What's your Lucky Charms methodology?

The Magically Delicious Intersection of Financial Discipline, Generational Poverty, and Marshmallows

What’s your methodology for eating a bowl of Lucky Charms? And in a related question: how’s your financial discipline?

RESIST.

Do you peck the marshmallows out first, like a marshmallow-loving chicken? Or do you eat around them, creating a cereal-free pleasure palace of marshmallows, swimming together decadently in their milk? Or do you dig in holistically, indiscriminately, with marshmallows and cereal intermingling freely, devil-may-care, eating whatever ends up on your spoon?

The answer could reveal a whole lot about your life, your personality, and the health of your personal finances. We know this thanks to a fascinating series of studies conducted on children eating marshmallows.

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Come at me in the comments, you short-rest dependent motherfuckers.

A Dungeonmaster’s Guide to Defeating Debt

Let’s talk about D&D&D! That’s Dungeons & Dragons and debt. Strictly 5e. Live in the now.

Guys. I don’t mean to brag, but I run a fourteenth level wizard that I’m pretty damn proud of. She is a cold-hearted bad-ass lawful-evil murder-machine.

My steed is a magic broom with a fifty-foot move-speed. My staff turns into a friendly giant constrictor snake on command. My Contingency spell is set to Polymorph me into a T-Rex if my hit points drop below 20%. I know, I know, it’s basically a massive free heal! And I’m a resourceful motherfucker. I once used a level one Disguise Self to convince two-dozen hostile Kuo Toa that I was Blibdoolpoolp, lobster-headed mother deity of the sea. I ordered them to pray until they died of exhaustion. #lawfulevil

If you play Dungeons & Dragons, you already know the best way to handle enemies depends on your class strengths. A barbarian has no business casting spells. A wizard has no business grappling. (And a warlock has no business in any campaign, period. Come at me in the comments, you short-rest dependent motherfuckers.)

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Emotional gratification and continuous encouragement aside, what is the best method of paying down debt?

The “Best” Way to Pay off Credit Card Debt

The Harvard Business Review recently published a study on “the best strategy for paying off credit card debt.” Set aside for a moment the idea that you should try not to rack up credit card debt in the first place (shit happens, no judgment). This study benefits the millions of Americans who are literally $800 billion in collective credit card debt according to the Federal Reserve. So it’s a problem that needs a solution.

The researchers tested a couple of different methods for credit card debt reduction:

  1. Dispersing payments equally across every debt account each month.
  2. Concentrating as high a payment as possible on one account at a time.

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The proof is in the pudding. The cold, hard, numerical pudding.

The Debt-Killing Power of Rounding Up

If you haven’t noticed by now, I’m a big fan of incrementalism. Like an establishment politician, I believe in taking reasonable baby steps toward an idealized future (and unlike said politician, some day I’ll actually get there… at least where my personal finances are concerned). You can make really big progress on your debt and savings gradually, by degrees, and it feels so much more manageable and easy than committing yourself to meeting your financial goals in big chunks.

Take, for example, the debt-killing power of rounding up on all your bills.

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Building a Scrooge McDuckian money vault is too gauche.

I Paid off My Student Loans. Now What?

After spending over a year scrambling to put every extra dollar I could find into my student loans, I’ve paid them all off almost five years ahead of schedule. I’m now in the enviable position of having a big chunk of extra money every month. It literally feels like I just got a massive raise. So what do I do with it?

Building a Scrooge McDuckian money vault is far too gauche. And besides, I want to use this money to improve my financial position in the fastest, most badass way possible (with badass defined as “most profitable in the long-term”). There’s no shortage of options.

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Why? Because fuck student loans.

I Paid off My Student Loans Ahead of Schedule. Here’s How.

I paid off my student loans almost five years ahead of schedule.

I dedicated every waking hour for a little over a year to stomping out these loans like the parasitic infestation that they were, and now that this monumental task has been accomplished it feels really, really good. I wiped out about the last $18k of loans in 14 months, and doing that required intense discipline and concentration. I channeled the mental fortitude of a Buddhist monk and the austerity of an Irish peasant circa the Potato Famine. Here’s why and how I did it.

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If you're confident in your ability not to abuse it, raising your borrowing threshold will give your credit score an instant boost.

How to Instantly Increase Your Credit Limit

One of the ways you can improve your credit rating is to lower your credit utilization ratio, that is: the amount you owe compared to the amount you could borrow. It’s usually better to just pay down the principal, but sometimes that’s not possible. If you’re confident in your ability not to abuse it, raising your borrowing threshold will give your credit score an instant boost.

I’d assumed this was a complicated process requiring some degree of cringing, but it turns out increasing your credit limit is extraordinarily easy. This method was described to me by an educator in my city’s free first-time homebuyer program. I will try to transcribe it exactly as she said it:

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If you really need to borrow money but you're scared of the bad kind of interest, don't fret! For there are ways to lessen the pain of paying interest on a loan.

Dafuq Is Interest and How Does It Work for the Forces of Darkness?

Here at Bitches Get Riches, we’re constantly extolling the virtues of the law of compounding interest, which Albert Einstein, Mother Theresa, and Nelson Mandela all coined the Eighth Wonder of the World.* This might lead personal finance novices to believe that interest is universally a great and wealth-building thing. Not so, dear readers. Not so. Just as interest can work for you, contributing mightily to your financial goals over a long period of time, so it can spell your very doom. DOOM.

Like a monetary Dr. Jekyll and Mr. Hyde, interest has both your best interests (see what I did there?) and your utter financial destruction at its heart. Let’s explore the dual nature of interest with a healthy dose of hyperbole, shall we?

*Not intended to be a factual statement

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Buying something you don't need can be an act of defiance against your current situation.

Buying the $7 Chocolate Bar

Yesterday I watched a friend who was struggling with homelessness unpack her few belongings. Inside her purse was a large, rather expensive, luxury-brand chocolate bar. She held it up and twiddled it back and forth in her hands, letting the silver foil catch the light. “Sweetie, I’m homeless,” she said, very matter-of-fact. “You’d better believe I’m getting the good stuff.” And boy was she making a great point.

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