A money mindset is your unique, individual set of beliefs about money and how it should be used. These beliefs guide your financial decisions, often expressing themselves through your spending and saving habits.

Why is a money mindset important?

The beliefs you hold about money have a significant impact on your financial success. As personal finance author Rachel Cruze points out, “What you believe about money, yourself, and the world shapes how your life will unfold.”

A key aspect of a healthy money mindset is having the ability to spend money but being okay with the decision not to. If it seems like your relationship with money could use some improvement, we’re here to help.

How to improve your money mindset

It’s okay to realize that your money mindset hasn’t been benefiting you. Don’t get caught up—your challenge now is building a better one. Here are five tips you can start implementing immediately.

1. Get your budget in check

If you’ve never managed a budget, there’s a chance it could feel restricting when you begin. Rather than think of the downsides, appreciate the priceless things a well-crafted budget provides: security, confidence, and freedom from financial anxiety.

Visualize how you’ll feel when you’re certain all your expenses are accounted for. Once your finances are in order, you’ve taken the first step in building a better money mindset.

2. Check in with yourself before making financial decisions

Once your budget is in check, you’ve taken care of the logical side of your money mindset—but it won’t take the emotional aspects into consideration. Practicing mindfulness can help you here, especially if you sometimes struggle with guilt after making a purchase.

So, next time you see something you want to buy, take note of your immediate emotional reaction. Once that wave of excitement or desire passes, try your best to engage your logical mind. Ask yourself questions like:

As you avoid the urge to buy things you don’t need, your money mindset (just like a muscle) will grow stronger.

3. Start reading

Some of us struggle with our money mindsets because we never learned how to build a healthy one. Fortunately, countless authors have set out to change that, working to shift their readers’ beliefs about money for the better. Here are a few of our favorite selections:

•          Mindset: The New Psychology of Success by Carol Dweck

•          Secrets of the Millionaire Mind by T. Harv Eker

•          The Psychology of Money by Morgan Housel

As they say, knowledge is power—and the shift in perspective these books provide is all you need to start building a better money mindset. If you prefer listening over reading, check out our list of 5 top-rated financial podcasts instead.

4. Start writing

When we focus on what we lack rather than what we have, a negative money mindset is the typical result. A gratitude journal can be effective in keeping the positives in mind.

Gratitude doesn’t have to be the only thing you write about, however. Through journaling, you can also learn more about yourself and where your money mindset comes from. We’ve included a few prompts for you to get started:

•          What’s your personal definition of financial success? Why?

•          What’s your ideal way of generating income? What’s keeping you from doing that?

•          What barriers keep you from feeling financially confident? How can you remove them?

A challenge for you: For a week, spend 10 minutes journaling about your money mindset every day. See how quickly you gain a deeper understanding of the beliefs you hold about money, where they come from, and how you can change them.

5. Keep your financial end-goals in mind

Keeping your financial end-goals in mind is crucial when changing your money mindset. The more connected you are with your destination, the easier it’ll be to stay focused as you make progress toward it.

As you start defining your goals, try creating a vision board to keep them top of mind. This board will serve as a visual reminder of your aspirations. When temptation to go off course comes around, your vision board helps you remember why each goal is important to you.

By putting your vision board someplace you’ll see it every day, you’ll create the sense of accountability needed to achieve your dreams—and a money mindset you can be proud of.

Are you stuck in the rut of living paycheck to paycheck? Don’t worry—you’re not alone. According to a 2023 survey, 61% of Americans find themselves in the same boat. But the good news is you can break free from this cycle. Let’s explore the critical question: “How much of my paycheck should I save?” and learn valuable money-saving tips along the way.

Unraveling the root causes of living paycheck to paycheck

Before finding a solution, it’s crucial to understand the problem. Ask yourself, “Why am I living paycheck to paycheck?”

People fall into this cycle for several reasons. For some, their income is insufficient to cater to their lifestyle and simultaneous savings. For others, unexpected expenses or emergencies lead to such a situation. Some might be earning enough but still struggle to save, thus living paycheck to paycheck. To find the root cause, you need to determine whether your income is inadequate or if your expenses are excessive.

The magic of budgeting: An insight into your finances

The first step toward escaping the paycheck-to-paycheck cycle is constructing a budget. How much money should you save each month? A budget is the answer. It provides a clear picture of your monthly income and expenses and is a great first step toward better money management.

Rethinking your relationship with money

A staggering 77% of American households are in debt, indicating a troublesome relationship with money. A perspective shift might be all you need to break free from the paycheck-to-paycheck lifestyle.

Taking a page from the classic personal finance book Your Money or Your Life by Vicki Robin and Joe Dominguez, think of money as a representation of your life energy. Every dollar spent is a measure of your life energy that you’re parting with.

“Our life energy is our allotment of time here on earth… Money is something you consider valuable enough to spend easily a quarter of your allotted time here on earth getting, spending, worrying about, fantasizing about, or in some other way reacting to.”

With this perspective, unnecessary expenses might not seem worth it anymore. So, the next time you’re about to make a purchase, ask yourself, “Is this worth my life energy?”

Is debt the culprit behind your paycheck-to-paycheck lifestyle?

If debt is the reason you’re living paycheck to paycheck, it’s time to devise a repayment plan. Repayment plans offer you a clear roadmap to becoming debt-free.

Start by listing all your debts, including credit cards, student loans, mortgages, and personal loans. Make sure the list includes the balance owed and the interest rate for all debts.

Now, let’s look at two effective debt repayment strategies: the debt snowball strategy and the debt avalanche strategy.

The debt snowball strategy

List your debts in ascending order of balance. Pay the minimum amount for all debts except for the one with the smallest balance. Try to pay as much as you can for the smallest balance until it’s ultimately settled. Then, move on to the next smallest debt.

This strategy offers quick wins and helps pay off individual debts faster.

The debt avalanche strategy

Here, debts are listed from the highest to the lowest interest rate. Pay the minimum balance for all debts except for the one with the highest interest rate. For that debt, pay as much as possible until it’s cleared. Then, move on to the debt with the next highest interest rate.

This strategy helps save more on interest, although it might take you longer to pay off individual debts.

Building an emergency fund: Your financial safety net

Living paycheck to paycheck often leaves no room for saving for emergencies. However, even a small amount set aside for unforeseen circumstances can make a significant difference.

Breaking free from the cycle of living paycheck to paycheck isn’t easy, but with the right money-management skills and financial discipline, it’s certainly achievable. Remember, every step you take toward financial independence today will contribute to a stress-free and more confident tomorrow.

The holiday season is filled with festive decorations, big meals, and gift-giving. And it’s easy to go overboard with holiday spending, which can quickly pile up into holiday debt.

In 2022, consumers buying holiday gifts racked up substantial debt. A LendingTree report indicated the average person’s holiday debt was $1,549. And more than a third of survey respondents said it may take 5 months or more to pay down that debt. So, let’s look at a few ways you might tackle your holiday debt.

Best Egg Financial Health gives you resources to help you take control of your financial future. Keep track of your credit score with a comprehensive credit report. Check it as often as you like with no impact on your score. And our credit alerts will keep you on top of activities that could affect your score.

Ways to pay off holiday debt

There are some basic, time-tested ways to deal with holiday debt. Try one or more of these tactics to attack debts confidently.

Personal loan

A low-interest personal loan might make it easier and less expensive to pay off debt from holiday purchases. You could consolidate high-interest debt from multiple sources into a single, lower-interest loan. This allows you to structure your debt and set a budget—and could cost you less in the long run. You’ll have a single, fixed monthly payment and know exactly how long it will take to pay it off.

Holiday bonuses

Get a bonus from work this year? Many holiday bonuses come at a very tempting time and are quickly spent on something you “wanted,” like a new big-screen TV. Then your regular holiday spending kicks in, and you wind up with credit card debt. It may be a better idea to save your bonus money until after the holidays. Buy gifts for others first, then spend the remainder on yourself. And if you get a tax rebate or an unexpected windfall, use it to pay off debt or save it for next year.

Balance transfer credit card

If you’ve taken on more debt than you can pay off quickly, a 0% balance transfer credit card might help. These cards let you transfer debt to them and give you 18 months (sometimes less, sometimes more) to make payments while no interest is charged. That can be a great help to consumers stuck with a large balance on a high-interest-rate credit card. But remember: These cards usually charge an initial fee of 3% to 5% of the transferred amount. And the interest rates can go quite high if the card carries a balance after the grace period.

Ask for a lower credit card rate

Call your credit card company and ask for a lower interest rate. There’s no downside to this strategy—all they can do is say no. Having good credit may help your chances, but it’s worth the effort, no matter your credit score. If you strike out the first time, wait a few weeks and try again.

Sell stuff online

Almost everyone has things gathering dust in their attics, garages, or sheds. If you have old tools, bikes, furniture, lamps, etc.—list them for sale on eBay, Facebook Marketplace, and Craigslist. Whatever you end up selling provides extra money to pay down high-interest debt. Ten bucks here, 20 there—it all adds up, and it all helps. With this method, it’s like you get paid twice: once for the thing you sell and once when you eliminate credit card charges.

Pull in extra income

Can you get some overtime at work? Ask your boss. Look into a temporary side job to generate extra cash. Put the pay toward your debt and reduce the interest payments you make each month. After the debt is paid off, you might work a little longer at that side hustle and earn cash for future holiday expenses.

Revisit your budget

It’s a good idea to review your budget regularly. After the holiday season, take a close look at your budget and financial picture. Are the income and expense numbers still valid? Could you trim some expenses and put more toward paying down debt? Maybe cut out some entertainment or travel for a month or two? The sooner you pay off your debt, the less you’ll pay overall in interest charges.

Go on a spending fast

This might seem extreme to some, but it goes together with the tip above. You might avoid debt next year if you start cutting expenses now. Maybe drop some streaming services—keep only one active for a while. Eat at home more often and pack a lunch for work. Plan and combine errands, so you use less gas. Refrain from buying anything you don’t absolutely need. Don’t spend time online shopping or surfing merchant websites. It only encourages spending urges and impulse buys.

Use the snowball or avalanche method

These are two solid methods for attacking debt.

The avalanche method pays off the debt with the highest interest rate first while making minimum payments on everything else. Once the first debt is paid off, you focus on the one with the second-highest rate.

The snowball method pays off the smallest balance first while making minimum payments on other debts. Once that smallest debt is paid off, you tackle the next-smallest amount.

In both cases, you determine the total amount of your budget that you can apply toward debt. You add up the minimum monthly payments for all but the target debt and subtract the minimum payment amount from the total debt allocation. Then, you pay that amount toward the primary target. When that account is conquered, you transfer the amount you were paying toward that debt to the minimum amount you were paying on the new target account. In this way, you gain momentum and make bigger payments on your target accounts. Fans of the snowball method say it helps you stay motivated because you can pile up victories faster. However, both have proven track records.

Cut entertainment costs

Take advantage of free activities. Museums often have free days. Go on a group hike in a public park. Take a free class through a local school or community center. Many cities have public concerts and outdoor movies in the summer. Apply the money you save to your debt.

Get help

If your credit card balances far exceed your ability to repay in a timely and cost-efficient manner, seek help. Financial professionals could assist in finding the best solutions. Nonprofit credit counseling agencies can help you structure and negotiate debts. You may be able to establish a debt repayment plan with creditors and possibly reduce your interest rates.

Avoid holiday debt

One of your New Year’s resolutions could be to “avoid holiday debt next year.” The earlier you start, the better. There are many ways to save money and be ahead of the curve by the end of the year.

Start planning/budgeting for next year

Review how much you spent on the most recent holiday shopping season. Add any cash purchases to your bank statement and credit card receipts. Try to estimate what you’ll need for holiday spending next year. Make a list of people you buy gifts for and set a fixed amount for each. And, of course, make sure the total is within your budget.

Start saving ahead of time so you can pay in cash

Once you know how much you’ll need for the next holiday shopping season, start saving. One way to avoid holiday debt is with a savings account dedicated to holiday expenses. Every month, deposit 10% of your budgeted amount, and by November, you’ll be ready for the holiday shopping season. Direct deposit can help tremendously with this effort.

When the high-cost season hits, you should have enough to buy gifts without going into debt. Make withdrawals from savings and pay cash for purchases. Avoid using credit cards, and you’ll likely avoid debt. Cash has a remarkable quality: you can’t overspend it.

Avoid sneaky costs

Save gift bags you receive and reuse old gift bags next season. If you’re worried about giving one to the same person who gave it to you, label them so you don’t. Get gift wrapping early—watch for after-holiday sales. Why pay full price when you can get supplies for 50% or 75% off? Shop at a “dollar store” for wrapping materials.

Focus on essentials; go for a simple holiday menu

When hosting parties, stick with a simple holiday menu. The classics are always favorites and don’t have to be expensive. Organize a potluck dinner for gatherings rather than footing the entire bill yourself. Create an online spreadsheet where attendees can sign up for what they’ll bring.

Learn to use shopping apps

Since you’ve started shopping early, there’s time to wait for discounts. Many shopping apps let you tag things you’re interested in and then send notifications when they go on sale. When you make a gift list in advance, you can follow items on the apps. Apps also can make it easy to compare prices and track price trends.

Favor holiday planning over holiday debt

The holiday season is one area where thinking ahead can create a wide range of benefits. Holiday shoppers might avoid stress when they have a plan for balancing celebrations and finances. They can focus on things that truly bring joy. Avoiding spur-of-the-moment decisions and last-minute purchases is a great way to stay out of holiday debt.

If you’re searching for a roadmap to financial success, there’s no better time to begin setting your financial goals. Whatever objectives you have in mind, whether they’re related to spending, saving, or investing, a list of well-crafted financial goals is your starting point.

Setting financial goals involves three crucial components: assessing your current financial situation, envisioning your desired financial future, and determining the steps to bridge the gap.

Step 1: Assess Your Current Financial Situation

Before setting your financial goals, evaluate your current financial standing. This involves gaining a clear understanding of your assets, liabilities, income, and expenses. Take the following steps to assess your financial situation:

This process may reveal areas where you can adjust to improve your financial situation.

Step 2: Envision Your Desired Financial Future

Once you have a clear understanding of your current situation, it’s time to envision what you want your financial future to look like. This step involves setting goals based on your aspirations.

Retirement lifestyle: What kind of lifestyle do you want to have during your retirement years? What would your annual income have to be to support that lifestyle?

Homeownership: Would you prefer to purchase a home or continue renting? What are the financial implications and long-term benefits of each option?

Entrepreneurship: How much would it cost to start your business? What financial goals could you set to achieve that amount?

Travel and experiences: What type of travel experiences do you desire? What financial goals could you set to make them a reality?

Emergency fund: How much money would you need to cover your expenses for at least three months if you were to lose your job unexpectedly?

Envisioning your desired financial future provides a sense of direction and purpose.

Step 3: Bridge the Gap

The final step in setting financial goals is determining how you’ll bridge the gap between your current situation and your desired future. This step involves prioritizing your goals and creating a plan to achieve them.

Life circumstances and priorities may change, requiring you to adapt your goals accordingly. Be flexible but stay committed to achieving financial success.

Tips for Success in Achieving Your Financial Goals

Now that you’ve set your financial goals and developed a plan to achieve them, it’s crucial to stay on track and maintain momentum.

Automate and simplify: Simplify your financial tasks by automating processes whenever possible. Set up automatic transfers from your paycheck to your savings or investment accounts. Use financial apps that automatically put your money to different savings goals.

Share your goals: Let your family, friends, and trusted colleagues know about your financial goals. They can provide support, encouragement, and hold you accountable for making progress.

Set short-term goals: Break down your long-term goals into smaller, short-term milestones. Achieving these milestones will provide a sense of accomplishment and keep you motivated.

Be adaptable: Remember that life is full of surprises and unexpected events. Be prepared to adjust your goals when necessary. Embrace change and use it as an opportunity for growth.

Celebrate milestones: When you achieve a financial milestone or make significant progress toward your goals, celebrate your accomplishments. Rewarding yourself helps maintain motivation and reinforces positive financial habits.

Remember, the journey toward financial success requires dedication, discipline, and perseverance. Stay focused, stay motivated, and watch your goals come to life.

Setting different types of financial goals is essential when working toward the life you want. Whether you aspire to travel the world, start a business, or retire comfortably, having clear and achievable financial goals is key.

Let’s explore the importance of financial goals, define the different types, and review a few examples you use to get started.

What are financial goals, and why set them?

Financial goals are objectives you set for yourself to accomplish specific financial outcomes. They’re a roadmap that aligns your aspirations with your resources and then helps you create a plan to achieve them.

As you determine which types of financial goals you’ll focus on, make sure that each has a:

Just like setting goals in other areas of life, setting financial goals provides the clarity and direction you need to stay focused.

Types of Financial Goals: Short-term vs. Long-term

Financial goals can range from a few weeks to several decades. The timeline depends on the type of financial goals you want to achieve and a realistic estimate of the time required to do it. Let’s explore the common categories of short-term and long-term financial goals first.

Short-term Financial Goals

Short-term financial goals usually span from a few months to a couple of years, and they’re focused on achieving specific outcomes within a relatively short timeframe. Here are a few examples:

Long-term Financial Goals

Long-term financial goals require a more extended timeframe, often spanning decades. These goals are aimed at securing your financial future and achieving major milestones in life. Take a look at these examples of long-term financial goals:

As you define your own financial goals, aim to have a mix of short-term and long-term goals that are aligned with your life stage and personal aspirations.

Common Types of Financial Goals

Financial goals are unique to everyone, reflecting their values, priorities, and aspirations. While your financial goals may differ from others, here are four common types of financial goals that most people set at some point in their lives:

1. Saving

Saving is one of the most common financial goals, yet it can be challenging to commit to. Your saving goals could include:

When initiating a savings plan, consider following the 50/30/20 rule, which suggests allocating 20% of your monthly income toward savings.

2. Investing

Investing is an effective way to generate wealth over time. Setting investment goals involves putting money toward various investments based on your risk tolerance and long-term objectives. Types of financial goals related to investing could include:

Understanding your risk tolerance and seeking professional advice can help you make informed investment decisions.

3. Adjusting Finances for Lifestyle Changes

Life is full of transitions and major events that require adjusting your financial plans. Common financial goals associated with lifestyle changes include:

Each of these life events requires a period of adjustment and may require reworking your budget, reallocating funds, or adopting new financial management strategies.

4. Paying off Debt

Paying off debt is a crucial financial goal that allows you to achieve financial freedom and reduce financial stress. By eliminating outstanding debts, you can regain control over your financial situation. Some debt-related financial goals are:

Paying off debt requires discipline, consistent effort, and a well-executed plan, but it can also significantly improve your long-term financial health.

As we mentioned earlier, aim for a balance in the duration and types of financial goals you focus on. Short-term goals will provide the motivation needed to stay committed to your long-term objectives—allowing you to enjoy every step on your journey toward financial success.

Setting money goals is always one of the most popular New Year’s financial resolutions. Whether it’s saving more, paying down debt, or creating an investment strategy, people are thinking about getting their financial house in order to kick off each new year. But, statistics show that only about 10% of people who make resolutions feel like they succeed. One reason resolutions often fail is because they aren’t SMART goals. Here are some tips for setting SMART resolutions to help you accomplish all you set out to do this year.

1. The Importance of SMART Goals

Before you set any resolutions, it’s a good idea to think about what you really want to accomplish. Once you know that, it’s time to set SMART goals. For a goal to be SMART, it must be:

Setting SMART goals makes you more likely to stay motivated and achieve your financial resolutions.

2. Crafting a Budget

A budget acts as a financial blueprint, guiding your income and expenses throughout the year. If you don’t have one yet, it might be a good idea to make building a budget one of your new years resolutions. Best of all, with the budgeting tool in Best Egg Financial Health’s Money Manager, you can achieve that resolution in a snap. The tool will automatically assess your spending, show you where your money is going, create spending categories, and recommend caps for each to help keep you on track.

Adopt the 50/30/20 Rule

If your goal is to save more money, you may want to consider the budgeting method known as the 50/30/20 rule. The rule works like this:

Remember, this rule serves as a guideline. Feel free to adjust the percentages based on your unique financial situation.

3. Reduce Debt

Paying down debt is a common yet challenging financial resolution. A couple of effective strategies for debt reduction are the debt snowball and debt avalanche methods.

With the snowball method:

  1. List your debts in order of their balances from smallest to largest.
  2. Pay the minimum on all debts except the smallest balance.
  3. Allocate as much money as possible to the smallest debt until it’s paid off.
  4. Move to the next smallest debt and repeat the process until all debts are paid.

The debt snowball method provides a psychological boost as you see debts being eliminated one by one.

With the avalanche method:

  1. List your debts in order of their interest rate from highest to lowest.
  2. Pay the minimum on all debts except the one with the highest interest rate.
  3. Allocate as much money as possible to the debt with the highest rate until it’s paid off.
  4. Move to the debt with the next highest rate and so on until all debts are paid.

The debt avalanche method allows you to pay off debt faster and for less by attacking the highest interest rates first.

4. Establish an Emergency Fund

An emergency fund acts as a safety net, protecting you from unforeseen expenses like medical emergencies or a sudden loss of income. Building an emergency fund with money that can cover at least 3 to 6 months’ worth of living expenses is a great resolution and one you can achieve with a little effort.

5. Monitor Credit Reports

It’s a good idea to keep tabs on your credit report. You can get your credit report for free and check it anytime without harming your credit score at Best Egg Financial Health. Checking your report, at least quarterly, is a best practice and helps ensure you’re on the path to reaching broader financial goals. Checking your score every 4 months is not only a resolution that doesn’t cost a thing, but it could save you money in the long run.

6. Prioritize Physical and Mental Health

Everything is connected, and physical and mental health are closely tied to financial health. Regular exercise, quality sleep, and social connections are essential for maintaining a healthy balance in life. At the same time, the more confidence you have in your financial well-being, the less stress it may cause, thus boosting your mental and physical well-being. Setting resolutions to improve all aspects of your health is a really great idea. 

7. Explore Investment Opportunities

Investing can be a powerful tool for wealth accumulation. As the saying goes, “Don’t put all your eggs in one basket.” That goes double if you’re considering investment strategies. Consider building a diverse portfolio by investing in stocks, bonds, mutual funds, and real estate. Investments have peaks and valleys, so with a diverse portfolio, you’re more likely to stay afloat with the others when some aspects are down.

8. Plan for Retirement

No matter your age, it’s never too early to plan for retirement. If your employer offers a retirement plan like a 401(k), it’s a good idea to participate and contribute as much as you can. If your employer offers a matched contribution, at the very least, try to meet the threshold to get the full match. That’s free money. If you have an individual retirement account (IRA) or other retirement savings options, look at ways you can maximize your investments so that you can build those funds to last well beyond your working days.

9. Teach Kids About Money

If you’re a parent, teaching your kids about money can be one of the most valuable lessons you provide. Instilling good financial habits early can set your children up for financial success in the future. Talk to your kids about the value of money and explain the differences between wants and needs. Let them earn money and save up for something special. Teaching kids how to save is important. Something as simple as a piggy bank can start building an understanding of the importance of saving. No matter which methods you choose, talking to kids about money early sets them up to be more financially confident adults.

10. Give to Charity

Charitable giving can provide a sense of purpose and joy. Plus, your donations might be tax-deductible. Remember, charitable donations can be more than just cash. You can donate clothing, home goods, food, cars, or even real estate. Choose a cause you’re passionate about and make a difference in the new year.

Remember, achieving your financial resolutions won’t happen overnight. Be patient, stay committed, and celebrate your progress along the way. Here’s to a prosperous new year!

Financial independence is a goal that many of us aim for, but it can often feel like an elusive target. So, what does it mean to be financially independent—and more importantly, how can we navigate our way down the path to financial independence? This guide provides a roadmap to reaching financial independence, whether you’re employed, considering real estate investment, or planning for early retirement.

Understanding financial independence

Before we delve into the details, defining what we mean by financial independence is crucial. Financial independence means having enough wealth, savings, or passive income to cover living expenses without being employed or dependent on others. It’s about having the financial ability to make choices that allow you to enjoy life without worrying about your next paycheck or unforeseen expenses.

Reaching financial independence doesn’t necessarily mean you have to stop working. Many people who achieve this state choose to continue their careers, start new businesses, or devote time to causes they’re passionate about. The significant difference is that they do these things out of choice rather than necessity.

Setting clear, achievable goals

The first step to financial independence is to identify your financial goals. These goals should be SMART: Specific, Measurable, Achievable, Realistic, and Time-bound.

For instance, you might set a goal to save a certain amount for retirement by a specific age or to pay off your mortgage earlier than the traditional retirement age. Your goals will depend on your circumstances, such as your current income and expenses, age, and retirement aspirations.

Remember, the path to financial independence is a journey, not a sprint. Setting realistic goals will help you stay motivated and keep you from feeling overwhelmed.

Creating a comprehensive budget

A comprehensive budget is the cornerstone of financial independence. It’s the blueprint that guides your spending and saving decisions.

Your budget should detail all your income sources and expenses, including housing, groceries, transportation, insurance, entertainment, and other personal costs. It should also include a provision for retirement savings and building an emergency fund.

Living within your means is a critical principle in achieving financial independence. This means spending only what you earn and avoiding debt whenever possible.

Building a safety net

A safety net, or emergency fund, is vital to your financial independence plan. This fund covers unexpected expenses like car repairs, medical bills, or job loss. Aim to save enough to cover three to six months’ living expenses.

The size of your emergency fund will depend on your circumstances, but it’s essential to start saving immediately, even if it’s a small amount. Over time, these small savings will add up and provide a robust financial cushion that can weather life’s unexpected storms.

Saving and investment strategies

Savings and investment are the engines that drive your financial independence vehicle. Regular savings help you build a nest egg, while investments can generate passive income and grow wealth.

There are many saving strategies, but one practical approach is to “pay yourself first.” This means setting aside a portion of your income for savings before you pay your bills and other expenses.

On the other hand, investing involves putting your money into assets that can generate returns over time. This can include stocks, bonds, mutual funds, and real estate. Diversifying your investments is crucial to manage risk and maximize returns.

Cultivating passive income

Passive income is income you earn without actively working, such as rent from real estate, stock dividends, or book royalties. Cultivating passive income sources can provide an additional financial cushion and accelerate your journey to financial independence.

Planning for early retirement

Retirement age is a significant factor in your financial independence plan. The earlier you can retire, the sooner you can enjoy the fruits of your financial independence. However, early retirement requires careful planning and substantial savings.

It’s essential to consider the cost of living in your retirement years, including healthcare, housing, and lifestyle needs. Planning for these expenses will ensure you can maintain a comfortable standard of living, even when you’re no longer earning a regular income.

Leveraging real estate

Real estate can be a powerful tool in your financial independence toolkit. Whether it’s your primary residence, a rental property, or a real estate investment trust (REIT), real estate can provide a steady income stream and potential appreciation over time.

However, real estate investment is not without risks. It requires careful research, management skills, and weathering market fluctuations.

Making your health a priority

Your health is an essential asset on your path to financial independence. Good health can reduce healthcare costs, increase productivity, and improve quality of life. By investing in a healthy lifestyle, you also invest in your financial future.

Getting professional financial advice

Working with a financial advisor can be invaluable on your path to financial independence. A financial advisor can provide personalized advice based on your unique financial situation and goals. They can help you create a comprehensive financial plan, choose the right investment strategies, and stay on track toward reaching your goals.

Conclusion

Achieving financial independence takes time and effort. It requires discipline, patience, and a well-thought-out plan. However, the freedom and peace of mind that comes with being financially independent are well worth the effort. Start your journey today, and before you know it, you’ll be well on your way to reaching your financial independence goals.

Think of one word that comes to mind when you think of holiday shopping. It’s probably budgeting, right? Okay, maybe it’s not the first word that comes to mind—but it should be. The holiday shopping season can be a lot of fun, but it may also be financially damaging. According to the National Retail Federation, Americans routinely spend more during the holiday season than during any other time of year. Good budgeting is your best defense against overspending, and we have some holiday shopping tips to help you stay smart with your money this season.

Tip #1: Build your holiday budget

Before you even start leafing through the holiday ads or scrolling for deals online, it’s a good idea to create a rough budget. It doesn’t have to be down to the penny, but get a rough picture of your financial plan for the next few months. Consider how much of your savings, income, and credit limits you can responsibly spend.

Once you have that estimate, figure out how much you’re able to spend on your holiday shopping. Think about how much you’ve spent in years past, take stock of what you already have, and set your goals for the season. Be sure to check your credit utilization before shopping as well. It’s a good idea to keep your credit utilization below 30%. Maxing out a credit card could negatively impact your credit score. You can check your credit utilization at Best Egg Financial Health.

Finally, set your holiday spending limit that includes a bit of a cushion just in case you miss out on a few deals or if there’s a last-minute addition to your shopping list.

Tip #2: Create a holiday shopping list

List everything you’re gifting, cooking, baking, and decorating. Once your list is complete, estimate the expenses. You should plan to spend no more than your holiday budget limit.

Think of your holiday shopping list like your grocery list. Write out what you plan to purchase—and stick to that list. Just like a grocery list can help keep you on track and save you money, keeping a holiday shopping list can help keep you organized and prevent impulse purchases that could put you over budget.

Tip #3: Seek out the bargains

Now comes the fun part of holiday shopping—bargain hunting. Research the stores and websites advertising the lowest prices on the items on your list. Most retailers will promote deals well ahead of the popular shopping days, so make note of them and prepare to be in-store or online during those times to take advantage of the sales.

While some door-buster deals may seem too good to pass up, if the items aren’t on your list, don’t buy them. It’s a slippery slope to a busted budget if you allow yourself to stray from your plan. Use your list to keep track of your spending and adjust if you under or overspend on an item. If you overspend for one gift, make sure you spend a little less than you had planned on another to balance it out. If you’re worried that you may be tempted to overspend, it may be a good idea to shop with a friend or family member who can help you stay on track.

Tip #4: Some of the best gifts don’t cost anything

Remember, the holiday season is all about showing others you care. While expensive gifts may be a nice gesture, consider alternatives to traditional gift-giving. Plan a unique experience. Take some time to do something they love, like a trip to the lake, a sporting event, or a ballroom dance class.

Consider cooking their favorite meal, baking their favorite treat, or spending a day volunteering for their favorite cause. Making memories with your loved ones is priceless and can most often be done without overspending.

In conclusion, whether bargain hunting or getting creative with gifts, make sure you’re keeping your holiday spending in check. January credit card bills always seem to come sooner than you expect, so follow these tips, and you’ll be the master of smart holiday shopping.

Key takeaways

In the era of online shopping, Cyber Monday can be thought of as the digital equivalent to Black Friday. It’s the annual online shopping day that semi-officially takes place on the first Monday after Thanksgiving. We say “semi-officially” because many vendors start earlier, and sales can run for quite a while afterward, too.

Though most Cyber Monday sales happen online, brick-and-mortar vendors have been known to offer similar great deals to compete with their web-based counterparts. Those deals offer shoppers a great chance to score deep discounts on electronics and other goods.

Anytime you’re shopping online, stay on the lookout for hacking attempts and the fallout from data breaches. Best Egg Financial Health has tools in place to help keep an eye out as well. We can monitor your credit report and alert you to any changes that you need to know about. Good or bad, hacker or credit boost — don’t be caught by surprise.

Is it worth shopping on Cyber Monday?

Absolutely. If you plan to buy electronics, Cyber Monday offers a chance at the best deals of the year. Many retailers blur the timelines a bit, though. Pay attention to when the deals really begin — and when they truly end. Don’t be fooled into checking prices only on Cyber Monday. Sales often start days earlier, sometimes even before Thanksgiving. It’s common for sales to extend past Cyber Monday, as well.

Is it better to buy on Black Friday or on Cyber Monday?

Although Black Friday has traditionally been the bigger sales day, Cyber Monday has changed things. On Black Friday, great deals are offered on items like small kitchen appliances or vacuum cleaners. Here and there, you might see deals on e-readers or video gaming stations.

But on Cyber Monday, many vendors offer site-wide deals on everything electronic. You might find deals on laptops, gaming systems, big-screen TVs, professional cameras, car stereos, and other tech gear. If you’re looking for something electronic, Cyber Monday is the time to buy. Be alert though, as you might find that exclusions apply. You may be limited to buying only one item at the sale price, or only one sale item per day.

Cyber Monday deals often run for a few days afterward. In fact, it’s sometimes called Cyber Week. If you miss out on Monday, try to check back later. Vendors restock continuously — and sometimes without notice. Sometimes, being able to grab that great deal can take equal parts persistence and luck.

Tips for Cyber Monday shopping

When shopping at Cyber Monday stores, there are a few tips that may help you. Remember, it’s still “regular shopping,” even if the wild discounts and excitement seem otherworldly. Here are some helpful tips to consider:

Create a budget and a shopping list

Make sure that you can afford everything you want. Setting your budget before the sales kick off will help you keep an eye on costs. Making a shopping list of what you really need will help you focus on those items. And it will help you to resist impulse buys. Include on your list all of your holiday gifts for others (or for yourself). Set a fixed limit to spend and stick to it, no matter what amazing deal you might find.

Sign up in advance

Early on, hit the websites of vendors you might visit during Cyber Week. Sign up for their newsletters or notification emails. It’s never too late to do this, but it’s best to sign up at least a week before Thanksgiving. That way, you’ll receive the vendor’s coupons, discounts, or unadvertised specials beforehand. Make a note to unsubscribe when you receive your purchases to avoid getting inundated with spam emails.

Check social media

Along with email signups, make sure to follow vendors on their social media channels. Vendors sometimes post special deals, coupons, or discount codes via social media, or they may offer early access to sales events, letting you get the jump on other shoppers.

Will it be on sale?

Consider what you’re planning to buy on Cyber Monday. If it’s electronics, perfect. If it’s winter apparel — jackets, coats, insulated boots — you might wait until the end of the chilly season. That’s when those items get discounted. Holiday decorations, linens, jewelry, and sportswear usually go on sale at other times of the year. Focus your efforts on what Cyber Monday is all about: technology.

Compare prices

Vendors are known to “mark up to mark down.” Sometimes, 50% off the “suggested retail price” ends up being what everyone else sells it for. Use a notepad or create an electronic spreadsheet to track prices and vendors. You can also use online price comparison tools. Whichever way you track prices, don’t jump on a deal until you verify that it’s really worthwhile.

Look for free shipping

This especially applies when you’re comparing prices. A “rock-bottom price” loses some of its appeal if a shipping charge is attached. Some vendors always offer free shipping, and some offer it only during sales events. Many offer free shipping if you spend a minimum amount, say $25 to $99. Knowing this, and tracking it on your spreadsheet, will help you decide whether a deal is worth it. Or you may decide to stack multiple purchases at one vendor in order to qualify for free shipping.

Is it returnable?

You might be surprised, but some vendors don’t allow returns. Or they’ll only offer something minimal, like a three-day return window. Both are typically red flags. Reputable vendors allow returns, and they often offer 14 to 30 days to make them.

As always, exclusions apply. A vendor may allow exchanges or refunds only on items that are damaged or broken upon receipt. For personal items or food products, they may not allow returns or exchanges at all. Other items, such as refurbished electronics, often carry a limited warranty or exchange period. It will pay you to know these things before you buy.

Make a bookmark folder

Early on, create a new bookmark folder in your browser and label it “CyberWeek.” Fill it with links to all of the vendors you’ll visit, so that you’ll have them handy and organized. You can even add links to general searches. For instance, let’s say you use Google, and you enter “gaming chair” into the shopping search. Be sure to bookmark the results page. Then, anytime you need to check that search item, just click your link.

Check your credit cards

You’ve made a budget and know what you plan to spend. But have you checked your credit cards to see if there are any tie-in deals? Sometimes, card issuers offer a discount at certain vendors’ stores. You might score an additional 5% or 10% off, and that’s usually stacked on top of other vendor sale discounts. That could bring substantial savings on big-ticket items.

Security

Scam attempts and malicious websites abound, and they’re even more prevalent during the holidays. Be careful. If you get an email that appears to be from a vendor, double check who’s really sending it. Don’t click links you find on other sites or in emails — type the vendor’s address directly into your browser. Be wary of slight misspellings in the URL or web addresses that don’t match the retailer you are trying to visit. Those could be signs that someone has set up a phony website to trick shoppers.

Don’t trust a random site that pops up in a search engine. You know the kind: those with the deal too good to be true. It might be a scam. Prices on the same item don’t vary tremendously from one reputable vendor to another.

Always make sure that the site is secure before you enter payment information. The URL should begin with “https:”, which shows that the site uses an encrypted connection. The address bar should feature a lock icon as well. If you don’t see these items, anything you type can be easily intercepted and read by hackers. As always, register with vendor sites using unique usernames and strong passwords for each. Or use “guest checkout” if it’s available.

And be sure to keep an eye on your credit card and bank accounts throughout the season. Data thefts and financial hacking tend to increase during holidays. The faster you contact your bank about a problem on a statement, the sooner your bank can address it. Following these tips should help you stay on track with your holiday shopping budget and keep your accounts safe and secure. For more tips or to track your holiday spending, check out the My Finances section of Best Egg Financial Health.

Black Friday Budget Key takeaways

As the holiday season arrives, with it comes Black Friday deals — a delight for shoppers everywhere. It can also be a time when consumers get carried away and  make the most of it, consumers might want to start now on their Black Friday budget.

In past years, Black Friday has occurred only on the day after Thanksgiving. Deals started just after midnight on Friday morning. Eager shoppers would camp in parking lots at the big-box stores and wait in long lines that often would stretch around the buildings. But things have changed since online shopping has now become a major part of our lives. Holiday deals sometimes start well before Thanksgiving — and may run days past the following Cyber Monday.

It doesn’t matter whether you stand in line in a store or use a computer from the comfort of your home, Black Friday sales offer some of the best deals available — but it’s easy to get carried away. Without sticking to a Black Friday budget, you may end up buying things that you don’t need. And even worse, you may spend money that you don’t have.

Many folks use credit responsibly to pay for their holiday expenses. If you do, it’s important to keep track of your credit score and know your debt options. Visit Best Egg Financial Health to check your credit rating. You could also use their credit simulator to compare financial options.

How to set up your budget

The best way to think about a Black Friday budget is to consider it a subsection of your greater holiday budget. One budget section could be for decorations, meals and entertaining, a second for gifts, a third for trips and travel. Breaking down the gifts section of the budget to cover just Black Friday shopping could help you decide how much to allocate for that day, or days. Of course, your overall gift budget might overlap with your Black Friday budget.

It’s important to be prepared. Don’t wait until the busiest shopping day of the year to figure out your budget. To improve your chances of saving money, start planning earlyand decide what sale items you truly need to buy. Let’s go over the action list for your Black Friday budget.

Set a spending amount

Right up front, before you do anything else, write down how much your budget will allow for all your holiday items. If you have an annual budget, use it to guide your spending for the season, including decorations, travel, meals, food, gifts. From that careful allocation, you should have a good idea of what you’re able to spend during the holiday shopping season. Naturally, your Black Friday spending will have to be within that overall holiday limit.

Build your gift list

Identify everyone on your gift list. Write the name of each person, how much you will allocate for them, and any possible gift ideas. Don’t try to save money or over-complicate things by trying to figure out exactly how much you’ll spend on whom. Just create a reasonable list of possible expenses, either on paper or in an electronic spreadsheet.

It’s okay to add yourself to this list. But make sure you also add the fixed amount that you plan to spend on yourself. Not setting a spending limit for yourself could be financially dangerous — especially once that holiday shopping rush hits.

Add it up

Total up the cost of your expected gifts, including those for yourself. If it comes in at or below your budgeted spending amount, that’s awesome. Well done. Go forward and search for the best deals you can find.

But what if your expected spending exceeds your budget? That could happen, but don’t worry. Remember, your spending should be based on what you can afford, not on what you want to spend. If it looks like you might go over your budget, there are a few options to pursue.

The most helpful balancing solution might be a little of each.

Take some time to reconsider those items for yourself

Are you buying things you need, or just things you want? Are you only interested in something because you might get a great deal on it? Buying a new laptop at half price on Black Friday or Cyber Monday would be awesome, but is there anything wrong with your old one? Think about it beforehand. A good deal is only good if you really need the item you’re buying.

Fantastic online sales drive impulse buys

Be prepared. Have your shopping list in hand — and stick to it. If you take advantage of a “can’t pass it up” deal, remove a similarly-priced item on your shopping list. Otherwise, you may spend even more money to purchase items than you wanted to. And remember, you will have to pay for everything when it’s all over and done. That’s why you stick to a budget.

Have trouble resisting impulse buys?

Shop with a friend — someone who’s responsible and not enabling. You want someone who’s comfortable asking “Why do you want that?” and “Did you budget for it?” Then, do the same for them as they shop. This sharing could keep everyone on track and on budget.

A shopping partner is an obvious choice to accompany you to the stores, but what about online sales? In recent years, many of us have become proficient in teleconferencing with screen sharing. Virtual partnering works the same as being there in person. Share your buying experiences with your friend while you’re both online, and help each other stay within budget.

Work up a shopping strategy

Figure out your best chances to get that good deal by looking online well in advance. Plan your shopping around those factors. Don’t want to deal with lines and crowds? Forget about the ads for in-person sales, even though they’re tempting, and focus on the online retailers. Research online sales windows (when those sales open and close). Then, make a cheat sheet to remind you of what websites to visit and when.

Don’t forget about essentials

Yes, an 85″ TV for $100 is pretty amazing. But don’t forget about the less-exciting items that many Black Friday shoppers ignore. Getting toilet paper, cleaning supplies, toothpaste, and socks at 80% off is a fantastic bargain, no matter when. Your budget should already include those expenses, anyway, so take advantage of the savings. Stock up when you can — it might allow you to put more money toward gifts.

Relax

It’s easy to get caught up in the madness, whether you’re at the store in person or shopping from home. Don’t take anything personally. Websites bog down, crash, and items may go out of stock under the massive load of shoppers. People can get ruthless over limited items in stores or get upset when they miss a sales window. Don’t sweat it.

Check other sites if one crashes — there’s always another bargain out there. Many online sites restock without notice, so always check back later. If you choose to shop in person, don’t worry about standing in line for 12 hours. Drop into the store after the early mayhem is over. Many stores offer great deals all day long with timed releases and sales. You could avoid the jostling and shoving at 2 a.m. for a cheap big-screen TV. Then, at 2 p.m., when those early shoppers are asleep, you might score a 10-speed bike for $20.

Wrap it with a bow

If you don’t already have an annual budget, why not build one now? Set up both a monthly and a holiday budget, while you have the time. Check out the great resources at Best Egg, and start creating your budget today.