Category: Personal Finance

Zina Kumok

Since I write about personal finance, I’m used to advising my friends about their own finances. It seems that every time I bring up the subject, I find myself correcting people.

With most of the information available readily on the internet, how is it possible that there’s so much misinformation?

But even I sometimes find out that something I believe is wrong. Personal finance is a complex topic, full of changing rules and expert advice. Read below to see if you believe any of these common money myths.

All adults need life insurance.

When I got married, I called my insurance agent a few days later to ask about life insurance. I felt so grown up, thinking about my future and impending death.

But my agent told me I didn’t need a life insurance policy. I didn’t have a mortgage or a child with my husband, so there was little reason to pay for a policy. If he died, I could still support myself.

I was relieved to know that I didn’t have to buy an extra form of insurance. I’m a fairly cautious person, but I like being able to avoid spending money if I don’t have to.

Of course, there are other factors at play, such as how much cheaper life insurance costs while you’re younger. You can also consider funeral costs for your parents if you pass. While you might not need life insurance right now, keep it on the back burner. It’s something you might consider before you hit 30 and rates go up.

Investing is risky.

Recent surveys indicate that millennials are afraid of investing, either because they don’t understand the markets or they’re shell-shocked from growing up during two recessions.

But Dani Pascarella, CFP and founder of wealth coaching firm Invibed, said that people who don’t invest are guaranteed to lose money.

“The current rate of inflation in the U.S. is around 2.2%, but most savings accounts pay less than 1% in interest,” she said. “That means if you don’t invest your savings, you are actually losing your purchasing power.”

That’s not to say that any form of investing is better than a high-yield savings account. People lose money every day in the stock market. But finding an investment that will not only beat inflation, but also provide a healthy return, is possible. You can research investing on your own, use a robo-advisor, or hire a financial planner.

And you might be surprised that you can start investing with very little. Companies like Acorns allow you to start with pocket change.

I need to keep a small balance on my credit card.

One of the most persistent credit myths is that you need to have a small balance on your credit card for the card issuer to report on your credit report. Some people mistakenly believe that if they pay off their balance every month, the issuer won’t report any activity on your account, which won’t help your credit report.

Not true. The only way a credit card company will report zero activity on an account is if you pay off the balance before the statement is posted. Once the statement is posted, you can pay off the entire balance with no fear of what it’ll do to your credit report.

This myth is dangerous because it entices people to keep a balance on a credit card that likely has a high interest rate. There’s no reason to pay interest fees every month, especially not for the false reason of boosting your credit score.

All debt is bad.

Most financial experts agree that you should avoid debt whenever possible. But not all debt is bad, and if you’re careful, you can use debt to create more revenue.

“The rich actually use it as a tool for building wealth,” Pascarella said.

For example, rental properties are a popular form of investing. Borrowers take on mortgages on properties that they believe will provide a solid stream of income. Not only do these rent payments pay for any expenses, they also provide a tidy profit.

Many business owners also got started by borrowing money, from a bank, family members or other companies. Without that initial loan, they wouldn’t be able to build their empire.

Renting is throwing your money away.

This is a myth I’ve heard a lot, mostly from people who buy a house way too quickly. They believe that a home is an investment and always better than renting.

But owning a home is expensive. Closing costs, private mortgage insurance, property taxes, homeowners insurance and maintenance fees can quickly drain your bank account. In general, if you plan to own a home for five years or less, you’ll likely lose money on the deal. That’s partly because when you first take out a loan, your initial payments mostly go toward interest. Only later do the payments skew more toward the principal.

That means if you sell a home three years after you bought it, you’ll have little equity to gain from it. Plus, the market isn’t likely to change that much in a short period of time, so you’re not able to get a huge rate of return.

Unless you plan to settle down in an area for more than five years and are prepared for the responsibilities of a house, stick with renting.

You don’t have to fall victim to these money myths. Instead, think about what matters most to you. Create a financial life around what you hope to see in your own future, and look for solid information that will help you on your path.

Miranda Marquit

At some point, any number of us are looking for ways to earn a little fast cash.

Whether it’s an extra $50 this week or a desire to find an extra $1,000 in the budget this month, the ability to make extra money entices all of us.

But how do you make extra money quickly? And can you get the cash when you want it?

One way to get that paper quicker is to sell yourself.

Not like that. That’s illegal.

But there are ways to sell some bits of yourself and it’s totally legal. Here are some of the ways you can make extra money by selling what your mama gave you:

Hair.

Believe it or not, people want to buy your hair. You’ve probably heard of people donating hair, but you can actually get money for your hair.

Your best bet is going to be if you have long hair (at least 10 inches or so) that hasn’t been treated or dyed.

However, even if you have shorter hair, or hair that was treated or colored at some point, you might still be able to get some money.

It’s possible to make up to a few hundred dollars when you sell your hair. There are websites like HairSellon that allow you to list your hair for sale. There’s even a hair price calculator to help you estimate what you should list your hair for.

I just did my own hair and discovered that it is worth $70. (It’s been dyed). Not bad considering all I need to do is cut it off.

Blood plasma.

I know several people who have made decent money by donating blood plasma. You can make $25 to $50 per donation, depending on where you live.

It’s also possible to donate up to twice in a seven-day period. That’s up to $200 a month. I know a guy that paid for his family’s groceries just with his blood plasma donations.

Companies like BioLife can provide you with the ability to make extra money quickly and easily. You do need to make sure you meet the requirements, including a medical screening and testing negative for hepatitis and IV, and follow a recommended diet.

Eggs (for the ladies).

When I was in college, I saw an ad in the newspaper for egg donations. I was intrigued. Ultimately, I didn’t go for it. But sometimes I wish I had.

When it comes to egg donation, you can earn thousands of dollars. One company, Growing Generations, starts at $8,000. You get $750 of it upfront, as you begin the medications required.

Most egg donation isn’t just about getting the compensation for the donation itself. All your expenses are paid. This includes mileage if you have to drive and airfare if you have to fly. Meals, hotel, and other expenses are covered.

However, the downside is that this can be harder to do than just lop off your hair. You have to go through a whole cycle of medications. Plus, you have to be healthy. The ad I saw insisted on high intelligence as well.

I’m almost too old to make a good candidate now, but there are times I wish I’d gone for it when I was younger. I was a good weight, not totally unattractive, and doing quite well in school.

It’s something to think about if you want to make extra money and don’t mind the idea of your genetic material being given to someone else.

Women can also make money by selling their breast milk and by being surrogates. But you really have to be committed to make extra money in these ways, since it requires going really above and beyond.

Sperm (for the dudes).

Men can also get in on the genetic material racket by selling their sperm. This is easier than being an egg donar, though. You can make up to $1,500 a month if you meet the requirements to be a sperm donor.

You have to make a commitment, though. You need to come in at least once a week for between six months a year. You might also need to meet a height requirement and pass a health screening.

Realize, though, that you could end up with some of your progeny coming to find you. Even if you ask for confidentiality, there are ways for determined people to find out the truth about their biology — and come looking.

You can find a local sperm bank using a directory.

Poop.

Yes, poop.

A company in Boston is willing to pay you $40 per stool sample.

You do need to pass a screening and be willing to donate several times a week for 60 days. But that’s not too bad, when you think about it.

However, it’s limited to those who can get to the centers in the Boston area. So if you aren’t local enough, it’s not going to help you. But if you do live in the Boston area, your poop could save lives — and be profitable.

Clinical trials.

I recently had a medical procedure. Because I was willing to answer questions about it, I received $75 in Amazon gift cards.

While it’s not cold, hard cash, it was still useful. And I shop at Amazon regularly, so it was very helpful. Not bad for 45 minutes worth of talking on the phone.

You can also participate in clinical trials to make extra money. If you meet the requirements, you can try out pharmaceuticals and other medical items.

You can search for clinical trials in your area to see whether you have a nearby trial that you qualify for.

Of course, the downside is that you can end up with adverse reactions and serious discomfort. But if you’re willing to stick it out, it can mean thousands — or even tens of thousands — of dollars.

Used panties.

Finally, you can wear your panties like normal and then sell them. Websites like Pantydeal can hook you up with buyers looking to sniff your used panties.

It’s part of the adult industry and a way for you to make some money easily and even quickly.

Websites that deal in panties promise discretion, although you are likely to make more money if you are willing to share pictures and videos.

If you consider yourself “adventurous,” there might be some money in your old underwear.

Bottom line.

Before you get too excited about selling yourself to make extra money, think through it. It can be hard to give bits of you away. And some of the best-paying opportunities can be painful and inconvenient. B

But if you are sure, look into ways that you can take your income potential to the next level just by being who you are.

Have you ever sold your body parts legally? Are you interested in taking that step? Let us know in the #Adulting community on Facebook.

Zina Kumok

Let’s face it. Your finances suck.

It’s ok, most people are in a similar position.

Staying perfectly on top of your budget, your investments, your income, and your expenses is like trying to juggle flaming chainsaws while brewing a cup of tea.

But much like juggling, balancing your financial responsibilities can be done. It just takes knowledge, practice and a little finesse.

Here are some of the problems holding you back from money greatness and what you can do about them.

You aren’t willing to change.

During my time as a personal finance blogger and writer, I’ve offered financial coaching on the side. I’ve counseled people who made $10 an hour and those who earned six figures a year. Before coaching, I thought the main problem most people faced was a lack of income.

Turns out I was wrong.

The biggest reason for my clients’ success was a willingness to change and improve financial habits – and vice versa. If you aren’t willing to eat out less, move to a cheaper apartment or find a part-time job, there’s not much I can do for you.

If you really want to pay off your credit card balance and don’t have enough in your current budget to do it, the answer is simple: change your lifestyle. If you refuse to do that, you’re just like an alcoholic who won’t admit they have a problem.

If this is you, don’t feel ashamed. Addictive spending is very real, and moving forward isn’t about bringing yourself down – it’s about realizing you have the power to build yourself up.

What to do: Change is hard, so start slow. If you eat out for lunch every day, try bringing in leftovers a couple times a week. If you often order take-out, make a big dinner to last you for a few days. As you get accustomed to your new lifestyle, each change will feel less and less noticeable.

You aren’t sure where the money’s going.

When I was a college senior, I decided I would start budgeting to prepare myself for “the real world.” I allocated $80 a month toward eating out, which averaged about one meal a week.

In two weeks, I had blown through my self-imposed limit. I called my mom, confused as to how I could have spent that money so quickly. She suggested I go through my bank statement to see where my money was going.

I was shocked at what I found. I was spending $150 a month on eating out and more than $200 on groceries. How was I spending so much on food without realizing it?

That’s when I learned the power of tracking my expenses.

If you don’t know where your money is going, you can’t control it. Like most people in this situation, I was consistently underestimating how much meals, groceries and other expenses were costing me. Once I started tallying those numbers, there was no excuse to overspend.

Any time I coach people on budgeting, I have them go through their bank and credit card accounts to add up how much they actually spend. Most people are surprised to find out how much they’re really spending compared to what they thought.

What to do about it: Find a tracking system that works for you. I use Mint.com, but others like the You Need a Budget software or the old-fashioned pen-and-paper method. Track every purchase you make, even if it’s $1.50 for a Coke at a gas station. Little purchases add up, especially when you’re unaware of your spending.

You want to live like your friends.

Peer pressure is a powerful behavioral catalyst. A 2016 study from Ryerson University in Toronto found that people who surround themselves with less-frugal friends tend to spend more.

Even when I was committed to paying off my student loans early, I had trouble saying no when I was out with my girlfriends. If I promised myself I’d avoid ordering food or more than one drink, I had trouble saying no if the people around me were doing it.

It can be even worse if your friends are encouraging you to overspend in other aspects of your life, like housing, transportation or traveling. That’s not even mentioning the inherent pressure that comes from comparing your lifestyle to friends who live extravagantly.

So how do you combat peer pressure without dropping your social circle?

What to do about it: If you’re going out, bring cash so you won’t spend more than you want to. Suggest having drinks at someone’s house instead of happy hour or a potluck in place of a restaurant dinner.

Tell your friends about your financial goals and how you’re trying to change. Some might be feeling the same way, but are too embarrassed to say anything.

And what if they start throwing shade? Well, those probably aren’t friends you want to keep around.

Bottom line.

There are some things we can’t change about how we got to our current place. But you can influence what happens next. Pinpoint the reasons behind your current problem. Acknowledge the reasons you suck at money.

And then take steps to make a change. It’s not always easy. It’s not always fun. But in the long run you’ll be happier — and have more money.

What’s your biggest money struggle? How are you working to overcome it? Let us know in the #Adulting Facebook community and see if you can find a few ideas you can use.