Goodbye 20, Hello 30

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Hello readers! I am turning the big 3-0 today, and I am super excited about it! I chose this image, because it’s a great metaphor for my 20’s.  It was crazy and exciting with lots of unexpected twists and turns.  Somehow, I still managed to hang on and enjoy the ride, just like I did on that waterside.  Anyway, lots of my friends are somewhat bummed about leaving their twenties behind, but I’m optimistic for the next decade and all the excitement I am certain it will bring. Here are 30 reasons why I’m looking forward to kissing my twenties goodbye:

  1. Independence. I support myself and do what I want, when I want. Booyah!
  2. Confidence. I know so much more about myself than I did at 20. I have a better sense of my personal and professional goals, higher self esteem, and feel far less shy about expressing myself to others.
  3. Career. I have a solid foundation in my field, and while there are lots of open doors, I am developing a sense of my niche and how to pursue my interest in it. Also, if I change my mind, there is plenty of time to go back to school.
  4. Family. I am no longer at odds with my family because I neither live with or depend on them financially. It has helped my relationships with family members tremendously.
  5. Money. I know so much more than I did at 20, and expect that my knowledge base will just keep growing and growing.
  6. Compassion. I have learned how to relate to others in meaningful ways, and understand where people are coming from. Turns out, there are a lot less assholes in the world than I originally thought.
  7. Community. I am learning how to participate in different communities – personal, professional, local, etc – and to make a difference in them.
  8. Love. I spent a lot of my twenties learning how to love myself. Once I learned to love myself, it opened up the opportunity to love someone else too. Yay!
  9. Forgiveness. I’ve been letting go of things that are bothering me. Instead of avoiding these issues, I confront them so I can forgive, forget and move on.
  10. Discretion. I am way better at knowing when to share different pieces of myself with different people. This has opened up lots more opportunities for networking.
  11. Friendship. I am incredibly rich in friends, and have lots of people who love and support me even when I fly off the handle. But I’ve been learning to give back to my friends, listen to, support, and love them unconditionally the way they do for me.
  12. Listening. I learned how to shut up and listen. It’s not all about me, and listening to others has had a profound effect on my social interactions.
  13. Relaxation. I no longer feel the urge to go out every night of the week. I value the time I spend at home relaxing with a good book or watching a favorite show.
  14. Food. I am eating way less junk food, and more real food. I’ve cut out soda and most processed foods and sweets. I’m eating way more fruits and veggies, and as a result, feel a lot better.
  15. Exercise. I hit the gym, play volleyball, go cycling, go swimming… the possibilities are endless. It’s hard to get started sometimes, but I never regret it.
  16. Vanity. I’m less obsessed with looking perfect, but somehow feel that I look better than ever. Maybe it’s the confidence.
  17. Dreams. I still have a bunch, but it’s pretty damn cool that I’ve achieved some already.
  18. Humility. I’ve had my butt kicked by the real world quite a bit, and I’m ok with that.
  19. Depth. There are many parts of my being, and I have had some time to work on the different dimensions that make up my core. In the process, I’ve discovered whole new pieces of myself that I never even knew existed.
  20. Work. I’ve worked hard, and am continuing to do so each and every day. I’m not afraid of it and I’m not lazy.
  21. Balance. On the subject of work, I have learned when enough is enough, and when to nurture myself. I’ve learned that if I don’t take care of me, I can’t be as productive as possible.
  22. Travel. I’ve been to some cool places. I’ve also lived in a couple of cities in the good old USA. I have lots more travel to do, and every trip I take makes me want to add 3 more to my bucket list.
  23. Budgeting. This is a super important skill that I learned through trial and error. Managing my money makes me feel in control of my life.
  24. Debt. I paid it off. Adios student loans and credit card debt!
  25. Indulgence. I do indulge sometimes, but I know that it’s got to be a treat and not a regular occurrence. Besides, a treat can’t be a treat if it’s a part of you every day routine.
  26. Experience. I buy a lot less stuff and a lot more experiences these days. For example, instead of buying a new pair of boots that I don’t really need, I buy tickets to the ballet instead. I’ve learned that it’s more fun and makes me happier than buying stuff.
  27. Acceptance. I’ve stopped trying to fix everyone and everything around me. Sometimes, you’ve just got to accept that people won’t change because they choose not to.
  28. Risk taking. Lately I’ve been way more open to taking measured risks. It’s opened lots of new doors and opportunities to me. I’ve let go of the rules that I thought existed, and am learning that it’s ok to not play it safe sometimes.
  29. Health. When I get sick, I take care of myself instead of pretending nothing is wrong until I’m really feeling crappy.
  30. Authenticity. I’ve comfortable being me when I am around others. I’m learning to interact with the world in my own skin, with my own thoughts and beliefs, and to be real in my exchanges with others.

I’ve transformed so much over the last decade, and can’t wait to continue to learn and grow. So, twenties, I’ve got nothing against you, but it’s time to move on. Goodbye 20’s and hello 30’s!!!

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How To Borrow Money from Random Strangers

Image(Photo Credit: http://www.slate.com)

Need a loan? Thanks to the interwebs, there are more options than a traditional bank loan or heading to the bank of mom and dad. Peer lending, a new(ish) form of digital lending has evolved over the past few years into a loan delivering juggernaut. The premise is pretty straightforward. If you need cash, you fill out some forms, make a plea for your loan, and hopefully get funded by an investor. You should expect to pay interest on the loan, and to pay the loan back at regular intervals over a span of 1-5 years. Interest rates are generally determined by your credit worthiness, and borrowers with good credit will be rewarded with lower interest rates than those with poor credit.

On the flip side, investors now have the ability to deliver funds to people in a pinch, essentially becoming someone else’s bank. The enticement here is that you have the opportunity to collect a decent return on interest. But the rewards do come with risks. As with any bank, there is always the risk that the recipient of your loan will not pay it back promptly, or even at all. Lenders therefore assume the risk that the loans will default, and payments from borrowers arenot guaranteed by peer lending websites.

In order to diminish the risk of default, investors in this platform are generally encouraged to diversify the loans they make. This means spreading out your money by making lots of small loans to lots of different borrowers. The idea here is to diminish the risk that one person won’t pay by buffering your loan portfolio with lots of people who will pay. For example, assume you have $1000 to invest. If you make 100 loans for 10 dollars, and one person doesn’t pay back, it won’t hurt your bottom line that much in the long run. In fact, the interest you make on the other 99 loans should more than make up for the loss. However, if you make 1 loan for $1000 to 1 person, and that person doesn’t pay you back, it’s going to hit you right in the wallet. You will lose your initial investment of $1000 plus the interest you were hoping to make on it.

So next time you need a loan or have a few bucks that you aren’t sure what to do with, perhaps you’ll consider peer lending. Remember that even though these services aren’t guaranteed, they still can provide a useful alternative for the average Joe’s and Jane’s of the world looking to borrow some money or make an investment. Plus, it’s a heck of a lot better than asking your parents!   

Well, Hello There 2014

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The holidays always tend to set people back a pretty penny. Whether it’s gifts, travel, fancy meals, or just general socialization, the holidays can be an expensive time of year. While the time between Thanksgiving and New Year tends to fly by in the blink of an eye, it can leave lots of us with unexpected debt that we will be dealing with for months into the New Year.

Happily, with a new year come New Year’s Resolutions. Try committing yourself to one or two financial resolutions this year to pump up your financial health and recover from the holiday crunch. Here are a few that might tickle your financial fancy:

1) Save at least 10% of your income each month. You need savings, and you need a plan to develop your saving skills. Start out with as little as 1% if you have to, but make a point to get into the habit of saving.

2) Live within your means. This means actively avoiding getting into situations where you will incur unneccesary consumer debt. You may need to forgo some nights out, adjust your plans to socialize, or forget about shopping for the next 6 months, but it could free up the wad of cash that you need to pay the bills on time, or prevent you from using your credit card unneccesarily.

3) Pay down debt agressively. I suggest focusing on the debt with the highest interest rate first, the second highest interest rate second, and so on. If you are feeling overwhelmed, try consolidating debt into a single monthly payment with a fixed interest rate. This could cut down the number of bills you are dealing with significantly, and give you the structure you need to manage your money more effectively.

4) Clean out the closet. Organize a clothing swap with your friends or head to a local consignment shop and see if you can sell any of your old duds. If thos aren’t options, virtual consignment and eBay can be great ways to digitally clean out the closet and make a few extra dollars. You can even donate your old stuff to charity, and might be able to use the donation as a tax write off for the new year (check with an accountant on this one).

5) Get in shape. Studies show that people who take control over their physical health take control of their financial health too. I don’t know if it’s because of the endorphins, or the time spent at the gym, but it is just an extra reason to get fit, so get off the couch and get motivated. You’ll feel good when you look in the mirror and when you look at your bank statement too.

 

Life Insurance 101

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I’m back after a fantastic spring break vacation with my guy. We did plenty of awesome and relaxing activities, but one of the many financial activities we did over our break was buy some extra life insurance. You’re probably thinking, “But Christine, you’re in your 20’s. Do you really need life insurance?” To which I would respond with a resounding, unflinching, “ YES!!”

There are two types of life insurance; term life insurance and permanent life insurance. Both types of life insurance pay out their death benefit if the policy holder passes away.  However, there are some major differences between term and permanent life insurance, three of which I plan to talk about below.  

The first major difference between the two is that term life insurance has an expiration date and permanent life insurance doesn’t. So at 30 years old you could buy a term life insurance plan that lasts ten years. It would expire when you turn 40. However, if you purchase a permanent life insurance plan at 30, it never expires.

Another major difference between term and permanent life insurance is that term life insurance doesn’t build cash value, while permanent life insurance does. With term life insurance, you pay for it, and it covers you for a specific amount of time, somewhat like care insurance or home insurance. With permanent life insurance, you pay for a specific number of years, lets say ten years again, but at the end of the ten years, when you stop paying, the policy doesn’t expire. As the years pass the policy builds cash value and you can withdraw from the policy for things like retirement income or for unexpected expenses. When you take money out from the policy, the amount you borrow gets deducted from what your death benefit would be.

A third major difference is that term life insurance tends to be significantly cheaper than permanent life insurance, especially for young people. Because of the fact that you build value over time with permanent life insurance, it is more expensive.

Depending on your situation, you may want to consider term, life, or both types of insurance. For example, if you are in your 20’s with no dependents (kids), no mortgage, and no health problems, you probably want to get permanent life insurance. It will be cheap because you are young, and the risk of you dying in the near future is pretty small. It will take you a few years to pay off, and then you will be insured for the rest of your life. Plus, it will give you an option for supplemental retirement income in the future.

If you have kids, you probably want to get some term life insurance. It’s cheaper than permanent insurance, so it will be better for your diaper and baby food filled budget. Regardless of whether you are a working parent or a stay at home parent, I recommend getting a term policy. If you’re the breadwinner, you want enough money that if you aren’t around to provide for the family, you know the family will still be able to live.  If you’re a stay at home parent, you should consider getting a policy that is enough to cover the cost of a caretaker for the remainder of your dependents’ childhood years. Remember, if you aren’t around while your significant other is out bringing home the bacon all day, your child(ren) will need care, and care is expensive.

Personally, I’ve chosen to take a balanced approach to life insurance, meaning some term and some permanent insurance. I have enough term life insurance to cover my major financial obligation, my mortgage. This way, if anything were to ever happen to me, I know that D, my fiancé, could stay in our home comfortably. Luckily, I don’t have any other debt, but if I did, I’d want enough to cover any other major debt I had. I also have some permanent life insurance. It’s more costly, but I’m using it as a financial vehicle for my retirement planning. Specifically, I plan to use it to supplement my income upon retirement. Or, in the event of my untimely passing, it would cover my funeral costs and give my family a couple thousand extra dollars for any unexpected expenses associated with my death.

The bottom line here is that you may not realize it, but you need life insurance. Whether you are single or taken, have kids or not, it’s a smart move to ensure your future financial stability and the financial stability of the people you love just in case you aren’t around anymore.  

Sunday Shout Outs

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Photo Courtesy of thepoliticalcarnival.net 

This week I had tons of time to browse the interwebs because I was sick at home.  I’m finally feeling better, and although being sick was pretty awful, the silver lining was that I had plenty of time to check out and enjoy other bloggers’ writing.  Here are some of my favorites: 

How To Coupon – An Exercise in Frugality

Fear of Not Having Enough Money – Budget and the Beach

How I Became the Budgetnista (The Bike Story) – The Budgetnista

Went in the Grocery Store for One Item But… – Debt Round Up

You Vs. Debt: A Financial Guide for Controlling Your Expenses – Girls Just Wanna Have Funds

#Tag Getting to Know the “Person” Behind the PF Blog – Living Debt Free Rocks

30 Days & No Drinking – I’ll Cheer to That – Mo’ Money Mo’ Houses

Renting Out a Room in Your House – Moneyglare

10 Positive Financial Habits – No Debt Brunette

Rules for a One Night Stand – Thought Catalog (Not personal finance related, but hilarious)

Mean Spirited Friends – House Haters  – Student Debt Survivor

Thanks to everyone for the well wishes and for reading this week!  See you on the other side of Monday.

xo – Christine