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#9 Pay Off Your Debt

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College is great -- but gosh, education is expensive these days! The class of 2013 held an average debt load of over $30,000 per student. Yikes!

So let's talk student loans: Ideally we'd love to pay off our loans sooner rather than later, because that means you end up saving more in the long run (and golly, isn't it a long run?). But life is expensive! I know, I know!

Although this tip is way down at #9, think of it far higher in terms of priority. The sooner you pay off your debt, the more money you can save for a house, a baby, a dog, and retirement. All those grown-up life steps.

So let's look at smart moves to paying off student loans: 1. First and foremost, set up auto-deduction. Easy-peasy. You pay loans on time and it won't be quiiiite as painful as writing a check every month.

2. With federal loans, choose your repayment schedule wisely. There are five repayment options ranging from a 10-year, $50/month minimum plan to an income-based plan. Use this handy student aid guide to figure out what plan best fits your budget.

3. Prioritize based on interest rates. Pay off higher-interest rate loans first. If you have an extra chunk of change this month, chip it in to the loan that's feeding off of a double-digit interest rate. One interesting thing to note: the exception to this rule is private variable-rate loans. This means your interest rate can change. Translation: it can go up! And currently, this interest rate is relatively low, which probably means it will shoot up in the coming years, so pay off that bad boy ASAP.

4. When student loan payments end, CELEBRATE. You have moved a mountain, my friend, so please do your happy dance accordingly. Maybe you can take the money you would've spent on next month's loan repayment and take a little mini vacation. Or buy a fabulous pair of shoes. Or all the chocolate milk you could possibly drink. Go crazy, because paying off loans is a BIG DEAL.

Side note: I didn't touch on credit card debt, but you can take gems #1-#4 and apply it to your plastic as well. But girl, if you have to give up living a fabulous lifestyle to pay off your credit card debt, don't do it. Just kidding. Do it, definitely do it. And fast. Forget the faux-leopard coat and lululemon-everything workout apparel. Heres another great calculator to help you plan.

The sooner you pay off your debt, the less you end up owing! More money in the bank for you!

The Talk

There comes a time in every young man and woman's life when it's time for..."the talk." ...the money talk, duh! This is the talk with your significant other because you are combining finances. KABOOM.

Now for all my single ladies, you don't need to worry about this one quite yet. You can read and store this knowledge bomb, or just go find some funny kangaroo gifs and send them my way.

For the folks who are shacked up and sharing bank accounts with their favorite person in the world, this one's for you.

Car guy husband and I just had the talk. We've been married for almost two years, and this is probably our second talk, or maybe our third. It's good stuff - and I'm not just saying that because I geek out about finance. It's legitimately good for our marriage, and we fight less about money as a result. We have the talk when our situation changes - for us, I had come out of a stretch of unemployment (which I'll delve into for a later post in case you ever find yourself in the same unfortunate situation) and was bringing home a paycheck again. We had the talk when I got laid off a few months prior. We had the talk when we first got married. Lots of opportunities for the talk.

We made it fun. It was set up on the calendar in advance. Monday night: money talk. We grabbed a picnic lunch (plus a choice cider for yours truly to take the edge off...it can be a little stressful). We went to a park on a bright and sunny evening, brought our computers, and delved into the world of joint bank accounts.

The talk lasted into the night, but the view was alright.

Make your money talk your own version of fun. It helps! Now for the nitty gritty:

The many screens of the money talk

Ten questions for the money talk:

With excerpts from our own

1. How much money do we bring home after taxes each month?

A bajillion dollars.

2. How much money are we spending each month?

Half a bajillion dollars, plus a golden doubloon.

3. Are there any areas where we can spend less?

Clothes, gas, fast food, and utilities because it's almost summer!

4. Are there any areas where we can spend more?

Up the ante for retirement accounts, savings accounts, and definitely more money on restaurants (Ha! It doesn't always have to be fuddy duddy practical).

5. Do we want to give more money away?

Well, we have more money, we could probably give more money away.

Or

Well, we have less money, we should give less money away.

6. How is our credit situation?

Let's hop on credit karma. Cool. Our credit score went up. Let's consider a better credit card because our current one is meh.

7. What are our financial priorities?

Car Guy Husband: Retirement and house. Both number one (ahem, clearly, we're still working on the definition of "priorities").

Sage & Mint: Financial security, retirement, living in the moment (and this is why we have money fights).

8. How can we compromise on both of our money goals AT THE SAME TIME?

Sage & Mint+Car Guy Husband: We shall save xx% for retirement because that's important to both of us. We'll increase our fun budgets because Sage & Mint loves going out to eat in the city. And the rest we'll save up for a down payment on a house. Compromise reached. All parties content.

9. How can we make money more fun?

Ok, so this isn't really one you'll find in the books, but really: make it fun. I love massages so we created an incentive plan. If I reach the goal, I can take money out to get a massage. Car Guy Husband really likes trucks. We set a goal for him and when he reaches it, he gets a chunk of money to buy a truck. It's fun. Fo realz.

10. What are the next steps?

Car Guy Husband: Go here and here, switch money here, shazam katchow, all done.

Sage & Mint: Adjust the budget here, transfer money there, find a new credit card. Shazam, katchow all done.

Make a pie chart with where your money goes. Do it. Really.

#8 Set Up an Emergency Fund

You get a flat tire. Your bike gets stolen. Your dentist discovers 11 cavities in your mouth. Everybody has a bad day once and awhile.

For those inevitable bad days, this tip will be a salve to life's financial bruises.

Start an emergency fund

Dave Ramsey is a huge proponent of emergency funds, and this little secret gives you a pretty useful pot of money sitting around.

How much money goes into an emergency fund?

A thousand buckaroos.

Where do I keep my emergency fund?

Separate is key. You need to convince yourself it's an emergency fund. Some ideas: stash it in a piggybank that you actually have to break. Store it in an online bank. It needs to be easily accessible but inconvenient to use (so as not to tempt you). Our "emergency fund" is my old bank savings account from growing up, so it's separate from our checking account but still easy to use with my old checkbook.

Why do I need an emergency fund?

Emergencies, duh. The stuff you don't plan for: illness, layoffs, accidents, and all those other very unfortunate events. Bad days can end up costing a lot of money outside of your monthly budget, and it's crucial to have a safety net. Bad days happen to everyone, it's just a matter of when (Debbie downer...over and out).

What if I have debt?

Even if you have debt, you should still stockpile a little egg. Think a robin's egg rather than an ostrich egg. Pay installments to your emergency fund of $25-$50 a month if you can't afford the upfront costs due to other debt. It's important to pay your loans, but an emergency fund is definitely a more pressing expense after basic living costs. This prevents you from going further into debt ("Or even bankrupt" says Debbie downer) when times get rocky.

How should I use my emergency fund?

Finance folks will give you different answers, as this is a bit of a "gray area," but at this point in life, use it for unforeseen expenses outside of your monthly bills for rent/mortgage, food, internet, and clothing. My list includes:

  • Surprise health expenses (cavities? x-rays? a stockpile of airborne?)
  • Car costs (accidents and issues, not gas or insurance!)
  • House issues (plumbing work, a tree falls on your garage, the basement floods, blah de blah blah blah)

There you have it. Set up an emergency fund pronto! Shoot for a thousand dollars at this point in your life, and when you have paid off debt try to save a bigger chunk down the road. Store it in a place you won't dip into for non-emergencies. Good luck!

#7 Live Simply

This post is more of the warm, fuzzy philosophical type. You won't find a whole lot of numerical advice for your bank account (Thank goodness! She's finally laid off the rules). Right. so along with the "be generous" motto, money rule number seven gets into your head rather than your wallet.

Live simply. We're getting into the vein of minimal living here, but I'm not going to ask you to move into a shipping crate or anything. However, the less stuff you have, the less money it'll cost you. But here's the catch, it's not just about up front costs - it's about breaking the cycle of consumerism.

Living in the United States, consumerism is as American as apple pie and baseball. Unless you've swam upstream of the culture river, you're probably another victim of this mindset. I am too: I have 5 different kinds of Neutrogena Moisture Shine Lip Gloss. FIVE. Even three would've been murder but I've got two on top of that. Gold star. Except not really.

Each of these tubes cost $7.99 each (sidenote: a ripoff, but I like them). Simple math: I'm approaching fifty bucks on lip gloss! The final kicker: with each one I acquire, I want to buy two more in different colors. Buying more makes me want to buy EVEN more. Amiright? Amiright? There is no quenching this beast. I want all the lip gloss everywhere 4ever.

Now I'm gonna talk about two books, because 1. I'm a book nerd and 2. These authors explain the concept at least 823 times better than I do.

If you're intrigued about cutting down on the excess in your life, Jen Hatmaker has a great book called The 7 Experiment. The author basically addresses seven different areas of her life: food, possessions, spending, waste, media, clothes, and stress, and attempts to simplify and reduce the excess in each category. It's challenging, it's interactive, and she gets at the heart of the problem. Some of the things I did following a workbook study of her book:

  • Gave away multiple possessions every day for a week
  • Counted my clothes (ah! I was up to 400 and didn't even delve into my under-bed storage)
  • Ate the same seven things for a week (I've never been more grateful for spices)
  • Only spent money seven times in a week

However, if you're the kind of person that is more drawn to the economical perks of living below your means, the book for you is The Millionaire Next Door. It was written in the '90s, but basically makes it on the Top 10 books for finance people even now. The premise: People that look rich aren't necessarily actually rich. The authors spent 20 years interviewing millionaires for market research, and this book is a summary of their findings. I'll share a few:

  • The most common cars driven by millionaires are Toyota and Ford.
  • In fact, 86% of luxury car buyers (Mercedes, BMW, Audi) are not millionaires.
  • 50% of millionaires interviewed had lived in the same house for 20 years.
  • Most millionaires have a budget (what a sexy stat to finish off the list).

So check out those books from your local library, give 'em a read. What does this "living simply" mean for you? Well it requires a bit of self-assessment. How much money do you really need for morning frou-frou drinks? Do you feel the need to appear wealthy? Is the brand worth the price? And to myself: do I really need another tube of lipgloss??

I give you all my Irish blessing! To living simply (raise my invisible glass). *Clink*

#6 Be Generous

"Whoever loves money never has enough. Whoever loves wealth is not satisfied with their income." -Ecclesiastes 5:10

I think it's time for a mystery of the universe: Making tons of money might still leave you wanting more.  Sometimes, as we start earning more money, it becomes easier to fall into this pit.

So I propose a small salve to combat this temptation: be generous. When we give away our money, our time, and our resources, magic things start to happen. Generosity keeps us grounded. The more you give of your money, your resources, and your time, the more  grateful you become for what you have. It's a recipe for contentment, which is really very hard to create or manufacture. I'll be sure to invest when they figure that recipe out.

Here's a great story of this phenomenon playing out in real life for one of my college friends:

Over Christmas our family finalized the sale of a large tract of land and wanted to generously share some of the proceeds of the sale with their children.  What a gift!  They explained that there were no strings attached to the money—they only hoped it would help us be more generous in our friendships and communities.  In essence, it was a gift to gift others! 

The money sat in my bank account for a while as I contemplated what to do with it.  It would make a huge dent in my student loans—but how was that being generous?  My dad talked to me later about how he defined generosity: it isn't about the money he and my mom give; it’s about how they give of their time, their abilities, and their respective gifts.  So I paid off my loans (woah, YAY!) and used the money, time, and stress that my loans occupied and now I give, in any way I can—both large and small.  A card and candy for a hurting co-worker, going out to lunch with a new acquaintance, and a plane ticket to visit some faraway friends in Seattle-- each of these has blessed me far more. 

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What a cool story!

There was a great study about how happiness and money essentially hits a plateau: that up to a certain level, more money made people happier. The magic income? $75,000. However, past $75,000, there was no correlation between making more money and more happiness.

I find this study oh-so-intriguing, because it's essentially saying in giant letters: BEING RICH DOESN'T MEAN YOU'LL BE HAPPY. That's a culture shock in America. It goes against our entire free market system.

If you're a religious sort, this post is nothing new. For some, there's actually a spelled out percentage of how much to give away (10% for Christians' tithing and a minimum of 2.5% for Muslims' zakat if you were wondering). This mandated "open-handedness" keeps your perspective in check.

Here's what I'm saying: Make money. That's great. Hoarding that money though? Unwise. Unhappy. That's the recipe of a grouchy old curmudgeon.

Ten Ways to Give Your Money Away

1. Buy dinner for friends, buy drinks for coworkers, buy lemonade from the neighborhood kids.

2. Remember birthdays and anniversaries. Give gifts, turn into Santa Claus for a day.

3. Sponsor a child through World Vision or a similar company. $35 a month gives kids food, education, clean water, and healthcare.

4. Getting coffee? Pay for the person behind you. $5 to make someone's day: Talk about return on investment.

5. Part of a church, mosque, or other religious organization? Give your money with open hands.

6. Give a Kiva loan. For as little as $25, you can can empower people to make a better life.

7. High schooler going on a missions trip? A neighbor kid comes to sell you something? Open hands.

8. Help end hunger with Heifer International. Give a flock of chicks to a family in need for $20.

9. Donate to a local homeless shelter.

10. Throw it out the window. But seriously, you know where the money is needed most in your city or town. Get it there.

#5 Drive A Used Car - Part 2

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Welcome back to Sage & Mint: Car-Buying Edition. Once again, Car Guy Husband is here to help. In the last car post, we figured out how much to spend on a car and a payment plan. Now, let’s figure out more specifics: a few car suggestions and how to find your car.

Picking your car is definitely the fun part, and you probably have a few in mind. Let’s go back to Car Guy husband, because he knows a lot about cars.

Car Guy Husband: I eat piston rings for breakfast. Then I read auto blog, and then I spend 8 hours a day working in the automotive industry. I wuv cars.

Sage & Mint: Ok, so let's say you had to recommend three affordable used cars to people in their twenties who don't want to pay a whole lot but still want some practicality and dependability. Whatcha got for us?

Car Guy Husband: (visibly cringing) That’s a tough question; people have different needs and wants. But, if you just want a box on wheels to carry you from point A to point B (cringing again), here’s a few of the most reliable used cars from 5 years ago according to Forbes:

  • Acura TL
  • Ford Fusion
  • Honda CRV
  • Toyota Highlander

Plus a few others I would recommend in the same price range:

  • Hyundai Elantra
  • Honda Accord
  • Subaru Outback

There are a ton of cars out there, so do your homework! Read consumer reports and other reviews on how the vehicle holds its value, what commonly breaks, and cost of ownership. Ask friends and family what cars they’ve had good luck with, and make the best informed decision possible. Remember, the used car business is still like a surprise egg at times, so just do your best. Don’t forget, this is supposed to be fun!

Sage & Mint: Ok, one last lineup. Can you give us three husband-approved used cars for 20-something folks that are affordable ($8-$12K used), fun, and have a little more personality?

Car Guy Husband:

  • Subaru Impreza or Subaru WRX
  • Mazda 3 (Kara you should be jumping for joy)
  • Ford Escape/Mazda Tribute/Mercury Mariner (these are all basically the same car and can be a good small utility vehicle)
  • Infiniti G35 Sedan or Coup
  • Jeep Wrangler (A fun car, but make sure it fits your needs analysis)

These are just a few cars that are more than just a “box on wheels” that I personally like. It doesn’t mean they’re the best cars, or they won’t break. Every car has a fan club and a list of enemies. You and your neighbor might have the same car with very different feelings about it.

Now let’s talk about the actual purchase process:

My suggestion for a 20-something who doesn’t know much about the car industry would be to find someone who loves this stuff (basically your version of Car Guy Husband) to help you. I wouldn't recommend Craigslist unless you have someone with a LOT of used car knowledge and experience helping you, and you’re ok with taking a higher risk for a better deal. I understand this is your chance to show you’re capable and independent, just don’t get screwed over in the process.

Sage & Mint: I’d like to interject here, we have both bought and sold cars on Craigslist, so we’re not anti-craigslist, and don’t personally have any horror stories to report (but some of our friends do). It’s just a riskier move, and if you’re a first-time car buyer, there are safer routes. Back to you Car Guy.

Car Guy Husband: Right, so if your life is lacking in car buddies, the best route is to buy a “certified pre-owned” car. And then add some car buddies to your life, because they’re great people. Anyway, certified pre-owned means you’re buying a used car from a dealer and you'll get a car with factory-backed warranties (so if it breaks, they'll fix it most of the time, but always read your contracts so you know what’s covered). Lots of dealers offer their own “warranties” which range from great to not so great. Going with a factory warranty (Toyota, Ford, GM) is a little clearer about what is covered.

Sage & Mint: Then what?

Car Guy Husband: You can look for a car online, or you can visit a dealership in person (again, I would look at online reviews or get recommendations of good dealerships). Find a few you’re interested in, go for a drive, sleep on it (highly recommended to prevent impulse buys). Dealers may even back the price down if you’re getting up to leave, but still sleep on it. Then you should make a decision. If it’s a go, there’s plenty of paperwork to fill out. Read it, understand it, have a friend read it too. Then you buy! Say hello to your new car!

Sage & Mint: Any other tips for us?

Car Guy Husband: Yep!

  • Stay away from anything that says “rebuilt title.” You’ll find these often on Craigslist.
  • Haggle. Haggle like you're at a mercado in Mexico. The car business was set up for haggling.
  • Don't be afraid to walk away. This is not the best deal you’ll ever find on a car, even if the dealer tells you otherwise.
  • For repairs, find a reputable shop that won't rip you off (use yelp or that knowledgeable car friend of yours).

Sage & Mint: Thanks Car Guy Husband for all of your knowledgeable help!

Car Guy Husband: You are welcome. Now go forth, and find your set of wheels. I personally suggest a celebratory drive to the nearest ice cream shop (not to be eaten in your new car, of course), to follow your transaction!

Travel on the Cheap: Big, Expensive City Edition

A few weeks ago, car guy husband and I took a little trip to Vancouver, Canada. We stayed in a four-star hotel. We saw sights and sounds and had a few rounds of drinks. We even went hot-tubbing. Oh, and Vancouver is the most expensive city in North America. More pricey than NYC, costlier than LA. Ok, now that we sound spoiled and snooty, let's be honest: we're cheap. And I was unemployed. So how can we pull off an awesome weekend at 50% off? Let's look at the numbers; First the expensive normal prices per couple and then you'll see how much we actually paid. 

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  • Hotel: $260 (Spency! I know! This is downtown-downtown, like walking distance to shopping and touristy things.)
  • Gas: $60
  • Parking: $20
  • Saturday lunch: $15
  • Two-Pricetags Saturday Night Dinner: $60
  • Drinks post-dinner: $30 (everything is so expensive in Vancouver!)
  • Sunday breakfast: $12
  • Sunday lunch: $18
  • Sunday dinner (driving home): $14

And that's not even counting the $60 duty-free perfume I was lusting over!

Grand total: $489

($549 if hunky husband was feeling generous and wanted to buy me perfume)

But Sage & Mint, you might say, I'm young and wild and free, my bones don't creak yet and I don't have little chilluns running around, and THIS IS THE TIME TO TRAVEL.

You are so right, fretting reader. Here's how we do it:

Let's go back to that first sentence. Last weekend car guy husband and I took a little trip to Canada with OUR AWESOME COUPLE FRIENDS THE HOGANS. They're great. We travel well together. They're in grad school for counseling, so they're excellent at both communicating and listening , and this is key to our travel smoothness.

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Right. So this basically means our couple of two turns into a party of four, and we split the cost of everything. So then we stayed in a four-star hotel that we found on Hotwire.com that was basically half off. We shared a hotel room on the 34thfloor of a Hyatt with a wall-size window looking out over downtown Vancouver.

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We split the cost of gas. We found cheap parking,* and for a string of non-cheapness, we had a normal dinner and drinks afterward (see, we still have fun). OUR AWESOME COUPLE FRIENDS THE HOGANS went to Trader Joe's prior to the trip and stocked up on snacks, so we basically skipped buying an entire breakfast, lunch, and dinner at a restaurant. I didn't buy that perfume that I was lusting over, even though I still want to.

Actual prices per couple:

  • Hotel: $63
  • Driving: $30
  • Parking: $10
  • Saturday lunch: $15
  • Saturday dinner: $60 (same)
  • Saturday post-dinner drinks: $28 (same and spency)
  • Sunday breakfast: $12 Starbucks special treat
  • Sunday lunch: $16
  • Sunday dinner: skipped it and ate at home

And yes, I'm going to do that mastercard thing, I know you were waiting for it:

A weekend with friends adventuring in a new city: PRICELESS

Grand total: $234 + priceless

Muuuch more manageable. Yes, it's a splurge fo sho, but if you've got some pocket change, why not take a vacation!

A few travel gems:

  • Skip the souvenirs. Or just buy cheap ones. Tchotchkes will sit, pictures are forever.
  • Skip the tourist draws. We went to two suspension bridges in Canada. One was free. And in a park. And surprisingly bouncy, to the chagrin of a few afraid-of-heights folks. The other was $32 PER PERSON and $5 to park. We skipped it and looked at google images instead. Don't be afraid to say no to your former plans.

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  • Buy groceries ahead of time. It's cheaper and prevents hangry-ness while traveling.
  • Do free stuff. Cities have tons of great public spaces and actives. Go for a walk, drive around the city, wander around shops.

Now for a few warnings:

*You get what you pay for. Turns out our cheap parking was cheap for a reason. (Side note, this would've made our weekend way more expensive but we are forever grateful for company cars.)

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  • Sharing a hotel isn't for everyone, and that's the truth, but if you can pull it off, it's pretty much like a giant slumber party and pretty fun.

There ya go: International travel on the cheap!

Expect plenty more on the travel front. Ski trips, camping adventures, exotic locales. At Sage & Mint, we lurv to travel. I bet you do too. Got any tips or tricks to share?

How to Rock Your Taxes

It's that time of year again! The time of samoas, thin mints, and tagalongs, oh...and taxes.

For a lot of twentysomethings, tax season is a relatively new phenomenon (it is for me!*) - or perhaps your dad is still doing them for you.

Well, if you're finally taking over tax duties, let's go over what you need to know, and nothing more:

What the heck am I actually doing when I file taxes?

You're figuring out if you still owe money to the government (boo), or if the government owes money to you (woot!). Over the course of the prior year, you cut a chunk of your paycheck to the government every pay period, and now it's time to settle the tab and see if you paid them too much or too little.

When are taxes due?

April 18, 2016 - that's a funday Monday. They need to be mailed or emailed on or before this day.

How do I do taxes?

You'll get some official-looking tax-related papers in the mail. Store them up; I just have an old school folder. Here's what to look for:

From your employer

W-2: Your employer will send an earnings statement from last year. It has a lot of numbers on it and the same muted color scheme as a standardized test.

From your bank or other financial companies

1099: While a W-2 keeps track of your wages, the 1099 keeps track of other forms of income. You'll get a 1099-SA if you have an HSA, you'll get a 1099-INT for interest earned, and a 1099-R for retirement plan-related income. There are a whole slew of 1099 types, all with corresponding letters. Just keep 'em all as they roll in.

For deduction-related categories

Charitable donations:  If you gave money last year, the organization will send you a receipt-type paper for your taxes around this time.

Interest Paid on Loans: If you have a car loan, a mortgage, or a student loan, you should receive paperwork on these topics because they can count toward your deductions (AKA less money being taxed).

How do I file?

Well, you have a few options:

Turbotax

Cost: Free/$30/$50

They have a free option with very basic forms, which is great for folks that don't have kids or houses yet. I might recommend the $30-$50 Deluxe version that offers clearer guidance. You'll have greater chances to get money back on your tax return, which can soften the up-front price. But don't worry, if you start the simple version and it becomes too complicated, you can upgrade at any point without losing your information. An easy tax return takes a few hours, while a more complicated case takes up an entire Saturday and a bottle of wine.

Certified Public Accountant (CPA)

Cost: $200-$500

CPAs know a lot about numbers. This is a great outlet for those with complicated tax situations, because CPAs dream in tax code. Ask friends for referrals or look on Yelp for reviews.

H&R Block

Cost: $90-$200

H&R Block is made up of a lot of mathy folks. They might be accountants in their day jobs, retired business teachers, and people who just "get" taxes better than the rest of us. They'll do your taxes for you at a price, and are a good option for people who don't have the time or don't trust their math skills to do their own taxes.

A piece of advice from a wise sage:

My always-teaching father recommends at least once in your life, you should do your own taxes. This will help you grasp the math and also give you an appreciation for how screwed up our tax system is (a theme also shared by Legendary Larry, the tax guru who helped me with this post). 

Then what?

Time for the tax return form! For most of us it'll be some version of the 1040:

If you use Turbotax, you'll fill the form in online.

With a CPA or H&R block, they'll do the form after you've dropped off your paperwork.It's super easy, hence the price.

So...what are the forms?

1040: a long and ridiculous form that has a lot of special cases, deductions, and may require a few ibuprofen, choice swear words, or a drink of choice when finished. Blame Congress.

1040A: a shorter version of the aforementioned, but instead of tallying up your personal deductions one by one, you'll just take the "standard deduction," basically just a flat amount (for single folks in 2013 it was $6,100 and roughly double for married) that reduces how much you can be taxed on.

1040EZ: finally. something that actually makes sense in the tax world. EZ actually means easy. Wow. It's one page long and particularly applicable to many 20-somethings. If you don't have any dependents and do not make more than $100,000 a year, you can fill out this form. WOOT!

After filling in the form, you'll see if you owe money or get a return, right down to the dollar. If you owe money, pay up at this time. If you get money, wait happily for your return (a few weeks) and start dreaming.

A few notes on taxes:

  • If you're doing your own taxes, don't forget to sign it! It's an easy mistake to make.
  • REVIEW! Even if you have your taxes done for you. Stupid things like a misspelled name or wrong digits in your social security can really screw things up.
  • If you're married, no need to file separately. This used to be a "thing," but government has changed the code so it makes sense to file jointly.

Ok. That's it. STOP READING. Do your taxes, buy some girl scout cookies. Enjoy life.

*special thanks to Legendary Larry and Wise Sage Dad for the help on this one - thanks for your tax code kung fu and deep wells of knowledge. 

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#5 Drive a Used Car - Part One

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My dad is a car guy. My brother is a car guy. My husband is a car guy's car guy.

Dear readers, I am not a car guy. I judge vehicles by their colors. Green ones are the best. Thus, my car guy husband will inform you. He's pretty good at explaining this stuff, so let's give it a go.

Sage & Mint: Hey, husband. How do I buy a car?

Car Guy Husband: Well, first: If you own a car and it's paid off or almost paid off, it's the cheapest option 99% of the time.

Sage & Mint: Ok, but let's say I am in the market to purchase a car. Where do I start?

Car Guy Husband: You should conduct a needs analysis.

Sage & Mint: Boy car guy husband, you must be a businessman. Can you translate that last part into normal language?

Car Guy Husband: It just means you need to figure out what's important to you and what you need in a car purchase.

-Do you live in a snowy/hilly place? 4-wheel drive suddenly becomes more important.

-Is your commute awful? Great gas mileage would be nice.

-Does your body temperature run perpetually cold? Maybe you should be introduced to heated seats…

Sage & Mint: Ok, so once we figure out what we need and want, what's next?

Car Guy Husband: Next you decide your budget. The easy rule is you can usually afford to buy a car up to 20% of your salary (or your joint salary if you’re married).

Cheat sheet on how much car you can afford in a perfect utopia:

$30,000 salary = $6,000 car

$45,000 salary = $9,000 car

$60,000 salary = $12,000 car

$75,000 salary = $15,000 car

$90,000 salary = $18,000 car

Sage & Mint: I'm going to interrupt real quick. If you’re totally new to car world and don’t have a grasp of car costs, a very very basic new Ford Focus will cost about $17,000. That’s roughly $200 a month in a 6-year finance plan.

With used cars, prices are a little different. Here’s my Yelp-like pricing rundown on used cars:

$

$3,000-$8,000 cars. On Yelp, these are the McDonald's, Subways, and hole-in-the-wall-delicious-Mexican restaurants. In the car world, these are probably going to need a little work, or might have rust or a dent. They'll get you from point A to point B, but expect to have some repairs done at a local shop following your purchase.

$$ 

$9,000-$15,000. Via Yelp, these are your gastropubs and breweries. You will get from point A to point B, your car will have a smaller chance of needing expensive repair or maintenance and you might even get a sunroof. These cars are probably less than 10 years old and still have mileage under 100,000 (luxury cars not included). A big chunk of your coworkers probably drive these cars.

$$$

$15,000+. These are you romantic dinner spots on Yelp. You will get from point A to point B in style, with warm buns, and maybe even backup beeps (awesome). Expect these cars to have relatively low miles and newish, unless (again) your eye is turned toward luxury brands.

Ok, back to you Car Guy Husband:

Car Guy Husband: Right, so used cars can be a great idea for 20-somethings who don’t have tons of money yet.

Once you figure out how much you can afford, let’s figure out how to pay for it. In the ideal world, you’ll have an extra $5,000-$10,000 in the bank to pay cash, but that is unrealistic for some. If your bank account isn’t so flush, let’s look at your payment options: you can get a loan from your parents, a loan from the bank or credit union, car dealer financing, or a loan from the car manufacturer.

Parent loan: The upside is the flexibility and lower (if any) interest. The downside is borrowing from family is a sticky situation in general. Make sure all parties are in agreement on loan repayment and maybe even write out a contract.

Bank/Credit Union loan: The upside is loan rates are currently fairly low (less than 5% usually), the downside is you’re still paying a lot in interest. If you choose this route, go into your bank to get a loan pre-approved for an easier buying experience.

Car manufacturer loan: The upside is shiny deals like 0% down or a very low interest rate. The downside is they're usually only for new or certified pre-owned cars and wording can be tricky. Read the whole payment plan and make sure your interest won’t balloon after a certain number of years.

Car dealer financing: The upside is the convenience. You buy your car and sit down with a finance guy right at the dealership. The downside is they are professional upsellers, and you might end up paying more than you intended. It’s especially important to plan your payment schedule (a 60-month lease=5 years) and stick to it. Car dealers tend to push out your loan to make monthly payments more manageable. 

There you have it! Your first steps in buying a car. Up next: what cars you should buy and how to rock a dealership visit.

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#4 Give the Markets a Go

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When my brother and I were in middle school, our parents each gave us a thousand dollars to invest in the stock market. We could use the money for college. My investment choice: Hershey's, because I liked chocolate. My brother put all his in Sobe (remember those drinks?) because he liked the Lizard Lava flavor. I lost $400 by the end of it, and used the $600 to pay for a fraction of a college class (and I hope it was one that taught me sound reasoning and logic).

Although we didn't do so well in our tasty investments, my parents' little gift introduced me to the stock market, and I learned quickly that you don't always make money. There's another part of the story, though: my parents also invested for our college educations and their money doubled and tripled to pay for back-to-back tuition. Although there are foolish investments (read: my brothers' and mine), on the flip side, the stock market can be a valuable engine to grow your money if you do your research (my parents).

So how do you go about investing in the stock market?

1. First, make sure you should invest. 

Do you have six months of savings? Do you have an emergency fund? Those definitely take priority over investing in the market. Work on those first and then come back. If you do have your savings in line, then let's get started.

2. Find a broker, or become your own.

Brokers are helpful, but you're paying for their services, which can be a little cheeky and a little tricky. I use E*Trade for its straightforwardness. Each trade costs $9.99 and they pride themselves in no hidden fees. I'm a fan, but you can explore other options too (Ameritrade, Scottrade, Fidelity, to name a few).

3. Pick your poison.

Ok, so it's not poison. But determine whether you want to put your money in a mutual fund, company stock, or exchange traded fund (ETF).

Let's get a quick rundown:

Mutual funds:

These are a collection of very diversified funds run by money managers. Mutual funds are the buffets of the finance world - you'll get a little shrimp cocktail mixed in with your Swedish meatballs for a "well balanced" meal, likewise, you'll get an assortment of industries and assets in a mutual fund for a "well diversified" portfolio. Also to note, mutual funds are a more expensive because you're paying someone to actively manage the fund (for better or worse...often passively managed index funds perform better than the helicopter-parentish mutual funds).

Stocks:

You're buying a chunk of the company, well more like a crumb of a company. Stocks are for the risk takers; you can win big or lose big. Spend some time researching. Lots of stock players have done the research for you, so just read some of their well-thought-out ideas. I tend to like The Motley Fool's collection of stock tips.

Exchange Traded Funds (ETFs): 

ETFs are buckets of assets, also a bit like the mutual fund buffets. However, they are a cheaper, passively managed, and a more transparent version of mutual funds, with no investment minimum. These are a great option for new investors.

4. Buy!

Once you've nailed down your prospects, you buy shares. Prices run the gamut, but you'll find many from $12-$500+. Cheaper doesn't mean better, nor does more expensive stock mean you'll get more money back. That's the fun of it: it's hard to predict the stock market.

You're totally allowed to invest in a company you like. We have stock in Tesla because I think it's a cool company (did you know Tony Stark's character was inspired by the Tesla CEO? Awesome blossom). And of course, I did my research.

One more tip on buying: As a newcomer, a good practice is to consistently buy into the market for a more average price, therefore lessening your risk.

5. Sell!

Set a reasonable goal for your return (practically speaking, it'll probably be a percentage in the single digits) and sell when the timing is right. Although you might not think so now, stocks can  be a bit of an emotional attachment and it's important to keep your investment relationship purely platonic. They're just cold, hard investments after all.

There you have it, the joys of the market. Don't go all in, but by investing a chunk of extra savings you'll make your money tree blossom at much higher rates with just a little help from you.

*Muchos gracias to my BIL erique. He rocks the socks off this stuff and puts up with a lot of questions from yours truly for this blob of information.

#3 Track Your Day-to-Day Spending

While the budgeteers of yesteryear kept track of their daily spending by doling out cash in envelopes and keeping receipts to manually enter in excel spreadsheets, you my friend, are living in the modern age. Enter: Mint.com.

Let me introduce you to Mint, a wonderful app of technology and actually totally unrelated name-wise to my blog. Heck, they're not even paying me. It's that handy dandy.

But first, why must we be so anal in our accounting practices? Well, dear friend, this post should probably be written by my hunky man husband, rather than myself. He actually did have an excel spreadsheet before he learned of Mint from another type-A husband.

Transparency moment: I'm not very good, nor do I enjoy, keeping track of my daily (or weekly, or monthly) spending. I would rather floss than monitor spending, and I do not like flossing.

But anyhoo, if you want to be rich someday, you need some oversight and personal accountability in your bank account. Mint will do that, and it doesn't even have a nagging tone of voice. It's simply cold, heartless, and helpful.

How does it do it? Mint is backed by Intuit, a well-known financial software company. To use the helpful budget tracking of Mint, you'll be entering your information through their secure system. To ease your worry, know that Mint stores your data with the same high-level security as a bank. Read more here if you want to learn more about the safety of your information.

Five Things I Love About Mint

The Big Picture View

After you set up Mint, you'll be able to see your total cash available, total credit debt, monthly budget, and spending breakdown all in one place. Awesome blossom. It's like a tip-top-treehouse view of your neighborhood. This is a particularly helpful view, especially if you're toting around multiple credit cards and have multiple bank accounts.

A Visual Budget Tracker

You'll set certain budgets for the month (gas money, phone bill, utilities, restaurants, groceries, coffee shops, everything else, and so on). As the month goes on, Mint tracks your spending (remember, it's tied to your bank accounts and credit cards) and the budget bars will turn colors like a traffic light: Green, yellow, then red as you hit your month's budget limit.

It's Easy

I check Mint every few days, but it doesn't require me to do much work. Every time you swipe a card, Mint sorts the purchase into your budgets automatically, so a $4.50 Starbucks purchase drops into my coffee budget (set at $20-a-month, now down to $15.50 remaining). Some of the purchase drops need a little tweaking, especially if you're just starting Mint, but they're easy to sort and the app "remembers" any resorting for future reference.

It's Nonjudgmental

If I go over my budget, Mint doesn't ring alarm bells or send push notifications to my iPhone. It just goes over, there's no hard stop. It doesn't give me gold stars for saving or seven lashes for spending too much on restaurants (again, oh-so-guilty). It just keeps track silently and meticulously. Sure, there's an advice section, but I choose to read it and it's not too pushy. Thanks Mint, you can hang out with me anytime.

It's Empowering

You will know where your money goes. No more arriving at the end of the month with empty pockets, scratching your head and trying to recount the resting place of your hard-earned dollars. Plus, it's great for decision making. Should you go out to eat tonight? Check Mint. You've only spend $20 on restaurants this month and it's the 27th? Go for it.

Ok, and one more, just for kicks and giggles. It makes the beginning of the month way more fun. Every first day of the month, it's a blank slate all over again!

Now go and sign up for Mint. Once you see your finances, you'll be able to control them with a Midas touch.

 

 

#1: Don't Spend More Than You Earn

Don't spend more than you earn.

This is the number one rule for personal finance. It's oozing so much with wisdom it'll explode like Gushers in your mouth.

So why are we even going over this? Isn't it obvious that we shouldn't spend more than we earn? Well, yes...but that's where credit cards come in.

Credit card companies will loan you money for everyday expenses, just like a good 'ol pal, knowing you'll pay your debts like a true Lannister (Game of Thrones, anyone? Anyone?). Ok well - don't use that pretty little shiny bit unless you actually have the money in your account to cover it. No trips to Mexico unless you got the cash up front. Same for buying a new puppy, moving to a new place, buying a car, and your weekly coffee habit. Just say no. To drugs. And to spending money you don't have.

Let's divvy up your expenses. Here's an oft-quoted and nicely divided rule if you need a jumping point for your budget. It's called the 50/20/30 rule (I agree, it's not the most memorable of rules). But let's be honest, you don't need to remember it frequently, just when you initially start budgeting.

50% You should spend no more than half of your take-home pay (that's after taxes) on essentials (food, housing, utilities, and transportation). 20% Save, save, save! This healthy chunk of pie goes to responsible decisions. Pay off your debt, save for retirement, and stash away like a squirrel preparing for winter. 30% Fun budget/life budget. Use 30% of your pay for things like clothes, eating out, phone bill, internet, charity, child care, gym dues, pets, etc. etc. etc.

These percentages aren't hard rules, just guidelines. I'm more in favor of upping the ante on saving if you can. My ideal percentages are heavier on saving a little lighter on essentials (just pay less for your house/apartment/car!).

One of the biggest perpetrators can be a rent payment (or a mortgage). Rent can be expensive, especially if you're a gal living in the city. Try really hard not to spend more than 30% of your income in rent -- especially because this money is pretty much just vanishing at the end of the month (unlike paying a house mortgage, where you get to sell the actual house at the end). Here's a great chart (hat tip nakedapartments.com) to figure out how much you can afford in rent. *For total income, if you're married or sharing expenses with a partner, include their salary too.

10 Money Rules

Like snowflakes, no two budgets are exactly the same. We approach our finances from all different angles: you might have a golden nest egg or a pit of college debt; a chubby trust fund or holes in your pockets; you might be living check to check, or have a comfortable sum in a bank account.

And here we all meet in the middle. So first, let's lay some ground work for finance. Here are ten money rules that are hard to argue about.

1. Don't spend more than you earn. Cardinal rule number one. When dieting, if you want to lose weight, you have to burn more calories than you consume. Simple math. The same calculations apply to finance: if you want to be rich, you can't spend more than you earn.

2. Start a retirement account. Snoresville right here, but the sooner you start a retirement account, the more it'll pay off later. Consider it a notch in the belt of maturity: if you can see the logic of saving early for retirement, you've arrived. Well, that and being able to down hard liquor without wincing.

3. Track your day-to-day spending. This doesn't have to turn into receipt holding and excel spreadsheets unless you get giddy about that sort of thing. We'll talk about easy ways to keep track of your little spending breadcrumbs later. For now, just realize the more you know about where your money goes, the better decisions you can make.

4. Try investing. Right now, a good ol' savings account won't earn you much interest (read: free money). May as well bury your paycheck in a hole. Check out other money storage options with higher returns. It's an effortless way to grow your pot (of money, of course).

5. Drive a used car. Don't buy a new car. Just don't. It's quite silly for 97.8% of folk.

6. Be generous. Give gifts! Give to charity! Give to your church! Keep your hands open, willing, and generous rather than in a tightly balled greedy fist. It's just money after all.

7. Live simply. We're surrounded by excess we don't really need. Plus, it costs a lot of money. Live simply, live richly.

8. Set up an emergency fund. Hat tip to Dave Ramsey on this one - and he's so right. Make a pot to dip into when the times are rough. Watch your stress diminish in those adrenaline-packed moments.

9. Pay off your debt. Back to basic math here. The sooner you pay it off, the less you end up owing. Don't go around carrying debt. That's silly, you smartie!

10. Find a healthy medium. If you're a scrimper, don't be afraid to spend money and go on a trip! If you're a spender, maybe pack a lunch instead of going out.

That's the list. Did I forget anything? Any tips and tricks you'd like to share? Add yours in the comments below!

Pilot Episode

Oh, hello! Welcome to Sage & Mint: an approachable guide to money in your 20s.

This decade of breathing is full of crazy transitions. Schooling finishes, we move out of our childhood bedrooms for good, we buy business casual attire, and we finallllyyyy have a disposable income. Finally. More on that last one: school didn't really teach us about what to do with money, so unless your parents had a particular soft spot for interest rates and bonds, you might be left in the dark. Or at least the shade. Time to come out into the sun and educate yourself on savvy tips for your paychecks. Let's grow that green.

This blog aims to answer your basic money questions. It precipitated from three things: A failed New Year's resolution, a telling conversation, and economics camp.

Let me explain: 1. I hold tightly to my New Year's resolutions. I have three this year, and two were finished before January ended. It just so happens that my resolution from last year was to write a blog. I didn't do it. Well, I did it for one day. I also hold tightly to second chances, and I'm giving it another go.

2. A recent conversation with my best friend since second grade (who shall now be referred to as BF4EVA for brevity) revealed a great need. She is a savvy, smart, capable 20-something who had no idea what a Roth IRA was. You may be nodding your head saying, yeah, who the heck is Ruth Ira? Well, dear friend, it is not a long-lost aunt, but a type of retirement money pot. Blahblahblah, we'll get to that later. Point is, my savvy, smart, capable BF4EVA had some fear and anxiety surrounding her finances, and I don't think she's the only one.

3. I WENT TO ECONOMICS CAMP. I use shouty caps there not because I'm proud, but because I'm confessing. Does it get any nerdier? Even a flute player in a marching band is forever cooler than me and my economics camp days. Anyway, I actually liked it (and...one more nerd point for the kill). Money, incentives, free markets, and interest rates are the brain candies on which I chew. I'm hoping one day it'll be a hipster phenomenon of coolness, but until then, I shall take my financial savvy to help you actual cool kids out.

Personal finance? FEAR NOT. I'm here to break it down for you over a plate of cookies, or a cup of tea, or while holding a fuzzy wuzzy teddy bear. Whatever it takes for you to buck up and put on your brave to delve into the world of money. Let's go!