Tag: Personal Finance

  • Finance Gender Gap: Looking at the Gender Gap in Financial Literacy

    In a Global Financial Literacy Excellence Center study, female participants answered 49% of personal finance questions correctly while male participants answered 56% of them correctly. Although both these scores are very low and need to be brought up significantly, the interesting findings were about the gender gap in financial literacy as the study also found that women did significantly worse in questions about borrowing, saving, earning, and investing than men. This knowledge impacts every aspect of your life from the decisions you make to the ones you don’t make.

    Another result of the study is that women answered “don’t know” to 25% of the questions compared to 20% for men. This suggests that it may not only be lack of knowledge creating the gap, but also lack of confidence. Another study by GFLEC found that when the “don’t know” option wasn’t available, female participants often chose the right answer. This study credited lack of confidence for one third of the gender gap. In personal finance this may look like not wanting to invest or take risks, trusting others more than yourself, or feeling like you do not have the tools to even get started. Consider finance bros, Wall Street Suits, and khaki wearing car salesmen. These typical symbols of finance are all male and as you can imagine, they represent the male majority which can be intimidating. A way to combat this is through education and experience by seeing exactly what you can do for your finances instead of letting it stay a large unknown.

    Educating yourself can be the hardest first step because it requires you to confront what you do not know. Admittedly, finance has many moving parts and can become convoluted, but you don’t need to open a Roth IRA tomorrow. The first steps can be as simple as calculating your income and expenses to stay mindful of spending. Everyone starts from knowing nothing and learns through watching and learning from others. Instead of being intimidated by people who are more knowledgeable about finance, start with videos, books, or sites that are your level and build up slowly. As we have seen, the confidence to start and trust in yourself makes a very large difference.

    There isn’t one easy solution for fixing the gender gap in financial literacy. However, progress starts with empowerment and creating an environment where women can believe in themselves. Technology has made it easier to take control of your finances but we also cannot forget the women in the field who are paving the path like Tomo CEO Kristy Kim and allowing women to see themselves in the finance world. Although they may take a little longer to find, there are plenty of women in finance who you can bank with, learn from, and emulate.

  • 5 Books to Jumpstart Your Personal Finance Journey

    Investing. Budgeting. Debt. For many who have never dabbled in the field of personal finance, these finance phrases can seem intimidating — but fear not! The field of personal finance presents beneficial knowledge in regards to managing an individual’s monetary resources. With summer break upon us, it provides a perfect opportunity for you to learn and work independently. Here are our top 5 personal finance book recommendations that are a great place to start.

    Rich Dad Poor Dad

    This book, written by Robert T. Kiyosaki, explores the author’s learning experiences from two father-figures and their different money-management strategies. It delves into the concepts of smart investing, earning money without necessarily having a high income, and how to maintain long-term acquisition of wealth. No matter what age group, this insightful book offers diverse perspectives on the concept of earning money and is an excellent read for those interested in developing their long-term personal finance skills.

    Broke Millennial

    Geared more towards the younger generation, Broke Millennial: Stop Scraping By and Get Your Financial Life Together by Erin Lowry presents a variety of tips for those who are just beginning their journey towards financial independence. It covers topics such as investing, budgeting, planning, avoiding credit card debt, and much more. If you are a beginner looking to learn about these personal finance concepts, this book is for you!

    I Will Teach You to Be Rich

    I Will Teach You to Be Rich by Ramit Sethi is another resource that is perfect for college students or individuals starting out on their personal finance journey. It provides helpful advice on paying off loans and other debts, how to navigate late fees, and basic investing knowledge. It also gives recommendations on making future large-scale purchases in life such as property and vehicles. Overall, it is an excellent educational read for the younger generation who are beginning to face these real-world financial decisions.

    The Millionaire Next Door

    Thomas J. Stanley’s The Millionaire Next Door: The Surprising Secrets of America’s Wealthy is a helpful book that has had a significant impact on people’s understanding of what it truly means to be “rich” in America. It consolidates research findings revealing traits shared by those who have accumulated notable amounts of wealth, such as their saving practices, financial habits, and more. This book is a great fit for anyone looking to increase their wealth and develop healthy personal finance skills to do so.

    Your Money or Your Life

    Another resource for students in college or beginners to personal finance, Your Money or Your Life, by Vicki Robin and Joe Dominguez, shares nine steps that can be taken to achieve financial independence. It goes into detail about avoiding debt, maintaining living expenses, and keeping in mind the importance of your financial impact on the planet. This book promotes healthy as well as sustainable financial habits and is a great read for those who want to practice effective and responsible lifestyle choices.

  • How your Parent’s Financial Attitudes are Impacting You

    After the age of 20, you may find yourself slowly becoming your parents whether you’ve inherited their loud booming laugh, sense of style, or even that one annoying tendency. We know the basics of heredity and can possibly draw a punnett square for eye color, but how much do our parents’ experiences and attitudes affect our day to day lives? We do know that poverty and coming from a low income household greatly affects children in many aspects of their lives. But, it turns out that it’s not just household income that affects children. Your parents’ financial literacy and attitude also impacts your financial literacy and attitude towards money.

    First, let’s start with what financial literacy means and why it matters for your life. Financial literacy is defined as “the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.”Simply put, it is the ability and skills to make educated decisions about your money. This impacts not only how you get your money but also what you do with it. People with low financial literacy may find making big financial decisions intimidating and might enter into agreements that do not benefit themselves. Imagine going to buy a car and not knowing about interest rates, the actual value of the car, or monthly payments. In this case, you may be easily talked into a car you cannot afford, paying much more than you should, or signing documents you do not understand. Someone with high financial literacy would be able to avoid these mistakes and dodge their long lasting effects.

    So how does your parents’ financial literacy affect yours? As you may imagine, your parents can only teach you what they know. If they made poor financial decisions, you may see this as normal because of lack of exposure to better approaches to saving, spending, and earning money. They may have modeled poor habits which you picked up on whether consciously or not. However, if they modeled good habits, you would also see this as normal and replicate it later in life. For example, if you saw your parent haggle, coupon, or budget as a child, it probably gave you more appreciation for a dollar. Whereas if you saw your parent put everything on a credit card and live above their means, you may not understand the connection between money and the numbers on the screen. While small splurges may not seem too important, your attitude towards money will have a drastic impact on your life as those habits add up.

    Another possibility is that your parents kept much of the discussion about money from you. Many parents and cultures consider finances an adult topic and frown upon worrying children. This is financial secrecy and it can lead to children who have no knowledge of basic personal finance concepts. These concepts are only required to be taught in schools in less than half of U.S states, leading to a reliance on informal methods of learning with the highest being mom and dad. Consider this: your parents talk about major financial decisions extensively, budget, and save without showing you. How would you learn those skills? Because your parents never taught or modelled those positive habits in front of you, you start your adult life without the benefit of all of that knowledge.

    The relationships between parental financial knowledge and attitude are numerous, but the important thing is acknowledging them and taking the time to reflect on your own situation. Your parents may have been too frugal, leading you to overspend in an effort to overcompensate. They may have been careless with family finances and not balanced needs with wants leading you to live above your means as well. Whatever your situation, make sure to take a step back and analyze your financial history and its impact on your life. This process is not about pointing blame but more about understanding who inspired your amazing money habits and also finding holes that need filling. Thankfully, we do have many options for filling in those gaps. You could learn about personal finance through websites such as Cashcourse, Khan Academy, or Investopedia. You could even watch videos on YouTube, Instagram, or even TikTok! Get to learning in any way that fits your needs (and attention span) so we can continue breaking generational cycles and setting our own.

  • A Recent Graduate’s Guide to Controlling your Finances

    In many ways, graduation feels like the finish line of a long race. You’ve been dreaming about not having to attend classes or write twelve pages on the molecular structure of a twig. What happens when you get there and realize that graduation is just the beginning of an adult life? Well if you are anything like me you may have come to the realization that there is much that school didn’t prepare us for so non-finance majors, listen up.

    Take Stock of any Debts

    First thing is first, take stock of any debts from that $50 you owe your friend to those thousands of dollars accumulated in student debt. Pay off those small debts as soon as possible to get into a good habit for future finances. As a student, acquiring debt is pretty easy but unfortunately keeping track of it is not, especially since many need to take out different types of loans to cover the cost of college. As a fresh graduate, understanding your options is important and thankfully the student aid website has all your public loans in one place with helpful visuals no matter where you are in your loan journey. For those private loans, log in to the lender’s site or check your credit report if you’ve lost track of that information. While in many cases repayment does not begin right after graduation, it is important to know your debts and pick a repayment plan. This can start with low payments and increase over time or you may want to plan for future repayments. Either way, it’s best to address any debts before time goes by and it seems too daunting to find accounts and information from years ago.

    Address Current Finances

    For this step you’ll need to pull up all bank accounts and piggy banks. Thankfully we have the benefit of banking apps which allow you to view account summaries, transfer money, and pay bills. While some apps include more advanced features like depositing checks, checking rewards, and a breakdown of your spending based on categories, you may need to supplement with a third party tracking app or personal spreadsheet including any cash purchases. For this you will want to track how much you spend on popular categories such as housing, transportation, food, etc as well as some personalized ones for hobbies, pets, or guilty pleasures such as your personal sneaker fund.

    As you take a closer look at your accounts, now is the best time to review the organization of your finances. My personal favorite debit account setup utilizes banking on the go by having direct payments go into savings first and periodically logging on to your accounts to move money from savings to checking. While this is a great way to make spending more purposeful, it does take some diligence to ensure that you do not over withdraw and many institutions have a monthly limit of six transfers. An easy solution is to open a credit account which works in virtually the same way by keeping your spending and savings separate while allowing you to take advantage of cashback rewards and build credit. For this you will want to look for cards without any fees or apr such as the Tomo credit card, which also offers a weekly repayment plan to increase the number of full payments and build credit faster.

    Anticipate Future Expenses

    Now that we have gotten organized, it’s time to look to the future by accounting for any upcoming costs. For example, if starting a new job, you may want to anticipate the costs of transportation, appropriate clothing, necessary technology, and housing. Other costs can include those that your parents may have been covering such as phone, insurance, and household items which can add up quickly. Depending on your situation, it may be time to consider these expenses seriously or just in a general sense. Either way, being aware of any upcoming spending will help you start saving or make any necessary changes to ensure that you are both mentally and financially ready. There is no one-size-fits-all route or financial plan, so take this time to reflect and explore what your priorities are and how to best make those happen!

  • Simplify Your Finances and Your Life in 5 Easy Steps

    Simplifying your finances can improve your quality of life by decreasing money-related stress and freeing up time to do the things you love. Everyone has to deal with their finances differently, and some are more organized than others. Every individual would benefit from getting a hold of their spending, budget, and personal finances to live a stress-free life. Below are five tips to simplify your finances so that you can start living your best life now.

    1. Consolidate Bank Accounts and Credit Cards. Check the number of credit cards and bank accounts you have accumulated throughout the years. Most people only need one checking and one savings account, allowing you to simplify all of your finances into one account. This will streamline your bank statements and make it easier to plan your budget, evaluate your finances, and stay organized. Reevaluating the number of credit cards in your wallet and the bank accounts attached will also simplify the organization in your wallet and your online bank account. Cutting back on the number of credit cards will simplify your life and your spending. It would, however, be beneficial to keep some credit cards to build credit and reek the benefits. When picking what card is right for you, it is essential to look at each card’s benefits and evaluate which one offers the most valuable rewards. It is important to ensure that your cards are building credit and have cash back options when finalizing your card decision.
    2. Get Rid of Paperwork. As the world is turning digital, you might want to consider doing the same to all of your finances. Bank statements, water bills, energy bills, etc., primarily have included a paperless billing option which will allow you to handle all of your finances online without the hassle of receiving bills through the mail. This leaves your finances at your fingertips and will keep you organized without keeping track of paper within your home. Companies have rolled out perks for signing up for their paperless option to encourage more customers to join while also giving benefits such as a cut on payment and no added fees. A bonus of going paperless is that you are contributing to saving the trees and the environment.
    3. Pay in Cash. Paying for goods and services when outside the house with cash will allow you to easily budget and track your spending. Using money will allow you to map out your purchases, keep you from overspending, and helps stop impulse buys. Using actual cash will simplify your budget and your credit card bill. This is an excellent tactic to have better peace of mind in knowing you spent what your budget was. Understanding how much cash you have can also include reevaluating your cards’ benefits and seeing if there is a cashback option. This feature will allow you to get cashback on your spending and use it towards other purchases.
    4. Cut Services. Check all of your billing statements and the app store’s subscriptions to evaluate what services you are currently paying for. There are many streaming platforms, app subscriptions, and other memberships that you might be paying for monthly without even knowing it. It is very easy to accidentally sign up for a plan and be credited each month without using the service. To avoid this, take time to review your bank statements each month and check to see if you are still using these services. Cutting down on subscriptions and memberships will simplify your financial life and allow you to use that money towards other products or services that will be of greater benefit to you.
    5. Stop Looking at Your Screen. Now that you have simplified your finances, it is essential to go outside and live your life without the stress of being unorganized. The average American spends half of their day staring at a screen, while that number has only increased during COVID-19 lockdowns. With vaccine rollout, the reopening of businesses, and the loosening of restrictions, there are more opportunities to go outside, put down the screen, and start to experience life on a deeper level. Simplified finances will allow you to spend your money and time on things and experiences that bring you joy.

  • Avoid Fooling Around with your Food Budget

    As we head into April and COVID-19 restrictions allow for restaurant reopenings, it is essential to reassess your food budget. Most people have come across the thought process of choosing to eat a meal out or stay in and eat what is at home. This is a typical expense that people experience daily. There are convenience and lots of other factors involved in the decision-making process. This is important to any budget when choosing what to eat and where to spend your money.

    50/30/20 Budget:

    Divide your budget into three main categories: needs, wants, and savings. Breaking down your budget will allow you to get a clear sense of where to allocate your money and understand how much you have to spend out on food. This budget consists of spending 50% of your after-tax pay on needs, 30% on wants, and 20% on savings. This rule may not apply to every budget, but will help you better understand managing your funds appropriately. This rule may not apply to people living in areas where it costs more to live, and therefore the budget cannot be applied to the generic spending rule. While not every individual can follow this rule, the general idea is to keep the “30%” or spending money allocated towards dining out and other expenses. Dining out should be categorized as spending and not needs because making your own meals will always be cheaper and more budget-friendly.

    Use Coupons

    Coupons can be found online, in magazines, in stores, and in the newspapers. There are several spending websites such as Groupon, Restaurant.com, etc. These types of coupon sites may offer deals to discount your dine-out meal and grocery shopping. There are also particular times such as Happy Hour that many restaurants take advantage of to offer discounted prices on their food and drink menus. This could be the perfect opportunity to get the experience of dining out while budgeting for a lower price.

    Menu Plan

    When choosing a restaurant to spend out at, take a look at the menu before to understand the prices and options on their items. This will allow you to plan on your expenses while dining at the restaurant and choose which items to purchase beforehand. One example is beverages- water is available for free at restaurants,, while other drinks will cost more. If you decide to have a glass of wine for dinner, you could call the restaurant ahead of time to get a price for their corkage fee, while bringing your bottle could be more affordable.

    Food Delivery Convenience

    While many Americans face the hassle of meal prepping and cooking, there has been a rise in food delivery services. There are some budget-friendly delivery services, however, most of them continue to charge high prices. Food delivery includes meal kit services such as Blue Apron, to restaurant delivery such as DoorDash or UberEats to grocery delivery like Instacart. These big delivery services profit from the convenience craze but at a higher cost than doing it yourself. Before using delivery apps, take a look at the price breakdown and reevaluate if it makes more sense to do it yourself. Eating out at restaurants is costly, while food delivery services offer similar prices. When considering a food delivery service, it is important to check the pricing of your different options to know which one is most suitable for your budget. It could help understand and price the difference between eating out vs. food delivery when thinking about where to spend your money on meals.

  • Spring Clean Your Finances

    Spring is just around the corner, giving us an opportunity to welcome the new season through some much needed spring cleaning. Along with tidying up your house, it’s a smart idea to check your finances and get ready for the rest of the year, along with the approaching tax season. Here are some easy steps for tidying your finances:

    Clean Up your paperwork

    Most Americans have mass amounts of paperwork lying around their house or office, now is the smart time to go through all of those bulky amounts of paperwork to organize and throw away any you no longer need. Another aspect of this is to consider going digital. As we live in a digital world, you can reconsider the need to keep important paper documents by going paperless this spring. There are many options and tools to help you declutter your workspace such as scanners for digitizing important documents, Google Drive for organizing in the cloud, and an iPad for annotating.

    Cancel Unused or Unnecessary Subscriptions

    Throughout the year, you might have accidentally or intentionally signed up for a subscription that went unused. Keep an eye out for subscriptions such as gym memberships or delivery services that may not be useful to you currently. Understand which subscription services are unnecessary and identify the ones that you actually need. With many businesses having a subscription model, it’s easy for your monthly bill to become cluttered with various memberships. This is common as it can quickly happen with a click on the wrong button or the intention of using the subscription goes unused. Checking your subscriptions will save you from wasting money throughout the year.

    Review your monthly budget

    By taking the time to reevaluate your spending habits, you can see unnecessary costs and expenditures throughout the month. A quick reevaluation will allow you to see exactly how much you are purchasing and if you need to rethink your spending. You can budget through apps, saving a percentage of your paycheck, and setting up a monthly budget plan. Overall, understanding where you can cut spending will help you clear up finances for things that really matter or setting up an emergency fund. Budgeting can also help you save money on unnecessary expenses and will leave you with money to spend on other things such as a mini-vacation or a nice dinner.

  • How to Budget as a College Student in 3 Easy Steps

    Managing money as a college student is not an easy task. As you start your college journey, there are many activities to manage such as school work, extracurriculars, social life, etc. Most students quickly learn that it is essential to be cautious of the money you spend in order to continue with daily activities. Here we will tell you three easy steps to budget your money in order to get the full college experience and take off stress.

    Gather your financial details

    This is an important first step in order to understand how much money you will be spending. You can do this by talking with your parents, checking your bank account cash flow, and searching for scholarships and grants that your university offers. By gathering all of this information, it will allow you to see exactly how much money you will have to manage.

    Predict and Plan your Expenses

    This includes anticipating how much money you will be spending on rent, food, textbooks, clothing, transportation, and extra cash for fun. Having a clear understanding of what you have to and would like to spend your money on will help you form a direct plan. This will help you stay cautious of where your money will be spent while at school.

    Track Your Spending

    This is an important final step in budgeting your money as you will need to keep track of all your expenses. By doing this, you can see exactly where you spend your money in case you need to reevaluate your spending. This helps to see where you can cut back or have room to spend more.

  • Millennial Focus #1: Sri Ramakrishnan

    College is one of the toughest times to manage your personal finances.

    We know this and this is why we interviewed a (relatively) recent college grad and budgeting maestro Sri Ramakrishnan to learn more about his approach regarding college finances and personal tools.

    Our conversation here below:

    Tomo: Hi Sri, thanks for taking the time to chat with us! How long has it been since you were last in college and what did you study?

    Sri: Thanks for having me! I graduated undergrad in 2017 and I majored in Economics.

    Tomo: Did you have any jobs or internships during college?

    Sri: I did indeed, I had a few jobs through my years in college. I was an English tutor during my sophomore year, worked as a barista at Starbucks for a summer, did a part-time internship at a technology startup alongside my classes during my junior year, and I did a full-time summer internship between my junior and senior year.

    Tomo: What were your spending habits like when you were in college?

    Sri: To be quite honest, I was (and still am) a fairly frugal individual. Throughout college I’d find ways to stay within specific budgets I had outlined for myself and make sure that I saved a significant percentage of my income when I was working.

    That being said, I always made sure to spend money on things that made my life easier or on areas that I felt were investments in myself. Through my senior year, I made a conscience effort to spend more money on experiences that I thought would enrich my life and would become memories I could look back on as opposed to material objects that didn’t give me much joy after the first purchase.

    Tomo: Did you have a credit card during college? If so what kind?

    Sri: I did but it was just a standard credit card issued by my bank with barely any rewards.

    Tomo: Did you use any tools to manage your budget or personal finances during these years?

    Sri: During my time in college I didn’t have a specific budget tracker as I do today (I currently manage all my monthly expenses manually on an excel spreadsheet) but I did use a few apps to invest my money and to generally become more financially literate.

    I first opened a Robinhood account during my junior year to put my money in a few individual companies I felt very strongly about. I was very compelled by the commission-free trading proposition and wanted to get involved with these stocks that I felt were promising. At the same time I opened an account with Coinbase and invested in Bitcoin and Ethereum after doing a lot of research. This was early in 2017, just at dawn for all the publicity that was brewing around the blockchain/crypto space. For personal transactions and peer-to-peer expenses I used Venmo, as it became impossible to navigate the college landscape without it. Other than these three, I just used my bank’s standard web portal to oversee my expenses and income.

    Tomo: Looking back, was there anything you wish you had done differently in regards to your personal finances?

    Sri: Honestly, I remember after my senior year vividly wishing I had a high rewards credit card through my time in college. There were so many random expenses from a variety of categories (especially food/travel) that I could have reaped rewards from. On top of this, I was paying the rent for my senior year apartment through Venmo to one of my roommates who would write to our landlord the check for all of us. I figured if I had a high rewards credit card throughout this time, I could have built my credit history through these consistent payments and potentially had secured some cash back.

    Tomo: Any tools you wish you had used or had during this time?

    Sri: Not to sound cheesy but a Tomocredit card would have been huge for me along with many of my peers during this time in college. I know it was hard for a lot of college students to qualify for high rewards credit cards during our pre-employment years without significant credit history or a credit score. Not to mention for me, especially during my years in college to have had a credit card where I could earn rewards in crypto would have paid off tremendously with the huge bull run for cryptocurrencies experienced in late 2017.

    Tomo: Any advice you’d give college students who are trying to manage their personal finances?

    Sri: Live within your means and try to save a little bit from every paycheck. Start investing in low cost Index funds as early as you can. Pay off any debt you may have as soon as possible (student loans, credit card etc). Once you have enough of a savings cushion, try to live within your means but don’t forget to go spend money on experiences and with people who will bring you joy. You only have one life so go live it up!

    Follow @TomoCredit on Twitter and Instagram and go sign up for our waitlist today at www.tomocredit.com

    To learn more about budgeting, and personal finance tips you can connect with Sri Ramakrishnan on Twitter and Instagram (@sreezy3000) or reach out to him on LinkedIn.