Make Saving Fun with These 4 Ideas

Make Savings Fun with These 4 Ideas

Saving is fun. Oh, wait — for most people, it’s not. At all. It’s a chore and something that we struggle to do.

And that’s the problem with building a savings habit. If something isn’t alluring, we generally don’t give it much thought. Humans are more emotional than logical, after all.

But what if you could make saving exciting? What if you could develop a strong desire to save extra cash?

This is about how to start saving more because you want to save more. Check out these four ways to gamify and automate saving more so it’s easier — and maybe even fun.

Open Goal-Specific Bank Accounts and Give Them Compelling Names

Banks like Ally or Capital One 360 is a great bank for getting this done. You can open multiple bank accounts and give a name to each. All the accounts can be monitored on one dashboard.

Many other banks let you do this as well — and if it’s not an option where you like banking, jot the names down in your phone. This technique is powerful because it makes visualizing the end goal so much easier. Every time you make a contribution to your “Ultimate European Vacation with my Best Friends” account, you’ll feel more motivated and encouraged to keep working toward what you want to save for. 

Setting goals should be fun and motivating. Saving is more fun when there’s an end result in mind. What will you be calling your bank accounts?

Start Saving More without Realizing It

 

It’s 2015 and the world of personal finance is automated thanks to new apps and tech. There are free tools galore to help you start saving more.

Digit, for instance, is a tool that tracks your spending habits. It analyzes your spending and account activity to determine what amount it can move to savings for you — and promises that it will never transfer more than you can afford. It’s a quick, painless way to save without having to think about how much you think you can move to savings and when you should do it.

An app called Acorns does the same thing, but it invests the money it transfers. Investing is a powerful way to start saving more, as you can then take advantage of compounding returns.

Automating your savings is the best way to consistently save more, because it takes the emotional decision-making out of it. There’s no room for excuses about how you forgot to make a transfer or needed the money for something else instead. Automation can help you make saving a priority.

Turn Savings into a Game

Peer pressure can be used for good. Get a group of friends or family members together and make savings a challenge or a game. Think of it this way: many people spend to impress their friends. This results in little savings. But what if you flipped it around?

Each person can make a savings goal public to the group and you can do weekly checkins to make sure everyone is on track. 

Negotiate Those Bills

Look over all your bills. Could any of them be reduced? Here are some bills to negotiate:

  • Cell phone bill
  • Internet
  • Home phone
  • Cable
  • Electricity and gas
  • Gym memberships
  • Satellite radio
  • Home security systems
  • Rent
  • Medical bills
  • Car insurance

Question everything and don’t be afraid to call and ask how a service provider can reduce their fees.  Some may not have anything to offer — but you never know unless you ask. And making those calls is well worth it when you get the answer you’re looking for, and are able to free up cash to save more at the same time!

Make Saving Fun and Enjoy the Process

You’re only going to be good at something you’re passionate about. Can you get passionate about saving money? I think so, and it can start by finding ways to make saving fun.

Begin by incorporating just one or two of these suggestions into your life. Pretty soon you’ll be singing and dancing around the extra cash savings you’ve created! Although most of the cash will be digital so you’ll probably have to dance around your computer. But either way — it should be a fantastic time!

About the Author: Will Lipovsky is a blogger, freelance writer, and webmaster. Feel free to contact Will at First Quarter Finance.Will Lipovsky

Financial Freedom Versus Retirement: What’s the Difference?

Financial Freedom v Retirement

Many of us want to achieve the American dream: a nice house, kids, and a luxurious retirement filled with golf and fancy cocktails. We’re encouraged to save to a small portion of our income our entire working careers to create that retirement of our dreams.

Finally, after years of working, we’ll have enough so we can quit and finally travel, relax, and spend time with family. And hopefully, we still have enough energy to do all the things we’ve dreamed of for so long.

Pursuing a traditional retirement by saving 10-15% for 30 years is one way to buy back your time. But many Americans are exploring new ways to drop the soul-sucking job to create the life they want today.

Forget retirement and explore financial freedom now.

What is Financial Freedom?

Financial freedom is the point when you’ve saved enough that you can support yourself for the rest of your life without needing money. Many people can achieve financial independence well before qualifying for Social Security.

These savers created sufficient income streams to support themselves. There are a variety of ways to generate the income needed to reach financial independence.

Some people choose careers in the military to get a pension at a younger age. Others invest in real estate and develop relatively passive income streams. Some invest money heavily into 401(k)s, IRAs, and brokerage accounts to have enough investment assets to pay for their lifestyle.

Financial freedom is easier to achieve when you can reduce expenses and boost your savings rate. While traditional paths to retirement say you only need to save 10% or 15% of your income to reach your goals, people aiming for financial freedom often find unique and creative ways to save and invest 50% to 75% of what they make.

Financial blogger Mr. Money Mustache has an interesting post that allows you to see the math in action. It’s a great illustration of the power of saving more.

Why Financial Freedom?

Why spend less for so long in order to achieve financial independence? 

When you’re free from the necessity of earning money, you have the freedom to spend your time — the most valuable thing you have — as you see fit. You might stop working –or maybe not. You might travel around the world or pursue other important goals that you couldn’t work toward because you lacked the freedom and flexibility you needed.

With financial freedom, it’s your choice.

Even A Little Helps

There are degrees of financial independence. Financial freedom isn’t created overnight, and even a little bit helps create a life where you’re less burdened to a job you hate.

It doesn’t take complete financial independence to give yourself more time and autonomy, and to leave behind a boring job. You’ll need some money, yes, but creativity, resourcefulness, and a drive to make it work mean much more.

If you didn’t have to work for money, what would you do? How much does that cost? And what can you do to get there? You can do work you love long before achieving complete financial freedom.

Choose the Lifestyle You Want

Some people want a traditional retirement. They’d rather spend more along the way, and keep working the 9-5 until their sixties or later. But if you’d like to have the freedom to leave behind the corporate grind sooner rather than later, begin the pursuit of financial freedom now.

jv-7515-webAbout the Author: Jenna VanLeeuwen is a freelance writer who enjoys helping others make the most of their money to create a life they love. Connect with her on Twitter @JennaVanLeeuwen to join the fun.

Why You Should Negotiate for a Raise

Negotiate for a Raise

If I told you there was an easy way to earn $500,000 for about 10 minutes of work, would you take it? Sounds like a scam, right?

Almost 20 percent of workers don’t negotiate for a raise. Some studies say those people leave almost half a million dollars on the table – all during one conversation that could take just 10 minutes of your time during a work day.

Why don’t people negotiate? Some fear that it will make them look greedy. Others assume the company is being fair and offering as much as they can afford. Most think negotiating requires some special skills that they don’t have.

While there’s no absolute guarantee that you’ll get more when you negotiate for a raise, anyone can make the investment of time and effort — and doing this can offer one of the best ROIs out there. Here’s what you need to know before asking for more pay at work.

Be Prepared

You can’t just pick for a dollar amount randomly and expect to get a positive response. You have to show that you’re not looking for more money because you bought a house you can’t afford or another personal reason.

A raise should always be tied to your performance, your value, and other professional factors. Show that you know what you’re worth and you’ve done the research to prove it. 

Look on websites like Glassdoor.com to see what the average person in your position would make and take into account what the company’s other benefits are. Be prepared to make the case about the responsibility you have and how much value you can provide to the company.

If they say no to more money, remember that negotiating doesn’t begin and end with financial compensation. There are other benefits you may be able to discuss. (And remember, there may be good reason why more money isn’t an option — companies have budgets, too, or your supervisor may not have the authority to make the ultimate decision.)

Ask if you can get more paid time off or the flexibility to work from home some days. Some companies may be more amenable to those benefits because they don’t cost them money directly.

Show Confidence When You Negotiate for a Raise

When you get ready to negotiate, you have to prepare yourself. Stand up straight and look up tips on negotiating and body language. You’ll feel more confident, and more certain that you deserve what you’re asking for. 

If you come into negotiation proceedings looking scared, your employer will sense that. They’ll wonder why you’re so uncertain. Is it because you know you’re not worth the extra money?

Ask your friends and family members about their own experiences with negotiating. If you have a mentor in the industry that you can trust, take them out to coffee and get their take on your proposal. Having someone with experience back you up will only add to your confidence level.

You Can Earn What You’re Worth

Learning to negotiate for a raise is one of the most important skills you can have. It’s the most efficient way to increase your income. After you do it once, you’ll be accustomed to doing it again. Employers are used to people negotiating, and they won’t think you’re strange or entitled for expecting more if you come prepared with evidence of the value you add and why you deserve higher pay.

No matter what happens in the negotiating process, the act of doing it will raise your confidence, make you feel more valued and teach you an important skill.

 

ZinaKumok-28About the Author: Zina Kumok writes about paying off $28,000 worth of student loans in three years at Debt Free After Three. She has been featured in DailyWorth, LifeHacker and Time. In her free time, she loves to play with her dog Lyra, read Nora Ephron and plan her latest European adventure.

How to Overcome Financial Insecurity

Do You Suffer from Financial Insecurity

How confident are you about your financial situation?

According to this infographic from Masters in Accounting, only 50% of Americans feel financially secure.

57% aren’t ready for a financial emergency, 71% are worried about paying incoming bills, 69% don’t think they have enough money to retire on, and a whopping 83% have anxiety over a lack of savings.

Whether you’re worried about paying off your debt, making your rent or mortgage payment, or saving enough money for a rainy day (or retirement), it’s clear money is a huge source of stress for many Americans.

It doesn’t have to be that way. There are a number of actions you can take today to create a secure financial future for yourself and your family. If you want to ensure you don’t become part of these statistics, follow the steps below.

1. Know Your Numbers

It’s understandable to feel anxious about your financial situation when you’re in the red and dreading your incoming bills. Ignoring the issue is only going to create more stress. It’s better to face the numbers head on so you can create a plan of action for your money.

What numbers are we talking about? Do you know how much you’re earning each month? How much you’re spending? How much debt you’re in?

If not, these are the best numbers to start with. By gathering this information, you can empower yourself to make better financial decisions. You need a clear picture to work with before you start creating a plan.

2. Create an Emergency Fund to Avoid Financial Insecurity

This is a financial fundamental for a reason. Since 57% of Americans don’t feel prepared for a financial disaster, and 6 in 10 households had a large unexpected expense in the surveys cited from 2015, it’s a good idea to have one.

Creating an emergency fund can be difficult when you don’t even have enough to pay the bills, though. Try saving a little bit at a time, whenever you can. Any progress is good progress when you’re starting at $0. Having funds in reserve means you won’t have to go into debt should anything happen, and it will help you sleep better at night.

3. Make a Plan to Get Out of Debt

Is your paycheck already spent before it hits your account because you’re overwhelmed with the amount of bills you have to pay? It’s time to change that. Paying off your debt will give you more freedom and more breathing room in your budget.

Everyone’s situation is different, so do what will work for you. Either focus on paying off your lowest balances first, or your balances that have the highest interest rates. Chip away at your debt until it’s gone.

By not having to worry about so many monthly payments, saving for emergencies and retirement will become easier.

4. Figure Out a Spending Plan

Getting your finances in order might not be possible without a budget or a spending plan in place, especially if you’re spending more than you earn consistently. It can help to have your expenses and income laid out in front of you as a reference when you feel like you’re going off track during the month.

Keep yourself on task by tracking your expenses, either with an old-fashioned Excel sheet, or software such as Mint.com or You Need a Budget. You can even set alerts for when your spending is nearing the limit in each category.

If, after getting your spending plan together, you realize you’re spending much more than you earn, you need to figure out where you can cut back. Reevaluate your expenses and be honest with yourself about which ones are needs and which ones are wants. Reducing the amount you have to pay for things means more money in your pocket.

After that, switch your focus to earning more money, either through your current job, another job, or a side hustle. Earning more is limitless, whereas cutting back isn’t.

5. Automate Your Finances

Worried you can’t keep up with it all? After doing a thorough review of your financial situation and making progress, put payments and savings on autopilot (while still checking in, of course).

Autopay bills (as long as you have the funds in your checking account), set up automatic contributions to your retirement accounts, and set up automatic transfers to savings accounts.

This makes managing your money less burdensome, and everything will be taking care of itself in the background.

Putting It All Together

Once you begin erase that feeling of financial insecurity, it’s a good idea to get in touch with a financial advisor you can trust to discuss the future. If you don’t want to worry about affording retirement, an advisor can help create a plan to get you there. They’ll also help you identify which financial goals you should be working toward, and how you can achieve them.

Your financial journey isn’t a sprint — it’s a marathon. Change takes time, so be patient with yourself while you find your footing. There are a lot of pieces you need to get in place before moving on to the bigger wins. Make sure you celebrate the smaller ones, too!

Here’s the full infographic on financial insecurity, from Masters in Accounting:

FinancialSecurity

How Much Should You Put in an Emergency Fund?

Emergency Fund

Job loss, medical emergency, transmission failure… you know what they say: when it rains, it pours. What they don’t usually say is when financial disasters strike, where you can get the money to cover these issues.

Ideally, you can take care of these expenses by using an emergency fund. An emergency fund serves the purpose of eliminating financial woes when something goes wrong or when the unexpected happens.

How Much to Set Aside in an Emergency Fund

Life happens! And an emergency fund can help you deal with things that your regular monthly budget just can’t. But how much money should be held in such a fund?

There is no universal answer. The amount to keep in an emergency fund is unique to a person’s situation. Those paying off debt should consider a low emergency fund — something around $1,000. This amount will take care of most of life’s emergencies that crop up, and leaves you free to put more money from your cash flow to debt repayment.

If debt levels are at a comfortable, manageable level (or if there is no debt at all), a bigger emergency fund can be put in place. Remember, there is no “right” answer when asking how big an emergency fund should be. It depends on your financial stability.

One question you can ask is, “how secure is my income?” The more stable the income stream(s), the less an emergency fund is needed. Most experts recommend 3-6 months worth of savings if income is stable.

Stable income typically comes from a full-time salaried position, long-term contracts, or many streams of income. Full-time salaried positions are pretty stable. Long-term contracts mean the money will keep flowing in as long as both parties keep the terms. And multiple streams of income provides more security, as if one dries up there are others to rely on before pulling money from savings.

Those who are self-employed may want to carry a larger emergency fund for peace of mind. Your business may need additional funds in a hurry. It could be because taxes weren’t paid properly, the business needs a new tool, or someone sues. Keeping 6-12 months’ worth of an emergency fund will work well for anyone worried about cash flow — and that goes for you if you’re single, too, since you don’t have a second income from a significant other to fall back on.

Where to Keep an Emergency Fund

First and foremost, an emergency fund needs to be accessible. An emergency fund also should be relatively safe from economic risk, and, preferably, bearing interest. Think about a separate checking account, special savings accounts, or money market accounts.

If you’re not sure where to put your cash, consider trying an online bank. They generally offer higher interest rates compared with physical banks as overhead is lower. Many people also discover online accounts (or at least, accounts at different banks than their regular checking accounts) make them less tempted to use their emergency funds on non-emergencies.

It’s best to keep emergency funds separate from other accounts so the temptation to use them on non-emergencies is kept at a minimum. Don’t say, “anything above $3,000 in my checking account will be my emergency fund.” That’s dangerous. Instead, keep separate accounts. It’s easy to open a dedicated account and it’ll help keep things organized.

Think Carefully Before Investing Cash for Emergencies

Can it be done? Absolutely. But think long and hard before doing so. The problem is, if an emergency happens when the markets are down, a lot of money will be lost when you make your abrupt withdrawal. The initial $10,000 may only be worth $7,000 on the day of the emergency. Paying capital gains is also a concern.

Certificates of Deposits typically don’t make good emergency fund spots, either. If the money is needed before the CD matures, expect a hefty penalty. Added financial stress is the last thing you want to deal with when you’re already under pressure to deal with an unexpected situation.

When to Use Your Rainy Day Fund

FInancial emergencies are usually situations in which you have no other means to handle the cost of the issue or situation. If you don’t have the cash flow to pay the expense or any accessible cash elsewhere — or covering the cost would push you into (or farther into) debt — you may want to use your emergency fund.

Keep in mind that overspending because you weren’t tracking your purchases for the month is not an emergency! That’s a financial mistake that you can (and should) work to correct. That’s trouble you create for yourself, and an emergency fund is designed to cover things you couldn’t see coming, didn’t expect, or had no control over.

Remember, it’s not a matter of if an emergency happens, it’s when. An emergency fund brings a person strength, assuredness, and peace of mind. They eliminate the financial stress so emotional needs can be cared for. Either start or reassess your emergency fund, and do it today!

How to Pick a Hobby that Won’t Break the Bank

Pick a Hobby

Editor’s note: Please welcome guest contributor Anum Yoon. Anum is a personal finance blogger who’s sharing her tips on how you can pick a hobby that won’t break the bank this season.

These days, it seems as though anything worth doing costs a lot of money. Whether it’s traveling, sky-diving, horseback riding, or even antique collecting, hobbies can end up busting your budget

While hobbies are a great way to decompress and explore your creativity, calculating their costs prove challenging difficult since your expenses completely dependent on how much you are immersed into your chosen activity.

That’s why it’s important to be active when it comes to making decisions on how to entertain yourself when you have extra time. Choose how you spend your time and money by picking a hobby that allows you to do both wisely.

Keep reading to discover a few hobbies that won’t cost you much of anything at all:

Choose to Play Outdoors

I’m not sure if you’ve noticed, but nature is totally free to be in! Most outdoor activities cost very little to get started with. While costs can climb, the barrier to entry is low.

Take up hiking or something simple like gardening. For gardening, all you need is a few plants or seeds to get started. Then, you can move on to just giving it some tender love and care, sunlight, and water. If you’re picking something else outdoors like hiking, all your really need is the right pair of shoes and a trail. It can be extremely fun to challenge yourself to reach new heights (literally).

Find New DIY Projects

DIY projects are really inexpensive when you don’t go overboard with the materials. You can take anything you have laying around the house and put it to use. If you pick a DIY project that you can build upon over time, it can become a rewarding hobby. Choose to redo your dresser or weave a new rug using old bedsheets, and don’t stop until you’ve used every piece of material you have at your disposal.

Pick a Hobby Requiring Minimal Supplies or Equipment

Speaking of materials, if you don’t have much, pick a hobby that requires very few. An example of this would be learning a new language. You could use a free app on your phone like Duolingo and learn something new every day.

Another example would be to start a blog. Writing is a great way to pass the time while doing something that you can actually share with others. It’s immensely rewarding especially if you’re consistent with it. It’s hard to get tired of blogging when you’re doing it for your own satisfaction. It serves as a creative outlet that you will have complete and total control over.

Become a Perpetual Learner

You can also continue the idea of learning and try a lot of new things and pick up new knowledge with just an Internet connection. Thanks to sites like YouTube, it’s possible for you to take dance lessons, fitness classes and even singing lessons online – at zero cost! And you’ll develop new skills and abilities.

 

You could even try attending a local event every week. There are so many different free activities and events hosted throughout the summer seasons, and why not take the time to explore them and venture out of your comfort zone? A lot of them are free, and it would give you a chance to get to know your area a little bit better.

 

At the end of the day, you can spend hours feeling bored, scrolling through your phone or watching mindless TV shows, or you could spend it mastering a new skill or perfecting a fun project. Both are better than spending the summer being less than productive.

Spend some time investing in your hobby – without breaking the bank of course. You just have to be willing to get started and keep at it.

Anum Yoon is a personal finance blogger and freelance writer who found her passion for money management through her extensive travels around the world. Since deciding to settle in the US, she has been faced with the task of becoming a responsible consumer with an excellent credit score. You can read her blog at Current on Currency and catch her updates by signing up for her newsletter. You can also connect with Anum on Twitter.

How to Achieve Financial Empowerment

Financial Empowerment

Have you heard of The Road to Financial Wellness? It’s a 30-day, 30-location campaign to raise awareness for financial empowerment. The goal of the team putting this on, a financial brand called Phroogal, is to help people learn about money by starting the conversation. We understand that local conversations can help bring about national awareness. The event takes place from June 1 to June 30th.

As part of the movement, the Phroogal team reached out to XY Planning Network and asked if we’d share our take on financial empowerment. Here’s a little of what that means to us.

Financial Empowerment Starts with the Right Mindset

Many members of Gen X and Gen Y have difficult or downright negative relationships with money. Maybe you feel you’ll never have enough because it’s too scarce of a resource and there’s not enough to go around. Perhaps you feel that money is evil and those that seek to make more of it are bad or greedy.

But this is us, as emotional creatures, placing feelings and creating stories around finance. In reality, you can use your money as a way to build the life you really want to live — and that can include very selfless, meaningful, and fulfilling things like volunteering your time, giving to charity, or working in some way to help better the lives of others.

We can’t do this if we believe money is bad or that our financial goals are simply out of reach because we don’t have enough money. It may sound cheesy, but the first step to financial empowerment is a mental one. We need to believe and understand that we can successfully manage our money to reach our goals and live our idea of a great life.

Release your negative money scripts and embrace a more positive mindset. This might mean shutting down thoughts that sound something like this:

  • “I will never have enough money.”
  • “I can’t make more money.”
  • “My income and my savings are out of my control.”

If you think that way, stop now! Instead, focus on thoughts that go a little something like this:

  • “I can take action to change my financial situation.”
  • “There are solutions to what I currently perceive as problems with my money.”
  • “I have options when it comes to my finances.”

This may not be easy to do at first. But stick with those positive thoughts! Combined with your next step, it’s a powerful way to feel that you do have a say in what happens with your money.

Developing the Knowledge — and Team! — You Need to Reach Your Financial Goals

The most important thing you can do for your money: learn about it! Building your financial education is the next action step if you want to feel empowered to make the right decisions that will lead to success.

This may sound daunting, especially if you’re building this foundation of knowledge from the ground up. But remember two things: everyone, even the financial experts, starts somewhere — and it’s easier than ever for motivated individuals to seek out and collect the information they need to make informed, empowered choices around money.

The internet gives us access to a wealth of information about personal finance, money management, and nontraditional concepts of how we can use our money (like financial independence). While you do need to use good judgment and seek out information from a variety of sources to verify accuracy of data and statements presented as facts, if you’re willing to sift through what’s out there you’ll be rewarded with a rich base of financial knowledge.

Financial blogs and podcasts are a great (and fun!) way to start diving in. Lots of people blog to share there experiences in getting out of debt, investing more, reaching major financial goals, or finding new ways to earn money (and to earn more money). Reading along can provide you much needed inspiration and motivation — along with a lot of education.

Of course, nothing beats getting one-on-one time with professionals to really learn what you need to know about money. Keep in mind that while lots of folks out there know their stuff, a certified financial planner (or CFP®) has gone through years of education, experience, and continuing training so they can provide others with the best advice and recommendations possible.

Hearing from CFPs and other financial pros is simple and easy with XYPN. Each Friday, we provide a roundup of our financial planner’s blog posts — and of course, you can check in on our own blog every Wednesday. We also send out a biweekly newsletter complete with a special money tip from an XYPN advisor. And of course, you can learn more about our advisors themselves by visiting the Find an Advisor portal. You can browse through to find an advisor by specialty, by age, and more.

When looking for a financial advisor, consider asking these questions to determine if they’re a good fit for you:

  • Are they a fiduciary? A fiduciary will work in your best interests at all times. If an advisor won’t sign a fiduciary oath for you, you need to continue looking for a financial planner.
  • What kind of experience do they have? Ask about a potential financial planner’s background and understand the education, training, and work experience they have
  • What are their qualifications? The gold standard for financial service professionals is the CFP designation.
  • How are they paid? It’s important to understand how an advisor receives earnings. Are they on commission? Do they charge by the hour? Fee-only advisors offer a flat fee for their services and don’t make money off commissions — and don’t push products to try to force sales.
  • What services do they provide? Your needs are unique to you — and you should look for a financial pro who understands and respects those needs, along with what you want to achieve with your finances. Look for an advisor who specializes in clients like you, or has experience in helping others achieve big financial goals you want to reach for yourself.

Empower Yourself to Do More with Your Money

Financial empowerment starts with setting the right mentality, and continues when you choose to educate yourself and build a team of financial professionals to help you achieve more.

At XYPN, we’re all about the idea of a nationwide movement to support financial education and literacy. Our financial advisors are able to support folks on a national level, too, regardless of where they (or their clients!) are based. That’s because they all offer virtual financial planning services. Don’t limit yourself by location — get on the right track to financial empowerment with the support you deserve from an XYPN advisor.

4 Ways to Travel for Less

Travel for Less

Already planning your summer vacation for this year? If you’ve got a big travel bug but not a big travel budget, don’t get discouraged. There are many ways you can say money on travel and still enjoy your trip.

Whether you’re on a strict budget or just looking to save a few dollars (to plan another vacation around the corner!), here are 4 ways to travel for less. Read more

The Net Worth of Gen X and Gen Y: Where Do You Stand?

Net Worth of Gen X and Gen Y

Do you know what your net worth is? It’s not too hard to calculate, and it’s a good number to know as you work toward your financial goals.

Your net worth is your assets minus your liabilities — or, as Investopedia puts it, “it’s the value of everything you own, minus all your debts.” Net worth is one measure of financial success. It helps give you a real understanding of your overall financial position.

Your net worth can be a negative number, and this often happens for young professionals who are out of college but still working at paying off their student loan debt.

Calculating Your Net Worth

If you want to calculate your own net worth, here’s how to do it.

  • Make a list of your assets. This includes cash, checking and savings accounts, retirement accounts, investments, and assets like homes or cars.
  • Add up the total amount of your assets.
  • Then make a list of your liabilities — or your debts, or what you owe. This includes credit card debt, student loan debt, mortgage loans, car payments, and so on.
  • Add up the total amount of your liabilities.
  • Subtract your liabilities from your assets. The number you get is your net worth.

How does your net worth stack up to your peers? And what can you do to increase that number as you work toward your financial goals?

Read more

7 Savings Challenges to Help You Better Your Finances

Savings Challenge

Want to kick your savings into gear for the new year? There’s no better time than now to try a savings challenge. Use your motivation to save as fuel and commit to taking back control of your finances with these 7 savings challenges:

The Classic 52 Week Savings Challenge

If you haven’t heard of this challenge before, it’s fairly simple: you save $1 the first week, $2 the second week, $3 the third week, all the way up until you hit $52 in the last week.

This will give you a total of $1,378 at the end of 52 weeks — all from saving small amounts of money each week. Read more