Last week, the House passed a bill that would require bondholders and Social Security beneficiaries to be paid first in case of a failure to raise the ceiling on the national debt later this summer.

While the bill passed, there’s doubt it will get past the Democratic majority in the Senate; the White House has already promised to veto it. Even if this legislation doesn’t make it farther than the House of Representatives, it is stimulating debate about the real issue behind it — the national debt crisis.

The U.S. has already maxed out its $16.4 trillion debt limit, but thanks to a movement by Congress to ‘stall’ the crisis in January, the government has until at least May 18th and, most likely, longer. Obviously, the national debt crisis is the main concern of this session of Congress.

Republicans claim that the purpose in ensuring the Treasury is able to pay back its bondholders (largely foreign nations such as China) is to uphold the U.S.’ credibility on the global scale, as the ability of the U.S. to borrow funds in the future is doubtful if the U.S. defaults on its current loans. The measure would also prioritize Social Security to ensure funds are not withheld from beneficiaries who have been paying into the system their whole lives and are dependent upon it.

While these reasons seem legitimate enough, Democrats counter that the government can’t pay some of its creditors and not others, especially when so many other (just as important) government programs, such as veterans benefits and Medicaid, might suffer.

Although confronting the issue of the debt crisis will likely occur later this summer, national finances so far this year have been better than expected, allowing some breathing room before drastic measures are necessary.

Pay Our Creditors or Pay Ourselves?

While the House and Senate wrestle with these issues on a national level, there’s a personal application for the problem of debt management. There may be times you’re over your head in debt and face the decision of who to pay first or, even worse, who not to pay at all. 

Ideally, we should tackle our debts while they’re small and manageable, but some circumstances, such as severe illness, loss of income, scams, business bankruptcies, severe drops in stock, or identity theft, are beyond our control.

When you’re facing debt on every side, who do you pay first?

It’s always best to meet your outside obligations first, in order of importance.

If it’s helpful, make a list of your debts starting with those that are the most critical/nearest to default. You may be able to let smaller bills slide, especially if you know the grace period is longer on them. Many creditors are willing to make arrangements for smaller monthly payments, and are satisfied as long as they’re getting paid something.

Don’t be afraid to be bold and do some negotiating, since it may buy you some time to focus on getting your finances in order and avoiding bankruptcy. It can be humbling to have to admit you’re in a tight spot, but doing so can save you worse financial ruin.

Drop all unnecessary services. 

Drastic circumstances call for drastic measures. There’s no logic to getting manicures while you’re facing foreclosure, and you don’t need television, internet, or data plans on your phone. Temporarily canceling unnecessary services that won’t affect your credit score will free up cash you can apply to other more important payments, such as your mortgage, bank loan, or major credit card.

“Tightening up the belt” has always been a good way of coping in hard financial times, even though it can be hard to let go of the lifestyle you’re used to.

Do everything you can to avoid bankruptcy.

Although filing for bankruptcy seems like a good solution to people in severe debt, it’s never advisable. It may be a quick fix for the stress of creditors, but it will murder your credit score for years to come.

These are some ideas of how to prioritize repayment in a debt crisis.

Who and what would you pay first?

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

During a recent trip, I had the pleasure of talking with a retired couple who are spending their golden years touring the world. Italy, China, Mexico, Hawaii — they’ve seen it all, and some places more than once. While I didn’t want to ask personal questions about how they could afford such luxurious trips, I was amazed that this seemingly-average couple was able to achieve travel goals that most can only dream of.

They had some great tips for budget travel that I eagerly soaked up. After all, I’d like to see more than the foothills of Appalachia before my time on earth is up.

Try Vacationing Abroad

One suggestion I found particularly intriguing was to vacation outside the United States. Even accounting for airfare, the couple claimed it’s often cheaper to book a vacation abroad than it is to vacation in a nearby state.

Booking a year or two in advance helps them get package deals and cheap rates. They also don’t usually use a travel agent, saving more money by booking trips themselves over the internet. Comparison shopping for travel and vacations can really rack up the savings.

Look for All-Inclusive Deals

All-inclusive vacations are a good deal if you like to eat often and eat well. The cost of surf and turf dinners can easily chip into your vacation budget, unless you go for an all-inclusive deal. Nightly drinks and access to entertainment are often bundled into all-inclusive packages, saving you even more money if you plan to participate in these activities.

However, if you spend more time eating light meals and taking in the local sights on vacation, the all-inclusive price may not be worth it. Examine your habits and determine if a package deal is right for you.

Save Money with Impulsive Trips

While vacationing in Miami, Florida, one family found the cost of eating out to be ridiculously high. To save money, they impulsively booked a three-day cruise leaving from Miami for the weekend. The cruise provided nightly entertainment, safe activities for their teenagers, and all-you-can-eat buffets 24 hours a day — not to mention sights and experiences at ports of call. This was all for one low price that was far less than decent restaurant meals and and a hotel room for the weekend.

Check the Reviews

One nugget of advice from my new travel sage friends was to always check reviews before booking a package vacation. If there are hidden costs or unexpected expenses, these are likely to show up in the reviews. Resorts or luxury getaways often sound like a great deal until you read the fine print.

For example, the $200 in free vouchers for spa services at one resort was actually broken down into four separate activities, with price restrictions before use. In order to get your free $40 spa service, you had to book an hour long session that cost $160. And that $10 voucher for a bottle of wine may only be good on a selection with a price point higher than $50. Added up, some freebies aren’t freebies at all — but rather, cleverly disguised sales pitches.

What are your best budget travel tips? 

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

One of the timeless ways to save money is to comparison shop, and switching to a Medicare Part D plan that costs the least amount of money would be a great way to save. But yet, only about seven percent of seniors who enroll in Medicare Part D changes plans each year, according to the Centers for Medicare and Medicaid Services.

And it’s not due to the lack of need either. Walgreens conducted a survey and found that 37 percent of the participants worry about their prescription drug costs and one in five had to delay filling a prescription or skip doses just to manage medication costs.

The real culprit is fear of the unknown. Many seniors are simply confused by the complexity of these drug coverage plans. They are also worried about the potential repercussions of changing coverage, especially when the consequences could be not having the drugs they need to take until everything is sorted out. That’s why the details of what to look for when comparing Medicare Part D plans is the first thing I want to write about when Walgreens contacted me to cover Medicare Part D here on MoneyNing.com.

Here’s what I found someone shopping for a Medicare Part D plan will need to know in order to find the best plan for them.

Know the four basic costs of Medicare Part D. Most people are familiar with monthly premiums, co-payments and deductibles (the out-of-pocket costs for covered medications before the Part D plan starts paying), but Part D costs include a coverage gap as well, or commonly referred to as the “donut hole”.

Basically, there exists a gap in coverage where you will be paying 50% of the costs of brand name drugs and 79% of generics regardless of your plan’s co-payment when your annual spending reaches a certain level (in 2003, it’s from $2970 to $4,750). The Affordable Care Act is aimed to slowly reduce this gap until it’s eliminated between now and 2020. But until then, take note of this in your calculations.

Know how the formulary affects you. Each plan covers different drugs and they issue that list known as a formulary. Obviously, pick the plan that covers the drugs you take regularly. Make sure you look for the co-payment amounts for each drug too. Each plan cover drugs in tiers with different co-payment amounts. It’s not uncommon to see a drug in one plan be in one tier while the same drug in another plan be in a completely different tier with a much reduced co-pay. Note also that a plan can change its formulary at any time as well, so don’t have the set-it-and-forget-it attitude when it comes to picking the best plan for you.

Where you get your drug matters too. If your Part D plan lists a preferred network pharmacy, you could be saving as much as 75% on prescription co-pays. This is often a forgotten part of the equation, as Walgreens found that only 21% of its survey respondents switched to a pharmacy within their plan’s preferred network to save money, and 24% were not even aware that their plan offers a preferred pharmacy option!

Know the plan’s stance on brand-name drugs and other expensive medications. Some plans require the pharmacy to substitute a brand-name drug with a generic one unless you get an exception from the plan, while some plans may restrict the number of doses in each prescription. Other plans have a step therapy requirement, where they will require the doctor to prescribe the least expensive drug in its class for you to try before they will approve the use of a more expensive drug. If you are adamant about sticking to brand-name drugs, or you are already taking expensive medication, you will want to make sure all the ducks are lined up before you switch plans.

It’s easy to see how a comprehensive comparison can get complicated fairly quickly. Luckily, the government run website, Medicare.gov, offers a very good medicare plan finder that will help you find the right Part D plan for you, including a way for you to enter all your prescription drugs for easy comparison.

Give the tool a spin and make preparations to start saving today.

As I mentioned up top, Walgreens contacted me to write (and will compensate me for writing) this article. For more information on whether a Medicare Part D plan is right for you, click here.

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

Last week, I was promoted a level within my organization. As a baseball player, this meant that I had to leave immediately. I was told around 10 pm that I’d be leaving the next morning on a 6 am flight. My wife and I had settled in to our lives in Florida, and now I had to move again. We needed to choose a new place to live, figure out how to get our belongings there, and find someone who could take over our current lease.

Moving Our Lives

My dad happened to be in town when I was promoted, and he kindly offered to drive our new car up the east coast with all of our stuff packed in the back. I couldn’t drive, as I needed to get there as quickly as possible. My dad took only a day and a half to drive up the entire coast, which meant that all of our stuff arrived in our new city quickly.

My wife still has a couple weeks left on her seasonal assignment in Florida, so she’s staying to finish up her work. Once she’s done, she’ll join me in Connecticut. She packed most of her items and kept only the essentials. She’ll fly up with the rest of her belongings soon.

Moving things quickly is difficult. In our case, we were lucky to have my dad around and willing to drive. Usually the only options are to use a moving company or the postal service.

Where Next?

With an outstanding lease in Florida, we don’t want to get another one in Connecticut (unless it’s month-to-month). This limits our options a bit, as does our little puppy that’ll be flying up with my wife. Until my wife arrives, I found a place to stay with a host family. This option won’t work with my wife and dog, however, so we’ll need to find a new home when they arrive.

Our options are some low-level apartment complexes with furniture, or an extended stay hotel. We’re trying to find a host family to take us, but we haven’t gotten any leads yet.

The apartment offers a slightly lower cost, but less convenience. We would have to set up our own internet and cable, along with other utilities. The extended stay hotel is more expensive, but very convenient. Either way, paying a month at a time is going to get fairly expensive.

The Other Place

Luckily, we have friends in Florida that are willing to take over our old lease. This is assuming they stay in the same city for the rest of the summer. Baseball players lead a very transient lifestyle. Our friends will hopefully cover the cost of the lease, as well as any utilities that are incurred. This will leave us a little more wiggle room in the cost of our new place.

This is the first time my wife and I have needed to do this. While it created some headaches, it’s been fun to sort out. Hopefully, we will soon establish where we will live for the rest of the summer.

Have you ever needed to move to a new place quickly?

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

One of the ways that you can grow wealth over time is to invest. Unfortunately, many Americans don’t understand how to get started.

According to a recent survey from NerdWallet Investing, 81% of Americans don’t know that a brokerage account is needed to invest online. (This doesn’t mean that 81% of Americans aren’t investing at all. For a number of Americans, the investing isn’t really recognized as such, since it’s done through their retirement accounts.)

If you want to invest on your own, however, you need a brokerage account — and the NerdWallet information seems to indicate that a large majority of Americans don’t understand this, or know where to go to open a brokerage account.

This is a shame, as many Americans could improve their financial fortunes if they knew that there were options for them. It’s really not too hard to open a brokerage account; as long as you have identifying information and a bank account for transfers, it’s possible to open a brokerage account and get started.

Do You Have Enough to Invest?

Another interesting piece of information from the survey indicates that 39.3% of Americans don’t have enough money to begin investing. Although this isn’t even half of Americans, it does represent a significant number of people who think that they don’t have enough to invest.

Despite the fact that technology has made it possible for nearly anyone to invest, it seems as though there’s still the belief that you have to be wealthy in order to begin investing. The good news is that this isn’t the case. In many cases, it’s possible to start investing with as little as $25.

It’s also relatively easy to set up an automatic investment plan that can help you stick with your efforts. The use of an automatic investing plan allows you to take advantage of dollar cost averaging in a way that gets you on the right track with building wealth.

One of my friends started investing by setting aside $25 each week in a savings account. Each month, $100 was then transferred out of that account and invested automatically through a brokerage account. Over time, he was able to set aside more each week (and invest more each month).

Chances are that you can find the money you need to become a regular investor. When you break it down, you’ll realize that there are plenty of discount brokerages willing to work with you.

Don’t Forget to Compare Fees

As you get started with a good discount broker like TradeKing, ETrade, Scottrade, Sharebuilder, or any number of brokers, don’t forget to compare fees. The NerdWallet survey indicates that many people consider fees a major issue when investing, but that only 10% of investors really compare them.

It’s easy to get started investing, but you don’t want to just begin investing with any broker. Do a comparison to see what fees are charged. Don’t forget to check into expense ratios on fund offerings, in addition to transaction fees.

With a little planning, you can beat the average American when it comes to your investing know-how.

How did you start investing? Any tips for beginners? 

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

Are you sick of work-from-home scams? Do you really want to earn some extra cash?

People have been trying to work from home for years. Yet with so many online scams, it’s hard to know which are truly legitimate.

There are ads in newspapers and magazines offering you opportunities to make money by forwarding emails. All you have to do is pay $29.99, and you’ll have access to thousands of companies in dire need of your help.

Really? No, thanks.

If it sounds too easy, it’s probably fake. Skip searching through endless seas of illegitimate work-from-home scams and use this guide to help you earn the extra cash you want — without losing money to third-party rip-off artists.

12 Work-from-Home Plans That Work

1. Web designer – The boom in online businesses means a boom in the design industry. Some people have even quit their day jobs and become full-fledged business owners — just by playing around with Photoshop. Don’t know how to code a website? Get a free education from CodeAcademy. There are also tutorials on YouTube and many blogs that can teach you the basics of design.

2. Writer – Elance, Odesk and Craigslist are all places to find legitimate writing gigs — with everything from writing education curriculums to reviews of products, or even blog posts. The sky’s the limit when you know where to look.

3. Editor – Better at spotting punctuation errors than writing the original piece? Those same sites (Elance, Odesk and Craigslist) list jobs for editors, as well.

4. Affiliate marketer - If you already have a website, selling products through Amazon and other resources can earn you as much as 50% of the selling price.

5. Handmade retailer – If you have an eye for beauty and a hand to help produce it, consider opening an Etsy shop. Be aware; you’ll need a little investment in equipment. Handmade craft shots taken with your iPhone may not cut it in quality and your sales will suffer. Maximize your success by studying what makes for better product photos and sales pages, then implement what you learn.

6. Transcriptionist - If you can make the approximate $3,000 investment in the training, this can work for you. As with most work-from-home situations, you’ll still need to network for new clients, which can be difficult in an overflowing market of transcriptionists. However, you can step outside the box and offer video transcription for YouTube users and companies broadcasting their videos, as well.

7. Virtual assistant – There are loads of places to get VA training, so be sure to assess the site carefully and check their reviews. Join VA forums and find out who offers the best training at the best prices. VA forums are also a great place to discover job openings.

8. Customer service agent - With a little equipment, you can receive and settle customer service and tech support calls for a call center. Some companies will require a dedicated landline with features like call waiting. A quiet space to work is an absolute must. Kids yelling and screaming in the background of your customer service calls are a certain way to lose your position.

9. Online teacher/tutor – Tutor.com and other tutoring sites need tutors, and many can make hundreds each month. Online teaching usually requires an active teaching certificate, where tutoring doesn’t. Either way, be prepared to take some testing and go through background checks before getting started.

10. ESL teacher – Through sites like YouCanTeachEnglish.com or americantesol.com, you can find places to train for your teaching certification in ESL and get certified in a few months. If you don’t want to wait, find language learning groups online and set up your own Skype-based business. You can charge per hour to tutor or teach English as a second language to students all around the world.

11. Survey taker - You won’t get rich taking surveys, but if you’re interested in bringing in a bit of extra cash while you’re parked in front of the TV, cashcrate.com, Ipsos I say, and Opinion Outpost are three reputable sites that will pay for your thoughts.

12. Focus group member - Paid focus groups have you test products and report on your findings. You can earn as much as $75 – $150 for reporting on products you already use or are sent. Focusgroup.com, findfocusgroups.com and paidfocusgroups.net are three sites where you can connect with companies who will pay for your reviews.

What are some of your favorite ways to earn money from home?

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

College has become something of a Catch-22 for students. It’s impossible to secure even a mediocre job without a college degree, but the constantly spiraling costs of education make it nearly impossible to pay for that necessary degree.

For parents of students, it can be tempting to try to help out — by cosigning a loan, taking out a Parent PLUS loan, or even paying off a child’s individual student loan. However, as reasonable as it may be to want to help your child fulfill their academic potential, taking on their student debt in any way can seriously affect your bottom line.

Here are three reasons why it’s okay to let your child navigate the student debt issue on her own:

1. Co-signing a loan could leave you saddled with debt.

While federal student loans don’t need a co-signer, private student loans will often require one. And that can be a huge burden for families. Federal loans offer many repayment options, but private loans are not required to do so.

This means that if your child has trouble finding steady or lucrative employment after college, you’ll be on the hook for any payments owed to the co-signed private loan.

What’s worse is that if your child were to pass away — with no one benefiting from his education — you’ll still be required to pay back the loan. Some parents who have co-signed student loans for their children have bought life insurance for them in order to protect themselves. These aren’t issues that parents who are looking forward to retirement should have to worry about. Have your child stick with the federal student loans, and leave the private loans be.

2. The Parent PLUS program is a great way to get in over your head.

One way families try to bridge the gap between the cost of university and the amount that student aid will pay is to use a Parent PLUS loan. These loans allow parents to borrow up to the entire cost of a child’s education, and eligibility isn’t need based — which means they’re an attractive option for parents whose students don’t qualify for federal student aid.

Unfortunately, these loans don’t check income or current level of debt for eligibility, which means that parents can easily get overwhelmed. And since PLUS loans don’t have the repayment flexibility available to student loans, but still have the government power to garnish wages and Social Security benefits and seize tax refunds, these can really be a nightmare for parents who are unable to pay.

3. Paying your child’s student loan outright could get you stung by the gift tax.

Let’s say your adult child has been paying their student loan since graduation, when you suddenly come into a windfall. While you might be tempted to pay off their student loan with your newfound money, recognize that it could have some financial consequences that you wouldn’t have faced if you’d paid that cash as tuition back when he was in school.

If you’re giving your child more than $14,000 (in 2013), or $28,000 for a married couple filing jointly who is splitting gifts, then your lifetime unified credit for giving gifts is reduced by the amount of the gift. That lifetime limit is $5 million, so this might not be an issue for many families, but it is something to consider. In addition, you and your spouse will both have to file Form 709 when you file your taxes.

The Bottom Line

Giving your child financial help in order to get an education is a wonderful gift. However, taking on or taking care of loans for that education is the kind of gift that could really hurt your finances. Set a good example for your child by taking good care of your own financial future, and they’ll be a better place to take care of theirs.

Have you helped your children with their student loan debt? 

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

Hobbies are part of how we express our individuality. In the daily grind of life, they’re also a way we can unwind, have some fun, and do the things we most enjoy. Without this outlet, life would be a lot more stressful. You could say that having hobbies is good for your health and well-being.

On the other hand, hobbies can be downright expensive and a huge strain when balancing your budget: a source of financial stress.

Here’s a list of some of the most expensive hobbies in the world:

Big game hunting, sailing, flying, mountain climbing, cigarette boat racing, hot air ballooning, collecting art and other expensive antiques or memorabilia, drag racing, flying, horseback riding, playing polo, ballroom dancing, tornado chasing, and sky diving

Some of these hobbies can cost millions of dollars a year! It’s important to keep in mind, however, that hobbies should be relative to your lifestyle and income level. Someone who is making several million a year can afford to spend more on their hobbies. What would be an expensive hobby for us might only be consuming 1% of another person’s income.

So, how much should YOU be spending on your hobbies?

The amount will differ for each person. There’s no set percentage of your budget, because each person’s budget is unique. When you organize your budget, you should, of course, prioritize your mortgage, car loans, utilities, necessities, and savings.

If you still have discretionary spending money after your bills are paid and you’ve set aside the recommended 10% of your income for savings, by all means spend some or all of it on your hobbies.

Some people allow themselves a particular dollar amount per month to spend as they wish, whether that be for luxuries, entertainment, desired purchases, or hobbies. This is a good method, since it allows you to spend without guilt — while staying within your budget.

Even though hobbies are necessary and healthy, there may be times a particular hobby is taking up too much of your discretionary income or endangering your ability to save money. When deciding whether you need to cut back on or cut out a hobby, here are a few questions to ask yourself.

How much does it cost?

The first step to evaluating a hobby is to determine exactly how much it’s costing you. Look for hidden expenses such as replacement of gear, membership fees, and fuel. Many times we don’t think we spend as much as we actually do.

Is it hurting your finances?

Once you know how much you’re spending, determine the percentage of your income as relative to other categories of your budget. Are you spending more on your hobby than you’re saving?

How much does it mean to you? Are there other benefits that outweigh the costs?

Even if a hobby is taking up more space in your budget than would normally be healthy, it may simply be important to you. After all, hobbies are closely tied to who we are as individuals, and if we take that away, we may be robbing ourselves of living to the fullest.

Some benefits such as physical health, fitness, mental health, helping people, or giving back to the community make hobbies worth more than they’re costing us, even if we can’t calculate that into dollars and cents.

Is there a way to make it less expensive without sacrificing your enjoyment?

Even though a particular hobby may be well worth the expense, there are usually ways to save money without sacrificing its quality or our enjoyment of it. The amount you’re spending is seldom directly tied to your enjoyment of an activity, so if there’s a way to save money, do so.

Or, is there a way you can turn your hobby into a money-maker?

Hobbies don’t have to be strictly budget-draining. If it’s something potentially profitable, look for ways to make it pay for itself. You may even be able to start a small business and eventually quit your day job. What better way to enjoy your hobbies than when you can make a living off them?

What are your hobbies? How do they fit in with your budget?

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

Buying gifts for others can be rewarding, or it can be stressful. If you haven’t prepared for a holiday or other gift-giving occasion, you’ll most likely be stressed out and at a loss for ideas. There are a few ways you can prepare so that you’ll be ready to buy the perfect gift — at the perfect price:

Pay Attention

My dad would always use this simple, yet underused, method for buying gifts. Whenever a holiday or a birthday approached, he’d closely examine what we talked about and what we hinted towards. Sometimes, he’d get a perfect gift and we wouldn’t even know how he came up with the idea. He’d do the same for my mom every year, and she’d always be amazed.

By paying attention to the person you want to buy a gift for, you’ll be able to understand what they really want. Maybe they’re constantly talking about something they have difficulty doing at home or something that’s broken. Pay attention and write down ideas as soon as they come to you.

Look for Solutions

This is a good method when you’re with someone on a regular basis. It delves a little bit deeper into the gift-buying process. Finding solutions to problems around the house can be a great way to buy the right gift. My wife and I both recently used this method.

My wife loves getting back massages. After giving one, I was locked in as the go-to masseuse for life. The only problem with back massages at home is that they’re difficult to do comfortably on a couch or bed. When her head is turned to one side, it changes the alignment of her whole body, making for a less-than-ideal massage. So I turned to the internet to find a pillow with a hole and air holes in the middle. Now, she can put her face down comfortably while getting a massage.

Get the Right Price

I shopped around on a few sites to find the right price for the pillow. Once I found the cheapest possible price, I made the purchase. Amazon is a great place to start for many gifts.

My wife and I often work very different hours. This means we sometimes don’t get a chance to talk for a couple of days at a time. We’d been leaving each other messages on the mirror with dry erase markers as a clever way to communicate. This had become difficult to clean off, so my wife came up with a solution. For just a few dollars, she bought a picture frame and put a few stickers on it. It’s working wonderfully as a new spot to write messages to each other.

Sometimes, DIY is the best way to save. Many websites, such as Pinterest, offer DIY solutions and projects that can make great gifts.

Get it Right

By paying attention and looking for solutions to problems, you can find the perfect gift for a friend or family member. You can save money by shopping around and looking for DIY ways to make the gift work. By following this process when buying a gift, you can ensure it’ll be perfect.

What process do you use when buying a gift?

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

One of the more interesting things I’ve read recently was a piece about how the wealthy think differently than the middle class.

Steve Siebold, the author of the book How Rich People Think, interviewed more than a thousand millionaires and billionaires and came up with some information on the way that the wealthy approach life.

Among Siebold’s most interesting observations is the fact that, in the middle class, many people trade their time for money. Here’s what Siebold points out:

This made stop and think. Am I trading too much of my time for money?

The Problem with Earned Income

According to Siebold, the emphasis on getting advanced degrees — and even four-year degrees — might be preventing some of the middle class from joining the ranks of the super-wealthy.

After all, a formal education prepares you for a job or career. It doesn’t really prepare you to engage in some form of wealth creation.

I know that, even though I’m self-employed, I often trade my time for money. My freelance writing business requires that I spend time and effort in exchange for pay. This is earned income. Earned income can be a great way to live comfortably, and even provide you with a way to set aside money for the future, building a nest egg for retirement (if your job is a “good” one).

However, earned income rarely results in financial freedom right now. And it doesn’t set you up to eventually rely on regular, organic revenue streams, rather than always having to give up time in order to get money.

To this end, many of those who are wealthy cultivate diverse revenue streams that involve passive income.

How to Develop Passive Income

Passive income does require a lot of work to get going. You have to research dividend stocks and spend time building up an income portfolio. You might have to build a business from the ground up, or become involved in a creative endeavor designed to provide you with royalties.

However, the common thread is that after a few years of putting in the time, you’ve cultivated passive income that provides you with revenue — without the need for you to always be trading in your time.

Instead, you have a little more flexibility and freedom. To a certain extent, a career like mine provides some of that. I do have some flexibility in terms of being location independent, as well as being able to set my own schedule and decide which clients to work with. However, I’m still trading my time in for money.

I don’t expect to always be doing so, though. I’ve started investing in dividend paying investments, as well as considering other alternative revenue streams. The goal is to eventually get to the point where much less of my time has to be used to earn a living.

What do you think of Siebold’s observation? How much of your time are you trading for money?

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

You’ve always purchased whatever you wanted, whenever you wanted. It’s part of your mentality: you “deserve” to have the things you want because you work so hard.

Adding another $100 to your credit card bill thinking you’ll “pay it off” with your next check is perfectly normal. Um, what about the other $10,987 you said that about?

Nothing’s changed, and you’re feeling increasingly worse the deeper you fall into debt. The problem is, the worse you feel, the more you want to spend to make it better.

Trust me. It never works that way.

Instead of making yourself feel better, you’ve bought more guilt, and that’s always expensive.

$12,764 later, you don’t know what else to do with yourself, and it hurts. You can’t stop spending.

Here’s the thing, though. You can, starting the second you change your mind.

You’ve heard the saying, “Change your mind, change your results.” It’s true. When you truly believe you’re above your spending habits, you can control them. They no longer dictate when your money leaves your wallet, since that’s left to your common sense.

Meditation can help you change your mind and facilitate better decisions.

Meditation Leads to Mental Change

There’s a new phenomenon sweeping the world that can help you transform your thoughts. Only, it’s not new; it dates back to around 1500 BC.

The earliest written records of meditation started with Buddhists and Taoists, who recognized the inherent power of the mind. The tradition of harnessing that power continues today. Only now, you’ll find it discussed — not only in yoga — but in businesses, schools, and child development classes.

Scientists have determined that meditation changes the brain physiologically — increasing the density of gray matter in the brain stem and thereby increasing the folds in the brain and cortical thickness. Simply put, the benefits of meditation range from, but aren’t limited to, faster information processing, better judgment, and less pain.

We once thought that meditation only calmed the mind, but studies now show that the benefits are farther reaching.

How to Curb Bad Spending Habits with Meditation

If you want to increase your brain’s capacity, make better decisions, and curb your worst spending habits, these five steps are a great start.

1. Find a mantra or chant that resonates with your goal.

For example, if you want to start thinking through your decisions better, you might try something like, “Gained materials means lost money” or “I’m happy where I am.” The specificity of your mantra doesn’t matter, but you must determine the words that reflect your goals and help you feel empowered.

2. Repeat your mantra each morning as you wake.

With traditional meditation, you’ll need to sit silently, with your back supported, as you control your breath and repeat your mantra, maintaining your focus for at least five minutes. As you learn to calm your mind, you can work your way up to 15 minutes. The key is to resharpen your focus once you recognize that your mind has started to wander.

3. Repeat your mantra throughout your day, as needed.

Try practicing it in the same sitting position. If you can’t, then focus on your breathing as you repeat your words of peace, wherever you are. I’ve found that chunks of 25 repetitions scattered throughout my day really help to return my mind’s focus when the hustle and bustle of business begins to strip it.

4. Repeat this before sleep.

You should be in the same sitting position for a minimum of five minutes.

5. Meditate before social situations. 

To bolster efforts, make sure you take a moment to meditate before going out with friends, shopping, or eating out. Extra meditation will help your brain focus on the goal of better spending habits before you leave.

When starting your meditation practice, it’s important to be patient. Though all this talk of rewiring your brain makes it sound like you’re flipping a switch inside your decision-maker, in reality, it’s more like digging new tunnels of thought. It usually takes about 40 days for meditation to show signs of changes in your thought patterns and actions.

This isn’t a quick fix method, but it does work.

Have you ever tried meditation? Has it worked for you?

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.

While we all know the importance of having life insurance to protect our families in the event of our death, the details of being the beneficiary of a life insurance policy are a little less clear.

Here’s what you need to know about collecting life insurance benefits, so nothing comes as a surprise during a stressful time:

Filing a Claim

A recent troubling investigation of insurance practices has shown that insurers will often fail to pay death benefits to beneficiaries, even if they know that the individual who purchased the policy has died.

In any case, while insurers will sometimes make efforts to contact beneficiaries after a death, there’s not necessarily a contractual requirement for them to do so. That means that the onus is on the beneficiaries to file a claim in order to receive their benefits.

Options for Benefits

In most cases, you’ll receive the benefits as a lump sum cash payment. This is obviously a popular option, as it allows beneficiaries to have control over how the money is invested or spent.

However, there are also settlement options, which will dole out the insurance benefit in installments or at a later date. One plus-side to settlement options is that they allow the money to continue to collect interest for the beneficiary.

On the other hand, some settlement options, such as taking payment as a life annuity, cannot be reversed. Before agreeing to such an option, talk with a financial planner. They might advise you to take the lump sum payment, in order to have more leeway with your investments.

Tax Considerations

When you receive a life insurance benefit as a single lump sum payment, it generally won’t be included as part of your earned income for the year, meaning you won’t owe taxes on the money. However, there are situations in which you may owe some taxes.

For instance, if you take a settlement option that allows the money to grow, you’ll have to pay taxes on the interest payments, but not on the principal.

In addition, if the deceased was the owner of the policy at the time of death, the death benefits are included as part of the estate, meaning they’re potentially subject to estate taxes. This is why it’s a good idea to make the beneficiary of your policy the owner of the policy, as well. That will protect the death benefits from estate taxes. However, assigning a new policy owner must happen three years prior to the death of the purchaser, or else the IRS will still consider the deceased the policy owner.

The Bottom Line

Life insurance claims are generally paid quickly — usually within a few days. Before you get to the point where you receive your benefits, though, you need to know just what to expect from the claims process, the insurance company, and the IRS. 

Have you been a life insurance beneficiary before? Any tips to add? 

This article originally appeared on MoneyNing.com. Let us know what you think (or read what others thought) here.