MC Journal

Making your money work for you is essential in the fast-paced world of today. Although keeping your money in a savings account might seem like a safe move, it's important to realize that inflation can eventually reduce the value of your hard-earned cash. Investing, fortunately, offers a solution. We'll examine the world of investments in this article, from shares to index funds, giving you the knowledge you need to make wise choices and increase your wealth.

Understanding Inflation and Its Impact on Your Money

Picture this, you put $100 in a savings account today, but what if I told you that after 20 years, that money would only be worth about $70? That's the effect of inflation. Inflation causes the cost of goods and services to increase over time, diminishing the purchasing power of your money. This realization makes it clear that simply saving is not enough to secure your financial future.

Embracing Investments: Planting the Seeds of Wealth

Investing is like planting a seed that grows into a mighty tree of wealth. It allows you to allocate your money strategically, aiming to earn potential returns, capital gains, and income. One popular form of investment is shares, which grant you ownership in a company. As the company grows and becomes more profitable, the value of your shares also increases, providing an opportunity for wealth accumulation.

How to Buy Shares and Start Investing

Now that you understand the power of shares, let's delve into how you can become a shareholder. Opening an online brokerage account is the easiest way to access the stock market and purchase shares. By transferring cash into your account, you can buy shares of various companies. Alternatively, financial advisors or employer-offered 401(k) investment plans can also facilitate share purchases. Remember to conduct thorough research before investing and aim for diversification to manage risk effectively.

The Allure of Index Funds

Beyond individual shares, index funds offer another avenue for investment. Index funds replicate the performance of specific market indices, such as the S&P 500 or the Russell 2000 Index. These funds provide broad market exposure through diversified portfolios, making them popular due to their long-term growth potential and low fees. Consider exploring index funds to gain exposure to a wide range of shares while minimizing risk.

The Risk-Return Relationship in Investments

It's natural to question the risks associated with investing. While investments can fluctuate in value and entail some level of risk, it's important to remember that risk and reward go hand in hand. Diversifying your portfolio and adopting a long-term perspective can help manage risks and increase your chances of positive returns. Education and staying informed are key to mitigating risks effectively.

The Importance of Starting Early

Timing plays a vital role in investing due to the power of compounding. The sooner you start, the more time your investments have to grow. Investing is a long-term endeavor, and consistency is key. Begin your investment journey as soon as possible to maximize the potential returns on your investments.

Breaking the Myth of Minimum Investment Amounts

Don't be discouraged by the misconception that you need a large sum of money to start investing. Many brokerage firms now offer low-cost options and fractional shares, enabling you to invest with even small amounts. Start with an amount you're comfortable with and gradually increase your investments over time. The most important step is to take action and begin your investment journey.

Conclusion

Investing your money wisely is a transformative journey toward financial freedom. By understanding the impact of inflation and embracing the world of investments, you can make your money work harder for you, beat inflation, and grow your wealth over time. Remember to educate yourself, conduct thorough research, and seek professional advice when needed. Start early, stay disciplined, and watch your investments flourish. The power to build a secure financial future is within your reach.

With high inflation and starting 2023 in the midst of a predicted recession, many Americans including yourself are probably wondering how you will quickly receive your IRS tax refund for the year. 

Once you receive your W2, 1099, or complete your business bookkeeping for 2022 the fastest way for you to get your tax refund is to e-file your return and sign up for direct deposit. Although some returns may take longer to process, most federal tax refunds will be issued within 21 days. You can begin filing your tax return in January of 2023 as there have been 4,000 positions hired by the IRS to help assist with in person filings and digital processing. 

Generally the sooner you are able to accurately complete and return your tax filing, the sooner you will receive your money and allocate it for personal or business use. Because the time value of money dictates that a dollar today are always worth more than than a dollar tomorrow, it is always best to receive your money as early as possible in order to pay down any high interest loans, credit card debt, or invest in high quality businesses. 

In 2023, the deadline to file your tax return will be on Tuesday, April 18th 2023 for individuals and families. Normally we see the tax deadline every year fall on April 15th, but in 2023 the 15th falls on a Saturday and the following Monday is Emancipation Day, a holiday noted in Washington, D.C. Because of this, the tax deadline is pushed until the following Tuesday after April 15th, 2023. If you are needing an extension, you will need to fill out and file IRS Form 4868 for an automatic extension that will put your deadline on October 15th, 2023. 

If you are submitting a business tax return for your partnership, multi-member LLC, or an S-Corp, the tax deadline is typically on March 15th each year. An extension can also be filed for your business tax return using IRS Form 7004. 

Some important 2023 dates to note for your business tax return include the following: 

• 1099 Filing deadline: January 31st, 2023
• Delaware Corporation Filing Deadline: March 1st, 2023
• Multi-member LLC, S-Corp, and Partnership Tax Deadline: March 15th, 2023
• Sole Proprietor, single member LLC, and C-Corp Tax Deadline: April 18th, 2023

Maximize your deductions in order to pay the least amount of taxes and file early so your investment dollars stretch further over time. 

With Ukraine pushed out of the capital markets, they are forced to sell bonds in order to raise money. Bonds are essentially loans that governments and companies issue to investors. These loans pay out an interest rate over the maturity period designated by the bond.

In the case of war bonds, they are considered higher risk assets. As such, investors demand more and more interest because of the dire situation within the country, and the likelihood that the government will be able to service those debts diminishes over time. Because of this risk, these war bonds are not sold to professional money managers who try to maximize returns in the short term. Instead they are sold to your typical individuals who may not weigh out risks and seek to maximize returns. Retail investors who are comfortable with additional risk may seek out higher returns through different assets. 

Ukrainian wars bonds pay 11% currently with a 1 year tenure (also known as maturity) allowing the country to raise money for military spending. They have raised $277 million as of early March from big institutional investors. Although this is still considered a relatively small amount because international investors don’t want to invest in currencies that are not widely traded and therefore have limited liquidity.

There is also a 2 month war bond that is paying 10%. Because Ukraine’s financial infrastructure is frozen, they are only able to raise capital through war bonds. Throughout history, you have seen this during wartime periods as certain countries close their stock markets. However, the United States has kept the economic machine churning evening both World Wars. Currently you can sell international currencies and buy the Ukrainian currency Hryvnia as a means to try and access government bonds, but not the other way around. Even then, retail investors generally cannot purchase war bonds easily. 

The US financed WWI when they issued the Liberty Bonds, and the UK also issued bonds during this time but it took them 100 years to repay part of its debt since then. A sign that the time horizon is often long and deferred to the next generations. 

Normally investors think of bonds as a safer asset class with low volatility and a much more reliable rate of return. But war bonds are a different story.

Ukraine is in war so the currency still faces significant risk, and there is no guarantee that the Ukrainian government will pay back the amount owed, hence the increase in interest premium that is offered in the market. 

Most bonds are difficult for your typical investor to buy because they are often sold directly by banks to larger professional investors, and require a large investment up front. Some of the bonds were auctioned through Citigroup as well as a couple international banks but for smaller investors there will not be many options to access these. 

Because of the difficulty to access capital internationally, the next best alternative in the 21^st century is the modern digital war bond: Cryptocurrency and NFT’s.

Ukraine has a fitch debt rating of CCC following the Russian aggression, placing its loans deep in the junk bond territory. Even the BB rated mortgage bonds from the last housing crisis were considered junk. CCC would fall into the speculative realm of investments. When considering making an investment, consider the spectrum of data before making a final decision. 

Shiba Inu coin (SHIB) is a new spin-off cryptocurrency ambitiously aiming to be the Ethereum-based version of Dogecoin and promotes an incubator environment for digital currency. 

There are roughly 400 trillion SHIB coins currently in circulation whereas there are about 2.2 trillion US dollars (as of September 2021) in circulation as a relative comparison. Although it is said that half the total coins were burned to a dead wallet in order to increase the chances of survival for the coin. This may certainly be considered a frivolous attempt at creating scarcity and hence why you still see many zeros in front of the valuation today.  

The coins were sent to Ethereum creator Vitalik Buterin, but this loose involvement / marketing ploy was used to paint Vitalik as a direct investor, misleading would be investors. Vitalik eventually donated the coins to an Indian relief fund. 

When tied to the production of goods and services, an extreme excess of any currency will drive the price down due to supply and demand. 

SHIB coin does not aim to be scarce by any means. In fact, the max supply of the coin is actually capped at one quadrillion, a number you'll never need to use practically in any sense because it is equivalent to 1,000 trillion. These numbers are only ever used in cosmic language, stars, and talking about the universe to put it in perspective. If you had 1,000 trillion of anything laying around, is it really worth anything? 

Imagine bringing grains of sand to the farmer's market or your local Best Buy and hoping to make a fair exchange. You are essentially doing just that with a hopeful purchase of SHIB coins. 

One of your most important considerations with a new investment is capital preservation. The permanent loss of capital in a low interest, high inflationary, and speculative environment does create much greater risk for new investors.

The greatest risk to a new investor is that they never invest again.

Taking a painful irreversible loss on an investment that prevents them making future investments is a common reality. The fear of loss creates a perception that all assets are high risk. 

Is SHIB coin safe?

A red flag that could lead to the permanent loss of your money is that a developer at some point had permissions to simply withdraw user tokens on ShibaSwap and deposit them to different addresses. There has not been enough history to have regular, transparent audits on operations, and whether insiders will follow the non-compliances of an audit is still subject to review. 

Does a listing on a large exchange like Coinbase help vouch for a coin like SHIB? 

Coinbase's revenue mainly comes from brokering transactions between the buyers and sellers of cryptocurrency. They are not in the business of auditing, fraud prevention, and ensuring the integrity of white papers and their associated founders. Trending coins provide an attractive influx of transactions to brokers that take a percentage of every transaction that takes place. 

SHIB coin received a healthy surge up 35% after Coinbase's initial listing of the currency. 

With the extreme dilution that SHIB coin faces, there is no strong reason to make it an investment. Founders are looking to ride the meme tidal wave and lure in new investors with the promise of wealth and innovation. 

If you're willing to accept a small amount of speculation, make it a reasonable portion of your portfolio (<5%) that you are willing to lose without major consequence. 

You can purchase SHIB coin on ShibaSwap, Uniswap, and Coinbase. 

Most Common Financial Mistakes Millennials Make

The road to financial independence can often be volatile and exasperating – though millennials seem to have the greatest difficulty compared to the generations that preceded them. Everyone has financial desires and dreams, but most of the time, the ideas go from one lily pad to the next, with little thought given to the actual planning process.   

But with greater awareness and acuity, financial mistakes are a window into future success, and undoubtedly a learning experience that is ingrained the more they are encountered. Securing the reigns of a financially prosperous future is the culmination of these mistakes, and teaching others to avoid the common pitfalls. Here are some of the worst financial mistakes millennials often make.

1. Impulse Purchases

We live in an era when consumerism is not only at its peak, but is too easily accessible. Making a purchase is just one click or swipe away, whether on Amazon, DoorDash, Lululemon, eBay, and countless others. Wanting less seems more counterintuitive than ever, and needs are often the estranged category left behind.

Millennials don’t put many barriers in front of those impulse purchases, and it tends to hamper the funds available for saving and investing. In 2020, at the beginning of the COVID-19 pandemic, impulse spending was increased by 18% - a fairly significant rise, considering the level of uncertainty ahead.  

When things were most grim, many people turned to retail therapy as a means to cope with the layoffs and endless stressors of the pandemic. But consequently, it became a cycle of more overspending, borrowing, and an increase in overall debt loads.

2. A Lack of Budgeting

Budgeting is at best an afterthought, and at worst never done! Millennials are not the only ones ignoring this coveted financial fundamental. In fact, many Americans don’t know how much they spend on a regular or monthly basis. Establishing a budget is the gateway to spending with purpose, and is one of the best tools in personal finance. While millennials do their best to create budgets, they tend to create unrealistic ones, trying to sprint before they can walk. Some even tighten the belt really early and amplify their savings rate to a personally unsustainable level, leading to failed plans and a cycle of binge spending. Setting a primary focus on needs such as rent, groceries, health insurance, debt, and transportation before channeling wants and desires is a winning recipe, but requires regular practice and accountability.

One piece of advice is to create a friendlier budget that isn’t so restrictive. Set aside “fun dollars” that are meant for enjoyment and freedom. It is absolutely healthy to have some level of guilt free spending.

Always revisit and review, changing your budget based on your requirements and individual goals. Life isn’t static, so there’s no reason why you should think that your income is. Pull the different levers of budgeting, investing, and spending as income fluctuations occur. A budget should be created around one’s cash flow – not the other way around. It may take some time before you find the perfect ratio of saving and spending, so don’t be too hard on yourself. Patience is key! 

3. Not Saving Enough

When it comes to savings, there are several things that millennials could certainly do better. For one, many people don’t start saving early or when they should: Before an emergency. It is critical to be proactive rather than reactive in these instances because an inordinate number of Americans are still living from paycheck to paycheck, scrambling to even find $400 for a pressing emergency. People create their own jails, falling into the psychological trap of “I’ll save when I can,” effectively procrastinating until the point of emergency. Over time, costs and expenses tend to rise and the difficulty of saving becomes even more overwhelming.

With the two generous rounds of government stimulus, millennials have been spending their tax refunds on additional wants, desires, and even stocks. Instead of addressing more prominent needs or establishing an emergency fund, they are postponing stability and finding a haven amongst ‘meme stocks.’ Do not buy stocks with your tax refund or stimulus checks until you have consistent stability.  

Millennials also make the mistake of not saving for retirement, missing out on many years of compound interest. It might not seem like a big deal now, but it’s a mistake that will likely haunt you in the future. Reports show that one-third of millennials even make early withdrawals from their 401(k) plans so that they can pay for vacations, big purchases, or extravagant personal expenses. Avoid the need to keep up with the Joneses at all costs!

4. Not Investing

While we might tend to think that the last few years and especially the last decade have been the golden years of investing, statistics reveal that this is not the case – at least for many millennials who have steered clear of the markets out of fear for years. Between 2017 and 2018, only around 37% of Americans under 35 owned stocks. This is in sharp contrast with the 61% of people past 35 that have also owned stocks.

Indeed, opening an investment account does come with a few risks, and you cannot expect the market to always go in your favor, especially in the short term. Even in spite of this, millennials still have one thing that they can control: The amount of money that they save and invest.

Most people want instant gratification, and the America culture does not disable this by any means, but by simply putting a small percentage of your earnings in long-term investments, you are able to reap the exponential rewards of compounding. It would serve millennials well to hone this skill consistently.

5. Borrowing Too Much

Nowadays, borrowing is as natural as breathing and enables people to make a big purchase today, even if they are lacking the funds and means to pay it off later. The problem is that millennials are indiscriminately buying houses and cars that are too expensive, beyond their income limits, and they do it sooner than they are actually ready.

Maxing out the borrowing of your student loans to supplement your lifestyle? Do not do this unless you have a very nice friend or family member who is going to cover this irreversible decision.

Before taking on a large loan or undergoing hard inquiries for new credit cards, review your current financials and make sure that you can reasonably handle the monthly costs, including interest, fees, and any potential penalties. Minimize the stretch of borrowing from your budget. We live in times of ultra-low interest rates where you can easily buy a home for the promise of equity, but don’t let this fool you into overspending and reaching beyond your means. The house that you buy now does not have to be your dream home. Take the incremental steps required to build up to a purchase that you can accommodate without going underwater with your options.

6. Ignoring Insurance

According to New York Life, only 10% of the millennials have life insurance – a reality that can create real hardships in families where dependents rely on the income of sole breadwinners. In the event of an untimely death, the surviving spouse would be left alone to deal with costly expenses such as paying off a mortgage, car loan, health expenses, unexpected repairs, education, or supporting children and family members.  

Considering a replacement income or nest egg is a wise and proactive decision. We can never truly predict a black swan event that carries catastrophic consequences, but we can certainly prepare for it.

7. Credit Card Overuse

Credit cards are great tools for building credit, making larger purchases, and pursuing new opportunities if they are used responsibly. They are irresistibly convenient to use, and accordingly lead to overspending and misuse. Spending 20% to 30% more annually while carrying plastic versus cash is no surprise. The instinctual aversion to loss is removed when you carry a credit card.

With our innate protective barrier removed, it becomes harder to rely on sheer willpower. One helpful rule for credit cards is to not rely on them to pay off daily necessities, until you have a firm grasp on your spending habits. It also does not hurt to give yourself some wiggle room. Give yourself an additional 10% to 20% of extra spend so that you don’t feel so constrained. Congratulate yourself when you’re able to stay under your credit card spending budgets. Maintain your focus on needs and keep your credit cards tucked away when you find yourself wanting extra! Credit card debt piles up quickly, and the interest rates are very difficult to keep under control when they get out of hand.

The Bottom Line

Financial mistakes are very common in an environment where these skills are not formally taught, nor are they ever openly discussed. These are some of the common pitfalls that many millennials face today, but there will always be situations and circumstances that breed even tougher decisions. Fail fast and fail often, but keep your mistakes from becoming catastrophic. Choose a few areas where you want to improve most over the next 6 months or year. Give yourself a well-defined plan and a deadline. Your financial competence will only get better with time.

COVID SAFE SIDE HUSTLES IN 2021 THAT WILL MAKE YOU MORE MONEY 

With unemployment rates maintaining a strong footing, the U.S. economy contracted a firm 32.9% in the summer of 2020. Many parts of the economy are seeing much more damage than others, and labor recovery is minimal in other sectors. The K shaped recovery has greatly benefitted white collar workers capable of flexibly working from home or remotely compared to blue collar workers needing a physical presence in the workplace. As many Americans are combatting the lackluster job market, many young people are diversifying their efforts and bringing in as much income as possible from multiple sources. 

In light of the enduring global pandemic, it is still highly pragmatic to maintain social distancing and minimize the likelihood of infection and any potential adverse events associated with Covid-19. Here are 10 side hustles that are relatively safe from excessive direct human contact to boost your income streams while protecting you and your loved ones. 

1. TUTOR ONLINE VIA ZOOM 

One of the best ways to bring in additional income, especially while in school or working a full time job, is to help others either academically or professionally. The emergence of countless video sharing and streaming platforms has provided a convenient way to meet up with clients and offer dedicated time to educate, assess, and help improve someone else's skills. The ability to screen share and give step by step instructions in real time has been a reliable alternative to meeting in person, and a lucrative way to earn some extra bucks! 

The earning potential of tutoring can vary depending on the specific subjects, goals, and needs of individuals. But typically on the lower end of the pricing zone, tutors can start out between $20-30 dollars per hour, with regularly scheduled meetups to assist with homework or projects. 

With more experience and expertise, you can make your way up as a more committed private tutor, who can then potentially charge up to $50 an hour or even up to $80 an hour! Talk about some nice income potential! 

For those operating solo or within a small team outside of an agency, negotiating your rates would be key, and many clients are willing to commit to a longer term agreement on a monthly or semi-regular basis. 

2. RESELL PERSONAL OR IN DEMAND ITEMS

There is always a treasure trove of unique paraphernalia, collectibles, and useful items in one's closet, attic, or garage just waiting to find its way into a loving home. The potential resale value of items are of course based on market supply and demand, but nonetheless even old couches, clothes, and work tools can go for a pretty penny when offered on Ebay, Craigslist, or Offer Up. If you're not using it anyway and it doesn't have deep sentimental value, there's a great benefit to decluttering and making a nice sale. 

If you're a more market savvy individual who has a knack for consumer trends, then you'll be able to find more in demand items such as collectible cards, shoes, car deals, or even flamethrowers! Any products with a constrained supply will naturally see an attractive price increase when there is ample or growing demand. Build your seller's status on a platform like Ebay, Amazon, or Rakuten, and you may earn up to $100k in sales, which is what a third of seller's are able achieve. But keep in mind, this takes consistent and dedicated effort in order to find the right products to meet consumer demands.  

3. BE A PERSONAL SHOPPER OR DELIVER 

The rapid growth of the sharing economy has permitted a budding demographic of on demand workers who are shopping and/or delivering products and services to their willing clients. Mobile services have enabled companies like Postmates, Doordash, Ubereats, and Grubhub to really capitalize on the to-your-doorstep economy, and this is a great way to bring in some extra cash if you have the time and energy. 

4. BECOME A VIRTUAL ASSISTANT

Versatile and flexible, many virtual assistants are bringing their skillsets to small businesses and fortune 500 companies alike. Many virtual assistants provide services in social media marketing, data entry, organizing staff, and customer support. The demand is growing, and business owners are always looking for talented individuals who can pivot and make solid decisions on the fly. 

Many assistants can expect around $15 to $19 an hour in initial pay, with more experienced VA's earning up to $50k annually. 

Build your network with as many businesses as possible. These relationships will open doors to high level positions with greater incentives and pay. 

5. OPEN A SHOPIFY STORE

If you have entrepreneurial ambitions, tendencies, and spirit, opening a Shopify store from scratch is a pure play that imposes no limits. You can explore products and services in specific niches, build an audience, and serve your customers. Keep in mind that this is no easy endeavor. You will be thinking about operations, financials, marketing, sourcing, customer service, and every angle of infrastructure. Aligning yourself with the right team will be paramount as the number of moving parts increase. But Shopify offers a way to rapidly open your own store while minimizing startup costs and initial pitfalls.

Smaller stores can earn up to $10,000 a year while bigger brands easily do millions in sales annually. 

Ecommerce has a compounded annual growth rate close to 15% and is showing no signs of slowing down. This macro-trend is not one to sleep on. 

6. HOST AN ONLINE EXPERIENCE

One of the most creative developments throughout 2020 was the advent of online experiences, from cooking sessions to magic shows, escape rooms, and comedy skits. Sharing your passions has never been easier. Both AirBnB and Online Experiences have been the go-to platforms for hosting wanderlust events. 

Giving people the chance to connect culturally has been undoubtedly lucrative. Some earners have brought in up to $20,000 in a single month while the most charismatic and entertaining have managed to clear $150k in just 30 days. 

Want your fortune told? Maybe you want to learn how to make a killer cocktail. Online experiences are here to stay for the most enterprising earners. 

7. BECOME A COACH

The demand for personalize coaching is higher than ever, with workers around the globe needing proper guidance and direction. The most important consideration in coaching is your experience and finding your niche. Targeting too broad an audience often results in fewer conversions. Fitness coaches and career coaches have been establishing themselves for years on various social media platforms, leading with value and offering a clear value proposition for their potential clients. 

Communication skills are a crucial part of the coaching process and will be the bulk of the matching decisions between coaches and clients. Improve these skills carefully and consistently. 

Many coaches easily add an additional $15,000 in income at the end of the year. The most prolific coaches clear 6 figures per annum, but these individuals are in the 90th percentile within the industry. 

8. AMAZON FBA

If you have a knack for trending or collectible products, building a fulfillment infrastructure with Amazon FBA is a great option for making sales. Amazon handles the physical work for you, taking care of the pick, pack, and shipping process, allowing you to focus on growth and strategy. This is without question a competitive and fast paced marketplace. Finding a winning product will require experimentation, testing, and iteration to determine what the market needs. 

Selling wholesale goods on Amazon can bring in $3,000 - $4,000 a month, depending on the product. Trending products in 2021 include handheld device accessories, doormats, and household storage containers. The internet really is your oyster when it comes to potential products. 

9. PERFORM FREELANCE WORK ON FIVERR 

The sharing economy has been extremely robust in the past decade, growing at double digit percentages and continuing to compound year after year. Fiverr has become a melting pot of skills and talents on demand and with clear criteria for collaborative work. Many budding artisans, writers, and technical programmers are able to find a variety of projects to work on through Fiverr's platform. You can build your skills and portfolio while gaining a ton of invaluable experience with direct clients in the industry. Your earning potential depends on your negotiated gigs and the consistency of your projects. It is not uncommon to see freelancers earning thousands, with some resume writers raking in up to $50k a year from their work. 

10. BUY AND SELL REAL ESTATE 

Although this endeavor requires capital, often times at significant levels, the risk and reward dynamic is attractive to many. The soaring prices of real estate through the pandemic has garnered a lot of attention from investors. In metropolitan regions where supply is tight and demand is high, the opportunities are much more limited. However, to the dedicated investor, finding properties that have potential as rentals or renovations can offer significant returns that help create income and build wealth. 

During a recession, one of your greatest assets will be your ability to adapt, diversify, and develop your personal human capital. 

Forging a path toward financial independence is a lifelong journey, starting with your ability to diversify and stabilize your income. Creating multiple sources of income insulates you from broad market recessions and decreases the likelihood of individual black swan events. 

The Strongest Cryptocurrency In the Market By Sheer Size and Growth

Coming Soon March 17th, 2021

What’s First In Your Wallet?

Stepping into the credit card world can be an overwhelming and daunting task when you’re first starting out as a beginner. From cash and travel rewards to retail specific and gas benefits, the mountain of selections seems endless.

When you’re selecting your first credit card and subsequent cards, you should always choose a card that is most compatible with your spending habits. This will require a monthly budget analysis of what you normally spend on, although this does not have to be extremely detailed or comprehensive. Try your best to get an estimate about how much you are spending in total, and a rough breakdown on what specific categories of purchases you are spending on.

Are you spending the most on groceries? Maybe there are subscriptions or entertainment expenses that are accumulating the most? Is it on housing and transportation?

Having an estimate of what you spend on will help you decide which credit card will be ideal for your spending, allowing you to receive the most benefit with your return on spend. So for example, if you spend most of your monthly budget on groceries and dining out, then a credit card that gives you a good return for that particular spend, say 3% cash back for groceries or 3X points for restaurant dining would provide you the most benefit based on your spending habits.

Here are 5 beginner choice cards to get you started:

A great credit card for beginner’s is the Chase Freedom Flex card which comes loaded with perks and benefits. The card has no annual fee, so you can keep this card long term in your wallet and build up your credit history. With Chase, all of your reward points can be redeemed either for cash back, travel, activities, gift cards, and other bonuses. This is a behemoth of an offer and Chase's biggest package yet with the freedom collection. 

• $200 cash back or the equivalent 20,000 Chase ultimate reward points when you spend $500 within the first 3 months of the account opening
• 5% cash back on rotating categories
• 5% cash back on travel purchased through the Chase travel portal and on Lyft rides
• 3% cash back on restaurants and dining, including delivery
• 3% cash back on drug stores
• 1% cash back on all other purchases 
• Complimentary DashPass with DoorDash for 3 months and 50% off DashPass for 9 months thereafter 
• Travel interruption insurance
• 15 months 0% promotional APR period

Also a great sidekick and starter card in the Chase lineup is the Chase Freedom Unlimited. This no annual fee card packs a similar benefits package to the Chase freedom flex, and is known for its 1.5% cash back reward on all purchases. There is no ceiling on how much you can earn with this card. When you sign up for this card, you’ll receive a very comparable package:

• $200 cash back or the equivalent 20,000 Chase ultimate reward points when you spend $500 within the first 3 months of the account opening
• 1.5% unlimited cash back on all purchases
• 5% cash back on Lyft rides
• Complimentary DashPass with DoorDash for 3 months and 50% off DashPass for 9 months thereafter
• Travel interruption insurance
• 15 months 0% promotional APR period 

Third on the list is the Capital One Quicksilver card. The Capital One product family is a great place to build out a rewards portfolio, with cards available for to solely build and repair credit, and earn both cash and travel rewards. 

• $200 cash back when you spend $500 within the first 3 months of the account opening
• 1.5% unlimited cash back on all purchases 
• No foreign transaction fees 
• 15 month 0% promotional APR period 

The Discover It Student Chrome card is an excellent choice for beginners who are still in school and concurrently on a work study program or on a lighter part time work load in additional to classes. It is friendly toward purchases that are common while in school and college. Starting early in the credit building journey is a big advantage after graduation and in the working world. This card also has no annual fee for the cardholder. 

• Earn 2% cash back at gas stations and restaurants on up to $1000 in combined purchases each quarter
• Earn 1% unlimited cash back on all other purchases
• Earn $20 in statement credits each school year if your GPA is a 3.0 or higher for up to 5 years 
• 6 month 0% promotional APR period 

Lastly, the Citi Double Cash card incentivizes conscientious spending and responsible payback, rewarding you over time for building creditworthy behaviors. And best of all there is no annual fee! There may be a trend here. 

• Earn 2% unlimited cash back on all purchases, starting with 1% after your purchases and another 1% as you pay off those purchases
• 18 months 0% promotional APR period. Wow! 
• Citi Entertainment perk: Special access to events and dining experiences

Your credit building journey starts early and we're happy that you're thinking about the long term strategies that will create options and opportunities downstream.