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Why emotional spending is OK (sometimes)

Emotional spending

Good morning loves.  Well my 11 day vacation is officially over and I’m back at the office.  Even though I’m working away I am definitely still in vacation mode.  I spent five days of my vacation in New Orleans and before that I kicked off all the festivities with a little shopping celebration.

After scouting deals online I set my budget at $100 to spend on myself to celebrate the beginning of, not only my vacation but a new phase in my life.  Here’s a little rundown of what’s coming up in my life aka all the reasons I need o celebrate: we are moving.  That’s about it.  We are moving to a new apartment and starting a new phase in our lives: that’s definitely a reason to celebrate.

Emotional spending is not compulsive spending

Now here’s my point, it’s OK to splurge every now and then if a) you can do it without using your credit card and b) your spending is controlled.  Now let me ask you this, do you spend money when you want to celebrate something great in your life?  I used to be a compulsive spender, spending money when I was both happy or sad.  Now I only spend money on myself occasionally and never in excess.

After I paid off my debt I was afraid to spend money for a long time because I didn’t want to go back to being broke.  Now I allow myself to spend money occasionally, but within a budget and never on anything I don’t need. That’s the key to emotional spending – keep it in check.

Emotional spending can be controlled

I say that I spend  money emotionally but that’s only partially true because my expenses are always very calculated.  The intent to spend money is based on emotion, but the amount I spend and how I spend it is always based on my budget.

The season is changing so my happy emotional spending came at the perfect time.  I bought basic items I need for fall such as black tights, new black dress pants for work, a new dress for my trip to New Orleans.  In total I only spent $80 and I got absolutely everything I need.  Now that is controlled emotional spending.

How often to you spend money emotionally?

Think about the last time you bought something, anything, was it emotionally initiated?  Did you buy ice cream the last time you were having a bad day?  Did you buy a bottle of win the last time you wanted to drown your sorrows?  Or did you buy yourself a new outfit to celebrate a new job?  The truth is a lot of our spending is emotionally based.

I have to be honest I’m not sure what it is about spending money, but it can be gratifying, consoling and uplifting all at the same time.  I don’t know any other activity that has the same effect on people.  Do you?

How to spend wisely when emotions are involved

The old me would spend money on anything, and I mean absolutely anything from meals to home furnishings just so I would have something to do.  My money and my life were ruled by emotions; but not anymore.

The pain, tears and stress that come with being in debt are heartbreaking.  Now I spend money based on emotions but not as I’m feeling them.  If I have a bad day I go home and wallow, sometimes I eat cookie dough.  I think about how much money I can spend and how much I can afford to spend without feeling guilty.  That’s how I control my emotional spending and I never feel bad about it.

Photo from Flickr

A credit card without debt?

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Does that really exist? We shall see.

Have you ever been offered a VISA or MasterCard that you can reload with your own money and thought to yourself “WOW that’s a great idea because I won’t get into debt”?  That is definitely a normal reaction, I mean seriously who wouldn’t love to have a credit card without the temptation to spend and get into debt?  I know I would.  This type of credit card is prepaid and it’s often confused with a traditional VISA or MasterCard.

Do you have a prepaid credit card?

Yesterday my Dad called me and said “I got a VISA today.”  I was shocked and secretly proud because over the last few years my Dad’s financial situation has been less than stellar.  To make a long story short my parents got divorced, my Dad wanted to keep our childhood home so he got into a lot more debt (by buying out my Mom) than one person should.  When you combine this with the overwhelming need to give your daughter everything she wants in hopes that you’ll be her favorite parent it’s a recipe for financial disaster.

Fast forward to my Dad selling his house and paying off all his debt.  You would think that’s a good thing right?  Well it normally would be, if the person worked towards rebuilding their credit score.  However my Dad went in another direction.  He moved in with his now girlfriend and let everything – and I mean everything – from the phone and the car insurance to the house and the cable be in her name.  This is not helping my Dad rebuild his credit.

What is a prepaid credit card?

Yesterday when my Dad was at the bank paying his monthly bills (yes he still goes to the bank) the teller offered him a prepaid VISA card.  She explained that he can use it worldwide where VISA is accepted as a payment method and he can load as much money onto it as he wants whenever he wants.  Since my Dad has been without a credit card for over three years he thought this was a good idea.

The truth is it can be because it gives people with less than perfect credit the option of online shopping as well as booking tickets and travel.  It opens a world of doors for payment options that normal credit card less people wouldn’t have.  Since the card is funded with actual money, not credit, there is no possibility of further harm to your credit score.

Is it really the best option?

So what’s the downside?  The exact same gift of a prepaid card is also the curse.  Since the credit card is loaded with cash or money transferred from a bank account or PayPal there is no credit.  Everyone is approved for a prepaid credit card because there is no approval process, but it also doesn’t help rebuild your credit score.

If your credit is less than perfect you may want to consider a secured credit card because as you use it each month and pay it off you will rebuild your credit score.  Photo from my Flickr

Do You Consider Life Insurance an Asset or an Expense?

life insuranceA recent State Farm study found that half of Americans (50 percent) say life insurance is an asset while one-third (33 percent) say it is an expense.

While I completely agree with life insurance being an asset I’m pretty shocked that one third of those polled considered life insurance an expense.

Here are four reasons I believe life insurance is an asset that everyone should have.

Life Insurance Rounds Out a Financial Plan

I’m a firm believer that the right types of insurance round out a financial plan. For instance, you can pay off your debt, build an emergency fund, and start investing but what happens when a major emergency hits? The normal answer is that you’re back in debt or have depleted your savings trying to cover the cost.

If something happened to you or your spouse what kind of financial repercussions would there be?

For most Americans who are still paying off a mortgage and living on two incomes the answer isn’t good.

Once you get all of your ducks in a row, financially speaking, life insurance should be considered the protection layer of your financial plan.

If you need some more proof you can read all the amazing stories on Good Neighbors to see just how important having the right types of insurance is.

Life Insurance Allows You to Protect Your Family’s Future

If you have kids then I know you can understand the feeling of wanting to protect their future. As a parent all you want is the best for your children.

You want them to grow up as happy, healthy, responsible adults but you also want them to have every opportunity possible.

If you’re worried that your kids won’t be able to attend college if you’re not around then life insurance can bring you peace of mind.

You can choose what coverage amount you need and rest assured that you’ll still be taking care of your kids – even when you’re no longer here.

Life Insurance Can Cover These Types of Expenses Too

I don’t want to give off the impression that life insurance is only for couples who have children because it’s not.

Life insurance can be used to cover the cost of a funeral and can protect any co-signers you have on your debt.

If you don’t have a spouse and children to protect (yet) but want to be able to cover the cost of funeral services or cover the amount of debt you have then you probably don’t need a lot of coverage.

Find out how much you do need in these cases and get a quote. As long as you’re in good health I think you’ll be surprised at just how affordable life insurance can be.

Life Insurance Brings Peace of Mind

There’s something peaceful in knowing that even if something happens to you it’s not going to cause financial ruin to those around you.

It only takes a couple seconds to pick up the phone and call your agent but that one phone call could bring you the peace of mind you need.

Do you have life insurance?

Disclosure: This blog post was written as part of a sponsored program for State Farm to raise awareness about the importance of life insurance. All views expressed are entirely my own, and were not influenced or directed by State Farm. You can learn more about this blogger program and life insurance at GoodNeighbors.com, PlantingMoneySeeds.com, and by following #StartLiving on Twitter.

Spending extra for convenience

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Good morning loves.  Last weekend I went home for a family reunion and let me tell you I had a blast.  Every year my extended family, aka my Dad’s oldest friends from childhood who also happen to all be related to each other as well as my God parents, host a family barbeque.  It’s a chance to see all my “uncles, aunts and cousins” (who are of course not related to me by blood) as well as their spouses and children.

Spending the long weekend with family

This year we had approximately 80 people who came out to spend a day in the park.  We ate lots of great food, had a ton of drinks, played volleyball, had a water balloon toss, enjoyed a pie eating contest and basically just had a great time.

I wasn’t planning on attending the family reunion this year because I haven’t spent a long weekend at home all summer.  I was busy travelling and taking advantage of the warm summer months.  So this Labor Day weekend I thought I would stay home.  However after several text messages from my sister telling me that I would be the only person not in attendance and one phone call from my Dad actually offering to pay for my trip – I was guilted in to going.

Travelling the cheapest way is not always the best way

The truth is I actually didn’t want to miss the reunion because it’s always great to see my family, but for once I just wanted to stay home, sleep in and relax in my apartment.  I didn’t take my Dad up on his offer to pay for the trip and I started looking into last minute travel options.

I love taking the train, it’s actually my preferred method of travel because security in airports is a hassle and driving makes me sleepy.  However the last minute train prices were more than I wanted to pay (since I didn’t have a planned budget for this last minute trip) I decided to book a trip on Megabus.

Have you ever taken Megabus?  The concept sounds very appealing; it’s a double decker bus that allows limited assigned seating and tables for drinks and workstations.  The travel time was only one hour longer than the train and the price was half the cost.  I thought it was a win-win; until I actually got on the bus.

Spending for convenience

The one factor that I didn’t take into consideration was the fact that a bus travels on the roads and a train is off road on tracks.  My one hour of extra travel time turned into two hours with traffic and I was late for the barbeque.  There is nothing more that I hate than sitting in traffic; it’s a waste of time and I am extremely impatient.

At the end of the weekend I decided that I just couldn’t get back on another bus so I booked a very last minute train ticket.  If I would have just taken the train both ways it would have saved me a lot of time and actually cost less than the bus ticket plus the last minute train ticket.  Lesson learned.

Have you ever spent a little extra money for convenience?

Photo from Flickk