Don’t Get Spooked by Market Volatility

Stock Market Market Volatility

This is a special bonus episode of The Money-Guy Show. In light of recent market activity, we’re re-releasing a past show that covered the importance of staying rational and understanding what market volatility really means.

Spoiler alert: no, the sky is not falling. Don’t let the financial media get you riled up when they start trying to develop an emotional frenzy. When you start hearing dramatic reports about the stock market from media outlets, it’s important to understand that the actual data paints a very different picture than the talking heads on your TV or radio.

There’s a reason for that! News outlets have something to gain from creating a highly charged emotional environment – they get more viewers and more engagement. And nothing drives more people to tune in than negative emotions like fear, anxiety, and panic.

Financial media outlets often push stories to get a reaction out of their audience, so keep this in mind the next time you hear a news anchor making doom and gloom predictions about the market.

In today’s episode, Brian and Bo go beyond common sense in order to help you understand how financial markets work when you invest for the long term. They talk about how you can manage your emotions during these times when it’s all too easy to irrationally give into an atmosphere or group panic, and they give tips on strategies you can use to make the most of swings in the market.

You will learn:

  • What volatility really is…
  • …and what market volatility has to do with puppies. (Yes, puppies.)
  • The right perspective to keep when thinking about market volatility.

Brian and Bo also share advice for managing your own emotions when we experience big changes in the market:

  • Know where you are in terms of your long term investing plan.
  • Understand all aspects of risk. It’s not just about risk tolerance!
  • Recognize your own blind spots and know your own experiences will shape your perspective and behavior.
  • Accept that you will need a lot of perseverance to hang in for the long haul, but understanding the cycle of market emotions can help you manage your own.

The guys wrap up with a discussion of the financial tools and strategies you can use to handle market volatility wisely – and come out ahead of the average investor who tends to buy high and sell low.

3 Steps to Take When You Ask for a Raise

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Asking for a raise is one of the most simple and effective ways to increase our earning potential. Yet, how often do we make that ask?

Are you guilty of letting the fear of rejection get to you? Does talking money and compensation with your employer make you nervous?

It’s time to put those fears aside. If you don’t ask for a raise and negotiate for what you’re worth, you risk missing out on increasing your income. Taking the following steps will help ease your concerns about how to ask for a raise.

First, Understand the Process

At its very core, asking for a raise is just a matter of business. All employers should expect their employees to inquire about more money at some point during their career. Just as it’s foolish to accept a job offer without negotiating, it’s foolish to think raises will fall into your lap.

Instead of building up bad scenarios in your head, and thinking about how much of a disaster asking for a raise could be, rationalize it. If you’ve been making progress at your job, taken on more responsibility, and contributed value to the company, you’re not out of line for asking.

How much you ask for, of course, is another issue (but we’ll get to that). For now, you need to mentally prepare yourself for the meeting — which you need to ask to have, unless a review is coming up. Schedule a time to talk with your supervisor, and then prepare.

1. Prepare the Proof

Once you’ve got a date set with your boss, you need to prepare the proof you actually deserve a raise. This is necessary even if your manager knows you’re a great employee, or even if you’ve received recognition for your work.

Why? Depending on the hierarchy at your job, your manager might need to ask their boss or HR for your raise. You want to make this as easy as possible, and they’ll be able to use your proof to make a case.

First, you should be keeping track of any praise you receive. For most people, this comes in the form of an email. Make a folder in your email specifically for this purpose. Save any emails from customers or colleagues complimenting your work. You’ll want to document hard numbers and any kind of metrics you can use to show growth and progress thanks to your work, too!

Second, prepare a list of ways you’ve improved since your last review. Be as specific as possible, and note any important achievements or increased responsibilities. This is going to look different for everyone depending on the type of role you fulfill at your job. Don’t brush off accomplishments that seem trivial to you. Include anything that shows you’ve made a valuable contribution to the company.

Third, you’ll want to get some hard numbers to know how much of a raise to ask for, and what’s appropriate to ask for. When you come to a meeting to ask for a raise, you want a hard number in mind that you can propose.

You can do some research ahead of time by compiling salary data from sites like glassdoor.com, indeed.com/salary, and salary.com. These sites will tell you the average amount people in your position and in your area are making.

2. Have the Meeting

Time to make the ask? Stay calm and be confident. In a way, you can treat this like another interview.

You’re trying to showcase the value you’ve brought to the company since you’ve been there. You’re proving to your boss that you’ve grown in your position, and are subsequently worth more to the company. It’s time to be compensated for that appropriately.

Be diplomatic, but go with the culture of your workplace (i.e. don’t be too formal if that would be out of the norm). Present the hard data you compiled that shows how your work has benefited the business. Discuss how far you’ve come, highlight your strengths, identify what your weak points are and what steps you’re taking to improve on those weak points, and cite how much your coworkers and customers value you.

When it’s time to talk numbers, state what you’re looking for — and don’t be nervous! This is why you did your research: so you could state your case with confidence and know you’re making a reasonable offer.

3. Evaluate the Aftermath

Your meeting can go one of three ways:

  1. You get your raise, exactly what you asked for. Great!
  2. You get a raise and it’s not as much as you hoped for, but you did increase your earnings.
  3. You don’t get any raise at all.

If you’re dissatisfied with the second or third outcome, and know you deserved more, you have some choices to make.

How important is earning more to you? Will it make a huge difference in your ability to accomplish your goals? Are you grossly underpaid?

Do some soul searching and figure out if you can stay at a place that’s not willing to pay you what you’re worth. Sometimes you have to move on to another company that’s willing to do that.

Business is business. Companies are going to look out for their bottom line, and you need to as well. If you’re not happy, start looking to your network for new opportunities. Send your resume out and go on a few interviews to see what you could potentially earn elsewhere.

Of course, you don’t need to take drastic action. You can politely ask for feedback — what does your boss feel is necessary to see before you can earn a raise? You can also ask if you can schedule a review in another six months, and open negotiations for higher pay at that time.

Ask for That Raise!

So what are you waiting for? Prepare the proof that you’re worth more, schedule the meeting, and ask for a raise with confidence.

If you enjoyed this post, you’ll love free access to more content from The Money Guys. Click here to learn more and join the community!

5 Tips on Navigating Marriage and Money

Marriage and Money

Whether you’re a newlywed or have been married for decades, navigating marriage and money can be tricky. We all know that communication is key, but some of us don’t exactly know how to communicate. This is especially true with the topic of money, which is (sadly) often taboo.

The Money Guys recently stumbled across some disturbing trends uncovered by Fidelity’s Couples Study that proves this is true: 48 percent of couples are unaware of how they’ll continue to afford their current lifestyle in retirement. 47 percent aren’t sure how much money they’ll need in retirement. 60 percent are lost when it comes to how much of a paycheck they’ll receive from Social Security.

The headline “American Couples Worrying More, Planning Less” doesn’t seem to make sense, either. The best way to alleviate worry is to create a plan, which is illustrated perfectly in Fidelity’s study. Couples that had a retirement plan in place had more overall confidence in their ability to retire, but only 21 percent of couples surveyed have bothered to create one.

Not surprisingly, the advice of the couples who were surveyed was to start saving for retirement early on, and to make joint financial decisions. How can you do that without a plan? Brian and Bo are here with some tips.

1. Merge Your Worlds

You don’t want to have colliding financial plans between the two of you. You and your spouse need to be on the same page, or as close to it as possible. You also need to be understanding of where your spouse is coming from. If you were raised with different financial backgrounds, you’re going to have different financial habits. Make sure communication stays open when creating a spending plan, and refrain from judging each other.

Additionally, we know paperwork can be boring, but it’s important: update all your policies. If you just got married, list your spouse as your beneficiary, look into getting life insurance (even if one of you stays at home), and talk about your vision for retirement.

2. Realize Money Can Sometimes Buy Happiness

Is your time so limited, you can’t enjoy a date night or two during the week? How much is quality time worth to each of you? You may find it’s worth hiring a few tasks out, especially if chores are getting the best of your household. We’re all about being frugal, but you need to use your time and resources wisely, too.

3. Don’t Let Outside Voices Influence Your Relationship

Are friends and family constantly butting into your relationship? Are they telling you how things “should” be done? It’s all well and good to receive advice, but you need to recognize that each relationship is unique. What has worked for other couples may not work for you, and that’s okay. Consider the advice you receive, but frame it in the context of your relationship, and evaluate the advice from there.

4. Big Team, Little Me

Marriage means working as a team. There’s not much room for selfishness. That goes for finances as well. If one spouse is working, and the other is staying at home watching the kids, the spouse who’s working should not feel entitled to all the money, even if they “technically” earned it. The stay at home spouse is still dedicating time and a lot of energy to watching the children.

Have mutual respect for each other and the roles you fill in the relationship. Getting a joint bank account may be a good idea, as “what’s mine is yours and what’s yours is mine” can be put into action.

5. Plan at the Next Level

Have you and your spouse been managing your finances well by yourselves? If so, it may be time to consider planning your finances at the next level. We mean going pro. Hire a fee-only financial advisor to help you craft a foolproof retirement plan and estate plan, to update your beneficiaries, and to know where your money should be invested. It always helps to have a second set of eyes looking things over.

Beyond that, if you’re the money manager in your household, and something happens to you, having a financial advisor to help your spouse afterward will alleviate a lot of stress and uncertainty for them.

Marriage and Money Don’t Have to be Complicated

Managing your money with your spouse isn’t that difficult if you’re both okay with discussing your thoughts and feelings on the matter. Get together and talk about the big picture and what you can do in the present to achieve your goals. Working together and being aware of what the other wants out of life will give way to creating a retirement plan, which will serve you well not only in the later years of your life, but in the immediate future as well.

If you enjoyed this podcast, you’ll love free access to more episodes from The Money Guys. Click here to learn more and join the community!

How to Stop Feeling Guilty About Spending Money

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As a frugal person, do you ever have trouble parting with your hard-earned money? We can’t blame you if you love seeing your bank balances go up, or if you thrive on staying within your budget.

However, aren’t there times you wish you could actually enjoy spending your money — without feeling guilty? After years of saving and living within your means, that can be hard to do, especially if you’re in a scarcity mindset.

It’s important to step back and focus on the bigger picture. Money is a tool — a means to an end — that we should use to accomplish our goals and enjoy life. While some of the best things in life are free, that doesn’t mean we can’t plan for a thought-out splurge once in a while.

If you want to break free of feeling guilty about spending money, consider these tips to help you develop a healthier mindset.

Relax Your Grip on Your Money

If you watch your balances and expenses like a hawk and check in with your budget every day, you might be focusing too much on the numbers and not enough on what your money is actually doing for you.

For example, let’s say you’re nearing the cap on your grocery budget — but there’s a really great sale on your favorite food at the store. You refuse to buy it, because it will put you over budget for the month. You don’t take into account that you have enough of a buffer in your accounts, and an extra $10 won’t derail your financial situation.

It’s important not to go overboard with frivolous expenses, but there are times when spending the extra money is worth it. Being so uptight about your money and your budget can make for a stressful time if you never allow yourself to spend just a little outside your strict budget. As per our example, purchasing your favorite food should make you feel happy, not guilty!

Put Things in Perspective

You don’t have to do a 180 on your financial beliefs, but it can help to step back and look at the bigger picture. If you’re someone that gets caught in the details (like your net worth, or your expenses), it can help you gain more perspective.

Take a deep breath and realize spending a small amount for a splurge is worth it from time to time. What’s not good is the stress you’re putting on yourself to have a perfect budget every single month.

It’s okay to reward yourself for the progress you’ve made. Since you’re following the Money Guys, we’re sure you’re great at saving. If that’s the case, you have nothing to worry about! Put it in perspective: if you’re on track with your retirement savings, have a healthy emergency fund, and normally stick to a smart budgeting plan, a $10 to $20 splurge is absolutely worth it from time to time.

Take Action to Stop Feeling Guilty About Spending Money

Convinced you need to relax a little when it comes to letting yourself spend? It’s time to take baby steps.

Let’s start with the $10 to $20 splurge idea from the last section. Create a list of things you’ll enjoy spending your money on, and attach a price to it. Remember, you’re more likely to be happy when you spend on things you value, so keep that in mind when creating your list.

When you’re done, order your list of splurges from least to most expensive. This allows you to start off small and work your way up, and it also gives you time to budget for some of the larger ones. Then organize the list by priority. This will help you create a plan to reasonably work your splurges into your budget so you can stop feeling guilty about spending money on things that you enjoy.

You don’t have to stay small, either. When’s the last time you let yourself live a little? We’re talking vacations, a spa day, a trip to see family, a date night, or a play. These are all experiences we can, and should, enjoy.

Budget for It

Again, make splurging and spending without guilt make financial sense — simply plan for it ahead of time!

If you’re a budget-oriented person, have a line-item specifically dedicated to “fun money.” Pick an amount you’re comfortable with spending each month (you can start off small and increase it). Use this to spend on anything your heart desires as long as it’s within the budget, no questions asked.

This should keep you saying “yes” to fun, spontaneous opportunities, instead of shooting everything down because you “can’t afford it.”

You Don’t Have to go Overboard

We’re not recommending you throw caution to the wind and completely abandon your budget. There’s value in using your budget as a tool to help you save and accomplish your financial goals. But it shouldn’t hold you back from getting to enjoy life. Your budget is working to allow for these occasional splurges.

The bottom line is don’t live and die by the numbers. There’s more to life than spreadsheets and budget software. We know how it’s easy to get caught up in saving and working toward financial freedom, but there’s a balance to be achieved in the meantime. You don’t have to sacrifice everything today for early retirement in a few years. After all, you can’t take your money with you. Enjoying a little bit of it now — without guilt — is a good thing.

If you enjoyed this post, you’ll love free access to more content from The Money Guys. Click here to learn more and join the community!