How To Make Sure Your Financial Resolutions Stick

March is here – the month of the Irish, NCAA basketball, and diminished New Year’s resolutions. All the gung-ho dieters are now quietly giving up their weight-loss goals, the gym that was teeming with new members in January is now emptying out save for the year-round regulars, and those committed to finally getting a grip on their money are seeing that grip unravel. What is this phenomenon about? Why do we lose the motivation to stick to our New Year’s resolutions so soon after starting them? Well, according to psychotherapist Robi Ludwig, the reason for this is that we count on motivation to keep up with our goals – but self-motivation is not enough. Here’s the problem – there’s no plan in motivation. Sure, you can plan to be motivated, but how do you measure and maintain that? Your resolution needs structure and definition: determine what to change, how to change it, how to measure it, and what your timeline and final outcome will be.

Without that structure, your resolution may play out like this. You tell yourself, “I’m going to save more money,” and after a couple of months, you realize that nothing has changed. But it sounded like such a responsible idea: New Year, New You, New Finances.

Without that defined plan, though, your resolution could never be more than just wishful thinking. So how do you plan for a financial resolution, then, and how do you stick with it? With that tried and true solution: a budget, of course.

What to Change

The first thing you need to do is decide what needs to be changed. Where did you fall short last year or even last month? Take that information and start to create a list of what you want to do different this year, but be careful. You don’t want to change everything, especially if “everything” ends up being more than two or three goals. Stick to a few goals so you don’t overwhelm yourself, and you’ll start on the right foot.

How to Change

Now you need to make your plan detailed. Your goal should be specific enough that if you showed it to someone on the street, they would interpret it the same way that you do. Remember, the devil is in the details, which is why many resolutions fall through without further definition. For example, the odds of meeting your goal are pretty slim if you simply state, “I am going to save more money.” Your odds of success improve, however, when you give it parameters:  “I am going to save $100 more this month.” You need a real goal to strive for, because “saving more money” could imply $25 to one person, and $2500 to another.

One way to actually start saving is by setting up automated savings. If you’re already enrolled in direct deposit, you may be able to designate that a percentage of your paycheck goes directly to you savings account. You may also be able to set up automated transfers from your checking to savings account through your bank. Either way, the money is going to savings before you even touch it.

How to Measure Your Change

Each time you make a contribution to your savings goal, celebrate it. You don’t have to wait until the entire goal is reached to be proud of your progress. This takes care of some of that instant gratification that many of us thrive on, and it keeps us excited to reach the end goal.

Monitor your progress weekly and expect to have some missteps. Your resolution will only stick if you keep it on track, but nobody is perfect. Set aside time in your normal schedule to sit down and go through your finances to adjust what you’re spending or to celebrate all that you’re saving. Pretty soon it will be a normal task, and this will make a big difference in the end.

The Outcome

Success. If you create a detailed plan and stick to it, you won’t fail. Whether your goal is to save over a month, year, or decade, you will see results if you stick to your plan.

Then, share your results! It’s not a bad idea to share your goal from the beginning to give yourself some accountability, but sharing your results will push you to keep going after you hit your first mark.

All-in-all, you need structure and a way to make that motivation last longer than a couple of weeks. To lose weight, it’s your weight-loss program; to save more money, it’s your budget. Whatever your resolution is, a detailed plan and some accountability will be a rewarding journey.

What Financial Education Looks Like for This College Student

When I was 17, I had a unique opportunity to take on some adult responsibilities. As a business owner and single mother of three, my mom needed some help, and I was eager to get some real world experience under my belt before college. So together we agreed that I would take over various business and household tasks for the summer, which included one especially important duty: paying the bills.

I want to be clear: at first, I didn’t know much at all about money management. In fact, I hadn’t yet held a job more official than babysitting. Though I had my own checking account, I never had a steady income, let alone any regular expenses to plan for. Because of this, my learning curve felt pretty steep. My mom gave me her account information, walked me through the first round of bills, and just like that I suddenly had a brand new perspective when it comes to money. Not to mention a whole new appreciation for how complex it can be to juggle finances to keep a family of four afloat.

Expenses Add Up

Most of our bills were paid online, and I remember thinking to myself how fast it just “disappeared.” One click. Boom. There went $215 for one month’s use of our cell phones. $215? Suddenly all that texting and downloading became real. Physically writing a check didn’t feel any better. Writing out the words was sobering: one thousand one hundred dollars and eighty-three cents, all to live in a house I had taken for granted for over eleven years. It was shocking. Are we really paying that much just to live here?

I found myself feeling guilty as I quickly realized how much it all cost. Our phones, electricity, heat, car payments, mortgage, credit cards – all of it added up so fast, but I hadn’t thought about it until I was the one filling out the checks and clicking the “submit payment” button.

My new appreciation for everyday expenses and how hard my mom worked to cover them triggered in me a desire to adjust my own lifestyle to help keep costs down.  I started using the Pandora app for free music, packing sack lunches, and hand-washing the dishes – all thrifty alternatives to just a few of our daily expenditures.  I had been contributing to my family’s collective bills for a long time; it just took this experience to help me understand I could positively impact our finances as well. That realization was actually kind of empowering!

Another added bonus to my experience? By learning to effectively manage my family’s finances at 17, I was also preparing myself for managing my own money when I left for college a short year later. Here are four key lessons that I was fortunate to take with me onto campus:

  1. The importance of small spending choices. It’s easy to pass up Starbucks every day when you realize that the tradeoff is keeping your lights on, or being able to turn on your oven. Missing one bill could mean a mess, so the money has to be there when the bill is due – period. Small choices really do add up and can make all the difference.
  2. The importance of saving. Especially for an emergency fund. One example: our family’s water heater broke, but instead of dipping into our vacation money we were able to pay for it with our emergency fund. Though our vacation fund didn’t grow as fast while we worked to replenish our emergency fund, what was the alternative without those emergency dollars? Take freezing cold showers for months so we could go on a one week vacation? Yeah, we chose the hot showers.
  3. The responsibility of living on your own. Before my summer stint, I couldn’t have imagined the amount of time and organization needed to stay on top of the finances. What worked best for me was to retrieve and sort the mail immediately, so nothing was misplaced or overlooked. I created a list of all the bills expected each month and organized it chronologically by due date. By the time I made it to college, I already had a working system so that was part of my normal routine. Some of my new college friends weren’t quite so lucky, and their disorganization meant they had to eat a few late fees early on that hindered some of their weekend fun.
  4. I became much more aware…of how long my showers were, of how often we left lights on in unoccupied rooms, and how quickly all this waste could easily outpace our living expenses. Again, it all adds up. It’s actually not that difficult to save money by being mindful of daily routines. Just a few little tweaks can quickly improve our bottom line. I hadn’t thought about any of those tricks until I saw money leaving the bank account; now, I can’t stop looking for ways to save money around the house.

The lessons I learned from that one summer of bill paying has served me well in so many ways, and not just when it comes to money (although that’s a big part of it). I’d also like to think that being knowledgeable about finances has allowed me to take advantage of opportunities that I otherwise may not have been able to, like becoming the treasurer for my sorority, or my position as the financial education intern for Inceptia, where my money savvy helped me stand out during the interview process.

With each of these opportunities, I gain more experience and make more professional connections, both of which are key to my future success after college. When I reflect on how just one summer has affected my journey already, and how it will continue to provide me with the savvy to handle financial challenges in the future…all I can say is, thank you mom. It was you who did me the favor.

Fed Rate Hike: What It Means, And What to Do

Last week, the Federal Reserve raised its key interest rate to a range of 0.25% to 0.5%. This move didn’t come as a big surprise, though it is a good sign of economic recovery; essentially, experts believe the U.S. economy has healed enough since the 2008 Great Recession to warrant an increase, the first in nearly ten years.

The rate hike may seem minor, but the ramifications of the increase will affect millions of U.S. investors, home buyers and student loan borrowers in coming years. But you’re probably wondering, “Okay, but what does this mean for me?”

Here are a few ways in which these economic changes will trickle down to your wallet, either through credit card use, personal savings, student loans or big spending. We’ve even shared some ideas to get you thinking about how to stay financially balanced through this development – and how you may even benefit!

Pay off and consolidate credit
Paying down credit debt is always a good move. But since most credit debt is tied to variable interest rates, the rate hike means you’ll soon begin paying more on your credit card balances. That makes this is a good time to take a peek at your accounts to see where you can make a smart shuffle. Transfer high-interest credit card balances to cards with lower rates, or see if you can negotiate a lower APR. Remember that the Fed plans on increasing rates a few more times in the next year, so tackling this sooner rather than later is a smart idea.

Put a little more aside
There once was a time when you could earn 3-5% interest on your savings accounts. Well, while those numbers aren’t likely to happen again any time soon, banks are likely to boost rates on money market accounts within the next 8-12 months. So if you can, beef up your savings account a little at a time, and you may start to reap the benefits of increased savings interest by 2017.

Watch those loans

For most student borrowers, your federal student loans have a fixed interest rate. This means the news this week probably won’t affect you much. But if you have private loans, or a federal loan granted before July 1, 2006, it’s likely that your loan has a variable interest rate. This means that a federal interest rate hike will gradually start to effect (increase) your payments. If you’ve been a smart spender and have a healthy credit rating, it’s the ideal time to consider consolidating any private student loans into one fixed-rate loan.

Don’t rush big ticket purchases

Most millennials may not be ready to purchase a home, but some older Gen Y-ers are starting to test out the market. If you’re considering the house hunt, don’t feel too much pressure, yet. While this announcement will cause mortgage rates to gradually rise, experts advise that homebuyers have at least a few years before the rate hike makes a larger impact. It’s good to get organized, but with mortgage rates still sitting at historic lows (around 3.9%), you have time to find that perfect home.

The biggest takeaway from this new federal rate hike is making the connection between the health of the nation’s economy and how that trickles down to all of us as consumers. Despite those inevitable large-scale changes, taking the time to understand how our individual financial decisions can beneficially work with economic shifts is time well spent. With just a bit of foresight and planning you’ll be able to protect your wallet, and hopefully find smart ways to prosper through this and future changes.

#TBT: Friends With Money

In recognition of Throwback Thursday, we’re bringing back an all-time 90’s favorite. This award-winning television series, Friends, still plays in syndication – in fact, all ten seasons are ready to binge-watch on Netflix, right now. Whether you watch to laugh at the group’s everyday shenanigans, or as a cure for your 90’s nostalgia, most of us can relate to their antics at some point throughout the series. Isn’t that why we find it so funny?


Between laughs, you probably haven’t thought too deeply about their comical misfortune. But what if you could actually learn from their fictitious mistakes? Here at Inceptia we focus on helping you stay out of trouble financially, and even more than a decade later, we believe the lessons learned from Friends are still valuable today. Behold, the financial wisdom we can all learn with a little help from our Friends.


The One About Working
On the very first episode, we learn quite a bit about Rachel that we should take into serious consideration when it comes time to pay for college.


Rachel: So, like, you guys all have jobs?


Monica: Yeah, we all have jobs. See, that’s how we buy stuff.


This is something that seems like common sense, right? Well, sometimes that common sense falls by the wayside, especially after financial aid is disbursed. Many college students receiving federal aid, instead of accepting only the amount of money they absolutely need, end up over borrowing and receive a large refund check. For some students, this may seem like the best solution for their extra expenses such as school supplies, food, or housing. However, Monica is right: getting a job is a smarter option to help you pay for those added expenses. The benefit of following Monica’s example – rather than accepting an overblown refund check – is that earned money doesn’t get charged interest like borrowed money does. As we see next, Rachel has a lot to learn about working.


Rachel: Guess what!


Ross: You got a job?


Rachel: Are you kidding? I’m trained for nothing!


Take Rachel’s dilemma into consideration when you’re making decisions about a field of study. With a little research into job growth and high-demand skills, you can make an informed choice of major and eagerly begin the job hunt without worrying whether your studies have prepared you for available careers. Take a look at the projected level of growth your desired career will have in the next several years. Study the demand for positions you wish to hold someday, and be sure they’re located where you want to live. Most importantly, pick a career you will enjoy while staying financially stable. The last thing you want is to graduate with high levels of college debt and low levels of income; after all, the goal is to pay those loans back and strengthen your credit history, not wreck your credit by going into default.


The One About Where Your Money Goes

Another important lesson: don’t forget to figure in the chunk you’ll have to pay Uncle Sam.


Rachel: Isn’t this exciting! I earned this! I wiped tables for it, I steamed milk for it, and it was totally… not worth it. Who’s FICA? Why’s he getting all my money?


Once Rachel finally scores a job, she quickly realizes you don’t get to keep all of your earnings, as many students discover once they start their jobs. FICA is the government, and “he” takes this money out for government funded programs. It’s important to be knowledgeable about the taxes you will have to pay so you aren’t surprised when your earnings don’t come back as bulky as you initially expected. When you create a budget, plan it around the money you earn after taxes are taken out, otherwise you may find yourself buried under a pile of debt.


Chandler: Okay, here’s the electric bill.


Joey: This is how much we pay for electric?


Chandler: So we’ll do the rest of the bills later then?


Clearly, the women of the show aren’t the only ones who struggle to understand their finances. Joey is guilty of the same mistake many first-timers out of the nest find themselves guilty of – a nonexistent budget. Bills add up quickly, and it is critical to be aware of how much you spend on utilities and other reoccurring expenses so you can figure them into your budget. When you get your paycheck, determine how much will go to taxes. Then, pay yourself by putting a bit of the money into savings and your emergency fund. Follow that with normal monthly payments (including quarterly, semiannual, and annual payments). Once you have a budget, you will know how much excess spending money you have, but be sure to keep a tight grip on those extra bucks and avoid the temptation to impulse buy.


The One About “What’s In It for Me?”

Mark: …and the style number, and the invoice number, and the shipping date. Good. Any questions so far?


Rachel: Yeah. What kind of discount do we get?


Rachel is actually being a really smart shopper here. Do not be afraid to ask about discounts! Many businesses offer student discounts, especially in college towns. You can get discounts on food or larger purchases such as printers, personal computers, and computer software. In addition to discounts, think about the benefits offered by your employer (or potential employer). Don’t underestimate the benefits of medical insurance, retirement plans, disability insurance, paid time off and more. All of these perks can add up to a substantial part of your overall compensation, and your benefits package may make or break your workplace decision.


So next time you settle in for a night of 90’s nostalgia, pay attention to the details. These are only a few of the notable financial tips that can be dissected from our favorite gang of six, but there is plenty more we can learn from the mistakes from our group of “friends.” Nothing like a night of channel surfing to help us pick up on some solid personal finance advice – #TBT style.


This article was originally published on August 13, 2015.

Why Katy Perry and Jay-Z Might Never Be Friends

If we are being honest, we can all admit that we have followed a celebrity trend at one point or another (remember trucker hats? Ed Hardy shirts? *shudder*). Hopefully, most of these trends are pretty harmless, save for a few embarrassing photos that may resurface from time to time. But as I was driving and humming along to the radio the other day, I realized there is one area in which we should be particularly mindful of what celebrities are telling us to do: how to spend our money. So naturally, because I’m an intern in the financial literacy field, I put pen to paper (or fingers to keyboard) to explore both the negative and positive money messages that we hear on a daily basis.


Katy Perry is a prime example of an artist that conveys negative messages in her songs, as two crucial negative messages appear in “Last Friday Night” and “This is How We Do.” In the first, “Last Friday Night,” she sings about maxing out her credit card and getting kicked out of the bar, while she just continues on with her Friday night like it was no big deal. After all, “this is how we do.” Don’t be fooled! Maxing out your credit card can be extremely detrimental to your financial stability and future, resulting in:


  1. Lowering your credit score;
  2. Increasing your risk of exceeding your credit limit, which incurs hefty fees;
  3. And difficulty in obtaining future credit, loans, apartments, and even jobs due to your low credit score. If you have poor credit, it’s nearly impossible to obtain a home loan, or any other large loan for that matter, but if you do the interest rate will be much higher than if you have good credit.


But Katy Perry is not alone in this. Both she and Nicki Minaj allude to the idea that not paying your rent and using that money for something else (something fun) is the way to go. And while I like to have fun just as much as the next college intern, I know it must be done in moderation… and after all your other bills have been paid. You know, like rent. So when Katy Perry commends kids for buying bottle service with their rent money, it makes me cringe. And Nicki Minaj also seems to make rent payments optional in her song “Starships” where she sings, “And I ain’t paying my rent this month, I owe that.” Yikes! There are numerous consequences for neglecting to pay your rent on time, or even at all:


  1. Late fees are the obvious consequence of not paying your rent on time, although the amount that you’re charged varies by landlord or how long you have neglected to pay.
  2. Neglecting to pay your rent can also inhibit your ability to rent in the future, since landlords can report this information to Equifax and TransUnion (and there goes your credit score).
  3. Getting evicted. Enough said.


So maybe the Perry/Minaj rent payment plan is something to think twice about before adopting. I know, all these irresponsible messages have you ready to delete all your iTunes, cancel your Spotify account, and swear off Pandora, right? Well, not so fast! Despite the poor advice shared by Katy Perry and Nicki Minaj, there are several artists that advocate being financially savvy, such as Macklemore, The Lonely Island and Jay-Z.


Macklemore’s hit “Thrift Shop” topped the charts for over a month, but the financial message contained within can stick with you forever. Macklemore explained the meaning behind the song was that you don’t need to buy expensive things to be cool or look good, but by budgeting your money and shopping smart you can “look as fresh as possible” with minimal financial burden. Macklemore has gone against the norm of today’s hit songs to make frugal look cool.


And although The Lonely Island is a comedy group well known for their role in Saturday Night Live, their song “YOLO,” featuring Kendrick Lamar and Adam Levine, contains some surprisingly critical financial messages. Lamar provides financial advice for few verses, starting with, “Invest in your future, don’t dilute your finances, 401k, make sure it’s low risk,” as well as, “And if you can’t afford it, don’t forge it on your last bill.” These are both solid pieces of financial advice! Maxing out your low-risk 401k may mean lower reward, but your investments are less volatile; trust me, you will thank yourself for this once you reach retirement . The second line is simplistic, but speaks volumes. Many people today want to buy the newest things, the most expensive things, and things that other people have, but not everyone can afford these things. Don’t buy things you can’t afford, and don’t purchase things you can’t afford with a credit card. There’s nothing worse than going in debt due to something you truly don’t need. Living within your means, and not keeping up with the Joneses are two simple, yet essential financial mantras, for a financially sound life.


Finally, let’s not forget the music moguls that have used their music careers to spread financial education to others. Take Jay-Z, for example; it’s no mistake that he and Warren Buffett are BFF’s, appearing on the cover of Forbes together as two of the richest people in America. Jay-Z regularly speaks about what it takes to build wealth and how to be a successful entrepreneur, as well as giving back to others through his scholarship foundation. In the song “Versus,” he even scolds his fellow rappers for lying about their money: “The truth in my verses, versus, your metaphors about what your net worth is.” Lesson learned? Live your life by your own measure, not by the material things that will only leave you bankrupt.


The real takeaway for this little musical journey of mine is that it’s always going to be up to me to make the best financial decisions I can, but that means paying close attention to what messages I allow to sneak in. It’s easy to think that spending unwisely is the norm, especially if that’s the song I hear every time I turn around. But that just means I need to analyze a little more, dig a little deeper, and decide for myself if my choices are lining up with what I want for my financial future – now THAT’S music to my ears!


This article was originally published on December 10, 2014.