Handling Debt Efficiently – Until It’s Gone

Full Article

Subscribe to get my Email Newsletter

More Articles

It’s no secret that making purchases on credit cards will result in paying more for those items over time if you’re paying interest charges from month-to-month.

Despite this well-known fact, credit card debt is at an all-time high, rising another 0.3% this past year.¹ The average American household now owes over $$6,741 in revolving credit card debt.² Add in an average mortgage of over $200,000, plus nearly $90,000 of non-mortgage debt (car loans, college loans, or other loans) and the molehill really is starting to look like a mountain.

The good news? You have the potential to handle your debt efficiently and deal with a molehill-sized molehill instead of a mountain-sized one.

Focus on the easiest target first.

Some types of debt don’t have an easy solution. While it’s possible to sell your home and find more affordable housing, actually following through with this might not be a great option. Selling your home is a huge decision and one that comes with expenses associated with the sale – it’s possible to lose money. Unless you find yourself with a job loss or similar long-term setback, often the best solution to paying down debt is to go after higher interest debt first. Then examine ways to cut your housing costs last.

Freeze your spending (literally, if it helps).

Due to its higher interest rate, credit card debt is usually the first thing to tackle when you decide to start eliminating debt. Let’s be honest, most of us might not even know where that money goes, but our credit card statement is a monthly reminder that it went somewhere. If credit card balances are a problem in your household, the first step is to cut back on your purchases made with credit, or stop paying with credit altogether. Some people cut up their cards to enforce discipline. Ever heard the recommendation to freeze your cards in a block of ice as a visual reminder of your commitment to quit credit? Another thing to do is to remove your card information from online shopping sites to help ensure you don’t make mindless purchases.

Set payment goals.
Paying the minimum amount on your credit card keeps the credit card company happy for 2 reasons. First, they’re happy that you made a payment on time. Second, they’re happy if you’re only paying the minimum because you might never pay off the balance, so they can keep collecting interest indefinitely. Reducing or stopping your spending with credit was the first step. The second step is to pay more than the minimum so that those balances start going down. Examine your budget to see where there’s room to reduce spending further, which will allow you to make higher payments on your credit cards and other types of debt. In most households, an honest look at the bank statement will reveal at least a few ways you might free up some money each month.

Have a sale. To get a jump-start if money is still tight, you might want to turn some unused household items into cash. Having a community yard sale or selling your items online can turn your dust collectors into cash that you can then use toward reducing your balances.

Transfer balances prudently.

Consider balance transfers for small balances with high interest rates that you think you’ll be able to pay off quickly. Transferring that balance to a lower interest or no interest card can save on interest costs, freeing up more money to pay down the balances. The interest rates on balance transfers don’t stay low forever, however – typically for a year or less – so it’s important to make sure you can pay transferred balances off quickly. Also, check if there’s a balance transfer fee. Depending on the fee, moving those funds might not make sense.

Don’t punish yourself.

Getting serious about paying down debt may seem to require draconian measures. But there likely isn’t a need to just stay home eating tuna fish sandwiches with all the lights turned off. Often, all that’s required is an adjustment of old spending habits. If your drive home takes you past a mall where it would be too tempting to “just pick a little something up”, take a different route home. But it’s important to have a small treat occasionally as well. If you’re making progress on your debt, you deserve to reward yourself sometimes. All within your budget, of course!


¹ Steele, Jason. “Debit card statistics.” creditcards.com, June 25, 2021 https://bit.ly/2JB9cGE.
² “Does Using a Credit Card Make You Spend More Money?.” Kiviat, Barbara. Nerdwallet, Jul 27, 2020, https://www.nerdwallet.com/article/credit-cards/credit-cards-make-you-spend-more

Handling Debt Efficiently – Until It’s Gone

Chances are you’ve cooked some pretty elaborate plans to trick yourself into being more productive.

Have you considered the role your surroundings play in your everyday life? It turns out that one of the easiest ways to bring about change in our lives is actually to change our environments. What if the layout of your bedroom or the distance from your desk to the kitchen was impacting your productivity and decision making? There’s plenty of room for each of us to improve. Here’s how and why making some changes to your environment works.

Your brain is efficient Making decisions is draining. (Heard of “decision fatigue”? It’s real!) We can only make so many choices per day before we start to run out of steam and need a rest. But we’re faced with countless choices every time we wake up! Should I go back to sleep? Should I shower or brush my teeth first? What will I wear to work? Should I try out that new shortcut to the office? It can become stressful for your brain to struggle with a choice every time one of these little prompts presents itself. That’s why we rely on decision shortcuts called habits.

A habit is just a routine that you regularly perform. Most of the time we don’t even notice that we’re engaging in a habit because it’s second nature to us. And there’s a reason for that. It’s your brain saving energy by going on autopilot to perform an action without having to make a decision. That way you can use the bulk of your mental power on unique and important problems that might pop up during the day, not on thinking about when you should brush your teeth!

Trick yourself into making wise decisions What does your brain’s love of shortcuts have to do with your environment? Let’s look at an example.

Your alarm clock is right next to your bed. It goes off every morning at 7:30am. It doesn’t take you long to figure out that you can smack the snooze button and go straight back to sleep with hardly any effort. Before long you’re hitting the snooze button every time the alarm goes off without even thinking about it. You’ve trained yourself to sleep in later by making your alarm easier to turn off. But what if your alarm was on the other side of your room? What if to silence it you had to stand up, walk over, and hit a button? That simple change could give you the jolt that you need to wake up and get your day started on time!

Take a look at your surroundings and ask yourself what kind of behavior it encourages. Is it more convenient for you to grab a soda from the fridge or fill up your water bottle? When you work at home, are you in the middle of distractions like the kids playing or too close to the TV? At work, does your office layout lend itself to productivity or socializing with your co-workers?

It might take some legwork to get started, but try to arrange your life in a way that makes wise decisions easier. You might be surprised by the results!

Trying To Change Your Life? Start With Your Environment

Advice about trying not to care what others think about you ranges from inane to utterly insane.

Almost no one will tell you that you should care what others think. Instead, you hear platitudes like “marching to the beat of your own drum”, or “just do you.”

You might even hear something counterintuitive like, “People will like you more if you don’t care about their opinions.”

What? You should stop caring about what others think so they’ll like you more? It’s a bald-faced contradiction at best, deceptively manipulative at worst.

The simple fact is that, unless you’re a diagnosed psychopath, you’ll care what others think about you. And that’s a good thing. It can stop you from alienating people in your life with bizarre decisions or unnecessary antagonism.

But is there such a thing as an unhealthy obsession with the opinions of others? Yes! Analysis paralysis, social anxiety, and unmeasured decisions can all result.

But that shouldn’t lead to a fluffy kitchen countertop quote about “one’s own sweet way.”

Instead of jettisoning all your social concerns, try this—prioritize your values over all.

Let’s say that one of your values is maintaining healthy relationships. That requires care about what someone else thinks of you—without their love and respect, the relationship is doomed to fail.

But you may discover other values, like protecting the well-being of the ones you love. That might mean making hard decisions that, in the short-term, lower the opinions of others.

This isn’t just advice for your personal life—it can benefit your career as well.

For instance, if you’re an employee, you should care about your boss’s opinion of you. That doesn’t mean being a doormat or suck-up. It simply means that you would do well to pay attention to their instruction, make sure you’re on top of things, and show them you’re honest, responsible, and a hard worker. This may lead to a promotion, a raise, and being known as a reliable team member.

The same is true for entrepreneurs. It’s hard to land and keep clients if you’re oblivious to their feelings toward you.

That’s not an excuse for tolerating mistreatment by customers, which is common among new entrepreneurs. Instead, it’s a call to know your own worth, to discover what you value, and then actually serve your clients.

The takeaway? “Don’t care about what others think” is short-sighted, selfish advice.

Instead, explore your values. Discover what matters most. And build your life around those principles. They’ll bring far greater cohesion—and happiness—than ignoring other people and running head-long into the void.

Should You Care What Others Think Of You?

Three simple words can strike fear into the heart of any millennial:

Student.

Loan.

Debt.

The anxiety is not surprising: Members of the Class of 2017 had an average of $29,900 in student loan debt.¹

Nearly $30 grand? For that you could travel the world. Put a down payment on a house. Buy a car. Even start a new business! But instead of having the freedom to pursue their dreams, there’s a hefty financial ball and chain around millennials’ feet.

That many young people owing that much money before they even enter the workforce? It’s unbelievable!

Now just imagine adding car payments, house payments, insurance premiums, and more on top of that student debt. No wonder millennials are feeling so terrible: studies show that graduates with debt experience lower life satisfaction than those without.²

Now is the time to get ahead of your debt. Not later. Not when it’s more convenient or feels less shameful. You have the potential right now to manage that debt and get out from under it.

So how do you get out from under your debt? Sometimes improving your current situation involves more than making smarter choices with the money you earn now. Getting out of that debt ditch means finding a way to make more.

There are 2 things you can monetize right now:

  • Your education
  • Your experience

Both have their own challenges. You may not have spent much time in a particular field yet, so not a lot of experience. And what if you’re working a job that has nothing to do with your major? There goes education.

Two speed bumps. One right after the other. But you can still gain momentum in the direction you want your life to go!

How? A solid financial strategy. A goal you can see. A destination for financial independence.

Debts can become overwhelming – remember that stat up there? But with a strategy in mind for the quick and consistent repaying of your loans, so much of that stress and burden could be lifted.

Contact me today. A quick phone call is all we need to help get you rolling in the direction YOU want to go.


¹ “A Look at the Shocking Student Loan Debt Statistics for 2018.” Student Loan Hero, Jan 27, 2021, https://bit.ly/2de72OP.
² “The Devastating Psychological Burden of Student Loans,” Mark Travers Ph.D., Psychology Today, Dec 16, 2020, https://www.psychologytoday.com/us/blog/social-instincts/202012/the-devastating-psychological-burden-student-loans.

Headed in the Right Direction: Managing Debt for Millennials

Boredom fuels creativity.

Why? Because boredom is profoundly uncomfortable. You can’t ignore it. That itch for something—anything—to fill your attention, your imagination? That’s boredom.

Think about how far people will go to avoid boredom. One study found that it can be so unbearable that most people would rather endure an electric shock than sit alone with their thoughts for 15 minutes.¹

Why do people move to new cities, fly across oceans, skydive, paint masterpieces, or create businesses?

Because they’re bored. Boredom drives people to seek new ideas, experiences, and solutions.

Boredom is a good thing. That’s why always trying to instantly cure it will hamstring your creativity.

Think about the thing you’re probably holding in your hand right now as you read this. It’s the ultimate boredom killer—your phone. Any craving for something new can be instantly extinguished with a viral cat video, trending makeup tutorial, the latest game release, or that life-changing self improvement prompt that will get you out of bed earlier tomorrow.

The solution? Put your phone down and make space for boredom. Block out 15 minutes a day for absolutely nothing. Stare at the wall. Twiddle your thumbs. Above all, let your mind wander. You may be amazed by the thoughts, ideas, and visions you develop to occupy your time.

What great things will you allow your boredom to drive you towards?


¹ “The Unexpected Value of Boredom for Well-Being and Creativity,” Jeffrey Davis M.A., Psychology Today, Jun 30, 2022, https://www.psychologytoday.com/us/blog/tracking-wonder/202206/the-unexpected-value-boredom-well-being-and-creativity

Embrace Your Boredom

Study after study has shown that hopping in the shower and turning the handle towards C can have tremendous benefits.

It’s claimed that doing this can boost your mood, enhance metabolism, and increase focus. One experiment even found that ice baths and breathing exercises can reduce the impact of illnesses like E. Coli.¹

But why? And more importantly before you dive into a frozen lake, how?

The science of cold showers and ice baths is actually pretty simple.

Cold showers suck. They feel terrible. The first drops of arctic water that blast your back or face seem to turn off your brain. Your heart starts racing. Your vision may get blurry. You start thinking, “how can I make this stop?” In other words, you enter full on survival mode.

And that’s one of the best things you can do for your body.

Why? Because your body floods with chemicals to make sure you survive.

Dopamine levels soar. That’s the chemical that makes you pursue goals, like getting out of the shower alive.

Adrenaline surges through your body. That’s the chemical that makes you want to move and scream and focus and escape.

Your body starts torching calories. That’s so it can maintain a stable body temperature.

And those chemicals and processes persist once you turn off the water. That fight-or-flight response gets replaced by a profound sense of calm focus that can last for hours.³

That’s not counting the mental toughness benefit. Every time you step into that stream of cold water, you’re training yourself to endure something unpleasant. You strengthen your ability to overcome fear and to do hard, yet beneficial, things.

There are some critical factors to consider…

Don’t take cold showers too often.

Eventually, you’ll get used to shock and minimize the benefits. According to Andrew Huberman, a Stanford professor, you should aim for 11 minutes in cold water per week.²

Don’t expose yourself to dangerous situations.

Diving into a frozen lake on your first day could lead to panic and even death. Start with an uncomfortable, but safe temperature in your own shower in your own house, and build up your tolerance.

Don’t take cold showers if you’re trying to build muscle.

Cold showers are perfect if you need to eliminate muscle soreness. But it also impacts muscle hypertrophy, slowing growth. So if you need to quickly recover from workouts, take cold showers. But if you’re trying to gain mass, opt with your normal shower routine instead.

Cold showers provide a host of benefits, from boosting your mood to aiding in weight loss. But it’s important to start slowly and increase the intensity gradually to avoid any negative consequences. So if you’re looking for a way to improve your mental toughness and boost your productivity, add a cold shower to your routine. Just make sure you do it safely.


¹ “MR ICE: Men’s Health Chills With Iceman Wim Hof,” Alex Harris, Men’s Health, 27 Apr 2022, https://www.menshealth.com/uk/health/a758182/big-read-mh-chills-with-iceman-wim-hof/

² “The Science & Use of Cold Exposure for Health & Performance,” Andrew Huberman, Huberman Lab, May 1, 2022, https://hubermanlab.com/the-science-and-use-of-cold-exposure-for-health-and-performance/

³ “Cold Shower for Anxiety: Does It Help?” Kristeen Cherney, Healthline, June 22, 2022, https://www.healthline.com/health/anxiety/cold-shower-for-anxiety

Can Cold Showers Give You Superpowers?

Imagination is underrated.

We live in a world of dollars and cents, ones and zeros, and cold, hard facts. Dreams and hopes are great, but results will always be our number one priority.

But what if your imagination mattered?

What if your mind’s eye actually held the key to success? There’s strong evidence that actually visualizing certain outcomes can reduce stress and empower you to achieve your goals and dreams. It might sound like voodoo, but it’s actually not! Here’s how it works.

Mind and Muscle

Your brain is connected to your body. Your brain registers things that happen to your arms and legs and ears and lets you know if they’re good or bad. A soft blanket? Good! Stubbing your toe? Bad!

But the connection between your brain and body goes both ways. Imagining an action in your mind can actually improve your performance in real life. There’s plenty of anecdotal evidence for this; legends like Arnold Schwarzenegger and Muhammad Ali.¹ ² But there’s also research to back it up. People who imagined exercising certain muscles gained almost as much strength as people who physically exercised!³

Visualization can also reduce stress. Studies have found that novice surgeons and police officers who receive imagery training feel less stress and have less objective stress.⁴

Some visualization tips

Imagining yourself on a generic island paradise in 15 years is just daydreaming. The key to effective visualization is specificity. Be as precise as possible. Break down how you’ll achieve your goal or throw that game-winning pass into as many tiny movements as possible, and imagine how you’ll execute each one. Incorporate your senses; what will you smell and hear when you finally achieve that goal?

Verbal affirmations can also help with this visualization process. Take a page from Muhammad Ali, and tell yourself that you’re the greatest every morning before you get breakfast! Even better, say your goal out loud before you go to bed or eat lunch. Writing up a mission statement that you read daily or making a vision board of images that inspire you are also ways to boost your visualization!

Just remember that one of the key strengths of visualization is that you can do it anywhere. Develop your goals, make them as specific as possible, and then start imagining!


¹ “The Power Of Visualization And How To Use It,” Lidija Globokar, Forbes, Mar 5, 2020, https://www.forbes.com/sites/lidijaglobokar/2020/03/05/the-power-of-visualization-and-how-to-use-it/

² “Seeing Is Believing: The Power of Visualization,” A.J. Adams MAPP, Psychology Today, Dec 3, 2009, https://www.psychologytoday.com/us/blog/flourish/200912/seeing-is-believing-the-power-visualization

³ “Seeing Is Believing: The Power of Visualization,” Adams MAPP, Psychology Today

⁴ “The Power Of Visualization And How To Use It,” Globokar, Forbes,

What You See Is What You Get: The Power of Visualization

Graduating from college is a huge transition.

It’s the end of nearly two decades of classrooms, tests, essays, late nights, and early mornings, but it’s the start of your full-fledged independence.

That move isn’t always easy. We face a huge number of unknowns when we leave the hallowed halls of the university and enter the dog-eat-dog “real world.” What kind of job will I end up with? Where will I live? What will my coworkers be like? How well will I adjust to a totally new routine? Those are important questions that don’t always have clear answers. However, there are some things you can do that will help navigate your post-graduation world. These aren’t magic antidotes, just helpful steps that might bring some stability and order to your experience!

Create a vision

Having a career vision is essential. It can provide structure and a sense of purpose. Decisions can be weighed by how much they move you towards realizing your goals, which can help give you clarity when making tough calls.

Keep your vision as specific and precise as possible. That dream of working at a prestigious law firm and wearing designer suits every day? Take it and drill down on the details. What kind of law do you want to practice? What’s your dream city? How high up on the ladder do you want to climb? Be honest with yourself about what you really want.

It’s also important to develop a time frame for your goals. Think about a 5 to 10 year time frame and see what you think is realistic!

Map out your path

Now it’s time to map out how you’ll make your vision a reality. What needs to happen for you to get that promotion or end up in the city you want to experience?

The first step is research. Your dream position might require a master’s degree or special licensing that you can’t afford just yet. Maybe you need some time in the field before moving up. Break down exactly what needs to happen, and when, for you to achieve your goal. Sometimes it’s best to start with the goal itself and deconstruct it into smaller and smaller pieces that are easier to manage. Start checking off those little steps until your goal looks more and more achievable!

It’s also a good idea to find a mentor to guide you. Ideally this would be someone who’s undertaken this journey themselves! They’ll have insights into roadblocks that you’ll face and little tips that can make all the difference.

Maximize positivity

No plan is perfect. We’ll always overlook a detail, not factor in a risk, or overestimate our ability to handle something. It’s easy to get discouraged when those things go wrong. It can make your dream feel unattainable, and you might start to doubt yourself. But rolling with those punches and not getting discouraged by setbacks is essential to achieving your goal. Take a step back, assess the situation, learn from your mistakes, and get back to the grind. You might have to adjust your expectations and even re-evaluate your process. That’s fine! Do what you need to do and get back to work once you’ve hammered out the details.

Remember that flexibility is key. Your passion for a certain type of work or field of study might cool off as the years go by. You might find that your goal of becoming an alpha executive conflicts with your goal of being an available parent. Don’t push those hard decisions off until tomorrow. Do some serious soul searching about what matters to you today, make some goals, figure out a process, and don’t let little failures get you down!

Tips For New Graduates

Side gigs should be simple.

They’re not usually meant to consume hours of your time each week or distract you from your main source of income. Fortunately, right now we’re in a side gig golden age. There are dozens of opportunities just a tap or click away. Here are a few simple side hustle ideas that might make you a few extra bucks without sacrificing all of your free time!

Freelance writing

Working as a freelance writer can be a simple, efficient way of turning your prose prowess into cold, hard cash. Powerful and persuasive writing is of top importance in the information age, and there are plenty of people and companies that are willing to pay writers for quality content.

Look for opportunities to write about your favorite hobbies and interests. It’s an easy way to combine your personal passions with making a little extra each month.

Private tutoring or lessons

Do you have a hidden talent? Maybe you’re a secret chef, a low profile ping pong wizard, or a late night guitar hero. You might be surprised by how much people will pay for your insights and guidance—certain video game coaches can make a surprising amount of money!

The beauty of this gig is that it doesn’t take tons of leg work to get started. You already have the skills and your client base can be from your local community. Just plot out a curriculum, set a price for your services, and get the word out!

Delivery driver

Rideshares have become icons of the side-hustle economy. But ferrying strangers to and from bars on the weekends isn’t the only way to make some extra cash with your car. There are plenty of startups and companies that need drivers. That might mean delivering food for a local restaurant chain or dropping off packages for a more established company. Do some sleuthing on what’s available near you and what demand looks like in your area.

The beauty of these gigs is that they’re built on skills and tools that you already have. Put in the leg work to get things started and you might just find yourself with a dependable extra income stream!

Simple Side Gigs

It’s not your imagination—your cramped, beige cubicle might be torpedoing your productivity.

Research has shown time and again that your work environment plays a critical role in your level of focus, analytical thinking, and creativity.

So if you have the freedom to do so, here are a few ways to spice up your workspace to maximize productivity.

Alternate sitting and standing

It turns out that standing desks aren’t just a fad—they can actually boost productivity.

According to Andrew Huberman, a neuroscientist at Stanford University, research has shown that halving your sitting time at work can reduce back and neck pain and boost cognitive performance.

And best of all, you don’t need a fancy contraption to make it happen. Simply stack some boxes or books to lift your computer and monitor—voila! Now you have a standing desk.

Maximize lighting

At the start of your day, increasing your light exposure can boost your focus. Why? Because your body and brain are conditioned to respond to sunlight. It’s a powerful trigger that your day has started and you need to get it in gear!

So first thing, go outside and sit in the sun for a few minutes. When you’re in the office, turn on overhead lights, lamps, and ring lights. If you can, work by an open window. You might be surprised by the impact it has on your alertness and focus.

Just be sure to tone down the intensity as the day wears on so your body knows it’s time to settle down, relax, and hit the hay. Bright light exposure when it’s too late can be detrimental to sleep, especially looking at your phone less than an hour before you want to go to bed. The light shining in your eyes tells your body that you need to stay awake.

Leverage ceiling height to switch mental gears

You read that correctly. The height of your ceiling can help you toggle between analytic mode and creative mode.

High ceilings tend to promote creativity and brainstorming. Low ceilings promote analytical thinking.

It’s called the cathedral effect, and for good reason. Think about how you would feel stepping into the Chartres Cathedral vs. say, your basement. One creates awe, wonder, and an appreciation of beauty. The other forces you to zero in on only what’s in front of you, like that load of laundry you forgot about.

So as a rule, try to do your creative thinking in high, open spaces. Do your analyzing in closed, dull, non-distracting spaces.

Try one or two of these strategies over the next week and see if they impact your productivity. I’d love to hear about your results!

Your Workspace May Be Hampering Your Productivity

Oops. You did it again.

Maybe you used the credit card to buy something you didn’t really need, even though you’ve sworn it off time and time again.

Maybe you found yourself clicking checkout, even though you promised to stop online shopping.

Or maybe you just found yourself discouraged by the number in your bank account… again.

Either way, you’ve had a financial relapse—you did something to set back progress with your goals, even though you knew better.

It sucks. It’s enough to make you throw up your hands and quit.

But here’s the truth—it’s part of the process.

Research suggests that there are six steps to changing behavior…

Pre-contemplation » Contemplation » Preparation » Action » Maintenance » Relapse

Why is relapse the final step? Because it’s an opportunity. It reveals the limitations in your strategy, unnoticed behavior triggers, and above all, new areas for growth.

This is good to acknowledge, but it’s a far cry from how relapses make you feel. They feel like proof positive that you’ll never change, that you didn’t change. You fell back into your old behaviors.

But nothing could be further from the truth. The reality is that relapses merely point you to deeper truths about yourself… and what you’re capable of.

So next time you feel down about a hard-to-break financial habit, give yourself some grace. Examine what happened, and integrate what you learn into your strategy.

Consider meeting with a financial professional to chat things through. They can help you process what happened, refocus on your goals, and create a strategy to prevent future relapses.

And if you feel like you’re stuck in harmful financial habits that you can’t break, book a meeting with a licensed and qualified mental health professional. They can help you identify patterns, understand their origins, and develop steps for change.


¹ “Prochaska and DiClemente’s Stages of Change Model for Social Workers,” Yeshiva University, May 11, 2021, https://online.yu.edu/wurzweiler/blog/prochaska-and-diclementes-stages-of-change-model-for-social-workers

Financial Relapses

Couplehood can be a wonderful blessing, but – as you may know – it can have its challenges, too.

In fact, money conflicts are behind 41% of divorces.¹ The age-old adage that love trumps wealth may be true, but if money is tight or if a couple isn’t meeting their financial goals, there could be some unpleasant conversations (er, arguments) on the bumpy road to bliss with your partner or spouse.

These tips may help make the road to happiness a little easier.

1. Set a goal for debt-free living. Certain types of debt can be difficult to avoid, such as mortgages or car payments, but other types of debt, like credit cards in particular, can grow like the proverbial snowball rolling down a hill. Credit card debt often comes about because of overspending or because insufficient savings forced the use of credit for an unexpected situation. Either way, you’ll have to get to the root of the cause or the snowball might get bigger. Starting an emergency fund or reigning in unnecessary spending – or both – can help get credit card balances under control so you can get them paid off.

2. Talk about money matters. Having a conversation with your partner about money is probably not at the top of your list of fun-things-I-look-forward-to. This might cause many couples to put it off until the “right time”. If something is less than ideal in the way your finances are structured, not talking about it won’t make the problem go away. Instead, frustrations over money can fester, possibly turning a small issue into a larger problem. Discussing your thoughts and concerns about money with your partner regularly (and respectfully) is key to reaching an understanding of each other’s goals and priorities, and then melding them together for your goals as a couple.

3. Consider separate accounts with one joint account. As a couple, most of your financial obligations will be faced together, including housing costs, monthly utilities and food expenses, and often auto expenses. In most households, these items ideally should be paid out of a joint account. But let’s face it, it’s no fun to have to ask permission or worry about what your partner thinks every time you buy a specialty coffee or want that new pair of shoes you’ve been eyeing. In addition to your main joint account, having separate accounts for each of you may help you maintain some independence and autonomy in regard to personal spending.

With these tips in mind, here’s to a little less stress so you can put your attention on other “couplehood” concerns… Like where you two are heading for dinner tonight – the usual hangout (which is always good), or that brand new place that just opened downtown? (Hint: This is a little bit of a trick question. The answer is – whichever place fits into the budget that you two have already decided on, together!)


¹ “10 Most Common Reasons for Divorce,” Shellie R. Warren, Marriage.com, Jul 14, 2021, https://www.marriage.com/advice/divorce/10-most-common-reasons-for-divorce/.

Tips on Managing Money for Couples

Online banking is normal these days.

Most major banks have apps or websites that allow you to transfer funds and manage your account without ever going into a branch. But what about the new generation of online-only banks that seem to be popping up? Can you be a reliable bank without brick and mortar locations? Let’s explore the world of online banks and some pros and cons.

How do online banks work?

Online banks and physical banks have a lot in common. They’re both places that store and protect your money. They both loan out your money for a profit. So what’s the big difference?

For one thing, banks with brick and mortar locations have high overhead. They may pay rent on properties, maintain buildings, hire managers to operate locations, and pay tellers to serve customers. Online banks typically have drastically lower upkeep costs. Sure, you need to pay developers to keep the system running smoothly and securely, but it’s generally much lower compared to the costs of maintaining physical locations.

Pros

So what do those differences mean for you, the consumer? Banks with physical locations will pass on their location upkeep expenses to you, the customer. That means they’re more likely to charge you for opening an account, give you as little interest as possible, and crank up rates on loans for houses and cars.

Online banks aren’t weighed down by those physical locations. They have fewer expenses and don’t have to charge you as much to make ends meet.¹ That means you might get significantly higher interest rates on your savings accounts. They also tend to lean less on fees than traditional banks.²

Cons

But there are some drawbacks to using an online bank. You might find withdrawing cash without paying ATM fees more difficult than before.³ Depositing cash might also take some more leg work and research.⁴ Customer service can’t be handled in person so problems must be solved via phone or online chat. Plus, safety deposit boxes are harder to come by with an online bank. In short, many of the old school conveniences just aren’t provided by the new generation of online banks.

It’s important to weigh the pros and cons before pulling the trigger and opening an account with an online bank. Trying to make more with your savings account? You may want to investigate banking online. But if you’re on a strict cash diet to avoid excessive spending, a traditional bank might have some classic services that will come in handy. Talk with a licensed financial professional before you make the decision.


¹ “What Is Online Banking? Definition, Pros and Cons,” Amber Murakami-Fester, Nerdwallet, Mar 25, 2021 https://www.nerdwallet.com/article/banking/pros-cons-online-only-banking

² What Is Online Banking?” Murakami-Fester, Mar 25, 2021

³ What Is Online Banking?” Murakami-Fester, Mar 25, 2021

⁴ What Is Online Banking?” Murakami-Fester, Mar 25, 2021

What's Up With Online Banks?

So you’ve made the commitment and started your budget, but after a while something seems off.

Maybe your numbers never add up or too many expenses are coming “out of the blue”. You might also feel a sense of dread every time you make a purchase. No matter what you do, this whole budgeting thing doesn’t seem to be working.

Hang in there! Here are a few budgeting potholes that might be slowing down your financial goals and how to avoid them!

Stinginess

Budgets are supposed to help you use your money wisely. They should be a positive part of your life—they’re not supposed to make you feel like you’re constantly failing. But sometimes our passion to save money and get our financial house in order gets the better of us, and we set up budgets that are too restrictive. While coming from good intentions, an overly thrifty budget can actually make it harder to achieve your goals. An impossible to follow plan can make you feel discouraged and resentful. You might even decide that it’s not worth the hassle! Try starting with a more reasonable strategy and then build from there!

Too complex

Sometimes our budgets are just too complicated to actually be useful. Not everyone loves working with numbers, and sometimes fiddling with spreadsheets can get so overwhelming that we just want to quit. Plus, there’s plenty of room for human error! A good option is to investigate free budgeting sites or apps. All you do is punch in the correct numbers and the magic of technology will do the rest!

One time budget

Life is constantly changing. Your simple, streamlined budget might be perfect for the life of a young single professional, but will it still hold up in five years? Where will the portion of your paycheck that works down your student loans go once you’re debt free? And when will you start saving for a house?

Take some time every few months to review your budget and see what’s changed. Evaluate what you’ve accomplished and areas that need improvement. Ask yourself what your next milestones should be and if those line up with your long-term goals!

Budgeting takes work. But it shouldn’t be a burden. Cut yourself some slack, prune your process, and stay consistent. You might be surprised by the difference filling in budgeting potholes can make in your financial life!

Beware These Budgeting Potholes

Here’s every millennial’s dream—you wake up one day to find all your student loan debt completely forgiven.

And recently, that dream became a reality for dozens of former students when the U.S. government gave $17 billion of debt relief to 725,000 borrowers.¹ Not bad!

Still, that hardly puts a dent in the $1.6 trillion in student loan debt collectively owed by $43 million Americans.²

So, what are the chances that your loans will be forgiven, and how do you know if you qualify?

Here are three ways to qualify for student loan forgiveness…

Public Service Loan Forgiveness

Work for a qualifying non-profit or public organization? Then you qualify for the Public Service Loan Forgiveness (PSLF) program.

Under this program, your remaining loan balance will be forgiven after you make 10 years’ worth of payments.³

And fortunately, it just got far easier to qualify—before recent reforms, the denial rates for the PSLF program was up to 99%.⁴

So if you’re a public servant, head over to the Federal Student Aid website and head over to Manage Loans.

Teacher Loan Forgiveness

Similarly to the PSLF program, the Teacher Loan Forgiveness program is available for educators. If you’ve taught in a classroom for 5 years and meet the basic qualifications, you could be eligible for up to $17,500 of debt forgiveness.⁵

Be warned—there are some highly specific qualifications. From the Federal Aid website:

“You must not have had an outstanding balance on Direct Loans or Federal Family Education Loan (FFEL) Program loans as of Oct. 1, 1998, or on the date that you obtained a Direct Loan or FFEL Program loan after Oct. 1, 1998.”⁶

Sound complicated? That’s because it is. As with most financial moves, meet with a debt professional or financial planner to see if you qualify.

Total and Permanent Disability Discharge

If you’re totally and permanently disabled, you may be eligible for a complete discharge of your student loan debt.

You’ll need to submit proof of your disability to your loan servicer. The proof can come in many forms, such as a doctor’s letter, a Social Security Administration notice, or documentation from the U.S. Department of Veterans Affair.

As with everything involving bureaucracy and disability, you can quickly find yourself mired in red tape and conflicting phone numbers. That’s why it’s always wise to seek out professional help if you think you might qualify.

The sad truth is that few actually qualify for these programs. If you work in the private sector, are healthy, and face significant debt, you’ll need to find alternative strategies for moving from debt to wealth.

Still, it’s good to know that there are options out there for those who qualify. So if you think you might be eligible for one of these programs, don’t hesitate to explore your options.


¹ “Here’s who has qualified for student loan forgiveness under Biden,” Erika Giovanetti, Fox Business, Apr 26, https://www.foxbusiness.com/personal-finance/student-loan-forgiveness-programs-biden-administration

² “Student Loan Debt Statistics: 2022,” Anna Helhoski, Ryan Lane, Nerdwallet, May 19, 2022 https://www.nerdwallet.com/article/loans/student-loans/student-loan-debt

³ “Want Student Loan Forgiveness? To Qualify, Borrowers May Need To Do This First,” Adam S. Minsky, Forbes, May 16, 2022, https://www.forbes.com/sites/adamminsky/2022/05/16/want-student-loan-forgiveness-to-qualify-borrowers-may-need-to-do-this-first/?sh=6aa44a617cdb

⁴ “Want Student Loan Forgiveness?” Minsky, Forbes, 2022

⁵ “Teacher Loan Forgiveness,” Federal Student Aid, https://studentaid.gov/manage-loans/forgiveness-cancellation/teacher

⁶ “Teacher Loan Forgiveness,” Federal Student Aid, https://studentaid.gov/manage-loans/forgiveness-cancellation/teacher

Who Qualifies for Student Loan Forgiveness?

Inflation. Tumbling market values. Supply chain catastrophe. Wars and rumors of war. Pandemics.

They’ve all been plastered on headlines and social media feeds for the last two years. And there’s no sign of it stopping.

Worst of all, as individuals and as businesses, we can’t control the economy.

But what we can control is how we respond to it.

In times of economic volatility, the key is to stay focused on your long-term goals, and make sure your actions align with them.

Here are a few tips on how to navigate economic volatility…

1. Check your emotions. Fear is the natural response to economic volatility. What will happen to your job? What will happen to your business? What will happen to your retirement savings?

Know this—one of the worst mistakes you can make is acting on those fears. Volatility creates opportunity. Don’t lose out on potential because of headlines you read. Instead, assess your situation, what you stand to lose, and opportunities you might have.

2. Stay focused on your goals. It’s easy to get caught up in the day-to-day noise of the news. But if you want to help your sanity—and make sound financial decisions—it’s important to keep things in perspective.

How far are you from retirement? What kind of lifestyle do you want in retirement? What’s your strategy for protecting against long-term losses?

If your goals are in line with your current reality, take a deep breath and ride out the storm. If not, it’s time to reevaluate where things stand and make adjustments as necessary.

3. Review your budget and financial plan. Once you’ve gotten past the initial emotional reaction, it’s time to take a clear-eyed look at your budget and finances.

There are two critical components to examine here—your emergency fund and your debt.

If you have an adequate emergency fund in place, keep it intact. Resist the temptation to tap into your savings to cover short-term losses. You’ll need your emergency fund for more volatile times ahead.

As for debt, make sure you’re not overextending yourself with credit cards and loans that only make sense when the economy is booming. If you lose your job in a downturn, the last thing you want is a bunch of high-interest debt to worry about.

4. Meet with your financial professional. It’s simple—a financial professional can stop rash financial decision making in its tracks.

That’s because volatile times can bring out the emotions. And when emotions are involved, it’s tough to make sound decisions.

A financial professional can help you see the big picture, keep things in perspective, and develop a plan that will help you stay on track—no matter what the economy throws your way.

While economic volatility can be frightening and chaotic, it’s important to stay focused on your long-term goals. Having the right mindset and guidance can help you navigate a crisis with confidence.

The Right Way to Respond to Economic Volatility

Your credit score is a big deal.

A low score can saddle you with anything from high interest rates, difficulty scoring important loans, or poor employability!¹

But what exactly is a credit score? And how is it different from a credit report? It turns out the two have a close relationship. Let’s explore what they are and how they relate to each other.

Credit Report

Your credit report is simply a record of your credit history. Let’s break that down.

Many of us carry some form of debt. It might be a mortgage, student loans, or credit card debt (or all three!). Some people are really disciplined about paying down debt. Others fall on hard times or use debt to fuel frivolous spending and then aren’t able to return the borrowed money. As a result, lenders typically want to know how reliable, or credit worthy, someone is before giving out a loan.

But predicting if someone will be able to pay off a loan is tricky business. Lenders can’t look into the future, so they have to look at a potential borrower’s past regarding debt. They’re interested in late payments, defaulted loans, bankruptcies, and more, to determine if they can trust someone to pay them back. All of this information is compiled into a document that we know as a credit report.

Credit Score

All of the information from someone’s credit report gets plugged into an algorithm. It’s goal? Rate how likely they are to pay back their creditors. The number that the algorithm spits out after crunching the numbers on the credit report is the credit score. Lenders can check your score to get an idea of whether (or not) you’ll be able to pay them back.

Think of a credit report like a test and the credit score as your grade. The test contains the actual details of how you’ve performed. It’s the record of right and wrong answers that you’ve written down. The grade is just a shorthand way to evaluate your performance.

So are credit reports and credit scores the same thing? No. Are they closely related? Yes! A bulletproof credit report will lead to a higher credit score, while a report plagued by late payments will torpedo your final grade. And that number can make all the difference in your financial well-being!


¹ “The Side Effects of Bad Credit,” Daniel Kurt, Investopedia, Jun 11, 2021, https://www.investopedia.com/the-side-effects-of-bad-credit-4769783

Credit Score vs. Credit Report

What you’ve heard is true—used cars really are getting more expensive.

And it’s not just a few dollar price hike. Used cars saw a 66%-110% price increase from December 2019 to December 2021.¹ For comparison, overall prices have increased ‘only’ 12% from 2019 to 2022.²

Why? Like almost everything over the last two years, it all comes back to the Pandemic.

Here’s the story…

New cars need microchips. That’s where all the computerized magic happens that consumers have come to expect when they drive out the dealership.

But chip manufacturers were hit right between the eyes by the pandemic. They faced extensive lockdowns, followed by surging demand once the economy began to recover. Factories were simply unable to produce new cars. Consumers needed alternatives. So they started buying used cars, en masse.

Demand shot up. Supply went down. And as a result, prices for used cars have soared.

Fortunately, there may be relief on the horizon. If chip manufacturers reopen and new cars hit the market, used car prices should start to trend downward. J.D. Powers estimates the market will stabilize in late 2022 or early 2023.³ Morningstar puts the date in 2023.⁴

But whether those predictions become reality remains to be seen. For now, if you’re in the market for a used car, expect to pay more than you would have just a few years ago.


¹ “When Will Used-Car Prices Drop? 3 Things Car Shoppers Should Know,” Jane Ulitskaya, Cars.com, Feb 3, 2022, https://www.cars.com/articles/when-will-used-car-prices-drop-3-things-car-shoppers-should-know-446525/

² “$1 in 2019 is worth $1.12 today,” in2013dollars.com, https://www.in2013dollars.com/us/inflation/2019?amount=1#:~:text=Core%20inflation%20averaged%203.02%25%20per,2022%2C%20a%20difference%20of%20%240.09

³ “When Will Used-Car Prices Drop? 3 Things Car Shoppers Should Know,” Ulitskaya, Cars.com

⁴ “Used car prices continue to surge. Here’s why — and when they could come back down,” Mike Stunson, Miami Herald, https://www.miamiherald.com/news/nation-world/national/article257060717.html#storylink=cpy

Why Used Cars Are So Expensive

Your mind is incredible. But it’s not perfect. It makes mistakes. And those mistakes can wreak havoc on your finances.

This isn’t to talk bad about your brain—it’s like a supercomputer that’s constantly trying to make sense of the world and keep you safe. The trouble is, sometimes it does this by coming up with shortcuts, or rules of thumb, that lead to errors.

These mistakes are sometimes called mind traps. They derail your train of thought and lead you astray. And they can have a big impact on your money.

Here are some of the most common money mind traps, and how you can avoid them!

1. All or nothing thinking.

This is a classic example of the great being an enemy of the good. Unless you can go all out on saving and building wealth, you’ll do nothing. Go big or go home, right?

It’s an obviously flawed line of thinking. Saving a little is always better than saving nothing. But it’s still very, very powerful. Why? It might be because of anxious or perfectionist tendencies. Anything short of perfection seems like failure. And that sense of failure is so uncomfortable that it seems safer to not even start.

But here’s the truth—you’ll never go big unless you start small. Waiting for the stars to align, or even to get all your ducks in a row, will result in permanent inaction.

The solution? Start small. Save $20 per month. Read one blog article about money. Follow just one money influencer. You might be surprised by the difference that even just a little move can make!

2. Magical thinking.

For example: “I’ll start saving when I get a raise.” Spoiler—you won’t.

Why? Because you didn’t start saving after your last raise. What would make this new one any different?

This is magical thinking. This time will be different, even if you do nothing different. It’s the hope that circumstances will change on their own, and with them, your behavior.

The solution is to be proactive. If you want to save more money, you have to take action. That might mean setting up a budget, or automated transfers into savings. It might mean looking for ways to make more money. But whatever it is, do it now. If the present you won’t do it, neither will the future you.

3. Catastrophizing & personalizing.

Have you ever opened your bank account and thought “This is the end of the world?” It’s happened to everyone at least once. Suddenly, you realize you’re far closer to zero than you realized. Worst of al, you’re not sure why.

To be clear, that’s NOT the end of the world. There could be plenty of good reasons for why you’ve spent more this month, and there are plenty of ways to get your financial house back in order.

But that’s not how it feels. It feels like defcon 3. Surely this means that you’ll default on the mortgage, lose the car, and ruin your future.

And that catastrophizing almost always leads to personalization. You start blaming yourself. How could you let this happen again? What’s wrong with you? Those negative voices are off to races, and it can feel impossible to get them back. And it’s all because you’re looking at your bank balance.

The solution is to step back, take a breath, and remember that this is just a number. It does not define you. Sure, you need to take responsibility for your actions. But follow your train of thought. Where are you making mental leaps? What are you assuming? If you can catch yourself in the moment, it’s a lot easier to calm those anxious thoughts before they get out of control.

In conclusion, mind traps are dangerous because they’re so believable. They seem like rational thoughts, but they’re really just mental shortcuts that often lead to costly errors.

The good news is, once you’re aware of them, you can start to catch yourself in the act. And with practice, it gets easier and easier. So next time you find yourself thinking you have to go big or go home, or that your finances will magically fix themselves, or that you’re a failure, take a moment. Write down your thoughts. And then ask yourself—is this really true? Or is it just a mind trap?

Mind Traps and Your Money

Money is symbolic.

Sure, it’s a store of value and a medium of exchange. But above all, it’s a symbol. It’s how people evaluate if they’re succeeding or failing.

What is a symbol? It’s a visible representation of something that’s invisible.

Think about it—can you see success? Not really. It’s an abstract idea.

But what do you see when you imagine a successful person? Cars, houses, clothes, and zeros in a bank account.

Those are the symbols of success. And make no mistake—money is the central symbol of success.

How do you feel when your bank looks full? Awesome! You get a quick rush, and your step’s just a touch lighter.

But what about when you’re in debt or when you can’t make ends meet? Not so great. You feel stressed and anxious, like you’re not good enough.

That’s because money is a visible representation of your success or failure. It’s a way to keep score.

You see that loaded bank account, and you think “Everything looks good! I’ve really got my act together.”

You see an empty bank account, and you think “What have I been doing? I’ve really messed up my finances.”

Here’s the sticking point—the symbolic nature of money is great for motivation. It’s terrible for guiding decisions.

Why? Because it can easily lead you to making moves that give you the appearance of wealth without being wealthy. You start buying things far beyond your budget to symbolize wealth you don’t actually have. It’s the fast-track to living paycheck-to-paycheck.

But as motivation? That’s where its power lies. Think about that bump you get when you see your net worth climb. Use that feeling as fuel to keep pushing when you hit roadblocks and obstacles.

So what does money mean to you? Is it a scorecard? A way to motivate yourself? Or something else entirely?

How you answer that question will determine whether money is a powerful tool or a dangerous weapon in your life.

Money is Symbolic