I have been a bit busy lately, and for that I apologize; I’ve been spending more time on school and at work, and I’m joining a few other campus activities as well.

Working at a retail store has held me responsible for relatively large amounts of cash at any given time when I drive to and from the bank to drop off our daily deposits, for example. Carrying the cash and having to count it every day really started me thinking about how often I personally use cash, and what I feel about using it. I’ve come to the (simple) conclusion that I hate cash. There are a number of reasons I hate it, and I don’t think that it’s unjustified.

First of all, security is important to me. I like knowing that if I were to lose my wallet, a few phone calls will cancel my cards and, even if there are large charges on there I would only be responsible for a small portion of them (assuming I reported them within two days). If I were going to buy a TV at a store, for example, even if I could pay with cash I would not want to be carrying around several hundred dollars. Credit card fraud can also be traced, whereas cash typically cannot.

I like having a thin wallet. Having a few credit cards in my wallet makes it far less bulky than carrying around cash. I have some pretty severe back problems thanks to scoliosis, and sitting on a thick wallet all day can be both uncomfortable and actually harmful to my health to a certain (very slight, but still noticeable) extent. Thin wallets don’t stretch seams on my jeans and they’re easier to carry elsewhere; if I’m somewhere and I don’t feel comfortable carrying my wallet in my back pocket (because of pick-pocketing) it’s easier to put a thin wallet into a front pocket or an inside coat pocket. Thin wallets also fold up easier and look nicer and although I don’t really care what my wallet looks like, having it not fall apart is always a plus.

Cash is inconvenient at times. To deny the convenience of cash in some situations is absurd - but certainly there are times where cash is less convenient than using a credit or debit card. I personally am a fan of credit cards above debit cards, and debit cards above cash. Being able to use credit cards at gas stations helps save me time on road trips when I don’t have to go in, and I can go back in my car while my gas is pumping and not have to venture out in the cold to go pay. At some places, purchases under $20 don’t require a signature; this saves time. I don’t have a heavy pocket full of change after a day of shopping, and I don’t have to count out my money before I pay; I do calculate roughly how much I’ll have left on my card to use (but I pay it off in full all the time and so I generally start with a 0 balance) but generally speaking I don’t make purchases that large to seriously come within my cards limits. Cards are also nice to use, as I already said, for purchasing highly priced items like televisions and such. Carrying around large amounts of cash can make you a target for somebody looking to steal some wallets.

Cash doesn’t help build credit. Building credit is an important part of being able to have, essentially, more purchasing power (being able to obtain a loan, for example) and using cash doesn’t let you build credit. I only use credit cards (and then pay them off in full each month) to help build a strong credit history.

I spend cash far too quickly. If I have a credit card with a limit of $1000, chances are I’ll be able to use that $1000 for something worthwhile (such as food, and other necessities) and be able to use it for a longer period of time than if I were to have cash. Cash, to me, is very tempting and if I have it, I will spend it. It’s one of my financial weaknesses, and it’s kind of opposite of what the norm (overspending with credit cards) is.

With all this cash bashing, it’s important to note tht I know not everybody will share the same views as me. Some people love cash and will swear by it - others will only use debit cards - and still others agree with me. I think that the argument of cash vs credit is one that cannot be resolved for a group of people with just one answer. Each person is different. The person who uses credit cards far too much may hold on to cash significantly better, and so cash may be a great idea for him. Some people don’t want - or can’t get - credit cards but also don’t like cash all that much, so they stick to debit cards.

No matter what your personal choice is, the important thing to do is to track, or at least be aware of, your spending habits. I know that I spend far more money when I have cash than when I use a credit card, and so by not using cash - EVER (unless it’s a gift) - I save money for other investments. Figure out (by trial and error, if necessary) what works for you as far as saving money goes, and stick with it. As for me, don’t bother trying to rob me; I’ll have no Benjamin’s for you to snag.

Financial goals are important for people to have, as it helps them gauge a lot of things - like when they can afford to retire, for example. A big problem I’ve noticed is that many people don’t know how to set good financial goals, and many people don’t know how to properly track their progress once they do set their goals. I’ll briefly attempt to tackle this problem, with a few things that have worked for me.

One of the hardest parts of setting goals is, well, setting them. I know it sounds a bit obvious, and it is; unfortunately, it doesn’t make it any easier.When I started setting my financial goals, I realized that the hardest thing was figuring out where I wanted to be, and when I wanted to be there. I had to take many different factors into consideration, including how I was going to accomplish my goals. I have a long-term goal of retiring by the age of 45, but in order to do that I need to achieve a lot of smaller financial goals. Saying that I wanted to be retired by 45 wasn’t enough just by itself; in order to make that goal actually mean something, actually feel attainable, I needed to make smaller goals, or benchmarks, to help accomplish that.

Figuring out what is attainable depends on your own personal lifestyle and income, among other things. I live a fairly frugal life; as a general rule, I don’t spend money on something unless I genuinely need it. Somebody who lives a different lifestyle than me - somebody who lives in a nicer apartment or house, somebody who drives a nicer car, or has ‘nicer stuff’ than I do, will likely not have the same type of goals I do. For somebody who ’splurges’ on these types of things, retirement at 45 may be unattainable.

Making smaller goals is essential to accomplish your bigger goals. So you want to be able to purchase a house in 5 years? Depending on your current situation, you may need to make other goals; develop a more vigorous savings plan for a down payment, clean up your credit and remove as many debts as possible, etc. Something I do before I set goals is to estimate how much it will take to achieve my goal. If I want to be able to purchase a house in four years, after I have found a job and generally know where I’m going to be living, I need to figure out what kind of a budget I’ll need, then how much I need to save each year up until then.

Smaller goals also make the bigger goal seem less daunting. If I were to make a goal of buying a house in 5 years, but didn’t have smaller goals to help me work my way toward it, I may get sidetracked and discouraged. By making small goals, like checkpoints for along the way, I’m helping my overall cause by tracking my progress and also am encouraging myself by accomplishing other goals along the way. The final result doesn’t seem as difficult when it’s broken up into smaller parts. These smaller parts also help keep me on track and let me make any adjustments if necessary; if I find that I’m not saving enough money, I can make a conscious effort to cut down my expenses or increase my income somehow in order to get back up to speed. If I’m cruising along much quicker than expected, I can either continue the cruise, the the ‘extra’ money away/invest it in something else, or maybe splurge just a little if I think it’s something I’ll be able to realistically cope with.

Goals also need to be challenging. For me, buying a house in four years seems like a very difficult task. I’ve still got two more years of college, and my expenses after college will go up considerably. My income will rise as well, but these may not be proportionate. By giving myself something that I really need to work for in order to achieve, it makes that final result feel much better. I know that I’ve accomplished something that actually required a change in me, a constant commitment.

Commitment is another thing that can make or break goals. I’ve got a list of goals that I’d like to accomplish, and I have this list tacked to my wall in two different locations. When I started these goals a month and a half ago, I looked at them every day just to remind myself of what I wanted to do, and how I wanted to do it. Now that I’m a month and a half in, I don’t feel the need to look at them every day. Trent over at The Simple Dollar made a great point about his personal finance management - he related it to training wheels. My sheet of goals has turned into just training wheels. I know what I have to do now to reach my goals, but I can always put my training wheels back on - look at my goals - if I need a bit of extra help remembering. By ingraining this into my daily routine, I don’t even think about these things anymore. What was a chore at the beginning of the year is now scheduled into my day, is so solidly with me that I have a hard time doing otherwise.

Measuring your progress is a crucial part of reaching your financial goals, but more important than measuring your progress is how you handle your progress if you aren’t where you really want to be. It’s easy to get discouraged, it’s easy to become pessimistic about your financial goals. It’s easy to become pessimistic about money in general - I can’t even begin to describe to you how many people don’t want to talk about finances for one reason or another - they don’t understand it, or they’re struggling financially, or think that talking about finances is bad. By shutting out financial discussions, these people are basically condemning themselves to 45 years of working 9 - 5 five days a week. They’re extending the amount of time they have to spend working a job they probably want to leave early, just by neglecting discussion of how they can better their situation. Goals work the same way. If you get down about failures you make along the way, it’s important to keep on trudging along no matter what. There are some goals that I’ve made for the year ahead that I know I will likely not accomplish; but instead of looking the other way and ignoring them, I am taking action to rectify the situation or at least get a plan in motion for how I can fix it next year. Pessimism, as cliche as it sounds, kills dreams. By keeping a positive attitude, you won’t lose sight of the final result and you’ll do what needs to be done to get there.

When you finally do reach your financial goals, you should reward yourself somehow. For me wanting to buy a house of my own, that is reward enough; having the sense of pride that homeowners have. Some people might want to take a vacation, buy a new TV, or just take a few days off work to relax. Whatever it is that will make you strive more for your financial goal, make it done - you’ll find that you are more likely to work harder toward reaching that point. Setting up checkpoints - or smaller goals - along the way can be a great way of rewarding yourself for your progress so far. Whatever happens, just make sure you keep your eyes on the final goal you’ve set for yourself, and as long as you work toward that goal you have a good shot at reaching it, maybe before you had planned.

I have heard many a people say that they don’t need - or even want - credit cards. Many proclaim they are bad, and many say that they’re good. Both sides of the argument have valid points in some instances, but not all points made in the argument apply to everybody. Here’s my stance on the subject…

 What the ‘credit cards are bad’ people tend to say is that credit cards lead to financial problems. People will use cards, max them out on buying luxury goods and either fail to make timely payments, or get buried under mounds of interest fees and eventually, it leads to a financial breakdown. Many people I know live this type of lifestyle, charging what they really should not be spending money on. Some people do it to impress others, some people do it because it makes them feel better (until the bills roll in), others do it because they don’t realize they don’t have the money. I agree with this points.  Maxing out credit cards is never a good idea, especially if you can’t afford to pay it off.

Unfortunately, many people who say that credit cards are bad also refuse to take the time to properly educate themselves on how credit works and what it means.  Some of my friends max out their credit cards and don’t realize the repercussions; paying interest, for example. Sometimes they have the money to pay off their card in full, but don’t because they don’t realize they are paying interest. Proper education on credit card usage is vital - without being aware of how credit cards work, and how to responsibly manage them, it’s very likely that people will find themselves in problems.

What the ‘credit cards are good’ people tend to say is that credit cards offer flexibility and convenience. Being able to pay with a credit card is a convenience for most people; being able to pay at the pump, purchasing items online, utilizing 0% APR offers for larger purchases or balance transfers. Utilizing credit cards allows people the flexibility to pay over time, and a lot of smart credit card users will only do this if it’s on a 0% APR offer and they have a specific reason to not pay off their card in full. I also agree with this point. Credit cards are incredibly useful and convenient.

In addition, credit cards tend to be more secure than carrying around cash. A simple call to a credit card company if one has been lost or stolen will put a freeze on the card, or cancel it completely, and a new card can be issued. Many issuers don’t even hold you responsible for the charges made. If you lose cash, there isn’t anybody to go to for the most part.

All the above being said, I think that credit education is the single most important factor when deciding if a credit card is a good idea for you. Read about credit cards, how to use them responsibly, and start out small. Don’t go on a spending spree, and pay off your card in full every month to avoid paying interest. As with many things, moderation is the key. I don’t buy something on credit unless I can afford to pay cash for it. I use credit very frequently because it is convenient, I can pay my cards off a few weeks after the purchase and thus earn some interest on my money, and it helps build my credit history in a positive way. Building up my credit history is important if I want to apply for a home or car loan. Take the time to get educated before you decide to use credit cards, and make sure you are aware of your spending - then your credit cards will help you instead of hurt you.

Habits are always a touchy subject for some people. They can have both positive and negative influences on our overall health. Saving for retirement automatically, spending a few extra minutes thinking over purchases, paying off your credit card as soon as you use it - these are good habits that will help us. What about the bad habits? Drinking, smoking -things that, for the most part, you know are bad for you, but you continue to do them anyways because of, likely, a physical addiction.

You always hear about the bad habits from people telling you that if you stop, it will help you out. Stop drinking, you’ll spend less money and you won’t risk as much being injured in a drunk driving accident. Stop smoking, you’ll help prevent cancer and you’ll cut back on $5 a day if you’re smoking a pack a day. It’s the habits that don’t seem bad for you that, financially, can be devastating. Take, for example, a morning coffee stop at Starbucks - or another coffee place. On average, a coffee probably costs you $4. Over the course of a week, $20. Over the course of a year, roughly $1000. Now $1000 may not seem like a lot to some people, but when you’re living on minimum wage like me (post coming later, so heads up!) those $4 mornings can get quite pricey.

I recently gave up drinking alcohol for three and a half months. Even though I’m underage, I’m in college and drinking is a big part of college life here at my school; it’s a great social outlet. Besides the obvious legal and physical ramifications of drinking, it was taking its toll on my bank account. Over the summer, I spent far too much money on alcohol - I’ve estimated that, since I stopped drinking one month ago, I’ve saved about $200-$300 that I would have otherwise spent on alcohol. That’s a pretty hefty chunk of change for any college student, and I’ll be happily shoving that money into my Roth IRA. Kicking bad habits improves physical and financial health. I have no question that whatever a bad habit is, getting rid of it will help you financially and physically.

That being said, it’s vital that good habits are developed to help you improve your physical/emotional health, and your financial health. Saving for retirement is something that I - ignorantly - thought most people would be doing. Having my father be a Certified Public Accountant has put some huge discipline on me when it comes to my finances, so I’ve been saving for retirement in a Roth IRA for a number of years already. If you don’t already have a retirement account, open one as soon as you can. It’s a great way to protect your money from, well, yourself, and also have it grow exponentially. This Roth IRA calculator is a rough estimate of how much a Roth IRA will be worth given your current age, your age of retirement, yearly additions (max this year is 5K, although that number will be increasing), marginal tax rate, and expected rate of return. I myself should have over $1.5M in my Roth IRA alone by the time I am 60 - I was going to say the time I retire, but I hope to retire far earlier than that.

Saving can be difficult when it’s something you have to think about. I will be the first to admit that if I have cash in my wallet, I am going to spend it, and it’s very likely that it’ll be on something I don’t need. For that reason, I’ve set up automatic transfers from my checking account to two of my other savings account to take a total of $400. When I made my budget (they are a good way of helping measure your financial progress), I had to figure that I had $400 less a month to spend on something - fun money, bills, etc. It’s made me rework some of my variable expenses - cutting back on drinking alone helps me save over half of this money. Automated transfers are an invaluable resource to help you stash away money. You no longer have to think about it, you just automatically do it - and help yourself in the long run. If you can’t save $400, save $100, save $10 - any amount is better than spending it on variable expenses that are luxuries. If you can save more, do it; if you invest wisely, your money will grow for you.

Paying off your credit card bill immediately and thinking about purchases don’t really need much said about them. They’ll help keep your debt and unnecessary purchases under control, which will help you be able to kick in more money to your savings.

Instead of working for your money, make your money work for you. Kick the bad habits, promote the good ones. If you can’t kick a habit completely (I am only giving up drinking until I turn 21, and then it’ll be in moderation to save my liver and my wallet), cut back as much as you can. Stretch your comfort for a while. Most of the time we continue a bad habit because it’s a comfort for us - our coffee gives us energy for the day, but so can something else. Satisfying a physical addiction can be comforting. But if you can stop and still be moderately comfortable, you’ll find, like me, that you don’t need alcohol or nicotine or your morning coffee to feel good. If you’re struggling to get ahead, I bet that you won’t unless you evaluate your actions and figure out what needs to go and what needs to stay.