The transition between college and the real world can be a bit of a culture shock.
Going from classes, studying, and an all-inclusive dorm situation to working full-time and needing to uphold your apartment, body, and personal life can be a major challenge on your mental well-being and your wallet. Luckily, there are plenty of shortcuts to making your life a little easier here and there. If you're a young man in your 20s, here are some of the best saving tips to get you through your next work week.
1. Buy a good electric razor
While it might seem counterintuitive to spend money to save money, sometimes bulkier upfront payments should be viewed as long-term investments. This is especially true for essential household and lifestyle products, where the more expensive, high-quality versions usually last a long time and ultimately save you money compared to their cheaper, easily breakable brethren. When it comes to shaving (a necessity for almost any man), a great electric razor will end up costing hundreds less than disposables in the long-run.
2. Start cooking at home
Eating out is definitely easier for anyone on-the-go, but eating in is a whole lot cheaper. And if you're looking to save some money, buying groceries and cooking for yourself is one of the most substantial ways you can do so. If cooking isn't a skill you've honed, start simple. Buy a basic cookware set on Amazon and start experimenting with eggs and pasta sauces. Grill up some chicken. You'll be surprised how far you can stretch a few dollars when you're making your own food, and it's not a bad skill to have with roommates and significant others, too.
3. Buy in bulk
Most things are cheaper in bulk. Luckily, most essentials are also available in bulk quantities. Large sets of socks, underwear, and shirts may seem bland, but they're also very cost-effective. Similarly, many food items can be bought in bulk too, especially if you have access to a Costco or similar club membership. That being said, always be careful not to buy more quantity of any product than you actually need. It's only saving money if you end up using it.
4. Game online
You've probably never seen anyone recommend playing video games to save money before, huh? Well, it's true, entertainment can get very expensive. From various streaming subscriptions to consoles to newly released games, every purchase adds up. But nowadays, many of the most popular games are free-to-play, with major hits like Apex Legends costing you nothing outside of the Internet service you already pay for. Of course, optional cosmetics are always a cash-sink, but if you can avoid those, your entertainment expenses just got a whole lot cheaper.
5. Get a therapist
Seriously, life is tough sometimes, and society often puts unfair stigma around men's emotions. Consider therapy an investment in your lifelong well-being. Even if you can only afford it once a month, having someone to openly talk with about all the issues in your life, whatever they may be, provides an amazing outlet for stress. Never let unfair social pressures prevent you from taking care of your mental health.
Ultimately, it's a rough world out there for 20-somethings of any gender. Make sure to prioritize your well-being over financial decisions. It's okay to splurge every now and again. But if you can save a little bit every so often, it'll serve you well as you move into the next stages of your life.
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When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.