Financial Literacy

Written by True Tamplin, BSc, CEPF®

Financial literacy is the knowledge and confidence to make smart financial decisions. It doesn’t just mean balancing a checkbook, but also taking advantage of opportunities for your future self such as savings accounts and Roth IRAs that offer tax benefits over traditional checking or savings accounts. Financial literacy can help you get rid of debt and build wealth. Financial education is the key to financial literacy.

Why Is It Important? 

Financial literacy is about being empowered to make the best possible financial decisions for yourself, your family, and your future. It’s not just about accumulating wealth or earning a high salary—although both are nice benefits of being financially literate. It allows you to take control of money matters without relying on someone else to do it for you. Financial literacy can improve your overall quality of life. It also has the power to change the world for the better.

How to Raise Financial Literacy Levels

You can’t magically impart financial knowledge to someone. Financial literacy isn’t a simple subject.  Financial decisions are emotionally laden choices about things people care most about. It’s not enough to tell someone that credit cards are expensive, for example — you have to help them see that the cost is coming out of their future and that the scars from using a credit card will last much longer than the initial thrill or relief of getting something they want. Financial education is about developing skills, not knowledge alone — it’s about helping people to think critically about money choices. Effective financial literacy programs also involve experiential learning. Here are some actionable steps that can give you an opportunity to improve your financial literacy levels: 

1. Create a Budget

One of the most basic but effective ways to get more control over your money is by sticking to a monthly budget. This plan will help you identify exactly where your money is going so that you know how much you’ll have for savings, entertainment, and debts. Financial experts recommend using software to help you build a budget that works for you.

2. Find Ways to Increase Your Income

Building a monthly budget will show you exactly how much money is coming in and going out of your accounts, but sometimes expenses can go beyond what’s listed on the report or identified by other people who know your financial situation.  So, you might need to find ways to bring in extra income. Even if it’s an hour a week of bartending on the weekends or babysitting for a neighbor once a month, every little bit helps.

3. Say No to Credit Cards

Yeah, that piece of plastic with your name on it is the gateway drug into the world of credit card debt. The problem with them is that once you run up a balance, it can be hard to pay it down quickly because of high-interest rates and minimum payments that don’t reduce the balance. Financial experts recommend waiting until you can pay off your balances in full each month before treating yourself to something expensive with a credit card.

4. Only Spend What You Have

Financial experts agree that impulsive spending on things you don’t really need is a surefire way to get yourself into debt troubles or hamper your ability to save for the future. Financial literacy means learning how to say no and putting away your wallet when you feel the urge to buy something that isn’t on your budget. Financial literacy also teaches how to recognize a situation where purchasing an object, even if it’s available for sale, is not the smartest option.

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How To Boost Your Memory Power Part One

How to Save Money: 22 Proven Ways

By Courtney Neidel

When it comes to saving money, small changes can add up quickly. Adjusting a few daily habits, cutting monthly bills and leveraging tools that automate savings can collectively make a big impact.

We highlighted some of the best ways to save money right away. These money tips can help you save for a house or a car or simply save more money out of your salary.

22 ways to save money

1. Automate transfers.

2. Count your coins and bills.

3. Prep for grocery shopping.

4. Minimize restaurant spending.

5. Get discounts on entertainment.

6. Map out major purchases.

7. Restrict online shopping.

8. Delay purchases with the 30-day rule.

9. Get creative with gifts.

10. Lower your car costs.

11. Reduce your gas usage.

12. Bundle cable and internet.

13. Switch your cell phone plan.

14. Reduce your electric bill.

15. Lower your student loan payments.

16. Cancel unnecessary subscriptions.

17. Refinance your mortgage.

18. Set savings goals.

19. Track spending.

20. Pay off high-interest debt.

21. Keep savings in a high-yield savings account.

22. Create a 50/30/20 budget.

1. Automate transfers

By setting up automatic transfers from your checking account to your savings account each month, the money will accumulate over time without any additional work on your part. This technique can be especially useful when your savings accounts are dedicated to specific goals, such as establishing an emergency fund, going on a vacation or building a down payment.

You can also let apps like Digit or Qapital do some of the work for you. After you sign up, they’ll transfer small amounts from your checking account to a separate savings account for you. That way, you don’t have to spend time or energy thinking about making a transfer. You can learn more about apps that automate savings and decide if they’re a good fit for you.

2. Count your coins and bills

Another option is saving your change manually by setting it aside each night. After you have a sizable amount, you can deposit it directly into your savings and watch your account grow from there. In fact, when you want to watch your spending, it’s a good idea to use cash instead of credit cards because it can be harder to part with physical money. While this strategy doesn’t build savings overnight, it’s a solid approach for slow-and-steady savings growth.

3. Prep for grocery shopping

A little work before you go to the grocery store can go a long way toward helping you save money on groceries. Check your pantry and make a shopping list to avoid impulse buying something you don’t need. Learn how to get coupons and join loyalty programs to maximize your savings as you shop. In exchange for sharing your phone number or email address, your local store’s loyalty program might offer additional discounts.

If you use a cash-back credit card, you could earn extra cash back on grocery purchases. Some cards offer as much as 5% or 6% cash back, but you’ll want to be sure to pay off your bill each month to avoid paying interest and fees.

The app Flipp pulls in coupons from local stores when you enter your ZIP code. That way, you can shop sales without sorting through the newspaper. If you shop for groceries at a large retailer like Target, Amazon or Walmart, you can often find additional savings by downloading the store’s app.

4. Minimize restaurant spending

One of the easiest expenses to cut when you want to save more is restaurant meals, since eating out tends to be pricier than cooking at home. If you do still want to eat at restaurants, try to reduce the frequency and take advantage of credit cards that reward restaurant spending. You can also opt for appetizers or split an entree with your dining companion to save money when you eat out. Skipping drinks and dessert can help stretch your budget as well.

5. Get discounts on entertainment

You can take advantage of free days at museums and national parks to save on entertainment costs. Your local community might offer free concerts and other in-person or virtual events; check your local calendar before splurging on pricey tickets to private events. You can also ask about discounts for older adults, students, military members and more.

6. Map out major purchases

You can save by timing your purchases of appliances, furniture, cars, electronics and more according to annual sale periods. It’s also worth confirming a deal is actually a deal by tracking prices over time. You can let tools do this step for you; the Camelizer browser extension tracks prices on Amazon and can alert you to price drops. The Honey browser extension pulls in coupon codes and checks for lower prices elsewhere.

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9 Benefits Of Living Below Your Means

By Be The Budget

Do you dream of retiring, getting out of debt, building wealth, or just living a life that doesn’t rely on your next paycheck? Well, no matter what goals you have for your financial future, they require one common thing: living below your means.

But, what does it mean to live below your means?

Put simply, living below your means is the act of spending less money than you earn. For example, if you earn $3,000 per month, but only spend $2,500, then you are living $500 below your means. This is an important financial habit, because it allows you to save, invest, and build wealth.

But, let’s be honest, that’s easier said than done.

Living below your means requires you to trade immediate pleasure for the sake of long-term gain. It means placing a higher priority on saving than you do on spending. And, above all, it takes self-discipline and sacrifice.

That said, what if it isn’t as tough as everyone makes it out to be?

What if, instead of focusing about all the sacrifices of living below your means, we focused on all the benefits? Because, seriously, there are tons of them.

Well, that’s exactly what we’re going to do!

In fact, here are 9 benefits of living below your means.

1. Living Debt Free

For a long time, I thought living below my means just meant my monthly payments had to be less than my monthly income. The problem with this way of thinking, was that it allowed me to take on debt that I couldn’t actually afford.

What living below your means, actually means, is only buying things you can pay for in full. That means no credit card debt and no loans. Just cold hard cash.

Now, when you first read that, you might think it sounds boring, and a little bit insane. But I can honestly tell you that it is wonderful to get a paycheck and not have to subtract monthly payments from it.

It is exciting when you hop in a car that you own outright.

It is glorious watching your bank account grow instead of shrink.

And it is thrilling to know that as long as you live below your means, you will never have to pay off debt again. Ever.

2. Less Stress and Anxiety

Have you ever felt ‘buyer’s remorse’? Well, when you live below your means, you almost never experience it.

You see, when you live below your means, every dollar has a purpose, and every purchase requires thought and intentionality. When you know how much money is coming in each month, you have to be disciplined with your spending to operate within that amount. And with that discipline, comes a surprise reduction in stress.

You won’t lay awake at night wondering where your money went this month. You won’t be stressing over the length of time between now and when you get paid. And monthly living expenses like water, heat, and electricity won’t even come close to making you sweat.

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7 Expert Perspectives on Why Financial Literacy Is Important

By Samantha Rose

For better or worse, money touches all areas of life. Financial literacy can help.

Why is financial literacy important?

Financial literacy is important because it equips us with the knowledge and skills we need to manage money effectively. Without it, our financial decisions and the actions we take—or don’t take—lack a solid foundation for success. And this can have dire consequences:

Given the above statistics, it might not be surprising that nearly two-thirds of Americans can’t pass a basic test of financial literacy.

To explore the importance of financial literacy, we turned to personal finance experts working in colleges, high schools, and credit unions. Together, the populations they serve span a broad range of ages, incomes, and backgrounds. These educators witness first-hand the impact that financial literacy—or the lack of financial literacy—can have on a person’s life.

We posed the same question to each of them: “Why is financial literacy important?” Here’s what they had to say.

Expert perspectives on why financial literacy is important

“For college students, financial literacy is important because the formula for college success today only has two factors: grades and money. Professors and instructors thoroughly educate students on academic requirements and grading policies. It’s often new financial responsibilities and realities that campuses are not adequately educating or preparing students for success. Research has even shown that students are more likely to drop out of school because of “outside pressures” than poor grades. Student success is no longer constrained to classrooms or defined by academic performance alone. The future success of our students relies on providing opportunities for them to learn, develop, and strengthen core life skills they need today and more importantly tomorrow as successful graduates. Our team is proud to be creating a new paradigm within higher education by bringing the topic of money out of the shadows. We have become national leaders in our field by confirming that personal financial education services are no longer an exception for today’s students—they are an expectation.”

“Finances inherently—whether or not it’s incredibly short-term in just buying lunch for that day or long-term saving for retirement—help you accomplish whatever your goals are. And financial literacy is important because if you learn about it, it’s going to teach you how to be efficient with your finances in such a way that you can accomplish more goals, and the goals that you do have, faster.

Paul Goebel, Director, Student Money Management Center at the University of North Texas

“I think if people truly understand the way that financial systems work at an early age, or even later on in life—if they’ve made poor decisions but learn how they can go back and fix them and start planning for the future—they can then encompass that and take the steps to make a better life for themselves.”

Cherry Dale, Director of Financial Education, Virginia Credit Union

“Financial literacy, for me, the most personal debt I have…between my wife and I we paid off $110,000 of debt in five years, because we just learned how to organize our finances in such a way that allowed us to do that. You know, we don’t make a ton of money, but by learning the process and learning what you can do to better organize your life through financial literacy, you can accomplish things a heck of a lot faster and more efficiently.”

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5 Ways People Lose All Of Their Money

By Marc Guberti

One of the worst financial fates someone can endure is losing all of their hard earned money in a matter of days or weeks. While this doesn’t happen to most people, it unfortunately does happen to some people.

$100,000 turns into $0 and a few hard years of work go down the drain. It’s incredibly heart breaking just to think about this scenario, but it’s one we must actively seek to avoid.

There are several reasons why some people lose large chunks of money seemingly overnight. These are five of the more common reasons why this phenomena happens.

Not Tracking Their Expenses

If you don’t keep an eye on your expenses, you can suddenly fall prey to them. While the drop to zero isn’t as dramatic, it whittles away your wealth over time. This can have an accelerated impact if one or more of your income streams suddenly dry up.

Tracking your expenses on a spreadsheet will give you a deeper appreciation of where your dollars go. You’ll hesitate each time you’re presented with the opportunity to spend your money. This is a good thing because you’ll then only spend money on meaningful purchases rather than impulsive ones.

When you track your expenses, you’re more likely to focus on experiences rather than the accumulation of stuff.

High Risk Investments

Investing is paramount for building wealth over time, but it can get ugly if you invest in high risk assets. Cryptocurrencies and options are two high risk, high reward investments.

While it’s okay to have some high risk investments in your portfolio, you should keep it to a minimum. There’s a big difference between 0.5% of your portfolio getting wiped out versus 20% of your portfolio getting wiped out.

If your investments keep you from sleeping at night, you need a different strategy. Sure, a high risk, high return reward can result in significant appreciation in a short amount of time. Some options traders turn $500 into $100K. However, it’s just as possible to turn $100K into $500.

Some high risk investments don’t even present a proper risk-reward ratio. Shorting stocks is among the riskiest ways to invest because you can double your money at the very best and face unlimited losses at the very worst. Some shorts end up losing their entire portfolios because a stock suddenly shoots upward (I’m looking at you, GameStop).


I went to Las Vegas once because my brother was speaking at an event there. I had always heard of it but was curious with what I would find. I knew I’d be in a place where gambling was very popular, but I was unprepared for the amount of slot machines and different card games I saw there along with the smell of cigarettes.

Casinos aren’t exactly my cup of tea, and I’ve never gambled in them. Not even with $5 just to see what would happen. If you don’t start, you never have to stop.

Gambling can quickly deteriorate wealth because people’s prides get hurt in a system designed to make them lose. No one wants to end in the red, so they keep gambling hoping from one stroke of luck that they end up in the green again. Then, they get greedy and want to get even deeper into the green. That puts them back in the red and leaves them very frustrated.

Many businesses capitalize on people’s desire to gamble, and the effect the industry has on people’s lives is disastrous. It’s not worth it. You can have fun in plenty of other ways.

Getting Into Bad Debt

Debt is a silent killer that compounds over time. It’s the reverse of your stock gains compounding over time, and if you don’t stay on top of it, debt can have a devastating effect on your net worth.

Most people slowly get into debt and don’t feel it until the compounding makes it unbearable. There are some types of debt that are good such as a mortgage. Good debts are tied to reliable assets. Bad debt such as credit card debt can take a toll on your wallet.

But then there’s a gray area. Investing in stocks with margin is a great way to boost your returns when things are going well. However, investing with margin can have disastrous consequences if things don’t go your way. Although margin debt is for investing purposes, you put yourself in an extremely vulnerable position. Some people can get wiped out if their portfolios go down 20% to 50% because of their level of margin.

Excessive leverage is how Archegos lost $110 billion in 5 days according to the Financial Times…even though the fund only had $20 billion in assets. Archegos used an investing device similar to a CDO, a high leverage asset that led to the Great Recession.

Most of the heavy losses in the stock market are attributable to margin gone wrong. I like stocks more than real estate, but leverage only makes sense with real estate. If you use margin in the stock market, you’re playing a very risky game.

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3 Cryptocurrencies To Earn You Money While You Sleep

By Ermos K

I’d firstly like to start off by thanking Michael K. Spencer for listing me as a Top Crypto Writer on Medium in 2018 (#28/100) — it means a lot to see my content and sharing of knowledge resonating with readers.

As mentioned in one of my previous posts, despite the bear market, not everything is doom and gloom. The technology that will revolutionize our lives still exists and is thriving. Alongside it, there are coins that you can earn passive income with, regardless if the market is green or red.

In Part 3 of my series, I will highlight another 3 Cryptocurrencies that allow you to earn a passive income. If you haven’t got the chance to read my previous ones, here are some convenient links: Part 1 | Part 2

“If you don’t find a way to make money while you sleep, you will work until you die” — Warren Buffett

Ontology (ONT)

Ontology is a diverse, integrated, distributed trust network and the infrastructure for building a trust ecosystem. Ontology encourages trust cooperation and allows projects of all shapes, sizes, and technologies with different business scenarios and compliance requirements to pass through Ontology’s chain networks and take advantage of the distributed trust network how they see fit.

Unlike all other coins I have discussed in the past (with the exception of VeChain Thor), Ontology is still very much a work in progress but one with huge potential and this can be seen by how well it’s performing even in this bear market. Just to give you an idea, it was launched on Binance at ~1.30$ and at the time of writing stands at ~7.42$ (a ~570% increase) as a time where the total cryptocurrency market cap has dropped by more than 13%.

Ontology will use a consensus mechanism called Verified Byzantine Fault Tolerance (VBFT).

VBFT is a new consensus algorithm that combines PoSVRF (Verifiable Random Function), and BFT. With VBFTOntology nodes first apply for participation in network consensus through placing stake. Then, by using a verifiable random number, several nodes are selected from among all the consensus nodes. The selected nodes take the responsibility to propose, verify, and vote for new block(s).

The consensus mechanism is central to the passive income “piece” of Ontology. You can find more information about VBFThere.

The Ontology network will feature a dual token mechanism that are bound together — ONT (the cryptocurrency coin of main chain services) ONG (the utility token of main chain operations). By owning and holding ONT; you will passively earn ONG.

The Ontology Governance Model, which allows the ‘passive income’, is compromised by the “Triones Economic Model which uses ONT/ONG and combines the VBFT consensus algorithm and a consensus management smart contract”. You can find more information about the “Triones Consensus System Economic Model”, here.

In order to earn ONG, you will simply need to hold ONT in your wallet and ONG will accumulate over time. There is very little effort involved on your part. To get an idea on how much ONG you will generate, you can check this calculator.

You can purchase ONT on and many others.

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5 rules for managing small business cash flow

By Xero

Get your invoicing right

BlueVine knows invoicing is part of good cash flow management. Once you’ve delivered a product or service, don’t wait to invoice. That can hurt your cash flow and your business. You should get into the habit of sending invoices for payment quickly.

Consider sending invoices immediately, or on a daily basis, depending on the nature of your work. If you are providing a service, think about asking for a deposit upfront, or a payment part-way through. It’s a reasonable request.

A product or service that has been delivered is the closest thing your business has to cold, hard cash. The sooner you invoice your client, the sooner you’ll receive payment.

Five rules for managing your cash flow

Invoicing is only the start. To maintain a healthy cash flow, you need more than just strong revenue. You need to be able to collect that revenue too. Here are five rules for managing your cash flow and getting your invoices paid faster:

  1. Keep your books accurate and up to date
    Your cash flow is only as good as your accounting and reporting. Don’t let this get out of hand. Make sure your accounting information is updated regularly. Then you can see the financial state of your business at a glance.
  2. Don’t be too lenient with your customers
    Be direct and fair without being a pushover. A clever but polite invoicing strategy will usually get you a long way. But don’t be afraid to take more formal action if you need to.Keep a close watch on your accounts receivable turnover at all times. If it’s trending up, it might be time to step up your efforts at chasing payment. As receivables age, their quality goes down, so you should act sooner rather than later.
  3. Keep your accounting simple
    If you’re not confident with numbers, hire a professional accountant. Use quality accounting software, so you always know your cash position. It will also help you forecast your cash flow for planning purposes.For example, maybe you’re expecting a big order next month. How will you know if you’ll have the working capital needed to expand payroll? Or be able to buy the necessary inventory? Many small business owners get caught out when a large opportunity turns up. They are unable to take advantage of it due to a lack of cash. Don’t let that happen to your business.What’s more, a reliable accounting system will help you track and report on key business metrics. These include accounts receivables aging, operating margins and inventory turnover. Having a good handle on these business metrics will help you manage your cash like a pro – and take advantage of new opportunities.

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5 Online Businesses You Can Start With No Money

Brian T. Edmondson was the online business expert for The Balance Small Business. He also covered topics on bitcoin and cryptocurrency for The Balance.

The internet is the great equalizer. In business specifically, it has leveled the playing field. Anyone can start a money-making online business—anyone with a computer, that is. But here’s the thing: virtually no technical experience is needed. Today there are plenty of tools you can use to build an online business that makes the technical work a lot easier than it was in the past.

You can also live anywhere you want, set your own schedule, and work as little or as much as you want, depending on how fast or big you want your business to grow. No business or marketing experience is needed either. It’s a truly democratic medium for entrepreneurship.

Best of all, unlike a brick-and-mortar business, you don’t need a lot of startup capital. In fact, you can get many internet businesses up and running with no money at all because so many free services facilitate the possibility. For example, you can set up a website or blog for free using WordPress. Or you can leverage a third-party site like Amazon or eBay to sell goods with no inventory costs. You use their selling platform in exchange for giving them a cut of your sales.

And this is just the start of the many available no-money e-commerce startup solutions. Let’s consider five of the top ways to start an online business and make money online with little or no cost at all.

Illustration by Ashley DeLeon. © The Balance, 2018

1. Drop Shipping

The basic idea behind an online drop shipping business is that, as a small business owner, you don’t have to maintain a large inventory (or any inventory whatsoever) of products or handle any delivery to your customers. That eliminates the financial cost and risk of having a warehouse full of stuff you might not sell, and the hassle of arranging to send orders all over the country or the world. In fact, you don’t have to manufacture or store any products at all.

The only thing you have to focus on is marketing and advertising to find the customers and make the sales. Once the sale is made the rest is handled by others. Your only cost is the expense of marketing and advertising to acquire a new customer.

Once that is done, you’ll work with a company that specializes in drop shipping. Here’s how it works:

  1. You list products for sale on your website or a platform like Amazon, eBay, or Etsy.
  2. When one of your customers makes a purchase, you purchase the product from a third-party company (the drop shipper, usually a manufacturer or wholesaler) for a lower price. This process is as simple as forwarding the order from your customer, a process that can actually be completely automated. (Remember you don’t have any risk here of buying inventory because the sale has already been made).
  3. Your drop shipper then sends the product to the customer.1

Easy enough, right? With drop shipping, you can offer a wide range of products, so the operating expenses for your business are super low.

As you can see there is no risk on your part because you don’t even purchase the product (at cost) until the actual sale is made!

What are the downsides to the drop shipping business model? You have to find a reputable drop shipper you can count on to deliver to your customers. If an order is late or doesn’t go out—or a product is of poor quality—you get blamed, as your company is the one representing the product and customer experience.

Also, because this market is so competitive, the margins—that is, the difference between the wholesale price and how much you can sell a product for—are lower, so this will be a high-volume type business to generate a serious income. But still, it is a worthwhile low or no-cost startup option.2

One way to stand out from the competition with a drop shipping business is to private label your products. This simply means you put your own label/brand on the products that the manufacturer is creating. That way you’re not selling the same product brand and just competing on price; rather you can use your own brand and face less competition.3 Think about when you’re looking at medicine at the pharmacy; the brand names sell for higher prices and people think they are different from the generic brands even though the ingredients are exactly the same. Consider these important factors when looking for a good drop shipping product.

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5 Tips for Saving Money When You Have Low Income

MoneyNing was founded in July of 2007 by David Ning. David is a published author, entrepreneur and a proud dad. After two successful careers as an IT manager and the top salesperson at a business to business corporation, David’s frugal, yet driven nature allowed him to shake off the burden of the 9-5 to start several successful ventures. Aside from running MoneyNing on a day to day basis, David is a trusted advisor at the firm he previously worked full time.

Most of us want to save money so we can build wealth and plan for the future. We have goals we want to reach (like traveling) or things we want to buy (like a dream home). However, this can seem impossible when you’re surviving on a low income.

According to CNN, 25 million American households are living paycheck to paycheck. When money is tight, saving any amount can be the last priority on your list. You’re just trying to get by.

So how do you save more money when you’re making minimum wage? How can you reach your financial goals on a low income?

When it comes to finances, it’s important to not only think about the now but also the future. Even if you’re earning a minimum wage, you can still save little by little. Here’s how:

1. Tackle High-Interest Debt First

In order to start saving more, you have to tackle your debt head-on. Specifically high interest rate from personal loans, or credit cards, because they force you to pay outrageous fees and interest charges.

When paying off debt, you need an attainable, yet challenging plan to pay it off. Start by prioritizing your debt so you’re paying off the ones with the highest interest first.

Then, as you go forward, avoid accumulating any more high-interest debt, especially credit cards.

2. Cut Down Your Biggest Expenses

Trying to save money when you have a low income can be very difficult. Sometimes it feels impossible to cut down even a dollar or two every month.

Aside from the usual money-saving ideas, like cooking meals at home and canceling your cable bill, what more you can do? Instead of trying to cut back your small expenses, focus on the larger ones so you can make more of a significant impact.

For most people, housing costs tend to be the biggest part of their expenses. If you’re renting, consider downsizing to a smaller home or living with roommates.

If you own your home, take a look at whether or not refinancing your mortgage for a lower rate would be beneficial. You can also rent out a room or parking spot for additional income.

David’s Note: Make sure to understand the terms of a refinance though. What generally happens is that along with a reduced monthly payment, a refinance also extends the loan term. Be comfortable with the fact that it will take you longer to pay the loan off if this is the option you choose. Also remember to shop around for the best deal, because there are a ton of people willing to help you get a refinance and some will charge less than others for their services.

And I know Connie just said to work on the big stuff, but I argue that you need to cut out the small stuff too, especially if the costs are recurring like a cable TV bill. Do you absolutely need to pay for it? There are many ways to reduce the TV subscription costs, and it only takes minimal effort for a sizable benefit.

3. Take Advantage of Free Money

Take advantage of “free money” when you can. As a family with a low income, you may qualify for the earned income tax credit (EITC). According to the IRS website, the EITC can be a large refund on your taxes, helping you keep more of what you earned. Sometimes even as much as a few thousand dollars.

You should also look into a 401K at work and see if your company matches up to a certain percentage of your contribution.

If they do, you should take advantage of it and start saving as much as possible. The company match is basically free money that will help you save towards retirement.

4. Keep Your Budget Lean

To save more, you have to take control of how much you spend. Choose the categories you want to indulge in and keep the rest of your budget as lean as possible. You’ll have to make sacrifices but it’s not impossible.

Just learn to spend in moderation. For instance; cut back on how often you dine out. You can still enjoy a nice meal at a restaurant, just not multiple times a week.

5. Start a Side Hustle

If you can’t cut costs anymore than you already have, consider diversifying your income by starting a side hustle to earn extra money. Aside from your full-time job, you can get a job on the side to provide another income source.

Many side hustles can be done right from your own home in your spare time. Think about what you’re good at doing, what kind of hobbies can earn money, or what you already enjoy that can be turned into a side job.

Popular side hustles include freelance writing, data entry, and graphic design.


Saving money when you make minimum wage is certainly hard but can be done. It’s important to understand what your priorities are, and create a values-based spending and saving plan.

Once you do, you’ll be smarter and savvier with how you spend money and ultimately, be able to save more.


Getting Out of Bad Loans- What You Should Know

In the West, we’re used to living above our means, by borrowing money to pay for what we can’t afford. Bad loans – or bad debt – is one of the most destructive behaviors we can do to our personal finances, yet many people don’t quite understand just what bad loans are, or how to identify one.

Most of the time, people would push away from finding solutions to their debt in hopes that it would fix itself. In reality, the only solution is to manage your debts of any size and to make sure it doesn’t get out of control.

In this post I’ll explain just what bad loans are, and actionable steps you can take to start getting yourself out of one.

So, What are Bad Loans?

To put it simply, bad loans are those that do not contribute to an increase in your net worth over time. On the contrary, they usually do the opposite, deprecating in value and dragging the rest of your fiances with you.

What is considered a bad loan?

Distinguishing a bad loan from a good one is not always clear as black and white. In general, a bad loan as mentioned is any type of debt that doesn’t increase your net worth. However, even a good loan can go bad if not paid off or if the payments are more than your income.

One’s financial habits hugely affect whether their loans are good or bad.

Some examples of a bad debt include: 

  • Spending money you don’t own by using your credit card and not paying the full amount on due date
  • Using an auto loan to pay for a car
  • Taking out a payday loan

According to a report from Lexington Law, America owed a total of around $870 billion in credit card debt in the Q4 of 2018. Household members who are not paying credit cards on time and letting payments roll over on a monthly basis contribute to the growing amount of household debt which is increasing at a staggering rate.

How does a bad loan affect your credit score?

Bad credit refers to a person’s poor history of not paying bills on time and is often reflected in a low credit score. Some of the causes of a bad credit score are defaulting on a loan, filing bankruptcy, and not being able to pay on time. If you are interested to understand it further, read more here.

Credit Score is commonly expressed using the FICO Score Model, where a score of 850 is considered a perfect credit score:

Having a poor or even average credit score can make your life a lot harder in many ways, from home rental, higher insurance premiums, to getting any kind of loans (home, car loans etc).

One of the less talked about ways a bad loan can negatively affect your credit score is by hurting your credit utilization rate.

A credit utilization rate is the amount of the available revolving credit you’re using that is relative to your total credit limit. It basically goes up and down based on the payments and purchases you’ve made.

To calculate your credit utilization rate, here’s a simple formula: 

  1. Simply combine all the balances on all your credit cards.
  2. Add up the credit limits on your cards.
  3. Divide the total balance by the total credit limit.
  4. Multiply by 100 to see your credit utilization ratio as %. 

Say you have three credit cards with different credit limits:

Card 1: Credit Line: $3,000, balance $500

Card 2: Credit Line: $4,000, balance $1000

Card 3: Credit Line: $8,000, balance $5000

Your total revolving credit would be = 3,000 + 4,000 + 8,000 = $15,000. 

Your total credit would be: $500+ $1000 + $5000 = $6,500

Therefore, your credit utilization ratio would be: $6500 divided by $15,000, multiply by 100 = 43.3%

It is essential to keep your credit utilization rate below 30%. If you have a lot of bad loans, it’s probably because you’re using more than 30% of your available credit. This in turn can significantly lower your credit score.

There is no specific formula for calculating how much a bad loan lowers your credit score but typically, the higher the loan, the greater its impact.

How to Prevent and Deal with Bad Loans

The first thing in solving a problem is determining what it is — there are two ways you can deal with your bad loans:

1. Make a budget and stick to it

Not knowing how to manage your finances can lead to bad loans. Making a budget and sticking to it helps you manage your income and expenses.

One way to quickly optimize your spending is by following the 50-30-20 method. It’s a smart way to break down your household budget and help them reach their financial goals. 

This is where you put 50% of your income toward necessities such as rent, car payment, groceries, the 30% toward your discretionary spending like buying new clothes or eating out, and the 20% toward your financial goals like paying your debt or savings.

Another excellent way to manage your finances is by meticulously tracking your spending. Doing so helps you set your budget and shows you where your money really goes. This helps you redirect the money you spent on not-so-important things to reducing your debt.

Always set and follow a realistic budget to help you make steady progress toward achieving your financial goals.

My favorite budgeting app is called Mint. It’s a comprehensive, easy-to-use app where users can sync their financial accounts.

  • This free app guides you on your day-to-day spending by helping you by automatically categorizing your expenses
  • It alerts you when you’re going over your budget
  • It helps you reduce fees you may incur from your loans, and
  • Since this app alerts you when you go over your budget, it’ll keep you abreast on your credit score as well.

2. Consolidate your loans

If you have numerous loans or ones with high-interests, loan consolidation might be a method that would work for you.

Loan consolidation is when you use one larger loan to pay off several small loans. It works by combining your different loan accounts into a single monthly payment with a lower interest rate. 

There are two ways to consolidate debt: 

  1. Get a 0% balance-transfer credit card.

This method works by transfering all your debts onto this credit card and paying the full balance using their 0% introductory promo. is a useful site that helps consumers compare credit cards based on their features. Check out which one works for you.  

  1. Get a fixed-rate debt consolidation loan

Alternatively, you can opt for debt consolidation loans. These are used to pay off and simplify existing debt by consolidating multiple payments into a single account. 

This option lowers your monthly payment with a long term.  

You can use Wells Fargo’s Debt Consolidation Calculator, which is a great tool for determining whether debt consolidation is a viable option for you. 

Of course, both of these options have risks tagged to them, so it is crucial to review and understand before you make a decision. 

For example, if you’re consolidating your debt onto one 0% balance-transfer credit card, you can’t afford to miss your payments anymore. Balance-transfer credit cards reserve the right to cancel your promotional interest rate once you make a late payment. 

With debt consolidation, it’s common to use a secured loan or home equity line of credit. The downside of this is that you may lose that asset in the event you can’t pay back the loan.

Whether you are trying to reduce or avoid your bad loans, knowing your credit score is always a wise move to make. It’s best to check your credit score at least once a year to keep tabs on how you are managing and handling your loans.

If you want to learn more about your credit score, you can check the USA Gov website to help you get your credit report, make corrections, etc.


If you’re already facing the challenges of having bad loans, start by evaluating the risks and opportunities for each loan you have. You can seek help from a financial adviser or underwriter to help you determine how and when to start eliminating your bad loans. 

Avoiding bad debts can be obtained by making wise decisions about your financial future. Invest time in learning and applying the tips above to start gaining control over your finance in no time! is a collaboration between two MBA graduates George Guillelmina and Kate Camillo. On there site they share best tips and resources on budgeting, saving money, and earning an income online.