7 Resolutions to Help You Achieve Financial Freedom in the New Year

A new year, and a new chance to improve your financial situation. We have seven resolutions to help you achieve financial freedom in 2019.

At the end of every year and the beginning of another, we tent to reflect on our lives and look for ways we can improve upon it during the next 12 months. For many of us, January seems like a reboot–a way to look at our lives with renewed energy and focus.

We all have different lifestyles, different income levels, and various financial goals. But nearly everyone reading this article can share some common resolutions. Building financial freedom is a long process; it’s a marathon, not a sprint. So, while the concept of New Year’s resolutions can be exhilarating, understand that these resolutions must turn into habits if they’re to have any sort of lasting impact on your future.

With that said, here are seven financial New Year’s resolutions for this year.

1. Create Actionable Financial Goals

According to the University of Scranton, about 92% of people who set goals for the new year don’t actually achieve them. To further this, 40% of people who write their goals down don’t even check whether they’ve achieved them. It’s safe to say we have an issue when it comes to meeting our goals. So what can we do?

First, you need to be realistic about the goals you set. If you have $100,000 in debt and only make $30,000 a year, it’s not realistic to say you are going to pay off all of that debt in a year. It just doesn’t make sense.

Instead, I would suggest developing S.M.A.R.T. financial goals–goals that are specific, measurable, action-oriented, realistic, and time-bound.

After that, let your friends and family members know about your commitments. One study showed that we tend to achieve more when we send commitments to friends versus just writing them down.

Finally, use the power of visualization to help you meet your goals. You can create something called a prosperity picture to help you visually track and achieve your goals. There’s science behind it–it’s crazy. There’s even a full book about it–Picture Your Prosperity.

Once you’ve developed realistic goals and shared them with others, step up your game by visualizing. These actions will help you stay on track the entire year. You may even have a little fun doing it.

2. Develop a (Realistic) Budget

Along the same lines as developing realistic goals comes developing a realistic budget. Too many times we open an Excel document and type out all of our expenses, then figure out exactly how much we’re going to spend in each category.

It’s okay, we’ve all done it. The problem with these types of budgets is that they’re not budgeting at all. They’re forecasting. And the moment we blow a category out of the water by spending too much, we quit.

Then there are the categories. Oh, the categories. So many of us are perfectionists and we try to map out every possible category in which we could possibly spend money. Then sub-categories upon sub-categories. By the time you get to actually tracking expenses, you’re exhausted because you don’t know where to categorize.

Like YNAB founder Jesse Mecham says in his book, You Need a Budget, we need to keep things simple and budget only the money that we have. And when we screw up–it’s okay. We just need to roll with the punches.

So instead of crafting a giant forecast of what you may or may not spend each month for the year, create a real budget. Only budget the money you have right now. When new money comes in, assign it to a category. Keep your categories simple.

Be realistic about it, too. If you value eating fresh, organic produce, you can’t expect to skate by on $50 a week in groceries. You may need to beef up that food budget (yes, pun intended) for the month.

Also, make sure you’re including a savings category in your budget. I’ll talk about automating below, but you won’t be able to achieve any real long-term financial success without the addition of a savings plan.

3. Do a Complete Credit Review

As a consumer, you’re entitled to a free copy of your credit report, from each of the three major credit reporting agencies, every year.

So if you plan it right, you can get a free copy of your credit report from TransUnion, Equifax, and Experian over the course of the year. Space it out and get one every four months or so, that way you’ll always have a free update on your credit multiple times throughout the year.

An easier way of doing this is by using tools like Credit Karma or Credit Sesame. You can monitor your credit report for free using these tools.

The point here is to get a full run-down of what you owe and where your debt is at. You also want to check in on your credit score and see if you have any negative marks you’re unaware of on your credit report.

Once you do this and have a clear understanding of where your credit stands, you can create a plan (or a goal) around improving or maintaining your credit score.

4. Try a Spending Fast

Here’s what to do:

1. Create a list of needs. List out things you absolutely cannot live without. Think rent, clothes, food, and other necessities.
2. Double check your needs. Odds are you listed a few “needs” in step 1 that may be more like wants–or at least needs you can live without. Try to get rid of at least one of them.
3. List out any extras that you want, but aren’t needs. Consider these “bonuses.”
4. Set a goal for what you’ll do with the extra money. Will it be paying off debt? Saving for a home? Whatever it is, write it down.
5. Only spend money on things that are listed as needs. You’re entitled to one “want” per month–within reason (i.e., don’t spend $300 on a want–keep it cheap).
6. Everything else, dump toward your goal. Whether it’s savings or paying off debt–put every extra dollar you have toward that goal.

This is just an example of how you can do a spending fast. You can modify the “rules” of the game however you want, and for whatever works for you.

The point is–you cut out unnecessary spending and you make it really hard to do. You can do this for a week, a month, or a year. Try something out and see what fits.

5. Improve Your Net Worth

Many of you will receive a pay raise this year. Think very critically about how you set aside that money. If you’re fiscally irresponsible and have a tendency to spend, consider an increase in a paycheck withdrawal into a 401(k), health savings account, or IRA.

Up your retirement savings contribution

According to CNBC, the median savings for all working-age families in the U.S. is only $5,000. It’s time to start increasing your retirement contributions, as much as you might think it’s painful to do. Even if you increase your contributions by 2 or 3%, it could mean a big change.

Excluding any type of company match (since I’m assuming you’ve already contributed enough to at least get the match), a 2% increase on a $50,000 salary is an extra $1,000 per year. Over 30 years at a 6% average rate of return, that extra 2% equals about $89,000 down the road. That’s significant for just a $38 addition each bi-weekly paycheck.

Speaking of matching, you should be taking full advantage of your employer’s retirement matching, if they have one. If your employer will match up to a certain percentage of your earnings contributed to your retirement account, make sure you contribute that amount. To do otherwise is basically to short-change yourself out of free money that will be a huge benefit during retirement.

Fully fund your IRA

This one is a bigger deal than many folks think. This year, the maximum contribution for those under age 50 is $5,500. Those 50 and over are able to contribute up to $6,500 per year.

Younger readers take note: the dollars you invest today can multiply into thousands thanks to the power of compounded earnings. Experts agree that waiting to start saving for retirement means saving much more in later years to make up for opportunities lost when you were young, so open an IRA account and start saving today.

Increase other assets and cash flow

Consider other avenues to increase your net worth as well. This might be a time when you need to be proactive about things like a career change, a move to an area with a better cost of living, or looking into side projects that can earn you money.

A lifestyle change might even be in order. Maybe you trade in your luxury car for a cheaper, more reliable vehicle. Perhaps you consider eating out less, or any of the other popular (and sometimes cliché) resolutions. Again, be consistent and deliberate with how you go about this.

These two resolutions can combine into one simple one: increase your net worth this year. The combination of debt and cash flow make up your net worth. While it’s possible to both reduce debt and increase cash flow, if it makes things easier for you, just pick one and focus on that.

If you change nothing with your income but cut your grocery and restaurant bill in half each month, you’ll still be increasing your net worth. And once you feel consistent and in control of that one resolution, you can add more, understanding that you have the willpower and capability to check them off.

6. Build a Plan to Pay Off Debt

This may seem common-sense, but it really is number one: work on reducing or eliminating your debts.

Debt comes in many forms, be that student loans, credit card balances, car payments, or a home mortgage. Conventional wisdom would dictate you focus your efforts on the most damaging debts, like high-interest credit card balances or private student loans. It’s important to understand the massive psychological impacts of carrying debt and the corresponding benefits of reducing it.

Maybe you have a small bill that you’re paying off monthly. It’s not a particularly high-interest rate, and it’s not a large balance, but it annoys you. The satisfaction of having that struck from your balance sheet can have a significant impact on developing healthy financial habits.

No matter how you do it, be consistent about paying down debt. Set up automatic transfers from a checking account, or schedule payments as soon as income hits your wallet. Making one-off payments here and there can be mentally draining and easy to forget or ignore. A consistent cadence, however, can bring peace of mind and a sense of organization and purpose.

7. Research Major Expenses, Then Automate as Much as Possible

David Bach, the author of The Automatic Millionaire, has a simple philosophy for getting rich. Automate.

His basic advice is to automate your savings and live off of everything else. His book supports this philosophy with stories and data, too. He’s the one who originally talked about the “Latte Factor”–meaning a latte every day will add up to a huge amount over time.

But it goes beyond this. You should be researching major expenses first. Some of these big expenses can be automatic already–and you need to break that habit first.

Everyone thinks of savings as little things we need to go without. “Skip the latte,” conventional wisdom says. If you’re spending $5 every day on a mocha skim frappe, then you might be sabotaging your financial goals.

But, you may be sending more dollars out needlessly each month on larger expenses. This year, make it a point to review what you’re spending on phone, the internet, car insurance, life insurance, and other big-ticket items. If you’ve thought about refinancing for a lower interest rate on your home, make this the year you research refinancing to see if it can save you money.

Once you’ve done this, it’s time to automate.

I’m with David Bach in saying you should automate any and everywhere possible. Automate your savings before your bank account even sees it. Set up a direct deposit to a savings account so it’s taken out of your paycheck before it hits your checking.

You should also automate all of your bills. If you’re still paying bills manually online or (I can’t even believe I’m going to say this) still using checks–stop. Automate, automate, automate.

You’ll save time, money, and headaches. And you’ll get rich much quicker.

Bonus: Tools to Help You Track Your New Year’s Goals

Now that you’ve started to think about your financial resolutions for the new year, it’s time to accelerate the process by using some tools to help you along the way. Here are our favorites:

1. Personal Capital

Personal Capital is by far, our favorite money management tool. It’s free and gives you the ability to track and monitor an important number we mentioned above–your net worth. You can easily sync your accounts to Personal Capital, track your money and get an accurate read on your net worth. Being able to physically see that number will help inspire you to pay down your debt, save more and actually want to grow your net worth.

One way to increase your net worth is by investing. When you upgrade to Personal Capital’s Wealth Management service, you’ll also be able to easily manage your investment accounts, your bank accounts, retirement accounts and your budget with one easy-to-use dashboard. Personal Capital’s Wealth Management team can manage all aspects of your investments. But even if you’re not ready to jump into investing just yet, it’s worth your time to get started with the free version.

2. Mint

Mint is another free online money management tool that brings together all your financial accounts in one place. With Mint, you can monitor multiple accounts like checking, savings, investments, retirement, and credit cards. You can set up a budget, elect to receive bill reminders, make goals, and receive free savings advice.

While you can monitor your investments on Mint, you won’t be able to actively manage your investment accounts. So if you choose to use Mint for their budgeting features, you may also want to automate your investing with a tool like Betterment. Ideal for those wanting to invest money each month, Betterment gives you access to an array of ETFs that instantly diversifies your portfolio. Betterment is extremely easy to use (I have an account), and you can track your Betterment investments from Mint.

3. Joe’s Goals

Joe’s Goals is an online goal tracker that helps users develop good habits. This is a simple tool to use and is designed like a calendar. You just set up your goals and then track them on a daily basis. A daily score is automatically calculated for you so you know how you are doing.

With this tool you don’t just track the positive, you also track the negatives that are keeping you from accomplishing your goals. The negative goals are things you want to get rid of or habits you want to break. For example, if you have a goal of eating out less, but you give in and you eat out, you track this with a negative mark. Your negative marks are visible along with your positive marks and are calculated into your daily score giving you an overall picture of how you did on any given day.

4. Coach.me

Coach.me has two features that will help you develop new habits and keep your goals. The first is their app. It’s pretty straightforward in that you create a habit or a goal and track it every day (or whatever frequency you choose). Each time you meet your milestones, you can get “high fives” from friends, family, or the broader Coach.me community. One user said the following about the app:

“Coach.me helps me change my life, step by step. Every release gets me more excited about how good it is at providing accountability, community and motivation for my goals. It helps me to consciously learn and grow every single day.”

You can also get habit coaching for as little as $15 per week. According to their website, “over 700 coaches are ready to help,” and you can “message your coach through our app or arrange a phone consultation.”

5. Strides

Earlier, I mentioned the benefit of using S.M.A.R.T. goals for your financial resolutions. Strides is an app that uses that methodology and lets you track goals as well as habits you want to form. One of the things I love is the ability to break your goals down into smaller pieces. Sometimes our goals (i.e., paying off $100,000 in debt) are a little lofty–so it’s nice to break it up into smaller chunks.

Conclusion – Now What?

Financial planning isn’t particularly difficult on a personal level. A budget can be drawn up with little effort, and you can gather a snapshot of your financial state reasonably quickly. Taking a look at credit card statements, paycheck stubs, and receipts can help you understand the money you’re bringing in and where it’s going. At its most basic level, a financial plan can merely be a budget, so long as you stick to it.

So, if you don’t have a budget, start there. Define as many categories as you feel necessary to portray where you spend your money accurately. Then, understand how much money you pocket each month, and where that money ends up going. Finally, establish your spending limits in each of those categories, so that the amount of income you earn each month is less than what you spend.

Now comes the hard part: sticking to those numbers over the next week, month, year, and decade. Inevitably, the hope is that your budget evolves, enabling you to direct your income to other areas. Your plan will regularly need refining. The worst thing you can do is to make lifestyle changes that increase frivolous spending.

Look at, and really evaluate, the resolutions above: to reduce your debt and increase your assets. Are you debt-free? Are you maxing out a 401(k)? How about an IRA, or maybe an HSA if you’ve got one? If you have kids, are you contributing to a college savings plan, or are you otherwise setting aside money for their future?

No, this year might not be the year that you reach the summit, achieving “financial freedom.” But, building wealth takes time, patience, and effort. It starts with laying the proper foundation, taking those first steps, and then following through.

At face value, these resolutions seem simple… perhaps even too easy. However, the most straightforward resolutions can often be the most difficult to achieve. Start here, building the basic habits that will follow you throughout the years. You’ll be glad you did.

I hope you’ll join me and many others who are looking to lead a fulfilling life, financially and personally. Here’s to health, wealth, and happiness in the new year!

Topics: debt • financial planning • Money and Life • Money Management • Personal Finance

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Why are Millennials Using Prepaid Credit Cards?

Millennials are making their mark by doing things differently. But while their intentions may be good, the millennial way may not always be the best way. So why are millennials using prepaid credit cards over traditional credit cards? And is this a wise choice?

Headlines about millennials “killing” various products and industries are so common these days that there are entire Twitter threads devoted to poking fun at them. We millennials (yes, I am one of them) have somehow managed to kill everything from fashion to the 9-to-5 workday to bar soap. And now we have a new murder to add to our rap sheet: credit cards.

A recent report from the Philadelphia Fed shows millennials ditching credit cards en masse in favor of prepaid cards. Prepaid cards, which used to mainly be used by low-income and unbanked people, are a darling of budget-conscious millennials. The report showed that even millennials with household incomes of $100,000+ reported using prepaid cards in huge percentages.

So why are we using these cards–which come with some serious disadvantages? And if you’re a millennial who uses prepaid cards, what might you try instead? Let’s dig into the data.

The Why Behind Prepaid Cards

You might think that millennials are using prepaid cards because they don’t trust big banks. But, actually, we’re more likely to trust banking institutions than our parents. So why are we flocking to prepaid cards? Of course, the reasons will vary depending on the individual. But here are a few reasons for choosing prepaid cards:

A Budgeting Tool

Despite rumors to the contrary, millennials haven’t killed the budget yet. In fact, we’re pretty good budgeters. We spend our money a lot differently than previous generations because we value different things. But we do tend to plan how we spend our money. A Bank of America survey showed that 73% of millennials have a budget and stick to it most months.

One way many millennials budget is by physically (well, electronically) separating our money into budget categories. We may not opt for a Dave Ramsey-style cash budget. (Honestly, the only cash in my car or wallet at the moment is the quarter I save for the shopping cart at Aldi.) But we may separate money into different accounts–or onto different prepaid cards–for spending.

For instance, if I move my “fun money” to a prepaid card each month, it’s hard to over-spend. Once the money runs out, it’s gone. Prepaid cards can help keep me more accountable to my budget.

Related: Free PrePaid Credit Cards

Low Risk

Millennials are pretty risk-averse when it comes to our money. And we’ve seen first hand what happens when people’s spending gets out of control because of high credit limits. Boomers have more credit cards than millennials and charge a lot more on them. Often because of high student loan payments, millennials know they can’t afford to make payments on a credit card. So rather than risking running up a balance they can’t pay off, they just avoid them altogether.

Prepaid cards, by their very nature, require you to have the money up front. So they keep spending in check and give you the convenience of swiping plastic without the risk of overspending.

Unable to Get a Credit Card

Some millennials turn to prepaid cards because they actually don’t qualify for a real credit card. This may be because they don’t have much credit history, or they generally don’t borrow much. It may also be because millennials are still struggling to find stable employment, in some cases. Without a solid income to report, credit card companies are less likely to extend credit.

Why Not Prepaid Cards?

Honestly, millennial reasons for turning to prepaid cards seem strong. They want to stick to their budgets and not risk overspending. That’s a gfood thing, right?

Right. Except that prepaid cards come with issues that many may not consider when deciding to use them. So why should you consider avoiding prepaid cards, even when you think they’re a good tool? Here are the four main reasons:

They’re Expensive

Prepaid cards come with loads of fees, especially compared with credit cards or debit cards. You don’t have to pay interest, of course. But you’re paying money to access your money. For instance, you might pay a fee every time you spend something on the card. Or you might pay money whenever you load the card or get cash back off of it from an ATM. These fees may seem small, but over time, they really do add up.

They Don’t Have the Same Protections

You’ll get some basic fraud protection with a prepaid card. But you don’t get the same protections you get with a credit card or a bank account. The fraud coverage isn’t as robust, for instance. And not all prepaid cards are FDIC-insured, like your checking account should be. Consumer protection advocates are trying to get the same protections for prepaid card users that bank accounts have, but this isn’t the same case.

Their Terms Can be Confusing

This is, of course, not unique to prepaid cards. Bank accounts and credit cards can also have confusing terms. But prepaid cards are less regulated, so their terms can be even more confusing. Plus, if you’re buying a prepaid card in a store, you may not have access to all of its terms and conditions on the outside of the package. Most of the fine print lives inside the package, and you can’t see it until you’ve paid for the card.

No Rewards for Spending

Finally, prepaid cards don’t typically offer rewards for spending like credit cards do. Using credit cards wisely can be a great financial move that gives you access to a variety of rewards–travel points, cash back, and more. Plus, credit cards offer a variety of other benefits, including things like additional travel insurance and other features.

What’s the Solution?

So if you’re a millennial currently using a prepaid card or two, what should you do instead? Here are some solutions to consider:

Open a Bank Account

First, if you’re using a prepaid card because you don’t have a bank account at all, get one, and stat! Having a checking and savings account is an essential part of “growing up” financially. Plus, these accounts will be FDIC-insured. This means that if the bank behind your account tanks, you’ll still get your money back. This may not be the case if you’ve got a large balance on a prepaid card account.

Bottom line: check out our list of the best bank accounts available today, and go open one as soon as you can.

Try Multiple Free Checking Accounts

Are you using prepaid cards to segment your money for budgeting purposes? That’s not a bad strategy. Actually, it’s one that my family uses. But we do it with a few different free checking and savings accounts. Many banks will let you open multiple linked accounts. This makes it easy to move money into an account for a dedicated purpose, like vacations or everyday spending.

Just be sure you check the terms of your bank account. If you have to pay fees when you don’t carry a high balance, you could wind up paying a hefty monthly fee for multiple accounts.

Another option is to consider an account with in-account budgeting tools. With some banks, like PNC, for instance, you can segment your money within the account. That way you can get a feel for where you are with your budget without having to carry multiple cards in your wallet.

Use Credit Wisely and Well

Finally, you need to get hold of the idea that not all credit is bad credit. In fact, regularly using credit cards well can set you up for other borrowing situations, like getting a car loan or a mortgage. If these things are in your future, you should have and use at least one credit card. Even if you’re already a homeowner, using a credit card for everyday spending can get you great rewards over time.

The key is to keep track of your spending. You can use a budgeting tool–Mint or Personal Capital, for example–to track your spending on your debit and credit cards. Then be sure you pay off your credit card ahead of time every month. With this strategy, you’ll get credit card rewards and protections, stick to your budget, and build your credit score over time.

Topics: Credit • Credit Cards

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PocketGuard App Review – Know What’s in Your Pocket at All Times

13 Ways to Pay for College Without Loans

A college degree doesn’t have to be a debt sentence. Here are 13 ways to pay for college without loans.

As of 2018, Americans owe more than $1.48 trillion in student loan debt. The average student loan payment, per month, is $351. Those numbers, alone, are an argument for trying your best to pay for college without student loans. This may seem impossible, but it’s not. At the very least, implementing some of these ideas can help you cut down on the amount of debt you take on to get through school.

1. Save Up Before College

Obviously going into college with some money in your account is one of the best ways to graduate without debt. If you can pay cash for even some of your degree, you will take on less debt. Typically the best place to put your money while saving for college is in a 529 account. You can find more about this and other college savings options here. But the most important thing is just that you start saving as soon as you can.

2. Apply for Scholarships and Grants

Free money is always a good idea, too. There are literally thousands of scholarships and grants available to apply for online. You can also find local scholarships and grants at your neighborhood library. Often times small local groups pass out $250 or $500 scholarships, and the applications may not be that competitive. Even if you put an hour or two into these applications, your return could be pretty high!

Bottom line: Apply for as many scholarships and grants as you can, provided they’re a good fit for your high school record, abilities, and future plans. But don’t spend loads of time applying for scholarships and grants that you don’t really qualify for. That time is better spent working so you can complete step one.

3. Choose Your School Wisely

Contrary to popular belief, this doesn’t always mean choosing the school with the lowest sticker price. If you can qualify to get into an elite Ivy League school, for instance, you might find that they charge absolutely no tuition. Some of the most well-known schools have the most robust financial aid programs, even for upper-middle-income families.

The key here is to apply broadly to different schools. Try some local schools, which we’ll talk about in a moment, that have a lower sticker price. But consider more prestigious, expensive schools, too. Then, compare the schools based on their actual cost after non-loan financial aid is applied.

Once this is done, choose a school that you can afford, but one that also has a strong program for your area of interest. Remember, future employers care less than you’d think which school your degree comes from, as long as you have taken the right courses and excelled in your program.

4. Try a Community College First

If those offers aren’t enough to make college truly affordable, consider going to a community college for your first two years. Many of these local schools offer solid education for a very low price tag. And they’re getting better by the year at ensuring their credits and degree programs are transferable to more well-known schools. If you can pay cash for a community college, and especially if you can live at home during that first two years, you can save up more money for your last two years at a larger state or private school.

5. Negotiate With The College

Once your offers come back from the schools you’re interested in, you can negotiate with the financial aid offices. Some schools give their financial aid officers more leeway than others. But it never hurts to at least try to negotiate. This is especially true if you get a great aid package offer from your second or third choice school. You can use that offer as leverage when negotiating with your first choice school.

6. Explore Alternative Schools

A community college is a good option for the first couple of years. And if you’re choosing a more technical career, you might find that a community college is exactly what you need all the way through. But even if you’re looking at a more academic career, alternative schools can be a good option. For instance, try a “directional” school. These are schools whose names tell you where in the state they’re located (central, north, south, etc.).

These schools are less likely to be research schools, where a good chunk of staff time and school money is put into producing research and publications. Instead, they put more resources into the classroom. They’re more affordable but can still offer an exceptional education that is very well-respected.

7. Work Through School

You don’t have to stop earning money just because you have a full course load. Many students manage to work a few hours a week or more while carrying 18+ credit hours. You just have to be wise about how you use your time. Working through school can let you avoid loans by paying for your living expenses in cash as you go. Or if you’re living at home without many expenses, you can save the money for future semesters. If you can’t work during the school year, you can at least work during school breaks.

8. Consider a Five-Year Master’s Program

Does your degree require a master’s level education to be really effective? More schools are offering five-year programs that give you both a bachelor’s and a master’s degree. This can be a much more affordable option for getting an advanced degree. And if you really need that degree to advance in your field, getting it off the bat can reduce your overall educational costs.

9. Fill Out the FAFSA

Even if you don’t want to take out federal loans for your education, fill out the FAFSA every year. You may qualify for free funding, like a Pell Grant. Or you may run out of money by your last year of school, requiring you to take out some student loans. In this case, you can opt to take out the minimum amount of loans possible, but at least you’ll have the option.

10. Streamline Your Degree Track

One major problem for many college students is the four-year degree that takes six or more years to complete. If you’re wandering in different academic directions, you’ll ultimately pay for courses you don’t need. And staying in school longer means it takes longer to launch your career and start earning the big bucks.

Even if you have to wait a year or two before you enter college, go into the process knowing what you want to do, at least in a general way. Then be sure you work with academic counselors to plan your degree track so that you can get through it in the least amount of time possible. If you can cut a semester or two off of your path to a degree, you’ll save even more money.

11. Live Off Campus

Some schools require that you live on campus for at least your first year or two. But if you can live off campus, you’ll often save money doing so. It’s less convenient. But living at home or sharing an apartment with a few roommates can help you save some significant cash on your living costs. Then, more of the money you save and earn can go towards tuition instead of room and board.

12. Get a Job First

Not sure what you want to do yet? Or don’t have any money saved for college. Consider taking a year or two off to work before you go to school. Increasingly, employers are helping cover the cost of tuition for their employees, even if they only work part-time. Employers that pay for college include Walmart, Taco Bell, Starbucks, Amazon, and Disney. Some only pay for coursework in certain areas, while others are wide open.

Do your research, and you might just be able to save money while also having an employer pay for your basic general education coursework or your transferable associate’s degree. Plus, you can spend time exploring different career options so that once you go to school full-time you have a clear idea of what you want.

13. Start Living on a Budget

The bottom line on paying for college without student loans is that you have to make good financial choices. And that all begins with having a budget and sticking to it. Even if you’re making minimum wage and living on Ramen noodles, a budget will help you make the most of every dollar. Free budgeting tools like Personal Capital can help you track exactly where your money is going and even keep tabs on your 529 account balance.

Bottom Line – It’s Possible to Pay for College Without Loans

Even if everyone else you know is taking on student loans and guaranteed to graduate with heavy debt, you don’t have to follow suit. One of your ultimate goals should be financial freedom. Being able to manage a budget, a job (even if it’s only a few hours a week), and your college coursework at the same time is great training for the challenges that life will present to you further down the road.

Topics: Education • Personal Finance • Smart Money

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4 Steps to Invest in Retirement When You Have No Money

Retiring with a million dollars when you have little to spare is possible. It’s not about how much money you make, it’s about how you save, spend and invest what you have. Still think you can’t afford it? Here are 4 steps to invest in retirement when you have no money.

All the traditional advice tells you to start investing as soon as you can. I regularly read about experts saying you should start investing the moment you get your first paycheck, if not sooner.

This is excellent advice.

But what if you can’t afford to?

Yes, the argument is that you can’t afford not to, but I know several people who barely make enough to live on.

So, unfortunately, investing takes a back seat until they get more stable in their careers.

If you’ve reached your 30s, or even your 40s, and haven’t started investing much if at all, fear not. There is still time.

In fact, one person I reference in this article didn’t start until he was 35, and he accumulated $5 million on a modest salary.

So there’s hope.

Steps To Start Investing Now, Even If You Have Little Money

1. Start with SOMETHING

The first, and the most important thing you need to do when you’re in your 30s or 40s and you don’t have much lined up for retirement is to start with something.

If you only take one line away from this entire article, this is it. Start investing anything you can–even if it’s only $20 per month. And if you can’t afford $20 per month, then you have some serious budgeting to do. You can read more on this below.

The minimum I would shoot for is $100, but I understand that’s not possible for everyone, so do whatever you can. Assuming you can find an extra $50-100 lying around, I would strongly suggest you put this into a Roth IRA with Betterment–it’s just the easiest, worry-free solution (I’ll explain more below).

2. Free Up Capital

After you’ve found some extra money you can invest each month by either getting rid of a subscription, cutting back on a coffee addiction or just watching what you spend, it’s time to find some ways to create and free up even more money. This is the only way you’ll begin to accelerate your investment savings.

Create a Strict Budget

Your first step in beginning to beef up your investment savings is to create a strict budget. Look, I get it that budgeting isn’t fun for most people. I used to absolutely hate it until I found YNAB. If you’ve read any of my other articles, you know that I seriously love YNAB (You Need A Budget) for creating budgets. This is for a couple of reasons:

1. It got me back on track financially. Years ago I wouldn’t budget because I couldn’t stand analyzing every dollar I spent. I would always forecast my spending and it was never correct–so I got frustrated. YNAB takes a different approach and forces you to only budget money you have–not what you don’t have. So there’s a big difference between forecasting and true budgeting.
2. It forced me to be in touch with my money. One of the key tenants of YNAB is that you have to be in touch with your money. You can’t just set it and forget it–you need to know what you have coming in and what you have going out. I found their software so easy to use, and it helped me really understand what was happening with my money.

YNAB worked for me, but it may not work for you. I’m not saying you have to use YNAB or their software–but I am saying you need to create a budget and do your best to stick to it.

Cut Back Everywhere You Can

After you’ve created a strict budget, you need to look at ways to cut back–everywhere you can. The first place to look is in monthly subscriptions. These types of charges add up quickly and are very easy to forget about. Things like Audible, HBO Now, or Stitchfix are all value-adding services that probably make our lives better, but they add a significant monthly cost when it all adds up.

You can also find ways to cut back on your monthly bills. Services like Trim and Truebill will work on your behalf to get your bills reduced. They will take a portion of the savings, but you’ll still end up saving money in the long-run.

The overall goal here is to cut back as much as possible–it won’t be easy but it’ll free up some extra money for you to start investing. Remember, you’ve reached this stage for a reason–so socking money away now is critical.

Pick Up a Side Hustle

I read a statistic the other day that showed over 44 million Americans now have a side hustle. Doesn’t that seem crazy? But when you think about it, it seems like life gets more and more expensive. I mean, think about the reason you’re reading this article–you’re looking for ways to invest when you don’t have any money to do so. So it makes sense that so many people are finding side hustles to earn extra money on the side.

There are plenty of things you can do to earn money on the side–but they are going to require you to work more. This might mean driving for Uber or delivering packages for Amazon, but if it gets you a few hundred extra bucks a month to invest, it’s probably worth your time. If you’re serious about this, check out our massive list of side hustle ideas.

Find Ways to Create Passive Income

Creating passive income is similar to picking up a side hustle, but it’s more… well, passive. With a side hustle, you’re usually actively working–such as freelance writing. The more you work, the more income you produce. With passive income, however, the money flows in after you’ve invested an initial amount of time and/or money.

A great example of passive income is if you own a blog, you can add links to products and services to sell via affiliate marketing. You aren’t doing anything more than adding links, and if the site is getting traffic, the money will come in.

An example of this is the mega-site The Wirecutter. This started off as a small affiliate site years ago and was recently sold for a ton of money to The New York Times. Basically, they review products and add affiliate links, so when you read their reviews and ultimately buy a product, they get a commission.

Ask for a Raise

Finally, an often overlooked way of creating extra cash flow is by asking for a raise at your current job. Most people just assume their company will say no, but that’s not always the case. Jesse Dickler from CNBC gives four steps to asking for a raise:

1. Plan ahead
2. Do your due diligence
3. Be realistic
4. If at first you don’t succeed…

Make sure to read the full article because she gives some excellent advice. If you keep it real and have a good justification for why you deserve a raise, the worst thing your employer will say is no. At that point, you’ve at least given them something to think about, and it allows you to think about your next steps as well–maybe looking for a new job if your employer isn’t willing to increase your pay.

3. Simplify Your Investing

Now that you have some idea on how to create and free up additional money each month, it’s time to figure out what you’ll do with the extra money. As I mentioned above, if you’ve waited until your 30s or 40s to begin saving for retirement, you really shouldn’t be playing any games with investing in individual stocks. There are only two recommended investment “philosophies” I’d have for you at this point:

Index Funds

Investing in index funds is a smart and easy way to get started in the stock market. An index fund is similar to a mutual fund or ETF–they’re pre-diversified “baskets” of stocks that give you broad exposure to a particular index, such as the S&P 500. They’re inexpensive, too. If you’re interested in this path, you can learn all about index funds in this article.

Roboadvisors

When you invest in index funds, you’re actively purchasing and monitoring your investments. You need to open a brokerage account, choose your index fund, buy it (at the right time) and rebalance your portfolio when necessary. This is what I’d call active investing, even though an index fund requires far less monitoring than an individual stock would.

The other option is to go with a more passive investment strategy by using a roboadvisor. A roboadvisor is essentially a robotic financial advisor. No, you won’t get to meet with an actual robot (sorry to burst your bubble).

A roboadvisor is a computer algorithm that makes investments on your behalf, based on your personal goals and individual risk tolerance. So, for example, with Betterment you can have a goal of saving for retirement and choose an aggressive risk tolerance. This might mean you put everything (100%) in stocks. Alternatively, you can open an account to save for emergencies and Betterment may guide you to have a much lower risk tolerance, being that you will need the money sooner than you would for retirement. My Betterment emergency savings is 40% stocks, 60% bonds by default, for instance.

4. Don’t Slow Down

Now that you’ve created some momentum, it’s time to keep going. At this stage in your life, it’s important you don’t take your foot off the gas if you want to retire. You can do this by focusing on two key things:

Create New Habits

By now you’ve realized that you need to start investing, and hopefully, you’ve begun thinking about ways you can free up and create more cash, as well as invest properly. Now it’s time to start thinking about how you can create sustainable habits so you don’t fall off the investment wagon.

Author James Clear says there are four stages that form what we call the habit loop–cue, craving, response, and reward–and if any of them are missing, a habit won’t be formed. This is also very much in line with what Charles Duhigg says in his book, The Power of Habit.

The habits you’re forming should be around the way you look at money–spending, and saving. For instance, when you’re tired during the workday (cue) do you want a coffee to pick you up (craving)? From there, you might go buy one (response) and feel energized for a short period (reward).

This habit loop can be broken by inserting new rewards at the end of the cycle. I’ll encourage you to read Duhigg’s book to learn more about this process, but it can work for your saving, spending, and investing habits right away.

Remember the Four Pillars

Recently, Rob did a podcast of the four pillars of personal finance. If you haven’t listened to it, I suggest you do that now. To recap, though, the four pillars are:

1. Understand the Power of Small Decisions
2. Know What Makes You Happy
3. Know What Things (Really) Cost
4. Challenge the Assumptions We Live By

By now I am hoping you’ve built some (or at least have a plan to build some) serious momentum in the way of spending less and saving and investing more. These four pillars correlate directly to your success in investing, and it’s critical that you understand them and live by them.

I found that these pillars force you to think differently about your money, and ultimately push you to spend less. This will, in turn, create more free cash for you to invest.

Bottom Line – You Can Invest In Retirement Even When You Think You Have No Money

Investing, in and of itself, is a difficult concept for many to grasp. It’s time consuming, confusing, and causes you to have to send your hard-earned dollars into the abyss of the stock market.

But it doesn’t have to be that way.

Even if you’re in your 30s or 40s and haven’t started investing.

In fact, I just read an article about a 100-year-old man who has $5 million saved, and he didn’t start until he was 35.

There’s still time–but you have to start now. Follow the advice in this article and you’ll be well on your way to retirement in less time than you think.

Topics: Investing

The post 4 Steps to Invest in Retirement When You Have No Money appeared first on The Dough Roller.

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TIAA Direct Online Bank Review – Great CD and Money Market Rates

Thinking about making the switch to an online bank? TIAA could be a good choice for you, especially if you’re interested in stashing your cash in a CD or money market account. But before you move your money, be sure to read our full TIAA Direct Online Bank Review.

TIAA Bank

's rating

9.5

Fees 8.8

Interest Rates 9.2

Ease of Use 9.8

Customer Service 9.8

Mobile Accessibility 10.0

Pros

• Competitive rates on CDs and money market account
• Mobile-friendly
• 24/7 phone support

Cons

• Lack of ATMs can make fees add up
• Low APY on Basic Savings and Checking accounts
• $5,000 minimum deposit on Yield Pledge accounts

Learn More

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Table of Contents

• About TIAA
• TIAA Account Features and Fees
• Opening an Account
• Synchronization
• Security
• TIAA Bank Mobile App and Online Banking
• Customer Support
• Pros and Cons
• Alternatives
• Bottom Line – Is it for you?

About TIAA

TIAA, formerly known as TIAA-CREF, stands for Teachers Insurance and Annuity Association. But you don’t have to be a teacher to benefit from the TIAA Direct online bank. This bank, originally founded in 1918, is adapting to the times offering an online-only banking arm to its customers.

TIAA Direct lets TIAA customers log in online to take care of their accounts. So regardless of what type of account you have with TIAA, you can log in online to check your account, transfer money, or set up online bill pay. Here, we’ll talk about the different account types TIAA Direct offers, interest rates and fees, what you can do online, and more.

TIAA Account Features and Fees

TIAA offers both banking and borrowing services with an assortment of account types, including:

High-Yield Accounts

TIAA Bank features three different high yield accounts: Yield Pledge Checking, Yield Pledge Money Market, and Yield Pledge CDs.

Yield Pledge Checking currently offers a 1.21% 1-year intro APY for first-time checking account clients with balances of up to $250,000. The variable ongoing APY ranges from .25% to .71%, depending on account balance. These accounts have no monthly account fee and no minimum balance, but they require a $5,000 minimum deposit to open. If your balance is $5,000 or more, you’ll be reimbursed for all ATM fees charged by other banks. And even if your balance is less than $5,000, you can be reimbursed for up to $15 per month in ATM fees.

Yield Pledge Money Market is currently offering a 1.80% 1-year introductory APY, with an ongoing APY of between 1.10% and 1.70%, depending on account balance. This account also has a $5,000 minimum deposit to open. As with the checking account, there’s no monthly account fee and a $0 fee for online bill pay. ATM fee reimbursement also applies.

Yield Pledge CDs have a minimum opening deposit of $5,000 but guarantee a high yield. CD APY ranges from 1.75% on a 3-month CD to 3.10% on a 5-year CD.

Specialty CDs

If the Yield Pledge CDs aren’t what you want, you can also take advantage of TIAA Bank’s two specialty CD options:

Bump Rate CDs are great in a rising-interest environment, as they let you bump your CD’s rate once during the lifetime of the CD. So if interest rates climb, you can take advantage of this without pulling your money out and paying a penalty. As of this writing, the Bump Rate CD has a 3.5 year term, $1,500 minimum to open, and a 2.85% APY.

CDARS Service allows users to invest in CDs from multiple banks while allowing one bank to administer the account. This can give you more financial security without the hassle of managing multiple CDs on your own. You can find out more about this service here.

Basic Accounts

If you don’t have a $5,000 deposit to open a Yield Pledge account, you can take advantage of TIAA Bank’s basic checking and savings accounts.

The Basic Checking account has a $25 minimum to open, and carries no account fee as long as you maintain a balance of at least $25. It offers ATM fee reimbursements, mobile check deposit, and free online bill pay.

Basic Savings also has a $25 minimum deposit to open and no monthly fee as long as you maintain at $25 minimum balance. It also allows for mobile check deposits. Basic Savings accounts currently offer a .61% APY.

Mortgage Loans

TIAA Bank home lending solutions include home buying and building mortgages, refinance options, and home equity loans. It also offers HARP refinancing and FHA streamline refinancing.

As with all mortgage loans, rates and terms depend on your situation and creditworthiness. You can apply for a mortgage or refinance to see what your terms might be.

Business Accounts

TIAA Bank also offers business-specific accounts, including:

Business Checking features a $1,500 minimum deposit to open, free processing of the first 200 items each month, no monthly maintenance fees for accounts that maintain a $5,000 minimum balance, and mobile deposit. It also lets you make ACH state and federal tax payments and offers handy online reporting tools that suit most of your business needs.

Small Business Checking has a similar structure to the business checking account, except that it’s an interest-bearing checking account. It gives you a 1.21% introductory 1-year APY right now with ongoing APYs of between .20% and .61%, depending on your account balance. This account also requires a $1,500 deposit to open. It’s specifically created for sole proprietors and single-owner LLCs and combines the benefits of business checking and savings.

Nonprofit Checking is specifically for not-for-profit and faith-based organizations. It is a high-yield checking account with a $1,500 minimum opening deposit. It has no monthly maintenance fee for accounts with a $5,000 minimum deposit, and has an APY of between .20% and .61%, depending on account balance.

Business Interest Checking gives you a business checking account with .61% APY and a $1,500 minimum to open. And Business Analysis Checking offers a .55% APY on 90% of the account’s balance and a $1,500 minimum deposit to open.

Business Money Market account offers a .70% APY and no monthly maintenance fees with a $5,000 minimum monthly balance. With this account, you’ll need a $1,500 deposit to open, and you can move money up to six times a month without incurring excess transaction fees.

Opening an Account

Filling out the application is fairly simple online. There, you can view the different banking and business accounts and choose the account (or accounts) that suit your particular needs. During the application process, you’ll need standard information like your personal address and ID number–typically your driver’s license. You’ll also need information to proceed with your opening deposit, since all TIAA Bank accounts have a minimum deposit requirement.

One thing that’s nice is that you can open multiple TIAA Bank accounts with the same application, so think carefully ahead of time about which accounts you plan to open.

Synchronization

Besides withdrawing your money through an ATM, TIAA Bank allows you to move money between TIAA accounts and between these accounts and other financial institutions online. So you could use your TIAA account to earn interest, but then make a free transfer to a local bank account before withdrawing from an ATM to avoid ATM fees altogether. Remember, different types of accounts, particularly money market accounts, have their own withdrawal and transactions limits. So be sure you familiarize yourself with these rules when you open your account.

Security

Are these accounts safe? TIAA Bank is FDIC-insured. That means that checking and savings accounts, along with CDs, are insured for up to $250,000 per depositor. It doesn’t get much safer than that.

What about online security? Concerned about the security of your banking account online? Don’t be. TIAA Bank uses the best encryption around to ensure that your information stays safe, even when you’re logging in online or from your mobile app.

TIAA Bank Mobile App and Online Banking

With TIAA Bank, you can access online and mobile banking for any of their accounts. Signing up online is easy and allows you access the following:

• Set up account alerts so you’ll know when your account balance is low, etc.
• Manage online bill payment options so your bills all get paid on time
• Online deposits between TIAA Direct accounts or between your TIAA Direct account and other financial institutions
• Online statements and check images so you can keep track of your balance and spending

On the TIAA Bank mobile app, you can do all of the above plus deposit checks via your mobile phone. Just snap images of the check front and back to make a mobile deposit, so you never have to make an emergency ATM run to deposit checks again.

Customer Support

One thing to pay attention to particularly with online banking is customer support. Since you can’t easily walk into a bank branch, you need to know that you can get your questions answered in other ways. TIAA offers 24/7 phone support and via Twitter during business hours. You can also get information from the bank online and through its mobile app.

Customer support has middle-of-the-road ratings on various review sites. As with most online banks, it will likely depend on the support rep you happen to connect with.

Pros and Cons

Pros:

• Plenty of account options
• Competitive rates on CDs and money market account
• FDIC-insured
• Mobile-friendly
• Online bill pay available
• 24/7 customer support by phone

Cons:

• $5,000 minimum opening deposit for Yield Pledge accounts
• Relatively low APY on basic checking and savings accounts
• Limited ATM access

ATM access one of the biggest limitations for TIAA Bank. It doesn’t offer a lot of ATMs in the U.S. However, on most accounts, if your balance is more than $5,000, you can get reimbursed for any ATM fees you incur. And if your account balance is below $5,000, you can be reimbursed for up to $15 per month in ATM fees. That’s not a bad rate, considering that will cover two or three withdrawals at most ATMs. Just be sure that you consolidate your ATM withdrawals as much as possible to avoid excess fees.

Alternatives

When you’re shopping for an online bank, there are a few features you want to be sure to check off your shopping list–fees, interest rates and convenience are high priority. Most importantly, find the features that fit what you need. For example, if you already have an established fee-free checking account you might be more interested in the rates of a CD or a high yield savings account from another bank.

If you’re goal is saving, you’ll want to look into a new product that recently launched called CIT Savings Builder. When you commit to saving at least $100 a month in this account, you’ll earn a rate of 2.15% APY. It’s a great incentive to save and an excellent way to build the habit of paying yourself first.

Remember, it’s important to comparison shop before you choose a bank. Fortunately, we’ve compiled a list of Best Online Banks you’ll want to refer to before making a decision.

Bottom Line – Is it for you?

TIAA Bank isn’t the best in the market for basic savings and checking, with a relatively low APY compared to other online banks. However, if you’re in the market for a CD or a money market account, it’s a great place to look. Its CD rates are near the top of the market, and its introductory 1-year APYs–and ongoing APYs–are also competitive on these accounts.

As long as you can avoid the ATM fees and account maintenance fees with your account balance, TIAA Bank is a solid option for online banking that actually earns you some money.

Topics: Banking • Reviews

The post TIAA Direct Online Bank Review – Great CD and Money Market Rates appeared first on The Dough Roller.

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Colwood Corners by Onni in Victoria

Colwood Corners by Onni Group is a new 5 storey condo development located in Victoria, BC. This project will offer 284 units. Upon completion, Colwood Corners has the potential to provide 125,000 square feet of retail as well as multi-family residential.

The post Colwood Corners by Onni in Victoria appeared first on Vancouver New Condos.

from Projects – Vancouver New Condos https://ift.tt/2A5mWqs

Colwood Corners by Onni in Victoria

Colwood Corners by Onni Group is a new 5 storey condo development located in Victoria, BC. This project will offer 284 units. Upon completion, Colwood Corners has the potential to provide 125,000 square feet of retail as well as multi-family residential.

The post Colwood Corners by Onni in Victoria appeared first on Vancouver New Condos.

from Projects – Vancouver New Condos https://ift.tt/2A5mWqs

Gender Pay Gap – Statistics, Trends, Reasons and Solutions

Would you wager that a man gets paid more for doing the same job as a woman? We’ll discuss the latest insights relating to the gender pay gap–the facts, the figures, and where to go from here.

Table of Contents

• Statistics on the Gender Pay Gap
• Trends in the Pay Gap
• The Pay Gap Around the Country
• Factors that Contribute
• What Can Women Do?
• What Can Men Do?
• Summary

You may have heard the old statistic that women make just 77 cents on the dollar compared with men. That oft-cited statistic is one of many surrounding this idea of the gender pay gap–the idea that women get paid less than men for the same work.

So do men and women actually get paid differently for the same work? Or are other factors at play in these headline-grabbing statistics? And if women are paid less, why is that? Finally, what can women actively do to close this gap (if it actually exists)? We’ll look at all of this in this below.

Statistics on the Gender Pay Gap

The statistic cited above–that women make 77 cents on the dollar compared with men–is actually out of date. The latest statistics from the Census Bureau in September 2017 put the pay gap at 80.5 cents on the dollar–the same as in 2016.

That broad pay gap is even wider for women of color compared with white men. African American women earned just 61 cents on the dollar, and Hispanic women earned just 53 cents on the dollar. American Indian and Alaska Native women earned 58 cents on the dollar, and Native Hawaiian and other Pacific Islander women earned 62 cents on the dollar.

However, the above statistics are very broad. They look at the median salaries of all full-time, year-round workers. And much of the pay gap is embedded in the different industries in which men and women work. If more women tend to work in low-wage industries–and they do–then of course their average wages are lower than men’s.

With that said, even within an industry and with similar qualifications, there’s a gap between what women and men make.

Adjusted Wage Gaps

Economists talk about “adjusted wage gaps” when they adjust for additional factors like education, age, or industry. The 2016 report from the Economic Policy Institute says that the general wage gap may be the most helpful to look at because it’s an understandable snapshot of women’s wages versus men’s. However, even when adjusted for factors like education and experience, the pay gap persists.

In fact, the Economic Policy Institute notes that women workers, on average, have higher levels of education than men, but they still experience a pay gap. And even same-industry analyses show that women earn less than men. The American Association of University Women’s report on the gender wage gap showed that women in higher-paid industries actually experience a more severe gap in wages.

For instance, a female financial manager makes, on average, $65,237 per year, while her male counterpart earns $100,575. And among physicians and surgeons, women make an average of $171,880 while men make an average of $234,072. Over time, these gaps have a huge impact on what women make in a lifetime.

A few studies show results out of line with these general findings. One, for instance, shows that there is no pay gap between male and female chief executives at publicly-traded companies. Of course, this is a pretty small sample size to compare, given that there were only 21 female executives in the study compared to 382 male executives. Companies aren’t exactly rushing to put women in the top leadership positions, and those that do may just be more conscious of wage gaps in general.

Motherhood and the Wage Gap

Women are generally more likely to take breaks from their careers to care for their family. About four in ten mothers reported to Pew in 2013 that they had taken a “significant amount of time” off of work or needed to reduce their work hours to perform caring duties. About a quarter said they needed to quit at some point to take care of family responsibilities.

In contrast, only 24% of men in the same poll said they’d taken time off to care for a child or another family member.

While the majority of women rejoin the workforce at some point during motherhood, they still pay a penalty for becoming mothers. According to the Economic Policy Institute, research shows that mothers are paid less than both women without children and men in general, even if those men are fathers. Controlling for other factors, women who are mothers are paid 4.6% less hourly than women without children.

Women now become mothers, on average, at older ages. So they often have more education and experience, and they’re less likely to leave the labor force after giving birth. And they generally come back quickly. But even still, women pay a financial penalty for being mothers.

A study from Harvard showed that some of this pay gap may have more to do with perceptions of working mothers than reality. For instance, mothers were considered less committed to their jobs than non-mothers, while fathers were considered to be more committed than non-fathers. This may have to do with our culture’s persistent belief that men should be the ones to provide financially for their families, even when that isn’t the case for a particular family.

The same study also showed that mothers are held to higher standards of punctuality than childless women or men, regardless of their parental status. And visibly pregnant women are seen as less competent than non-pregnant women or men in the same position.

By contrast, men who become fathers are perceived to be more committed to their jobs, actually do put in a few more hours at work per week, and often get a pay bump. Research also shows that dads are more hireable than men without children.

The Bottom Line on the Pay Gap

The bottom line here is that the gender pay gap does exist. Even when controlling for a host of factors, from age to experience to education to industry to time in the field, women consistently make less than their male counterparts. In some locations and industries, the gap is smaller than 80.5 cents on the dollar. But in many locations and industries, it’s much larger. It’s still not unheard of for women to make half what their male counterparts make, even for the same work.

As Pew Research Center points out, the most difficult factors to measure in this issue, including discrimination, are likely the most influential on the persistent pay gap. In a 2017 Pew survey, 42% of women experienced discrimination in the workplace because of their gender.

And the Economic Policy Institute points out that the effects of gender discrimination on women’s pay don’t just show up in employer’s pay-setting policies and practices. Women are often steered towards lower-paid careers, expected to balance the challenges of parenthood and work more fully than men, and guided to expect lower pay all along. All these factors can influence a woman’s career choice and path from the beginning, funnelling more women into lower-paid jobs and making them less likely to fight for equal wages once they get there.

But the bottom line is that no matter how you slice it, the gender pay gap does exist across the board.

Trends in the Pay Gap

Over time, the gender pay gap has shrunk considerably. In the 1960s, women made just over half of what men made, on average. We’ve obviously come a long way since then. With that said, the pay gap has mostly stalled since 2000. It’s gone up about a nickel per dollar since that time, even as individual companies have worked to reverse the trend.

Some large companies like CRM leader Salesforce have worked to close the gender pay gap in a public and visible way. Two female executives at Salesforce drove an initiative to close pay gaps within their company. And now the company has a global Equal Pay Day each year. They do a thorough analysis and adjust pay gaps for gender, racial, location, or other issues.

Again, the pay gap is closing, due in part to more visibility of the issue. But it’s not closing fast enough in the past several years, and we still have a long way to go both in general and in specific industries.

The Pay Gap Around the Country

Gender discrimination in the workplace is unconstitutional. But states don’t enforce these laws in standardized ways. Add that to the fact that different states have different industry trends, and you get wage gaps that vary wildly from state to state. This chart from the AAUW shows the general gender pay gap in states across the nation.

It can be interesting to see what the gender pay gap is in your state compared with other states in the U.S.:

Factors that Contribute

We’ve already discussed some of the factors that contribute to the gender wage gap. And it’s difficult to control for all of these factors separately. So it’s impossible to say exactly how much weight to give each of these factors in the gender pay gap. With that said, here are some of the factors researchers acknowledge have at least some impact on this inequality:

• Discrimination: We can control for every other factor listed here and still come up with a wage gap. That means that at least some of the gap is due to discrimination in companies’ hiring and wage-setting practices. Again, it’s hard to figure out exactly what percentage of the wage gap is directly due to discrimination, but at least some of it is there.

• Job Choices: Women often work in lower-wage industries than men. In fact, many of these jobs are seen as traditionally feminine, including jobs that involve caring for the elderly and the young. Some estimates say occupational differences account for nearly half of the wage gap.

• Different Hours: Women tend to work fewer hours per day than men, on average. Full-time working women, on average, work about 35 minutes less per day than their male counterparts. With that said, in the highest-paid industries, especially, a reduction in hours results in a disproportionate reduction in salary. And there’s no evidence whether working that extra 35 minutes actually makes men more productive than women at some types of work.

• Family Responsibilities: Women are much more likely than men to take time off work to care for others, either their children or their parents or other aging relatives. Understandably, this time off work can reduce women’s income over time. But the workplace reaction to men becoming fathers–often a pay bump–exacerbates the pay gap.

• Negotiation: Women are less likely than men to negotiate their starting salary or raises, which can contribute significantly to the wage gap in higher-earning fields. Some try to explain this away as a confidence issue, and that may be some of the problem. In general, women are less self-assured than men. But one study from Harvard showed that women may be smart to hold back on negotiations, as negotiating aggressively can come at a social cost for women. Women negotiating for themselves can feel a real social backlash in the workplace that may disadvantage them over the long term.

What Can Women Do?

As a woman, writing this article is pretty disheartening. I’m a happy employee and freelancer. I’m more productive as a 30-something mother than I’ve ever been before. (Seriously, if you want to get something done, ask a mom.) And I’m the primary breadwinner in my family by quite a bit. But I know this gender wage gap has almost certainly affected me and probably will continue to do so in the future.

But that’s not to say that we are completely helpless to change the situation, either for ourselves or for our daughters. Here are some steps women can take to get equal pay for themselves now and to change these statistics globally in the future:

• Evaluate your own company. If you can do it, push for an analysis of the gender wage gap at your company. Then put on the heat to make changes if the results don’t come back as promised.

• Advocate for all women. As we noted above, negotiating for your own salary can be tough and can come with a social backlash. However, women are expected to advocate on behalf of others. If you’re in a management-level position, try advocating for equal pay adjustment to those below you on the pay scale. These types of changes can take place company-wide and make a huge impact for every woman.

• Encourage men to participate. Many of your male colleagues are probably just as frustrated with the gender pay gap as you are. So if you can educate and onboard men to the cause, we can all move forward together.

• Vote. It’s easy to get caught up in huge headline issues when deciding how to vote. But you should dig into your representatives’ policies on equal pay, as well. Currently the United States doesn’t have great laws in place to reduce the gender pay gap. One example of a potential law to consider is the Paycheck Fairness Act. This act means that employers will have to be more transparent about wages for potential employees. This can reduce the likelihood of women getting a lower starting salary because they made lower wages in a previous job or fail to negotiate well. This isn’t the only legislative way to reduce the pay gap, but it’s one good option.

• Discuss salary and compensation. Many companies discourage employees from discussing their salary and compensation. But being more transparent can open up more people to seeing and fighting against the gender wage gap and other wage gaps that exist.

• Advocate for better parental leave policies. If your workplace has a terrible parental leave policy, work to change it. Having better leave–including paid maternity leave–helps women stay on their feet financially and makes them more likely to come back to the workplace. But dads should get–and be encouraged to take–parental leave, as well. When dads take leave, they show that its important, drive down imbalances between men and women taking parental leave from the workplace, and are more likely to continue pitching in at home over the long term.

• Talk to your daughters and other young women. Some of the gender pay gap is because of what we expect of young women versus young men. If we raise a generation of daughters ready to advocate for themselves and find true partners in the fathers of their future children, we’ll go a long way towards reducing the gender pay gap in the future.

What Can Men Do?

For men, the to-do list has a lot of the same action items. Advocate on behalf of the women in your life, including the ones you work with. If you’re in a position of power at your place of work, push for these changes to be made, and pay attention to how you vote. But here are a few other ways men can help:

• Take responsibility at home. Often times working moms reduce their work hours because they carry more of the load at home. Women consistently do more chores at home and spend more time caring for children than men, even when both parents work full-time. Taking on more of the work at home can allow at least one woman in your life to bring more of herself to her job, thus reducing, little by little, the idea that moms, in particular, are less committed at work.

• Reduce your hours or stay home. More men than ever are stay-at-home dads. In many families, this makes sense if mom is the one with higher-paid skills. But if more men would reduce their hours or stay home entirely–even if only for a few years–this could have a hugely positive impact on the gender wage gap.

• Set an example for your children. When children see their dads participate in all aspects of raising children and managing the home, they’re more likely to follow suit. If we raise a generation of boys who expect to help around the home and take care of their own children, we’ll also raise a generation that expects women to equally participate and be compensated in the workplace.

Summary

As a working mom with a full-time job, two kids, and a true partner, I know how big of a deal this issue is. It’s nuanced and messy, as with most things in life. But it’s essential that we as a culture spend time discussing issues like the gender pay gap and what we can do about it.

Even with an excellent partner at home and being my family’s primary breadwinner, I feel the pressure to be the perfect mom and to over-perform at work to meet a very high standard. My hope is that as we better understand this issue and work towards changing it, my daughter will be paid equally for working hard at whatever career she chooses.

Topics: Personal Finance

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