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6 Money Hacks to Make Life Easier

Posted by on Mar 18, 2016 in Articles, Uncategorized | Comments Off on 6 Money Hacks to Make Life Easier

Every now and then we might discover a great tip that makes life so much easier. Whether you’re perusing Pinterest, Reddit, Instagram or magazines, there are shortcuts you can take when it comes to spending and saving. Here are 6 shortcuts to make dealing with money a little easier. Buy in bulk. Sasha Mitchell-Fuller, a current producer at “The Dr. Oz Show,” formerly of “The Tyra Banks Show,” loves to stay current on fashion while putting together segments for TV, and believes you can have an up-to-date wardrobe with designer brands without depleting your bank account. She thinks getting a much-needed wardrobe reboot can happen all in one shot during the times of year where stores are known to have big sales. This approach encourages shopping efficiency for those who have busy schedules and might find it hard to shop every season. Instead of having to stay up on every random sale throughout the year, Mitchell-Fuller uses this bulk shopping method for clothing and can insure that she can look polished for every season. She snags deals at stores like Zara and Nine West only during their 70 percent off sales. She adds, “These are also items that you can wear forever.” Be a super saver. If you want to save money on a regular basis, think about how much you want to put away per month. Set savings goals to keep track of how much actually hits your bank account. You can automate this process on bank accounts like Capital One 360. There is a goal-setting feature that is easy to set up and keeps you aware of how close you are to reaching your goal whenever you login to your account, displayed as a bar graph next to the dollar amount inside the account. You can check in on multiple goals this way without ever having to touch a spreadsheet or calculator. Create an out of sight, out of mind savings account. If you’re a spender and you tend to dip into your emergency fund any time you come up a little short, setting up a different savings account might be how you approach putting away money and keeping it there. If you make it a little less convenient to get the money, you may be less likely to touch it. Consider this to put money away for long-term goals or even an emergency fund for saving 3 to 6 months’ worth of living expenses. This way, you won’t see it on a regular basis and won’t be tempted to think of it. Take stock of the food you buy. You might already get some savings at the grocery store by picking up sale items listed in the circular or by clipping a coupon or two, but another way to save money is to actually eat the food that you buy. Write a list of needed items. When you purchase the items at the store from that list, keep the list after shopping. You can keep it on the fridge or close by to remind you of what’s inside the fridge. It’s easy for something like broccoli or carrots to get thrown in a drawer and forgotten about, only to have them spoil. With a reminder of what you have, you can cook meat before it goes bad. You...

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5 Life Events Everyone Should Financially Plan For

Posted by on Mar 15, 2016 in Articles, Uncategorized | Comments Off on 5 Life Events Everyone Should Financially Plan For

You can make your own plans, but life might change them. Whether you are getting ready for college, just starting out with your first real job, or you have worked for years, there are certain life events that you should plan for. It’s important to plan your finances and make specific goals about where you want to go in life, both career-wise and financially. However, even if you do make these goals, sometimes life will get in the way. There are many regular monthly expenses that you need to budget for, but you should also take into consideration potentially expensive life events that arise for most people. If you haven’t yet set up a budget, or you are bored with your finances, there are ways to make the process more fun. Once you are on track with the basics, it’s time to start planning for the life events that can cost big. College If you’re getting ready to head to college, you likely already know that it will cost you big. Hopefully you can earn a scholarship or a grant, but there’s a good chance that you will end up taking out at least some loans. It’s important that you know some of the basics about student loans, such as the difference between subsidized and unsubsidized loans. It’s also important to truly think about how much debt you are taking on; the average graduate for the class of 2013 had more than $35,200 in student loan debt. If you haven’t accrued any debt yet, make it a point to plan for just how much you can afford, and if there’s any way you can take out fewer loans (such as working part-time). If you are a parent of a soon-to-be college student, one of the best things you can do to help your child is to make sure they truly understand what they are taking on by using student loans. If you have time, start saving for your kids’ college fund now, and encourage them to earn good grades so that they have a better chance of earning a scholarship. Marriage and family life You may want to get married soon, or you may believe that you never want to get married. Whatever you are feeling now, things can change if you meet the right person (or you decide that the person you thought was perfect actually isn’t so right). Marriage can be expensive: The average wedding in the United States costs $26,444, and depending on the circumstances, divorce can be costly too. The earlier you start saving for your wedding, the better. Include wedding savings in your monthly budget. According to Gallup, as of 2013, more than nine in 10 adults said they already have children, plan to have children, or wish they had children. Yet, according to the USDA, parents were projected to spend $241,080 to raise a child born in 2012. Planning financially for a child ahead of time is usually the easiest way to save, but many of us just can’t do that. If you are about to have a child, and you haven’t saved anything, it’s time to start. Down payment Owning a home is part of the American dream, at least for most people. If you want to own your own home, you will need to apply for...

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4 Mistakes That People Make When Budgeting Money

Posted by on Mar 10, 2016 in Articles, Uncategorized | Comments Off on 4 Mistakes That People Make When Budgeting Money

Now that a new year is here, one of your financial resolutions may be to develop a budget so you can stay on track with your finances. Everyone should have a budget, but this is especially important if you’ve been living paycheck to paycheck. Getting a budget in place is a good start. However, if you’re not careful, you could end up busting your budget soon after you set it. Here are four things you should not do when developing a budget. Not keeping track of spending Before you set up your budget, you should track how much you spend for at least 30 days. That means everything from your monthly credit card bill to your morning cup of coffee. No purchase is too small to include in your budget. There are plenty of apps and online tools that can make the process easier. Two tools to consider are Mint and Buxfer. Making your budget too restrictive It is important that you set up a budget that is realistic and manageable. Keep in mind your expenses will likely change each month, so you’ll need to leave some room for unexpected costs. For example, you may need to make an unforeseen trip to a doctor’s office or purchase supplies for your child’s school project. Also leave room for a few wants in addition to your needs. Depriving yourself will only make you desire to spend more. Forgetting to include savings You should include savings as part of your monthly budget. This will help you get a realistic view of your entire financial picture. Don’t treat emergency savings as an afterthought. That emergency savings fund can be a real life saver when you need it most. If you don’t think you have what it takes to diligently sock money away each pay period, arrange to have a certain amount of your check (preferably 10%) automatically transferred to your savings account. Impulse spending Spending on a whim will wreck your budget in no time. One way to stop yourself from making impulse buys is to unsubscribe from email lists for stores where you tend to spend a lot. This will help reduce the urge to splurge whenever you get a notice about a sale at your favorite clothing store or receive the latest coupon code. These emails make it very tempting to go to the website and make a purchase. Even if you just “browse” online, you’re setting yourself up to give in to temptation. So do yourself a favor and click the “unsubscribe” button...

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5 Warning Signs You’re Headed for Financial Disaster

Posted by on Mar 8, 2016 in Articles, Uncategorized | Comments Off on 5 Warning Signs You’re Headed for Financial Disaster

Financial problems have a way of sneaking up on you. At first you may start borrowing money to make a purchase or using your credit cards a little too often. Before you know it, you’re facing a mountain of debt. You may be content with denying you have a problem with managing money. However, burying your head in the sand will catch up to you if you don’t take the proper steps get things under control. Here are a few signs you’re headed for financial disaster. You often borrow money from friends and relatives Many of us run into a financial snag from time to time, but if you find yourself constantly asking your friends and family for a loan, and you have trouble paying them back — or at all — this is a warning sign. In addition, borrowing money from loved ones and repaying late or not returning the money can lead to even more strain in your personal life. Bill collectors are calling you — and it’s not to say hi Ignoring your bills won’t make them go away. You may feel a temporary sense of comfort and relief when you toss your bills into a pile on your desk, but that won’t resolve the issue. Your money problems will just continue to worsen. Soon enough, your creditors may come looking for you. You rely heavily on credit If you often reach for your credit card, even for small purchases, this is an indication that you are spending more than you earn. Relying too heavily on credit and maintaining a balance from month to month can cause your debt to balloon, leading to even more financial strain. When you get to a point where you can’t afford basics like groceries or gas, it’s time to reevaluate your budget. You’re living paycheck to paycheck If you find that you frequently overdraft and you’re just barely making it from one paycheck to the next, you are living on the financial edge. Burning through your cash faster than you earn it is asking for trouble. All it takes is one major financial emergency to put you in a crisis. The key is not to wait until a crisis hits before taking action. Once you start to see that you’re experiencing financial difficulty, begin looking for ways to either spend less or bring in more money. You tell financial lies Are you making purchases and lying to your partner about it? Are you gambling your paycheck away or excessively shopping? If you have lost control of your spending and you’re going to great lengths to conceal your behavior, this could put you at risk for serious financial trouble down the road. Furthermore, taking a reckless approach to money could point to some areas that need to be addressed concerning your mental health. Meeting with a therapist may help you figure out if you have a deeper problem that requires exploration....

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Considering a New Career in Retirement?

Posted by on Mar 4, 2016 in Articles, Uncategorized | Comments Off on Considering a New Career in Retirement?

Many retirees look forward to spending their golden years relaxing, socializing and improving their short game. For some, however, all of that R&R is overrated. Working after retirement may be an oxymoron, but it’s a trend that continues to gain steam. A 2013 study found that 60 percent of workers age 60 and older plan to look for a new job after retiring. That’s up 3 percent from the previous year. While financial concerns are often the motivator, for many retirees the decision to pursue an encore career is more about passion than paycheck. Retirement can be an opportunity for people to finally pursue their dreams, said Kimberly Foss, a certified financial planner and founder of Empyrion Wealth Management. It’s “a way for them to do the things they never had time to before,” she said. “Many retirees will likely have already established a decent emergency fund and have settled their debts — kids’ college tuitions, mortgages — so a position’s salary may not be a driving factor,” Foss added. “They might choose to volunteer, consult, start their own business or pursue a brand-new career that fulfills a lifelong passion, skill or hobby.” For example, when one of Foss’ clients was offered an early retirement package for the global IT company where she worked as a data analyst, she used the opportunity to begin a new endeavor: melting down glass and stones to create jewelry. “We reviewed her financials, and she and her husband set off to travel across the country in an RV selling these goods and earning a decent income from it,” Foss said. “Best of all, she loved what she was doing and felt financially secure enough to pursue her passion.” While encore careers can be highly satisfying for retirees, those who go down this path need to make sure they’re doing it for the right reasons and that they don’t make any major mistakes that could derail their happy ending. Here’s a look at some dos and don’ts when it comes to late-in-life second careers: Do find something that excites you. Bryan Franklin, an executive coach and co-author of the book “The Last Safe Investment: Spending Now to Increase Your True Wealth Forever,” said that perhaps you have a pursuit that you’ve always wanted to try but never thought you could. “Maybe there was a childhood dream that you’ve long ago dismissed as not practical or nearly forgotten about,” he said. “Use these as inspiration to find a way to contribute that makes you feel great about yourself.” “Retirement is a time you can pretty much do whatever you want to do. You realize life is shorter, and you value the time you have to a greater extent.” -Len Hayduchok, president of Dedicated Senior Advisors Len Hayduchok, a CFP and president of Dedicated Senior Advisors, agreed that starting a new career in retirement is something you should do only for the love and passion of it. “Retirement is a time you can pretty much do whatever you want to do,” said Hayduchok, adding that as you get older, “you realize life is shorter, and you value the time you have to a greater extent. It becomes more of a focus on how to spend your time in a way you enjoy.” Don’t make it about...

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3 Smart Things to Do When You Inherit Money

Posted by on Mar 3, 2016 in Articles, Uncategorized | Comments Off on 3 Smart Things to Do When You Inherit Money

When you inherit money from a loved one, it might be tempting to treat yourself to a luxury. Maybe your dream car or a long vacation? While it’s not necessarily wrong to use at least part of your inheritance for a little fun, make sure you don’t make an impulse decision about how to use your newly acquired funds. American retirees expect to leave an average inheritance of almost $177,000 to their heirs, and in several countries, that figure is much higher. An inheritance can be extraordinarily useful for your financial health, but it’s not something you can necessarily expect or completely rely on. And once you do inherit some cash, it can be difficult to know how best to manage it. Above all, you’ll need to slow down and think about what’s best for you before you act. According to Consumer Reports, the very first thing you should do with your money is “park it.” People who blow through their inheritance in a short amount of time typically will either go on a spending spree or make bad investments, so this is one time when it can be better to save than invest, at least initially. Consumer Reports recommends putting the funds into an FDIC-insured money-market account to start. Putting the money in a checking account would make it too easy to spend. Another option is a 3-month CD with a penalty for early withdrawal, which will help prevent you from making any rash decisions. After you’ve successfully parked your cash, you’ll be able to take some time to think through your options. At this point, some consumers will feel most comfortable consulting with a financial planner, but be choosy when it comes to selecting an adviser. Fee-only financial planners are recommended because they don’t work on commission, so they won’t try to sell you on investments you don’t need. Whether you seek the help of a professional or manage your inheritance yourself, here are three smart ways to use your funds to secure your financial health. Save for emergencies If you don’t have an emergency fund, this should be your top priority. While not all experts agree on exactly how much should be saved, six to 12 months worth of wages will give you a great cushion to deal with unexpected expenses or a possible job loss. A sizeable rainy-day fund is also great for surprise opportunities, like a last-minute vacation with friends. It could be tempting to use your inheritance to pay off your debts immediately, but without an emergency fund, you could be back in debt in no time. Pay down debt Paying off all high-interest debt, such as credit card balances and auto loans, is an excellent use of inherited money. The sense of relief you’ll feel after eliminating these burdens will be tremendous. Many consumers are less sure about whether to pay off a mortgage. This is not as cut and dry. In some cases, it can be wiser to put money toward your retirement before paying off a mortgage due to the tax deductibility of your mortgage. The decision will likely depend on how close you are to retiring, as well as the rate on your mortgage versus the returns you could expect by putting the money elsewhere. Contribute to your retirement If you have not...

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4 Ways Getting Married Will Change Your Taxes

Posted by on Feb 25, 2016 in Articles, Uncategorized | Comments Off on 4 Ways Getting Married Will Change Your Taxes

When you walk down the aisle, your vows aren’t likely to include the words “Till death—and taxes—do us part.” But including that clause may not be such a bad idea, because once you tie the knot, your tax situation has the potential to go from simple to complex fast—not to mention the fact that you’ll have to reconcile any disparate tax strategies. For instance, Melissa and Lee Bernhoft, Houston–based newlyweds who got married in April, have two very different attitudes toward declaring exemptions: Melissa likes to declare more, while Lee prefers fewer. “My expectation is that I’ll have to pay [the IRS] back, but that’s not her style. She would prefer to give Uncle Sam an interest-free loan,” says Lee, 30, a finance professional. Meanwhile, Melissa looks forward to getting a refund. “It makes me more nervous to have to owe a big lump sum of money,” says the 33-year-old IT audit relationship manager. “And I’m nervous that because my husband under-declares I don’t know if I’m going to get that sweet little check I’m used to.” The one thing they can agree on? For the first time ever, they’re going to use an accountant to help them file and navigate their new tax situation. If you’re newly wed like the Bernhofts, chances are you’re also confused by the uncharted tax territory that lies ahead. And with less than two months to go until the filing deadline, a good place to start would be simply to understand what’s different now that two incomes have become one. So we asked a few tax professionals to outline some of the most significant changes that happen once you go from single to married. Here are four major differences to consider before you file. Your filing status will change You’ve kissed the single life goodbye, which also means kissing goodbye your single filing status—you must now file as either married filing jointly or married filing separately. For most couples’ tax situations, married filing jointly will likely make the most sense. Not only could you enjoy a lower federal tax rate than when you were single, you’ll also be able to take advantage of tax breaks like the earned income credit (EIC) and various educational deductions and credits that aren’t available to couples who file separately, says Lisa Greene-Lewis, a CPA and TurboTax expert based in San Diego. The likeliest reason to choose a married filing separately status would be if you feel one of you is at risk for an audit or has tax “baggage,” like owing a lot in back taxes, says Andrew Poulos, a greater-Atlanta-based tax accountant and principal of Poulos Accounting & Consulting. Filing separately will help provide some protection from tax liability for the other spouse. “If one spouse has a balance owed to the IRS from prior years, filing as ‘married joint’ allows the IRS to offset any refund from their joint return against the prior collection balance owed by one of the spouses,” he says. The overarching rule to remember? “The minute a couple signs a tax return as ‘married joint,’ it doesn’t matter whose share of the money creates any sort of liability—both spouses are equally liable for the full amount even if they are divorced at some point in time,” Poulos adds. You’ll probably change...

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10 Retirement Saving Strategies You Should Know About

Posted by on Feb 23, 2016 in Articles, Uncategorized | Comments Off on 10 Retirement Saving Strategies You Should Know About

From tax-deferrals to employer contributions, here’s how to save more. We all know that we should be putting aside a portion of each paycheck for retirement. Setting up a direct deposit to a savings or investment account can help make sure that we don’t forget to save every month. However, once you start saving, there are many other things you can do to help grow and protect your nest egg. Here are 10 savings strategies that will help you build wealth for retirement. Tax-deferral on retirement savings. You can defer paying income tax on money you save for retirement in a 401(k) (up to $18,000) and IRA (up to $5,500). Workers age 50 and older can temporarily exclude from tax an additional $1,000 in an IRA and $6,000 in a 401(k). Income tax won’t be due on this money until you withdraw it from the account. And if you will be in a lower tax bracket in retirement, you can reduce your lifetime tax bill by saving in traditional retirement accounts. Set up tax-free retirement income. You have already paid the income tax on money you contribute to a Roth IRA and Roth 401(k). The money will accrue without taxes while in the account, and if you take distributions after age 59 1/2 from an account that is at least 5 years old, you won’t ever have to pay tax on the investment earnings. “If you put the money into a Roth and pay taxes now, then the money that you gain is tax-free,” says Austin Chinn, a certified financial planner for Fountain Strategies in San Jose, California. The myRA. A new type of Roth retirement account, the myRA, guarantees that your savings will never decline in value. The only investment option is a Treasury savings bond that pays a variable interest rate. However, when investors accumulate $15,000 or the account turns 30 years old, your savings will be transferred to a private sector Roth IRA. The saver’s credit. Retirement savers whose adjusted gross income is less than $30,750 for individuals and $61,500 for couples in 2016 could qualify for the saver’s credit. This tax credit is worth between 10 and 50 percent of the amount you contribute to a 401(k), IRA or Roth account up to $2,000 for individuals and $4,000 for couples. Trustee-to-trustee transfers. If you decide to roll over your 401(k) to an IRA or a new 401(k) when you change jobs, take care to transfer your balance directly from one account to another via a trustee-to-trustee transfer. If a check is cut to you, 20 percent of your savings will be withheld for income tax. You only get 60 days to put the distribution, including the withheld 20 percent, in a new retirement account. If you don’t meet the deadline you will owe income tax and potentially an early-withdrawal penalty on any amount that doesn’t make it into another retirement account. A trustee-to-trustee transfer allows you to avoid the tax withholding and the potential to trigger taxes and fees. “You want to do a trustee-to-trustee transfer and have the check going to the new custodian directly, so that way you can avoid that withholding,” says Mary Erl, a certified financial planner for Nest Builder Financial Advisors in Gurnee, Illinois. Tax-free IRA charitable contributions. Withdrawals from traditional IRAs...

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How Anger Can Hurt Your Finances

Posted by on Feb 19, 2016 in Articles, Uncategorized | Comments Off on How Anger Can Hurt Your Finances

Your emotions are useful for expressing yourself and alerting you to dangerous situations. However, one emotion, anger, can have a negative impact on your financial health. When not managed in a constructive way, anger has a way of consuming you and impacting every area of your life. Unfortunately, angry feelings can sometimes result in poor financial management. Financial expert Joan Sotkin says unresolved anger can keep you from being prosperous. “If you’re serious about changing your financial position, it’s essential that you deal with anger that is hidden deep inside of you and will interfere with your prosperity,” Sotkin said. A danger to your finances: letting anger fester One source of anger that can impact the way you approach your finances is debt. When you let this anger about your debt fester, the overwhelming emotions can prevent you from taking the steps necessary to get back on track with your money. Instead of making a change, you may resort to blaming others for your predicament. You may even engage in activities that have a low chance of working out or might make your financial situation worse (spending a significant amount of money on lottery tickets or gambling, for example). Billy Fay, a correspondent for debt management and education company Debt.org, explains how letting anger fester can snowball. You become angry at yourself for getting into this untenable position in the first place. You are angry at your boss for not paying you enough. You are angry at your creditors who charge too much interest, have too little patience or compassion, or are otherwise enjoying your predicament. You are angry at your loved ones because of the burden they have placed on you for their subsistence. You are angry at the world for not letting you win the lottery, which would put an end to all of your money problems. Anger can precipitate impulsive actions involving violence and/or illegal activities. Wishful thinking One of your first reactions may be to push all of your angry feelings aside, and deny having any financial issues or anger. You may start to daydream about being the next Powerball winner or receiving an inheritance. However, hoping and wishing that your financial situation will improve isn’t the best way to handle things. You have to put effort into some realistic money goals so that you can heal your finances once and for all. Sotkin says it is important to first accept your anger, and then think along the lines of more realistic solutions. “If you’re debting, spending, late-bill paying, or other financial behaviors that annoy or anger someone else in your life, then those behaviors are serving you because they allow you to control. Reversing these behaviors requires that you let go of your anger, resentment, and your need to control,” said Sotkin. Blame Avoid blaming yourself or others for your financial missteps. This is an unhealthy means for you to reframe your anger about your current financial state into a feeling that is bearable. According to psychologist Leon F. Seltzer anger often manifests as guilt, hurt, or fear. If you are feeling guilty, anxious, or fearful about your finances, resolve to set up a time to speak with a certified financial planner or certified credit counselor. The Certified Financial Planner Board of Standards can...

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5 Tips for Better Spending Habits

Posted by on Feb 17, 2016 in Articles, Uncategorized | Comments Off on 5 Tips for Better Spending Habits

While 2016 is in full swing, if you haven’t thought about a resolution yet, don’t give up. Maybe it’s time to make one that has the potential to stick. If you’re often wondering how money slips out of your wallet, consider becoming the crash test dummy for better spending habits. Test drive some of these ideas below to develop better ones. Be your own cheerleader. Patting yourself on the back after following through on a behavior you want to increase goes a long way to help cement a behavior. Ginger Dean, psychotherapist and website owner of GirlsJustWannaHaveFunds.com explains the power of rewards: “When making smart money choices, celebrate them by rewarding yourself. Yes, make rewarding yourself a habit. For example, when you make it through a pay period and adhere to your spending plan, treat yourself to something nice that doesn’t break the bank.” She points out that this creates what we call positive reinforcement, which helps you connect good decisions with positive rewards. According to research by Wendy Wood, a social psychologist and provost professor of psychology and business at the University of Southern California, a behavior only has to be rewarded initially to form a habit. So once the habit is established, you can relax and let momentum take over. Cheat a little. While it’s great to start the New Year off with a new idea, give yourself a lead and start with a familiar task. Repeat the task on a regular basis. Research shows you won’t have to train yourself to do the task, you just train yourself to do it repeatedly. For example, if you like drinking water when you eat at a restaurant, choose to do it more frequently. Set rules for yourself, like, “When I eat out, I will order water.” Before you know it, a small gesture will become a string of little actions that can have a big impact on how you spend. It can also do double duty for your bank account if you send the money you didn’t spend straight to savings. Once you establish one good habit, move on to another like trimming a little bit of your grocery budget every time you shop. Start with as little as five dollars and put that in savings, as well. Keep using the Benjamins. Let your dollars see the light of day and allow the real thing to get some exercise. Fans of carrying cash can do this more so in the New Year if it helps you control your spending. If you know you tend to do major dollar damage in just one swipe of a credit card, then this tip might work for you. Curtail the urge to go on a spending free-for-all when using a credit card as a short term loan and pay in cash whenever possible. Make using cash a habit if you find it keeps you on track. Choose a dollar amount to withdraw on a regular basis and challenge yourself to not to go beyond that amount. Graduate from a spending spree. Limit how much time you spend in a store. Research shows the slower you shop, the more you spend. Get what you need and go. Set a timer if you have to or have your eyes stay glued to your shopping...

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