If there’s anything you’re looking to buy, don’t “Buy it now”.

If there’s anything you’re looking to buy, don’t “Buy it now”.

Instead, change your mindset to “Buy it tomorrow”.

This tip is simply about cutting down on impulse purchases that you make without much thought.

It gets really interesting once you start digging deeper.

Many studies have shown that the pleasure of shopping is caused by a chemical – dopamine – released in our brains.

And if we take a step further, research has shown that the dopamine hit doesn’t actually come from the purchase itself. It comes from the ANTICIPATION of the purchase.

From this, we can conclude that BUYING something won’t necessarily give you that excitement you’re looking for.

You can get that same enjoyment by window shopping and not actually buying anything, thus saving the money.

This is a method I use all the time.

If there’s something I see that I want to get, I don’t just buy it right then and there.

Instead, I’ll just sleep on it and buy it the next day.

But more times than not, the desire to buy fades and I no longer want it the next day.

Quick Money Lessons

People are made poor by their desire to look rich. In other words, “act your wage”.

Having a college degree doesn’t guarantee you’ll make or save a ton of money. It’s all about real-life experience and knowledge.

Accumulating wealth requires discipline. Automating saving and investing is a “cheat code” to achieve discipline.

It is more important to protect your downside than to chase returns.

The most important part of solving a financial problem is realizing there is one.

6 Ways To Have Minimum Debt For The Holidays

Christmas is almost here, meaning the shopping season is in full swing. Between gift giving, travel and holiday parties, the expenses add up quickly this season. Many find themselves struggling to figure out a way to pay for it all, and turn to credit cards so they can afford the holidays.

For those turning to cards this year, here are some tips to keep your debt to a minimum:

Create A Budget

The holiday season should not be an excuse to spend wildly. Just like other purchases throughout the year – determine how much money you can afford to spend. If you are using a credit card, you are borrowing that money, which means you can not afford it.

Have A Plan

Make a list of exactly who you plan to buy for and what you want to give them. Once you’ve bought their gift, cross them off. Don’t give in to the temptation of buying additional little gifts throughout the season that are just “perfect for them”. This also goes for who is on your list. You are not Santa, and thus not expected to buy for everyone you know. If you are worried that someone not on your list may have a gift for you, keep a few bottles of wine wrapped up under the tree in case they pop by.

Get Creative

If you have a large group of friends, colleagues or family, instead of buying for each person, try secret santa or white elephant gift exchange.

Borrow Party Clothes

Instead of spending a fortune on a new dress for your work party, see if you can borrow one from a friend.

Sell old items for holiday cash

Go though your clothes and sell the stuff you never wear on Carousell or Refash. You can also post items for sale on Facebook. Holiday Cleaning can especially be a win-win when it comes to kids toys – tell them that to make room for their new gifts, they need to give away the items they don’t play with anymore.

Pay it off quickly

If you do wind up using credit cards, pay off your balance as soon as you can, within the billing cycle, to avoid costly interest charges.

Your Emergency Fund: How Much Is Enough?

As much as we’d all like to, it’s impossible to stop adverse events such as job loss or sickness. If you don’t have the cash to cover an emergency, you’re taking a big risk.

You don’t want to find yourself in need of cash you don’t have, which is why you must have an emergency fund. While it can be hard to figure out how large that fund should be, this article aims to help you decide how much to save in case bad luck hits.

What’s the right amount to set aside?
It’s impossible to know how much an emergency will cost you, but it’s better to be over-prepared than under-prepared. Typically, it is advisable that your emergency fund contain enough money for you to live for about three to six months.  

This should be calculated based on essential expenses you’d keep paying in times of hardship. Have enough to pay for housing costs, food, utilities, insurance, transport, debt payments, and personal expenses. You don’t necessarily need to save enough to ensure you can keep eating out twice a week or to cover other entertainment expenses. The must-pay expenses are what matter.

An emergency fund with three to six months of living expenses could sustain you if you suffer a serious medical issue, can’t work for a while, and aren’t eligible for disability benefits. Or, if you were to be deemed redundant by your employer, it could give you the money to keep making mortgage payments until you find your next job.

In other words, it could mean the difference between a brief period of financial hardship and long-term financial disaster.

How should you decide whether to save three months or six months of living expenses?
There’s a rather huge difference between saving three months of living expenses and saving six months of living expenses – so what size of an emergency fund is right for you? The answer depends on how vulnerable you are to a financial emergency.

Your emergency fund should be more substantial if:

  • You’re the sole or main breadwinner
  • You have an unstable job
  • It would take you a long time to find a new job if you lost your current position
  • You have no other money saved for home or car repairs
  • You aren’t very healthy

The likelier it is that you’ll lose your sources of income or need lots of money to pay surprise expenses, the bigger your emergency fund should be.

When does a smaller emergency fund make sense?
While saving three to six months of living expenses in an emergency fund is a good rule of thumb, it takes a lot of time and financial discipline to put aside this much money. And, there is one situation where you may not want to set this big goal right away: when you have a lot of debt.

If you owe a lot of money, you still need to prioritize building up an emergency fund before paying extra toward debt. If you don’t, you can’t break the debt cycle. While extra payments could help reduce your debt balance, a single bit of bad luck would lead you to accumulate debt on your credit cards again. This creates a never-ending cycle where you don’t make progress – and there’s a big risk that you’ll give up on aggressive debt repayment.

To avoid this problem, save up a mini emergency fund, then switch to bigger debt payments. The amount of your mini emergency fund will also be determined based on your personal situation. Saving $2,000 to $3,000 is a good rule of thumb, and you should aim for a larger amount if income is uncertain or there’s reason to believe you’re at high risk of costly emergencies.

When your mini emergency fund is built up, shift focus to paying your debt – although if you spend your fund, go back to building it up again. After debt is paid down, finish saving enough so your emergency fund covers the recommended three to six months of expenses.