6 Money-Saving Mantras Financial Experts Swear Will Get You Through Any Problem
SAVING FEELS BETTER THAN SPENDING
This is the mantra you need if you're about to make an impulse buy, and also anytime you're depositing cash into your bank account. Because—true fact—adding dollars to your balance really can feel just as good as, if not better than, spending them. "When you treat saving money like a chore, of course it will feel stressful and boring," says Ryan Howell, Ph.D., an associate professor of psychology at San Francisco State University and cofounder of beyondthepurchase.org, a site that studies the psychology of spending. But if you can mentally connect the act of saving to a tangible, delightful goal (like a family vacation or a down payment on a home), you may experience a dopamine-releasing rush in your brain that's just as potent as purchasing that cute-but-impractical top on sale at the store. "Try putting a photo of the thing you're saving up for in your wallet," says Jeremy Shapiro, Ph.D., a clinical psychologist with a specialty in money. When you reach for your credit card, you'll see that shot of Hawaii (or whatever your personal goal is), remember your mantra, andwantto save that 20 bucks. See if you can rename a savings account in honor of your objective; many banks make this simple. "Disney in 2019" has a more motivating ring to it than "Savings," don't you think? While you're at it, try smiling whenever you make a deposit. Yes,literally.Research suggests that the act of smiling can help trigger positive emotional feelings, so you may trick your brain into feeling better about saving your money—or just make banking in general feel a wee bit more joyful.
PLANNING FOR RETIREMENT IS NOT A SPRINT
Even Zen masters break into a sweat when they hear the wordsRoth IRA, but there's no need to panic. "The truth is, saving for your golden years is a marathon," says Deena Katz, a certified financial planner, professor of personal-finance planning at Texas Tech University, and founding partner of Evensky & Katz/Foldes Financial Wealth Management. Remember: The balance you see in your 401(k) today isnotthe one you'll see in the next 10, 20, or 30 years, and you can help it grow. As the old Chinese proverb says, "The best time to plant a tree was 20 years ago. The second-best time is today." That's a good way to think about retirement. "The magic of compounding interest gives you a big advantage," Katz says. Let's say you're 30, and you scrimp together 0 a month for retirement. If you stay at that rate, you'll have put aside ,000 by age 65—but your balance will be about 0,000, thanks to all the interest. At 40, you may need to pick up the pace, but you've still got plenty of road to amass more. The key is not to backtrack by borrowing from your 401(k). You'll lose serious earning potential—and may get hit with hefty fees and penalties if you default. Recent research estimates that 401(k) defaults add up to billion annually, according to the Pension Research Council of the Wharton School. If you're tempted to cash out your IRA for a down payment, remember your mantra and hold strong: Your retirement fund is sacred. Treating this kind of savings as a marathon will spare you the panic of sprinting to the finish line later.
MY SPENDING DECISIONS ARE UP TOME
Your best friend invites you to a pricey restaurant and you dread telling her you should eat in this week. Or your coworker comes to the office in a hot pair of boots and now you feel schlumpy in your year-old flats. If other people's little extravagances have you feeling like a financial failure, remember this: You probably don't even know if your friends are wealthier or better at money management than you. "So often, the super-well-dressed person with the great car comes to see me and they have nothing," says Manisha Thakor, a chartered financial analyst and director of wealth strategies for women at the investment company Buckingham and the BAM Alliance, a community of independent registered investment advisers. "At every income, 70 to 80 percent of people are stressed about money." You're only seeing the surface of your friend's finances, and you haveno ideawhat credit card debt or depleted savings might lurk beneath. So don't let others dictate your spending. And don't stay quiet: "If you have the courage to say, 'I can't afford this,' you may be a hero," says Thakor. "Because I bet some of your friends can't either, but no one wants to admit it." Keeping your eye only on your own budget will make you more confident in your daily spending choices. When it comes to personal finances, how you spend or save is just that: personal.
MY MONEY SHOULD WORK JUST AS HARD AS I DO
Bringing home the bacon (and the eggs, and the milk) isn't easy—you put in long hours for that cash. So why fritter it away on a sweater you only kinda-sorta like or another pair of headphones? If money feels like it's slipping through your fingers, set some ground rules for yourself and vow to buy only things that are worthy of you. "When deciding how to spend, measure each purchase against a very personal yardstick: your time and energy," says Thakor. Think about how long it takes you to earn . (If you make ,000 a year, that's about an hour of labor.) Now, the next time you see that on-sale sweater that's "only" , ask yourself,Is this worth two hours of my time? Will this sweater work just as hard to keep me warm and happy as I worked to earn the money for it?"This mind-set eases anxiety and helps you feel in control of your money," says Thakor. "Instead of conjuring up feelings of self-denial when you opt out of a purchase, you'll feel empowered." Plus, a study in theJournal of Consumer Researchsuggests that shoppers get their biggest mood boostbeforethey hit the checkout, so you might leave the store feeling good even without a bag in your hand. Putting your money to work can also mean hiring someone to help you clear a financial hurdle. If you tend to back away from daunting tasks like refinancing or investing, you may need an extra push from someone else. "Doing nothing carries its own risks," says Katz. You've worked too hard for that cash to have it sit idle; when you invest it, your money starts pulling its own weight. Never hired a pro? Search NAPFA.org for a certified financial planner. "The less you have, themorehelp a planner can be," says Katz. She'll look at your whole situation (rather than only your investment portfolio).
I DON'T HAVE TO HAVE ALL THE ANSWERS—I CAN LEARN THEM
Trust us—the average person on the street can't tell you what "earnings per share" means, and everyonegets upset about money once in a while. You are just as capable of handling stressful money situations as those people in the next house over. All you need is a little calm and know-how, and in many cases experience is the best teacher. Let's say an unexpected medical bill drops on your doorstep. Rather than trying to ignore that stressor, use this mantra to face it head-on. Start by acknowledging how lousy you feel about the setback, even allowing a minute to give in to the dark side and let the crazy voice in your head run its course. (You'll never get this figured out!,You'll never make enough money, and so on. You know,thatvoice.) It's not wallowing—it's a smart way to get it all out so you can regroup. Now, deliberately quiet those thoughts "and think,This challenge is an opportunity to learn something I didn't know," says Kachina Myers, a New York–based psychoanalyst who specializes in financial therapy. "Turn downtrodden on its head and get curious instead." Maybe that big bill lets youpractice asking for a price reduction. "It's the feeling of helplessness that's stressful, and the only cure is to find your sense of agency again," Myers explains. If you feel out of your depth, look for help—even if it's just calling the company that's billing you and saying, "I don't understand where this number on my bill came from. Can you explain it to me?" The more you ask, the better you'll feel, and the more savvy you'll be for next time.
MY FINANCIAL FATE IS NOT FIXED
News flash: You did not emerge from the womb with your future earning potential stamped across your forehead. Yet for many women, asking for a well-deserved raise or pulling the trigger on a kick-ass business plan can stir up anxiety. "Often, women are motivated by a deep desire to stay connected to the groups in our lives—a family, a friend circle, or an office staff—and be accepted," says Myers. Asking for a raise at work, for instance, might feel selfish if your boss has always stressed a team-player mentality. No matter where the pressure comes from, it's easy to feel like there are too many roadblocks, and to start telling yourself it's out of your hands. But there's no such thing as financial destiny. With your mantra in mind, look around your office (or even among your friends) to find a person who inspires you professionally. Create a lasting relationship with someone who knows your goals: She can quell future freak-outs and provide tips for landing that promotion. You can also look at sites like Score (a free advice forum for small business owners) or Levo League, which provides free mentoring for professional women; mentors post advice and can opt to answer your questions. Just seeing a site full of women who have successfully fought for their money proves you have control over your financial future. Need another reason to speak up? Only 43 percent of workers asked for a raise last year, but of those who did, 75 percent got a pay bump, according to a Payscale survey of 31,000 workers. So clear your throat, and get ready to set your own course.
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