6 Bad Money Habits That Could Wreck Your Finances — and How to Break Them

Bad spending habits — everyone has at least one of them. Maybe for you it’s adding “just one more thing” to your shopping cart, or repeatedly getting slapped with overdraft or late payment fees.

These bad habits may seem innocuous at first but could easily turn into financial self-sabotage.

“Breaking a habit like these can be really difficult because these habits have developed over the years, and they provide us with psychological comfort and safety,” says Thomas Oberlechner, founder and Chief Science Officer at FinPsy, a San Francisco-based consulting firm that integrates behavioral expertise into financial services and products.

Oberlechner says the key to overcoming a bad money habit lies in knowing when you’re using the impulsive, right side of your brain — as opposed to the focused, concentrated left side — in financial decision-making.

“It’s really about psychological experience. It’s about behavior. If we understand the role of emotion, then we have a chance to fix it,” Oberlechner says.

Once you understand yourself and can identify your bad habit, Oberlechner adds, then you can create a plan “that turns your impulsive or unconscious behavior into the healthy financial behavior that [you] actually want.”

Of course, breaking any bad habit is easier said than done.

MagnifyMoney spoke to financial professionals to hear how they and their clients broke their bad habit. See if any of their hacks could help you break yours.

Bad money habit #1: Spending money as soon as you get it

The solution: Automation

If you’re constantly feeling broke just a few days after you receive a paycheck, you may be guilty of this bad money habit. One way to make sure you hold onto some of your cash is to use what the behavioral finance community calls a “commitment device” to lock you into a course of action you wouldn’t choose on your own, like saving your money.

In this case, the device is automation. Automating your savings won’t help you stop siphoning money from your checking account the same day your direct deposit clears, but it can make sure you save what you need to first. Check with your bank or the human resources department at work to have a portion of your paycheck automatically sent to a savings account instead of putting the entire sum in your checking account.

You should automate your bills and credit card payments for the pay period, too. Once your obligations are automated, “you can be impulsive with your play money,” says Oberlechner.

Bad money habit #2: Reaching for your credit card all the time

The solution: A cash diet

Paying for everything you buy with a credit card can be good practice if you pay off your card every month. If you’re chronically swiping your credit card for things you can’t afford to pay off by the next billing cycle, leave your card at home and use cash instead.

When you don’t pay off your card each billing cycle, you rack up interest charges on everyday purchases, and that may cost you a lot more money in the long run. If you’re using more than 30 percent of your total credit limit each month, you may also be harming your credit score.

To break your habit, leave your credit card at home and use cash or a debit card for your purchases.

“Take a certain amount of cash and say ‘I can spend no more than that,’” says Vicki Bogan, an associate professor at Cornell University in Ithaca, N.Y., who researches behavioral finance. “If you have a huge [spending] problem, try to limit yourself so that you only have access to a certain amount of money.”

If you really want to challenge yourself, you can try going on what’s called a spending freeze, where you stop spending any money on non-essentials for a period of time. On top of helping you save money, the freeze can help you notice how much money you may be wasting simply because you’re always pulling out your credit card. After your freeze ends, you may be less inclined to swipe your credit card.

Another rule that could help you break your swiping habit is the $20 rule. The financial rule of thumb is simple: Anytime your purchase is less than $20, pay in cash, not credit. The $20 rule forces you to think about whether or not a purchase is worth swiping your card for. Chances are, if what you’re buying costs less than $20, it’s not something you’d be OK paying interest on.

Bad money habit #3: Spending beyond your means

Solution: Budgeting

If you chronically spend beyond your means each pay period, you are likely digging yourself into debt. Get a handle on this habit by understanding how much money you have coming in and how much you can afford to spend on a monthly basis. You can use budgeting apps like Mint or YNAB to make that part easier. These tools can also help you identify the spending categories that are costing you more than you might realize.

Oak Brook, Ill.-based certified financial planner Elizabeth Buffardi tells MagnifyMoney that after examining one of her client’s expenses she found the client was spending a lot of money at drugstores picking up snacks and little things after work. So the client gave herself a budget of $10 per drugstore visit to save money.

“We’ve been seeing her spending at drugstores go down steadily over the last few months,” says Buffardi.

Buffardi had two other clients who struggled with overspending because they loved to shop online. They both created boundaries for themselves when it came time to pay for the items in their online shopping carts. One client decided to buy a certain amount of gift cards that she could use on a given site.

“If she spent all the gift cards in the first day, then she was done until the next paycheck. If she wanted something that was more expensive than the amount she had on the gift cards, she had to hold off on other purchases in order to purchase the more expensive item,” says Buffardi.

The other client simply removed her credit card number from her payment profiles so it would be more difficult to make thoughtless purchases. Her theory, Buffardi tells MagnifyMoney, was that if she was forced to stop and pull out her credit card before she could make the purchase, it might slow her down and give her time to think about the purchase she is about to make and — maybe — stop some purchases from happening.

Bad money habit #4: Always buying lunch from a restaurant

The solution: Plan your lunches a week in advance

If you’re losing $10-$15 a day to the local deli during the workweek, remember this: You don’t have to buy lunch if you bring it to work with you. However, organizing your day so that you actually have time to prepare and pack your lunch may be where you struggle.

Leave room in your busy schedule to pack your lunch in the mornings, or during the evening when you may have more time to yourself.

Melville, N.Y.- based certified financial planner David Frisch says he packs his lunches in the evening because he knows he runs late in the morning. He puts together everything but the dressings and sauces he plans to eat while making dinner, so lunch is already 90% done, then he adds the last 10 percent in the morning.

Frisch suggests setting a budget for how much you’d like to spend on food per pay period, then tracking how much money you typically spend on the convenience of frequently going out to lunch. Again, a budgeting app can be handy here to easily identify places where you spend the most.

Compare that amount to how much you spend on food for entertainment purposes, like going out to dinner with friends over the weekend and for your necessities, like eating lunch to fuel your workday.

“If you are spending so much money on convenience, you have that much less money to spend on everything else,” says Frisch. If you’re spending money from your food budget for convenience purposes, you may be more reluctant to go out on Saturday night for dinner.

If you’re already packing your lunch, but purchase a second lunch because you’re still hungry or you no longer want to eat what you packed, try packing a larger meal or having leftovers for a second lunch.

Bad money habit #5: Ordering out for dinner because you’re too tired to cook

The solution(s): Prep when you have time/energy; try meal delivery services

It’s easy to spend more than $50 getting dinner delivered three to four days out of the week, or buying groceries that go to waste because you’re too tired to cook. Oberlechner suggests doing some of the “work” of making dinner when you know you have more energy.

“If you’re too tired to cook in the evening, replace the spontaneous behavior by preparing dinner in the morning. So in the evening you don’t have the work of preparing anything,” he tells MagnifyMoney.

Another hack Oberlechner suggests is making a little extra dinner for the days you know will be especially long, when you won’t want to cook dinner. For example, if you know Tuesday is a really long day but Monday is not, cook a little extra on Monday and have those leftovers for dinner on Tuesday.

If cooking dinner simply isn’t a habit for you, you can try a meal kit service like Blue Apron, Plated, or HelloFresh to get interested in cooking, suggests Brooklyn, N.Y.- based certified financial planner Pamela Capalad. She tells MagnifyMoney she’s advised many of her clients to sign up for a meal kit service, then transition into grocery shopping and cooking at home regularly.

Generally, the services cost about $10 to $15 per serving and can serve up to four people.

Bad money habit #6: Letting your kids throw extra things in your shopping cart

The solution(s): Shop solo or lay ground rules early

Frisch says he and his wife solved this problem with their now 15-year-old triplets when they were four years old.

“Up until they were four we couldn’t bring them to a supermarket because it was impossible for my wife and I to watch three kids at the same time,” says Frisch. The easiest recommendation, he says, is to have somebody watch them at home while you go do the shopping. You may spend some money on a sitter, but you are also saving money without an eager child sneaking candy and toys into your shopping cart as well.

If an extra set of hands at home isn’t available, then try to set ground rules before you go to the store. For Frisch, that meant allowing the triplets to get one — just one — extra item at the store.

When a child wanted to add something “extra” to the cart, Frisch or his wife would say, “If you want this now, then you have to put the other one back.”

“Ultimately what happened was they kind of had to make a decision as to which one they would really get,” says Frisch.

The triplets quickly realized they could all benefit from working together.

“They actually started to communicate and say ‘if you get this and I get this, we can share,’” Frisch told MagnifyMoney. “They just figured out that if they all got one thing and shared, they ultimately all got more than they would have.

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Mochi, Poke, Burgers, and More! How to Take Advantage of the New Options at Whole Foods

If you haven't been inside of Whole Foods lately, you'll be amazed by the new options they're offering — from mochi to fresh juice, they've got everything.

If you haven’t been to a Whole Foods recently, you may be surprised by the changes happening in some of their larger stores. Many stores have changed their look and moved toward a business model that keeps customers in the store longer whether they’re eating, hanging out or shopping. Several of the new changes have gotten some attention online, like their mochi station and wine bar. (These updated Whole Foods features aren’t in every store, so check your local Whole Foods store to see which perks are available.) Here’s a look at some of these new features.

Do-It-Yourself Food Stations

Mochi Bar

This newest addition to Whole Foods has gone viral on Instagram and Facebook. People are obsessed with mochi, a delectable handheld Japanese ice cream. Some Whole Foods stores now have a mochi bar where you can mix and match your favorite flavors of mochi, and take them home in a to-go container.

Trail Mix Station

The bulk section of a grocery store is anything but novel, but Whole Foods takes the personalization factor to the next level. Their new “Make Your Own Trail Mix” station features every trail mix staple imaginable. It’s easy to grab a container and create the trail mix of your dreams.

Bakery

Instead of waiting in line for a busy bakery assistant to help you at a counter, you can now grab a variety of Whole Foods baked goods yourself. From brownies to cookies to doughnuts, you can pick up whatever you want.

Gelato Counter

At Whole Foods, an employee can serve you smooth, rich gelato made in-house daily. This creamy treat will keep you happy as you peruse the rest of the store’s pickings. Gelato flavors include banana pudding, double dutch chocolate, pomegranate, and more. They also have vegan options such as berry sorbets.

In-Store Restaurants

Custom Poke Bowls

Poke, raw fish salad hailing from Hawaii, is a big food craze right now. The salad can be light and healthy depending on which toppings you add. Whole Foods sells custom Poke bowls, so essentially you choose your fish, sauce and toppings and an employee prepares it for you. A bowl costs $9 to $14 depending on the ingredients.

Diner

You don’t need to leave Whole Foods to find a diner with a classic, old-timey feel. With the exception of booth seating with red upholstery, this diner has much of the fare you’d expect. They have milkshakes and any type of burger you could want — including a vegan option. Some locations also offer poutine, a Canadian staple made of french fries, cheese curds and gravy.

Smokehouse

If you’re a meat lover, you’ll appreciate the new Smokehouse addition to Whole Foods stores. They have classic barbecue picks as well as rotisserie options, so there’s something for everyone. Their almost life-changing brisket burnt ends are must-tries. (While you’re at it, check out 50 things you must eat before you die!)

Taqueria

If you live in or near El Segundo, California you’re lucky enough to have the Korean-Mexican fusion spot, Kogi Taqueria, inside your Whole Foods Store store. Their specialties include short rib tacos, kimchi quesadillas, and classic burritos. They also have Korean hot wings. Outside of El Segundo, several stores have traditional taquerias with classic rice, beans, and other authentic Mexican picks.

Pizzeria

The smell of fresh pizza is always enticing, so the Whole Foods pizzeria definitely wins with their pies featuring delicious toppings. You can order your favorite pizza by the slice or a whole pizza to go. The pizza is made fresh.

Juice Bar

Whole Foods focuses on promoting a healthy lifestyle, so the addition of a juice bar aligns with their brand. You can choose a juice from their menu that’s made to order, or buy premade options for a cleansing experience or quick snack.

Wine Bar

If you want the advice of a sommelier without having to fly to France or Napa, look no further than your neighborhood Whole Foods. After scouring the wine selection, you can pick a wine and pour a few glasses to enjoy in the store before bringing the rest of the bottle home. Don’t want the whole bottle? You can also order a glass or two per recommendation of the staff. They also have charcuterie boards and cheese plates to accompany your wine choices.

And More!

Some of the larger Whole Foods stores also have Allegro Coffee Bars, cocktail bars, ramen stations, and more. If you live near one of these deluxe Whole Foods stores, be sure to explore those options even we haven’t tried yet. (And, while you’re there, remember to stick to your budget!)

Natural Skin Care

Whole Foods is primarily a grocery store, but they sell more than food. Some stores offer clothing and bags made of natural materials. Whole Foods holds its skin care products to high standards. On the Whole Foods website there’s a list of more than 75 ingredients that aren’t allowed in the skin care products they sell. Most of what they sell is plant-based and natural, which appealing to anyone trying to lead a more organic lifestyle. Whole Foods doesn’t support products tested on animals and they even feature numerous vegan product lines. The products they sell vary from makeup to hair care to facial and body soaps.

Cooking Classes

While some Whole Foods stores have had cooking classes for a while, several stores have recently started hosting classes. Their classes are aimed at beginner or intermediate home cooks, and some are even open to teenagers. If you love shopping at Whole Foods but don’t know how to cook many dishes, these classes are perfect, as they feature ingredients from the store and focus on easy-to-replicate dishes. You can also save on the ingredients by using our tips for saving money at Whole Foods. Good luck becoming a master of local, organic cuisine!

When shopping at Whole Foods and indulging in all of these fun perks, remember to stay on budget! There are a lot of great rewards credit cards that give you cash back when spending on groceries. These cards often require decent credit, so before applying check your credit score to see if you qualify. You can get two credit scores for free at Credit.com.

Image: krblokhin

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The Pros & Cons of Sharing Your Finances as a Married Couple

We’ve collected the pros and cons of combining your finances and keeping them separate so you can decide which method will work for you.

For years, the standard financial advice for couples was to combine their finances. All income, debts and expenditures belong to both parties, so why not put them together?

Combining finances makes sense for many reasons, but not everyone wants to take this direction. If you’re preparing to tie the knot, you might wonder which option is best for you. We’ve collected the pros and cons of combining your finances and keeping them separate so you can decide which method will work for you.

The Pros of Combining Your Finances

Combining your finances can be tricky, especially if both parties have their own debts, accounts and assets coming into the marriage. But it might be worth it for the following reasons:

Women May Have Greater Security

Other research shows that women have greater security when they combine finances with their spouses. That might seem counterintuitive, but remember, women are typically more prone to income interruptions, as they may take time off to start families.

It Keeps Things Simple

Splitting finances may work for some couples, but it can also lead to complicated conversations. Who pays which bills? Should you split evenly when there’s income disparity? Who should pick up the check on date night? If all the money is going into and coming out of the same pot, it may help simplify things.

It Allows for More Flexibility

When you can rely on your spouse to foot the bill while you take parental leave, go back to school or start a new business, you may be more likely to take certain career risks. And in the long run, those risks can be good for the couple if they pan out. If, on the other hand, you have to keep paying your share of the bills, you might be less likely to take the leap.

It Creates Shared Goals

When all the money comes from the same place, the couple needs to communicate. That can be a good thing, as couples can thrive on having common financial goals to work toward.

The Cons of Combining Your Finances

Combining finances may not be the solution for everyone. This strategy also has some potential downsides:

Making Debt a Bigger Issue

If one partner comes into the marriage with big financial problems — including hefty debt or terrible credit — that can turn the relationship sour. In these instances, it can sometimes be better to separate accounts while the indebted spouse works on their finances. (You can keep tabs on your finances by viewing two of your credit scores for free on Credit.com.)

You Can Feel Constrained

As an adult, it’s natural to want to spend your money however you see fit. After all, you earned it. When all the money is combined, you may not get to spend on those personal things you have in mind, especially if your spouse has a say in your spending.

It Can Cause Arguments

What if each spouse has a different idea of what financial responsibility looks like? Maybe one spouse prefers to pay down the mortgage, while the other thinks it’s wise to invest. Or maybe one spouse is frugal, while the other’s a spendthrift. In this case, combining finances requires take serious communication and the ability to compromise.

The Pros of Keeping Things Separate

There are plenty of ways to keep your finances separate. Some partners split expenses down the middle while others split them according to who earns more money. Some partners maintain a joint account for overarching expenses like housing but hold separate accounts for everything else. Regardless of how you do it, keeping separate finances can be good for a few reasons:

Keeping Spouses From One Another’s Messes

If you’re going into marriage with a lot of student loan debt or an otherwise complex financial situation, you may want to keep your money — and money problems — to yourself. This can make your spouse more comfortable and shield them from disaster in an emergency.

Giving Both Spouses More Autonomy

Perhaps the main reason couples decide not to combine finances is because they like having autonomy. Having control over your own money may cut down on fights and allow each spouse to meet their own financial goals.

The Cons of Keeping Things Separate

Here are a few reasons to avoid this option:

It Can Devalue a Spouse

Splitting household expenses by income may seem like a good idea, but it can make each spouse feel their value in the marriage is tied to their salary. However, splitting things 50-50 can make things stressful for the spouse who earns less.

It May Diminish Risk-Taking Ability

As we noted above, one of the advantages of a joint financial approach is that it allows for risk taking. When you have your spouse’s income to fall back on, you can go start a business or have a baby. The opposite may be true of couples who split their finances, unless the couple works out a system to allow for such ventures.

For many couples, the best approach to will be somewhere in between. My husband and I, for instance, combine most of our finances. But we each maintain a separate checking account for “fun money.” We can transfer a predetermined amount of money out of the joint checking account each month and spend that money however we wish. This helps us have a bit more autonomy, but ensures we’re still on the same page about our finances.

Whichever approach you choose, keep evaluating what works and what doesn’t. And don’t be afraid to discuss your feelings and change your approach if things aren’t working.

Image: PeopleImages

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How to Throw a Killer Fourth of July Cookout on a Budget

Like parades and fireworks, Independence Day cookouts are a holiday tradition. But hosting one can get costly if you don't watch your budget.

Like parades and fireworks, Independence Day cookouts are a holiday tradition. But hosting one can get pricy if you don’t watch your budget. Here are some tips for hosting a fabulous cookout this Fourth of July without going broke, courtesy of Sarah Spigelman Richter, a food reporter based in Manhattan.

1. Think Quality Over Quantity

You may think you’re getting a deal on that discount meat, but chances are the pricier goods are a better value, said Richter. Though you’ll have fewer burgers to go around, you’ll feel better about eating meat that was raised ethically and sustainably — it’s better for your health, the environment and animal welfare. Of course, “sustainably sourced everything does cost more,” Richter said, so don’t feel pressured to serve up a steak. “Go for any sort of poultry that’s interesting to you,” she said, or choose sausages, fish or ground meat. The latter is often cheaper and more delicious.

2. Serve Veggies 

“You don’t want to forget people who don’t eat meat at your cookout,” said Richter, who advised hitting the farmer’s market to stock up. “My general rule of thumb is, whatever looks best that day, get it,” she said. Veggies usually taste good either right off the grill or when they’ve cooled down, so they’re a perfect snack for after the pool. Try loading kebabs with veggies and a small amount of meat, or serve up meatless grilled mains like beans and tofu. “Things that can fall through the grates like asparagus can always be put in a foil pouch placed directly on the grill,” Richter said.

3. Grill Fruit 

The surprising, smoky flavor of grilled fruit is like “dinner theater,” said Richter, who explained that grilling brings out the natural sugars in fruit, which makes them sweeter, like caramelized onions. Remember to brush whatever you’re grilling with a little olive oil and keep a close eye on your fruit so it doesn’t go up in flames (indirect heat is best). Richter advised grilling stone fruit like peaches, plums, nectarines, pluots and apricots. Leave the skins on, then peel afterward and serve with a dollop of cool whipped cream. “It’s a really easy dessert,” she said.

4. Ask Friends to BYOB

We won’t dissuade you from stocking up on basics like water and soda, but it never hurts to ask your friends to pitch in. If they have particular tastes — yes way, rosé — encourage them to round out the offerings. As Richter jokingly put it, “Get your friends to bring exactly what they like so you don’t wind up with three bottles of white zinfandel that nobody drinks and eventually turns into vinegar in your pantry.”

5. Use Rewards Credit Cards 

If you’re going to go shopping, you may as well get a little kickback for it, which is what rewards credit cards are all about. You can earn points toward perks like gift cards, account credit and discounts at your favorite stores. Just remember to check your credit before you apply, as many issuers require decent credit in order to qualify. (Not sure where your finances stand? You can view two of your credit scores for free on Credit.com.)

6. Keep Side Dishes Simple 

“Don’t drive yourself crazy trying to make a risotto in the kitchen while everyone’s outside enjoying themselves,” said Richter. “Grab a bag of chips and some coleslaw and enjoy the day.”

Image: M_a_y_a

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Here’s Why You Shouldn’t Cut Your Budget to the Bone to Get Out of Debt

Getting out of debt is a lot like dieting. Sure you can stop eating, but that approach isn't sustainable. Here's how to focus on the long term.

So you have some debt that you need to pay off. If you listen to the advice of many get-out-of-debt gurus, you should pay it off as quickly and intensely as possible. They say you should never set foot in a restaurant, go on vacation, or do anything “extra” until the last credit card and student loan are paid off.

This seems like a good approach. If you can just cut out all your extra expenses — and maybe bring in some additional income — you’ll get out of debt much sooner, right?

Well, maybe not.

In fact, becoming debt-free may be quite similar to getting to and maintaining a healthy weight. The intense, fast options may seem like a good idea, but they can actually have negative consequences.

Paying Off Debt & Yo-Yo Dieting

Intense weight loss strategies can often result in what’s called a “yo-yo diet.” It’s when you lose a bunch of weight quickly only to gain it back quickly after your intense efforts are done. Even Biggest Loser contestants aren’t immune to this problem.

If you cut calories dramatically for three weeks before a big event, sure you’ll lose weight. But you haven’t made sustainable changes that will help you stay healthy over the long term.

This is similar to getting out of debt. Sure, you can cut your budget to the absolute bare bones to pay off credit cards in a matter of months. But does this approach really help you build sustainable habits — and a sustainable budget — for the long run? Maybe not.

My husband and I struggled with this early on in our marriage. We wanted to pay off our student loans and car loan desperately. So for a few months, we’d cut everything extra out of our budgets. No restaurants. No fun money. No nothing.

It would work for a bit, and we’d make some progress. But eventually, we’d get to the point where we felt so restricted, we just had to break free. And break free we did. Usually to the tune of a couple hundred dollars or more of “unnecessary” spending.

We went through this cycle for literally years until we learned to take a more measured approach to our “debt diet.” We still keep a close eye on our spending and try not to waste money. But we each have a monthly allowance for things like new clothes, our hobbies, and other personal items. And we have a date night fund so that we can enjoy each other’s company out of the house at least once a month.

This extra spending means we’re not paying off debt as quickly. But it also means that we avoid those splurges that used to throw us completely off track.

You Should Still Enjoy Life

What’s the main point of losing weight on a diet? Sure, you want to look good in a pair of jeans. But you also want to be able to move more freely, have more sustainable energy levels, and just enjoy life more.

What’s the main point of getting out of debt? Sure, you want to stop paying ridiculous interest rates on your credit cards. But you also want to free up money in your budget so that you have more options financially, so that you can enjoy life more.

So what’s the point of dieting or paying off debt if you’re miserable for months or years while you’re doing it?

When you’re dieting, you could cut out everything but salads with dry grilled chicken and probably lose weight very quickly. Or you could learn to make delicious, healthy meals that you love. And you could give yourself tiny splurges once in a while. You might see slower, steadier weight loss progress, but you’ll enjoy life while working towards your goal.

The same applies when paying off debt. You could spend on only the absolute necessities — food, housing, utilities, and transportation — to pay off debt more quickly. Or you could create a reasonable, sustainable budget that allows for frugal vacations, occasional meals out, and entertainment options you love. Again, you’ll see slower, steadier progress, but you’ll actually enjoy life while getting to that debt-free goal.

Your Approach Depends On Your Situation

Are there some times when a quick crash diet may be appropriate? Sure. Bodybuilders who are already in excellent shape will often cut calories dramatically right before an event. They’re just taking their everyday discipline one step further for a few days or weeks.

Similarly, what if you’re generally good at managing your money but just had an unexpected emergency — a broken-down vehicle or a medical emergency, for instance — that bloated your credit card debt? In this case, a few weeks or a couple months’ worth of cutting your budget to the bone to pay off the debt may make sense. Since you’ve already got good money management habits in place, you’re unlikely to rebound into more unnecessary spending.

But if you’re staring down a scale that says you need to lose 50 pounds? Research shows that slow and steady is the way to go.

And if you’re staring at massive amounts of debt? Slow and steady may work better for you, too.

Some Tips & Tricks

So how do you get started with a slower, steadier approach to paying off debt? Here are some tricks we’ve swiped from the diet world:

Make smart swaps on things you eat every day. When you’re trying to cut calories, it’s amazing how much progress you can make just by switching to a lower-calorie salad dressing or sprucing up your breakfast routine. The same goes for your finances. Try refinancing your mortgage or auto loan, renegotiating or even eliminating your cable bill, or revamping your insurance policies for painless ways to save money month after month.

Also keep in mind that your credit can impact how much you pay in mortgage and auto loan interest, and even increase your insurance costs if it isn’t very good. You can keep track of your credit by checking your credit scores regularly right here on Credit.com.

The quality of your calories matters. More and more research is saying that “calories in, calories out” isn’t the end-all-be-all of dieting. High-quality foods, especially healthy proteins and fats, can keep you satisfied for longer, making cutting calories easier. Similarly, not all spending is equally satisfying. If you only have a few extra bucks a month to enjoy life, spend it on what really makes you happy. (Hint: Experiences are usually a better bet than more stuff!)

Track your progress. Weekly weigh-ins are an important part of many weight loss programs. Weighing in often helps keep you motivated — and lets you spot problems quickly so you can correct your course. When paying off debt, keep track of your debts each month. Consider using a line chart to get a visual representation of your debt dropping each month over time.

Budget calories for enjoying. Many successful weight loss programs operate with the idea of a cheat meal, cheat day, or set number of cheat calories per week. This means you know how much and how often you can splurge. Do the same for your budget. Set aside some fun money each month, and you’ll reap the benefits of staying on track without feeling miserable.

Paying off debt isn’t exactly like dieting, of course. But you can draw plenty of parallels. So when you’re trying to get debt-free, think about ways to make your progress steady and sustainable over the long haul.

Image: LeoPatrizi

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6 Depression-Era Money Lessons My Grandparents Taught Me

Here are the values I hold close to my heart, all these years later.

My grandparents were only children in the Great Depression, and they learned a lot from their own parents during that difficult time. When they first were married, they had no money at all. They were very, very poor. But they were happy.

These two amazing people taught me many lessons in life — how to be a good person, how to sew and so much more. I remember watching my grandfather auction off cattle and pigs. Thinking back, it really amazes me how much they taught me without sitting me down. I suppose they led by example.

Of all the lessons they taught me, some stand out more than others, of course. Here are the values I hold close to my heart, all these years later.

1. Don’t Waste Food

I remember going to my grandma’s house and opening the refrigerator, or what my cousins and I often called “the ongoing science experiment.” Inside, you would find containers with a tiny scoop of potatoes or a completely dried out stalk of corn. When we tried to throw them out, she would get upset and tell us we could still eat it (which we never let her do, by the way). Still, it served as a lesson. Don’t throw things out immediately, save it or have it for dinner the next night.

When it comes to food, make sure you only purchase what you will eat. That way you’ll waste much less.

2. Know Your Wants Vs. Needs

The needs in your life include food, clothing, shelter and utilities like water and power. Your wants are different. You want a cell phone, but you don’t need it.

When we learn to identify our wants and needs, we become wiser about how we spend money. We hold onto it and get what we need. We also allow ourselves the occasional want — but not until our needs have been met. Learning to identify your wants vs. your needs is a crucial step in financial planning.

3. Pay With Cash

Unfortunately, I forgot this lesson when I was younger. Because of using credit unwisely, I got overwhelmed with debt and turned to bankruptcy for a way out. I then got married, and my husband and I built up more debt and had to dig ourselves out of the hole.

During the time we were paying it off, we switched back to using cash for everything. As a result, we gained better control of our money, because it really made us think about how we spent. We didn’t just rush out and get things because we could.

Looking back, I recall my grandparents always using cash, too. In fact, they did not even own a credit card. It was not that they couldn’t get one, they just decided not to. They said if they could not pay for something with cash, then they did not need it. (Not sure where your finances stand? You can view two of your credit scores for free on Credit.com.)

And though they were not rich, when they retired, they lived comfortably. They had been wise enough with their spending that they were able to enjoy their retirement. In fact, my grandmother supported herself for many years until she got too ill and had to enter a nursing home.

4. Find Joy in Simple Things

When you ask people what makes them happy, some say it is their house, their car or even their gadgets. For others, it could be the expensive handbag or new watch they purchased.

When you asked my grandparents this question, their answers were always the same: things that were free. Playing games with the kids. Campouts in the backyard. Having joy doesn’t mean that you own a big house. It means you find happiness in the people and things around you. Find your own joy and don’t rely on things to give it to you.

5. Cook at Home

My grandma was an amazing cook. She owned a small cafe in the same building where my grandpa was an auctioneer.

Every Saturday, the cafe would be filled with farmers from all around the area coming in for one of her amazing caramel rolls or cinnamon rolls. When an auction ended, they’d stop in for a good home-cooked meal followed by a slice of Grandma’s award-winning pie.

Then, after a long day of cooking for others, Grandma went home and did it again. There was always a home-cooked meal on the table for her family. She planned her meals and any shopping trips wisely so she always had what she needed to cook for her kids.

My grandparents did not eat out very often. There was a garden where they grew their own vegetables, and the chickens they raised provided eggs and meat.

While I don’t have a garden or a small farm, I still cook most of our meals at home. I find it not only tastes better but is healthier. The best perk of all is sitting around the dinner table with my kids and having incredible conversations. I can often picture my own grandparents doing the same thing. Sharing a meal really matters.

6. Save for a Rainy Day

Nowadays, I don’t call my savings a rainy-day fund but an emergency fund. But the idea is the same. My grandparents always saved a bit of every dollar they made “just in case.” This was money they never touched until they had to. For them, and even our family, having money set aside provides peace of mind. (You can see more smart habits of savers here.)

Though my grandparents are both gone, the values they taught me live on. I am now taking the time to teach these to my own children. I hope that they, too, pass them along to their own kids someday. The 1930s may be in the past, but the lessons learned during that time can still resonate and work today.

This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its partners.

 

Image: SolStock

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5 Ways Gyms Trick You Into Spending More Money

There are reasons why gyms can offer memberships at such a low cost: They generally find ways to supplement that base income.

$10 to $30 seems like a small price to pay for getting in shape — and it can be, if you stick to the treadmill, visit your club regularly and avoid getting hurt.

Still, there are reasons why gyms can offer memberships at such a low cost: They generally find ways to supplement that base income. Here are five ways your gym may be getting you to spend more money.

1. Ice-Cold Water

It’s common for people to bring few things with them into the gym, particularly at peak hours when space is tight. They tend to limit themselves to the essentials: keys, wallet and phone. Your gym understands you’re training light, which is why they have a cooler conveniently stocked with bottles of water and other assorted beverages, usually sold at a high markup.

Forking over $3 for a bottle of water post-workout might seem like a solid investment at the time, but if you work out five days a week and consume one bottle of water per day, add $60 dollars to the cost of your monthly membership — and that’s assuming that water is the only thing you buy.

2. Maintenance Fees

Did you read your membership contract before you signed it? Of course you didn’t. I mean, what could possibly be in there that’s worth squinting through all that fine print? Plenty, it turns out. Your gym may advertise that it costs only $20 a month, but your contract likely obligates you to pay an unavoidable, yearly maintenance fee. Where I live, that fee is usually around $50.

If you decide to cancel your membership after your contract is up, be sure to do so before that yearly maintenance fee comes due again, or else you’ll wind up eating those dollars as well.

3. A Juice Bar

Your gym likely makes big business by perpetuating the idea that you absolutely need some arbitrary assortment of nutrients, in an equally arbitrary number of grams, or you will squander your workout.

Most gyms are also adept at making you believe the liter of liquid candy you just consumed is somehow good for you. Because if it didn’t taste good, you wouldn’t drink it. And because it does taste good, you drink it habitually at a cost of about $5. Do that three times a week, and you can add $60 to the monthly cost of your membership. (Keeping track of your finances? You can view two of your credit scores for free on Credit.com.)

4.Your Absence as Indirect Income

Gyms are banking on a certain percentage of members to stop showing up — and since most facilities require yearly contracts or offer their lowest price for signing one, anyone who gives up on their new fitness regime after two months has signed up for a big waste of money.

5. Personal Training Sessions

As a certified personal trainer, I feel qualified, and ethically obligated, to tell you I belong to a group of underpaid professionals who collectively only have half an idea of what they are doing. With that said, your gym will do the best they can to sell you a training session with one of these people at, once again, a completely arbitrary price. In my area, that price can be $60 to well over $100 per session.

These sessions appeal mostly to those for whom the prospect of getting into shape is both daunting and confusing. The sessions could prove worthwhile, but they’re also going to cost you. Here are a few ways to cut down the price.

Image: Tempura

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On a Budget? You Can Still Visit Mexico for Cheap This Summer

Use these seven tips to maximize your savings while vacationing south of the border.

Travel site Hipmunk released two reports about Mexico recently that offer a host of insights. Not only is Mexico the site’s most popular international country for flights and hotels, it turns out it’s popular year-round. Bookings to the country are up 15% this summer over last year.

The increase comes despite regular headlines about violence. Mexico remains a go-to destination. Around 7 million Americans visit each year, said Steve Clarke, Hipmunk’s senior director of product.

“Mexico is a really big country, and these things happening in some areas of country are not happening in tourist locations or where Americans usually go,” said Daniel Peña, founder of LocalAdventures in Guadalajara. “If you go to Cancun or Mexico City or Puerto Vallarta, you’re not going to have these problems.”

What’s more, reported Hipmunk, the average round trip airfare to Mexico this summer is down 8%, making now a budget-friendly time to visit. With that in mind, here are seven tips to maximize your savings while vacationing south of the border.

1. Venture Beyond the Hotel

“Everything in a hotel is going to be 20% to 30% more than if you step outside of hotel and seek the same thing,” said Peña. This rule of thumb applies to activities, souvenirs and more, he added.

2. Ask Locals for Recommendations

When hunting for the best margarita, it helps to speak with the locals about things to see and do.

“Spend five minutes or 10 minutes talking to locals, and they will tell how to get a better price on whatever you want to do and where to go,” said Peña. A hotel concierge often receives a commission for their recommendations, he added. Locals will likely provide an unbiased opinion.

3. Come in Late Summer or Early Fall

According to Hipmunk, the low season, late summer through early fall, presents the best chance to optimize savings. The average hotel price in August in Oaxaca, for example, drops to $67 per night. During the same month in Ensenada, average nightly room rates are $87, according to Hipmunk.

Come October, there are still deals to be had. In Alcapulco, the average nightly room rate drops to $79, the lowest all year. Similarly, in Tijuana, hotel room costs hit their lowest in October, with the average being $76.

Flights are cheaper during these times, the report said. For instance, the average cost of a flight to Puerto Vallarta hits its lowest in September, at $389.

However, you’ll need to keep an eye on the hurricane forecast, especially if you’re bound for a coastal community.

4. Check Airbnb & Vacation-Home Rentals

All-inclusive resorts have their perks, as do luxe hotels, but if your mission is to save pesos, don’t overlook vacation home rentals on Airbnb or other sites.

Even the smallest Mexican communities have Airbnb listings these days, said Randy Bonds, owner of TravelYucatan.com. “There’s a plethora of beautiful condos and homes available and property management in the (Yucatan) region is outstanding,” he said. “A lot of times you get better services than at a hotel. And the rentals are as cheap, if not cheaper than a hotel.”

5. Check Social Media for Deals

“Local businesses will contact local influencers and travel boards to spread the word about any deals they might be offering for the next week or so,” said Bonds. “So if you follow the local tourism boards on Instagram and Facebook, you will find local deals.”

6. Haggle for Bargains

It might not be customary to haggle over the purchase of a coffee cup in the U.S., but in Mexico, asking for a discount is standard.

“Every Mexican asks for discounts when they are buying something or receiving a service, so people shouldn’t feel bad doing this,” said Peña. Expect to get at least 10% off the sticker price, he said. That said, if you’re dining at a fine restaurant, leave your haggling skills at the door.

7. Pack a Travel Rewards Card 

Nothing sweetens a vacation like getting a kickback for your spending. With travel rewards cards, you’ll receive bonus points and other incentives for swiping as you normally would. That could translate to free checked bags on your airline of choice, hotel upgrades and plenty more. (See some travel rewards cards to consider here.)

Thinking of getting a new piece of a plastic? Be sure to check your credit before you apply. You can view two of your credit scores for free on Credit.com.

Image: Dirima

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5 Signs Your Fad Fitness Program Is Really a Money-Waster

Here's how to tell if a fitness fad will have you losing dollars, not pounds.

There’s nothing wrong with paying for a fitness regime. If the program works, isn’t driving you into debt or causing any health problems, its costs could be negligible.

Unfortunately, fitness fads are a dime a dozen and many programs, plans or products don’t work as advertised. In fact, plenty are downright bogus. Do a quick search for “weight loss scams” on the Federal Trade Commission website, and you’ll see what I mean.

To help you avoid falling prey to a useless or predatory pitch, here are five signs a fitness fad will have you losing dollars, not pounds.

1. It Claims You’ll ‘Lose Weight … Effortlessly!’

Exercise, by definition, requires effort. To lose weight, you need to burn calories, which are units of energy, so expect a fitness regime to be accompanied by sweat, deep breaths and discomfort. If a workout involves little time, zero effort and minimal movement, it’s probably not worth the cost. Yes, doing a few minutes of crunches is better than nothing — but it’s still very close to nothing.

2. It Claims You’ll ‘Burn X Number of Calories!’

A popular — and effective — sales tactic in the fitness industry involves advertising the exact number of calories a client can burn over the length of a particular exercise program. But there’s more than one reason to disregard that promise.

For starters, the number of calories you burn during exercise can vary enormously. Second, it’s hard to tell what that number means in relation to actual weight loss. You’d have to be tracking your calorie consumption and keeping a regular log of your weight to have a frame of reference. Plus, even if you lost the exact number of calories promoted by a program, it might not matter. Remember, diet is a critical factor. What happens if you’re consuming twice as many calories as you need to burn to lose weight?

3. It Claims You’re ‘Guaranteed to Lose X Pounds in a Week!’

As in life, there are no guarantees in fitness. No one can know how you will respond to a given exercise. Educated health professionals and medical practitioners can’t make guarantees regarding your health, so be skeptical when some voice on the TV claims it can. Often the burden of success lies exclusively with the customer.

4. It Has an Asterisk Anywhere … or Everywhere

Qualifications abound in the fitness industry and a little star or cross can signify a number of things. “Only $29.99*!” Expect hidden fees. “Free Trial*!” Be prepared to enter credit card information that’ll get auto-charged if you don’t cancel the program before the promotional period ends. See “testimonials*”? Those claims may be unsubstantiated or only accurate under a narrow set of conditions.

Bottom line: If you come across an asterisk, read the fine print and ask plenty of questions before shelling out money. (Keeping track of your finances? You can view two of your credit scores for free on Credit.com.)

5. It Uses a ‘Secret Proprietary Blend’

There are plenty of fitness companies out there, particularly those hawking supplements, that do their best to make you believe they hold some super-secret, space-age, chemical formula developed by a team of sleep-deprived engineers in a lab 5 miles below the earth’s crust that’s totally essential to losing weight. But there are no secrets in fitness, just the truths you may refuse to accept, so there’s reason to be extra discerning when a company drops the “p” word.

Food and Drug Administration regulations don’t require manufacturers to include how much of each ingredient in a “proprietary blend” is actually in their product, just the weight of the mix itself. In other words, the term is often code for caffeine pills, plus some unpronounceable, inert filler chemicals that do nothing to advance your fitness goals.

While getting in shape can take hard work, the formula is basic: diet and exercise. Plus, you can get fit without breaking your budget. Here are a few ways to get started.

Image: BogdanBrasoveanu

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11 Reasons Why Cash Is Still King

Here are 11 reasons why you might want to pay with cash — or at least keep some on hand.

All I wanted was some cilantro and onions, and I didn’t have the money. Correction: I had the money, but it was in my bank account, not in my pocket. The corner fruit market I go to when I need a couple of quick ingredients only accepts cash for small transactions. My plastic wasn’t going to help me.

My wallet was empty, but my husband had a couple bucks in his pocket, so dinner was saved. But the experience made me remember sometimes it pays to have old-fashioned currency on hand.

Not all Americans agree cash is still king. About a third of people in the U.S. never or rarely carry cash, and 34% said they would go completely cashless if they could, a 2017 ING International survey found.

These days, you can use cards or mobile payments for everything, from taxis to paying the babysitter, meaning it’s easier than ever to live without cash. At some stores — such as Amazon’s brick-and-mortar bookshops — paying with cash isn’t an option. But a fully cashless society isn’t here yet, and there are still good excuses for keeping a few bills tucked in your wallet.

Here are 11 reasons why you might want to pay with cash — or at least keep some on hand.

1. It’s Accepted (Almost) Everywhere

Unlike your American Express or Discover Card, cash is accepted almost everywhere. Most merchants in the U.S. happily take greenbacks for payments, even as they refuse to run your credit or debit cards for smaller purchases. Of course, the flip side of the cash-only (or cash-preferred) business is the one that requires you to pay with a card. That’s a perfectly legal practice, and one common in certain industries. So it’s smart to carry both cash and plastic. (Here are the best low-interest cards to consider.)

2. It’s Useful in Emergencies

Credit cards are convenient, until they don’t work or aren’t available. If the power goes out or your wallet is stolen, you’ll be happy you have some paper money tucked in a cookie jar. In fact, the government includes cash on its disaster supplies list, along with essentials such as food, water and prescription medications. Although you shouldn’t hide your life savings under your mattress, $100 or $200 will buy gas or food if the unexpected happens.

3. It Can Save You Money & Hassle When Traveling

You need cash if you’re on the road, especially if you’re venturing abroad. Not only are cards not accepted everywhere, but pockets get picked, ATMs eat debit cards and other misadventures can befall you. Cold, hard cash can get you out of a jam almost anywhere. It’s best to carry a small traveler’s emergency fund on you separate from your main wallet and leave the rest of your cash and a backup credit card in the hotel safe.

4. Your Server Will Love You

You can add your tip to your credit card receipt when you pay the bill for dinner, or you could make your server smile and leave the cash on the table. Your waiter or waitress will be able to collect their earnings right away, rather than waiting for your tip to show up on their paycheck. Plus, restaurant managers sometimes take credit card fees out of tips that show up on cards, which means less for your hard-working server.

Cash is also useful for other tipping situations. The maid or bellhop at the hotel isn’t carrying a Square reader in their pocket, and if you want to tip your Uber driver, you’ll need bills because there’s no way to tip in the app.

5. You Might Get a Discount

Card issuers charge businesses a small fee for processing transactions. Some businesses pass the charge on to customers in the form of an extra fee. Others, especially in states where such surcharges aren’t allowed, offer cash-payment discounts. For consumers, the difference is one of semantics, but the point is sometimes cash will save you money. Cash discounts are especially common at gas stations in certain areas, where you’ll usually save 5 to 10 cents a gallon if you pay with paper rather than a card.

Gas stations aren’t the only ones cutting prices for those with greenbacks. Doctors might slash bills for uninsured patients if they can pay their bill in cash. Jewelry stores might also offer cash discounts.

6. You’ll Spend Less

Do you really spend more when you pay with plastic instead of cash? Studies say yes. Researchers at MIT found people who were told to use a credit card instead of cash were willing to pay more for purchases. Another study found people paying with cash were more likely to focus on an item’s cost, rather than its benefits. In a third study, consumers who were urged to pay cash for small purchases had less debt after six months than those who didn’t receive the same advice.

7. You’ll Enjoy Your Purchases More

Not only will you spend less when you pay with cash, you’ll also get more enjoyment out of what you buy. We have greater emotional attachment to purchases we make with cash than those we put on credit, a study published in the Journal of Consumer research found.

8. You Won’t Run up Debt

If you’re one of the many Americans who have trouble using credit responsibly, going cash-only has a significant benefit: You won’t be able to run up more debt on your cards. Give yourself a cash budget for the week and stick to it. If the money isn’t in your wallet, you can’t spend it.

9. It’s Perfect for Certain Types of Budgeting

Some people give themselves a cash budget to control discretionary spending, but they still use cards for other purchases. Others go all-in with cash, switching over to what’s commonly called the “envelope system.” Popularized by author Dave Ramsey, this approach to budgeting involves dividing all your money for a month into different envelopes — say, $400 for groceries, $200 for gas and $100 for lunches at work.

You only use money from the grocery envelope to pay for groceries, and when it’s gone, it’s gone. The rigidity of the envelope system doesn’t appeal to everyone, but for those trying to live within a strict budget, it works.

10. Your Bad Credit Won’t Be an Issue

So reckless credit card use or other financial problems have tanked your credit score. That means you’ll pay a premium in the form of higher interest next time you need to borrow money. But if you can pay cash instead, you can minimize or avoid the bad-credit penalty. (Not sure where your credit stands? You can view two of your credit scores for free on Credit.com.)

Use hard currency for your next used car and you won’t have to deal with crummy loan terms. At the furniture store, you might not qualify for the special financing, but showing up with a wallet full of $100 bills could earn you an even better deal: a cash discount.

11. Your Purchases Stay Private

There’s a reason criminals like to do business in cash: It’s hard to trace. But even law-abiding citizens who value their privacy appreciate the anonymity of cash transactions.

Aside from the possibility of identity theft, credit card companies and retail stores sell your purchase data, which marketers then use to try to sell you more stuff. In one infamous case, a teen’s purchases at Target clued the store in to the fact she was pregnant. The chain then sent the mom-to-be some coupons for baby stuff, much to the surprise of her parents.

The Cons of Paying With Cash

Cash has advantages, but there’s a reason most of us don’t rely on it exclusively. For one, it’s difficult or impossible to use it in certain situations. If you want to pay cash for your plane ticket, you’ll need to make a special trip to the airport, and renting a car without plastic is difficult.

There are drawbacks to cash that go beyond inconvenience. Cash can be lost or destroyed. You won’t get perks, such as purchase protection, that you get with some credit cards. Rewards points are nonexistent, and some people find it harder to keep track of cash purchases than those on cards. The disadvantages of sticking strictly to cash are enough to make a hybrid solution — cards for some purchases, cash for others — the right choice for most people.

This article originally appeared on The Cheat Sheet.  

Image: LarsZahnerPhotography 

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