It’s Thursday, and you know what that means: time for another round of awesome personal finance articles hand-picked by ESI of Rockstar Finance!
One thing we make sure to do often here at TFD is challenge the notion that there is one “right” way to money. Everyone is different and comes from a different financial background and upbringing. Maybe your parents were so good with money that their habits rubbed off on you, or the opposite happened, and you never thought about money until post-college you was thrust into the real world. On the other hand, maybe you learned how not to repeat your parents’ bad money habits from the get-go, or you inherited them and had to learn from them later on.
No matter how many mistakes you’ve made or how naturally “good with money” you may be, the important thing is finding what works for you — not what a family member, friend, or stranger on the internet tells you what you should be doing. For that reason, I really loved this piece dismantling the tried-and-true “Baby Steps” that so many finance nerds follow. It’s true that they might work for some people — a lot of people, even! — but not everyone has the same financial responsibilities, motivations, backgrounds, etc. I really liked that the writer provided her own suggested revisions to the baby steps and an explanation for each — this was my favorite:
But the reason the debt snowball a suggested is because of the momentum you feel when you knock out that first that it keeps you motivated to keep going. Which you don’t get with the debt avalanche method. And while the avalanche method will save you more money it’s hard to keep you motivated.
This why I actually recommend with that debt nor’easter method.
The debt nor’easter method has your pay off your debt in the order which will provide you the greatest financial gain. If you have different kinds of debt, you want to focus on paying off the debt that is going to help you move the needle forward on improving her overall financial landscape.
For example credit, Credit card debt is revolving and if you’re maintaining balances on your credit cards that can impact your credit score negatively. If you’re carrying balances upwards of 30% of your overall credit limit or more it’s going to start taking a toll on your credit score.
Be sure to check out the full post below, as well as the rest of this week’s great picks!
1. How To Negotiate A Raise You Deserve (In 3 Months) – I Will Teach You To Be Rich
“The key to getting a raise is remembering that it’s not about you. It’s about what you can do for your employer. You can’t tell them you need more money because your expenses are high. Nobody cares.”
2. Dave Ramsey’s Baby Steps – How They’re Hurting Your Finances & What to Do Instead – Less Debt More Wine
“Perhaps the most well-known set of personal finance rules are Dave Ramsey‘s baby steps. Now, while it’s impossible to expect those steps work for everyone, there are actually some big financial missteps buried in those baby steps.”
3. Average American Families: How To Make Your Child A Millionaire – The Money Habit
“The USDA says the average cost of raising a child in the US is $233,610, and that’s only through the age of 18. Somehow those dollars are slipping between our fingers without it feeling like we are getting a proportionate value from that spending.”
4. The Importance Of Grit In Financial Success – Money After Graduation
“For many, all that stands between success and failure is an intangible concept that has gone by many names through the years: stick-to-it-iveness, moxie, gumption. In the current lexicon, we know it as grit.”
5. Harder Than It Looks – Creative Planning
“There’s a funny thing about making money: It goes to our heads. We assume our fattened portfolios are because of our own brilliance and we start imagining we can get even better results — by actively picking individual stocks.”
6. You’ve Done The Math, Now What? – Ms. Fiology
“Your savings rate crossed the 50% line and you started maxing out your retirement and tax-advantaged accounts with low-cost index funds. Yeah, you’re killing it. So now what?”
7. Liquid Net Worth – How to Calculate Your Runway To Financial Freedom – My Money Wizard
“We’re in emergency mode. A big house or fancy car won’t save us now, because we need cash ASAP. To address this blind spot in the typical net worth calculation, finance geeks created what’s called a liquid net worth.”
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