Setting financial goals isn't easy. If you live paycheck-to-paycheck, saving even a little money each month can be difficult. Then there is all the conflicting advice out there. What if matters were made even more complicated by "impostor syndrome", a term coined by two American psychologists, Pauline Clance and Suzanne Imes, in 1978.
Simply put, it is the belief that what other people perceive of as accomplishments due to your skill, intellect, or other internal factors are in fact evidence that you are a fraud.
Oh, 2015, where did you go? It seems only moments ago it was time for New Year's resolutions, and now here we are again. With only a month left before another year is behind us, you may be wondering how best to maximize this year's finances. Well, look no further!
1. Prepare for taxes.
Hopefully, you've already started to put the year-end tax-planning 2015 checklist to good use. But here's another item: If you pay taxes quarterly, make sure you send in that final payment -- and, ideally, save a little bit extra if you think you might owe. (It seems like I always end up owing just a little more than I projected.)<
It's the most wonderful time of the year -- no, not the holidays -- performance-review season at work! Now is when many employers evaluate their employees' contributions to the organization's mission and bottom line, and then make decisions about raises, bonuses, and promotions accordingly. So it's a great time to ask for a raise.
But if you aren't able to make a good case for yourself, then you might find that not only is your career becoming stagnant but also that you could be first on the chopping block in the event of corporate (or wider) economic misfortune. Assuming you don't want to be considered disposable in the eyes of your employer, here are some tactics and strategies to implement before you ask for a raise. They might just help increase your chances of success.
1. Use your initial job interview to set the stage.
Remember how nobody cares about your money more than you do? Well, nobody cares about your career more than you do, either. In fact, in many ways your career and your money are arguably the same thing.
[This is the third installment in a series examining repaying student loans. Part I was a best practices guide for repaying student loans. Part II discussed an alternative payment plan, Revised Pay As You Earn or REPAYE.]
In my last post on REPAYE, the new student loan repayment program, I mentioned that it might be possible to artificially lower your adjusted gross income (AGI) in order to lower your required monthly payments under REPAYE.
[This is the second installment in a series examining repaying student loans. Part I was a best practices guide for repaying student loans.]
Pay As You Earn (PAYE) was introduced in December 2012 and has been widely touted as one of the best options for those struggling to pay back their student loans. Why is this? PAYE is an income-driven payment plan for federal student loans that caps the monthly payment amount at 10 percent of your discretionary income.
The U.S. Department of Education considers discretionary income to be "the difference between your income and 150 percent of the poverty guideline for your family size and state of residence." So let's do some math using the following assumptions:
Given that student loan debt in the U.S. tops $1.2 trillion and the average graduate owed over $30,000 in 2015, it's no surprise topics like how to start paying student loans are necessary.
However, if you're still in school or are still saving for college (or you have kids or grandkids in that category), there's an option for reducing or eliminating the amount of student loans you take out: apprenticeship programs.
What is an Apprenticeship Program?
The basic idea behind apprenticeships is that students/apprentices learn by doing. While apprenticeships used to be a very common way for people to train for a wide variety of professions, as higher education became ubiquitous, the apprenticeship model fell out of fashion.
Tailor your circumstances to your strategy. Sounds a bit backwards, doesn't it? Most of the time, we take the path of least resistance and tailor our strategy to our circumstances. And that can certainly work if all your finances need is some minor tweaking. But if you have a large goal in mind or you need to address debt, you may need a different approach.
Prioritizing circumstances and strategies
Defining the life you want to lead entails setting the balance between your current circumstances and which strategies you'll employ to reach your future goals. If you look at your circumstances as being fixed, you may have to accept a certain strategy that's available or suits your current situation. You tailor your strategy to suit your circumstances. But if you're willing to change your circumstances, then you may open yourself up to employing a different set of strategies -- and this may help you reach your goal faster.
I'm certainly not saying that tailoring your strategy to your circumstances is easy. After all, one of the basics of personal finance is inspired by this mindset: Spend less than you earn.
Student discounts are an interesting topic. They don't typically give you a discount for anything on campus, because those amenities are paid for by your tuition and "miscellaneous registration fees" -- though lots of student groups on campus offer free food in exchange for your attendance and involvement at their events.
No, student discounts are actually given at the discretion of retailers and service providers. And often, they are not advertised.
So how do you find out about and take advantage of these opportunities? The simple answer is to ask.
Eating out for lunch. For many of us, it's one of the biggest temptations we face at work every day because it's a tasty, convenient excuse to get out of the office and socialize (or not!) with our coworkers. But there are good reasons not to eat out for lunch too -- like how long it takes, how bad it can be for the waistline, how much it costs (not to mention that it just makes it harder to reach your financial goals).
A couple years ago, Visa's 2013 Lunch Survey pegged the expense at about $10 per outing and "an average of $18 per week or $936 per year." (The national average is 1.8 times per week according to the survey.) It might be even more today.
So if you're looking for ways to whittle down debt or boost your online high-yield savings account, packing a brown-bag lunch could be the frugal hack that does the trick.
If you are a recent graduate, congratulations and best wishes for your success!
Whether you were lucky enough to have a job lined up right after completing your degree or not, whether you graduated without student loan debt or your new balance rivals the national average of $30,000, you still need to get your financial life in place. So now that the celebrating is behind you, it's time to get to work. What are your next steps?
Here's a primer to get you started.