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Tips And Stories To Help You With Managing Money

Money Management Tips For 30 Somethings

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Manage money carefully in your 30's.
Manage money carefully in your 30’s.
What you do in your 30s, personal finance-wise, makes a difference to what your retirement will look like. There are some common mistakes people make in their 30s that influence the future. Here are some of them:

Over-spending for children

What you spend on cute clothes, sophisticated toys and even educational apps must be subtracted from what you expect to live on after you are through working. Better to spend conservatively and save money for your children’s college funds.

Not discussing finances before marriage

Getting married without discussing finances can be destructive. If by your 30s you have not learned to negotiate financial options, you could be in trouble. Money issues can become serious marital conflicts, leading to divorce or ongoing clashes. Learn to talk about finances and how to set monetary goals together.

Ignoring debt

Coping with consumer debt well into your middle years can be worrisome. There are always excuses to burden yourselves with debt. Children and the ordinary crises of life are among them. But ignoring debt can come back to haunt you. Budget aggressively, live thriftily, earn as much as you can and try to anticipate retirement free of consumer debt.

Keeping up with the Joneses

Over-extending for things like a house and/or cars is another pitfall. Temper your desires to have everything and to give your children everything and you’ll find yourself better prepared to make do in your retirement years. People don’t really need a huge house and several vehicles to rear happy children. Keeping up with the Joneses occupies the minds of too many of those in their 30s. Remember that the Joneses probably are trying to keep up with someone else up the ladder. Be reasonable. Buy within your means and put something aside for later.

Not leaving a will

Make out a will or set up a trust for your kids and your spouse. Save them the hassle of trying to sort things out in case of your passing. Set up a power of attorney and power of healthcare so things don’t get sticky at that point. Ditto life insurance. If you unexpectedly leave your family when they are still depending on your income or time, you need life insurance, enough to cover their needs, not just the minimum usually offered by an employer. Consider disability insurance. In your 30s, the chances of becoming disabled are greater than early death.

Ignoring investments

Re-evaluate retirement goals now and again. By 30, your income probably has increased. Re-calculate to ensure that your retirement will support the lifestyle you want to retain. Pay attention to how your investments are performing relative to those goals. Readjust if necessary to meet goals and risk tolerance. Find a capable financial planner to help you.

Not starting a college fund when kids are young

Don’t wait until your child/children are ready to go to college to prepare financially for that expensive undertaking. Put money into an online savings account toward that eventuality. Find ways, if possible, to enlarge your education savings. Some adults at this time of life, too, consider going back to school to enhance their employment possibilities. Be certain to carefully study how much you can expect to gain by more schooling before you enroll. You could be making an expensive mistake.

Not pursuing other income opportunities

Diversify your income. The days are essentially gone when you could expect to work for one employer throughout your life. If you have a hobby that can be converted to income, pursue it. Job loss is no longer uncommon and you may need fallback sources to get you from one job to another. Taking good care of your personal finances in your 30s could pay big dividends down the road. Pay attention.

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Be Wary of Fake Debt Scams

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Be wary of bill collectors claiming you owe them money.
Be wary of bill collectors claiming you owe them money.
When a thief gets your credit card info and runs up a huge debt, who is responsible for paying? Some scammers are making an art out of trying to get the money from the card holder and there are steps you can take to protect yourself. The elderly are particularly vulnerable since they tend to be less savvy about electronic finance issues.

One unfortunate retirement-age woman found herself being dunned for $8,500 after someone named “David” used her credit information illegally. She received more than 60 calls over a three-week period, often late at night, as she was hassled to pay the debt. The harassment didn’t end until she hired a lawyer.

The Consumer Financial Protection Bureau (CFPB) reports that 8,700 similar complaints were filed with the agency over a 15-month period, half from elderly persons who reported unrelenting attempts to collect money they didn’t owe.

In the period from July 2013 to December 2014, the agency received overall 110,000 complaints regarding debt collection. The Federal Trade Commission lists such complaints as its most consistent industry problem.

The debt collectors report they are trying to collect some $756 billion in debt. It isn’t possible to estimate how much of that staggering total involves “false debt” claims. But based on complaints by those 62 and older, there are several identifiable tactics that collectors use to weasel money not owed from the elderly, according to an AARP magazine article. They include:

Common debt collector scams:

Threats to garnish Social Security or veterans’ benefits if the person doesn’t pay the claimed “debt.” CFPB experts say this is not possible. Garnishees from these government sources are only possible for delinquent state or federal debt such as unpaid taxes, student loans or government-backed mortgages. Alimony or child support payments also can be withheld from Social Security payments, but Supplemental Security Income benefits cannot be garnished due to any debt.

Pressure to pay medical bills that supposedly were generated by a late spouse. Widows are the frequent victims of this particular scam, which are purposely imposed on them when they are emotionally frail, just learning to cope with their loss. Or the scammers may make repeated attempts to collect debts that they falsely allege were owed by deceased family members.

Frequently repeated calls, offensive language and threats of public shame are among the scammers’ arsenal to intimidate so-called debtors into paying. The experts stress that persons being subjected to these annoying tactics should not respond under pressure simply to be rid of the annoyance. Verify the debt before even considering payment. Be aware that collectors cannot collect on debt that has expired under statute of limitations provisions. The period ranges from two to 10 years, depending on state laws.

There are instances of mistaken identity in which legitimate collectors simply have their information wrong. In some instances, they are able to collect from the wrong party because those being dunned are reluctant to provide identifying information over the phone for fear of identity theft. But if you think you may have wrongfully paid a debt under such circumstances, contact the CFPB and your state’s attorney general to report your concerns.

To protect yourself against fake collectors, follow these steps:

Ask for specific information about the alleged debt. If the collector fails to respond, you can assume it is a scam. Visit go.usa.gov/Fsge for information about bogus collectors.

Keep close tabs on your credit transactions. You are entitled to three annual free reports from the three major credit reporting firms. Visit AnnualCreditReport.com for information on obtaining these reports. Look for unrecognized debt in your name and report discrepancies immediately.

Visit go.usa.gov/FsY3 to get information about alleged debt. Dispute claims that are not correct. You can obtain sample letters from that address that you can use as patterns to report your disputes. Send the information by certified mail and with a “return receipt” to the collector and to the creditor. Copy to the CFPB, the Federal Trade Commission and your state attorney general.

If you are being dunned for alleged credit card debt, insist on written proof, such as statements detailing unpaid charges. If the collector claims medical debt, ask for documents detailing services, dates and names of providers. Cross-check with Medicare and private insurers.

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Your Emergency Savings Can Save You

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Who plans on having roof repairs? Emergency savings can help cover these costs.
Who plans on having roof repairs? Emergency savings can help cover these costs.

Saving part of your income on a regular basis may sometimes seem to be an unnecessary step that just deprives you of having the things you’d like now. But there are instances when a savings pad may be what saves your bacon in an emergency.

A bankrate.com survey in June 2015 discovered that 29 percent of Americans have no savings at all. They could learn from the personal stories shared by Americans who found that their savings suddenly meant all the difference to their personal finances.

Claes Bell is one of those. It happened under very ordinary circumstance, he related. Those who make Florida their home know that heavy, long-lasting rain is a reality in that part of the country. “It’s sudden and loud and so thick you can’t see much past the end of your driveway,” Bell recounted.

The Bells knew that the roof on the home they bought was 25 years old and becoming a problem, but they’d put off repairs. So when the next storm arrived, they were dismayed but not surprised to hear dripping in their bathroom and find a stain on the ceiling that let them know where the rain was getting in.

Bell tried stop-gap measures, including a sealant, but the drip kept occurring during rainstorms. It became obvious that the only real solution was a new roof. In a poor realty market, the chances for a line of credit or equity loan seemed remote. That’s when the Bells’ emergency fund became the factor that saved their finances.

“Thanks to the sluggish market for home repairs, we were able to get a deal on the roof that allowed us to just cover the cost with our emergency fund,” Bell wrote.

Using up the fund was painful, but it served the purpose for which the family established it. They were able to repair their home without incurring budget-busting debt. They were safe and comfortable, even knowing that Florida’s rains would continue to fall. Starting a new emergency fund was at the top of their priority list.

Thousands of such stories should be impetus for that huge group of Americans who continue to shun saving as a vital part of their budget. As the Bells could tell them, savings and safety are words of a feather.

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Increase Productivity At Work

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Why kill time when you can make it work for you?
Why kill time when you can make it work for you?

What makes some people more productive at work than others? Here are some suggestions from people who are highly productive in business.

Time Management

Learning how to manage your time is the first thing to do. Focus on minutes, not hours. There are 24 hours in a day, but 1,440 minutes. Time spent can never be regained, it is gone forever. Some of the successful people plan their time in minutes, rather than blocking out half hours or hours in their time budgets. The experts say that if you master minutes, you master your life.

One Goal At A Time

It is easy to get distracted during the day. So many things come up that can take you away from your main goals. Try focusing on one thing at a time. Settle on your Most Important Task and work on it without interruption each morning. In other words, invest the most productive time of your day in addressing what is currently most important. To identify the “Most Important Task,” ask yourself what will have the greatest impact on reaching your goals or getting you up the ladder where you work.

Ditch The Lists

Don’t make to-do lists. Studies show that only 41 percent of the items placed on to-do lists actually get done. The undone items can haunt you and lead to stress. Highly productive people have a calendar and work from that calendar, setting aside 15-minute blocks for various tasks. Using such an approach will put you in the 95th percentile, production-wise, the experts say.

Use Resources Wisely

People tend to be time-inconsistent. Defeating your future self is one of the challenges. For instance, we buy bags full of healthy vegetables to get on a better regimen, then let them sit in the refrigerator until they rot. Or we buy exercise equipment that is still in the box a year later. Anticipate ahead of time the areas in which you are likely to self-sabotage and act accordingly.

Cherish Family Time

Make it home for dinner. There’s no such thing as being finished with your work. There’s always more. Even though your work is one of your values, there are others that do or should have equal standing. Each individual chooses his own “most valuable” list, but for many, it includes family time, exercise and giving back to one’s community. Consciously allocate time to your own personal value areas and stick to it. Put time for these things into your calendar and don’t let them be crowded out by work.

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Recovery From Losing Millions Of Dollars

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Altucher is a successful entrepreneur, chess master, best-seller writer and host of three high ranking podcasts. He’s started and sold many businesses, and has been involved in advising over 40 companies, several of which sold for large exits. He is the author of 17 books, including “The Power of No” and “Choose Yourself”.
Altucher is a successful entrepreneur, chess master, best-seller writer and host of three high ranking podcasts. He’s started and sold many businesses, and has been involved in advising over 40 companies, several of which sold for large exits. He is the author of 17 books, including “The Power of No” and “Choose Yourself”.

Losing a lot of money in a short time is painful. James Altucher, author and investor, learned some serious lessons when it happened to him.

His company built websites for entertainment companies such as Bad Boy Records, Miramax, Time Warner, HBO, Sony, Disney, Loud Records, Interscope, ConEdison and others.

First Company Worth $15 Million

The way Altucher tells it, “I did everything smart until I did everything stupid.” He sold his first company for $15 million, sold his shares so he had cash. He spent several million for an apartment, bought art and “played a lot of poker.” Then he began to invest in other companies, a million here and a million there. He put $2 million into an IPO and watched the $20 shares drop to nothing.

Then he started another company of his own in which there was significant outside investment. He started a VC fund and invested in more companies.

Then the Internet stocks began to drop. He couldn’t believe it. he had thought Internet was here to stay. He admits to knowing nothing about stocks or valuations or “anything resembling rational thought.” He doubled down, then quadrupled down, than octupled down.

Losing $1 Million A Month

From June 2000 to September 2001, he lost a million a month. The thing became addictive. “I was the worst idiot,” he admits. His ego was so tied up in financial success that he began to think that his life was over. Even going to the ATM was a disaster as the balance plummeted.

He lost his house, suffering a million dollar loss and was reduced to asking for help from his parents, who said no. They had footed college and felt that was enough. Things went from bad to worse as his health suffered and his mental stress multiplied. He felt he had failed his family.

“I went from feeling immortal to feeling dead all over, every day.”

The Financial Turn Around

The reversal was slow, but determined.

  • He exercised every day and improved his eating.
  • He spent time with those people who loved and supported him and broke ties with those who generated bad memories and frustrating feelings.
  • He began to write software again.
  • He studied the stock market and modeled what happens in different situations.
  • He developed ideas for trading systems that he shared with hedge fund managers, some of whom were willing to give him money he could manage.
  • He began to write articles based on his experiences with the Internet and stocks and over time was able to place them with Financial Times, Forbes, Yahoo Finance and other publications.
  • He prayed and expressed gratitude for his daughters and other daily blessings he had discounted. He refused to wallow in regret and faced his reality.

Gradually he came up with new ideas for businesses. At 6 a.m., he went to a café and read and wrote. He started a hedge fund and a newsletter, did deals, broadened his store of acquaintances to expand his new network. He became involved in a mental health company that he later sold for $41 million. He started a website, stockpickr! Which attracted millions of users and found advertising for it. Later he sold it advantageously.

Altucher repeated the loss-rebuild-thrive-fail cycle once again. He blames that on the fact that he stopped using the fundamental techniques he had used to rise from the ashes the first time. Now he is on the uptrend again.

Bottom line:

“I hope I can keep on building. I hope I don’t revert back to my addictive tendencies. I think this time I have learned. Every day, without fail, I focus on physical, emotional, mental and spiritual health. But life brings with it many challenges and many things to learn. I surrender to whatever I need still to learn.”

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