During our financial lives we are faced with many situations where we must determine our personal value. During these financial milestones how can we determine how much we are worth?
For some of us, the first independent financial decision we make is the limit on our first credit card. Very often, we are still in school when we apply for our first credit card, and therefore we get a student credit card. Sometimes financial institutions have a pre determined limit that they allow for student credit cards, such as $500 or $1000.
Financial institutions require a lot of our personal information such as our annual income, our program of study, sometimes our GPA, and amount of time that we have lived at our current address. These are all variable factors that help financial institutions determine if we are financial responsible. This is how our financial institution determines our personal worth…in the form of a credit card limit. Responsibility may be a factor that determines our personal worth.
After we finish college, we (hopefully) enter the work force full time. If we are lucky enough, we find a full time career that offers employee benefits. One of the next financial decisions we will have to make is the amount of life insurance we need to purchase. In general, with group life insurance, people choose an amount of coverage that is a multiple of our annual base salary. How much life insurance do you have? It may be enough to cover your debts. Or, it may be an amount that will allow your spouse to maintain his/her current lifestyle for a certain number of years.
The next step of our financial lives when we need to determine our personal worth is marriage. Pre nuptial agreements may be the next large financial decision when we need to place a value our personal worth. Do you have a prenuptial agreement with your spouse? If so, was it based on your net worth prior to the marriage? Or is it a personal value? Since I am not married, I don’t have experience in drafting a pre nuptial agreement. However, I don’t feel that a pre nuptial agreement should not put a value on a person’s life or relationship, but instead, it should protect a person’s net worth prior to the marriage.
As successful professionals we now often determine our personal value by our personal Net Worth. I definitely don’t agree that our personal net worth determines our personal value. However, many young professionals and seasoned successful professionals determine their personal value by their bottom line.
How do you value your worth?
(Photo by Sylvar)
(Guest post by 21st Century Insurance)
Everyone is looking for ways to save money these days, and sometimes you can find big savings in places you never considered. One of the hidden gems is your auto insurance policy. Many people go for years without comparing rates or adjusting their policies, which often leads to overpaying. Here are five easy ways that you can reduce your auto insurance rates:
1) Bundle your insurance. Many insurers give big discounts to customers that bundle their auto insurance with either their homeowners or renters insurance policy. Some offer rates up to 20% lower when combined, while others only 5%. If your current insurer doesn’t have a bundled rate, call an agent or do some quick online quotes to see if a competitor can do better. You’ll also see very low rate increases on a second (or third) car on a single policy, so check that any vehicles you are insuring are together in one policy for added savings.
2) Drive a safe car. Not necessarily a boring car, but one that is considered safe by the insurance industry. Check with the Insurance Institute for Highway Safety (http://IIHS.org), who do crash testing and safety ratings specifically for the insurance companies. Sometimes you’ll be surprised by the results, so when shopping for a car, it’s a great place to start.
3) Take a class. This goes for young drivers and more experienced drivers alike. Driver training courses are a great way to get your auto insurance rate reduced and are available all over the country, and for every skill level. Programs for young drivers are often offered by schools or local communities at very low cost.
4) Pay for the whole year. I know that it’s sometimes difficult to pay the large sum of your auto insurance up front, but you can save a bundle over the year if you do. Most insurers have long-term payment options, but push for monthly payments that can add $5 or $10 fees per payment. Doesn’t sound like much, but by the end of the year it’ll be nice to have that $60-$120 in your pocket instead of theirs.
5) Remove distractions. We’re all guilty of driving distracted these days, but do what you can to reduce distractions in the car. Talking on the phone and texting alone cause about 30% of traffic accidents, and some studies show distracted driving to be responsible for up to 80% of all crashes in the US. There’s no easier way to reduce rates than keeping a clean driving record!
With these few tips, you should be well on your way to saving some money on your car insurance policy.
I learned from the comments on our post DINKS: Smart or Selfish? that many of our DINKS readers are Born Again DINKS. They are parents who have adult children whom have moved out of their home; the parents now live in a dual income no kids (at home) relationship…again.
Born Again Dinks are referred to in the financial world as “empty nesters”.
This is the stage of a person’s life where they may be nearing retirement, or they may have already retired. They may be mortgage free or close to it; and they may even be considering downsizing to a smaller home, now that all of their children have moved out.
The Empty Nesters have spent their lives accumulating their wealth, and now they are enjoying it. Since my boyfriend Nick and I are in our late twenties and early thirties, and we don’t have children, we are definitely not Empty Nesters. I have a question for our Born Again DINKS…Is it better the second time around?
Young families are in the accumulation stage of their lives. If you are in your mid twenties to mid thirties then you may be in this stage. This is the stage when our mortgage outweighs the value of our home, and our accumulated total savings are less than a year’s salary. We may also still be paying off student loans and still making car payments. Imagine how costly this could be if we add the expense of one or two kids into the equation!
I honestly don’t know my parents remained financially stable during the accumulation stage of their lives with myself and my sister Tara. We went on family vacations every year, we always had food in the house, and we were never deprived of toys. I was born in 1980 , and if you remember Strawberry Shortcake, He-Man, Cabbage Patch Dolls, and Pogo Balls, then you are also an 80’s child. I look at my life now with Nick, and I can’t imagine adding the cost of a child or two into our monthly expenses.
During the Empty Nest stage of a person’s life they don’t have a lot of the same expenses as they did in the accumulation phase of their lives. In the Empty Nest stage of a person’s financial life they are not building up their retirement savings, they are topping it off. In many cases they are no longer paying off their mortgage; they are only paying their monthly bills.
In theory, Born Again DINKS should have a lot more money the second time around then they did the first time they were DINKS. I would like to know if this is true. I recently asked my Dad if he enjoys not having kids at home. He took the safe route, and responded “No Comment.” My Dad (and other men) often use this neutral tactic to stay out of trouble when speaking with women, regardless of whether it’s his sister, wife, or daughter.
Please, Born Again DINKS let me know…Are you enjoying your life as a DINK the second time around?
Deciding to have children may not be the lifelong commitment that I thought it was. Apparently…Once you go DINK you can go back!
(Photo By LisaSchaffer)
One thing I have noticed about successful people, or just people who have their finances in order, is that they usually have great time management skills. They know how to prioritize and get things done that need to get done. They also do whatever they can to avoid “wasted” time.
I’m a planner. I like to know what I want to accomplish and then get it done so that I can maximize my time. I hate not knowing what I want to get done or wasting time doing something I do not truly enjoy. That is one reason I am nearly obsessive about time management.
There will always be things that we should do that we don’t. We sometimes make excuses such as “there is no time!” or “I’m way too busy!” In reality the issue usually comes down to how we manage our time and prioritize what we do. There are many individuals and couples who do not have their financial house in order and often it is due to a lack of planning. It’s not the easiest or most fun task and it usually gets put on the backburner whenever possible. If we make time for things that should be a priority – like proper financial management – we would all benefit.
I thought I would offer up three tips that have helped me and continue to help me (I’m a work in progress!) manage my time, and in turn my finances, more effectively.
3 Ways to Improve your Time Management Skills
1) Write things down – If you are able to write things down as they come to you instead of trying to remember them later on, you will both save time and energy. The useful stuff you will have for quick reference and the junk you can just cross out.
2) Figure out your goals and, in turn, your priorities – With time management the key is to figure out what you really care about. If you care about having more time to spend with those you love, living a more frugal life could be something you prioritize. If you care more about having higher quality things, or just a bigger safety net you may want to look for some side work or figure out how to maximize your current income. Priorities should be tied to your goals.
3) Make lists – I’m a little biased: I make lists every single day. It helps me see what I want to accomplish as well as weed out the important tasks that need to be done soon as well as the tasks that I can shelve. Even if it is a task I may not end up doing for a week, it is still on my radar because it has a presence on my to-do list. If you don’t already make lists I would recommend that you at least give it a try – who knows, it might be an activity that really benefits you.
I hope this post was helpful. If you have additional tips to offer I would love to hear them!
Here are some posts we enjoyed this week! Enjoy:
With the current economic crisis over the past few years, many people have lost their jobs. Five years ago, some people may not have cared too much about losing their job. Back then, there were plenty of available jobs in the job market; and people had savings to use as a bridge to get them over the troubled waters of temporary unemployment. Nowadays, finding a new job, especially a job with the same compensation is rare, and people need to dip into their savings.
Don’t be discouraged if you find yourself using your savings. That is what savings are for. It is always good to save for a goal, but some people save just for the sake of saving. It is said that an emergency fund should be the equivalent of three months of our basic monthly living expenses. This was set as a rule because generally it took approximately three months to find another job with a similar annual income. However, nowadays, this is not always the case.
Professionals (especially in finance) are having a hard time finding another job that lives up to our high standards. I can only speak from personal experience but generally people who work with money are obsessed with money. Personally, I am not totally obsessed with money but, everything in my life does revolve around money. My friends also all work in finance and therefore we are at ease with talking about, and discussing our personal financial situations. People can be unemployed for over a year if they don’t want to accept a lower paying job because they feel they are overqualified. If one day we find ourselves unemployed and jumping in the puddle of our rainy day account, we should remember not to panic.
The first thing that we should do anytime something doesn’t go according to plan is sit down and make a new plan. It is easier to grasp a situation when there is a clear plan of action, and it is easier (for me) to follow a plan when it is clearly written out (and posted on my wall). If you are living on less income, then your monthly expenses should also become less. Re-budget your income and rebalance your expenses. Keep up to date on your bank account, as well as your spending habits. Check your actions with your action plan. Try to make sure they always match.
When recovering from a job loss and piled up bills, we should focus on bringing all of our past due bills up to date. The priority should be to eliminate the accumulated debt. This is because we don’t want to pay 19.99% interest on accumulated debts, when we will only earn 2.0% of interest on our savings accounts. Only pay as much onto debts as your budget allows. If we spend more than we have, we will always end up in debt. We don’t want to accumulate more debt while trying to pay off previous debts.
Once our income starts to flow again, and the debts are repaid, we should start to rebuild our emergency fund. Don’t be discouraged if the rainy day account becomes nonexistent or is a lot less than we hoped it would be. That is ok. Remember….the key to rebuilding our nest egg is to make a plan and stick to it. Our savings will start to grow again over time. Savings are just money and we can’t take it with us.
(Photo By Nina Matthews)
Would you agree that Donald Trump and Warren Buffet are successful? When we say that, what do we base it on?
In general, I believe that the majority of people determine how successful they are by the amount of money they have. Is success always measured by money?
Success is relative to each individual person. Donald Trump may not consider me as a successful young woman. However, I feel that with two university degrees, a long time career in finance, a newly launched online company (hopefully empire), and a stable relationship, I would consider myself successful. I am glad not to be divorced two or three times, and I am happy to wake up every morning.
Personal happiness may be the measuring stick for success. If a person is content with their life and their family they could be considered successful. Some people choose to focus on their family life as opposed to their career, and that is okay. It wouldn’t be my personal choice to stay home, raise a family, and not focus on my career. However, building a happy home can be the equivalent of building a successful business.
If someone is not well off, but they pay all of their bills on time, and they have a little bit of money in the bank, can society consider them successful? I would consider that as an individual success if that person’s personal goal is to live comfortably, not be too ambitious, and enjoy their everyday life. As an individual I always need to have a goal, or a plan. I like working towards something, and I like creating new things; it keeps me busy. I am really not a “go with the flow” type of person. Actually, uncertainly stresses me out. Some DINKS may strive on stress. However, I am not one of those people.
As DINKS we are all in relationships. Would you consider your relationship as a success? I definitely consider the ten years of my relationship with my boyfriend Nick as a success. Relationships take a lot of work. If a relationship can sustain all of life’s ups and downs, and at the end of the day we come out on top, I do consider that as a successful relationship.
You know what they say “More Money More Problems.” Maybe success is not only measured by money. Success can be measured in a variety of other ways such as personal happiness, the strength of our relationships, and our family bonds. With all of that being said….Are you successful?
(Photo By Bernt Rostad)
I used to rip on the whole frugal lifestyle, and the constant coupon-cutting and bargain-hunting by those who adhere to the frugal code of conduct.
But here I am eating my own words because today I want to share with you a new (to me at least!) website that I think will become a normal part of my life: Groupon.com.
I first heard about them a few days ago. A friend at work asked if I wanted to go bowling because he had a free hour of bowling (with free shoe rental) for up to six people for an hour….every day of the summer. I couldn’t understand how he got such a great deal!
Well, turns out before the summer started he saw a Groupon offer where you pay $30 and you get the free bowling deal. I then started asking him more about them and he explained that a lot of the coupons were restaurant related and 95% of the deals he wouldn’t consider buying. The reason he stays on their email list is to get those rare deals that save him a LOT of money over time. He’s gone bowling over fifteen times and has yet to spend a dollar at the alley (he resists the temptation to buy food there). That’s one heck of a deal!
So I signed up for Groupon and the very next day I found a deal that I could see myself buying: $25 for a $50 GAP gift card. Granted I don’t go to GAP super often (probably once a month tho), and you have to use it within a month and a half, but the gift card can be used for any item in the store including my personal favorites: the clearance section.
Now I’m not sure if it will be another day, week, or month until I find another deal that makes sense for me to purchase but I do know that Groupon should save me a decent chunk of change in the long-term.
I’m interested to hear what deals you have found on Groupon, or whether this is the first time you heard of it? Do any of you NOT like them? That would be interesting to hear as well!
-DC
*Side note: NO I was not paid in any way shape or form by Groupon for this post; I didn’t even put my affiliate referral link in the post! I genuinely think it’s an awesome site!*
The perfect DINK formula is a two income household as well as a childless couple. However, sometimes the perfect formula can become a cliché. Are you and your spouse typical DINKS?
Who are you married to? Maybe you are like myself and NOT married to your “second income”. For the purpose of this blog we will (loosely) use the term spouse when referring to our better halves. I work in personal finance, and Nick, my boyfriend, works in IT. Although we are not the standard DINK cliché of a lawyer being married to an accountant; or some other type of career with an accreditation/designation, we are both professionals with university degrees.
What is your income? As DINKS we are stereotyped as being middle to upper class. Do you and your spouse fall into this typical DINK cliché? We do. According to Yahoo Finance the household income of middle class households ranges from $51,000 to $123,000. The average household income for middle class is considered to be $81,000. Nick and I have a slightly higher combined annual household income than the average. I guess we would be considered upper middle class to lower upper class.
When are you planning to have kids? Some DINKS may currently be young professionals but may eventually be thinking of becoming parents. Some of us may just be DINKS… for now.
Where do you live? Nick and I live in an apartment in downtown Montreal. Although the cost of living in Montreal is considered to be much less than other major cities, it is still expensive to live downtown. Not only is the cost of living expensive in city centers, but we also pay for the cost of convenience. Amenities are also more expensive because we shop at trendy boutiques as opposed to the more cost efficient big box stores of the suburbs.
Why did you choose this lifestyle? Personally, Nick and I didn’t choose this lifestyle, we just sort of fell into it. We met at a young age and as we grew older we never really thought about kids because we were young and focused on our education and then our careers. Now that we are at the typical baby-making age there are too many variables and things to consider. I guess it’s the cliché of “There is never a right time.” If it happens, it happens, but we aren’t planning for it.
How do you spend your money? DINKS have a certain lifestyle. We enjoy good company, and nice things. Some people say that being a DINK is a lifestyle. But, for me, being a DINK is just a status. Nick and I don’t take extravagant trips. We usually travel twice a year to the United States. Most of our money is spent on tangible goods for our home such as electronics. Our everyday expenses are also a bit more extravagant than others. We enjoy eating out. I like knowing that I can walk around on a Saturday afternoon shopping at Chapters (the Canadian Barns and Nobel) for books, or at LUSH Cosmetics or random personal bath and shower products.
My score is 4/6. Although Nick and I didn’t choose this lifestyle, and we don’t spend our money excessively, I am still a DINK cliché. What is your official DINK cliché score?
(Photo By Jon Oakley)
If you are currently accumulating debt, or if you feel that your monthly spending is getting out of control, there are several things that we can do to manage our money. If you need to start living on less due to a change in your financial situation, keep in mind that it is a temporary situation that needs minor temporary adjustments.
If you want to save more, you need to spend less. It’s not always our income that needs to increase when we want to build up our savings account. We can cut some of our current expenses to help increase our monthly savings.
Here are three easy things to cut out of your monthly budget:
- Cut the Cable Bill. I cannot repeat this enough. Nick and I have an extensive television channel selection, which brings an overly expensive monthly satellite bill. (In my opinion) We don’t need 650 television channels and 200 satellite radio stations. Basic cable is acceptable. Most television shows and sporting events are available online; we can watch our favourite shows commercial free via the internet.
- Save at the Supermarket. Make a list and check it twice. Stick to your grocery list and never go to the grocery store hungry. Everything looks good and tasty when we are hungry. Impulse shopping can really break a budget.
- Excessive Entertainment Expenses. Movies, Restaurants, and life’s other finer things, such as vacations and shopping, can be cut down or totally eliminated. If you are like me you eat out 2-3 times a week. There are just some days when I get home too late, and I am too tired to cook and clean up after myself. Some days, it is just easier to eat out.
There are a lot of places that we can get a great meal for under $10. Subs and sandwiches are a quick and cheap take out option. I love Quiznos , even a combo can be less than $10; please remember that I am a vegetarian and generally meatless meals cost less. Chinese food restaurants generally give massive portions with minor costs. I know it is easy to see a Chinese food menu and get the sudden urge to order one of everything. However, if you stick with two major plates such as Chicken Fried Rice with General Tao Chicken, you and your spouse can eat for $10 each.
Forget the extras and add-ons. When you are waiting in line at the grocery store remember that you don’t need a chocolate bar, a razor, or batteries. Whatever it is that they are selling at the cashier checkout line…You don’t need it. Those grab and go items are strategically placed for impulse buyers. Please keep in mind that $5 is still $5 more. $5 every day is $35 a week, and $1820 a year.
We don’t need that extra dumpling or spring roll with our delivery order. While we are on the subject, we should go out and pick up our food. Or, we can pick it up on the way home. Many restaurants charge a delivery fee along with a tip for the driver. That can be another $4-$8 extra dollars added onto your dinner bill. How do you cut down your expenses so that you can increase your savings?
(Photo By Prince Roy)
