Happy Tuesday everyone!!

According to our dear friend Warren Buffett, here is the formula to success…

“Read 500 pages every day. That’s how knowledge builds up, just like compound interest.”

Hang on a sec… Five HUNDRED PAGES!?!?! That’s like 2 books a day! Who even has time for that? 🤷‍♂️

Well, we might not all be able to read for 16 hours a day like Buffett, but the good news is you don’t have to. Just like compound interest, even really really small efforts (done consistently) make a huge difference.

The real goal is to go to bed smarter than when you woke up. Whether you read 500 pages or just 5, it’s all about consistency.

Just keep learning 💪💪💪

ps. What are you reading these days? Would love to hear & share!

TO DO

BYO Culinary Masterpiece 🍱

Picture this: you, strutting into the office kitchen with a plain brown paper bag… But to everyone’s surprise, you open it up to reveal a hand-crafted, mouth-watering, culinary crown jewel! 🍲🥙🥘

Your coworkers bask in awe, immediately regretting their sub-par sandwich they just bought at the overpriced food stand. You’re not just a lunchtime legend — you’re living proof that being frugal can still mean enjoying delicious and fabulous meals.

Your challenge this week: Spend an extra 10 minutes crafting a delicious midday meal for work. Maybe you’ll turn some heads and encourage others to start BYO-ing and save a few bucks too.

CREDIT

5 Common Credit Score Myths 🧞‍♂️

Let’s take a dive into the mystical realm of credit scores and expose those pesky myths that have been lurking around the interwebs for far too long…

Myth #1: Checking Your Score Summons a Financial Storm ⛈️
Contrary to popular belief, checking your own credit score won’t spark a series of unfortunate events. In fact, it’s perfectly normal and occasionally necessary to peek at your score! Learn the difference between soft pulls vs hard enquiries!

Myth #2: Carrying a Credit Card Balance is Cool 🕺
It’s most certainly NOT cool. Every month your lender/bank sends your statement balance to the 3 major credit bureaus, and unpaid debts don’t help you, they hurt you (and cost you more interest!). Cool kids pay their balances in full each month, every month.

Myth #3: Closing Credit Cards Boosts Your Score 🚀
Actually, it’s sometimes the opposite! Closing old cards might lead to a sadder tune for your credit score because it removes account history and lowers your total available credit. Here’s a guide to closing cards and what you can potentially do instead.

Myth #4: Rocking an 850 Means You’re Rich 💅
There’s no pot of gold at the end of that rainbow. Once you’re considered to have “very good” or “excellent” credit (anything above or around 740), there’s no huge advantage to having a higher score. Credit scores measure worthiness, not automatic riches.

Myth #5: Lovebirds Have A Joint Credit Score 👩‍❤️‍👨
You and your partner may share everything in life, but you will never have a joint credit report. There’s no such thing. Credit scores are linked to your individual Social Security number. If you do have joint lines of credit (mortgages, credit cards, loans) under both your names, then that info is factors into your individual, separate reports.

Myth #6: You Should Hire a Pro to Fix Your Banged-Up Credit 👩‍🔧
No way, Jose! Plain and simple: Avoid anyone who says they’ll fix your score if you just pay them money. And if they ask for money up-front, it’s actually illegal. Nobody can scrub negative information from your report (although you can and should dispute incorrect information.)

Credit score misinformation is a real danger because following the wrong advice can have serious and long-lasting financial consequences. Make sure you’ve got the proper (and proven) facts.

Related stuff:

• 💻 Full Post: Most Common Credit Score Myths (Debunked)

• 🎯 MyFICO: A bunch on credit education blogs/videos/FAQ

• ✅ Score Check: AnnualCreditReport.com is great. But you can likely check your score for free using your credit card’s mobile app, or via Empower or CreditKarma.

   

TOGETHER WITH CARDRATINGS*

Feature: Blue Cash Preferred® Card from American Express

One of our personal favorites… The Blue Cash Preferred® Card from American Express.

This bad boy has the best cash back rate at supermarkets, a whopping 6%! There is a limit however, which is up to the first $6,000 in supermarket spending each year (afterwards it reverts down to 1% cash back).

Also, beware there’s a $95 annual fee… BUT, it’s actually just $0 for the first year, and there’s a great welcome offer of $250 cash back after meeting a minimum spend of $3,000 in the first 6 months. With our big families, it’s no surprise that the Blue Cash Preferred® Card from American Express is our favorite to use in the check out line!

_{*Advertiser Disclosure: How to Money has partnered with CardRatings for our coverage of credit card products. How to Money and CardRatings may receive a commission from card issuers.
*User Generated Content Disclosure: Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.}

SAVING

Saving vs Investing 👉👇👈

Returns on cash are better than they have been in quite some time. Savers can make a cool 5% in their high yield savings accounts right now - a rate that hasn’t been available since the mid-90s!

But, does that mean you should sock away ALL of your money into cash savings accounts?

Check out this chart from Morningstar, which shows the average *underperformance* of holding cash vs investing in equities using data from the last 100 years 👇👇👇

As you can see, the opportunity cost of sitting in cash is very high, and grows higher over time.

We’re not saying everybody should deplete their HYSA and dump everything into the risky stock market. It’s just a gentle reminder to tie your savings/investing plan to your short and long-term goals in life…

To save in your HYSA: Your emergency fund, sinking funds, and any money you absolutely cannot risk losing in the next few years (savings for 🏡 down payment, upcoming life events 👼💍🚘, etc)

To invest in your 401k/IRA/brokerage: If you’re not planning on using the money for 5+ years, history shows its better to invest and not touch it.

The bottom line is, by placing too much of an emphasis on short-term savings, you could be wrecking your long-term investing growth. Understand your goals and stash your money in the bucket it belongs.

Related stuff:

• 💻 HTM Blog: Saving vs. Investing, and How To Choose

• 👩‍🏫 Ownership 101: A Wealth Building Guide For Young People

• 📖 MegaPost: Investing for Beginners

ICYMI

In other news…

Forecasts 📈
An eye opening (but not surprising) article on the (In)Accuracy of Market Forecasts… “from 2005 through 2012, they collected and investigated 6,584 forecasts for the U.S. stock market offered publicly... Across all forecasts, accuracy was worse than the flip of a coin—on average, just under 47%” 😳

Car Value 🚗
Carvana just launched a new tool for tracking the value of your used car over time. Keep in mind though, while this is handy info to know, you’ll almost always get a better price buying and selling used cars directly. NOT through dealers and retailers.

Rental Scams 🏡
The FTC warns that rental scams are on the rise. Before sending off your security deposit or first month’s rent, take 5 mins to doublecheck the property management company is legit. Call their main number, visit them in person, do some online research. Never WIRE transfer rent/deposit money.

Are You Rich? 🤷‍♂️
Here’s a study and interactive tool from Bloomberg — Just put in your salary and metro area, and it’ll show how you compare to the median household around you. You’re probably richer than you think you are.

Gift Cards 🎴
Unused gift cards are still a big problem. The average American has $187 stashed away in unused credits! Reminder to all: Gift cards are like cash — the purchasing power is decreasing every day. Use those gift cards!

HOW *YOU* MONEY

Matt, 26y/o from New York 🗽

Occupation: Customer Success Manager
Salary: $75,000

Paycheck deductions: Taxes - $1,519. Insurance - $420. 401k - $173
Rent: $1,850
Other Debts: None!
Living expenses: ~$1,500

Leftover savings each month: $700 ish

How do you invest your excess savings each month?
Put it straight into my savings (I need to learn how to invest)

Biggest “craft beer equivalent” splurge:
Anything from Treehouse Brewery

Best savings hack/advice:
I created a budget sheet for myself in order to be aware of what I spend. It helped a lot to see what areas I was splurging in and where I need to save.

Biggest money challenge right now?
Navigating being a renter for the first time and adjusting my spending to be more conservative compared to when I was living with my parents.

Recent money win and how did you celebrate?
I received the only bonus I received all year. I bought a few items I’ve been needing for my guitar rig.

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Welp, that’s all for now. Cheers to a great day ahead, and don’t forget to go to bed tonight smarter than when you woke up!! 🛏️🧠

Best friends out 🍻