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Luke Landes

How to Save $500 a Month: Saving money doesn’t have to hurt. We’ve developed a plan to help you save an extra $500 a month without sacrificing your lifestyle.

Even when you’re good at managing your money, it’s surprisingly easy to let things get out of control.

When you’re young and broke, you can be incredibly creative in finding ways to save. Or maybe when you first catch the “get out of debt and save money bug” this happens to you. You take on roommates to reduce your living expenses. You live without a car, cable, and dining out. And when you start getting out of debt and finally investing, it’s all worthwhile.

But then your income starts to increase. And you may let your expenses inflate along with it.

Maybe it starts with some reasonable moves, such as moving into a more expensive, but more comfortable, home or apartment. Maybe you then buy a cheap car because it’s so much more convenient than public transit. Or maybe you start taking on more expensive hobbies and interests on the side.

None of these things is bad, in and of themselves. But over time, you might find that your new lifestyle is more expensive than you want it to be. Luckily, when you find yourself in this place, getting back to the basics may be easier than you think.

Even if you think you already live quite frugally, chances are likely that you can reduce your monthly expenses. Maybe you can even reduce them by $500 or more per month. Think that’s crazy? Start with these steps, and see how much you could save.

Step One: Shop Around for Insurance

All too often, consumers don’t take this step seriously enough. But you really should shop around for insurance–homeowner’s/renter’s and auto, at minimum–on an annual basis. You just never know what you could save by switching your policies. This is especially true if your financial or property situation has changed recently. For instance, as your car ages, you should pay less for insurance. And if you paid off your car and have money in savings, you might consider dropping the requisite comprehensive coverage. This can save you a bundle!

But even without major changes, you could save on insurance by switching companies. So be sure you’re shopping around at least once per year. And be sure to shop all of your property insurance policies at once, since most companies offer hefty discounts for carrying more than one policy with the same insurer.

Step Two: Optimize Your Life Insurance

Most people, even single people, ought to have a life insurance policy. But if you do have a policy, you may want to be sure you have the right amount of coverage. If your children are older or you have significantly less debt than the last time you purchase life insurance, you may be able to downgrade to a smaller policy. This could save you significantly each month or year, depending on how often you pay your life insurance premiums.

Step Three: Refine Your Food Spending

Too many people spend too much money on food. It’s easy to do, especially if you eat out often. But you can often tweak your food spending slightly to save big bucks.

According to the most recent USDA figures, there’s a huge variance between frugal and liberal food spending plans. As of August 2017, a family of four with two school-aged children could spend $642 per month on a frugal food plan. A liberal plan, on the other hand, could cost over $1,200 per month. There’s your $500 in savings, right there!

Maybe you’re somewhere in the middle, though, and maybe you don’t want to spend time clipping coupons and taking other steps to get your grocery budget down to the “frugal” level. But there are some simple ways to save on food spending, which could save you $500 or more per month with barely a thought. My top tips include:

  • Plan your meals. If you’re not great at meal planning, check out online meal planning services. They cost just a few bucks a month and can help you save hundreds by being more frugal with your food.
  • Shop your pantry and fridge. It’s easy to over-buy food. This isn’t as much of an issue with nonperishables. But check for fruits and vegetables or other perishable items you need to eat before your next grocery store trip. You might be surprised what you can make out of what you already have!
  • Look for sale items. You don’t have to clip, organize, and use coupons to save. You can do it automatically by shopping for items that are on sale. You’ll get the biggest bang for your buck by planning meals around on-sale meats and fresh products.
  • Switch to a cheaper store. My family loves the Aldi chain of grocery stores. They offer generally high-quality off brands, and we automatically spend way less when we shop there as compared with other local stores. Find the cheaper grocery store in your area, and buy everything you can there first.

Step Four: Optimize Your Services

If you’re like most modern consumers, you have a huge variety of services that you use every month. This could include basics like your trash and recycling services or optional items like internet and cable service. You can easily save $100 or more per month by optimizing these services. Here are some service-specific tips to try:

  • Shop around for trash and recycling. If your area offers more than one service, they’re competing for customers. You can use this to your advantage by shopping around. Before you switch services, though, be sure to let your existing provider know what the new offer is. They might just beat it and save you even more money!
  • Consider a different cell phone planWhen you’re in an area with good cell phone coverage, switching to a cheaper provider can make a huge difference. If you’re in a less-covered area, Verizon probably still has the best coverage. But you can often save on your plan by cutting out data you don’t use, downgrading to a cheaper phone, or just calling to ask for discounts.
  • Try a lower internet speed. Unless your family is consistently streaming with multiple devices, you may be able to get by with a slower, thus cheaper, internet service.
  • Get away from cable. With all the online options available today to get your favorite television programs, there’s not much excuse to have cable. If you have to have it, go with the lowest-paid subscription you can.
  • Review your subscriptions frequently. From magazines to apps to other services, we all have a lot of subscriptions these days. Some may be well worth your while. If you read a lot, Amazon’s Kindle Unlimited subscription could actually save you money, for instance. But subscriptions that you don’t actually use will just waste your money.

Step Five: Pay Off Your High-Interest Debts

The first four steps could very easily get you to the $500 per month savings level. But what if they don’t get you quite there? Then use the money that you have saved and pay off your credit card debt.

Right now, the average American family owes just over $8,000 in credit card debt. If you’re paying 15% interest on that debt, that’s about $100 in interest every month! So you could save 1/5 of that $500 per month just by paying off your credit cards. And, of course, on $8,000 in debt, your monthly minimum payments could very well cost $500 per month of itself! Sure, it might take you a while to pay off your credit cards, but each month you save on other expenses could be a month closer to this goal.

Another option, of course, is to transfer your high-interest credit card debts to 0% introductory APR credit cards. This can help you pay down your balances more quickly since your payments won’t be eaten up by interest each month.

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It’s never too early to start investing. In fact, we wish high school students invested even a little. So here are some tips on how to invest as a teenager.

how to invest as a teenager

It doesn’t hurt to start talking to even young kids about investing. But when they’re teenagers, the can–and should–get hands-on experience.

Like many other kids in the 1980s, I played the Stock Market Game in elementary school. I learned nothing about investing, but I learned that adults checked the newspaper every day and worried over IBM being down an eighth. It wasn’t a great introduction to long-term investing. In fact, it was no introduction at all.

One private high school thinks it’s doing the right thing by giving its teenage students $100,000 to play the Stock Market Game using real money from other people. They say it’s preparation for a life in a potentially lucrative career in money management. And if your annual earnings are in the mid-six figures, saving for the future is technically easy, even while living a flagrant lifestyle. But that’s not a great way for middle-class or socio-economically-challenged teenagers to learn about managing their own money.

You don’t learn much about managing money if the money you’re managing isn’t scarce. There’s no scarcity when a private school raises $100,000 for you to play with.

So what’s a parent or educator to do? I’ve got some ideas.

Earning Their Own Money

Parents with an eye on their children’s financial future often want them to start working early. Then, they can earn money on their own. Work, in and of itself, is an important experience to gain.

Of course, education is the most important work for any teenager. So they should only work as long as it doesn’t interfere with their education. (Unfortunately, the realities of poverty may favor earning money for the household over doing well in school. But whenever possible, parents should prioritize teens’ education over money-earning work.)

Even still, school breaks provide excellent opportunities for different types of work. And if a teenager shows no inclination towards extracurricular activities, a job after school is a good alternative.

On my first day on the job at my first job during high school, I learned what others might consider an obvious lesson. After being hired, I was to start my first day at Radio Shack in central New Jersey with an orientation with a regional supervisor. I showed up in jeans in a tee-shirt and the manager sent me home. I should have known that there was some kind of expectation to wear something nicer, like slacks and a button-down shirt. But for some reason I didn’t make the connection. So I came back the next day with a better understanding of expectations for my appearance.

Today, I work from home in comfortable clothing, so after twenty years, I ended up getting my way. But the point is that working as a teenager can provide experiences and knowledge that help later in life when it comes to assimilation into a career culture.

One of those lessons is what to do with money you earn from that first job. I saved some of it, but I didn’t do what I should have done–invest a portion that I wouldn’t touch for years. Some of it ended up helping me pay for college, but it was a small amount. I probably would have been better off investing it for the longer term.

Learning to Invest

For hands-on experience dealing with money, parents can help their teenagers set up a variety of financial accounts. Here are the best options to consider:

1. A Roth IRA.

Every teenager with a job should start a Roth IRA. You invest in a Roth IRA with after-tax income. Because teenages’ marginal tax rate will never be as low as it is while flipping burgers part time, a Roth IRA is a perfect vehicle for investing. The minimum investment to open a Roth IRA at Vanguard is $1,000 and at Fidelity is $2,500. So until the teenager has saved that much, socking money into a high-yield savings account is a good choice.

Some accounts waive the minimum opening amount when you set up a monthly automatic transfer from a savings or checking account. Check for this option, where possible.

The best place to open a Roth IRA for a teen, in my opinion, is Betterment. It’s very easy to use. You can start with as little as $25. And it’s a great way to learn how to invest.

2. Savings and checking accounts

Some online banks offer higher interest rates than traditional brick-and-mortar banks. But with the money a teenager is earning from a part-time job, interest rates aren’t a huge concern. The purpose of these accounts isn’t to earn interest, but to help the teenager learn basic financial skills. It’s possible to get an account in the teenager’s name. But most banks will have the parent or guardian co-sign on the account, just in case.

3. An index mutual fund

Once the teenager has saved enough money to open a Roth IRA with a minimum investment, he or she can choose the investment. A Roth IRA isn’t an investment in itself; it’s an account for holding investments. An index mutual fund is a great first choice. And a portfolio comprised completely of index mutual funds is a good idea for adults, too. Index mutual funds are low-cost and do not attempt to beat the market — an expensive endeavor that has never been shown to work over moderate lengths of time.

In a recent article on CNN Money, a financial expert recommended a specific fund, Vanguard Star, for teenaged investors. It combines bonds and stocks–two investment types that teenagers should learn about to understand their purposes and differences. I recommend going all in with the Vanguard Total Stock Market index fund. This is especially true if the investment will remain untouched for many years. And that’s always the goal of teaching a teenager about investing.

4. Investing in a business

If the teenager has any money left over after meeting the above goals and spending on any wants or needs, one interesting approach is giving him or her the opportunity to invest directly in a business. But be careful here. Such direct investments are a way for people to take advantage of young, impressionable teenagers.

Over the years, I’ve heard many cases where parents borrow money from their children to start a business destined to fail. You wouldn’t think teenagers would have a hard time saying no to their parents, given the rebellious nature of adolescence. But when a parent appears to be in need, even the most angsty teens want to help their parents.

Investing in a business directly is always a dangerous option. It’s true that failure can teach a strong lesson. But the cost can also be high, especially if the business is owned by a parent or someone else the teenager is close to.

So the best option here might be allowing the teenager to invest directly in a business opportunity of their own. Not every teenager will want to run their own business long-term. But giving them the opportunity to try it can he helpful.

The plan with this option is to take some of the money earned from that part-time job during school or over school breaks and use a portion of the funds to set up a business that aligns with the teenager’s passions and interests. If the teenager is interested in mowing neighbors’ lawns for money, have him invest in his own equipment. If she wants to house-sit, she should consider doing more than just offering services to friends and family. Invest in advertising, and perhaps form a local organization that can dispatch anyone from a team of sitters.

In this way, teenagers can leverage their own expertise to make more money. Then, they can continue investing some back into their growing business while putting the rest into the goals named above.

What kinds of investments should teenagers make with the money they earn from jobs while in school?

This article was originally published in 2013. The shizennougyou editorial team thorougly updated it on October 23, 2017.

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Walmart checking cashing service offers a low cost way to cash a paycheck. But is it the best way to get paid? We give you several free alternatives.

walmart check cashing

Google the words “cashing checks.” Below the paid ads and a Google map of various check cashing locations in your area, you will find Walmart.com.

A one-stop shop where at some “supercenters” you might pull up to the automotive department, drop your car off for servicing, and get your complete list of to-do’s done. Need to pick up a gift? Grab a carton of milk? Cash a check to pay for this latest excursion? If you belong to one of the 9 million American households reported not to have a bank account, cashing your paycheck at Walmart might be your best option.

We’ll look at the pros and cons of Walmart’s check cashing service. We’ll also cover some important alternatives. First, let’s cover why some use check cashing stores.

Unbanked & Under-banked

According to the FDIC 2015 Survey of Unbanked and Underbanked Americans, 7%, or nine million, U.S. households were “unbanked.” As unbanked, not one person in the household had a checking or savings account.

The survey also found nearly 20 percent of U.S. households were “under-banked.” In this case, at least one person in the house had either a checking or savings account at an insured institution. But they still sought out services like check cashing elsewhere.

Walmart Check Cashing Services

Many Wal-Mart locations around the country now have Money Center departments. This makes for great convenience. You can get your check cashed at the Money Center, and then use the cash for your shopping trip. With Wal-Mart’s trend to become a one-stop shop for all household needs, each location is becoming its own small village.

The Wal-Mart Money Centers are not full banks. They offer check cashing services, bill payments, outgoing wires, and reloadable debit cards. There are no checking accounts or savings accounts. Wal-Mart abandoned earlier plans to become a bank. In doing so, is able to offer certain financial services while not being held to the same regulations as Chase, Bank of America, or your local bank branch.

On the spectrum of financial institutions, Wal-Mart Money Centers are closer to establishments like payday loan companies and check cashing storefronts. These businesses charge high fees and cater to lower-income communities and the unbanked population.

Now back to the checking cashing service.

The Pros

While it might not be the ideal permanent solution, using Walmart’s Money Centers for your banking needs can be a better option than other check cashing services. The hours are convenient and the fees are low. Check cashing costs $3 for checks up to $1,000 and $6 for checks over $1,000, with a $5,000 cashing limit. It is worth noting from January to April, the cashing limit is increased to $7,500 to accommodate tax returns.

You may also be able to avoid long lines as Walmart offers customers the option to cash their checks at any open register. Their services are not just for paychecks. Customers may also cash government checks, tax checks, cashiers’ checks, insurance settlement checks, 401(k) retirement checks, and MoneyGram money orders purchased at Walmart.

The Cons

If you find yourself at Walmart with a pocket full of cash, you will have to exercise self-control. Cashing your paycheck at Walmart might tempt you to spend that money on impulse purchases. This could be an unwise decision if you are already struggling to save money or to keep up with your bills.

Walmart also does not cash personal checks. So what if you need to cash a personal check but don’t have a bank account? Your best bet is to go to the financial institution of the person who wrote the check.

You should know check cashing is not available at every Walmart location. To find one, visit the check cashing page of their website at Walmart.com.

The Financially Healthier Alternatives

Consider opening a bank account and using direct deposit for your paychecks. Even if you had a poor history with a financial institution in the past, it is worth speaking with someone at a bank. They may be able to offer you an account. Another option is to talk with your local credit union. Here are lists of the best checking accounts and savings accounts available today.

Another option is a prepaid debit card. Look for features including free direct deposit, free ATM access, and zero monthly fees. Walmart offers a BlueBird American Express prepaid debit card with those features. But the downside to that card is American Express is not accepted as widely as Visa or MasterCard.

Check cashing services are similar to fast food — inexpensive and convenient, but unhealthy in the long run. The best “food” for your financial health is a nest egg. With a bank account, you can store your hard-earned income, pay your bills without extra fees, and, most importantly, begin saving.

Originally published November 10, 2011, the shizennougyou editorial team updated this post on October 10, 2017.

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Switching banks doesn’t have to be a nightmare. Here’s how to change banks the easy way (and we’ve included a downloadable checklist)

how to change banks

With some banks changing their policies to be less consumer-oriented, I’ve received several questions about the logistics of switching banks. In previous decades, closing your account at one bank and opening an account at another was a simple process. All that was required was to walk into one branch and ask to close your account. Then take your cash or cashier’s check to a different location and open a new account with your deposit.

Today it’s not so simple. Banks now offer direct deposits, pre-authorized electronic withdrawals, and online bill payments. While these are great services, they tie you to your financial institution.

There is a financial risk involved too. If you neglect to change your banking information with a creditor, your payment could bounce. This, in turn, could result in late fees, insufficient fund fees, and perhaps even cancellation of your services.

If you’ve taken a modern approach to banking, with automated and electronic payments, you’ll need to start planning in advance. Here are the priorities, if you’ve already chosen your new bank. To compare banks, read through the reviews available here on shizennougyou.

Do You Need to Change Banks?

Before addressing how to change banks, the first question is whether you should. If the primary concern is a bank’s low interest rates, you may have another option.

Many people today keep their brick and mortar bank, even with it’s low rates. They then open an online savings account for the higher rates. An added benefit is that the money saved is at a separate financial institution. That makes it a little bit harder to spend (if your goal is to save money).

You’ll find our list of the best savings accounts here, and our best overall bank rates here.

How to Switch Banks in 6 Easy Steps

Download the shizennougyou Bank Switch Kit to help you organize the information you’ll need. The link is at the bottom of this article.

Step 1. Open the new account with appropriate minimums

Before you can change the account information stored with creditors, you’ll need to have your new bank’s routing (ABA) number and your new account number. For a short period of time, both your old bank account and your new bank account will be active. This ensures that all your payments go through and all your deposits are received during the transition period. Determine which types of accounts you need at your new bank. You’ll also need the minimum required to open the accounts ready to deposit.

If you had debit cards, ATM cards, check cards, deposit slips, or paper checks with your old account, don’t forget to order the same when you open your new account.

Download the Bank Switch Kit for a convenient way to keep track of your new banking information.

Step 2. Change your direct deposit information

It could take as many as two pay periods for your new direct deposit instructions to take effect. It could take two to four weeks after requesting the change to your direct deposit before you receive a paycheck at your new bank.

Most employers have their own forms for submitting changes to direct deposit, but I’ve included a generic form in the Bank Switch Kit that most human resources should be able to accept. Many employers have the ability to accept direct deposit instructions online, so check with your employer as soon as possible.

This is the slowest aspect of moving from one bank to another, so start as soon as you’ve opened your new accounts.

Step 3. Adjust your automated bill payments

You’ve likely configured many of your monthly financial obligations to withdraw money from your bank accounts. You’ll need to change this banking information one vendor at a time without missing any possible automated withdrawals. Review your past three or four banking statements to help your recollection of all the bills that are paid automatically.

Here’s a list of some of the most common bills that allow automated payments from your bank accounts.

  • rent or mortgage.
  • power bills (electricity or gas).
  • telephone bills (land line and mobile phone).
  • water and sewer bills.
  • property taxes.
  • income taxes, if you have enrolled in the Electronic Federal Tax Payment System (EFTPS) or your state’s electronic payment system.
  • car, home, and life insurance.
  • other insurance payments.
  • credit card bills.
  • payments to student loans.
  • payments to car loans.

The downloadable bank switch kit has a checklist where you can indicate the date you called to have your banking information changed. When you call, email, or complete this change online, make sure you know when the changes will take effect. Most of the time, the change is immediate, but if you have a payment already pending using your old bank account’s information, it might not be until the following month that the vendor applies the new banking information.

If you’ve opened your new bank account with just the minimum required to avoid fees, keep in mind that you may need to transfer more money from your to cover your bills.

Step 4. Update any linked bank accounts or investments

The ability to begin investing using automated bank transfers has helped many people begin to save for retirement — or the future in general — without having a large sum to devote to the investment immediately. It’s easy to forget about these investments and transfers. I have had a weekly $15 transfer from my primary checking account to another bank’s savings account for years, and it would be easy to forget this without reviewing my transactions each month. Updating information regarding your linked accounts serves two purposes:

  • to ensure your accounts don’t try to send money to or withdraw money from the account you intend to close, and
  • to ensure you don’t miss any saving or investment opportunities as you rearrange your bank accounts.

First, as mentioned above, link the new bank account to your old bank account to ensure you can transfer money to your new account at will. This will ensure you have enough funds in the account to cover all the bills you’ve transitioned in the previous step. Keep in mind that savings accounts are limited to six on-demand withdrawals per month. If you exceed that number, the bank may charge you fees or close your account before you’re ready.

Pay attention to your automated investments to your IRA, transfers to your high-yield savings accounts, and investments to your kids’ education funds. Download the Bank Switch Kit for a complete list of possible linked accounts.

Step 5. Wait and close your old bank account

First take the time to ensure that your old bank account has been inactive. You don’t want any new deposits or withdrawals showing up after you close the account. Then follow your bank’s process for closing your account.

In most cases, you can walk into any branch with proper identification for closing your account. In some cases, banks require you call a telephone number. If that is the case, they might want you to talk to a “retention specialist” who will do his or her best to keep you from closing your account. They may offer you a better deal than you may be receiving. It’s best to ignore these offers and stick to your resolution.

If you are required to close your account by phone or by mail, the only way you may be able to receive your deposited money is through a check sent to the address your bank has on file for your account. This is an imperfect process; it would be much better to walk into a branch and walk out with your money. It would frighten me if I had to close a bank account with a significant sum of money and wait for a check for the amount to arrive in the mail.

Once you’ve received the check, make sure the bank has provided the full balance. Your balance at the end of the statement or online should be zero. Ensure you’ve received any accrued interest your account would have earned. In some cases, you may need to time the closing of your bank account to ensure you don’t miss on any substantial interest that might be due to you if your bank does not accrue interest on a daily basis.

The shizennougyou Bank Switch Kit available for download includes a generic letter you may send to your bank in order to close your account.

Step 6. Destroy old forms

Shred any debit cards and deposit slips associated with your old account once you receive confirmation that your old bank has closed your account. Get rid of your paper checks and any endorsement stamps that you may have that include your bank number.

With this step, you can celebrate the moment you are now free from a relationship you are better off without. Don’t forget to monitor your new account and your bills closely over the next few months to ensure you haven’t missed anything. If you find a problem quickly, you may be able to resolve it without needing to pay any penalties (or have penalties reversed if they are charged automatically).

Download the Bank Switch Kit and Checklist

Bank Switch Kit and ChecklistDownload the shizennougyou Bank Switch Kit (Version 1.0α). Adobe Reader or another program that displays and prints Portable Document Format (PDF) files is required.

This is a work in progress. Please feel free to share your feedback. I’ll continue to revise the Kit for more consumers who wish to leave one bank in favor of another.

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American Express Personal Savings Review

by Luke Landes

Amex entered banking years ago. Today, they offer great rates with low fees. Check out our take in this American Express savings account review. By far, the most requested review on shizennougyou is for the American Express Personal Savings Account. Amex offers one of the highest interest rates available with this savings account, making […]

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How to Know if You Need Life Insurance

by Luke Landes

Not everybody needs life insurance. For others, it’s a critical part of financial security. Here’s how to determine if you need life insurance. It’s no secret that insurance companies make money primarily by not providing benefits to their customers. This is why insurance gets expensive if you’re risky to insure. The more likely an insurer is […]

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The Best Cash Back Credit Cards of 2017

by Luke Landes

Cash back credit cards can help consumers practice responsible spending while earning a little extra for their efforts when used properly. The days of earning 5 percent cash back on all credit card purchases may be just a memory, but the smart use of credit cards can still be profitable for diligent consumers. You may […]

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4 Tips for Teaching Kids About Money

by Luke Landes
teaching kids about money

According to the USDA’s latest calculations, a middle class American family will spend about $233,610 raising a child born in 2015 to age 18. And that doesn’t count college. Personally, I think these figures are a bit overblown. But the bottom line is that kids are expensive. So we parents are worrying about where we’re […]

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11 Reasons to Sell Your Business

by Luke Landes
Reasons to Sell Your Business

People become entrepreneurs for a variety of reasons. Maybe you just stumbled into starting your own business when you built a blog that started making money. Or maybe you inherited a family business, or started a business intentionally. Whatever your reasons for starting and running a business, it’s a good idea to consider your exit […]

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How to Calculate Your Net Worth

by Luke Landes

A step-by-step guide on how to calculate your net worth. The article also includes tools and templates to help you automate the process. Calculating your net worth can be a bit tricky. But it’s a worthwhile exercise, especially if you’re trying to meet certain financial goals. Figuring out your net worth for the first time […]

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