weeks would be sensible, thought a lot of stocks are much cheaper than they were just one month ago.

I have to put out a warning though. There's a difference between cashing in on the general public fear that the world is falling apart using your own cash versus taking out a loan to invest  (unless you are taking out a loan to invest the sum in a Term Deposit/CD account which is guaranteed at a fixed rate normally... and if the rate is higher than your interest rate on the loan, then it is actually quite brilliant). I'm sure you can decipher for yourself, which one falls into either category.

Taking a loan out to invest could destroy your credit and life. If you have found an amazing deal or something that made you believe that this is your time to walk away from the bunker and jump into the war (even though your strapped for cash... but are absolutely positive that this is your calling), then I suggest you stay put for now untill you can save up a few more dollars. Stocks will rise, but they will drop again. You will have your chance... things happen for a reason. Don't make the mistake that millions of Americans have made, and that is taking a loan out to buy a home in hopes that their life and their salary would be the same for the 30 years that they signed on for their mortgage. Except for you, it would mean that your taking out a loan, and perhaps the stock drops and now you owe heaps of money to the bank, and are paying for something that you no longer have. This happens, I've seen it happen and it's not pretty.

"There is only one real sin, and that is to persuade oneself that the second-best is anything but the second-best."         - Doris Lessing

International viewpoint on U.S. debt ceiling vote

Ausgust 2, 2011

Christchurch, New Zealand

It was a historical moment in the United States yesterday. Let's start out here with a bit of examination on the whole situation.

"QUESTION: What does the deal do?
ANSWER: It allows the Obama administration to issue at least $900 billion more in government securities -- and raise enough money to pay the nation's obligations for six or seven more months. It also creates a process in which an additional $1.2 trillion, if not more, can be raised down the road."

Studying abroad in breath taking New Zealand has been a really unique experience so far. I have met people from all around the world, all sharing very different views. I have finally found something that myself, and all the other international students at Lincoln University can agree upon. The fact of the matter is, that the U.S. is digging itself deeper and deeper into an endless pit. Some say it's going to give us a boost, but I say we've had plenty of boosts, it's now time to cut down on spending.

Now I understand that according to Obama's plan, we are going to cut costs into the billions (if not into the trillions) over the next couple years. As well, the debt ceiling will eventually rise to $1.2 trillion... luckily, not all at once. My question is, "we have bailed out companies which appear to be thriving... we were there for them, why can't they be here for us? I understand the money is coming from somewhere, and most likely, elsewhere, out of the United States... specifically thinking it will be coming from China perhaps? Why can't it come locally. Wouldn't we rather have a risk of defaulting in the United States, rather than with another country!?"

What are your thoughts? As a young adult, or an adult, how do you feel this will afect our futures? Will we ever escape this habit of endless spending?

Cheers,
MB

"People with clear, written goals, accomplish far more in a shorter period of time than people without them could ever imagine."

- Brian Tracy