No one cares more about your financial well-being than you, so having a personal financial plan is important. Knowing how to make a financial plan will allow you to save money, afford the things you want, and achieve long-term goals like saving for college and retirement.

This probably won’t come as a surprise, but everyone’s money plan looks different. If you’re wondering what makes a solid financial plan or even “what is a financial plan?” you’re in the right place.

In my opinion, money planning is critical, especially financial planning for women.

We all want to be financially independent and build wealth. Deciding to embark on the journey toward financial independence is a big deal!

It marks a fresh beginning with our money, and it means that we’re setting out to accomplish something that can change our lives for the better.

In this article, I’ll explain everything you need to know to plan for your future (I follow these same steps for my own finances).

So keep reading, and get ready to take some action to kick-start your own solid money plan.

What is a financial plan?

It’s simply a structured approach to reach your financial goals. It details your current money situation and financial system, including investing, saving, retirement, and estate planning.

In addition to these key elements, you may also choose to include milestones that you’ll reach along your financial journey to help with your long-term success.

So, what is a financial plan, in simple terms? It’s simply a long-term, organized approach to money management.

Create a list of things to plan for

Let’s start by creating a list of things you’ll need to have or build on your journey to financial security. These items below are essential to your money plan (Click the links below to delve deeper into each!):

• A monthly budget to help you keep your expenses below your income
• A debt reduction strategy and spending plan (using your budget)
• An understanding of all your bills and their due dates
• A fully-funded emergency fund
• A plan to start saving for retirement
• A diversified portfolio of investments
• Multiple sources of income
• Savings for the other things you want (e.g., your short, mid-term, and long-term goals)
• The right types of insurance coverage (Life, health, disability, home, etc.)

Now that you are aware of what to plan, let’s get into exactly how to create your financial plan.

How to make a financial plan

Below, you’ll find twelve steps for how to make a financial plan. These steps will cover all the basics to help you get started. Keep in mind that your plan is unique to you, so feel free to customize it as necessary.

1. Write down your financial goals

Having financial goals is the foundation for your financial success. After all, you have to know what you want to do to accomplish it.

However, when setting goals, you want to ensure that they are well-defined and prioritized accordingly.

It’s great to have big, lofty goals! But be sure to break them down into smaller chunks. That way, you’ll not be overwhelmed by the task and can easily measure your progress.

Your financial goals include anything from getting a new job with higher earnings to paying off student loans, car loans, and credit card debt. What’s important is that you know your priorities.

Evaluate your money situation

As you create your goals, knowing where you’re at with money is important. You should take time to understand your relationship with money and what you’d like to do differently.

You should also go over the numbers.

For instance, I might ask myself about my money: how much debt do I have? What does my savings account look like? And do I have any money invested?

Getting answers to these questions will help you know where to start.

2. Make a budget

Budgeting is a key part of how to create a financial plan that works. Without knowing exactly how much money you have coming in compared to your total outgoings, it’s impossible to save for the future or make smart financial decisions.

A budget must work for you, which means finding a method that suits your circumstances. The 50/30/20 rule, or the cash envelope system, or zero-based budgeting are all popular ways I recommend budgeting.

To create my budget, I go over my bank statements to make a list of all my regular outgoings. Then, I group the expenses into lists of “needs” (housing, utilities, groceries, travel, etc.), “wants” (shopping, leisure, and entertainment), and “savings.”

Next, I’ll total up my income. Income includes any interest or property rental income I might receive in addition to my monthly salary.

Then, I’ll take away my monthly expenses from my income and see if I have any money left over or have a shortfall. If it’s the latter, I ask myself, where can I make cuts?

Now you have your monthly budget, you can realistically use your money plan to set targets for the future.

3. Start an emergency fund

It’s also really important that one of your goals includes a plan to deal with emergencies. You want to make sure you are prepared to weather a storm. Otherwise, you’ll just end up in debt again.

Your emergency fund should have enough money to handle at least a few months of expenses and more if you want. Make sure the amount is something you’re comfortable with and that it will help you if something unexpected happens.

4. Pay off debt

When you make your money plan, be sure it includes a debt management system and a plan for paying off debt. Sadly, you can’t really kick-start your financial future if you’re carrying a ton of debt.

Between sky-high interest rates, large minimum monthly payments, credit card balances, and the damage lots of debt can do to your credit score, you’re better off prioritizing paying your debts.

Create a debt pay-off strategy and be patient but consistent. Work towards being able to say, “I’m debt-free!”

5. Track your spending

A master plan for your money should be an accurate representation of your finances, which means accounting for exactly where your money is going.

My favorite way to track my money is using an expense tracking sheet or app such as You Need A Budget. I can manage my money easily and access my finances anywhere and anytime.

You do need to commit to logging your purchases regularly, though, so an app or sheet may not work for you if you don’t like admin work!

A pen and paper or a budget planner will work just as well! The important thing is that you track every purchase you make and use the information you find to cut spending and improve your finances. Remember to adjust your budget accordingly!

6. Invest your money

If you are serious about building wealth and want to know how to make a financial plan, you’ll need to put your money to work, which is where investing comes in.

However, before you invest any money, it’s important to have clear objectives. Think about the reason for the investment, when you’ll need the money, and what your risk tolerance is.

Investing is a long-term activity, so you have to commit to it if you want to see your money grow.

Worried that you’ll need your money in the short term? Well, that’s what your savings accounts are for. Put aside your emergency savings and money for your short-term goals (i.e., the money you’ll need in 5 years or less).

You also want to ensure you have a basic understanding (at minimum) of any investment you make (e.g., the stock market, real estate, or small business). You should also understand investment terms.

Your investment plans should be part of your monthly budget, where you allocate a certain percentage of your income toward your investment goals.

7. Get the right insurance

After working so hard to earn your money, the last thing you want is an unplanned occurrence to wipe you out. Insurance is essentially your backup plan, protecting your assets in the event a life circumstance occurs that requires a large amount of money to resolve.

I make sure my insurance coverage includes health insurance, auto, disability, life, home or rental, and business insurance.

Basically, I want to protect anything of major importance and high value to ensure that I (and my loved ones) are protected financially.

Having the right insurance can turn what could otherwise be a major disaster into a mere inconvenience.

8. Create a plan for retirement

To have the lifestyle you dream of in retirement, you need to plan adequately for it.

You’ll need to determine how much you will need after retiring from work, considering inflation with your retirement income, and how you plan to save and invest for that period. Opening tax-advantaged IRAs (individual retirement accounts) helps you get more from your savings by paying less tax.

While retirement might seem like a lifetime away, it’s never too early to start! Preparing for retirement is how to make a financial plan that will enable you to live life on your terms when the time comes!

9. Plan for taxes

Yup, taxes! Taxes are annoying, but they’re certainly not going away anytime soon.

So, make sure your long-term income projections include taxes. Avoiding tax planning can impact your cash flow in a major way.

In addition, you definitely want to look into tax-saving investment options and stay up to speed on any relevant tax deductions you can apply to help you save money on tax payments.

You can consult a tax accountant, financial advisor, or robo-advisor to help ensure your tax system is adequate. You should also check out our blog post on how to reduce your taxable income!

10. Create an estate plan

Estate planning is not something many people like to think about, but it’s essential! It allows you to determine exactly what happens to your assets after you are gone.

It involves listing out all your assets, creating a will, and making it accessible to the people who need to have access to it. A financial planner or an estate planning attorney can help you set things up correctly.

This is an important part of my financial plan because I intend to transition generational wealth to my children.

11. Review your plan frequently

Once you have your money plan outlined and churning along, it’s important to review it frequently. Then, make the necessary adjustments if your goals or the circumstances around your life change.

For instance, maybe your insurance needs to change, or how risk averse you are changes, or you get married or have kids. At a minimum, you want to check your overall financial system at least every six months.

I find that when I check in frequently, it’s easier to deal with unplanned life occurrences, bounce back from setbacks, and accomplish my financial goals.

Example of adjusting your plan as you go through different life stages could be as follows:

• Young adult: Ages 18 to 25 is a great time to focus on saving as much as possible and reducing debt to prepare for the next stage of your life.
  
• Foundations and family: Between ages 26 to 45 you may decide to become a homeowner and a parent in this phase. Now is a good time to try to generate more income or cut unnecessary expenditure as new expenses come in.
  
• Retirement: Based on the age you plan to retire, it’s time to enjoy your hard work and savings efforts. Plan out what withdrawals you’ll need to make from your nest egg on an annual basis. At the same time you’ll want to ensure the money you don’t need to spend keeps growing.

When drafting your financial plan, don’t forget to factor in your aspirational needs such as vacations and car loans. Whilst life doesn’t always go to plan, it’s important to be as financially prepared for events as possible to avoid getting into debt.

With each financial plan review and life stage, you can also speak with a financial advisor for specific guidance if you feel the need to do so.

12. Stay the course, avoid overspending and learn from your mistakes

Your journey to financial independence won’t always be easy. There will be some tough days, weeks, and even months.

Have a solid financial plan, be disciplined, and avoid overspending. You’ll find out how great you’ll feel when you really make a concerted effort to stick to your budget.

As you work on your finances, you may still make mistakes with your money, and that’s okay. Sometimes, you might be unable to resist the urge to buy something that isn’t in your immediate budget. And sometimes, you will feel like ripping your entire money plan to bits because it just doesn’t seem fun.

However, as long as you keep your reasons WHY you want to be financially free in focus and try to rebound quickly from your mistakes, you’ll do just fine.

It’s all about assessing your mistakes, understanding why you made them, and making a plan to avoid making them again. Then, you’ll need to take those lessons and apply them to your future success.

Expert tip: Consider your needs for each life stage

In my opinion, financial planning for different stages of your life is the smartest move you can make. During your life, there will be changes to where your money is spent and your financial interests and goals, and it’s important to consider these carefully. You may find that instead of rent prices you start thinking about mortgages and how to get one.

For example, when I was in my 20s, my main goal was to reduce my debt to improve my chances of being approved for a mortgage. But now I’m a homeowner in my 30s, I want to make sure that I am financially stable for my children and their future by making smart money-related decisions (that means no more blowing money on clothes that I don’t really need!).

Determine the type of financial plan you need

Part of learning how to make a financial plan is determining what type of plan you need. Don’t think it’s too early or too late to organize this. Quite the contrary—now is the PERFECT time to start!

Make a plan for yourself if you’re single

If you’re single, it’s important to establish goals and systems that not only help you meet your immediate money needs but that ensure your future self will be taken care of.

A big mistake is assuming you’ll meet someone who will care for you and deal with the finances in your relationship.

If your relationship status changes or you get married, you’ll be well-equipped to plan your finances together if you already have things in place for yourself.

How to make a financial plan for your marriage

If you are married or have a significant other, you need to manage your finances as a team.

Discuss your budget and money goals and make financial decisions together. Understand where your money is going and how much money you have in savings and investments.

Should you have joint accounts or separate accounts?

Having joint accounts is great for finances in marriage, but I also believe in having your own personal savings accounts. As women, it’s important for us to build our own sense of security and have “our own” money that we bring to the table.

But don’t feel like you need to keep your personal accounts secret. Remember, marriage and committed relationships thrive on openness and honesty.

Tips on how to frequently review your financial plan

Now that you know how to make a money plan, here are some tips to help you check up on your goals.

1. Establish a routine

Allocate some time each week or, at minimum, once a month, unfailingly, to do a financial checkup.

Make it a coffee date with yourself, or put on some nice music, grab a warm cup of tea at home, and spend some time checking in on things. It’s a good idea to set a reminder on your calendar so you don’t forget this check-in.

2. Set and review your financial goals

If you haven’t already, it’s important to lay out your short and long-term financial goals, so you know exactly what you are working towards with your money.

As time progresses, you want to make sure you review and reassess your goals to make sure they are still things you want to accomplish and that you are on track to meet them.

3. Reconcile your bank accounts and bill payments

Check your bank account debits against any bill payments you previously scheduled or sent out. Make sure any pending bills or debt repayments have been paid or scheduled.

Compare your receipts against your credit card transactions and confirm the balance. Do a budget review and compare your actual spending to your budget. Once a month, establish your budget for the upcoming month. 

4. Review your savings and investments

If you have automated your finances and are set up to make transfers to your savings or investment accounts, check in on them. This would also include any automatic deposits you have set up for your retirement accounts, etc.

If you don’t have automation set up, make or schedule your manual transfers to your savings and investment accounts, and be sure to check and make sure the transactions went in successfully.

Also, plan to review your overall investment portfolio to rebalance and diversify as needed, or try automatic rebalancing. Be sure to review your fees too!

In addition, bonds are good options to add to your portfolio if you’re risk-averse.

5. Review your insurance policies

You also want to ensure you have the right insurance for your life. Which includes health, auto, disability, home, personal property, and business, as well as understanding the importance of life insurance, etc.

Set a reminder for twice a year where you sit down and evaluate the costs of your various policies and shop around to see what else is out there.

6. Check your net worth

Your net worth can almost be described as the thermometer used to measure your financial health, and you want to keep track of it, including your net worth by age.

Your main priority should be to pay off as much debt as possible, starting with your high-interest debt. Then, grow your assets, and your net worth will grow over time.

It’s also important to track your net worth over time to ensure you are in line with your long-term goals and financial objectives that you’ve set out to accomplish.

Many people start out with a negative net worth, but as they work on improving their finances, given time and the continued practice of good financial habits, this will change.

Reconciling your accounts and planning your finances ensures you are aware of everything happening with your money and that you are on the right path to accomplish your goals.

Questions to ask when you review your financial plan

Some questions to help you along with the process could include:

1.  What steps did I take this past month that got me closer to my goals?
2.  What things happened that have put me further away from my goals?
3. Was my spending in line with my personal core values?
4. What money mistakes have I made in the last month?
5. Why did I make them?
6. Are my financial goals still realistic?
7. What big expenses are coming up soon?
8. Is my emergency fund fully funded with 6 months of expenses based on my current basic expenses?
9. Am I saving enough to retire comfortably according to my decided retirement plan amount?
10. Am I meeting my other short-term savings and investment goals?
11. Am I on track with my savings for my children, including 529 plans?
12. What steps can I take to ensure I have a better month next month?

Tip: Keep a journal where you answer these questions and then review your past entries every few months. It’s a great way to stay motivated, especially as you see the progress you are making over time. If you stay committed to improving your finances, you WILL see progress.

What is a financial plan using an example?

Take a look at the example below for inspiration. Use it as a starting point and edit it to suit your unique financial situation and life goals.

A good financial plan should include details of your:

• Monthly income
• Monthly expenses
• Savings
• Debts
• Assets
• Investments
• Insurance
• Retirement strategy

Example financial plan

Emma is in her early 20s and wants to become debt-free in the next year.

• $4,650 monthly income
• $4,000 monthly expenses
• $250 monthly contribution to a savings fund
• $250 monthly debt payments ($3000 total debt)
• $0 assets
• $0 investments
• $100 monthly insurance fees
• $50 retirement savings

By reviewing her expenses, Emma has realized that she can save $250 a month by cutting out takeout coffees, eating out, and swapping to a lower-cost grocery store. This means that she can achieve her debt-free goal in 6 months instead of 12 while still contributing to her savings!

Is a financial plan the same as a budget?

No, a financial plan and a budget are two very different things.

Knowing how to create a financial plan is a tool for managing long-term finances (5, 10 or 20 years), whereas a budget organizes your money in the short term, usually on a weekly or monthly basis.

What they both have in common is the need to be regularly reviewed and updated to make them as effective as possible. A money plan and better budgeting complement each other, so use both to truly take control of your finances, both now and in the future.

Personal financial terms like financial planning and budgeting can be confusing, especially if you read conflicting information in the media. But it’s important to know their correct meanings so you can use them the right way.

What is a full financial plan?

A full financial plan is a detailed breakdown of your current situation, goals, and the step-by-step actions to achieve them. Its purpose is to help you understand your circumstances, which is the first step everyone needs to take before making positive changes.

Your plan should be a physical document so everything is written down. Depending on your preferences, it can be a hard copy or an electronic copy. The important thing is to have your money objectives in one document rather than separated into many different files.

The easiest way to get started is to gather information from all your financial accounts into one document.

When building your plan, remember to customize it to your unique finances and personal needs. There’s nothing wrong with using an example to get you started, but it needs to reflect your life accurately so it can help you plan ahead.

For example, don’t overlook the odd cash withdrawal for a soda. Instead, factor it into your full money plan because it could help you highlight areas of unnecessary spending!

Articles related to planning your finances

If you found this information about money organization and planning helpful, these other posts offer more ideas!

• How To Create A Strategic Financial Planning Process For Yourself
• Example Of A Financial Plan To Help You Create Yours
• How To Create A 5-Year Plan For Financial Success
• How To Create A Financially Sound Plan For Yourself!

Create a solid financial plan and it will help you become financially successful

Learning how to make a financial plan customized to your goals can help you attain them! Remember, this is your journey, not anyone else’s, so having a plan to succeed with your finances is super important.

I completely believe that planning ahead for the life you desire is 100% worth it. As you create a system that works and learn how to manage your money, feel free to leverage our free financial courses!

The post 12 Steps To Creating A Solid Financial Plan For Yourself appeared first on Clever Girl Finance.

One of the common ways to manage multiple credit cards and pay off debt quickly is by doing a credit card balance transfer. Are you wondering, “How do balance transfers on credit cards work?” or “What is a balance transfer?” Find out more here!

How do credit card balance transfers work? A balance transfer is when you move your balances from one or multiple credit cards to another card.

The new card offers a much lower interest rate, usually for a fixed period. Typically, you’ll find balance transfer offers advertised at a 0% introductory interest rate.

So, how do balance transfers on credit cards work to help you pay off debt? Well, a balance transfer can help you with saving money interest-free while paying off your credit card debt.

But it’s also a huge trap people fall into! This is because credit card companies offer balance transfers and the associated incentives as a way to make money.

How do balance transfers on credit cards work with credit card companies?

Balance transfers seem like one of the advantages of using credit, right?

However, some people may not pay off their transfer balances before their introductory rate expires. That allows the credit card companies to charge interest based on the agreement you made with them.

This is because, after the introductory period, the interest rate on your balances can be much higher than the 0% you paid before. These details can be pretty easy to glaze over.

The psychology of credit card balance transfers

The biggest reason people may not pay off even the best balance transfer credit cards? Because they get comfortable seeing the “new” lower interest rate, and they think they now have more time to pay.

I can’t tell you how many people I’ve spoken to who slow down on their debt repayment because they think a balance transfer is saving them money. Yes, you might have a lower interest rate but it’s still compounding on your debt. This means even though your interest rate is lower, if you slow down paying your debt or extend the time to pay it, you might actually not be saving anything in the long run!

In addition, many people end up increasing their balances through new spending. They think that, now that they’ve reduced their interest, the debt will be much easier to pay off.

How to do a credit card balance transfer the right way

It’s important to know the details of the card you are considering and how to transfer your balance correctly. Check out how to do a transfer!

1. Create a payoff plan

What is a balance transfer good for if it doesn’t help you pay off debt?

In other words, you need to make sure you can pay off your balance in full before the introductory period expires. Have you calculated how much you’d need for your monthly payments to pay off your balance in full by the expiration date?

You may run your calculations and find that you can’t pay your balance off in full before the introductory period ends. It might actually cost you more money in the long term if you make that balance transfer.

Create a debt reduction strategy and payoff plan to ensure you know exactly how much money you need and how long it will take to pay off your balance. Also, keep in mind that you usually can’t use a balance transfer to pay off your student loans.

2. Be aware of the balance transfer fees

Another question to consider is, “How do credit card balance transfers work as far as fees?” Many balance transfer agreements require you to pay a percentage of your balance as a processing fee. It will usually be anywhere from 3% – 5%.

So it’s important to ask yourself whether the fee is worthwhile (will you still save money?). If you choose to do a balance transfer, look for a card with no fees for the transfer and no annual fees.

In addition, in my opinion, it should have a 0% introductory period of at least 12 months (in which time you can work to pay off your balance).

3. Check your credit score before you apply

The most important thing to do before applying for a new card is to check your credit score and credit report. To qualify for the 0% annual percentage rate (APR), you will need to have a good or an excellent credit score. Otherwise, you may get declined.

Checking your credit score first will save you from applying for no reason. Improving your credit score can help you qualify for loans with better interest rates, saving you a lot of money!

4. Request a credit card transfer

Once you’ve decided that you want to go ahead with the credit transfers, you’ll need to send in an application to the credit card issuers. Often, a new credit card application will include the transfer request as an option.

You can also do this online or on the phone.

Before making any changes, read the fine print with the new card you are applying for.

5. Wait for the transfer to complete

Once you’ve submitted your application and requested a balance transfer, you’ll need to wait for the operation to complete. The time it takes for the balance to transfer will depend on the credit card company. Don’t forget to continue paying your balances in the meantime.

In most cases, it takes five to seven business days, but it can take several weeks to complete.

6. Do not continue to charge purchases

Just because your new credit card has a 0% APR doesn’t mean it’s time to hit the mall. Charging up purchases only adds to your debt, so it’s important to stop buying. It can also prevent you from paying off the balance before the introductory rate matures.

What is a balance transfer good for if you add more debt to your cards? Use this card for exactly what it’s for—to save you money on high interest and get out of debt for good!

Expert tip: Beware of interest rates

Balance transfers on credit cards work by offering promotional interest rates. When applying for a balance transfer, carefully consider the duration of any promotional interest rates offered.

While a 0% APR offer is enticing, I suggest having a plan in place to pay off the balance before the promotional period expires.

By creating a realistic repayment schedule and sticking to it, you can take full advantage of the promotional rate without getting caught off guard by higher interest charges once the promotional period ends.

Remember, the point of a balance transfer is to lower your debt, not get into more debt!

Alternatives to a credit card balance transfer

If you’ve decided a balance transfer isn’t financially beneficial, or you can’t qualify for a 0% APR, there are alternatives to a credit card balance transfer.

Pay off your balance in full on your current card

Remember, the credit card companies are not doing you any favors! Offering balance transfers is a strategy they use to make the maximum amount of money possible on interest. And for the most part, they always win.

If you feel like doing a balance transfer will be more trouble than it’s worth, don’t do it. The short-term gratification of a 0% interest rate that will inevitably lead to you paying more interest over time is not worth it if you won’t be paying off your balance in full before that 0% interest rate is gone.

The surest way to win is to buckle down and figure out the best way to get out of debt as aggressively and quickly as possible.

Clever Girl Tip:

If you choose to do a balance transfer, don’t run up new debt on your old or new credit card. Remember, the whole point of doing the balance transfer is to save money on interest payments. By doing this, you can pay your balance off faster.

Also, ensure you don’t miss any payments or pay late, as this could void your 0% interest rate. At least make your minimum payment, or try to pay off as much as possible each month.

Ask for a lower rate

Depending on your credit and relationship with your cardholder, you may be able to get a lower rate. They may be offering a promotional rate as well. It never hurts to ask.

Call your card issuer and ask if you qualify for a reduced rate based on your credit history and relationship.

Apply for a personal loan

You may wonder, “Should I do a balance transfer or apply for a personal loan?” People opt for a personal loan to consolidate their credit card debt because they will have a fixed rate for the life of the loan rather than trying to pay it off before the promo rate matures.

This is a good option only if the rate is lower than the rate of your current card.

For instance, if your credit card rate is 23.99% and you qualify for a personal loan with a rate of 7.99%, then it would make sense to consolidate your debt. It could save you quite a bit of money in interest if you do it right.

Remember, you still need good credit to qualify for an unsecured loan. And you still want to consider all the fees involved to make sure the new rate really makes sense for you.

Some people opt for a secured loan, such as a home equity loan, to pay off credit card debt.

However, I advise that you try other avenues to prevent risking your home as collateral.

Should I do a balance transfer?

You should only do a balance transfer if it benefits you financially i.e. it will save you money, not cost you more. That’s why it’s essential to create a debt payoff plan and know the balance transfer cost.

One other benefit of a balance transfer is it may simplify your finances by allowing you to bundle all of your payments into one.

Again, you only want to transfer your balance if you can pay it off before the rate increases. Otherwise, it’s best to get rid of debt with another method.

Will a balance transfer hurt my credit score?

A balance transfer to an existing line of credit won’t hurt your credit score, but if you apply for a new line of credit, it could impact your score.

In general, you should use a balance transfer to reduce your debt, which in turn could increase your score by reducing your credit utilization ratio.

The lower your utilization ratio (your credit limit relative to your debt), the better it is for your credit score. That’s because your ratio makes up 30% of your credit score.

Is it a good idea to do credit card balance transfers?

A credit card balance transfer can be a good idea if you have a lot of high-interest debt and can take advantage of lower rates.

However, it can also worsen the situation by giving you access to even more credit card use. If used effectively, then a balance transfer can help pay off debt.

But use a balance transfer with caution and look for alternatives to get out of, and stay out of, debt.

How does a balance transfer work on a credit card?

When you move a balance from one credit card to another, you generally want to do so to take advantage of a lower interest rate or a promotional offer. When you decide to do a transfer, you send in your application.

Once approved, the issuer will most likely pay off the balance of the old card and then transfer the debt. Then, you’ll have to start paying off your debt on the new card.

What happens to a credit card after a balance transfer?

After a balance transfer, the balance of your old credit card will be paid off, which reduces or eliminates the debt. Your old card will probably remain open.

You can then either keep and use it or close it yourself. If you keep it open, limit any new purchases or try a no spend challenge to not increase your debt further.

What is the downside of a balance transfer?

The downside of a balance transfer is it doesn’t get rid of your debt, it just transfers your debt from one issuer to another. You may also have to pay a balance transfer fee, usually charged as a percentage of the transferred balance.

In addition, any promotional rates offered are usually temporary, and the real rates can be very high. And if your old credit card stays open, you may be tempted to use it again and get further into debt, defeating the whole purpose of a balance transfer.

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You’ll love reading these other posts if you learned more about credit cards and debt payoff from this article!

• Can You Pay A Credit Card With A Credit Card?
• How To Get Out Of Debt On A Low Income
• Should You Use A Home Equity Loan To Pay Off Debt?
• 27 Tips For How To Pay Off Credit Cards Fast

Be cautious with balance transfers

So, how do credit card balance transfers work best for your finances? When they can be paid off within the 0% interest rate promotion.

However, be cautious with balance transfers, no matter how great they sound.

It’s very easy to get sucked into a balance transfer card for rewards and cash back features but then rack up more debt because of the no-interest mentality.

The key is to make it work in your favor! That’s why it is vital you figure out your debt payoff plan before applying for the card. You can pay off your debt with or without transferring your balance by changing your money habits and learning how to use credit cards wisely.

The post How Do Balance Transfers On Credit Cards Work appeared first on Clever Girl Finance.

The term personal finance ratios might give you flashbacks to math class, learning various formulas, equations, and ratios. Back then, if students looked like they were zoning out, your teacher might have told you “pay attention, this will be useful to you later.” Well, this time, you don’t have to wait—a lot of the equations below will be useful to you right now!

Let’s learn more about what ratios are and fourteen of the top money ratios you can use today!

What is a personal finance ratio?

In mathematical terms, a ratio is essentially a way to compare two numbers. Since finance is all about numbers, that can come in handy in many ways especially when making financial calculations!

You can use ratios to keep track of many different aspects of your financial situation—from cash flow to savings to tips for retirement planning and more.

A traditional ratio is expressed as a divisible number, but some of the ones below use multiplication or subtractions instead.

Ultimately, just think of it as a way to track your money and how you use it. Keeping a record of your money ratios can also illuminate how these numbers change over time.

14 of the most useful personal finance ratios

The best way to explain the ratios is just to start showing you examples! So below, we’ll explain how to use each one and why they can be helpful to your journey.

1. Monthly cash flow ratio

Monthly expenses divided by monthly income

The monthly cash flow formula helps you understand what percentage of your income is dedicated to your monthly expenses. Think about the cash flow ratio as how much cash flows in vs flowing out.

Start by adding up all your regular income from jobs, side gigs, investment income, etc. You can use a gross figure or your actual take-home pay (aka net income) after taxes.

Then, create or refer to your spending journal or a budget template or tool to see how much you spend every month. Don’t include savings or investments in your spending calculations (that has its own personal finance ratio)! Everything else is fair game: necessities, car payments, fun money, gifts, monthly debts, etc.

If you spend around $2,000 monthly and make $2,500, your cash flow ratio would be $2,000 / $2,500 = 80%. It tells you that 80% of your income is spent on expenses.

2. Savings ratio

Monthly savings divided by monthly income

This is basically the flip side of the one above. Instead of telling you how much you’re spending monthly, it tells you your savings rate.

Include all kinds of savings here. Whether you’re putting money in a savings account, your company’s 401(k), your personal IRA, an investment account, or even setting aside physical cash, it qualifies.

Using the same monthly numbers as above, let’s say you’re putting the rest of your money ($500) towards savings and investments.

Your monthly savings ratio would be $500 / $2,500 = 20% savings rate. You can also do the same to find your annual savings ratio. That way, you can decide if you want to save more to live better or if the amount you save makes sense.

3. Emergency fund ratio

Essential monthly expenses x 6

An emergency fund exists to protect you in the event of unexpected expenses or job loss. It’s money you want to keep easily accessible so you can use it as soon as needed.

As a full-time freelancer, I’ve had months where I have a ton of clients and projects, as well as months where business is a little slower. My emergency fund gives me peace of mind that I won’t be in a dire situation if my work schedule changes.

Since the common wisdom is to save 3-6 months of expenses in your emergency fund, this ratio reflects that. Simply multiply your essential monthly expenses by 6 to come up with your target for a fully stocked emergency fund.

When I say “essential,” I mean you might be cutting out some of your “fun” budgets for this one. Just include the things you can’t live without (housing, utilities, food, health insurance, etc).

Our example person may normally spend $2,000 a month, but let’s say that they can pare down their essential expenses to $1,500. $1,500 * 6 = $9000 would be the target for their emergency fund.

Keep this money in an interest-bearing account—ideally, a high-yield savings account. That way, it will remain accessible whenever you need it, but the interest will help you grow your money while it’s there! 

4. Liquidity ratio

Liquid assets divided by monthly expenses

The liquidity ratio is one of the personal finance ratios closely tied to your emergency fund since they both revolve around the idea of liquidity. Put simply, liquid assets refer to (A) cash or (B) other financial assets you can quickly convert into cash.

Money in a checking, savings, or money market account is highly liquid. If you have savings bonds you can cash in any time, they’re liquid.

If you have stocks, bonds, index funds, and other “cash equivalents” or other highly liquid investments that you can easily sell on the market, they would qualify as liquid, too. (However, their value fluctuates more, so it’s not a stable number).

Of course, you can’t just sell your house on a whim for quick cash, so that’s a great example of a non-liquid asset. Money stored in retirement accounts is also illiquid since withdrawals are subject to lots of rules and take time.

Once you have these figures, running the liquidity ratio formula will reveal how many months your liquid net worth could support you. So for someone with $20,000 in liquid assets who spends $2,000 a month, it’s $20,000 / $2,000 = 10 months of covered expenses.

5. Debt-to-assets ratio

Total liabilities divided by total assets

Now we’re getting into some potentially less fun territory: a couple of debt ratios. Don’t be scared if your numbers are higher than you’d like at first. It’s all part of your debt reduction journey!

If you don’t know where you’re starting from, you’ll just be stumbling around in the dark, hoping your debt will be gone one day.

You may also hear the debt-to-assets ratio called a solvency ratio. (Typically, “solvency ratio” is a term used for companies more often than individuals.) It’s a way to see whether you can pay off your debts by selling your assets.

Start by adding up your college loans, any consumer debt like credit cards, personal loans, car loans, and whatever other kind of debt you carry.

Then, calculate the value of your key assets, including all savings and investment accounts, paid-off vehicles, and personal valuables.

If you have $10,000 in total liabilities and $40,000 in total assets, you have $10k / $40k = 25% as much debt as assets.

Is a house counted as an asset or liability?

What about your home? Is a house an asset or a liability? It’s both! Unless your mortgage is paid off, you have equity in your house and debt at the same time.

Homeowners can choose whether or not to add their remaining mortgage balance as debt and home equity as an asset in this ratio. 

Keep in mind that since mortgages are the largest loans most people will have in their lives, including it can make your ratio seem skewed. If you like, you can run the numbers with and without the home factored in to see the difference.

6.  Debt-to-income ratio

Annual debt payments divided by annual income

This is one of the personal finance ratios that will help you figure out how much of your income is being funneled toward your debts each year. 

To start your equation, look at the debts you gathered above. But this time, add up your yearly payments towards each of them.

One exception is that if you’re a homeowner, it’s best to exclude mortgage debt from this equation—that’s a surefire way to kill your ratio! (Plus, housing payments fall more into normal expenses than debt payoff.)

Next, you’ll divide your annual debts by your annual income. Normally, people use their gross income rather than net income for this calculation. Include any income from side gigs and alternative sources as well.

As your debts shrink, the result of this ratio will, too! But if you’re adding new debts or paying things off too slowly, compound interest might increase your debt payments and, subsequently, this ratio.

Someone making $15,000 in annual debt payments while earning $50,000 a year is paying $15k / $50k = 30% of their income to their debtors.

For companies, a similar ratio called the “debt servicing ratio” helps lenders assess a business’s debt repayment ability.

7. Net worth ratio

Total assets minus total liabilities

The net worth ratio is going to be short and sweet! Grab the same numbers you used in #5, but instead of dividing, we’ll simply subtract.

Assets minus liabilities help you calculate your net worth! It’s motivating and fulfilling to watch this number grow over time.

$40,000 assets – $10,000 liabilities = $30,000 net worth.

8. Debt to net worth ratio

Total liabilities divided by net worth

This is very similar to the debt-to-assets ratio.

However, you aren’t just comparing total debt to total asset value with this one. Instead, you’re comparing your debt to the net worth figure from #7—where debt has already been subtracted from your asset value.

The ratio is meant to help you determine how much debt you’ve taken on relative to your net worth.

If your ratio is over 100%, you may feel over-leveraged and struggle with payments. The lower the result, the more comfortable you’ll feel with your debt levels.

$10,000 liabilities / $30,000 net worth = 33% debt to net worth ratio.

9. Housing-to-income ratio

Monthly housing costs divided by monthly income

You’ve probably heard some advice for spending a certain percentage of your income on housing. In the past, the rule of thumb number was 30%. Now, there’s a slightly more detailed model called the 28/36 rule.

The first part (28) means you should aim to spend no more than 28% of your income on your total house payment, including taxes and insurance.

The second part (36) adds your mortgage payment to all your other debt payments and recommends that this total not exceed 36% of your income. It’s effectively the same thing as your debt-to-income ratio from #6 (but a mortgage-inclusive version).

The 28/36 rule is a way to help you weigh whether your home purchase would put you in too much debt.

For instance, if a potential home purchase would bump you too far over the 36% debt-to-income figure, you might want to look at cheaper properties. Otherwise, you run the risk of becoming house poor!

If you’re spending $1,000 a month on housing while making $3,500, you’re spending $1k / $3.5k = just about 28% on housing.

10. Needs/wants/savings budget ratio

50/30/20, 60/20/20, or other

Want a personal finance ratio that gives you a quick guide on dividing your expenses? There are several ways to do this.

Usually, the simplest methods involve breaking down your expenses into needs, wants, and savings. Needs are everything you can’t live without, wants are the nice-to-haves, and savings are what you put aside for your future.

The 50/30/20 rule

One common budget ratio is called the 50-30-20 rule. In this formula, 50% of your income goes to necessities, 30% is reserved for discretionary income, and 20% gets saved.

Let’s see how this might work for someone who makes $3,000 a month. The 50/30/20 ratio would mean $1,500 goes to needs, $900 to wants, and $600 to savings/investments.

Other percentages

All of these numbers can be tweaked depending on your situation.

So if you’re spending 60% of your income on necessities, you might want to aim for more of a 60 20 20 breakdown or even the 70-20-10 budget.

11. Retirement ratio

25x your annual expenses

Ever find yourself asking, “Can I retire yet?” Once you stop working, you want to be confident that your savings and investments will be able to continue funding your life.

It’s a tried-and-true method for understanding what you need in retirement. It’s also based on something called the 4% rule, which refers to the idea that a retiree can safely withdraw 4% of their savings each year with little risk of running out.

Calculating your retirement expenses

Look at your current annual expenses and try to figure out if they’ll be higher or lower in retirement. Perhaps you’ll have a paid-off house by then and eliminate rent/mortgage expenses.

On the flip side, you might want to try full time traveling or have extra for medical care. It never hurts to pad the numbers, but the 25x expenses formula is a great place to start.

Someone who spends $50,000 a year would ideally want $50,000 * 25 = $1.25 million to retire confidently.

12. Credit utilization ratio

Sum of credit card balances divided by total available credit

Your credit card utilization ratio helps show how effectively you manage your available credit. High utilization could signify that you have an unhealthy reliance on debt. 

Utilization is also a big factor in determining your FICO credit score, so it’s worth paying attention to if you’re trying to improve your credit. Understanding and managing this ratio can positively impact your creditworthiness and financial well-being.

Figuring out your credit utilization 

To calculate it, take the current sum of your revolving credit account balances and divide it by the total credit limits across all your accounts.

A lower credit utilization rate helps your credit score. Avoid going over a 30% credit utilization ratio—keeping it at or below the 10% range is ideal. Focus on paying off outstanding debts and limiting the balances you carry from one month to the next. 

Consider a scenario where your credit card balances amount to $2,000, and your total credit limits across all cards are $10,000. The credit utilization ratio would be $2k / $10k = 20%. This indicates that you’re using 20% of your available credit. 

The good thing about utilization is that it essentially changes every month. Even if you have a high ratio for one month, you can pay down your balances and return to a low utilization in no time.

13. Student loan debt to starting salary ratio

Total amount of student loan, divided by expected starting salary

College is notoriously expensive. And unless you know how to get a full ride scholarship or have a college fund, it can be hard to stare those student loan offers and interest rates in the face and ask yourself, is it worth it?

The debt-to-salary ratio provides a simple guide for college students and their families to help answer this question. Will your degree be worth the debt in the long term?

This formula helps you determine the maximum loan amount to borrow for a particular degree program.

How do I tell if my college degree will be worth it?

Since you can’t predict the future, it’s impossible to calculate the exact ROI (return on investment) for a college degree. But you can look at the job market in your target field and determine what starting income you can expect after graduation. Websites like salary.com can help with this research.

Your results will also help you plan a realistic debt repayment schedule for your college loans. As a rule of thumb, students should limit their debt-to-starting-salary ratio to less than 100% to repay the loans over approximately a 10-year period. (Of course, interest rates can affect the exact timeline.)

So, let’s say you take out $30,000 in loans, and your anticipated starting income is $50,000. The debt to starting salary ratio would be $30,000 / $50,000 = 60%. The result indicates that your debt would be 60% of your expected starting salary, which is relatively conservative and reasonable.

On the other hand, borrowing $60,000 for a degree that leads to an average starting salary of $30,000 does not make as much financial sense. That would put the ratio result at 200%—double the recommended amount.

No matter what your degree costs, enroll in our free student loans 101 course bundle to ensure you clearly understand how they work.

14. Loan-to-value ratio

Remaining mortgage amount on a property, divided by its appraised value

The loan-to-value (LTV) money ratio is a crucial metric in the realm of real estate financing. Lenders reference this ratio as a part of the mortgage approval process. They also consider it for refinancing and home equity line of credit (HELOC) applications. A low LTV is good because you owe less on the loan.

Whether you’re a current homeowner or a prospective first time home buyer, this personal finance ratio will be relevant to you.

How the LTV ratio works for new home buyers

If you’re buying a home, your initial LTV will depend on the size of your house down payment. Let’s say you put 20% down on a house valued at $200,000, so your down payment is $40,000 and your mortgage is $160,000. 

That makes your LTV ratio equation $160,000 / $200,000 = 80%.

If you only put 10% down, you’ll be left with an LTV of 90%. Higher LTVs on new home purchases can come with additional costs, like higher mortgage interest rates and private mortgage insurance (PMI). 

The larger your down payment is, the smaller your LTV will be, and vice versa. Saving up at least a 20% down payment will get you the most favorable terms.

How the LTV ratio works for homeowners

For current homeowners, the LTV represents how much equity has built up in your home, i.e. how much of the mortgaged property you own. This figure also determines whether you can refinance at a lower interest rate or access a home equity line of credit.

Your LTV will decrease as you pay your mortgage, but it can also change if your appraised property value changes. 

In some cases, LTV can increase if a property’s market value drops. It can happen if there’s property damage (e.g. from flooding) or a recession hits. But it’s much more common for your LTV to decrease as your real estate value grows, which is a beneficial change.

Let’s say you bought our example home when it was valued at $200,000. After five years, you still owe $125,000, but your property value has appreciated to $250,000. That new value is the figure you’ll use for the ratio: $125,000 / $250,000 = 50% instead of $125,000 / $200,000 = 62%. It’s like getting extra equity for free!

Expert tip: Consider money ratios within the context of your life

Okay, you’ve just gone through a lot of math—take a breath! Now is the time to remember these math equations are most insightful when you put them into context. A single ratio isn’t going to provide a comprehensive view of your financial health. 

You should never feel bad if some of your ratio results are above or below the ideal numbers. You don’t have to live and die by money ratios! They’re just a guide, and there’s always room for exceptions and flexibility based on your unique situation. 

Maybe your desired college degree doesn’t come with an amazing starting salary…but it’s a field you’d love working in, with great future growth opportunities. Don’t rule it out because of a math equation.

Consider them all within the context of your personal core values, needs, and goals to make them work for you.

Why are personal finance ratios important for you?

These ratios are great ways to distill tried-and-true financial wisdom into simple formulas that anyone can use.

If you want to know whether your savings are on track—there’s a ratio for that. Curious if you’re spending too much on housing? There’s a ratio for that.

Knowing your financial numbers can help you improve your life

Furthermore, keeping a record of these numbers lets you reflect on where you came from. As you learn new frugal life hacks, you can pare down your expenses and improve your cash flow ratio.

As your income grows and you pay off debt, those debt ratios shrink in front of your eyes while your net worth swells.

They’re some satisfying little equations that give you another way to track your finances and set new goals.

What are the most important ratios for money?

Finance is a highly individualized journey, so the importance of specific ratios can vary based on individual circumstances and financial goals. But in general, there are a few ratios that everyone should be paying attention to.

The emergency fund ratio is one of my top recommendations for the beginning of your financial journey. Life can throw curveballs at anyone, anytime.

Having at least six months of expenses squirreled away helps give you a runway to figure things out if you get laid off, need to pay for a surprise home or car repair, etc.

I’ll also highlight the savings ratio, which includes traditional savings and investments. Savings are essentially your key to the future. They put all your goals in reach, whether it’s buying a house, paying off your loans, or early retirement.

What is a good debt to net worth ratio?

A good debt to net worth ratio strikes a healthy balance between leveraging debt for wealth-building and avoiding excessive indebtedness.

You might think it’s best to strive for no debt.

However, while that may be a worthy goal for some people, it isn’t always the case. In some situations, debt can be a tool to help you better your financial health. 

It ties into the concept of types of debt, like good debt vs. bad debt.

For example, student loan debt or business debt can help you earn more money throughout your lifetime. But credit card debt will eat your income with its high-interest rates.

You can think about it in terms of these ranges:

• Safest range: A ratio below 50% is generally considered healthy—indicating that your net worth is at least twice your total debt. 
  
• Moderate range: Ratios between 50-100% can still be manageable, depending on the situation. Evaluate the types of debt you have, its purpose, and whether it contributes to your overall financial well-being.
  
• Cautionary levels: Ratios exceeding 100% indicate that your total debt surpasses your net worth. It signals a higher level of financial risk, so proceed carefully and ensure you have a solid debt repayment strategy.

Articles related to organized finances and financial literacy

If you’ve added these ratios to your financial toolkit, you’ll love these reads!

• The 23 Best Financial Literacy Books
• Financial Freedom Vs Financial Independence: The Difference
• 7 Financial Literacy Basics We All Need To Know
• How To Manage Your Money: 19 Tips To Do It Right

Calculate your personal finance ratios!

Now it’s officially your turn!

In order to start crunching the numbers, you’ll need some key pieces of information in front of you. The main things you’ll need include:

• Total annual income
• Total monthly income
• Total debts/liabilities
• Monthly expenses (broken down by category)
• Total asset value
• Liquid asset value (aka cash or things you can quickly turn into cash)
• Credit limits on your cards
• Real estate value (for property owners)

Once you have these figures in front of you, the rest is just plug-and-play. You can recalculate these personal finance ratios as often as you want—say, once a month, once a quarter, or once a year—to stay on top of your personal financial plan. Over time, if you stay the course, you might even learn how to become wealthy!

The post 14 Most Useful Personal Finance Ratios And How To Apply Them appeared first on Clever Girl Finance.

Do you know someone who takes the bus to work, makes their own lunches, and never takes luxurious vacations? Or perhaps you have a neighbor who lives in a modest house, drives an average car, and cuts their own grass? We all know people like this, and we might even be people like this who’ve achieved stealth wealth!

Most of us probably make assumptions about people based on their spending habits and what they seemingly have or do not have. That’s a mistake because it doesn’t account for those around us who have built wealth quietly.

What is stealth wealth? Is it something you should aspire to?

That’s just what we’re going to talk about here! Read on for the benefits, signs, and secrets of stealth wealth that you can adopt in your own financial life.

Stealth wealth meaning

What is stealth wealth really? It means having a lot of money but not flaunting it. It means keeping the (large) amount of money you have a secret from everyone, including your friends and family.

People that do this don’t necessarily hide their wealth to be deceitful, they just don’t feel the need to show it off. That’s why it’s difficult to tell the “stealthy wealthy” apart from everyone else.

The benefits of stealth wealth

Why would you want to practice this? There are some real benefits to hiding your true net worth from the rest of the world, including:

Make real connections

There are many reasons why stealth wealth can benefit your relationships.

First, as much as you might try, it can be difficult to maintain a friendship when one person has quite a bit more wealth than the other. By concealing how much money they have, those with money essentially close the (perceived) wealth gap.

Friends won’t feel pressured to keep up with expensive nights out or dinners they can’t afford, and you can stick to doing things together that fit within both of your budgets.

Second, money can get in the way of genuine relationships. You might wonder if someone is friends with you because of your money and what they can get from you.

By taking money off the table, you’ll be more certain that whoever you surround yourself with is there for you, not because you’re rich.

In addition, you won’t have to think so much about setting boundaries in friendships with people who may care too much about your money.

Live a happier life

Many wealthy people get caught up in spending lavishly to show off how much they make. But spending money on material things doesn’t necessarily make a person happier.

Instead, you can look for happiness within yourself.

Not only that, but spending too much money can cause a lot of stress. By cutting back on luxuries you don’t even want, you can learn how to save money fast and lower your stress.

Instead of trying to keep up with everyone else, those who practice stealth wealth spend their money on things they truly enjoy. Whether that’s experiences or material possessions they want, it doesn’t matter.

What matters is that spending money on what you want, rather than what you think will make you look good in front of others, leads to a more relaxed and happy life.

Financial security

Those who are financially secure no longer have to worry about money. Imagine the peace of mind you’d have, knowing that you have enough in your savings and retirement accounts to fund your lifestyle forever.

One of the hallmarks of stealth wealth is living below your means, which can ultimately lead to financial security.

Stealth wealth signs

Those with this type of life usually live a traditional middle-class lifestyle despite all their money. There are, however, some stealth wealth signs that you can look out for if you are curious to know if someone is rich or not.

Even with these signs, it might still be impossible to tell the difference between stealth wealth and average wealth! Some possible stealth wealth signs include:

They talk about money in a healthy way

Those with money talk about it as a way to learn or develop new ideas. They don’t brag about how much they have, and even more telling, they don’t talk about what they don’t have, either.

You’ll never hear someone with stealth wealth boasting about their income or their appreciating assets. Likewise, you’ll never hear them complaining about being in debt or unable to afford something they want.

Why not? Because they are debt free and they can afford whatever they want.

Those with wealth don’t show off on social media

The stealthy wealthy value privacy and don’t flaunt their money on social media, ever. Mostly, they don’t acquire things to show off.

But, even if they do decide to spend on a fancy dinner or lavish vacation, they don’t feel the need to tell the rest of the world about it. They leave that kind of posting to those seeking attention and trying to show off the wealth they might not even have.

They seem “average”

Another stealth wealth sign? Don’t look for a flashy sports car or giant mansion. Instead, those who understand the true stealth wealth meaning appear average.

They drive average cars, have regular jobs, and seem just like the rest of us. They understand that buying an expensive car or house doesn’t make you rich; it just makes you look it.

Secrets of the stealthy wealthy that you can use in your own life

You can’t just decide to have stealth wealth one day. Like most things, it requires dedication and financial planning to achieve. But, you can take the secrets of the stealthy wealthy and incorporate them into your own life to get your financial house in order.

Here are various ways to do that – and, who knows, you might decide that you’d like to be “stealthy wealthy” one day, too!

1. Avoid lifestyle inflation

More money can appear in your bank account in so many ways. Perhaps you got a raise (congratulations!). Or, maybe you switched jobs and got a nice salary bump along with it.

No matter how you come into it, the more money you have shouldn’t mean the more you spend.

Lifestyle inflation – increasing your spending as your income increases – is something that those with stealth wealth actively avoid. While you could be tempted to spend more as you make more, it’s not the way to become truly wealthy.

Those who know the secrets of wealth know that avoiding lifestyle inflation is one of the key ways to grow their assets and become financially secure.

2. Don’t try to keep up with the Joneses

Just because a friend or neighbor got a shiny new toy (car, house, or gadget) doesn’t mean you need to get one, too. Keeping up with others’ spending only causes financial troubles. If you want to become wealthy, focus on yourself, not others.

Whenever you are tempted by emotional spending or buying something because someone else has it, take a moment to reflect on whether you truly want it. If you do, it’s ok to purchase it.

Those with stealth wealth don’t restrict themselves fully, but they only purchase things they need and truly want. They aren’t influenced or pressured by others or by trying to keep up appearances.

3. Be intentional about your spending

Society tends to regard wealthy people in two ways; they either spend frivolously or live like a miser. To join the rank of millionaires, the popular advice is to save every dollar and only spend on basic necessities. Not exactly enticing!

I learned that wealthy people are neither irresponsible nor stingy with money when I worked as a nanny for many households in an old-money neighborhood.

Instead, they practice living on less by being smart with their money. They spend on things that make them happy and cut anything that doesn’t.

For instance, one of my bosses has a total of zero designer handbags but is a proud owner of a rare diamond. Another client asked me to bank my hours and pay me bi-weekly to avoid bank fees.

You don’t have to give up everything you enjoy to build wealth. But you need to be clear on what you want and be intentional about your spending.

4. Diversify your assets to achieve stealth wealth

Another secret of the wealthy? They don’t keep all of their money in one place. And they definitely don’t keep it all in a checking account!

Instead, they diversify their assets and strive to build multiple income streams.

The wealthy invest in the stock market (in various asset classes), bonds, and real estate. On top of that, they might even have a business or two.

If you want to steal this secret, one of the best ways is to create a plan for your future self through investing.

5. Build generational wealth

Those focused on quiet wealth building are also focused on building wealth for their families for many years to come.

They know the importance of building generational wealth – wealth passed down from generation to generation. This means they typically don’t spend money on material possessions or experiences that don’t last.

Instead, they focus on growing their wealth over time. They invest in the stock market, build businesses to pass down and create estate plans.

Everything they do with their money is with an eye toward security for themselves, their kids, their future, and future generations.

6. Be generous in private

Just because they don’t flaunt it doesn’t mean that those with stealth wealth hoard all of their money. Many wealthy people are extremely generous, but they do so in private.

Whether it’s paying for a family member’s education or donating to a cause they care deeply about, they do it all without making a public display of it.

If you want to practice stealth wealth, start by giving quietly when you can. You’ll still reap the same benefits and can avoid some drawbacks of giving, like loaning money to family or friends when you aren’t comfortable with doing so.

7. Build a classic wardrobe

For subtle wealth, think timeless wardrobe, otherwise known as “stealth wealth fashion“, “quiet luxury’, or “old money aesthetic.” 

Ditch trends and achieve quiet luxury with pieces that never go out of style. Look for understated and logo-free garments.

In addition, choose high-quality materials that will last, like leather, cotton, or linen.

Build your classic wardrobe with everyday staples like t-shirts and jeans. You’ll also be able to mix and match outfits if you go for neutral pants and jackets.

Fill your closets with timeless fashion pieces that you can use for years.

8. Be careful of the car you drive

When you finance your car, you’re paying interest for an asset that’s losing value over time. (Also, read about the pros and cons of refinancing a car.)

The wealthy understand this. That’s why even ultra-rich people like Jeff Bezos and Warren Buffet choose reliability over luxury regarding cars.

With rising inflation and high-interest rates, there’s no better time than now to opt for safe, reliable, budget-friendly cars.

Besides, owning a car has added car expenses. So, make sure you factor in the cost of gas, insurance, maintenance, and repairs when buying a car.

9. Know what’s going on with your money

What gets measured gets managed, right? You cannot build wealth without actively trying to find simple ways to increase your income and manage your spending.

It may come as a surprise to you, but even billionaires pay attention to their money. They may not be the ones creating a biweekly budget or expense report, but they have someone they trust doing it.

Many who grew up in households where money is a source of stress mistakenly think that being a rich person means never looking at your finances and spending however you want. But it’s not. The first secret to quiet wealth building is knowing what’s going on with your finances.

10. Practice humility

Humility is understanding that you are not better than others, no matter what you accomplish or how much money you have.

Living a simpler life, even when you have lots of money, comes from the realization that you don’t have to prove yourself to anyone and that other people are not your competition.

That’s another secret we can learn from those with stealth wealth. As a practice, ask yourself: “Do I want this even if nobody ever knows I own it?” whenever you want to buy something extravagant.

11. Stealth wealth meaning: truly believing that fancy things don’t make life worth living

Lastly, those who are truly wealthy understand that material things and fancy vacations aren’t what makes life worth living.

They may have started their wealth journey by not buying things they wanted to save or by passing up opportunities to spend on things they really wanted. But since they have fully embraced being quietly wealthy, they don’t feel the need to buy these things anymore.

They have found other ways for fulfillment. That’s one of the biggest blessings having money can give a person. Not only do you have financial security, but you’ve also learned to want less, appreciate the little things and what you have, and be happy with who you are.

Expert tip: Follow your own path to achieve stealth wealth

You can get clues from the stealth wealth signs others exhibit to build this type of life for yourself. First, get clear on who you are, what you value most, and how you want to live your life. Very importantly, to build a strong financial foundation, you need to know what’s going on with your money.

Learn from people who accomplished what you’re trying to achieve. Success and wealth don’t just happen. You need a plan, the determination to put your plans into action, and the clarity to follow the path.

The world will keep telling you what you should be doing and how. But as long as you stay true to yourself and your values, you’ll reach your goals and achieve financial security.

What is meant by stealth wealth?

Stealth wealth meaning is defined as living simply and quietly maintaining your wealth without making obvious displays of your affluence.

I personally prefer to think of it as being free from the money worries plaguing society because one does not need to keep up appearances to look rich.

Instead, they build wealth quietly and smartly without flashy money displays like fancy cars, mansions, or designer items and clothes.

What are subtle signs of wealth?

People with wealth very often live a minimalist, quiet luxury lifestyle. Most of the time, their wealth is hidden in fat bank accounts, and they invest smartly in robust investment portfolios, or in multiple properties.

To know who these people are, you can look out for stealth wealth signs. For instance, they might wear for high-quality clothing and accessories with little to no visible logos. Many people at this level of wealth also live in comfortable, well-maintained homes.

Some drive nice cars, travel, and own luxurious items but without announcing to the world what they have or don’t have. You’ll also notice that the wealthy pursue knowledge and ideas for self improvement.

They spend time, money, and effort to learn more about the world or themselves. Lastly, people who achieve financial freedom are happy and content. Because of this, they can be incredibly generous.

What are the benefits of stealth wealth?

If you build wealth quietly, you’ll have peace, safety, and security. These are the key benefits of stealth wealth.

When only a few people know your true financial situation, you don’t have to keep up appearances to maintain an extravagant lifestyle. You’re also safe from the unwanted attention of people with bad motives.

Additionally, you can live quietly without the pressure to outdo others in pursuing and doing more. In turn, you have less stress, and you set yourself free to enjoy your life.

You’ll have more energy and time to focus on what makes you happy, whether that’s family, business, hobbies, or making a difference in the world.

Articles related to wealth building

Has this article got you interested in wealth building? Check out these posts to find out more!

• Rich Vs Wealthy: 3 Key Differences Between The Two
• How To Build Wealth In Your 20s In 9 Steps!
• How To Build Wealth In Your 40s
• 6 Secrets Of Self Made Millionaires You Need To Know!

Leverage the secrets of stealth wealth to improve your financial future!

Becoming quietly wealthy isn’t about hiding money or being stingy. It’s being strategic and living life on your terms. Start your journey to financial freedom by incorporating some of the practices above.

Now that you’ve discovered the answer to “What is stealth wealth”, are you ready to take some of these secrets and use them to boost your own finances? Find out more about wealth accumulation and more money secrets!

The post Stealth Wealth: 11 Ways To Leverage The Secrets Of The Wealthy appeared first on Clever Girl Finance.

When you don’t know exactly what you want, how will you know when you have it? That problem is precisely why it’s so important to gain an understanding of what you want in your life. Getting clarity to achieve your life’s goals is possible.

Sometimes, you can find yourself feeling lost in life, drifting along. Maybe you have some clue about what you want to achieve, or maybe you feel completely aimless.

It’s crucial to figure out what you want to focus on since that’s the first step towards achieving it one day. You may be searching for clarity in relationships, your career, your health, or any number of life aspects. 

If you’re unsure how to find clarity, consider the key tips in this article. But first, let’s discuss why having a clear purpose is so important.

Why getting clarity in your life is so important

“If you aim at nothing, you hit nothing.” Shang-Chi and The Legend of the Ten Rings

While you might technically be able to shoot a crossbow while blindfolded and hit something, it’s hardly a recipe for safety. You could end up completely missing the mark.

Yet many of us approach our career goals, physical and mental wellness goals, relationship goals, and all other goals this way.

If you don’t have a clear target in mind, how will you aim to hit anything? As my ten-year-old begins learning archery, he’s finding out that a clear target is essential to success. Here are some of the reasons focus in your life is so important.

Clarity helps you know what you want

First of all, clarity often refers to a distinct vision of the future. If you just have a hazy picture in your mind of what you want to do in life, it can be next to impossible to end up in the right place.

Try to figure out some answers to the questions: What do I want to do? And who do I want to be?

Do you want to be a stay-at-home mother for a few years to soak up more time with your little ones? Or build a six-figure salary or business from scratch? Maybe you want to renovate a century-old farmhouse with nothing but YouTube and your bare hands.

Whatever your goals (obviously, you probably have many), deciding what you want is the first step toward achievement. It’s okay if you feel some confusion at first. Taking some time to identify your true passions and hopes is how you can find clarity.

It also helps you recognize what doesn’t matter 

It’s not only essential to know what you want but to know what you don’t want or what doesn’t matter. It’s all part of intentional living. 

When you find yourself drifting through your days without much to show for them, take some time to recognize what is and is not important. Think about the things you devote most of your time to—do they truly matter to you?

Oftentimes, we end up spending a lot of our time on things we don’t really care about. Maybe we sign up for too many committees at work or the kids’ school or we get pulled into a project that isn’t our passion.

While we can’t get out of all unpleasant tasks or things outside our comfort zone, we can be more mindful. Figure out what tasks are sucking your energy without any purpose, and try to delegate them or give them up completely.

6 Practical steps to achieve clarity

Essentially, getting clarity about who you are and what you truly want is about priorities. What matters most, and what can you let go of?

Since your time is limited, try these practical steps to bring understanding to your days and your life. This will also help you achieve your goals in life.

1. Create space to discover new ideas and goals

A great first step towards getting clarity is to simply make space for it. Sometimes, the most aimless times in our lives are when we get too busy to think or pause.

We all need some breathing room in our lives to help us discern what we’re getting right and what we can do better.

Try these tips to avoid going through the motions for weeks or months.

Instead, you can make time for getting clarity in your life.

Set aside regular time for reflection 

Maybe you’re the kind of person who’s always going full speed, and it’s hard to find focus that way. We all need to reflect on how things are going to figure out what needs to change.

You can try these ideas for “Wellness Wednesday,” like taking a rest day or turning off technology for a set period of time. Check out blogs and books that help you. 

If you’re a woman who thinks, “There’s no way I can just take a break,” then you need a break more than anyone!

Just start as small as you need to. Pick a regular weekly or daily time for reflection on your life and goals.

You may try meditation, but don’t be scared off by that term. Reflection for you may mean focusing on a particular goal or looking back on how each day or week went. 

There are probably a lot of little pockets of time in any given week when you could carve out a few minutes or an hour for reflection. Or if you’re craving major “me time,” make a plan for a lazy weekend to recharge and find focus.

Leverage journaling

Journaling can be an excellent tool when looking for clarity. Writing in a journal helps us to process what’s happening in the here and now, dream about the future, and reflect on the past. Journaling is a great form of self-care.

There are many benefits to journaling, like keeping track of your progress, increasing your confidence, and finding inspiration.

Once you’ve carved out a slice of time every day or every week, you may use journaling during that time. Whether you write long paragraphs, stick with short sentences, or use bullet journaling, get your thoughts down on paper.

If you’re unsure where to start, check out these 60 journal prompts for self discovery. I bet you’ll discover a ton about yourself if you’ve never had a journaling practice before, and that focus will help you achieve your goals.

Declutter to create physical space

In addition to creating mental space, you may also want to spend time clearing out physical space. If you need motivation to declutter, imagine how much the stuff in your home could add stress and confusion to your mind. 

Why not start by clearing away some things that aren’t serving you? Try emptying out one drawer or closet, discarding what’s unnecessary, and reorganizing with only the essentials. 

One of happiness guru Gretchen Rubin’s key tenets of happiness is that “Outer order contributes to inner calm.” Even if you don’t think clutter bothers you, you may be surprised to see how a cleaner home or office helps you.

2. Seek clarity through relationships

Relationships are a great resource for getting clarity. As important as your beliefs are, the people in your life can offer amazing insight into who you are.

Friends can help you see yourself more clearly 

In addition to spending time journaling and reflecting on your own, take some time to listen to your friends. Whether through a weekly Zoom call, an in-person lunch date, or even text messages throughout the week, friends can help with getting clarity.

Unfortunately, you may have been burned in the past by unsupportive friends. Those painful experiences may have led you to shut yourself off from true friends. Seek out the ones who can help you see who you are and determine your next life steps.

Whatever life circumstance you’re unclear on, dear friends can give advice. They can often see past your blind spots, those areas where you can’t see your talent as clearly as others.

Perhaps a friend will remind you of something you loved to do when you were younger. A relative could help you envision new possibilities for the future.

Don’t forget to set boundaries in your friendships. You’re still in the driver’s seat; you’re just asking friends to help you along.

Spend time with people who challenge you 

You can find focus by paying attention to who you’re spending time with. Maybe you have a trusted friend who doesn’t always tell you whatever you want to hear.

But her advice is always given with your best interests at heart. That’s the friend you want to keep close! She can definitely help you with how to find clarity in your life and choices.

Beware of toxic friends, though. When I say to seek out those who challenge you, I mean only people who love you and can give you insight into yourself.

Consider talking to a sister, old friend, grandmother, cousin, coworker, you name it. People who challenge you may push you out of what’s comfortable or easy. They can help you make a decision to take the risk—but not a foolish one.

A true friend can help you decide which risks are worth taking to better your life.

3. Getting clarity is easier with healthy habits

As you’re thinking through these steps, remember the healthy habits you’re in charge of building for yourself.

It can seem so simple, but we all neglect self-care and healthy behaviors at times. Healthy actions are foundational habits.

Get plenty of sleep 

One essential component of a healthy lifestyle—which impacts your focus and your life—is sleep. Developing a better sleep routine is perhaps the most important aspect of creating a self-care week (which you’ll hopefully follow with a lifetime of self-care).

Getting enough high-quality sleep can improve your attention and concentration, along with memory, the ability to solve problems, creativity, how we process emotions, and judgment, according to The Sleep Foundation.

Don’t all of those aspects also sound important to getting clarity in your life?

Too many of us are sleep-deprived. If you’re not sleeping enough, try giving yourself a regular bedtime and stick to it. Other good sleep hygiene habits include leaving your phone out of the bedroom and turning off screens an hour before bedtime.

Eat a healthy diet 

Eating a well-balanced diet is also crucial to being happier and more productive. You can find focus more often if you’re fueling your body with good things that help you function properly.

It’s not easy to follow an eating clean meal plan or even avoid overeating or eating in response to stress.

Try making a few small changes, like switching from soda or alcohol to water or adding a vegetable to each meal. I’m not yelling at you here—eating healthfully is a lifelong struggle for me, and each day’s choices make a difference. 

Every small decision to do something good for your body can help guide you to the next healthy choice.

Move more 

And, of course, in the trifecta of healthy habits, add “Move more!” to your list of things to do. Physical activity is a way to invest in yourself.

Exercise will help you strengthen physically, but it also has mental health benefits. Getting clarity may be easier if you make exercise a part of your day.

Exercise can help you with weight management, brain health, and anxiety reduction. If you’re unsure of what exercises are a good fit, try them out until you find some form of movement you love and will do regularly.

Perhaps you’ll love yoga, hiking in the woods, Zumba, softball, weight-lifting…you get the idea.

If I’m working from home, I sometimes pause to do a few push-ups or walk around my yard. That small break lets my mind wander from other tasks, and when I return, I’m more able to concentrate and solve problems.

Meditation can be a useful habit

If you’ve never tried meditation, you could give it a try. Take advantage of free apps like Calm or YouTube channels on meditation for quick and easy ways to get started.

I’ll admit that I’m a total newbie to meditation, but I try it occasionally to help me settle my mind. Plenty of people will tell you that when learning how to find clarity, it can be a great strategy. 

4. Focus on your priorities so you can accomplish what’s most important

Clarity is another way of defining your priorities. Figure out what matters the most to you, and chase hard after those things. Everything else is secondary.

You might determine that your family is your number-one priority (most people believe that). And, of course, you have to spend time on work, relationships, health, and other goals.

Define your goals and how long they’ll take

You can have long-term goals as well as mid term goals and short-term goals. Focus first on the overarching top goals, then break them down into manageable parts of life.

You might read goal-setting blogs to get some inspiration if you’re unsure how to set goals. First, try to keep your goals manageable and be sure they’re within your control. 

It’s best not to set goals like “Write a bestselling book” because whether your book sells isn’t something you can control. But goals like “Write 500 words per day” or “Join a writers’ group” are manageable and don’t rely on external factors. 

Don’t be afraid of big hairy audacious goals, either! Consider these major life objectives that you won’t reach in a few weeks or months but that can inspire you to buckle down and make progress. 

Determine why you want to achieve those goals

As you work on gaining clarity, you’ll need to think through your “why.” If a certain goal comes to mind, such as “Save $5,000 in 3 months,” think of concrete reasons why you want to do that. 

The reasoning behind this is simple. Achieving goals isn’t always easy, and gaining an understanding of why a goal matters to you will help you when the going gets tough. 

Get really specific about your why. What will you feel like when you accomplish this goal? How will it change your life or your family’s future? 

For example, if you are saving a down payment, envision the kind of house you’ll purchase one day. If you dream of taking a month off next summer, picture the fun activities you’ll be free to do during that time. 

You can keep your goals in mind by writing them down in a prominent place, learning how to create a vision board, or sharing them on social media. Along with the goal, include images or words about how achieving it will make life better. 

Say no to things that don’t serve your primary goals 

You’ll want to start saying “no” to some things. If an activity doesn’t help you reach your most precious goals, perhaps it’s time to give it up. 

Once you’ve focused on what matters, you’ll learn how to say no. You don’t have to do it all! Keep that in mind when a task could derail you from achieving your major goals. 

You may even need to say no to things that are good in theory but simply don’t serve you at this time.

For example, while I’m writing a novel (my lifelong goal), I have to say no to other activities that might be fun, like pottery classes. 

A financial example is that if you’re working to get out of debt, you’ll need to say no to a lot of spending. After working on your budget and debt, you can focus all your income where it needs to go—paying off debt. 

5. Don’t wait for perfect clarity before starting

“Don’t let perfect be the enemy of the good.”

That quote has been attributed to Voltaire and restated by many wise thinkers. It reminds me that it’s more important to start than to have everything figured out.

Beat procrastination for good

So many times, we procrastinate on getting things done because we fear we won’t do them perfectly. Maybe you’ve had that experience with a major life goal. You build it up as so important that you’re paralyzed and don’t start.

When you put off doing what matters most out of fear or anxiety that it won’t be perfect, you don’t go anywhere. Meanwhile, time passes, and suddenly, you notice you’re in the same position as a year or ten years before. Don’t wait forever!

Start with baby steps

A good strategy for finding out what you want is to start small. While reflection is important, sometimes you need to start with a baby step. 

For example, you might feel that what you really desire is to study for a new career. But if that career requires years of study and a ton of money, don’t let that discourage you from trying. Start with one class or internship, then see how it goes from there. 

There’s a lot to be said for improving by 1% daily. Know that mini goals can be beneficial, too, and sometimes you need to take one step before the next one becomes clear. 

6. Experiment and adjust your goals periodically

Going hand-in-hand with starting imperfectly is the plan that you’ll adjust your goals over time. You can learn how to create goals for today, start working on your goals, and find that those goals don’t exactly fit what you want.

That’s okay! Life is an experiment, and you get to try things, fail (or change your mind), and try again. The important thing is to stay consistent in reaching for your goals.

Learn and change a little every day

Every day in your life, you can grow and change a little bit. You might use these tips to inspire change in your life. Use your experiences, continue to evaluate your life and find clarity for the present moment, and make adjustments as you go.

It’s not easy, but this can open your eyes to when it’s time for a change. Certain phases of your life will require more focus on your career, while others may be more focused on family. Life doesn’t stay the same year after year, and you won’t either. 

Changing your goals isn’t a failure

You need to realize that after making progress, your goals may shift over time. It’s important to accept this as a part of the process. 

I’ve read a few blogs about people who tried traveling full time, maybe in an RV or overseas. Sometimes, they loved it, but others found they were ready to return home after a few months. Those people didn’t fail, though!

There’s nothing wrong with taking a big leap and discovering the outcome wasn’t what you’d hoped. You’ll learn to live consciously and make adjustments.

Expert tip: Take the time you need to find direction

If you find yourself flailing or struggling to reach meaningful goals, it’s worth it to spend time getting clarity in life. Most of us face periods of confusion, when we either pursue too many goals at once or we feel aimless without a goal. By using these tips for better overall health and satisfaction, you’ll find yourself gaining focus in all areas of life.

Your life is too important to coast without specific objectives at the top of your mind, so use clarity to make your life plan. Remind yourself that you bring unique gifts to this world, and by understanding how to use those gifts, you can more quickly make your impact on the world. 

What does it mean to seek clarity?

If you’re unsure of how or why to seek clarity, think of it as finding a focus in life. Whether you feel lost in general or only in a specific area, you can figure out what you really want. 

You may look to inspirational blogs or self-help books for women to help you with your ambitions. Other ways to find focus include talking to loved ones, clearing out clutter from your home, or trying something completely new. 

It’s an ongoing process of self-discovery. It helps ensure that you aren’t simply coasting through life, which could lead to regret down the line. 

How do you find inner clarity?

There’s no one right answer for how to find inner clarity. Perhaps you’re seeking to focus on what you’re most gifted to do for a career. Or you’re unsure whether it’s time to move on from a painful relationship. 

Finding inner clarity requires you to dig deep and look inward. If you want more direction in your life, you must sit and think for a bit. Whether this means you simply sit down somewhere with a journal or try walking in the woods, get quiet. 

No one else can really tell you what you need or want. So don’t be afraid to be alone with your thoughts and figure out your goals. 

How can I get clarity fast?

Not to be a downer, but there may not be a quick solution for clarity. Of course, it would be great if you tried meditation once, and within the first five minutes, you experienced a lightning bolt of clarity. 

However, there’s a good chance that finding focus won’t happen fast. Just be open to whatever comes to your mind, and be willing to change as you learn and grow.  

One good way to focus fast is to create physical space. Clear your desk, for example, before you sit down for goal-setting. The absence of random papers could help you focus your mind. 

As you gain guidance on what you really want, you can also start trying the best manifestation methods to help you get there. 

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If you found this information about gaining direction for your life interesting, check out these other great posts!

• How To Find Your Why!
• Less Is Better! 7 Reasons Why Less Is More
• How Intentional Living Can Change Your Life
• 15 Practical Steps To Make Today A Good Day

You can live with clarity and purpose!

Finally, don’t be afraid to pursue what you really love.

That’s likely one of the hardest parts of achieving clarity: realizing what you want but then finding the courage to go after it. You may not struggle with confusion, but the belief that you deserve what you want. 

Remember to listen to yourself as you go through each day, and you’ll find the focus to keep working toward achieving your goals.

If you decide on financial goals to pursue, you can try out our free online finance courses.

The post 6 Steps For Getting Clarity To Achieve Your Life’s Goals! appeared first on Clever Girl Finance.

You’re likely reading this article because you’re interested in the differences between the way poor vs rich people think and act. You’d probably like to apply the habits of the rich in your own life, right? Well, one thing stands out – it starts with a rich mindset.

If you’re serious about becoming successful, then you need to understand the difference between rich and poor mentality. As you study the lives of wealthy people, you’ll notice one consistent theme: a growth mindset.

One of my favorite quotes of all time is from Dale Carnegie. “Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all.”

Having a rich mindset is ultimately about self-growth and persevering until you reach your desired outcome. The best place to begin? Understanding the rich vs poor mindset.

Ready to learn what sets apart the rich mindset vs poor mindset? Let’s dive in!

The difference between rich and poor mentality

If you’ve spent any time on social media such as Instagram, Facebook, and YouTube, you’ve no doubt seen people posting content about their incredibly lavish lifestyles. For some, the images are real. But for others, behind the scenes, there’s a lot of debt, poor credit, and zero savings.

In the extremely popular and captivating book The Millionaire Next Door, authors Thomas J. Stanley and William D. Danko studied millionaires over several decades. Do you know what they found? Most millionaires aren’t living out in Hollywood. 

Most millionaires are right in front of you – living in your neighborhood, driving that second-hand Toyota, and sporting the iPhone from 5 years ago.

There are so many lessons to learn from everyday millionaires. They’re business owners who’ve built their empires from the ground up, women and men who’ve maintained their old lifestyles while building real assets and using a rich mindset.

It’s important to realize that the truly rich often won’t flaunt it.

Additionally, it’s partly why they continue to increase in wealth. They’re not giving into consumption by buying the latest gadgets or the most expensive items. Instead, they’re building assets.

This is a key differentiator between rich vs poor people. Living in luxury can be one of the habits of the poor mindset.

But becoming rich is possible with the right mindset, and there are many more wealthy people out there than you might imagine. These are people who have built wealth quietly using a stealth wealth approach.

What is a poor mindset?

On the other end of the spectrum, you have a significant number of people stuck in a poverty mindset. Poverty and being poor are complex. The environment, exposure, and life experiences can keep someone trapped in this poverty mentality.

It can be difficult to overcome this.

However, you can carve your way out by deciding to adjust your thinking with the power of mindset. So, what are the thought patterns that can hold you back from becoming wealthy?

A poor mindset believes things will not change

Poor mindset convinces people that their circumstances are fixed and that living paycheck to paycheck is the best they can do. They have a lot of negativity and think that there’s not much they can do to improve their circumstances. It’s a big difference between rich and poor mentality.

An attitude of poverty believes overcoming challenges is impossible

Someone using habits of the poor mindset believes that what life has thrown them has never been seen before and their challenges are impossible to overcome. This way of thinking may also cause them to feel judgment towards those that are rich.

What this person fails to realize is that everyone goes through rough patches. Oprah didn’t rise to where she is without facing major personal and professional challenges.

Instead, she has a wealth mentality. Below, we’ll walk through certain habits that wealthy people have that set them apart from the rest.

13 Rich mindset habits to start emulating now

Now that you know the difference between the rich vs poor mindset, let’s get into specific rich mindset habits that you can start working on today.

1. Rich people always have a vision

Before you hit the ground running, ask yourself this: what is your vision? Jonathan Swift said it right when he said, “Vision is the art of seeing what is invisible to others.”

Do you have hopes and dreams you’re constantly thinking of achieving? Is your vision big beyond what you think you are capable of today? Will what you see for yourself change your life, the life of your family, or your community in the future?

If all you see is where you are today, challenge yourself to build a vision. Once you do, realize it’s not a one-and-done affair.

Instead, it’s an everyday process where your mind dreams further of what’s possible, and then you follow your dreams. The rich are persistent and keep working towards their vision and goals; a huge difference between the rich mindset vs poor mindset.

2. Rich people have productive routines

Netflix, YouTube, and TikTok have been dominating the entertainment scene of late. Millions of hours are viewed each day. While it’s great for them, it does little for you – and the wealthy know this. Most rich people are more productive with their time.

People with money are intentional. They have routines. And they understand that you don’t just wake up as a diligent individual out of nowhere.

When we talk about routines, we don’t just mean waking up at 5 am every day. That’s only a tiny part of it.

Instead, we’re referring to the overall environment the wealthy put themselves in.

Rich people are intentional about the friends they keep. They pay attention to what they feed their minds. And they put themselves in environments where success is most likely.

Routines consist of all these components – time, environment, and habits.

For example, when you need to work from home, do you stay in bed? You probably end up getting much less done. Having a designated workspace will get you much further ahead.

Basically, create a life that makes success inevitable and eliminates obstacles that could stop you from achieving your goals. The reliability of a routine can help you succeed. The wealthy know this and are intentional about having a consistent billion dollar morning routine.

3. A rich mindset is results-driven

Rich people focus on outcomes. They take full responsibility by setting goals and achieving them.

In addition, they aren’t building routines for bragging rights. No one is waking up at 5 am, so they can post about it on Instagram.

No. People with money are focused on the results and will commit to doing what it takes to achieve them.

Routines alone will improve your quality of life. But they won’t do anything for your bank account. Routines coupled with focused action will yield results.

So, what’s the best way to achieve results? Know what you want. When you have a clear idea of what the end goal is, it will be so much easier to work back and figure out what it takes to get there!

4. Rich people admit when they don’t know

Guess what makes you a smart person? Admitting what you don’t know and knowing how to ask meaningful questions.

The rich know this and are on a constant search for knowledge as part of their rich mindset. So, if you’re learning from a mentor, ask smart questions for informational purposes.

Learn in regards to the challenges they are facing, understand what they are trying to achieve, how they are planning to achieve their goals, and what they’ve learned from past experiences.

Listening always pays off. Gather intel on best practices, new opportunities, and potential challenges and solutions. Use this skill when learning, negotiating, exploring, or networking – basically every human interaction you have!

5. People with a rich mindset don’t work for money

You heard that right. The wealthy work to learn. Poor people often work for their next paycheck.

Reasons for working is a huge difference in the rich vs poor mindset.

You see it all around you. Poor people end up working from paycheck to paycheck, barely making ends meet. Rich people, in the meantime, grow their skills and abilities and continually rise up the ranks.

6. Rich people have mentors

Life is all about relationships. You’ve heard the saying before, “Your network is your net worth.” It’s true.

But that doesn’t mean you should go out there and dump your friends. Instead, it means you should broaden your circle.

Once you make money the end goal, you’ll be stuck working for it without growing in your talents and abilities to boost your income.

However, if you work to learn, you’ll be well on your way to success.

You see, those with wealth connect with other people. They identify stars in their field, study them, and through a leap of faith, make that connection.

It all goes back to your vision.

Who inspires you? What do you admire about them? What do you hope to learn from them?

And it doesn’t just stop there. A rich mindset asks how you’ll make a connection with that person. To connect with anyone you’d like in the world, you have to serve them first.

Understand their world and figure out how you can add value to them. They’ll be much more receptive to mentoring you once you’ve built a relationship.

7. Rich people always look out for opportunities

Shark Tank is a fascinating show. Every week, handfuls of entrepreneurs stand before the sharks and pitch a new idea. Some of them are wild.

Would you ever imagine a sponge in the shape of a smiley face making millions of dollars? Or a toilet stool that makes bowel movements easier, revamping how people handle their business? Scrub Daddy and Squatty Potty did just that.

Their founders were visionaries who saw opportunities in the mundane day-to-day activities of life.

Not seeking to improve things is one of the habits of the poor mindset. But not someone with a rich mindset.

A rich person always seeks to improve upon what’s out there – and there’s always room for improvement. Both in good economies and bad.

Past recessions birthed companies like Airbnb, Venmo, and Uber. Recessions and times of economic uncertainty create some of the greatest comeback stories you can ever imagine. It’s times like these where differences between people with rich vs poor mindsets stand out.

8. Rich people believe in abundance

In the rich vs poor mindset, there’s often one core belief that holds poor people back. It’s a belief that resources are limited, also called a scarcity mindset. It’s a belief that if my neighbor Jane succeeds, then there’s less room for me to succeed.

It can often lead to resentment and an assumption that rich people only look out for their own interests. To a person with a poor mindset, resources are always scarce.

People with money, on the other hand, believe in abundance.

You’ve succeeded? Great! Who else can, too?

Wealthy people know there’s plenty to go around. They do not engage in an “us vs. them” mentality. They focus on providing as much value as they can to as many people as they can. That’s their formula for success.

Zig Ziglar summarized it well when he said, “You can have everything in life you want if you will just help other people get what they want.”

9. A person with a rich mindset learns how to manage their finances

No one is born knowing how to manage their money. Sure, some people are born into families where good money habits are modeled well for them. But for the majority of us, that’s not the case.

Rich people know this and are proactive in managing their finances. A rich person has a budget.

A wealthy person has learned how to invest in the stock market. A successful person made it a priority to get out of debt.

Beyond that, the rich understand how to use money to their advantage. Instead of racking up thousands of dollars in consumer debt, rich people will leverage it to start a business if they need to. They use debt to build, and they pay it off responsibly.

10. Rich people are not afraid to fail

Rich people are not afraid to fail because they know failure leads to success. They’re not afraid of trying something new. They see a problem, and they are quick to think of solutions to it.

No one has 100% accuracy with finance and investments. Sometimes, you just have to take a calculated risk.

Failure and setbacks don’t worry them because they have not failed as long as there are life lessons to learn. They are willing to go out on a limb sometimes, at their own risk, because they want to improve and try to be more successful.

You’ve certainly achieved wins in the past, but you’ve probably also had things not go according to plan before those wins. Look back at each of them, and you’ll notice the lessons you learned in order for you to get to the point of success.

11. Rich people focus on the long-term

There are two different perspectives in life: those who focus on what’s in front of them and those who think about the big picture.

People with a rich mindset don’t just think about what’s going to happen tomorrow or even over the next year. They think about what is going to happen in the next 20 or 30 years. The rich realize that things take time, including building generational wealth.

For example, a rich person knows that forgoing the latest smartphone model and instead investing that money in a retirement account will be better for them in the long run. Sure, that money might be off-limits until they hit 59-and-a-half. But they know that even if it’s not accessible right now, it’s helping them build long-term wealth.

And thanks to earning compound interest, the longer they wait, the more money they’ll have in the end.

12. The rich take care of their health

People with a rich mindset have a different way of thinking when it comes to things like health and taking care of themselves. They know that while working hard will pay off in the end, it won’t if it’s at the cost of their health.

That’s why rich people make sure to prioritize living a healthy lifestyle. That means eating healthy, exercising, and regularly going to the doctor. But it also means focusing on mental health.

If you have a negative mindset and are struggling with your psychological health, it can be difficult to focus on other things like making money and building money habits. So, focusing on a positive way of thinking and mental health can help you succeed.

13. Rich people understand the value of investing

Another one of the differences is that rich people understand the value of investing. Putting aside money into an IRA or some sort of retirement savings every year might not seem like the most exciting use of your money, but it can be one of the keys to building wealth.

How? When you invest money, whether it’s in the stock market, real estate, or another type of investment account, you’re making a long-term bet that your money will grow in value over time.

People with a wealthy mindset understand that investing can pay off, especially if you start investing at a young age. That’s because the longer you invest, the more time your money has to compound and earn you even more cash.

Expert tip: You can change your perspective

If you want to start building wealth, you need to develop a rich mindset. By focusing on how you approach and think about things, you can turn your perspective around from being negative to positive.

Instead of thinking about what you can’t do or why you can’t increase your savings, think about the things you can do today. Use the resources you have available to you and start building the right habits and your mind will change.

How do you go from a poor mindset to a rich mindset?

If you want to go from a poor mindset to a rich mindset, focus on improving yourself and how you think about things.

For example, practice gratitude with a daily gratitude list, meditate, and surround yourself with people who are positive. Make sure to set clear goals and gain as much knowledge as possible.

What is the difference between a broke mentality and a poor mentality?

A poor mentality is a mindset where you believe that opportunities are limited and that money should never be spent. In addition, you believe you shouldn’t take risks, and if you do have success, it’s temporary.

A broke mindset is when you don’t know what’s important to focus on when it comes to money. You might spend your paycheck on the consumption of things you don’t need, then complain that you are not able to save or invest.

Both of these mindsets can be changed, and you can begin to think positively about your life and finances.

How do you know if you have a rich mindset?

If you think that being wealthy is possible and are focused on building value over the long term, then you may have a rich mindset.

Likewise, if you find yourself already practicing investing, managing your money, and recognizing opportunities, then you likely are on the path to having the right mindset to build wealth.

Articles related to having a rich mentality

If you want to know more about how to change your mindset and become wealthy, check out these posts next!

• How To Get Rich From Nothing!
• Rich VS Wealthy: 3 Key Differences Between The Two
• How To Stop Being Poor: Breaking The Cycle Of Poverty
• 11 Key Ways To Improve Your Money Mindset

Develop your rich mindset to become wealthy!

Now you know the difference between rich and poor mentality. Becoming rich is not hard, but it does take time and effort.

You just need to start cultivating habits that will get you there and understand a rich mindset vs poor mindset. Practice habits that will make you wealthy, not habits of the poor mindset.

Like many before you, you too can become a millionaire. It won’t happen overnight, but with consistent and diligent effort and a good mindset, you’ll be well on your way to achieving wealth.

So, I’ll leave you with these questions: What is your vision? Where are you going? Who do you want to be? 

Today is a great time to start developing your rich mindset and working towards your goals.

To learn new things about habits and finance, listen to our podcast, Clever Girls Know. Or check out these financial books for even more information about money.

The post Rich Mindset Vs Poor Mindset: How To Develop A Rich Mindset! appeared first on Clever Girl Finance.

A living trust gives your estate direction, ensuring your loved ones handle it as you wish. Trusts can also help seamlessly pass the trust’s assets to your heirs by avoiding probate court. While trusts seem confusing and complex, they aren’t as complicated as they sound. With the right help, you, too, can open a trust and protect your assets, and this guide will give you a crash course on living trusts as an estate planning tool.

The basics of a living trust

If you’re wondering, “How does a living trust work?” a trust is a legal document that holds your assets, such as real estate, cars, and investments. It helps protect your assets during your lifetime and beyond. The trust takes ownership of the property, but you generally still retain control over your assets.

Your trust documents also help outline your wishes for your assets after you pass away. You can use the trust to specify exactly how you want your assets distributed.

When you die, your trustee is responsible for distributing the assets to your named beneficiaries according to the terms of the trust.

Two types of living trusts

You have two options when setting up a living trust agreement: a revocable or an irrevocable living trust. Let’s explore how each type works and why you might choose one over the other.

Irrevocable living trust

An irrevocable living trust is a sort of trust that can’t be changed.

Even as grantor or trustee of the trust, you cannot change or terminate it—without exemption. Once an irrevocable trust is in place, you give up the ability to modify it.

Thus, irrevocable trusts are less common for obvious reasons.

Why people opt for irrevocable trusts over a revocable trusts

But why would someone opt for an irrevocable trust over a revocable one?

There are three main reasons:

• You want to minimize estate taxes through a life insurance trust or annuity trust.
• You have a disability and need to shelter assets and income to avoid losing federal benefits.
• You want to protect your assets from creditors.

Revocable living trust

The revocable living trust gives you—as the grantor and named trustee—the power to make changes while the trust is in effect.

A revocable trust is the most common type because it allows you to maintain control of your assets. As trustee, you can amend trust directives as needed, including dissolving the trust if necessary.

Just know making changes or canceling a revocable trust isn’t easy. You’ll still have to deal with a ton of paperwork and jump through administrative hoops. Still, it is technically possible to change or cancel a revocable trust.

How does a living trust work?

When you open a trust, you transfer your assets into the trust. You no longer ‘own’ the assets once you put them in the trust – the trust owns them.

However, you can retain control of your assets by naming yourself a trustee. Most people also name a successor trustee should they die or have the incapacity to manage the trust.

The successor trustee’s job is to act on your behalf and distribute the assets per your instructions when you die. You can also name specific conditions the beneficiaries must meet before receiving their inheritance.

For example, you might require that your children reach a certain age or complete college to receive funds.

Setting up a living trust: How to get started

Many people skip this because they’re unsure how to get started. Although the process is tedious, it’s often not overly complicated.

Your trust can be ready to go in six steps:

1. Contacting estate attorneys
2. Selecting assets for your trust
3. Picking a successor trustee
4. Naming beneficiaries
5. Signing the trust agreement
6. Transferring assets into trust ownership

1. Contact an estate planning attorney

Can you set up a living trust by yourself? Technically, yes.

However, your trust needs to follow certain state laws and regulations regarding trusts. Without extensive legal knowledge, setting up a trust on your own could be a bad idea.

Instead, get in touch with an estate planning attorney who specializes in living trusts. An attorney may come with a larger price tag than drafting the trust on your own, but you’ll know it’s done right.

In addition, attorneys can provide valuable insight into the formation of your trust. Your attorney will make clear to you the potential impact of setting up your trust a certain way. They’ll also help you work through other aspects of your estate planning checklist.

For example, your attorney can help you determine if a revocable or irrevocable trust makes the most sense for your needs.

2. Determine the assets for your trust

The next step to creating your trust is to determine what assets you want in the trust. Common assets you might put into your trust include:

• Real estate, such as real estate investments or your home
• Financial accounts like non-active bank accounts or non-retirement brokerage accounts
• Non-qualified Annuities
• Life insurance (read about the importance of life insurance)
• High-value personal items such as fine art or expensive jewelry

You shouldn’t put retirement accounts in your trust. Adding retirement accounts to a trust requires withdrawing the funds from the accounts.

A withdrawal will likely result in income taxes on the funds. The better option is to name your trust as a beneficiary on the retirement account.

3. Choose a successor trustee

Your successor trustee is the individual who takes over as trustee after your death. Choosing a successor is an important step because this person will eventually take control of your assets through the trust.

Your family situation will play a big role in your successor trustee.

For example, parents of minor children generally choose their preferred guardians. If the parent dies while the children are still young, the guardian gets access to assets or funds to help cover the living expenses of the children.

4. Name your beneficiaries

The beneficiaries of your trust are those who will benefit or receive the assets owned by the trust.

You can choose any beneficiaries you want, including friends, family, or even charities. Think about who you want your assets to go to, especially if you’re funding an irrevocable trust.

Many people list their children as beneficiaries to help build generational wealth.

5. Sign the living trust document

Signing is the easiest part of the process.

Once your lawyer has drafted the trust documents, you can review them and make changes as needed. When you’re ready, you’ll sign the trust in the presence of a notary public. Your attorney or one of their associates will likely be licensed as a notary.

6. Transfer assets and fund the trust

Funding the trust isn’t as simple as making a bank transfer or signing a form. You must rename all assets in the trust’s name to officially put them in the trust.

This process generally requires a fair amount of paperwork and might take a while to complete. (Learning how to declutter paperwork prior to this can be helpful!)

Say you want to put your house in your trust, for example. You’ll need to make the trust the new owner by changing the property’s title. Doing this requires signing a new deed for the trust property.

Additionally, you’ll need to notify your city or county of the change, which could require a small title transfer fee.

Pros of a living trust

A living trust is one of the most useful estate planning tools to protect your assets. Let’s look at some of the benefits.

Avoids probate

If you die without a trust, your estate goes into probate. The probate process is the legal process of reading and executing a will. The probate process also appoints an executor of your estate to distribute your assets.

Probate can delay when your beneficiaries receive their inheritance. It can also be time-consuming for the executor, who must oversee everything.

A living will, however, bypasses the probate process.

Avoids anyone contesting your wishes

Even the most close-knit families can get ugly when inheritance is involved, and family financial problems could cause concerns. Challenging a will is common, but a trust lowers the risk.

Contesting a will involves petitioning the probate court. Trusts skip probate, so it’s more difficult to contest. Challengers of a trust must prove you were not of sound mind—or were coerced—into setting up the trust and funding it, in addition to a couple of other reasons, claims Smart Asset.

Trusts create privacy

The probate process becomes part of the public record. That means anyone could see how much money you’re giving to heirs or what assets you have to give.

On the other hand, trusts aren’t public records. No one will know how much you left to your beneficiaries. Taking this route also reduces the risk of someone targeting your family or loved ones based on their inheritance.

Cons of a living trust

There are plenty of reasons a living trust is a good idea, but are there downsides?

As with most things, yes, there are drawbacks.

Trusts are costly

There’s no way around it: a trust is going to cost a chunk of change to set up. You’ll need to hire an estate lawyer to help you draft and fund your trust. You might also have to pay title transfer fees to move assets into your trust’s name.

All in all, you can expect to pay between $1500-2500 in the USA, according to Contracts Counsel, to draft a living trust. The more complicated your needs or assets, the more you may have to pay.

Inconvenient to make changes

A revocable living trust may offer some flexibility, but it’s still difficult—and likely expensive—to make changes. You’ll need to contact your lawyer to sell, add, or modify assets in the trust.

Even something like refinancing your home requires your attorney to remove the asset from the trust before you can make changes to your mortgage. Then, you’ll also have to pay your attorney to re-title the asset back into the trust.

Administrative work is hefty

Setting up a trust takes a lot of consideration. You have to determine what assets to put into the trust, who will be your successor trustee, and who will be your beneficiaries.

Additionally, putting your assets into a trust means renaming the assets. For many things like your house, bank accounts, and investments, it means a lot of paperwork and potentially some fees.

Expert tip: Consider a joint trust if you’re married

Married couples can set up an individual living trust for each spouse or create a joint trust with shared assets.

Joint trusts are less complicated to set up and could make it easier for a surviving spouse to access assets.

When you are putting your financial goals and financial affairs in order, make sure to consider this simpler approach.

Who are living trusts best for?

A living trust is best for anyone who wants control over their estate. It’s not just about managing who receives your inheritance upon your death, but rather managing your estate to avoid probate and put a 3rd party in charge of certain assets until all beneficiaries satisfy any conditions you set.

Suppose you’re concerned about your estate going through probate. If your estate goes through probate, it may take more time for beneficiaries to receive their inheritance. Not to mention that anyone could potentially challenge your estate.

On the other hand, a living trust could prevent your estate from going to probate at all.

Living will and trust: What’s the difference?

A living will and trust both have to do with your estate, but the similarities end there. The importance of a will should not be overlooked, but a living trust is equally important.

Here’s what you must know about the differences between a living will and trust:

A last will goes into effect when you die

A will doesn’t control your assets when you’re alive, even if you’re unable to make your own decisions. A living trust, on the other hand, manages your assets from the moment you open and fund the trust.

You are the trustee while you’re alive (if you choose to be), and your successor trustee takes over when you cannot manage your estate.

A will typically goes through probate

Even a will with specific instructions for distributing assets will likely go through probate. The probate process typically holds up the distribution of the estate. Probate also usually has court fees and costs associated with the process.

A living trust doesn’t have to go through the probate process.

A living will is a public record, whereas a trust is not

Since the probate process is public, your will is public. This lets anyone see what you’re leaving to your beneficiaries.

A living trust is a completely private agreement. Anyone not listed in the trust would not have access to the documents.

What is the point of a living trust?

The point of a living trust is to improve the efficiency of distributing your assets after your death. Trusts avoid probate, making it easier for your trustee to distribute assets to your beneficiaries according to your wishes.

What is the downside to a living trust?

The biggest downside of a living trust is the cost and the paperwork involved in creating it. Complicated trusts may cost several thousands of dollars to create. You also have to go through the paperwork and time to retitle your assets in the trust’s name.

What is the primary purpose of a living trust?

The primary purpose of a trust is to create a smooth distribution of your assets upon your death.

Additionally, trusts give you the ability to specify how assets are to be used.

For example, you might require your minor children to turn a certain age before they receive ownership of assets in the trust. It helps to teach financial literacy for kids to your children so they have a good foundation for handling money in the future.

Articles related to trusts and estate planning

If you now have a better understanding of trusts and what they do, read these articles next for more information!

• What Is A Revocable Trust And How Does It Work?
• What Is An Irrevocable Beneficiary?
• The Importance Of Estate Planning And Having A Will In Your 30s
• Key Steps To Get Your Financial House In Order Now

Next steps: Create your own living trust

A living trust helps organize and protect your estate. Understanding the process of funding and managing the trust is important. Having a trust ensures you can determine what happens with your estate when you’re alive and have peace of mind that your successor will handle it how you planned upon your passing.

Make sure you have a good financial planning process for each part of your finances, including retirement and investing. Also, consider other important aspects of your finances that will help you prepare for the future, such as saving an emergency fund.

The post What Is A Living Trust And How Does It Work? appeared first on Clever Girl Finance.

Life insurance is one of those things that we kind of know we need, but many of us don’t want to deal with getting it right away. Sometimes, it’s hard to even think about because, for many people, the whole idea is just plain scary. However, we can’t downplay the importance of life insurance, how life insurance protects our finances and family, and how much peace of mind it can give you.

Perhaps you feel like you are young and have plenty of time, or you even feel like, if something happened to you, there would not be any major financial impact. Or maybe you can’t decide what insurance type would work best for you.

Well, if you’ve ever felt any of the above, this article is here to help you understand the importance of life insurance and how to ensure you are covered. Let’s get into it!

Benefits of life insurance

Life insurance is not something to be afraid of at all.

In fact, having life insurance is protection for you and your loved ones that can minimize or potentially eliminate financial distress.

And it’s something you want to seriously consider, especially if you have kids or dependents or hold assets like a home.

There are seven main benefits of life insurance:

1. Financial safety net for you and your family
2. Creates generational wealth
3. Covers final expenses
4. Replaces income after a death
5. Provides a tax-free death benefit
6. Customizes protection and living benefits
7. Supplements retirement or other savings

Let’s dive a little deeper into the importance of life insurance and why it’s a good idea for you.

1. Financial security for your family

The main benefit of a life insurance plan is to provide financial protection and peace of mind to you and your family.

When you have a life insurance policy, you can be sure your family will be taken care of, even if you pass away. While it’s not fun to think about, knowing your family is protected can help take a weight off of your shoulders.

That peace of mind and relief is enough of a reason to get life insurance for many people, especially if you have children.

2. Builds generational wealth

Yup, life insurance is one way in which people transfer their legacies and create generational wealth.

Having life insurance is a foundational element when learning how to make a financial plan.

When you pass, your assets go to your heirs. So, a life insurance policy can be a major asset to pass on to your children or other dependents.

But keep in mind that you don’t need to have a million dollar life insurance policy. Having enough to cover what you bring to your family is a good start.

3. Covers your final expenses

Funerals and other end-of-life costs are expensive. Depending on your final needs, your family may have to pay thousands of dollars to put you to rest.

Part of the importance of life insurance is that it’s a great way to cover funeral expenses and help you out with what to do when a loved one dies. Your beneficiary can use the proceeds of your life insurance policy to cover the final costs you may have.

4. Replaces lost income

Do you bring in income to your family? Additionally, what would happen if they suddenly lost access to your income?

Life insurance addresses this issue by replacing lost income when a family member dies. These funds can be essential to helping your loved ones cover day-to-day living expenses.

Additionally, life insurance benefits could help cover big life expenses for your beneficiaries, such as college tuition.

5. Tax-free inheritance for your heirs

Did you know life insurance has tax benefits?

For example, in general, most life insurance payouts are tax-free for beneficiaries. So your heirs will simply receive a lump sum payout without paying income tax on the money.

For instance, let’s say you have a $500,000 policy and pass away. Your beneficiary would receive $500,000 in cash without paying income or estate taxes on it.

In addition, think how far that money could go toward their short and long-term needs and financial goals, which really shows the importance of life insurance!

If you are wondering if your life insurance payout will be tax-free, refer to this helpful tool from the IRS.

6. Access living benefits with riders

Your beneficiaries aren’t the only ones who can benefit from your life insurance policy. Policyholders can use riders, also called endorsements, to customize their policy with living benefits such as:

• Long-term care
• Disability income
• Guaranteed insurability
• Critical and chronic illness riders to cover medical bills

Be aware, however, that adding endorsements to your policy generally increases your premium payments.

7. Supplement retirement savings with cash value

Specific types of life insurance can help you build wealth even while you’re still alive.

For example, permanent life insurance policies like a whole life policy have a feature known as cash value.

Cash value life insurance is a type of savings account with interest, and it’s tied to your life insurance plan. Part of your insurance premiums go into the savings account.

You can use the money in the account as extra savings, such as a boost in retirement.

Additionally, some policies let you use cash value to pay ongoing insurance premiums once you reach a certain value.

Expert tip: Don’t wait to buy life insurance

The earlier you get life insurance, the better. In fact, life insurance premiums tend to be lower the younger you are. If you wait until you’re older, you may pay more in premiums.

In order to save money and be sure your finances are covered, It’s a good idea to get life insurance as soon as possible.

The cost value of all you do and how insurance ties in

As a mom of two small children with a small business, I have a huge impact on my family’s financials. And it’s not just tied to the money I bring in with my business. It’s also from the cost of all I do in my household.

One day, I sat down to really calculate the cost value of all I do for my family, and I was surprised. Shocked even.

I added in all my jobs. They include:

• Watching and teaching my kids (Job title: babysitter/teacher).
• Cooking for my family (Job title: chef).
• Cleaning my home (Job title: housekeeper).
• Driving my kids around (Job title: car service).

If I were to hire people to do all of these things that I currently do for my family, it would cost me over $70,000 a year!

That alone would have a huge financial impact if (God forbid) something were to happen to me. And I didn’t even include my other annual financial obligations, for instance, my kids’ education expenses or our household bills and mortgage.

Life insurance is a non-negotiable for me for this reason. My 20-year, $500,000 term life insurance policy will help ensure my family is protected financially and can help to cover several years of the loss of my value and income.

My husband also has a life insurance policy in place as well since he also contributes substantial income to our family. If you are the primary female breadwinner or the only breadwinner, then putting yourself in this scenario makes having life insurance even more critical for you.

Life insurance and your long-term goals

What are some of the biggest long-term financial goals you currently have?

Personally, I’m saving for retirement and my kids’ college education through 529 plans and custodial accounts. I have a vision of exactly how I want to retire, as well.

In addition, similar to the gift my parents gave me, my husband and I have decided that we will be paying for our kids’ college education in full, wherever they choose to go. (As well as imparting financial literacy for kids to my children).

But again, if something were to happen to me, these goals could very well be thrown out the window if both my spouse and I don’t have a life insurance policy in place.

It could mean a difficult retirement for me or my spouse and student loan debt for my children. All scenarios I don’t want, and that’s why I recognize the importance of life insurance, in addition to my savings and investments, as a safety net.

Make the process of getting life insurance simple

The truth is life can be hard, and unexpected situations happen.

However, it’s better to have a plan in place than face the unknown unprepared. One key element of your plan should be getting life insurance.

The good news? It doesn’t have to be a complex process.

Term vs. permanent life insurance

The first place to start would be to determine whether you need term vs. whole life insurance that includes a cash value.

Term policies are life insurance that expires after a set number of years, known as the policy term. At the end of the term, the policy expires, and you no longer have coverage.

Typical term lengths range from 10 years to 30 years or more. Some term policies have conversion riders that let you convert your policy to permanent life insurance.

Permanent life insurance works as it sounds: it lasts your whole life as long as you keep paying premiums. While permanent coverage tends to be more expensive, you may find the additional cash value and other benefits to be worth the cost.

Determine coverage needs

Once you know if you want term or permanent coverage, you can figure out how much coverage you need. There are many life insurance calculators available online to help you estimate your needs.

You can also reach out to a local life insurance company or agent for advice on your coverage options. They’ll be able to help you calculate a death benefit amount and discuss any riders you might need.

Compare coverage options

Be sure to shop around to compare policies and rates before you make a final decision. I recommend getting at least three life insurance quotes from different providers before signing up. Getting multiple quotes for similar policies will let you compare costs side-by-side.

You should also do due diligence on the life insurance company. Try Googling the insurance company and reading online reviews. The last thing you want after you pass is for your loved ones to have to deal with a difficult life insurance company.

Apply for coverage

So, you’ve found a life insurance policy and are ready to sign up.

First, you’ll need to fill out an application. Many policies will also require a medical exam to determine your risk level. Some policies, such as online term life insurance, offer coverage without a medical exam.

After your exam is done, the life insurance company will determine your risk rating. The better the risk rating, the lower your premiums. Generally, young, healthy people pay the least in insurance premiums.

Sign your coverage and put it in force

Once your insurance application is approved, you’ll receive a copy of the policy and a form to sign. Be sure to carefully read the policy to make sure you’re getting the coverage—and premium payment—you agreed to.

What is the most important use of life insurance?

The most important use of life insurance is to provide financial support for your beneficiaries after you die. Financial support might mean paying a child’s college tuition using life insurance proceeds.

Or, your life insurance policy could help cover the loss of your income if you’re the sole breadwinner in your family.

No matter how the funds are used, life insurance is there to help ease the financial burden of your death.

What are 3 things life insurance covers?

Life insurance coverage protects your family from financial hardship after your death. The importance of life insurance can be broken into three categories:

1. Covering the daily or future needs of your loved ones.
2. Building generational wealth for your descendants.
3. Providing living benefits for you as you age.

What are the pros and cons of life insurance?

While there are many good things about life insurance, there are also drawbacks. Take a look at some of the pros and cons to help you find a policy that’s right for you.

Benefits of life insurance

The pros of life insurance include:

• Financial protection for your family
• Customized coverage to fit your needs
• Easy access through online life insurance companies
• Rounds out an estate plan
• Builds wealth for future generations
• Protect your peace of mind

Cons of life insurance

The cons of life insurance include:

• Expensive for older adults or those with health conditions
• Cash value may not provide a huge nest egg

Articles related to life insurance

If you found this article about life insurance helpful, read these informative posts next!

• Term Life Insurance VS Whole Life Insurance? What’s Best for You?
• What Is Credit Life Insurance?
• How Does Cash Value Life Insurance Work?
• Do You Really Need A Million Dollar Life Insurance Policy?

Don’t overlook the importance of life insurance

Ultimately, the importance of life insurance is to provide peace of mind that your loved ones will be taken care of. And thanks to the internet and new technology, it’s easier than ever to get coverage in almost no time at all.

Whatever your financial situation, life insurance protects you and your loved ones. Other great things to consider for financial security include building an emergency fund and investing regularly for the future.

The post The Importance Of Life Insurance For Your Finances appeared first on Clever Girl Finance.

What is a bounced check? It’s one of those terms that a lot of people have heard, but not as many can explain. And the impacts of a bounced check can seem equally mysterious!

Of course, it’s important to understand all of these things, so you can avoid being put in a messy financial situation. Whether you’re the writer or depositor of a bounced check, it can have impacts on your finances.

So much in life is unexpected, but a bounced check doesn’t need to be one of them. In this article, we’ll answer questions like: what is a bounced check? What happens if a check bounces after I deposit it? How can I avoid writing a check that ends up bouncing? Let’s start learning!

What is a bounced check?

A bounced check, also known as a “rubber check,” is essentially a check that cannot be honored by a bank. This typically happens when the account holder has insufficient funds to cover the amount of the check.

Less commonly, a check can bounce if the check writer tells the bank to “stop payment” on it—even if there is enough money in the account.

When someone writes a check, they are essentially instructing their bank to transfer a specific sum of money from their account to the recipient’s account.

However, if there isn’t enough money in the account to fulfill this request, the check bounces. In turn, this can lead to a cascade of consequences for both the payer and the payee.

Bouncing a check is not always intentional. It can happen for various reasons, such as an unexpected expense, a miscalculation of available funds, or a delay in depositing money into the account. While these situations can be genuine mistakes, they can still carry financial repercussions.

What happens if a check bounces?

Your check can bounce when the amount in your checking account is less than the value of the check amount you wrote. If the receiver tries to cash or deposit your check before there’s enough to cover the full amount, the check will bounce due to “non-sufficient funds” (NSF).

When you write a check that bounces, you’ll probably be a bit embarrassed. While it’s not always your fault (maybe an automatic withdrawal happened before an automatic deposit cleared), you’ll still have to deal with the consequences. 

Let’s look at a few potential things that can happen.

Possible fees

One of the most immediate drawbacks of a bounced check are the fees that come with it.

Non-sufficient fund fee (aka NSF fee)

A non-sufficient funds fee is exactly what it sounds like. A financial institution charges an NSF fee when a check cannot be honored due to insufficient funds in the account. Normally, this type of returned check fee applies to the account holder who wrote the check.

Each state decides the fees owed for check payments that are returned for lack of funds. These “recovery costs” generally range from $20 to $40. Most of the time, you’ll pay a flat rate, but a few states base the fee on a percentage of the amount of the check.

Fees for non-sufficient funds are like a bad chicken-or-egg scenario. If you wrote the check and truly don’t have enough money to cover the cost, then with the new fees, you can go into debt over not being able to pay. That makes it even harder to right the wrong and pay the original amount you owed.

Merchant fees

In certain cases, merchants may charge additional fees for bounced checks. These fees are imposed to compensate for the inconvenience and potential costs incurred by the merchant when a payment does not clear. 

$30 is the average bounced-check fee from merchants. That said, in most states, they’re allowed to charge up to $40.

Overdraft fees

If you don’t have enough money in your account, but your bank covers the check for you instead of bouncing it, you may face an overdraft fee instead of an NSF fee.

When an account holder attempts to make a payment that exceeds their available balance, the bank may cover the difference through overdraft protection. This service is designed to prevent declined transactions due to insufficient funds.

However, this service often comes with a price—the overdraft fee. This fee applies when the account balance goes below zero, and the bank extends credit to cover the transaction.

Overdraft fees can also come into play if you deposited a bad check and didn’t realize it. You may assume you have more money in the account than you actually do, because the check bounced. Then, you might accidentally overdraw your account and incur a fee.

Some banks offer overdraft alerts or allow customers to link their accounts to savings to prevent overdraft situations.

Impact on your credit report & banking relationships

While your primary credit report will likely remain unaffected by your bounced check, some “alternative” checking account reporting companies, like ChexSystems or Telecheck, might ding you.

As a result, banks can deny your request to open a checking account if you have any red flags from these companies. In this case, be sure to ask for the report to make sure there aren’t any errors. You can also ask for a free report if you receive an “adverse action” notice, which the bank has to provide you if they turn you down.

Since a negative banking history may make it more challenging to open new accounts, it can also make it hard to build credit.

In the case of a loan payment, a bounced check is a bigger deal and could affect your main credit score. When your check bounces, it means that the transaction technically never went through. Unless you tried to pay early, that likely means you either missed a monthly payment or were late.

This unpaid balance could get you in trouble with a collection agency, which might report you to the credit bureaus. This is a fast track to lower credit scores.

Late payments will stay on your record for seven years, which can affect other loan eligibility and even insurance rates. Your top priority should be to get back on track with your original payment schedule.

Potential legal action against you

In addition to your credit score, debt collectors could mean bad news legally. Just like the recovery fees, each state determines the legal action you may face. You could be dealing with civil or criminal charges, ranging from a misdemeanor to a felony.

With civil charges, you’re in store for even more fees. (Remember that horrible cycle of being charged for having no money? It gets worse.) You might be able to avoid these charges if you can plead your case to the recipient before they file a lawsuit.

If you don’t reach them in time or they aren’t sympathetic to your situation, you’ll probably have to pay legal fees for yourself and them, as well as additional penalties.

In a criminal case, even higher fees might be in your future, along with a mark on your permanent record. In extreme cases, you might even go to jail. Usually, the amount of the check determines whether it is prosecuted as a misdemeanor or a felony. 

If someone is threatening you with criminal charges, be sure to seek legal counsel before things escalate.

Expert tip: Always negotiate fees

In some cases, banks (or merchants) may be willing to waive certain fees associated with bounced checks, especially if it’s a rare occurrence.

Contact them, explain the situation, and inquire about the possibility of fee waivers. Be gracious and understanding, even if they aren’t able to accommodate you this time.

Establishing a good rapport with your financial institution can lead to more favorable outcomes in lots of situations. Whether it’s waived fees, higher credit limits, or a better rate on a loan, it never hurts to get in touch and ask!

Steps to take if you bounce a check

Discovering that a check you wrote has bounced can be a stressful situation, but it’s essential to approach it with a proactive mindset.

In this section, we’ll outline practical steps to take if you find yourself in the unfortunate circumstance of having a check bounce. 

1. Contact the person you wrote the check to (and the bank) 

It may feel like an uphill battle, but you need to take fast action. Contact your bank and the payee (the person you gave the check to) as soon as you realize the check will bounce or has already. Make sure you’re all on the same page—that you’re going to make things right as quickly as possible.

2. Deposit funds as soon as possible

Deposit funds into your account as soon as you’re able. Decide if you can pull from a different account or even borrow from a loved one. Speed is key here. If you’re lucky, you’ll be able to deposit enough funds before the check officially bounces.

If you have multiple bank accounts at the same financial institution, you might also be able to arrange for your bank to pull money from your savings account in the case of insufficient funds in your checking account.

Note: An electronic transfer or check deposit might be immediate, or it could take days to hit your account. To be extra safe, bring cash to your bank branch in person.

3. Figure out what you’ll owe in fees

Next, figure out how much you’re going to owe in returned check fees. Work to bring your account current ASAP to avoid any additional fees.

While you’re at it, look into overdraft protection to avoid facing this situation again. With this protection, your bank will cover the amount of your bad check (up to a certain amount). Then, you’ll simply pay the overdraft fees to the bank, rather than suffering any additional processes or penalties.

The overdraft fees might even cost you less than bounced-check fees without protection, which you would possibly owe to retailers and your bank.

How to avoid having a bounced check

With technology speeding up the exchange of funds, you can no longer write a check and cross your fingers that the recipient will wait a few days to get to the bank. After all, they might just snap a picture from their phone to deposit it!

That said, if you realize after writing the check that you’re not in the clear, consider reaching out to the person or business and asking for a bit of a grace period. They may be willing to wait to process the check until you can refill your account with funds.

However, the best line of defense is good personal finance habits from the get-go. Here are a few tips that can help you avoid writing a bounced check in the first place.

Create a budget

Plan, then plan some more. Map out recurring expenses and income. Leave a cushion for unexpected costs. (You might not know the amounts and causes, but you can bet on something unforeseen popping up. Pencil that in.) Your budget is a useful framework to keep you in line with your priorities and means.

Build up your savings  

In your budget, consider how you can make room for savings. Every little bit helps and it adds up over time. Focus on building up your emergency fund and rainy day fund.

Your savings will help you avoid a crisis that sets you up for writing a bad check. It’s so reassuring to have money to fall back on when things go awry.

Balance your checkbook 

Keep your checkbook in check by setting money dates with yourself, and potentially your partner if you share bank accounts. Balancing your checkbook is especially important if you use a debit card or share an account with someone because your account balance may be different from when you last looked.

You need to have a handle on what’s going out and what’s coming in to see if your budget and savings are on track.

What happens if I deposit a check that bounces?

If someone else wrote you a check that bounces, it means the funds will never settle, or “clear,” in your account. 

The money might show up temporarily (depending on your bank’s procedures for pending deposits), but it will leave your account once the check officially bounces. Sometimes, the bank will also charge you a returned check fee or impose other penalties for depositing the bad check.

Your bank may notify you about the bounced check, but they are not required to. It’s important to monitor your own accounts to make sure the funds from a check clear in your account. This way, you can also protect yourself from spending money you don’t actually have (hello, overdrafts!).

Do you still get paid if a check bounces?

No, you won’t get paid if a check bounces. Since the money from a bounced check will never clear in your account, the person who wrote it will still owe you the money. They’ll need to send another payment—whether this is a new check or a different form of money transfer.

If you deposited a check that bounced, get in touch with the person who was trying to pay you. Hopefully, they’ll work with you to resolve it quickly. In a worst-case scenario where they refuse to reissue payment, you might have to pursue legal action.

Do bounced checks affect your credit?

What happens if a check bounces as far as your credit is concerned? Whether you were the payer or payee, can it ding your score?

The good news is, bounced checks themselves do not typically appear on credit reports. Credit bureaus primarily focus on credit-related activities such as loans, credit card payments, and debt collections. 

However, as we touched on earlier, the consequences of bounced checks can indirectly affect credit scores if they lead to a damaged banking relationship or other financial problems.

In extreme cases where a bounced check remains unresolved, the payee or the bank may take legal action to recover the funds. If the matter escalates to collections or court, your credit score can suffer significantly. 

To protect your credit, it’s crucial to address bounced checks as soon as you can.

Planning will help you avoid having a bounced check

Living within your means is important for your financial and mental health. So when times are tight, be extra sure you have the funds before writing a bad check. When your check bounces, it costs you more time, money, and energy in the long run.

Even if you work hard to avoid having non-sufficient funds in your account, accidents can happen. If a bounced check leaves your checkbook, don’t despair! Be proactive in handling the aftermath as quickly as possible, resolve the situation, and move forward with renewed confidence.

The post What Happens If You Have A Bounced Check? appeared first on Clever Girl Finance.

Do you ever feel like your life isn’t quite as put together as you thought it would be? Don’t worry; you aren’t alone. And while there’s some comfort to be had in knowing that you aren’t behind your peers in getting your life together, it can still feel disheartening. Well, it’s not too late to achieve that vision you had in mind!

Most of us had a vision of what adulthood would look like. We would have a stable job, plenty of disposable income, a beautiful home, and maybe a somewhat glamorous champagne lifestyle.

Well it’s still possible and you can start making the changes you want by telling yourself, “I’m getting my life together,” and then by following this “get your life together” checklist to make it happen!

Getting your life together in 18 steps

If you’re ready to get your act together starting today, here are 18 simple steps to get started!

1. Make a list of your current circumstances

To decide what you want your future life to look like, it’s important to first acknowledge the present.

If your life isn’t exactly where you hoped it would be, then it might feel easier to ignore your current circumstances. But you can’t make meaningful change without taking a hard look at where you are today.

First, make a list of your current circumstances in each area of your life. Areas you might make a note of include:

• Your current job
• Home
• Finances
• Love life
• Friendships
• Hobbies
• Health and fitness
• Your religion or spirituality

Your list should include everything you want to improve on!

2. Decide which parts of your life you’re happy with (and which you aren’t)

The next step in getting your life together is deciding which of your current circumstances are exactly where you want them to be and which aren’t.

First, go through the list of your current circumstances and indicate which ones you’re happy with. This part is easy since you don’t need to make any meaningful changes there.

The harder part is going through your list and highlighting the circumstances you aren’t happy with.

Sure, it might be hard to see just how many parts of your life aren’t where you want them to be. But now that you’ve identified them, you can create a simpler life by making a plan to change them and get your act together.

Also, know that acceptance of where you are now is a huge step towards your personal growth.

3. Set specific goals

Once you know what areas of your life you’d like to change, you can start setting goals to improve them.

When you’re setting goals for yourself, especially financial goal setting, try to be as specific as possible. It’s not enough to just decide you’re going to get your finances in order.

Instead, you should set specific financial goals such as starting a budget, saving $1,000, or paying off your credit card debt.

Set one or two specific goals for each area of your life. Try to have short-term and long-term goals for each aspect that you’d like to improve.

Some areas might seem more difficult than others. After all, how do you set specific and quantifiable short-term goals for your relationships? Well, in that case, you could aim to have a coffee date or phone call with one friend each week.

Once you decide on your goals, make sure to write them down. A study by Dr. Gail Matthews shows that you’re 42% more likely to reach the goals you set if you write them down, according to Inc.com.

For an extra boost of motivation, write them down and place them somewhere you’ll see them every day.

Also, don’t forget how powerful positive morning affirmations can be. So, telling yourself, “I’m getting my life together” or “I have my life together” can have a huge impact on accomplishing your goals!

4. Start small when trying to get your act together

You can’t get your act together all in one day.

Rather, you have to start small. As you decide what changes you want to make in your life, break them down into small, bite-sized pieces.

Sure, knowing how to save $10,000 is a great goal. But it’s not one that most people can achieve in just a few months.

Instead, set a goal for how much you want to save each week, month, or paycheck.

Similarly, start small when it comes to changing your habits. Let’s say one of your goals is to get in better shape. If you currently don’t exercise at all, then it’s not sustainable to set the goal of working out six days per week. You’ll burn out pretty quickly that way.

Instead, start with one or two days. When you’re consistently sticking with that, then you can add another day or two. Getting your life together can be accomplished by getting 1% better every day!

5. Organize your physical space

A huge part of getting your life together is getting organized. Often, a disorganized physical space can make you feel disorganized in other areas of your life. Imagine waking up in the morning and having a hard time finding your keys because your kitchen is cluttered.

Suddenly, you’re late for work and have higher stress the rest of the day. And not only is your stress higher at work, but you might even be dreading going home, knowing that you’ll have to deal with the clutter.

Decluttering your life might not seem like it will make a difference when it comes to your finances, your health, or your relationships.

But you’d be surprised just how much you carry that stress and disorganization into other parts of your life. So, make sure you don’t skip this step. Try reading organizational blogs to help you.

6. Find the right tools to help with getting your life together

A big part of getting your life together is finding the right tools to use along the way. No matter what goal you’re trying to reach, there’s probably a tool designed to help you get there. Here are a few examples:

Habit trackers

A habit tracker is an app that helps to create new positive habits. You set up the habits you want to work on and schedule how often you want to do each one. Then, the app reminds you of your habits and allows you to track them.

Budget apps

There are plenty of budget apps designed to help you reach your financial goals. You can find different apps based on your budgeting style, the goals you’re trying to reach, and more.

Or try the best budget templates! Budgeting your money is a big part of self-care and getting your life together!

Fitness trackers

For someone with health and fitness goals, a fitness tracker is a perfect tool.

First, fitness watches can help you track your steps and workouts. Next, fitness tracking apps allow you to track calories in and out.

Project management tool

For anyone starting a business or working on another big project, a project management tool like Trello or Asana can help you get your act together. It allows you to create specific tasks, assign them to different people, and create checklists of items to do along the way.

Journal

If your mind is what’s holding you back from reaching your goals, then journaling self care might be just the tool you need.

Studies have shown that journaling can have significant impacts on both your physical and mental health. It can decrease stress, decrease your chances of getting sick, and more.

7. Make a plan for your money as an essential part of getting your life together

One of the most important steps on the get your life together checklist is making a plan for your money!

Money is the number one source of stress for a large majority of people. It beats out politics, work, and family as a source of stress and has even more significant impacts on younger generations.

Whether or not your goals are financial in nature, knowing how to make a financial plan is crucial to your well-being. Hence, getting your finances in order can go a long way toward helping you get your act together.

8. Get your act together by minimizing stressors

If there’s something in your life that’s stressing you out, it can have a negative impact on many different parts of your life. Let’s say you have work stress.

Like many people, you might bring that stress home with you at night. It can then affect not only your work life but also your relationships, health habits, and more.

To start reducing stress in your life, make a list of everything in your life that causes you stress. Are there any on the list you can eliminate entirely?

You may find this is the case for expensive subscriptions or social obligations that add more stress than they’re worth. It could also mean planning ahead for major life events.

Other stressors you simply won’t be able to eliminate. Examples of these include toxic people at work and family members. And while you can’t eliminate these stressors altogether, you can identify changes you can make to reduce the stress.

9. Find a mentor

If you have big career goals that you haven’t reached, then a mentor might be the perfect way to take your life to the next level. A mentor can give you career tips or advise you on business goals, introduce you to people in the industry, and work as a sounding board as you come up against career stressors.

Wondering how to find a mentor? Think of people in your network who have offered you advice in the past. Mentorship can be a formal arrangement — at times, even a paid one. But it can also be an informal friendship with a friend in your industry.

10. Create routines for getting your life together

Routines are the backbone of success. When you have routines in place, you no longer have to rely on willpower to stick to your positive habits and reach your goals.

Think about a habit that comes naturally to you, like getting dressed in the morning or brushing your teeth. You don’t have to remind yourself to do those things. They’re a part of your daily routine schedule.

You can use those same systems to create other healthy habits and take better care of yourself. Want to commit to going for a walk each day?

Find the time when you can do it at the same time each day. It will become a part of your routine, and you’ll eventually find that it just comes naturally to you.

11. Identify bad habits

Being a human being makes you a creature of habit, even if those habits don’t really serve you. A key step on the get your life together checklist is identifying your bad habits. If we’re being honest, we can all admit that we have some bad habits in our lives that are holding us back.

Whether it’s staying up late at night watching television, overspending on things you don’t need, or something else, it’s likely affecting other parts of your life.

As a first step, sit down and make a list of bad habits that might be holding you back in certain areas of your life. Then, come up with strategies to reduce or eliminate them.

For example, set boundaries for yourself on how late you stay up at night. If you tend to overspend on home decor regularly, then pamper yourself and add it as a line on your budget so it’s accounted for.

12. Implement the one-minute rule

Do you ever have those tasks that are on your to-do list for days, weeks, or months, and yet you never seem to get to them? We’ve probably all experienced something similar in the past.

One simple strategy coined by Gretchen Rubin is called the one-minute rule. This rule states that if something can be done in one minute or less, you do it immediately.

Setting this rule for yourself helps clear up your to-do list from all of those small tasks that create a mental burden. This can be a great step to help you with getting your life together!

13. Change your mindset

You might be surprised to hear that if you aren’t reaching your goals, your mindset might be one of the most important things holding you back.

If you find yourself regularly talking down to yourself or telling yourself that you won’t reach your goals, then there’s a good chance that you won’t.

But if you adopt a positive mindset and truly believe you can reach your goals, then you might find it easier to do so.

14. Create a gratitude journal

It’s easy to spend your time focusing on the things that are going wrong in your life. And when you’re working on getting your life together and making big changes, it’s natural to focus on the negative things.

Unfortunately, this can also drag you down emotionally and induce anxiety. It can cause you to feel like everything is going wrong.

A gratitude journal is an excellent way to focus on the positive and appreciate the little things in your life. Each day, sit down and write down three things in your life that you’re grateful for.

Aim to pick out three different things each day. They can be as big as your family and friends or as specific as a delicious meal you enjoyed that day.

As you write down what you’re grateful for each day, you’ll find that you naturally become more optimistic and start looking for things to be positive about. Try these journal prompts for self discovery if you don’t know where to start.

15. Take action towards getting your life together

It’s easy to say, “I’m getting my life together,” set goals and write down steps you can take to reach them, but it’s a totally different thing to take action and actually complete those steps.

Starting working toward a new goal is often the hardest step. When you want to save $1,000, those first few dollars are the hardest because you’re not in the habit of saving. When you decide to start working out, those first few workouts are the hardest because you’re not used to working out.

The sooner you take action after setting your goals, the quicker you can get past that first difficult step. Once you’ve started, you’ll find that your momentum helps you keep going. A great way to do this is to focus on challenging yourself to get just a little bit better every day.

16. Track your progress

Once you decide what changes you want to make in your life, it’s important that you track your progress.

Otherwise, you might never realize whether you’re on the right track. As a result, you might find that you never get closer to your goals.

Tracking your progress helps to ensure that you’re on track with your goals. It also helps to motivate you as you see yourself progress. There are plenty of tools out there designed to help you track your progress and stick to your goals and habits.

17. Practice mindfulness to know how to get your life together

Balancing a career with family and other obligations can get so busy. If every day is pure chaos from the moment you open your eyes, make sure to add practicing mindfulness to your list.

Mindfulness has many benefits that include getting rid of negative thoughts, improving your overall well-being, and boosting your enjoyment of life. Luckily, there are many resources to help you get started with practices like meditation and deep breathing.

Check out apps like Headspace, Calm, or Insight Timer for guided sessions and tools to help you incorporate mindfulness into your schedule.

18. Ask for help if necessary

Sometimes, all you need is a little help. Whether you’re looking for advice or emotional support, talk to someone you can trust. They could be a friend, family member, colleague, therapist, or mentor.

Seek professional advice or consider therapy if you’re struggling with anxiety, depression, or any other mental health issues. You don’t have to go through this alone. That’s why asking for help is also an important step on the checklist.

Expert tip: Take it one step at a time

As you set out to make changes in your life, remember to focus on small changes. Whether you have a small hill or a steep mountain to climb, small steps can get you there.

It is easier to reach your goals with incremental, sustainable actions than grandiose moves that will leave you burnt out and back to where you started. Working through the steps on your checklist will most likely take months or years.

So, be patient with yourself, check back often, and celebrate every progress you make along the way.

What does it mean to get your life together?

To get your life together means to take back control of your life so you’re not derailed by every stressor that comes your way.

It’s a beautiful place to be – to have organization and stability over most areas of your life. It doesn’t mean life is perfect. But that you are prepared and you can deal with life as it happens.

What is the best way to get your life together?

The best way is to follow lay out the series of steps you need to take and begin finding strength to face the challenge head on.

Start with your list of current circumstances, what you’d like to achieve to make you happy, and then break out your specific and actionable goals. You already know there are aspects of your life you want to change.

Decide you will do it and start today. Set a schedule to sit down and make a list of the areas of your life you want to improve on and go from there.

What do I need to get my life together?

The good news is you don’t need to purchase anything to get your life together, you only need to want to change your life. You may need a pen and paper to start and some free apps along the way, but nothing expensive.

As you work through determining what will truly make you happy, laying out your goals and taking intentional action, be open to possibilities and use the power of mindset to stay positive. Stay committed to your goals and ask for help when you need it.

Articles related to getting your life together

If you learned a lot from reading about how to get your life together, check out these posts next!

• Daily Habits To Improve Life: A Good Habits List To Work On Now!
• 12 Steps For Creating The Life You Love
• Starting A New Life Of Improving Your Finances
• How To Rebuild Your Life After A Financial Downturn

Getting your life together is possible!

Getting your life together feels impossible at times, but it doesn’t have to be. There are plenty of steps and self improvement ideas you can take to make small changes and bring you a bit closer to your dream life.

You may not be able to control everything in life, but this get your life together checklist will help you focus on the things you can control.

Take action today by enrolling in our completely free financial courses to work towards your new goals!

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With all the resources online, it can be easy to overlook financial literacy books. However, books allow you time to reflect as you read.

Because they’re long-form, books are a great way to dive into topics you care about. That said, you can use some of the best finance books to achieve financial wellness. Check out this list!

We have put together a great list of personal finance books to help you get the knowledge you need. Additionally, these books will help women take control of their financial situations.

Financial literacy basics

Before we talk about the best books to help you, let’s discuss what is financial literacy.

Financial literacy is essentially is knowing how to make smart money choices and decisions. The more you know about money, the more you’ll feel confident and stable in your financial situation.

The three basics to practice for financial literacy are earning, saving, and growing. Earning involves simple money management, such as budgeting and debt management. Once those foundations are established, you can focus on other aspects, such as saving an building an emergency fund. Once you’ve built good savings, you can focus on growing your money through investments. 

While these concepts may be simple, much effort is required to navigate the different areas of financial literacy successfully. Fortunately, our list of books can help you learn and master new skills regarding your money.

Why reading financial literacy books is helpful

A basic understanding of financial literacy will set you on the right track for financial stability. However, if your long-term goals are to be more secure with your money and gain financial freedom, then books are necessary.

Financial literacy books go into the details, give examples, and better explain financial literacy concepts. In addition to providing helpful information, many books offer real-life insights and guidance from finance professionals. Books can help you humanize, simplify, and apply the different concepts of financial literacy.

23 Top financial literacy books

That said, here are 23 of the best financial literacy books you should check out. Note: These financial literacy books are linked via affiliate links that help us grow Clever Girl Finance! Please see our disclosures for more information.

1. Clever Girl Finance: Ditch Debt, Save Money, and Build Real Wealth by Bola Sokunbi

Clever Girl Finance’s Founder, Bola Sokunbi, has spent her career helping women achieve financial independence. In Clever Girl Finance, Sokunbi focuses on the three personal finance pillars money-savvy women must master.

Bola is a self-made money expert and finance influencer who shares real-world examples from her own life.

In addition, she also shares proven financial wellness processes. They include how women can leave debt behind, start saving, and invest in ways that build wealth for the rest of their lives. These ideas make it one of the best financial literacy books you can read.

The book aims to teach and empower women. It helps them identify their needs, challenges, and relationships with money. There are also stories from other women’s journeys that make financial security feel accessible.

2. Get a Financial Life: Personal Finance in Your Twenties and Thirties by Beth Kobliner

Written by financial journalist Beth Kobliner, the Get A Financial Life financial literacy book is for millennials wanting to explore their financial prowess.

Today’s young adults are faced with managing their money through societal challenges. We’re in the age of student loan debt and a nationwide housing crisis.

So Get A Financial Life gives concrete, actionable tips. The book promotes healthy financial habits that will benefit readers now and in the future.

3. Real Money Answers for Every Woman: How to Win the Money Game With or Without a Man by Patrice C. Washington

Patrice C. Washington draws from her own experience with student debt and overspending. She shares how women can dig themselves out of bad money habits in Real Money Answers.

Using a Q & A format, Washington covers how to truly own your finances. Additionally, she covers building credit, buying a home, and negotiating higher pay.

Whether readers are new to money management or need a financial reset, Washington’s advice shows how freedom comes with financial security

4. Broke Millennial: Stop Scraping By and Get Your Financial Life Together by Erin Lowry

Broke Millennial shows that being young doesn’t mean you have to be broke. It’s among the best financial literacy books for women who want to become better with money.

Erin Lowry writes in a relatable style that encourages action in readers. In fact, her philosophy is “Get Your Financial Life Together” (#GYFLT).

So beyond the budgeting and debt repayment basics, Erin dives into the mindset and a practical approach. For instance, if you’re planning a life with a partner and controlling your money habits in social situations.

5. On My Own Two Feet: A Modern Girl’s Guide to Personal Finance by Manisha Thakor and Sharon Kedar

Co-authored by Harvard Business School graduates and investment experts Manisha Thakor and Sharon Kedar, On My Own Two Feet provides a roadmap for money management.

Thakor and Kedar guide their readers through all the personal finance basics, from spending and saving habits to big-purchase goals and safeguards. With the aim of relieving money stress, this book is packed with useful advice.

6. You Are a Badass at Making Money: Master the Mindset of Wealth by Jen Sincero

Motivational writer Jen Sincero dedicated this book to the internal work needed to earn and grow the money you deserve. Therefore, it’s useful for entrepreneurs, freelancers, and women wanting to negotiate their salaries.

You Are A Badass focuses on the psychology of money. It identifies and addresses the barriers to earning that you’ve created in your own head.

In addition to humor and moxie, each chapter uses personal anecdotes of transformation. And there are self-reflection exercises for you to reach your earning potential.

The book is for anyone with a financial scarcity money mindset who wants to feel abundant with their money.

7. The 21-Day Financial Fast: Your Path to Financial Peace and Freedom by Michelle Singletary

This financial literacy book by Michelle Singletary is perfect to read if you need a clearly defined game plan for finance.

The 21-Day Financial Fast takes you through a three-week spending hiatus (except for essentials). In addition, it gives you time to address bad spending habits. Also, the book helps you create a plan for paying down debt and prepare for future expenses.

Michelle recognizes that money can be a source of stress and limitations. Consequently, this 21-day “fast” promotes financial peace and freedom.

8. Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence by Vicki Robin and Joe Dominguez

Vicki Robin and her co-author, Joe Dominguez, have sold over one million copies of this book.

Your Money Or Your Life teaches you to have agency over how you feel about and deal with money. You’ll work through a nine-step program. Robin explains everything from mindfulness and decluttering to side hustles and money conversations.

The book focuses on intentionality in your spending and investing. In addition, it explains how to make your money work for you and the world around you. So, much of the book’s content ties into Robin’s background in the sustainable living movement.

9. The Feminist Financial Handbook: A Modern Woman’s Guide to a Wealthy Life by Brynne Conroy

The Feminist Financial Handbook uses a feminist lens to approach personal finance.

We live in a society controlled by whoever can pay. Brynne Conroy argues that women can create a more fair world by building their own wealth.

It draws from stories of women of varying races, sexual orientations, abilities, and financial situations. Conroy provides motivation and resources to achieve personal success.

10. Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required by Kristy Shen and Bryce Leung

Quit Like A Millionaire was written by married couple Kristy Shen and Bryce Leung. It’s absolutely on the list of the best financial literacy books for wealth building. Both authors are champions of the FIRE (Financial Independence, Retire Early) movement.

Basically, this unique approach advocates for retiring at any age. You do this by spending less and investing. Shen uses a numbers-driven system that readers can adapt to live life on their own terms and grow rich.

In addition, you can do this away from day jobs and standard retirement savings. Find financial freedom with the money lessons in this book.

11. We Should All Be Millionaires: A Woman’s Guide to Earning More, Building Wealth, and Gaining Economic Power by Rachel Rodgers

We Should All Be Millionaires offers a powerful perspective on becoming rich. Rachel Rodgers shares ideas for earning more money. In addition, you’ll find advice for shifting your mindset about wealth.

Overall, it’s a refreshing look at why and how to be successful as a woman today.

12. Clever Girl Finance: Learn How Investing Works, Grow Your Money by Bola Sokunbi

Bola Sokunbi’s second book goes beyond everyday money management. Instead of focusing on budgeting and saving, it demystifies the investment world.

Likewise, it’s just as approachable as her first book. Learn How Investing Works guides novice investors to take action toward long-term financial gain.

Sokunbi also gives examples of the difference between making money and building wealth. In addition, she includes pitfalls to avoid and knowledge to use to become a successful investor.

Even on a modest salary, readers should feel confident enough to grow a nest egg for the future after reading this book.

13. The Black Girl’s Guide to Financial Freedom: Build Wealth, Retire Early, and Live the Life of Your Dreams by Paris Woods

If you are tired of feeling broke, The Black Girl’s Guide to Financial Freedom will help you craft a plan to build wealth. Based on the author, Paris Woods’s personal experience, it outlines a simple path to creating financial freedom for yourself.

After years of working in education, Woods figured out her wealth-building blueprint without changing careers. As a result, she wrote a book to show you how to do the same.

Although the focus is on Black women, this book will resonate with women of all ages, especially young professionals just starting their careers.

14. Women with Money: The Judgement-Free Guide to Creating the Joyful, Less Stressed, Purposeful (and, Yes, Rich) Life You Deserve by Jean Chatzky

In Women With Money, readers are encouraged to use money to build a more relaxed life that aligns with their values. It includes an organized system that helps you think through how you view money. In addition, you’ll learn to use your money to make strides toward the things you want most in life.

It features incredible research and sound advice. Jean Chatzky reminds us what money is really about.

15. Get Good with Money: Ten Simple Steps to Becoming Financially Whole by Tiffany Aliche

If you want to live your best money life but need a system to help you, this book is for you. Tiffany Aliche explains in a 10-step plan how to assess, organize, and control your money. In addition, she shares her own money mistakes and recipes for success.

Get Good With Money advises those new to finance. You’ll learn all the basics and the best way to structure your money.

16. Rich Dad Poor Dad: Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki 

Author Robert T. Kiyosaki uses his book, Rich Dad, Poor Dad, to tell his life story about how he learned to manage money well and build wealth. Based on Kiyosaki’s experiences growing up with his real dad and his friend’s wealthy father, the book highlights different perspectives on acquiring wealth.

The book focuses on risk management, investing in assets, and the importance of learning. Since it was published 20 years ago, Rich Dad, Poor Dad has become the #1 book in personal finance.

17. The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley, Ph.D., and William D. Danko Ph.D

The Millionaire Next Door will help you re-evaluate your spending habits and look at wealth obtaining and retention in a new way. The books show how greed or the need to demonstrate wealth can lead to financial disparity.

Written by Thomas J. Stanley and William Danko, who help you to see the benefit of saving for the long run. While many people may think there are secrets to getting rich, The Millionaire Next Door shows you that being rich is more about managing your money well than having a lot of money.

18. Think and Grow Rich: The Landmark Bestseller Now Revised and Updated for the 21st Century By Napoleon Hill

Think and Grow Rich was published in 1937, and in its updated version, it shares the classic insights from the original version with newer information. Author Napoleon Hill spent 20 years interviewing wealthy and successful people and sharing their wisdom.

Still, one of the best finance books because it focuses on mindset, staying focused on your goals, and surrounding yourself with people who help you grow. The book isn’t as direct as other financial books but includes timeless lessons you can use throughout your life. 

19. I Will Teach You How to Be Rich by Ramit Sethi

Author Ramit Sethi teaches readers how to save money and have the freedom to spend money on desired things. This New York Times Bestseller will give you a realistic approach to saving money. 

Reading I Will Teach You How to Be Rich, will help you take responsibility for your current financial situation and confidently move forward. In addition, it’ll help you start investing with very little money. 

20. The Intelligent Investor Rev Ed.: The Definitive Book on Value Investing by Benjamin Graham and Jason Zweig 

Benjamin Graham is a wealthy and famous investor whose book will teach you how to invest and think like an investor. The Intelligent Investor focuses on essential aspects of investing, such as diversifying and knowing which stocks to invest in and which to avoid.

With the revised edition, you still get Graham’s advice but with commentary from journalist Jason Zweig on today’s market. The book benefits anyone looking to make investing a part of long-term financial plans. 

21. Money Out Loud: All the Financial Stuff No One Taught Us by Berna Anat

Author Berna Anat called herself the financial hype woman. In her relatable and practical book, Money Out Loud, she simplifies personal money management, making it less scary for the average person.

Anat breaks down how to successfully and efficiently create a budget. But what makes Anat’s book a page-turner is that she takes serious money topics and makes them fun. Her book also tackles significant issues, such as how the wealth system is designed to keep many people from reaching financial success.

It’s a book that will have you feeling inspired to use money in a way that can help make the world a better place.

22.  The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime by MJ DeMarco

In MJ DeMarco’s book, The Millionaire Fastlane, he challenges conventional ways of obtaining wealth. He criticizes the traditional methods of relying on the stock market, relying on your savings or 401K to be rich. Ironically, he calls most conventional forms of wealth building the slow lane. This book emphasizes that if you continue on those paths, it’ll take years to acquire the wealth you desire.

Instead, DeMarco”s book introduces valuable insights into the different and faster ways of obtaining wealth. He helps readers reach their financial goals faster without sacrificing their free time or giving up buying Starbucks every day.

23. Money: Master the Game 7 Simple Steps to Financial Freedom by Tony Robbins

In his book, Money Master The Game, Tony Robbins takes financial advice straight from millionaires and shares it with average people. Over ten years of research was put into this book, along with the wisdom and guidance from wealthy professionals such as Warren Buffet, Ray Dalio, and Jacke Bogle.

The book includes the original transcripts to get the full knowledge and experience. In addition, Money helps you to create practical goals around your finances.

Expert tip: Read books related to your financial situation

While there are many bestselling financial books to choose from, it’s crucial you select the book that is right for you.

Consider your financial situation and the goals you want to achieve. Ask yourself which book will help you reach the success you desire. Just because a book is popular doesn’t mean it’s the right book for you.

What books do I need to read for financial literacy?

The best financial literacy books are often bestsellers, such as ” I’ll Teach You How to Be Rich,” ” Rich Dad, Poor Dad,” and our very own “Clever Girl Finance” book series.

In addition, the best financial literacy books should focus on different aspects of budgeting, saving money, money management, and investing. It’s best to choose books with practical advice and relatable content.

Where do I start with financial literacy?

The first step is understanding what financial literacy actually is. Reading the definition of the term is a great start, but to really understand, it’s best to read articles or watch videos on the topic. Once you understand what financial literacy is, you can start expanding your knowledge and applying what you learn by reading financial literacy books.

By reading financial literacy books, you gain a better understanding of the concept and are able to incorporate different elements of financial literacy into your life.

What are the 5 pillars of financial literacy?

The five pillars of financial literacy include earn, spend, save, borrow, and protect. Earn involves understanding how you make and understanding your gross vs. net income. Spending focuses on how you spend your money and is tied to budgeting. Saving focuses on saving money, such as having an emergency fund, a retirement, or a sinking fund.

Borrowing money is expected. Often, you borrow money for student loans or with credit cards. However, with financial literacy, you are paying attention to how much you are borrowing and making sure you are making regular payments on what you owe. Financial literacy helps you to borrow money in a responsible and manageable way.

Lastly, there is protection, which means you protect the money you’ve earned. Protection can look like monitoring your accounts regularly or having some insurance for your investments.

What is the best book to read on finance?

Determining which is the best book to read on finance can be tricky. While bestsellers such as our very own “Clever Girl Finance: Ditch Debt, Save Money And Build Real Wealth” are a great option, or classics such as “Think and Grow Rich” are also helpful, the best book to read on finance depends on different factors.

Overall, the best book gives practical advice that can be applied to your situations and has insights from professionals. Usually, books that successful people highly recommend are some of the best books to read on finance.

Related articles on financial literacy

• 10 Lessons To Learn From Everyday Millionaires
• How To Get Rich From Nothing!
• Rich Mindset Vs Poor Mindset: How to Develop a Rich Mindset!
• How To Become A Millionaire (It’s Simpler Than You Think!)
• 7 Financial Literacy Basics We All Need To Know

Start reading these top financial literacy books today!

Money management is different for every person because everyone’s lifestyles are different. Whether you are in your 20s with some debt or married and have an investment portfolio, it’s up to you to make an effort to succeed.

Fortunately, reading some of the best finance books and careful planning will help you reach financial freedom and independence.

Knowledge is the first step to taking charge of your journey. As you work on achieving financial wellness, consider joining the Clever Girl Finance book club and free financial courses.

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Many of us are guilty of having a scarcity mindset when it comes to money, which holds us back from achieving financial abundance. You might believe that there isn’t enough money to go around or that you have to work extra hard for every penny you earn. But changing your mindset about money can improve your life in huge ways.

You might be constantly stressed out and worried about your finances. But what if you could change your money mindset? What if you could adopt a financial abundance mindset instead?

In this article, we will discuss why developing a mindset of financial abundance is important, the true meaning of financial abundance, and tips for how to achieve it!

Financial abundance meaning

For some people, the word “abundance” might bring to mind images of money overflowing from safes or lavish shopping sprees on luxury items. But true abundance is so much more than that.

It’s about having everything you need and then some. It’s about making life easier and living with plenty, without concern about money or where your next meal is coming from.

When you have more abundance, you’re able to pursue authentic living and be true to yourself. You can afford to do what you love, and you have the resources to help others in need as well.

You’re also able to enjoy life’s simple pleasures and not be burdened by financial stress or worry. Money is attracted to you as a result!

In addition, financial abundance is a state of mind characterized by thinking positively about money and believing that there is enough money for you as well as everyone else.

Now that we’ve covered the financial abundance meaning let’s dive into why developing this mindset is so important!

Why is adopting a financial abundance mindset so important?

If you realize that you currently have a negative mindset and it’s limiting your financial success and money goals, then it might be time to learn how to change your life.

Of course, changing your mindset isn’t something that could be done in a matter of seconds. But with a little bit of work, you’ll be surprised at the benefits it could bring into your life.

Here are some of the things that can happen when you begin to think in a more positive way:

Leads to less financial stress

It’s probably not too surprising to learn that money is a huge cause of stress for the majority of Americans.

Not having enough money is definitely stressful, but what if you could change the way you think about the situation? When you adopt a financial abundance mindset, you start to see money in a different light and begin changing your perception of finance.

You stop worrying about having “enough” and instead focus on creating wealth and abundance for yourself. Which can lead to less financial stress and more peace of mind overall.

Improves your morale and confidence level

Financial abundance isn’t just about having lots of money. It’s also about feeling confident and capable when making decisions around money matters, both big and small.

When you adopt an abundance mindset, you’re more likely to make decisions that could lead to increased earnings potential and high-income skills because you know that even if things don’t go as planned, you’ll be able to weather the storm.

Also, having a positive relationship with money can improve your morale and overall outlook on your financial life.

Allows you to dream big and trust the process

When you have a positive mindset around your finances, you’ll begin to believe that achieving money abundance in your life is 100% possible. Having this kind of confidence and belief in yourself will allow you to dream big, set goals, and work hard to achieve them.

Also, when you know that achieving financial success in life is inevitable for you, you won’t worry during the process. Instead, you trust that everything will unfold perfectly in the end.

Scarcity mindset vs. abundance mindset

So do you have a scarcity mindset or an abundance mindset? These two mindsets could not be more different.

With a scarcity mindset, you see the world as a place where there isn’t enough for everyone.

On the other hand, with an abundance mindset, you see the world as a place of unlimited resources, and you can start planning to succeed along with everyone else. To achieve financial abundance, it’s so important to shift from a scarcity mindset to an abundant one.

Here’s how you can recognize a scarcity vs abundant mindset:

Won’t share knowledge vs. shares knowledge freely

People with a scarcity mindset are often afraid that others will take what they have. And because of this fear, they tend to hoard information and knowledge to themselves to feel like they’re in control.

But people with an abundance mindset know that there is enough for everyone! So instead of hoarding knowledge, they share it freely without hesitation or concern.

Fears change vs. embraces change

In a scarcity mindset, someone might fear change because it means that something is going to be taken away from them.

On the other hand, in an abundance mindset, people embrace change because it means there will be more opportunities and financial success for everyone.

Thinks small vs. thinks big

In a scarcity mindset, people tend to think small. They focus on the problems they face and see little opportunity to overcome them.

And if you don’t believe in your own ability to create the life you want, you can limit your own potential by choosing not to follow your dreams.

In an abundance mindset, you look for solutions that are out of the box. You take risks and think big because you believe that anything is possible!

Focuses on costs vs. focuses on results

The scarcity mindset is all about focusing on costs and results in a zero-sum game where there are only so many resources and only so much can be accomplished.

The abundance mindset, on the other hand, is all about seeing the world as full of possibilities with no limits on what amazing outcomes and results can be achieved. The power of mindset can change so much!

8 Key tips to help you create a mindset of finance abundance

Many of us think that we’ll never have enough money, and so we live our whole lives in fear of the future. And because we don’t believe it’s possible to succeed financially, we never even dare to try.

But if you begin to develop a financial abundance mindset and start to understand the financial abundance meaning, you’ll start to see that there is actually enough money in the world for everyone.

You’ll also realize that not only can you avoid living a wasted life, but you are worthy of living an abundant life just as much as anyone else. Essentially, it’s a mindset of possibility and opportunity! (Be sure to check out our list of best books about money mindset!).

Here are 8 ideas to help you change your mindset about finances:

1. Eliminate your negative beliefs about money

If you want to achieve success in your finances, you need to eliminate your money blocks and negative beliefs about money. Start viewing money as a tool and something that can help you create the life you want.

When you change your mindset about money, you open yourself up to new possibilities and allow yourself to see all the wonderful things that money can do for you.

So, how do you go about changing your mindset? Start by recognizing your limiting beliefs about money.

Then challenge your negative beliefs. For example, ask yourself why you believe that money is the root of all evil or that money is only for greedy people.

What evidence do you have to support this belief? Is there another way of looking at it? Once you have challenged your negative beliefs, focus on the positive aspects of money.

For instance, what can money do for you? And how can it help you achieve your goals?

Here are some common negative beliefs about money that could be stopping you from achieving financial abundance:

• Rich people are greedy and corrupt.
• I’ll never be rich enough.
• It’s impossible to make money in today’s economy.
• You have to be born into wealth to succeed financially.
• Money can’t buy happiness.
• You need a lot of money to start investing.
• You can only make money through risky investments.
• It’s impossible to get ahead without working hard.
• Financial security is a myth.

Once you know what your negative money beliefs are, start to remove them from your mindset.

2. Stop comparing yourself to others

Comparing yourself to others can be mentally exhausting and often makes you feel miserable about yourself. And yet we do it all the time without even realizing that this bad habit is robbing us of our peace of mind.

Comparison can make us feel negative emotions such as envy, isolation, or a lack of confidence, which can force us into a mindset where only lack exists. The more we compare ourselves to others, the less room we have for original thought.

And without original thought, we can’t create freely. Financial abundance requires creativity, and so does anything else worth achieving in life. So never compare yourself to others and start taking inspired action instead.

3. Develop a growth mindset

Having a growth mindset means that you believe intelligence and abilities can be developed through dedication and hard work.

When you have this type of mindset, you will always be learning and expanding your horizons to search for opportunities to increase your wealth.

Also, a self growth plan and growth mindset are important to keep you motivated even in tough situations. Since you believe that you’re capable of achieving anything you set your mind to, you won’t give up as easily as those with a fixed mindset.

4. Recognize the power of your thoughts

The thoughts you entertain on a regular basis play a significant role in how successful you are financially. If you want to achieve abundance, you need to recognize the power of your thoughts and take steps to align them with your financial goals.

Your thoughts create your reality! Think about this.

If you tell yourself that you’re a failure every single day, would you be motivated or inspired to take action and change your life? Probably not. What you think influences the way you feel and the way you act.

So if you think about money problems all the time, that’s what you’ll experience. But if you focus on the positive aspects of wealth and abundance, you’ll find it easier to manifest those things in your life, especially if you use the best manifestation methods.

5. Use financial abundance affirmations

Financial abundance affirmations can help you achieve your financial goals by changing and eliminating your negative mindset about money. When you start to think positively about money and wealth, you will be more likely to take actions that lead to financial success.

So if you are having trouble maintaining a positive attitude about money, try repeating financial abundance affirmations every day.

For instance, instead of saying, “I am broke,” you would say, “I have an abundance of money!”

You might be surprised how your whole financial situation could transform just by shifting your mindset! Check out our post on 55 Financial Affirmations to get you started!

Here are some positive affirmations about money that you can use every day:

• I have all the money I need, and I will continue to increase my income.
• I’m great at managing money.
• I will be a millionaire one day.

6. Express gratitude

Gratitude is one of the keys to unlocking your full potential for wealth and happiness. When you’re grateful, it’s easier to stay positive and enjoy what you have now as opposed to focusing on what you don’t have.

When you wake up in the morning, take a few minutes to think about all of the abundance in your life and be thankful for it. Or try out the 30 days of gratitude challenge.

You can even write down a list of things you’re grateful for in the notes section of your phone or in your diary. Here’s what it could look like:

I’m thankful for:

• The fact that I have a roof over my head.
• All of my family and friends continue to love and support me each day.
• The money in my bank account that’ll help me buy groceries this month.
• My healthy body.
• The beautiful view from my balcony.
• The clothes on my body keep me warm each day.
• My comfortable bed.
• The fact that I’m still alive and breathing!

7. Realize your current financial situation is temporary

If you try to think about your current financial situation as temporary, you may be able to stay motivated and achieve financial abundance in the future. Why? Because once you see your present difficulties as transient instead of permanent, they won’t seem so daunting.

Then, maybe change isn’t so difficult or impossible after all. A shift in perspective could also help you find some peace with your current circumstances by reminding yourself that there is a light at the end of the tunnel and that you will get through this.

8. Give back to the community

When it comes to developing a financial abundance mindset, one of the most important things you can do is give back and find nice things to do for people. Giving back doesn’t just help others, it also helps you to develop a more positive attitude towards money and wealth.

It teaches you to be grateful for what you have and to think beyond yourself. When you’re focused on what’s important, it becomes easier to let go of negative thoughts and emotions that can block your ability to achieve financial or money abundance.

Expert tip: Surround yourself with people who think positively

If you really want to change your financial mindset for the better, then make it a point to spend time with people who will encourage you with your goals. Positive thinkers and people who are financially successful themselves can help you a lot!

Learn from them, ask questions, and talk about your ideas. You’ll feel more connected and it helps when others are cheering you on.

How do you get financial abundance?

In order to get financial abundance, it’s important to start with your mindset. You must believe that you will succeed and that you can become wealthy and achieve your goals.

But beyond mindset, it’s important to also make a plan and get to work. Whether that means working extra hours, looking for a new job, or learning about investing, making these changes and starting your financial planning process will help shift your perspective.

What does financial abundance feel like?

Financial abundance feels like having all you need and knowing that you’ll have the money and resources you need in the future. You also feel thankful for the many blessings you have. This drives contentment. (A daily gratitude list can help with this!)

It means that you feel a sense of peace about your finances, and you know that your goals are not only possible but will become your reality.

Is abundance the same as wealth?

No, abundance is not the same as wealth. Wealth means having a lot of resources and money. Abundance means you have what is needed and more, but it is more of a mental state that goes beyond just money.

While wealth can refer specifically to money, abundance is more focused on gratitude and understanding that whatever you need financially and in your life will be made available to you.

What is the mantra for financial abundance?

There isn’t only one mantra for financial abundance. Rather, there are many, and you can choose whichever ones resonate the most with you.

You might start off using some of our mentioned affirmations to help you get to the right money mindset. But you can also come up with your own that are specific to your goals.

For example, “I will make a six-figure salary in the next year” or “I have plenty of money for all of my financial needs.”

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Create a mindset of financial abundance!

Mindset is everything, especially when it comes to financial abundance. If you want to achieve success in any aspect of your life, you have to start off by believing that you can!

Once you see that it’s possible for you to have what you want in life, you’ll become motivated to bring that vision into your reality. This is why knowing how to make a vision board and saying financial abundance affirmations work so well for many of us.

So if you’re not currently seeing success in your financial life, it might be helpful to work on the way you think about money. By developing a financial abundance mindset, you can open up your heart and mind to new possibilities that’ll allow you to finally achieve your financial goals.

The post How To Create A Mindset Of Financial Abundance appeared first on Clever Girl Finance.

Women and investing is a topic that doesn’t get mentioned often enough, but it is extremely important. Women’s financial plans are unique, so their investing strategies should be, too. Find out more about women and investing, and discover ideas for creating your own investment plan.

Women investors are doing great financially, proving that women are equipped with the skills needed to be successful investors. More women are taking charge of their finances by creating a financial plan and working towards building wealth.

Women make fantastic investors, keep reading to learn why. Plus get five key tips for how women can invest smartly!

Why women investors are amazing

There are a lot of things that set women and investing apart. And women can have great success with investing because of the unique way they view finances. For example:

Women approach investing with a cautious mindset

Women sometimes approach investing with a different mindset than their male counterparts. They tend to be more careful when considering investments.

Although action is necessary for investing, this cautious approach can pay off and help women make great financial choices.

Another thing that makes women great investors is that they don’t spend too much time trading. The Motley Fool explains that men tend to trade a lot more frequently than women, and that this contributes to their investments not doing as well. Women, on the other hand, tend to trade less and have better results over time.

They make fewer emotionally driven investments

Another key differentiator between men and women in investing is emotion. It may be surprising, but men can be more emotional about making investments than women.

In a survey, Adam Hennick of Hennick Wealth Management found that men who make a higher income are more likely to buy stocks based on a gut feeling at 13.7%, whereas women are less likely to do this at 7.5%.

Making a hasty emotional decision when it comes to investing often leads to regret, and it’s better to take the time to research to be sure you have the best chance of financial success.

Women give their investments time to grow

According to an analysis by Fidelity, female investors are starting to invest when they are younger, for example, between ages 18 to 35, women are opening a brokerage account by age 21 on average.

The older generation tended to wait longer to open a brokerage. It was also found that millennial women are investing outside of their retirement more often than previous generations.

This is great news because investments that are made sooner have more time to grow, and more investing beyond retirement may also be beneficial. All of this can result in more wealth for women.

5 Tips for how women can invest smartly

Before choosing an investing platform, investment products, or financial assets, consider how you can be sure that you are investing smartly. These 5 ideas will help you achieve your goals.

1. Set financial goals

If you are going to invest your money, then you want it to grow. And you probably have a good reason!

For instance, you might be thinking of retirement savings, long-term goals like saving up for a house or saving for vacation, irregular expenses, or education costs.

When making investment decisions, setting financial goals can allow you to know how much money you need to set aside. So think about how much money you want to make over how many years.

To start, try to think of 1 or 2 big long-term goals and then maybe a short-term goal or two. Then consider how much money you need for each.

After that, determine how long the money needs to stay invested. Having all of these numbers in front of you and knowing your goals can make it much easier to start the investing process.

For example, you may want to save $1 million by the time you retire and suppose that’s in 30 years. Now that you have that larger number, you can break it down by how much you want to save each year and then each month.

2. Research

Rather than simply choosing the first investments that come along, it’s important to form an understanding of how your money will be invested.

According to the Motley Fool, you should understand investing metrics and both types of stock analysis when researching stocks, in addition to looking at trends and management when you research the stock companies, and researching other important information.

Above all, don’t make a decision about your money without first thinking it over and doing your due diligence.

3. Understand your risk tolerance

Not everyone is comfortable with the same amount of risk for their money. When it comes to women and investing, you need to know if you are more risk averse or if you prefer to take more risk in favor of a potentially higher return. 

If you are risk averse, you might prefer safer investing routes like CDs or high-interest savings accounts.

However, while it is important to try to minimize risk, know that just keeping your money in savings accounts is unlikely to help you become wealthy.

Find more information about investing and become comfortable with the idea. Then you may find that, while investing does have risks, it isn’t as scary as it seems.

On the other hand, if you are okay with a lot of risk, you may choose to invest in single stocks in hopes of a high return.

However, just because there could be a high return on something doesn’t mean there will be. Another option could be investing with index funds, which invest in multiple things like bonds and stocks. Mutual funds are another good option.

As you can see, there’s a lot to consider with risk tolerance. You also need to take into account things such as personality, your age, and how long you plan to keep the money invested. These things could make you more or less risk averse.

4. Have a strategy and diversify

Before you make your investment choices, be sure to have a plan and diversify your investments.

An investment strategy involves the values you use to determine the investments you make, which ultimately lead to you reaching your money goals. You’ll need to take into account some of the things that were mentioned above, like how risk averse you are and what you plan to do with your money.

Diversifying means you choose several different investments, so you don’t have all of your money invested in one type of asset, and then you are likely to see more consistent returns.

Considering your values and strategy, in addition to diversification, is important for your investment portfolio and your future. You might consider an all weather portfolio, which will help you diversify without being overly risky.

5. Seek professional guidance

Imagine jumping into a huge decision like a career change or a big move without asking for any advice first. You probably wouldn’t do that – so don’t invest without getting some guidance.

Reading and research is a good way to begin getting guidance. You might ask other people you know who are savvy investors to give their advice, as well.

Consulting financial professionals can also be a smart choice, but be careful of fees. They may not be worth it in some cases.

The main point is that you don’t want to begin investing without knowing what you are doing to some extent. Although you don’t need a degree in finance to get started, understanding basic information and getting your questions answered is important.

Expert tip: Don’t rush the investing process

Whether you think that investing is difficult or you feel like you understand it pretty well, it pays to take the time to learn more.

Rather than jumping into new investments or opening accounts, first research, read for informational purposes, learn investment terms, and talk to others to get investment advice.

Don’t wait too long, but taking a few weeks or months to find out more about the basics and be sure of your investment choices is well worth it.

Why are women investors important?

Women investors EW important for their own futures and others. Not only are many women the female breadwinner for their families, but they have big financial goals and dreams to accomplish!

Women need to be great investors for their own futures and their families and to create greater awareness for others about what women are capable of with money.

And since women are not as confident in their investment knowledge, according to Morning Star, it’s vital that women learn all they can about finance and investing. Not only will this help their own futures but also the generations of women who will invest in the future.

If women today can make a huge impact, then they will likely increase confidence for other women about women’s wealth and what they can do financially.

How do women invest differently than men?

Not only are women more likely to be careful investors and make fewer changes to their investments, but they also care about investing in things that benefit other women.

For example, women investors more often invest with women entrepreneurs than men do. Women care about helping other women to succeed, and they’re willing to use their money to make this happen. Which can help to create a better financial environment for all women in the future.

Who are some popular women investors?

Some popular women investors include Barbara Corcoran, Mellody Hobson, and Melinda Gates.

Barbara Corcoran has a net worth of approximately $100 million, and she made a large portion of her money from her real estate company, as well as her investments with Shark Tank.

Mellody Hobson is the co-CEO of Ariel Investments, of which she owns 40%, in addition to owning a large portion of J.P. Morgan Chase and Starbucks shares. Ariel Investments manages over $17 billion in assets.

Melinda French Gates’ net worth is around $10.1 billion, and she received $2.4 billion worth of stock after her divorce from Bill Gates. She is also co-chair of the Bill and Melinda Gates Foundation.

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There’s a bright financial future for women and investing!

The one thing women investors can improve on is their investing confidence! It’s apparent that women are amazing investors and can be very successful in reaching their financial goals. Women’s ability to invest wisely sets them up for a secure financial future.

You can be an amazing investor, too! It’s all about educating yourself and getting the right financial advice to get you on track towards your money goals.

Are you ready to become a successful woman investor? Increase your financial literacy by enrolling in our FREE investing course bundle to learn how to grow your money and achieve financial success!

The post Women And Investing: 5 Key Tips For Women Investors appeared first on Clever Girl Finance.

Are you looking for tips on how to declutter paperwork? You are in the right place! Individually, paper doesn’t take up a lot of space, but once you start accumulating more and more of it, it can begin to feel overwhelming.

Do you waste time searching through paper piles and old bills? Sorting paper, looking for that one document you need? If so, it’s probably time to declutter your paperwork and clear out your space.

Read on for our best strategies on how to declutter paperwork. This will help you eliminate the stress and overwhelm covering your kitchen table, filing cabinets, desks, and whatever other spaces in your home have turned into paper clutter zones.

What causes paper clutter?

Paper clutter is often caused by junk mail and paper statements, papers from your kids, school forms, pay stubs, recipes, paper coupons, or sentimental paper items. For example, if I sign up for paper mailing from my bank, then I’ll get a paper statement every month and end up with a pile of old bank statements.

In some cases it can be caused by feeling like you may need the information later on, only to add it to a pile that you promise to sort through later. But chances are when you think of sorting paper, you get overwhelmed and it continues to pile up.

Why is it important to declutter paperwork?

Decluttering your life has so many proven benefits. These benefits hold true for decluttering paperwork, too. The main benefit of sorting paper and documents is to your overall mental health and well-being and for your family’s benefit, in the case of an emergency.

Decluttering papers minimizes stress and improves your mental health

Not only does decluttering clear your mind, reduce stress, and improve focus, but it also gives you back your time.

How many instances have you wasted endless amounts of time searching for the one bill you were supposed to pay? Or your kid’s field trip permission slip? Or that wedding invitation you need to RSVP to?

Once you declutter and develop a system for maintaining a clutter-free state, you won’t have to worry about those stressful, time-wasting searches anymore. Your space and mind will be clear to focus on what’s actually important, not on looking for lost slips of paper.

Decluttering papers keeps your organized for your loved ones

While nobody likes to think of it, there may come a time when your loved ones will need to access your records on your behalf. People who are incapacitated or have passed away still have bills to pay and important documents in their names.

By decluttering papers, particularly your financial documents, you will make it so much easier for others to help you.

Just like how purchasing life insurance helps you put the right plans in place for your family, decluttering your paperwork can bring the same peace of mind.

Sorting your papers can put you at ease and help your loved ones deal with your important documents in the event of an emergency.

How to declutter paperwork and stay clutter-free in 7 steps

It’s time to begin learning how to declutter paperwork. We’re not talking about decluttering a stray paper here or there; we’re talking about getting rid of a lot! When you’re ready to get to work, here are the six steps to take to declutter paper:

1. Create a plan and make time to declutter paperwork

It might be tempting to declare that you are fed up with your paper mess once and for all and immediately start tossing paper.

That might get rid of the surface-level stuff, but it’s not a good long-term solution to decluttering papers. Instead, prepare before you begin the process. Preparation looks like this:

Gathering any tools you need

We recommend getting a paper shredder for sensitive documents like old bank statements and three cardboard boxes or file folders to separate your papers in (more on that next).

If you don’t want to buy a paper shredder, look into where you can take your sensitive documents, like a FedEx or local store that will shred them for you.

Setting aside the time in your schedule to go through everything

Sorting paper is best done in one fell swoop if your schedule allows. You might need an entire afternoon (or more), so intentionally choose a day where you can devote enough time to decluttering, so you don’t start and fail to finish.

 Get in the right mindset

Often overlooked, the right mindset is crucial for success when decluttering papers. You might think of paperwork as just old bills, but it’s so much more than that. Papers can be sentimental, too, and some of those things can be hard to let go of, such as old family recipes.

That’s why it’s essential to get in the right mindset to declutter before you begin. Prepare yourself for discarding things and letting go of the past.

A great way to start this is to get clear on your end goal. Perhaps it’s to have a calm workspace or more control and understanding of your finances.

Whatever it is for you, understand your underlying goals for decluttering and remind yourself of those goals while you’re going through the process. It will be so much easier to stay motivated and let go of what you no longer need if you have those goals top of mind.

And, remember, as the decluttering guru Marie Kondo writes, the goal when decluttering papers is to get rid of almost all of your paperwork.

While you will keep some paper, the default expectation should be that you will get rid of the majority of your paperwork when decluttering.

Going into the task with the expectation that you will discard almost everything is key to following through and keeping only what is truly necessary.

2. Gather all of your papers in one place

Now, you’re ready to sort some papers! First, gather every piece of paper you have. That means bills, receipts, cards, letters, artwork, loose sheets of paper, post-it notes, and anything else lying around.

Go through your junk drawer (you know you have at least one!) and your office and dig up every last bit of paper in your home. You’ll probably be surprised by just how much paper you have hiding around.

Once you’ve gathered everything up, spread out your paperwork on a large surface like a dining room table or even the floor if that’s the best space for you.

3. Sort your papers

Next, it’s time for the most time-consuming piece of the process: sorting paper. To declutter paper the right way, grab your three boxes or file folders and label them recycle, shred, and keep.

Recycle

Everything that’s trash, like expired coupons, recipes, paper coupons, school forms, and letters you’ve read and are ready to toss, goes into the recycle bin. If it’s not essential, you aren’t using it, and you don’t need it, then get rid of it. You can also create digital copies for items that you may need in the future or that you’d like to hold onto for sentimental reasons.

Shred

Anything with sensitive personal information, like your name, address, social security number, or account numbers, goes into the shred pile. That might include old bank statements, some school forms, and pay stubs. You’ll shred everything at the end, or will take that bin to a store to have it shredded for you.

Keep

Whatever you plan to save gets placed in the keep bin. If you’re doing it right, you won’t have that much to keep! And, you’ll have even less after you complete the next step of going digital.

Be sure to create a simple storage system where you can easily access these document. Also having an at-home safe is a good idea. (Note: This is an affiliate link, which means if you buy from it, we may earn a small commission which helps us grow! See our disclosures for more detail).

4. Declutter paperwork by going digital and paperless where possible

Once you have sorted your paperwork and have decided what to keep, determine what you need an original of and what you can digitalize. Anything you’d like to keep a copy of but don’t need the original of, you can scan and toss.

If you don’t own a scanner, head to a local copy store or FedEx and you can do it there. Once everything is scanned, be sure to label it properly so you can find it when needed and back up the files.

Going forward, there are many ways to limit the amount of paper that comes into your space. For one, you can sign up to receive electronic bills and can pay them online, instead of receiving and sending them in the mail.

This will greatly reduce the amount of paper that comes into your house, and the amount of paper you need to digitalize!

5. Choose and implement a storage strategy

Lastly, decide on a storage strategy for the papers you intend to keep. How you do this depends on what type of paperwork you have.

For example, some people have extensive medical files and need to keep their records easily accessible to take them to and from appointments. For them, it would be a good idea to create a medical binder to keep track of everything.

Most people have some important financial records that they would like to keep. If you are one of them, you might want to look into a filing cabinet with labeled file folders to store all of your essential financial paperwork, including things like wills, tax returns, and marriage or birth certificates.

Whatever works for you, save figuring it out for the end. Just don’t forget about it, or your recently decluttered paperwork might become a mess once again before you know it!

6. Choose a space for incoming paper

In my home, the biggest paper clutter culprit is mail. From catalogs to magazines to bills and everything in between, the paper can pile up in a matter of days. A simple solution I decided on was to choose a landing spot to drop off the mail and other odds and ends.

I find that if I keep this kind of paper clutter limited to one specific spot, I’m more likely to notice when it’s starting to pile up, and more likely to sort through it before it builds up.

7. Take care of paperwork immediately

Still getting paper bills? Instead of opening them, throwing them into a drawer, and forgetting about them, take care of them right away. When your child arrives home after school with new artwork?

Decide right then and there whether you want to place it on the fridge for display, scan it for posterity, or get rid of it (maybe after they go to bed!).

When you address your paperwork right when it enters your home, it’s less likely to build up and become a problem. Make sure to unsubscribe from services you don’t use, like magazines and catalogs and instead opt for digital copies.

Expert tip

When decluttering paperwork, only keep the documents you are absolutely need to use on a regular basis or that give you joy. If you’t use it, get rid of it. Leverage the “recycle”, “shred”, “keep” approach to help you as you go through your paperwork.

Questions to ask yourself while sorting paperwork

So, you’ve read the six steps outlining how to declutter paperwork and you’re ready to get to it. If you’ve ever tried decluttering before and stopped, it’s probably been because you hit a roadblock.

The most common problems people face while decluttering papers are the inability to decide whether to keep or toss something and having trouble getting rid of sentimental items. What’s a declutterer to do when they reach such an impasse?

The best way to move forward when you’re stuck is to ask yourself the following questions:

1. Will I need this information again?

Keep the paper in question only if your answer is a firm yes. If it’s a maybe and you still don’t want to get rid of it, scan it and then toss it.

2. Will I be able to get this information again if I get rid of it now?

If you can access the information again, either by reaching out to someone, pulling your records online or by any other manner, let it go. Chances are you won’t need it again, but if you do, you know you can get it.

3. Is this information still valuable to me?

This question helps the most when dealing with things like manuals or guides. Do you really need to keep outdated training materials from an old job? Probably not.

4. Do I have other similar things?

This is the best question to ask when sorting through sentimental items. Perhaps instead of keeping every picture your kid drew in third grade, choose your favorite and discard the others.

When you’re decluttering papers, what should you keep?

Before you start decluttering, it’s good to have an understanding of what documents to keep, what to shred, and what to recycle. Here are some guidelines you can follow:

What to toss vs. shred

You can safely toss anything that doesn’t include any personal information. Things like scrap paper, junk mail, catalogs, old receipts, product manuals that you can find online, and expired coupons can go right into the recycling bin. You should shred anything that has sensitive information.

What to shred vs. keep

So you’ve decided something is sensitive enough that you can’t just throw it away. How do you decide whether to shred something or keep it?

When it comes to deciding what to keep, probably the most important category of documents is your financial documents. Some documents, like a record of your paid-off mortgage, should be kept forever.

Others, like tax returns, should be kept for at least seven years. A good rule is that you should keep the record if the contract or matter is active. Otherwise, use your best judgment when deciding whether to shred it or save it.

How do you clean up years of paper clutter?

If you want to clean up years of paper clutter, be sure create time in your schedule. Then you can start by first organizing your paper by what to recycle, what to shred and what to keep. Make a pile of the paperwork you need to take action on, then another for paperwork you need to keep, another to shred, and a final pile to recycle. In general you should keep certain documents, like your tax returns, up to seven years, whether in paper or digital form.

How do I stop hoarding paperwork?

The best way for me to stop hoarding paperwork was to switch to paperless billing, statements, receipts and notices. Most places allow online bill pay and paperless statements.

Be sure to opt for digital receipts and statements to prevent the paperwork from piling up and prevent you from sorting paper later on.

What is the fastest way to declutter paperwork?

The fastest way to declutter paperwork is to throw out everything you don’t need. Only keep the most essential documents, like birth certificates and social security cards. Make sure to shred and recycle the rest. You can also scan documents that you may need in the future and keep them backed up on the cloud.

How can I store sentimental papers?

We recommend storing sentimental papers in a nice keepsake box or album or even make a scrapbook. Try storing them in a place that brings you joy, such as a coffee table or bookshelf where you can go through them often, rather than letting them collect dust.

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Now you know how to declutter paperwork. It’s your turn to get to work!

The bulk of decluttering paperwork can be done in a day. Once you’ve taken these steps to declutter, you’ll have a clearer space and mind.

You’ll probably never go back to a life full of paper clutter again! But, if you do, know that you can always take another day, address the chaos once again, and start over fresh.

As you learn how to declutter paperwork, also take the opportunity to find out more about how to simplify your finances and your home. We offer plenty of great articles to help you get organized with your money and your life.

The post 7 Steps To Declutter Paperwork Including Financial Documents appeared first on Clever Girl Finance.

Not all bank accounts are set up with your best interests in mind. Your current bank account might come with high monthly fees, present no interest-earning opportunities, or have a clumsy interface that makes it difficult to manage your funds. All of these are perfectly valid reasons why you might want to know how to close a bank account.

If you’ve decided to part ways with your current bank, closing down your account is an essential part of the process. With that in mind, we will explore how to close a bank account today. 

How to close a bank account

Closing a bank account should be a simple process. After all, it’s easy enough to open a bank account. Why shouldn’t it be easy to close it?

Speaking from personal experience, shutting down a bank account isn’t a simple one-click process. Instead, it takes several steps to close an account properly. 

If you are closing an account, below is a step-by-step guide to follow through the process. 

1. Transfer your funds to another bank account

The first step of the process is to move your funds over to another bank account. For some, this means moving your funds into an existing account in an effort to consolidate your financial life.

But for others, this means opening an entirely new bank account. This depends on your answer to the question, “How many bank accounts should I have?”

If selecting an entirely new bank account, take some time to find the right fit for your situation. You don’t want to get stuck switching bank accounts again anytime soon. A few things to look for include any account fees, minimum balance requirements, and also accessibility. 

When you have the new bank account set up, you can transfer your funds from the existing account into this new account. 

2. Move all recurring payments to a new bank account

Once all of your funds are transferred, it’s time to let everyone who sends you money know about the change. If you have any automated payments coming to your bank account, make sure the person paying you has your new bank account information. 

For example, you might need to change your recurring payment information from your investment account or if you get money from any unique side hustles. 

3. Update your direct deposit information

When finding out how to close a bank account, you still need to make sure you can get paid as usual.

If you are paid for the work you do by direct deposit, it’s critical to let your employer know about your new bank account. Usually, this part of the process is as simple as filling out a new form with your company’s Human Resources department. 

Other sources of directly deposited funds, like government benefits, will also need to know about this new bank account. If you aren’t sure who should get this information, comb through your bank statements to find out who deposits money into your account automatically. 

4. Update your direct debit information for any automated bills

You might be someone who has decided to automate your finances. If you take advantage of automatic payments for any of your bills, you’ll need to update the payment information with your new bank account. 

Start by making a list of all of your automatic payments. Then work through the list methodically to avoid missing a bill provider. 

Some common recurring payments to consider include mortgage payments, rent payments, student loan payments, credit card payments, streaming services, utility bills, insurance payments, and also car payments. 

5. Wait a full month

It’s easy to miss an automatic payment. Instead of moving forward with your account closure immediately, wait a full month to confirm that nothing has slipped through the cracks. 

During this month, monitor your original bank account for any transactions. If you forgot about a particular recurring payment, you’ll have the chance to update it. Also, make sure your paycheck hits the right account. 

Once all pending payments have cleared your account, you can move forward with closing your account confidently. 

6. File paperwork to close the account

Most banks require you to fill out a form in writing to close your account. Not only will you need to submit the written form, but you’ll likely need to sign the document.

In some cases, your bank will require you to sign the document in front of a notary. 

While some banks may allow you to close your account entirely online, others require you to make a visit to your local branch. 

7. Get a confirmation

When you submit the paperwork to close your bank account, ask a bank representative for a written document that confirms the account closure.

If the bank account pops up on your radar in the future, you’ll have proof that the account was closed with your permission. 

Expert tip

When it comes to closing a bank account, be prepared for stalling tactics. I went through the painful process of closing an account at a major bank. It wasn’t a smooth process. Although the bank tried to stall at every turn, I eventually got the account closed. 

As you navigate the process, be confident in your decision. Don’t let the bank try to sway you into staying. After all, there is a reason you are making this switch. 

Can you close a bank account online?

Some banks and financial institutions will allow you to close your bank account online. It might be as simple as submitting a form through your bank’s online platform. 

But other banks, specifically large institutions with a brick-and-mortar presence, are likely to require an in-person component to closing your account. 

Do you have to pay a fee for closing a bank account?

If you close your account within 90 days, you might encounter an early account closure fee. But in general, you shouldn’t expect to pay a fee for closing your bank account. 

If you are encountering a fee to close your bank account, it’s further proof that it’s time to part ways with your bank. Working with a bank that nickels and dimes you at every turn usually isn’t a good move for your financial situation. 

What to do before closing your account?

If you’ve decided to close your bank account, evaluate why you want to make a switch. Simplifying your finances is a very valid reason. But if you only have one bank account, ask yourself why you don’t like the one you currently have.

Maybe you don’t like the high fee structure. Or perhaps you want to tap into higher APYS. Whatever your reason, look for a bank that presents a solution in your new bank account. 

Is there a negative to closing a bank account?

The process of closing your account might not be enjoyable. But the end result is usually very positive.

You’ll walk away from a potentially fee-riddled account. And you’ll hopefully step into a new bank account that offers you more bang for your buck. 

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Understanding how to close a bank account can help you with your money!

It’s possible to close your bank account in a few simple steps. Tackle each step with patience to move through the process with the best results.

While it’s not a process you can complete in one click, it’s still worth pursuing if you want to switch up your banking situation. As you move forward, carefully research your other banking options.

When you find a bank account that suits your needs, initiate the closing process on your current account. Doing this will help you to experience greater financial wellness and also keep your financial house in order.

The post How To Close A Bank Account The Right Way In 7 Steps appeared first on Clever Girl Finance.

When we think of someone being rich vs wealthy, we might think it’s the same thing but it’s not. For some reason, the words rich and wealthy are often incorrectly used to describe the same thing.

The two words might seem like synonyms, but they are completely different. It’s hard to spot the difference, but being rich and being wealthy are not equal. So, let’s dig into the difference between rich and wealthy.

What does it mean to be rich?

Being rich means having a lot of money or a high income. It comes down to how much cash you have in your bank account. But just because you’re rich, doesn’t mean you are wealthy.

In fact, being rich can often mean that you are spending a lot of money. It can also mean that you have a lot of debt e.g. high-interest credit cards, car payments, personal loans, etc,

It doesn’t matter how much money you have if your expenses are higher than your income. Being in debt is definitely not something to aspire to!

People who are rich might drive a fancy car, live in an amazing house in the best part of town, or have a high-paying job, but it comes at a cost. If you make $200,000 a year but spend $225,000 a year in expenses, you might seem rich because of your high salary, but you’re on your way to going broke.

As a matter of fact, plenty of celebrities have gone broke, some because of their rich lifestyles which lacked sustainability.

What does it mean to be wealthy?

When it comes to being rich vs wealthy, being wealthy means not only having enough money to meet your needs but being able to afford not to work if you don’t want to. It’s about amassing assets and making your money work for you. In other words, it’s having a significant net worth.

Wealthy people don’t necessarily own the latest gadgets or cars or throw lavish parties. What they do have, is a lot of assets, such as real estate, investments, cash, and financial stability. They think about building wealth, not owning more possessions.

For example, if your monthly expenses are $5,000 per month, and you have $30,000 in savings, then you have about six months’ worth of wealth. If you invest that $30,000 and you end up with $5,000 a month in investment revenue, you are wealthy.

And when asking “What is the difference between rich and wealthy”, wealthy people have money habits that are something to consider. For example, wealthy people choose to be cautious about expenses and plan out their finances.

The most wealthy people in America are often business owners. Elon Musk, Jeff Bezos, Bill Gates, and Warren Buffett are all worth multi-billions. (Fun fact: Buffett is considered a frugal billionaire!).

Despite his massive wealth, he still lives in the Nebraska home he bought in 1958 for $31,500 and didn’t switch his $20 flip phone for an iPhone until 2020.

What is the difference between rich and wealthy?

So, what is the difference between being rich and being wealthy? Well, there is a bit more to being rich vs wealthy than how much money you have in your bank account.

1. Net worth

It’s possible for someone who makes less than a rich person to actually be wealthier than a rich person with a fancy car and the latest fashion designs. The best measure of a person’s wealth is their assets and debt.

In general, a wealthy person will have a large net worth. A rich person might have a high income but if they have a lot of debt, their overall net worth will be low or even negative.

2. Expenses

Rich people tend to spend a lot of money, but wealthy individuals save and invest most of their money. Wealthy people might have a lot of money, but they don’t spend it all in one go.

And they certainly don’t use debt unless it’s for a very clear purpose, such as an investment in a house.

3. Investment

Rich people don’t necessarily adjust their lifestyle to ensure future wealth. They might buy the latest gadgets or increase their lifestyle inflation instead of investing.

A wealthy person saves as much money as possible and invests it in assets. That might mean buying real estate or investing in the stock market. Regardless of how they invest, wealthy people know that in order to grow their wealth, they need to turn their cash into assets and create a high net worth. They focus on making this a sustainable lifestyle.

Expert tip

The quickest way to become wealthy is to pay off your debt. That’s because debt can eat into your disposable income, making it harder for you to save and invest.

Prioritizing your debt repayment by paying more than the minimum and finding ways to earn more to pay off additional debt is key. Don’t forget to put aside emergency savings while you do this.

How to become wealthy

Now you know the difference between rich vs wealthy. So, if you want to become wealthy, there are a few things you can do to get started. Don’t just focus on how big your paycheck is.

You also want to avoid schemes that sell you ideas to get rich quickly. Instead, follow these steps to eliminate debt and have the right mindset when it comes to amassing wealth.

Keep track of your net worth

Your net worth is what determines your wealth. If you want to become wealthy then you should keep track of your net worth. The higher your net worth, the more wealth you have.

You can track your net worth using a net worth calculator or by deducting your liabilities from your assets. In other words, the things you own minus the debt you owe. If you have a lot of debt, try to pay it off to increase your net worth score.

Save 10 to 15% of your paycheck every month

The first step to becoming wealthy is to save a portion of your paycheck every month, no matter how much or how little you make. Always set aside at least 10% to 15% every month.

You can set up your bank account so that a portion of your paycheck is deposited directly into your savings. It’s an easy way to save without even needing to think about it.

If you struggle with saving, try a savings challenge, or look at your budget and find out where you can eliminate expenses.

Pay off debt, starting with high-interest debt

So another of the key differences between being rich and wealthy is being debt-free. If you want to be wealthy, you need to be debt-free in order to have financial freedom. Focus on paying off your debt, starting with high-interest loans such as credit card debt.

Find out if it makes sense to refinance your student loans or mortgage for a better interest rate. You can also look into things like student debt forgiveness. Make becoming debt-free your number one priority!

Invest as soon and as much as you can

One of the quickest ways to grow your wealth is to invest it. Of course, investing comes with its own risks, but there are plenty of options available.

You can use an automated service like a Robo-advisor, get investment advice from a broker, or invest in things other than the stock market, like physical assets.

No matter what you do, do something, even if you start investing a small amount of money! You can even put your money in a high-yield savings account to accrue interest until you’re ready to invest it.

Make your money work for you. Remember investing is one of the main differences between being rich vs wealthy.

Don’t splurge on unnecessary expenses

The key to growing wealth is being frugal and living within your means. In fact, you should live far below your means so that you can invest your extra income and savings. Your spending habits are a huge part of a wealth mindset.

That means resisting the urge to buy those designer jeans or buying the latest iPhone model when an older model will work just as well. Be smart about what you spend your money on and only buy the things that you not only need, but that will also last in value.

Think about your long-term financial goals and assets

What is another difference between being rich and being wealthy? Long-term goals and assets. Growing wealth is a long-term commitment. It’s not something that happens overnight.

It could take you years to build up your wealth and that’s okay. When things get tough, remember your long-term goals and why you chose to try to become wealthy in the first place.

Long-term wealth requires really thinking through how your purchases and investments today will affect you in the future. That means that the difference between being rich and being wealthy is that wealthy people spend time growing their income streams and investment portfolio and building up passive income, in order to make their future the best it can be.

Build passive income streams

Another way to build up your wealth is to build passive income streams. Passive income is money you receive without having to go to a day job. For example, dividends from your investments, or rental income from real estate.

Wealthy people often do not have to work traditional jobs because they make income in other ways. With passive income, you can earn money no matter where you are, even if you’re out on the beach.

Is wealthy considered rich?

Being wealthy and being rich are two different things. Being wealthy means being financially independent and having a large net worth. When you’re rich, you have a high income but you could also have a lot of debt so it doesn’t necessarily mean you are also wealthy.

How much money is wealthy?

There’s no set dollar amount that defines someone as wealthy, as wealth is determined by how high your net worth is.

However, according to a wealth survey by Charles Schwab, most Americans consider being wealthy as having a net worth of at least $2.2 million, but most people who say they feel wealthy have a net worth of $560,000.

Can a person be rich and wealthy?

The answer is yes. You can be rich and wealthy, although the two terms are slightly different. If someone has a high income, then they are often considered rich. If that person also has other revenue streams and a lot of high-value assets, then they would also be considered wealthy.

Related articles on becoming wealthy

Enjoy this article on the meaning of rich vs wealthy? Check out this related content!

• How To Get Rich From Nothing!
• Rich Mindset Vs Poor Mindset: How to Develop a Rich Mindset!
• How to Track Net Worth Using a Net Worth Calculator
• 9 Key Tips To Live Richer In Life

Wealth is a mindset: Improve yours starting today!

So, what is the difference between rich and wealthy? When it comes to rich vs wealthy, being wealthy doesn’t start with a huge wallet full of cash.

Wealth starts with the right money mindset. Save a portion of your income, focus on becoming debt-free, and invest early and often.

If you want to be wealthy, you need to always think about your long-term goals.

Do you want to retire early? Own a few houses? Travel?

When thinking about wealth, don’t just focus on your income, but focus on building up your investments and assets to last you a few lifetimes. Your financial plan is key to wealth building.

The post Rich VS Wealthy: 3 Key Differences Between The Two appeared first on Clever Girl Finance.

How many times have you heard that hard work is the key to success? Probably a lot, and it’s true! Hard work is key to success, and it’s for a variety of different reasons.

But before we dive into our reasons why being hardworking is the key to success, let’s talk about why it matters!

Why does working hard even matter?

Well, simply said, hard work leads to success. I’m living proof of that.

Several years ago, I knew I needed to make a change that would require me to work harder than I had ever before. I wanted to move back into management in the nonprofit sector.

One of the issues I was coming across in my career change was not having a bachelor’s degree. I had an associate’s, which was great for where I was but not the next step.

For the next two years, I dedicated myself to getting my bachelor’s while continuing to work full time. It was HARD. I worked from 7 am to 4 pm as a teacher then went to class every weeknight from 6 pm to 9 pm.

I did my homework when I could during breaks and I leveraged time blocks. On Saturdays, I would write an essay instead of hanging out with friends. And on Sundays, I spent the whole day catching up on sleep and prepping for the week ahead.

During those two years, people knew me as a hard worker. I had to be in order to be committed and dedicated for two years!

As a result of my reputation, several job offers found their way to me post-graduation. Because of this experience and others, I believe that hard work is key to success.

5 Reasons why being hardworking is the key to success!

I already shared my story with you and now I’m going to share why hard work is the key to success and how it can pay off in your own life.

Not only will hard work get you appreciation from others and more opportunities, but there is also a lot of personal growth that results from it. Here are the reasons why you should work hard!

1. Hard work motivates and rewards you

Being a hard worker is rewarding. When we work hard, we can see our success and achievements. And the whole process of hard work can be a reward in itself that can help you become a better person and keep you moving in the right direction.

Success isn’t everything, but seeing how far you’ve come is motivating. Especially with big projects such as going back to school or working hard to snag a promotion at work.

2. Hard work shows you are dependable

Another reason why being hardworking is the key to success is because it shows you are dependable. When you’re someone people can count on, people will keep you in mind. After all, why not?

People will start to talk when you’re known for working hard in your field. At the workplace, people might start asking you to be on their team or want your help to oversee any projects they may need assistance with.

If you own your own business, your products, and/or services could become the first choice for your customers because of your dependability.

People want someone who’s going to get things done on their side, and based on your hard work, they’ll know who to call. People wanting to work with you is an excellent example of how hard work leads to success!

3. Hard work shows commitment

For myself, when I decide on a path for myself and work hard to get there, I’m committed to that goal. This means I might have to say no to anything that comes up that does not align with my purpose or path.

Saying no to things that don’t serve you and staying focused while working hard shows commitment. Your commitment is what is going to help you succeed in the workplace and/or in business.

Choosing to be dedicated to your work can have both financial and career benefits, so it is worth it.

4. It helps you develop self-discipline

Hard work means that you are able to develop your self-discipline over time. Procrastination can set you up for failure when trying to achieve the simplest tasks.

Giving in to distractions can lead to idleness, but the opposite is true, also. When you are focused on being a good worker self-discipline will follow. It’s another reason why hard work is key to success!

And in addition to discipline, you can gain other good qualities such as patience and persistence. The character quality of self-discipline can also be useful for sticking to your financial and personal goals.

Be sure to check out our list of best books on self-discipline!

5. The harder you work, the quicker you get ahead

You already know by now that hard work pays off. The harder you work, the faster you get the results you want. But working hard doesn’t always mean that you’ll be able to get everything you want on the first or even second try.

You have to be patient and trust that hard work leads to success. What you put in now will get you ahead later.

Expert tip

Hard work matters but it’s also important to work smart! I’m a big fan of working smart, because that way I’m not wasting time, I’m able to identify opportunities and can effectively take action toward my success.

5 Key tips to embrace hard work because hard work is the key to success

Now that you know why hard work is key to success, here are some tips for working smarter, not harder.

1. Keep a log of your accomplishments to keep you motivated

I have ADHD, but even without a disability, it’s hard to remember everything you do so that you can be acknowledged for it later on via a promotion or raise.

By printing out emails as they come in or jotting down the results of projects or even compliments you receive you can create documentation of all of your accomplishments.

For me, having all of my achievements at hand made it that much easier to go back to my boss to ask for a promotion when I felt I had earned it.

A hardworking person can earn more money or move up in their career as a result of preparation and strategic actions like logging their accomplishments.

2. Post professional updates on social media

Sometimes your hard work leads to success but other times may go unnoticed. While that can be frustrating, know that you can fix that by sharing your accomplishments on social media.

LinkedIn is an excellent professional tool that’s free. So if you aren’t already utilizing it to its full potential, we have a Clever Girl Finance LinkedIn Course that’s completely FREE and can help.

By sharing your professional updates on a consistent basis with your network, people will keep you in mind the next time an opportunity with your name on it presents itself.

Plus you’ll gain momentum to continue as you see your accomplishments growing, proving that being hardworking is the key to success.

3. Set SMART Goals

Commitment is an excellent characteristic for anyone, but it’s easy to commit to the wrong thing if you don’t know where you’re going. Having goals can help you not only make new things into habits but also keep you focused.

Consider setting SMART Goals based on your to-do’s to get you further with your career and finances. SMART goals are Specific, Measurable, Achievable, Relevant, and Time-Bound.

When you know how to set the right goals, you’ll know what to focus on with laser precision and you’ll achieve them much faster. Hard work is key to success, especially when you focus on what you want to accomplish.

4. Gamify your results and treat yourself

Maybe it’s the ADHD I mentioned above, but one of the ways I’m able to hit my commitment goals is to make them into a game with a fun reward at the end. For me, it’s hard sometimes knowing that I have to do something repetitive, like working out.

I know I should work out and that it’s good for me. But having to do it week in and week out sometimes gets overwhelming. And that can be with anything you need to commit to and work hard on.

But making your goals into a game may give you a greater degree of satisfaction when you do well and help you get rid of bad habits and replace them with better ones.

So break down your commitment into smaller, more manageable steps, and then treat yourself at the end. For example, if I need to work out four times a week, I will give myself $10 extra spending money to have fun. How else am I going to fund my gardening hobby?!

5. Plan out your schedule and utilize time management

I mentioned above that I’m able to stay committed by “gamifying” my results, but my other secret to getting ahead with hard work? A good old-fashioned paper planner!

When you’re working hard, it’s hard to balance everything and even harder to keep track. Time is limited, which is why time management is your friend, and many successful individuals operate this way.

Make a list of everything that you need to do every week. Then sit with your planner and figure out how you’re going to schedule your week.

Only when we see our week in advance can we plan properly. You can also take advantage of time blocking to make sure you get things done.

By using a planner, you can manage your time to get ahead quicker while still taking time for yourself and other important things when they come your way.

Who said, “Hard work is the key to success”?

“Hard work is the key to success” is quite a popular saying that doesn’t have just one source. It is commonly attributed to Vince Lombardi, and John Carmack, amongst others.

What are the key points for hard work?

When it comes to hard work, the key is to have a vision, create specific goals to get there, and then take intentional ongoing action to make progress.

Setbacks are inevitable but as long as you pick yourself back up and consistently keep doing what you need to, even if it means stepping out of your comfort zone, success is inevitable.

Articles related to achieving success

If you enjoyed this article on how to achieve success, check out this related content:

• How To Keep A Commitment To Yourself To Achieve Your Goals
• I Am Broke! 10 Reasons Why And How To Do Better
• Women & Money Survey: The State of Our Finances
• 7 Simple Habits To Improve Your Self-Discipline
• 17 Best Books On Self Discipline

In the end, hard work is key to success!

When you’re a disciplined person, people know it. No one will ever question what you do because they know you are reliable, dependable, and committed. Plus your hard work will pay off in dividends as you start to see results in achieving the goals you have set for your life.

Being hardworking is the key to success, so don’t feel that it’s a waste of time. You can work hard by practicing perseverance, sharing your success stories, and continuing to avoid laziness. Keep your eyes on the prize and keep striving!

The post 5 Reasons Why Hard Work Is Key To Success! appeared first on Clever Girl Finance.

What influential women do you have in your life? Whether it’s your mom, best friend, favorite female celebrity, or influencer, there’s no doubt that it’s important to have women in our lives that we can look up to and learn from.

Find out what the habits of successful women are and how to make them part of your life!

Good habits set the tone for the way you choose to live and are essential for living a healthy lifestyle and also well-being.

Here are 10 habits of successful women and also a look at the daily routine of a successful woman.

It’s time to get inspired. You won’t want to miss these!

1. Set goals and achieve them

Successful women know what they want and, more importantly, how to get their hands on it.

Start by writing your goals down, no matter how small or big they are.

In six months’ time, what would you like to have achieved? What about a year or 10 years from now? Describing your goals in detail and visualizing them with images can really help motivate you to meet them.

Create an action plan

Every goal should be SMART (specific, measurable, attainable, relevant, and time-bound). You’re much more likely to achieve goals that have these characteristics because they give you a sense of direction.

Now that you’ve got your goals, it’s time to work out how you’re going to get there. An action plan is such a good way to capture the steps you need to take and keep an eye on your progress. Digital or paper form is good for writing them down, whatever works best for you.

Celebrating when you’ve achieved each goal is really important. It’s a great way to acknowledge your efforts, and being proud of what you’ve achieved puts you in the correct mindset for your next win. You’ve got this!

2. Believe in yourself

Ask any successful woman what the key is to achieve great things, and they will tell you it’s believing in yourself. Know what you’re worth and be confident in your abilities.

But how do you believe in yourself if it doesn’t come naturally to you?

Spend time with supportive people

Surround yourself with positivity and affirmations for self love. Ditch negative relationships and focus on the people that make you feel good.

In addition, build a network of like-minded people that thrive off positive energies.

You’ll be seriously impressed by what you can achieve just by believing in yourself.

Share what you learn

Sharing what you learn with other people is another great way to strengthen the belief you have in yourself. We all have something that we are skilled at and also passionate about. Why not help others learn a new skill and take pride in your abilities at the same time?

Ultimately, believing in yourself comes down to looking after your mind, body, and soul, only making decisions that you are comfortable with.

3. Say no sometimes

Saying no gives us the power to choose how we best use our time and where we focus our energies. The habits of successful women can help teach us the value of saying no.

It can feel like it’s impossible to say no, especially if you’re used to saying yes all of the time! But successful women know how to say no to opportunities that are unfair, don’t match their values, or if they simply don’t have enough time for them.

Why? Because it enables us to value ourselves and our time more and stay true to what’s important.

Practice your skills to improve

Saying no is a skill, and it does get easier with practice. Here’s how you can say no effectively:

Remind yourself why you’re saying no

Before you turn something down, it’s worth reminding yourself why you’re doing it to show confidence.

Be courteous yet assertive

Use firm words such as “No, I can’t at the moment” or “I don’t have the time currently”.

Don’t make excuses or apologize

Instead, provide a brief explanation if you feel it’s needed and move on.

Practice saying no

Start with small refusals, such as a coffee with a co-worker, to help build your confidence.

The above tips apply whether you’re saying no to a new work opportunity or even just saying no to a play date that you don’t have time for.

And remember, don’t feel guilty for saying no to something! Saying no to anything that goes against your personal core values frees up more time for the things you want to do – there’s not enough time for both.

4. Make time for self-love and mindfulness

To be successful, first, you need to take care of your own needs. This means maintaining both your physical and mental health.

Easier said than done? We hear you.

Creative ways to prioritize yourself

How does a successful woman include self-care and attitudes of mindfulness in her busy life?

Well, regular exercise and eating well are the first steps. Scheduling alone time into your week also allows you to reflect on you and your goals.

If you’re struggling for time, you can combine exercise and meditation to give you that much-needed time to yourself.

Self-care can be as simple as a morning walk to enjoying a cup of tea and reading a chapter of your book. You might even try a self care week!

Successful women also reward themselves with their desires when they meet their goals. Rewards could be anything from a full-body massage to a weekend away with the girls. It’s a healthy way to look after your mind and body whilst celebrating your wins and motivating you to achieve your next one.

These easy-to-adopt habits will help you prioritize self-care without making it feel like you’re adding to your to-do list.

5. Always have a backup plan

Sometimes things don’t happen the way we want them to, and that’s ok!

One of the most admirable habits of successful women is having a plan B. Things can go wrong.

Let’s say you don’t get the job that you really wanted, for instance. Or your car breaks down and needs emergency repairs.

Having a backup plan can get you back on your feet quickly and make you stronger than ever. A good example is to have a plan for the year, with extra ideas in case things change.

Make plans for finances, career, and life

To protect your career, always keep your resume updated with all your skills and experience and utilize your network of co-workers. When the unexpected happens to your finances, an emergency fund will protect you from debt.

Having a backup plan in life can provide feelings of safety and security, allowing you to live without stress and achieve great things. With patience, planning, and hard work, you can achieve anything.

6. Be comfortable with failing

Failure can make a person stronger. In fact, women have proved that failure is the path to success time and time again.

Failure causes us to have to start over and try again. Continuing to value hard work is key to success, as well as being resilient.

Successful women know how to cope with failure, and the good news is that adopting this habit is easy with our top tips.

Embrace your emotions

It’s ok to feel hurt, angry, and sad when something doesn’t go to plan. A good way to move on is to accept your feelings and also allow yourself some time.

Don’t worry about what other people think

You can’t control what other people think, so don’t waste your energy on it. Instead, take pride in your ambition and dreams, do what’s right for you, and learn from the habits of successful women.

Be kind to yourself

Beating yourself up about a failure will only make you feel a million times worse.

In addition, if a friend was experiencing a setback, what would you say? Follow the same advice for yourself, and you’ll soon bounce back from any unplanned event.

Instead of fearing failure, understand that failure is the first step to success.

7. Know when to accept help and say thank you

Our purpose in life isn’t to do everything alone.

Powerful women happily admit that they need help and that there’s no shame in asking for it. In fact, it shows courage, confidence, and resourcefulness.

Think of asking for help as one of your confidence building exercises. Asking and accepting help protects us from stress and burnout and can also increase our productivity and allow us to smash our goals.

Communicate honestly to connect with others

Need more reasons to start asking your support network for help? It’s also a lovely way to connect with fellow female leaders who share similar goals and values as you.

Once you’ve decided that you need some help, think about the best person to ask and how you might ask them. Be polite yet direct in your request, and don’t be disheartened if they say no. Chances are you will have other willing volunteers in your friend circle.

Remember to give back when you can and add this support to your daily gratitude list. Women helping women is a force to be reckoned with!

8. Strive for personal development

Enhancing your skills and experience has so many benefits for women, so never stop learning because life never stops teaching!

Aside from learning new things, you may also find that your mood improves too. As you improve yourself and your life, you naturally become happier.

Personal development also puts you in a great mindset to deal with change and evolve, and it’s one of the good work habits to learn.

Personal development takes many forms. You don’t need to commit a huge amount of time or money, either.

For example, here are some enjoyable ways that smart women add personal development to their busy lives.

Ask questions

Everyday life presents us with opportunities to learn without much effort. Try asking more questions during the conversations you have and see how much you can learn.

Read more

A great way to add personal development to your daily routine is by setting time aside for reading. You’ll learn something even from reading for just a few minutes a day, for example, check out these self help books for women!

Use a dictionary

When you find a word that you don’t know the meaning of, instead of skipping past it, look it up. This is a super simple way to enhance your vocabulary.

Sign up for newsletters

Receiving manageable information in the form of an electronic newsletter is also a good way to learn more. Plus, they are a free resource!

9. Don’t compare yourself to others

It’s hard to avoid comparison when we are constantly faced with images of inspiring women on social media, but it can make you feel insignificant, and that’s not healthy.

Badass women know that trying to be like someone else is self-destructive and unproductive. Nobody is you, and that is your specialty. So never compare yourself to others!

Try adopting these habits so the next time you start comparing yourself to others, you know how to stop doing it.

Start a gratitude journal

Most of us forget to pause and consider what we appreciate in our own lives. It’s a good way to remind yourself about what you have achieved and also motivate you to meet your next goals.

A gratitude journal forces us to look at the positives and find happiness in the little things. Or why not try a 30 days of gratitude challenge?

Compete with yourself

When somebody you know reaches their goal, use it as a chance to look at your own rather than feel jealous. Take a look back at the progress you’ve made and what you need to achieve to meet your next milestone.

Celebrate other people

A proven way to stop comparing yourself to others is to focus on their achievements and join in with their celebrations. So, when your friend gets a promotion, be happy for her instead of questioning your own career.

In addition to learning to celebrate yourself, be happy for the people in your life when something goes well for them.

Now you’ve got the techniques from the habits of successful women to stop worrying about what others are doing, so you can focus on your own game.

10. Accept the past and move on from mistakes

It’s human nature to make mistakes. It’s also essential for your future to know how to let go and move on.

Every successful woman knows that making mistakes are proof that you are trying, and it allows you to learn from them and become a stronger person. So don’t dwell on guilt or regret, instead, reflect, learn, and let it go.

Here are habits that will make letting go and moving on easier.

Look for the positives

When things don’t go to plan, remind yourself that the way you’re feeling is temporary. It might be a challenge to learn how to stay positive in a negative world. However, it is possible.

How can you turn something negative into a positive?

For example, if a new business opportunity falls through, what can you learn from it? If a relationship has been affected by a decision you’ve made, how can you resolve it? You might just find better things are just around the corner!

Create distance

Distracting yourself from a mistake is one of the best ways you can move on from it. Put your energy into something new or take some well-deserved me-time. Obsessing over a setback will only make your mood worse and won’t help you to move on.

Focus on what’s next

Life is full of exciting opportunities. One of the most admirable habits of successful women is looking to the future. Take the time to remind yourself what’s important. What path do you want your life to take?

Expert tip

As you can see, the habits of successful women are all about working hard and having confidence. And something to remember that will help you create great habits is to always be working towards financial goals as well as your professional, and life goals.

Making a budget, mapping out the next few years of your career, and deciding what big goals you’d like to reach in the next decade are great places to start.

The daily routine of a successful woman

Want to be successful? A good work-life balance is key. Let’s look at what a typical day in the life of a busy, modern woman looks like.

Morning

• 6 am: Wake up and drink a glass of water
• 6.15 am: Meditate
• 6.30 am: Shower and get dressed
• 7 am: Eat a healthy breakfast
• 7.30 am: Set your goals for the day with a cup of tea/coffee
• 8 am: Household chores
• 8.30 am: Go to work

Evening

• 6 pm: Finish work
• 6.30 pm: Self-care and exercise – yoga
• 7 pm: Have dinner
• 7.30 pm: Switch off social media
• 8 pm: Do some stress-relieving hobbies or take some social time
• 9 pm: Relax – read or enjoy a hot bath
• 10 pm: Get a good night’s sleep

Adapt the daily routine of a successful woman above to suit your individual needs, commitments, and lifestyle.

5 inspirational women we can learn from!

Women that show us it’s ok to make mistakes are great to draw knowledge from.

You’ve probably heard of the names listed below, but here’s a reminder of why they are so great!

1. Mother Teresa

Mother Teresa is a role model for selflessness. She was compassionate and recognized the value of giving to others.

She changed the world by giving to charity and also inspired hundreds of thousands of other people to do the same. Mother Teresa proved that you’ll have a fulfilling life if you stand by your values.

2. Kelly Holmes

Kelly was the first British woman to win two gold medals at the same game. She’s also an inspirational global speaker, award-winning author, and advocate for wellness, fitness, and mental health.

Her charity, Dame Kelly Holmes Trust, supports disadvantaged young people to use the skills of world-class athletes.

3. Oprah Winfrey

Oprah is a great role model for women that want to become leaders. She had a tough childhood and worked hard to achieve her dreams, earning her a reputation for being the most powerful woman on the planet.

Oprah’s determination has shown us that anything is possible.

4. Marilyn Monroe

“A wise girl knows her limits, a smart girl knows that she has none.” – Marilyn Monroe

Marilyn was an advocate for femininity, still inspiring women to be bold. The famous bombshell achieved so much in her life, showing us that anything is possible.

She also believed that you’re the happiest when you are true to yourself.

5. Michelle Obama

Former first lady Michelle Obama is, without a doubt, an incredibly inspirational woman. Her work and books have taught us to go for our dreams and not to sell ourselves short.

Michelle’s book, Becoming is a must-read for working moms who want to have a family and a career. She shows us that it’s absolutely possible!

What matters most for success?

Being determined and undistracted from your goals will take you far.

When you decide to do something, make a plan to get there, and don’t give up until you are able to accomplish what you wanted to. Determination is the essential factor that helps you get the results you want.

How do you create unique successful habits?

Start with the 10 habits listed here, and then find a way to apply them more directly to your own life.

For example, instead of just believing in yourself in general, make it personal by believing in your ability to make 100,000 dollars a year. Add your unique goals to your habits to remind you of why they matter so much.

How do you stick with your good habits when you want to quit?

Set up a system in advance to help you when you feel tired or unmotivated.

For instance, understand how to break down your habits into smaller mini goals, reward yourself often, and stay focused on the big picture.

When you’re tempted to give up, you can fall back on your systems and your habits until you feel more motivated.

Posts related to habits of successful women

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Adopt these habits of successful women to enhance your life!

The women we choose to surround ourselves with shape our lives and the decisions we make.

It’s important to recognize a successful woman but also know how to be one! The habits of successful women can help you be the best version of yourself.

Discover more ideas about enjoying the life you have and other self-improvement ideas!

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Money mindset exercises are a must when you’re setting up financial goals because, without the right mindset, it’s near impossible to make positive changes in your life. Regardless of where you are on your financial journey, these practices help you stay motivated. Let’s keep you on track and ready to achieve your goals with abundance mindset exercises!

What are money mindset exercises?

Money mindset exercises are practices that you do to change how you think about money and wealth. Because your perception of money impacts the way you earn, save, and spend it. All of which affect how you manage your finances and build wealth.

Since childhood, you were surrounded by beliefs, judgments, and ideas about money. Not to mention that your own experiences with money influenced how you view it too.

Whether you consciously think about your understanding of money or not, you carry these notions and judgments with you. And they show up in how you manage your finances.

Abundance mindset exercises help you discover and examine your beliefs about money. Then, you can look closely at the ways you earn, save, and spend your dollars to see how these beliefs are driving your actions.

Why do you need to do money mindset exercises?

You can learn to think differently about finances by changing your mindset. Rewiring the brain is a fascinating process called neuroplasticity. Basically, it’s using attitudes of mindfulness to redirect thoughts and change habits.

Financial mindset exercises help you become aware of your thoughts and redirect them. When you practice mindfulness and change your habits, you use new parts of the brain. That’s when the rewiring happens, and you create new pathways in your brain.

The task of building wealth is a long and winding road, especially if you grew up without money and are a member of a marginalized community. These mindset exercises can help you stay motivated. Because a huge part of the challenge is staying in the right abundance mindset.

Money mindset exercises to try

Money is a tool that humans created to make exchanging goods and services easier. But because we need it to survive and thrive, we’ve attached emotions and beliefs to it.

Unfortunately, those emotions and beliefs tend to run the show, whether we are conscious of them or not. The good news is you can redirect your thoughts with abundance mindset exercises. Check them out!

1. Look to the past

Being aware of what you tell yourself about money is a great start. Once you get those thoughts out, you can use money mindset exercises to shift them to the positive.

Start journaling to find out what you truly think about money. If you’re having difficulties identifying your limiting beliefs about money, remember they came from somewhere.

So, thinking about where you got them from is also a good place to start. Did they come from the way your family talked about money, teachings from church, or your own experiences?

Similarly, think about times when you felt shame, guilt, or disappointment around money. When do these feelings show up in your adult life?

For instance, do you feel guilty wanting more money – getting a big promotion or making more money in your business? Why?

When you’ve gotten your thoughts down on paper, it will be easier to see what you need to change.

2. Examine your current money situation

The challenge of financial mindset exercises is that you can only see if they’re working if you’re also taking action. That being said, you cannot improve a situation if you don’t know what’s going on.

If you’ve been avoiding looking at your credit card statements or bank accounts, now is the time to do that.

Likewise, you can’t create a budget that will work for you if you don’t know how much money you’re earning or spending.

For that, you may want to start a spending journal. The goal of which is to help you identify your spending habits and where your money is going. A spending diary will also show you where you can improve.

Basically, you need to look over your finances and see what is going well and what needs improvement. This may include habits for saving, spending, investing, or a combination.

3. Practice compassion for yourself

Since money is a huge part of our survival, we see every financial mistake as wasting money. Although that may be true in some situations, that’s not always the case.

Some mistakes are necessary for us to learn lessons and grow as a person. So if you’ve been berating yourself for past money mistakes, it’s time to stop (and maybe try some confidence building exercises to help)!

Forgive yourself and shift to money mindset exercises instead. Four ways to practice self-compassion are to take care of your body, write down your feelings, be positive towards yourself, and add mindfulness to your life.

4. Be grounded in gratitude

When you’re grounded in gratitude, you’re saying that you’re content with life. But you’re also happily anticipating more good things to come. That’s why it’s one of the best abundance mindset exercises.

Oftentimes, we only feel grateful when we get the big goals we’ve been working on, like a promotion, a new car, or a house. Of course, there’s nothing wrong with celebrating the big wins.

But those can be few and far between. It’s also unsustainable to keep chasing success and material satisfaction to feel grateful.

Practice money mindset exercises by being grateful for the small things every day. When you start with the small things as part of your daily gratitude list, you’ll always have something to be thankful for.

Be grateful you opened your eyes as you get out of bed. Be grateful you have running water as you take a shower or brush your teeth. Find more ways to be grateful in our 30 days of gratitude challenge!

5. Make a list of how you want money to show up in your life

Make a list of the things that make you happy and light your soul on fire. It doesn’t matter if you think they’re outrageous, and they’re never going to happen in a million years. Write down everything you would like to have and experience if money is no object.

Then, make another list of practical financial goals you want to achieve in the next 30 days, 3 months, and 3 years. Maybe you want to build up your emergency fund or start sinking funds for a family vacation or purchase.

Make a plan for each of your goals. Figure out how much money you need to save and how much you can truly afford to put away each month. Update your plan each month to check on your progress.

How about the first list you made? Pick one and make it your big hairy audacious goal.

6. Keep showing up for yourself

One of the most effective money mindset exercises is showing up for yourself relentlessly.

This happens when you read abundance mindset books and learn about how to invest for your financial future. Or, if you’ve been dealing with chronic debt, showing up for yourself is getting help to tackle your debts once and for all.

Showing up for yourself may not be the same every day. But you do it when you journal, meditate, and say positive money affirmations.

Listen to personal finance podcasts, read blogs, and watch YouTube channels to learn how to stay positive in a negative world. Call your bank to negotiate your interests or join a savings challenge.

No one can do this for you. So, show up for yourself every day, tirelessly.

Expert tip: Become conscious of your thinking

Having the right money mindset is all about being conscious of your thinking and choices. In addition to learning from your past and present money situations, you also need to balance this with compassion for yourself and an understanding of where you want to be in the future.

Money mindset questions to ask yourself

Being intentional with your thoughts means knowing what they are and where you got them from. So, here are some money mindset questions to ask yourself to figure out your beliefs about money and wealth.

How was money talked about in your family?

The way you think about money and react to it can be tracked all the way from childhood. Be patient with yourself if you can’t remember much. Answer these additional questions to get started.

Did your parents talk openly about money? What feelings did they express in these conversations – anxiety, anger, excitement, etc?

If your family didn’t talk about money, how do you feel about discussing your finances as an adult? In your life now, can you see similarities in how you feel, talk, and handle money the way your family did?

What are your experiences with money?

Needless to say, your experiences with money impact how you manage it today.

For instance, if you never got what you wanted as a kid, you may be the adult with money spending problems who spends everything you earn. It’s as if you’re trying to make up for all the times you didn’t get what you asked for.

As you look back and try to connect your money habits to your past, you will not always get such a clear-cut explanation. But spend time thinking about it and see what comes up.

What common beliefs about money have you heard a lot about growing up?

Perhaps you’ve heard, “Money is the root of all evil,” or “Money doesn’t grow on trees,” or “You have to sacrifice to make money,” etc. Are these phrases familiar?

You’ve probably heard them before, along with; “to serve God means you can’t want more money,” “the only way to make lots of money is to go to college and have a secure job,” or “you can’t make money doing what you love.”

Which ones of these are you subscribing to? Have you thought about whether they’re true or not?

Find out what money myths you believe and explore some common beliefs about money that may be harmful to your financial well-being.

How do you view poor people?

Continue your exploration by considering what you think about poor people.

Some common views about poor people are they’re bad with money or have bad money habits, they’re not trying hard enough, and they just want a handout.

Do you share the same opinions? If you experienced poverty, do these ideas align with your experience?

How do you view rich people?

It’s fascinating how the poor and rich are represented if you think about it. Because the rich aren’t described favorably either. Some popular views about rich people include they’re greedy, they don’t work hard, and they just got lucky.

The thing is, would you be excited to work towards your goal of being financially sound if you see rich people as selfish, entitled, and demanding?

Some of us have judgments and beliefs about money that we’re not even aware of. And doing money mindset exercises helps you uncover these narratives that may be holding you back from achieving your financial goals.

What do you actually believe about money?

Some of the beliefs we hold onto from childhood and painful money experiences may not be rational. But they drive the way we earn, save, and spend money nonetheless.

Look at your answers to the money mindset questions and relate your answers to your financial situation now. Can you spot patterns in your life, such as you can’t get out of debt?

Take some time to identify money values that you agree with consciously but you do the opposite of in your life.

For instance, do you spend all your money as soon as you get it, even though you want to save? Or maybe it’s the opposite – you restrict yourself from spending on luxuries and necessities even if you can afford them.

Identifying your actions and beliefs can help you to align them in your life.

What is the best type of money mindset?

The best type of money mindset is one that allows you to continually grow and improve. Rather than staying stuck with negative beliefs, you can constantly try to make your mindset align with what you truly think.

How do you instantly make your mindset better regarding money?

A great way to instantly improve your mindset is to believe that no matter how far you have to go, you are capable of achieving your money dreams. Even if your finances don’t look the way you want, keep telling yourself that you will find a way to change it, and then look for ways to do just that!

How do you continually practice an abundance mindset?

Whenever you catch yourself repeatedly thinking negative things about money, remind yourself of something positive instead. For example, instead of worrying about debt, be proud that you made a budget this month.

More money mindset articles

If you liked reading about money mindsets, check out these articles next:

• 11 Key ways to improve your money mindset
• How to use money journaling: Improve your mindset and your finances
• How to stop worrying about money
• Rich mindset vs. poor mindset: How to develop a rich mindset!

Money mindset exercises can improve your finances and life!

Changing the way you think about money for the better can only help you. In fact, it may help you build wealth for yourself and generational wealth for your family!

Whether you start with answering money mindset questions or looking for ways to think more positively, do one of the money mindset exercises today! And then, do them again and again and again until it’s easy to believe that you’ll achieve financial wellness. Cheering you on!

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