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Marriage and Money: 4 Tips for Financial Bliss

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The stress of paying a mortgage, getting money together for a vacation, creating a college fund for the kids…with so much financial stress to cope with, it’s no secret that money is one of the top reasons why couples fight. If you’re constantly arguing with your partner about money, you’re not alone and the good news is that, with a little understanding and communication, you can get on the same page and start enjoying a happier, healthier relationship. The following are some tips for financial bliss when you’re one half of a couple.

Have a Not-So-Secret Stash

Our advice here is to set up a ‘mad money’ account. A mad money account has cash that each person in a couple can spend without having to check with their partner first. Wouldn’t it be nice to buy a new handbag or a new part for your car without having to justify the purchase to your partner? The fact that it’s not a secret stash means that you both don’t have to ask/answer questions about the cash that comes from that account.

Open Up Communication Channels

Communication is key in every aspect of a successful relationship, but it is especially important when it comes to finances. By talking about money, you will know exactly where you both stand and you can align your goals for the future. Whether you want to build your dream home or go on vacation, if you’re both on the same page about saving and spending, you’ll be more likely to achieve your goals. With open communication, you can also work together to make financial decisions that are best for both of you.

Don’t Hide Debt

You may be tempted to keep debt a secret from your partner. Hiding your credit score and loan repayments might seem like the right thing to do but it’s a big mistake. If your partner finds out that you’ve been hiding debt, it can damage the trust in your relationship. Trust is essential for a healthy relationship, so it’s important to be honest about your finances from the start. As you grow together if you are trying to grow your net worth as a twosome, debt can hinder that if it is not managed properly. Setting the common goal of eliminating debt can actually bring you both closer and teach you effective problem-solving strategies as well.

Align Your Priorities & Goals

Couples who are serious about their relationship need to be on the same page when it comes to financial priorities. This means having regular conversations about money, setting common goals, and creating a budget that works for both partners. It means co-signing on a personal loan if you are taking out credit to cover expenses you will incur together. Thinking of taking out a personal loan so you can make renovations to the home where you’re both renting? It should be a joint responsibility. Or do you both want to take out a personal loan to go backpacking to Asia? Again, it should be a joint responsibility. If you don’t have the same priorities and goals as your partner, arguments about debt and spending will start to wedge a split between you that could, over time, become a much more serious problem.

What traders need to know about how the stock market works?

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There is a lot of chatter about the stock markets as some of the popular indices in the world are trading at or near all-time highs. For the past year, an increasing number of retail traders have joined the financial industry, aiming to take advantage of the volatility using derivatives such as CFDs.

Some concerns related to a slowdown in global growth are now emerging on the back of rising COVID-19 cases and diminishing fiscal support, which could create an environment where stock markets start to head south as well. Regardless of the outcome, there is an audience wanting to know the basics of how the stock market works and this article will provide more clarity.

What is the stock market?

The stock market is a place where private companies can go public. Basically, these entities sell shares to raise funding and once that’s done, the stock becomes liquid, its price fluctuating depending on several important factors.

At the same time, public companies need to comply with regulatory standards and release details on their activity (balance sheets, income statements, earnings, etc.) on a regular basis (once a quarter).

Using the stock market, companies can raise funding and continue to expand their activity, while retail traders and institutional investors can take advantage of price movements. Learn more about stock markets through a professional like The Motley Fool.

Why do prices move?

Due to the usage of trading apps like easyMarkets, there is a stronger involvement from the retail side in the stock markets. Also, the abundant liquidity in the financial sector has facilitated a rally that continues to expand, despite several setbacks along the way.

All this means is that stock prices change based on demand and supply. When market participants are confident in a stock or other financial instrument listed, they choose to buy, and as the demand increases, so does the price.

In the opposite scenario, deteriorating risk sentiment, poor earnings, or other negative news can put pressure on a stock price, because in this case, demand is dropping while supply is increasing as market participants liquidate their exposure.

Listing methods

Initial Public Offering (IPO) is a popular method used by companies to go public. This is a form of equity financing, where a percentage ownership of a company is given up by the founders in exchange for capital, as opposed to debt financing, in which entities issue debt to raise capital to conduct their daily operations.

Recently, direct listing is another method used by private companies to become public, mainly because it cuts out the underwriter and the fees that come with it. In this case, existing shares are offered to the public, as opposed to new ones being issued (as is the case with an IPO). UiPath is one of the notable names that used direct listing in 2021 and thus far, the stock has had a positive performance.

The bottom line

To conclude, the stock market is a place where companies can become public, while also following strict guidelines and operating transparently. Retail traders can take advantage of the price movements of stocks listed, aware that there are risks involved and they need to have proper knowledge and techniques.

Effective Ways to Lower Expenses in 2021

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Saving money is often one of the number one goals and resolutions when going into the New Year, and the start of 2021 is no different. Although there are a variety of ways to save money, some are more practical than others. Rather than go to extremes and set oneself up for failure, there are a few things that almost anyone can do that will help save money regardless of income or financial situation, and they are much simpler than most would think.

Find Cheaper Car Insurance

Car insurance is a necessity that cannot be eliminated from the budget. Failure to maintain insurance on an automobile will have several legal repercussions. However, there are ways the consumer can save, namely by obtaining various quotes, especially those done anonymously. The advantages of an anonymous auto insurance quote online include saving money, a faster process, and no obligation to buy any policy. This makes it possible to find the type of plan needed at a price that the consumer can afford.

Audit Subscription Services

Subscription services are a common money trap that can cost the consumers hundreds a year. Almost everyone is guilty of it. Whether it be a gym membership, an application for a phone, or other service, people tend to forget about them. That money adds up more quickly than one may think. For example, a $10 monthly gym membership that is not being used is costing the consumer a minimum of $120 annually before any taxes or fees. Those who have more than one unused subscription service may be throwing their money away.

Keep Energy Costs in Check

Electricity and water are also necessities to consider. However, that does not mean the homeowner has to pay an arm and a leg. There are ways to save on utility costs without taking drastic measures. Something as simple as turning the thermostat down one or two degrees or keeping the home cooler while away can significantly impact the usage. Not using a light or charger? Turn off the light and unplug the charger. Energy-saving lightbulbs and small appliances are also an affordable and convenient way to save too.

Evaluate Banking Costs

In this day-and-age, there is no need to pay outrageous costs for banking. Just like auditing subscription services, audit bank account fees. This can also include credit cards and other bank loans as well. There are a variety of no or low-cost banking options available. Your current bank may even wave some charges based on things like paperless statements. Going through financials with a fine-tooth comb to look at fees, surcharges, and interest rates and comparing them to other institutions is necessary.

Stick to a Budget

This one may be one of the oldest and most clique ways of saving money, but it is one of the best. Creating a budget and sticking to it is one of the simplest ways to save money. Despite popular belief, budgeting is more than merely figuring your expenses and allocating your money. Good budgeting consists of planning where every dollar goes before it hits the bank account. It can show where the money is being spent unnecessarily and where changes can be made. The more aware one is of spending, the more wisely they can spend.

Time is Finite. We Must Understand That

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time-is-finite

 

This week, we’re going to change things up a bit, and today’s post will get heavy so bear with me.

I’ve been reading a lot over the past year or two about Stoicism, as I’ve mentioned before. The basic teachings of this philosophy are as follows:

  • Controlling your response and your emotions, not outside forces and events
  • Amor fati – “Love of fate”. Accepting everything that happens in life and using it (events, etc.) as a catalyst or a resource.
  • Memento mori – Meditating on your mortality. Realizing that time is finite and that you must make the most of it while you have it.

The last point is what I would like to focus on in this post.

Memento Mori

Marcus Aurelius said, “You could leave life right now. Let that determine what you do and say and think.”

On September 21th, 2020, my best friend, Samuel Profeta, passed away tragically in a car accident.

Sam was such a beautiful soul. He had an enormous heart and he was as loyal as they come. Thankfully, we spent some time together the day before. I only wish I would have told him I loved him one last time.

One of my favorite things about Sam is how much he loved life. How much he lived in the moment. And how he lived life to the fullest.

You go through life assuming that your friends, your family, your living situation, and/or your job will be there tomorrow or next week. You put things off, saying, “I’ll get to it later” or “I’ll call them tomorrow”.

If it’s important, don’t put it off until tomorrow. Tell those dearest to you that you love them. Don’t wait until later, because you don’t know if later will come, for you or for the people you love.

You can’t forget someone like Sam. His personality was big and his heart was full. He was with me through my high points and low points, as well as I for his.

Sometimes you need a lesson pounded into you several times until it changes your behavior. After this terrible experience, I’ll hug a little longer, love a little harder, and tell my people that I love them every time I have the chance.

Time is our most precious commodity. We mustn’t waste it.

Related reading:

What is Memento Mori?

Be Kind While You Can

How My Finances Have Changed with Covid

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Aside from the death and illness, it has caused, Covid-19 has done a number on the financial system and the economy.

I’m writing this on May 19th, and up to this point, over 30 million people have filed for unemployment benefits.

In my previous post, which can be found here, I detailed how you can plan in the event of job loss.

Even if you haven’t lost your job, more than likely, your finances have changed. In this article, I want to pull back the curtain on how my finances have changed during this environment.

My Job

Thankfully, I’m still working. I work for my family’s business. Technically speaking, we have four family businesses and I work three out of the four in various capacities.

Two out of those three businesses are very resilient during recessions, so I’m not terribly worried about my income from those two sources.

The last, however, will be influenced by movements in the market. If I do my job well, it shouldn’t vary a ton, but if I don’t, my clients will feel the pain, as will I.

The reason being is I, typically, charge a percentage of the assets under management (AUM). If account values go down, so does the fee I receive. The two go hand in hand, as they should. If I do a poor job, I should make less. It just makes sense.

With that said, my income hasn’t moved too much from the financial advising gig. It dropped a little bit last month, but I imagine it’ll come back up by the end of May, as the market has recovered.

Opinion: The Economy

I don’t know if I’ve mentioned it yet here, but my opinion of the economy is darker than some. I think there will be a cascade of bankruptcies in the public and private sectors.

With regard to the public sector, the companies that are rated BBB are already at record highs. When revenues stop coming in or significantly reduce, it’s hard for companies to make interest payments to lenders (holders of debt).

Companies will start defaulting on their debts, and the ability to pay, as well as other factors, help determine the credit rating. This will cause a slew of BBB rated companies to get downgraded.

Funds

With regard to fixed income mutual funds and ETFs, the vast majority of them have rules they need to abide by. One of those rules could be only investing in investment-grade companies.

Investment grade is anything from AAA to BBB. My fear is that when companies get downgraded from BBB to BB, it’ll cause funds to dump those companies; exasperating the sell-off.

My Finances

With that said, here’s how I’ve adapted.

My finances really haven’t changed much. I’m spending more on groceries, especially right now as I am stocking up on certain goods. The added benefit of that is I’m spending less on food from restaurants, which saves me money and I’m eating healthier too.

So you’re spending more on groceries and less on take-out…what else? Well, given the nature of Covid and the uncertainty that surrounds it, my priorities have shifted a little.

More Cash

I’ve planned my clients’ portfolios with the above scenario in mind. The majority of clients aged 60 and up are positioned more conservatively than normal. With that in mind, all of the portfolios I manage will take a little hit, and my income will drop as a result.

I’ve suspended my retirement contributions, via payroll deduction, until I feel comfortable again. This may seem counterintuitive because of the stress I put on leaving things alone and dollar-cost-averaging as prices go lower.

Due to the fact that my income has some variability, not to mention my rental property and the uncertainty of my renters’ making rent payments (because of talks about forgiving rent payments for those affected by Covid), I have to keep more cash available than normal.

Retirement Contributions

As I mentioned, I stopped my automatic retirement contributions, but I am making voluntary contributions to my Roth IRA when I feel my cash available is adequate.

Other than that, nothing else has changed. Debt payments will continue as planned and saving for a down payment on a house will also continue.

Be advised: Any opinion expressed about the market/economy is strictly an opinion and should not be viewed as a certainty. Additionally, my preparations for said opinions are specific to me. Consult your financial professional about your particular situation.

Related Reading:

Why Asset Allocation Matters

What You Can Learn From Different Market Environments

Job Loss: What To Do

Dealing With Market Fluctuations

Hacks for Covid-Related Issues

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Our daily lives have been disrupted. People are working from home, unable to go to the store, or have lost their job.

For those of us that are able to continue living our lives, relatively normal, with some minor inconveniences, we need to adjust.

We need to take advantage of the 21st-century technology available to us. This could be anything from grocery shopping apps, social media, or the apps of your favorite stores.

In this article, we’re going to dive into some of the tools and hacks you can use to help get through this period of quarantine and social distancing.

Grocery Shopping Hacks

There are several hacks you can use to make your trips to the grocery store more efficient and effective.

  1. Get what you need and get out. You HAVE to make a list and you NEED to stick to that list. This isn’t the time to browse or look for sales (more on that in a minute), buy the items on your list and leave.
  2. Plan your route – If there’s a particular store you frequently visit, use that store’s app to plan your route. Personally, I go to Walmart for almost everything. The first thing I do is make my list. Then I go onto the app and start searching for the items on my list. The location marked as “your store” will pinpoint which department, aisle, and shelf position for your item.
  3. Buy in bulk – with items that won’t go bad or if the time in which you need to use it by is several months or years in the future, buy it in bulk. Be careful, however. It is important to do the math. Figure out the “per unit” price and make sure buying in bulk is an economically beneficial decision.
  4. Look up recipes ahead of time that require only a few/minimal ingredients. Ideally, you’ll want to find recipes that require few ingredients that can also make a healthy amount of food. That way you have leftovers. The way I like to think about it is how much does each meal cost?
  5. That brings me to my next point…buy foods you can freeze, or make meals that you can freeze. This gives you food that you can use down the road and also gives you something easy to eat if you’re tired or aren’t feeling well.
  6. One more quick one – Use your knuckles and/or elbows when possible. We all want to stay healthy and avoid passing Covid onto others. Where it makes sense, try not to use your hands.

Grocery Shopping Apps

There are possibly hundreds of grocery shopping apps available, but in doing my research, I found five apps that I thought were extremely useful.

  1. Flipp – Matches coupons from your favorite brands with the weekly flyer from your favorite store.
  2. MealBoard – Manages your recipes, grocery list, and it also keeps track of what you do or don’t have in your pantry.
  3. Grocery Pal – Browse sales and coupons from the stores you frequent, and seamlessly add sale items to your grocery list.
  4. Out of milk – Lets you know what’s in your pantry and what you need to add to your shopping list.
  5. Big Oven – Kind of like a social network for groceries and recipes. Find out what your connections are buying to get inspiration for recipes. You can also type in the ingredients you do have and find some recipes you can make with those ingredients

Working from home

It’s no doubt that we are extremely fortunate to be able to work from home. With all of the technology available, a considerable amount of the workforce is able to tap in from a remote location and still get their stuff done.

As lucky as we may be, working from home comes with its own unique challenges. Here are some hacks for those working from home.

  • Get dressed like you’re going to work – this is something that’ll help you psychologically. It’ll trick your brain into thinking you’re going to work. This helps you frame your mindset for work.
  • Designate a work-space in your home – a psychological trick as well as a means to an end. You can’t work in front of the TV. You need a space where you can actually be productive.
  • Keep a strict schedule (if you can) – Now this isn’t possible for everyone, especially if you have little kids at home that need constant attention. Just do your best. Lean on your family members to watch the kiddos for a little while so you can get some work done. Also, please remember to take breaks. Check-in with friends and colleagues. Try to make your day as normal as possible.
  • Communicate everything – Almost to a fault. Send emails and texts. Make phone calls about anything and everything. We’re so familiar with communicating in person that we don’t realize how much we actually say.

Working together

My favorite part of this post. Writing about the human condition and how in times of crisis we always put our differences aside to help our neighbor.

During this pandemic, do what you can to help your fellow humans. Offer to pool resources together. Share recipes. Have a rotation of who goes to the grocery store.

If you have an elderly neighbor or family member, do everything you can to help them. Go to the store for them. Send letters to loved ones. Send letters to folks in nursing homes and assisted living facilities.

We’re not all scientists, healthcare professionals, retail employees, or other essential professions that are keeping the wheels turning, so we have to do our part in some form or fashion. Be nice.

Reading and Resources:

What are the Advantages and Disadvantages of Saving at a Bank

Feeding America

American Red Cross

CDC Foundation

Direct Relief

Impeachment And The Stock Market

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The talk of impeachment is flooding the headlines, so we’re going to explore it, how impeachment proceedings took place in the past, what happened to the market with each instance, and what you should do with your money/investments while these events transpire.

What’s the process?

The first step in any impeachment proceeding begins with a formal inquiry. This is done by the House of Representatives, and that’s where we are at this point in time.

During the inquiry, the evidence is gathered by the house to help make their case. Once they’ve gathered everything they needed, they take a vote.

If that vote passes, it goes to the Senate. They, like the House, review the evidence and take a vote. If the Senate’s vote doesn’t pass, then the President may be acquitted, and things end there.

What history tells us

There have been three impeachment inquiries, with only one actual impeachment.

The first was Andrew Johnson in 1868. The second was Richard Nixon in 1973. The third was Bill Clinton in 1998.

Which one was impeached? Bill Clinton. However, the Senate acquitted him and he was not removed from office.

When Andrew Johnson went through the impeachment process, the stock market (yes there was a stock market back then) really didn’t do anything, finishing that year up 1.5%.

During the impeachment proceedings with Nixon, the United States was in the middle of a recession. From the initial inquiry to the day he resigned from office, the S&P 500 fell about 30%.

With Clinton, however, the economy and the stock market were in the middle of an expansion. From beginning to end, the S&P 500 gained about 28% during his impeachment process.

What history tells us is that the period surrounding the impeachment will lead to greater volatility, but the long-term direction of the market is determined by fundamentals.

Be mindful of the headlines

The current impeachment inquiry with President Trump is dramatically different from the other three.

  • The internet makes updating the public instantaneous
  • Algorithmic trading can be programmed to execute orders when publications mention Trump, impeachment, etc.
  • We’re in the middle of a trade war with China, so uncertainty at home (U.S.) puts Trump in a weaker position to negotiate. What’s more, if impeachment looks more and more likely, Trump may be inclined to make a deal to help his case…even if it’s a bad one.

What should you do?

That depends. If you have 15+ years until you need to access your investments, I would tell you to do nothing. If you’re in retirement or it’s right around the corner, however, I would think about being a little more conservative.

When you grow more reliant on your retirement savings, your primary objective must move from capital appreciation to capital preservation.

I’ll link to several resources that should give you more guidance about retirement planning by age, investing in volatility, and more information about what’s been discussed here.

Related Reading:

Why Asset Allocation Matters

How To Invest In A Volatile Market

How Does Trade Policy Affect Me?

The Questions You Need To Ask Yourself

Four Ways To Optimize Your Personal Finances In 2017

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As 2017 picks up steam, more and more people are hunting for strategies to optimize their personal finance picture. Is that you? If so, let’s tackle several techniques you can employ to make it happen.

1. Visit Your Insurance Agent.

Start StartingIf you’re serious about optimizing your personal finances in 2017, be sure to visit your local insurance agent. I’m always surprised by the number of people who don’t think to find out what special deals and offers are available.

One insurance agent friend of mine said that you should check every year, because every time you have a birthday, insurance companies may have different solutions that you now qualify to receive. While one company specializes in people in their 20’s, for example, another may not offer great rates until you turn 30. To make your search for a local insurance agent simple, you can use an insurance agent search website that will allow you to be geo-specific.

2. Create A Detailed Budget.

While this advice might seem obvious and not worth mentioning, we’re always amazed on our podcast about the number of new studies every year that show how many people DON’T have a simple spending plan. Don’t have one? 2017 is a great year to start.

A budget will help you optimize your personal finances for 2017 in numerous ways… but how about the biggie: it gives you a roadmap to a very clear understanding of where you’re spending your money and how much disposable income you have after paying all of your bills….which leads us to #3.

3. Find Money-Saving Apps.

There’s an app for almost everything, isn’t there? I was just reading yesterday about an app that would monitor my toothbrushing activity. While the huge number of apps in the Google and iOS stores can be overwhelming, the growing popularity of apps can work in your favor as far as personal finance goes. From Mint to Finovera and Acorns, there’s a personal finance tool for just about every part of your financial life. Finding the perfect app can be as simple as conducting a simple internet search.

4. Talk To Your Kids About Money.

Kids need to be taught about everything, including how to spend and save money. To put this process in motion, it’s a good idea for you to set aside time each week to provide them with clear, practical examples of smart money decisions they can make to start building wealth. Not only will this process benefit your children, but it could help you maintain financial stability in your elderly years in the event that you need assistance from one of your kids. Don’t have your financial house in order? Helping your kids learn could be the kick in the butt you need to get your act together, too!

Conclusion

If you’re serious about getting your personal finances in order in 2017, what are you waiting for? Any of the strategies listed above can help you accomplish your objective. By systematically implementing these tips and tricks, you will likely find that 2017 is one of your most lucrative financial years yet. Good luck!

Photo: Steven Depolo

Seize the Day: 5 Cities That Offer Graduates Great Opportunities

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City BusinessThe time after college graduation can be both exciting and a bit scary. After all, it’s your time to shine and seize the opportunities that come your way. While you may feel like renting your own apartment or house is the ticket to freedom and independence, living at home can help you save money on rent and perhaps be closer to your job.

But oftentimes this method of saving money can end up making people lazy, complacent and unambitious. It’s better to set the tone for the next couple years of your life and get out of your comfort zone. Sometimes that means moving to a new city in search of a new job, new friends and a new life. If you’ve decided it’s time to take the plunge into your adult life, it’s important to become educated about which cities provide the best opportunities for recent graduates.

Here are some quick stats on the five best cities for recent college grads.

Arlington, Virginia

  • Jobs in management, business, science or the arts: 67.1 percent
  • Percentage of population age 20-29: 21.4 percent
  • Percentage of population 25 and older with a bachelor’s degree or higher: 71.5 percent
  • Rent as a percentage of income for residents 25 and older with a bachelor’s degree: 31.4 percent
  • Median earnings for residents 25 and older with a bachelor’s degree: $72,406

Madison, Wisconsin

  • Jobs in management, business, science or the arts: 52 percent
  • Percentage of population age 20-29: 24.7 percent
  • Percentage of population 25 and older with a bachelor’s degree or higher: 56.8 percent
  • Rent as a percentage of income for residents 25 and older with a bachelor’s degree: 24.9 percent
  • Median earnings for residents 25 and older with a bachelor’s degree: $45,176

Washington, D.C.

  • Jobs in management, business, science or the arts: 60.5 percent
  • Percentage of population age 20-29: 20.7 percent
  • Percentage of population 25 and older with a bachelor’s degree or higher: 55 percent
  • Rent as a percentage of income for residents 25 and older with a bachelor’s degree: 26.1 percent
  • Median earnings for residents 25 and older with a bachelor’s degree: $62,475

Boston

  • Jobs in management, business, science or the arts: 47.2 percent
  • Percentage of population age 20-29: 24.8 percent
  • Percentage of population 25 and older with a bachelor’s degree or higher: 46.5 percent
  • Rent as a percentage of income for residents 25 and older with a bachelor’s degree: 29.1 percent
  • Median earnings for residents 25 and older with a bachelor’s degree: $55,810

Minneapolis

  • Jobs in management, business, science or the arts: 48.3 percent
  • Percentage of population age 20-29: 22 percent
  • Percentage of population 25 and older with a bachelor’s degree or higher: 48.1 percent
  • Rent as a percentage of income for residents 25 and older with a bachelor’s degree: 22.4 percent
  • Median earnings for residents 25 and older with a bachelor’s degree: $46,837

Keep in mind, it’s important to have a clean driving record for potential job applications. Don’t underestimate the possibility that certain jobs will require you to utilize your car during work hours. In general, it’s also important to stay safe on the road as you commute to and from work. Refresh your memory on the rules of the road.

If you find yourself grabbing a few drinks with friends after work or on the weekend, be smart about who drives. Use Uber or Lyft and eliminate the chances of getting a DUI. If you strive to maintain a clean driving record, you will — and it will save you a lot of unnecessary hassle in the future. Growing up means not only preparing for a big move, but also acting responsibly in all areas of your life.