Financial Spring Cleaning

Spring is finally here, regardless of whether it feels like it outside or not.  Around this time of year, many see it as their obligation to go through their homes and rid themselves of unnecessary items that clutter the place up.  The idea that a clean and happy dwelling is a rebirth and a new start.  Why not take this same approach to your finances?

At the start of every calendar year, I always suggest creating a new budget for the upcoming year.  Mapping out your income and expenses presents saving opportunities and fiscal responsibility.  We are now almost three months into the new year and expenses sometimes change.  That is why I always do a financial spring cleaning.  Below are my favorite three ways to do a financial spring cleaning:

Financial Spring Cleaning Tip 1:  This first tip is directly related to a normal spring cleaning of the house people already do.  Go through your closet and determine which clothes you don’t need anymore.  Maybe you have shoes you don’t wear, pants you’ve outgrown, DVD’s you no longer watch because of a Netflix subscription.  Or a lot of cravats and bow ties that are now out of style, or men’s bracelets that you aren’t using any more.

Gather up these items and donate them to a local shelter like The Salvation Army.  Not only will you eliminate these useless items from your place, but you will be giving to those who could benefit from such items.  The best part about all of this is most of the times you can receive a tax deduction for your donations.  This can lead to a higher income tax return for the 2017 year.

Financial Spring Cleaning Tip 2:  Clean out unnecessary clutter in your budget.  For example, maybe at the beginning of the year you signed up for a gym membership you no longer use.  Cancel it.  Go through the various categories in your budget and see if they are relevant to the remainder of the year going forward.  Perhaps you dedicated a portion of your budget to pay off debt, but now you no longer have that debt.  Eliminate that category.  Eliminating categories in your budget makes it simpler and much easier to read and track.

Financial Spring Cleaning Tip 3:  Review the dollar allocations in your budget.  Say at the beginning of the year you were eating out lunch every day, but now you realize the many health benefits and cost savings of bringing your lunch to work.  See if you can slash $30-$50 a month off your food budget.  Shop around for car insurance.  Perhaps you find the same coverage with a different company for $15 less a month.  Eliminating a little bit of money from a few categories adds up and helps boost your savings potential.

Financial spring cleaning allows you to revamp your finances for the remainder of the year.  Even if you haven’t done a good job of sticking to your budget, it is never too late.  A financial spring cleaning can allow you to set up your financial priorities for the remainder of the year and gives you a clear financial conscious heading into the spring and summer months.

Diworsification: How Much Diversification is too Much or Little?

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Diworsification

When I was picking stocks, I saw my portfolio lose 15% of its value in one day.  Simply put, I had too many of my eggs in one basket or too many of my investment dollars in one stock.  I wasn’t diversified.  Sure, I could hit it big with a stock, but I could also lose.  I saw the amount of time I was spending on picking stocks and knew it could be put to better use if I let the professionals handle my money.

My portfolio was under diversified, but many people also suffer from too much diversification of their portfolio or diworsification.  Diworsification occurs when you continually invest in the same asset class and keep your risk low but hurt your overall return potential.  It would be the equivalent of investing in many different mutual funds that only contained U.S. stocks.  If you want exposure to the U.S. domestic stock market that is great, I highly recommend it, but pick a fund that gives you just that and move on.

My investment strategy has come a long way from my earlier days when I was picking and choosing stocks.  I thought just like many that I could pick homerun stocks that nobody else could.  I did well on some and poorly on others.  I would come home every day from work and watch Jim Cramer’s show Mad Money.  I soon realized that the effort I was putting in wasn’t yielding the rewards I desired.  I quickly shifted all my investments to a mutual fund.  Being young, I knew I wanted a large exposure to stocks.  What better stocks to invest in than the U.S. Stock Market?  Warren Buffett has been noted to say that when he passes he wants the remainder of his fortune put into a low-cost index fund that mirrors the S&P 500.  That’s right, just one fund.  If he wanted his fortune to be spread across many funds that mirrored the S&P 500 he would be subject to diworsification.  I decided to follow Warren’s advice.

While my investment dollars are placed into a single low-cost Index fund that mirrors the U.S. Stock Market, not everyone will agree with this position, and that is fine.  Investment advice can be given to you from a hired professional or you can decide on your own.  My knowledge came about through the reading of numerous books.  If you want to invest in South America, there are funds for that.  If you want exposure to corporate bonds, there are funds for that.  If you think that the pharmaceutical sector is the next big thing, then by all means find a fund that suits you for that investment.  There are many ways you can invest your hard-earned money, but try and keep to the One and Done Philosophy when investing in mutual funds to prevent diworsification: Pick one mutual fund that covers the class or sector you are wanting exposure to and leave it at that.  Not only does it simplify your portfolio, but it keeps you diversified and away from diworsification.

How Rookies Can Invest in Real Estate

If you are interested in investing in real estate property, you may have started doing research about it. However, there is so much information out there about the topic that it can sometimes be confusing and leave you wondering how you should get started.  Fortunately there are a few not so complicated ways how rookies can invest in real estate.

1 Rentals

If purchasing a single family rental appeals to you but a lack of time to research and find an investment property is holding you back, there is a way to get it done fairly easily; Let someone else do the research for you. But saving time may not be the only thing making you hesitate. You also have to find renters, collect rent, do upkeep, and the many other tasks involved with owning a rental. It all takes time and it can be somewhat intimidating to a rookie real estate investor. So why not allow someone else to do some of the work for you? In addition, it is possible to purchase turnkey rentals even if you don’t have the expertise or time to manage the property yourself. Also, if you think you are locked into buying rentals only in the area where you live, think again. You can invest in properties in a different part of the country altogether even if you haven’t personally seen the property. Does this sound like a dream? There are companies in existence that can help you overcome these hurdles so you can purchase a rental and get started investing in real estate even as a rookie.

2 Crowdfunding

Crowdfunding is another way to help you get started as a rookie real estate investor, especially if you don’t have much money to get you started. By choosing this method you can put your money together with money from others and invest in real estate so everyone benefits. This is done through an REIT, or Real Estate Investment Trust.

REIT’s are a lot like mutual funds in that they give investors the power to diversify their investments and have steady money coming in. They are made up of knowledgeable team members who devise ways of investing pooled money in real estate investment options not usually available to the lone investor. They do this by putting the investment capital into more than one property, which makes the risks low and raises the growth potential of your investment. There are several companies that offer this type of investing, so it shouldn’t take too much time to research and find one to your liking.

3 Partnership Investing

Of course, you could also pool your money with someone else without the help of an outside company. Choose someone you trust to get started with and you could still invest in real estate even if you don’t have a lot of money or experience. When you work with someone else who has real estate properties already, you can learn a lot from them about choosing, financing, and managing rental properties or flip properties. It may also allow you to start investing a lot sooner than if you were to try to purchase a property on your own.

As you can see, even if you are new to real estate investing, there are different ways how rookies can invest in real estate. Don’t let whatever is holding you back prevent you from securing your future.

What other options do you know of how rookies can invest in real estate?

Kayla is a personal finance blogger in her mid-20s who loves to write about money topics of all kinds.

Paribus Review: A Good Way to Save Money?

paribus review

Have you ever purchased something online only to find out there was a price drop three days later? Frustrated, you don’t even bother contacting the retailer because it’s time-consuming.

What if there was an app that tracked all the possible price changes, missed coupons, and better-elsewhere deals online and contacted the retailer on your behalf to get your money back?

Now there is! Paribus.co, pronounced pair-uh-bus, is a one-of-a-kind money saving app that does the work of finding better deals, coupons, and price changes for you.

In this Paribus review, you’ll learn how it works, how much it costs to use, and if it’s worth your time to sign up.

How does it Work?

Not only does Paribus find price rewinds and coupon deals that you missed after purchasing a product, but it also does the work of submitting a claim on your behalf to get money back.

Paribus links to your email account and searches for retailer-specific communications like purchase receipts or order confirmations.

Once it finds your purchases, it then scours the web for deals like:

  • Price drops.
  • Better deals with other retailers that offer price-matching.
  • Missed coupon codes and promo deals.

If it turns out you missed a better deal, Paribus contacts that retailer and submits a claim on your behalf. This means, no more searching, printing, or managing proof of purchase statements. Just link your credit or debit card to Paribus so you can get your money.

Once you sign up, Paribus works in the background looking for emails from participating retailers and searching the web for better deals on the things you’ve already purchased. They’ll let you know if they find something.

How Much Does Paribus Cost?

Paribus is free to sign up and you get 100% of every refund. They don’t collect a dime.

Who is Paribus For?

If most of your everyday purchases are online, signing up for Paribus is a no-brainer. You should be using this app to automate money saving rebates. However, the places you are able to receive a refund are limited to the company’s eligible retailers, which is subject to change.

If you don’t buy things very often or most of your purchases are made offline, Paribus won’t be able to get you any refunds, and it’s probably not worth your time.

Is Paribus Worth it?

If you shop online a lot, absolutely! The more you buy online with Paribus’s ever-growing list of participating retailers, the higher your chances are of getting more money back. On average, Paribus can get you back $3-5 a month depending on your shopping habits.

The only issue people have with this app is the amount of personal information you need to give Paribus to reap the benefits.

Paribus assures its customers that all information remains private and is protected by bank-grade security. And it only searches your email for retailer-specific communications, nothing else. If you’re still worried about linking Paribus to your personal email, you could create a separate email account just for online purchase emails and confirmations.

Note: In October 2016, Capital One acquired Paribus which gives it another layer of security authority.

Your Turn

Are you ready to find out if retailers owe you money? You could be getting money back for most of your online purchases.

Let us know what you think in the comments.

Christine C. Renee is a self-driven money blogger and freelance writer who likes to tackle the areas of money, productivity, and all things freelance. Her main focus as a freelance blogger is to help businesses create engaging content for their online audience. Find out if her energetic writing style is right for your business.

This post was sponsored by Paribus