5 steps for coming to terms with your financial situation

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So I am an active listener of the Dave Ramsey show and I listen to it religiously everyday via iTunes. After hearing caller after caller come to Dave for their financial advice I have come to the conclusion that many of these people which most likely represent all of us really need to come to grips with our financial situations. Many of times you know the answers to these problems, whether it be debt, changing careers, retirement concerns, etc.. We know our situation better than anyone else and many times we know what needs to be done. However, we need a kick in the butt to start thinking about it.

So lets begin. Lets start thinking about.

1. Put it on paper

First thing you need to do is put your situation on paper. Find out where you really are at. Sure you have an idea floating around in your head somewhere but you really need to see it all laid out to begin building a foundation.

2. Come clean with others you may be affecting

If you are keeping financial hardships from your spouse or significant other (only if they are directly involved) you need to come clean. Now. You need to create a plan together and work through it. You will feel better and they will feel better (maybe not at first). Seguir leyendo 5 steps for coming to terms with your financial situation…

I Am Glad Oil Prices Are Rising

I know this is selfish and evil, but I need to get this out of my system.Of course, the rising oil prices cause sharp momentary pain at the gas pump and gradually increasing pain at retail stores; but, there is a silver lining to this dark cloud that I am discovering about now.

If you head over to a campus recruiting department at any college around this time of the year, you will know what I am talking about. Companies are picking up students like hot cakes - full time, part time, interns, and co-ops.

It’s difficult to trace the exact routes of all the excessive oil profits, but I guess you can observe some end effects when it comes to recruitment stats. Big companies, small companies, service companies, manufacturing companies, software companies, and many other companies … the money eventually trickles down to all of them and then they all try to get a piece of the action. Seguir leyendo I Am Glad Oil Prices Are Rising…

To Merge or not to Merge…

When my spouse and I first moved in together (yes, before we were married) we kept everything generally separate. We opened a joint checking account, and we each deposited a set amount into it per month to cover all of our joint bills, like rent and utilities, and groceries (I cook, he doesn’t, so our groceries became joint). That sort of worked. Except my spouse and I split all the bills 50/50 and my income was a third of what his was (I was in graduate school). I had left my graduate student housing to move in with him, and it was significantly more expensive than where I was living before.

Eventually, my spouse’s mother set him straight on what a financial burden he was creating for me (without any input from me - she just assumed he was paying more than I was and her assumption made him think about the actual reality) and we had a big talk and we decided to completely merge our finances. By this point we were engaged and the wedding was only a few months away so it wasn’t as big a step as it could have been. I took on his credit card debt, he took on mine, and we sailed off into the sunset… or at least, to where we are now. Seguir leyendo To Merge or not to Merge……

Things I’ve Learned About Money by Not Having a Lot of It.

Last week I told you about my biggest financial success:  becoming a stay-at-home mom.  Today I’d like to expand upon the things I’ve learned along the way.

When I quit my job a month before our first child was born, nearly half our income went away.   We were left with $19,000 a year to live on.  Yes, $19,000.  Right now you might be saying that me quitting my job was possibly the stupidest thing I could possibly have done.  But I think it was a smart decision.

I learned really quickly that I had to prioritize financial obligations.  Sure, it would have been nice to have lived in a single family 3 bed/2 bath home with a big yard.  Instead we chose a single wide manufactured home in a park.  The price was right, and the park was family friendly.  Yes, we lived near a rock quarry, but when my daughter became a toddler, she LOVED looking at the trucks from our kitchen window. Seguir leyendo Things I’ve Learned About Money by Not Having a Lot of It….

35 Minutes to Wealth

In the October issue of Money Magazine, one of the cover stories was 47 ways to get on track to a rich life in 35 minutes or less. Of the six plans they offered,the best one is “Building Lifetime Wealth” in 35 years.

1. Own stocks. Since 1925, the S&P 500 has gained 10.2% a year. In the short run, stocks are riskier than bonds and cash but you have 35 years.

2. Pay Less. The 1.5% annual fee you are paying on your mutual fund may seem small but over 35 years, this can take a big bite out of your account balance. If you have a $10,000 balance, the difference between a 1.5% fee and a .2% fee is over $50k over 35 years. Seguir leyendo 35 Minutes to Wealth…

7 Ways To Get A College Degree For Less

In addition to starting a 529 college savings plan for our son, I also have been looking at alternatives if my wife and I couldn’t reach our savings goal. These alternatives may come in handy if we run into some unforeseen financial difficulties. Aside from the usual financial aids (e.g., scholarships, grants, work-study, student loans, etc.), here are 7 alternatives that can help us spend less for college:

1. Opt for a less expensive school

In general, state universities are the best value for in-state residents; representing a good balance between costs and quality. To look for the best value, Kiplinger’s Best Values in Public Colleges Database is a good place to start. Seguir leyendo 7 Ways To Get A College Degree For Less…

Separate checking accounts, or keep them joint?

I’ve read a number of articles dealing with the dynamics of personal finance with couples, and one suggestion that pops up pretty regularly is keeping separate checking accounts for discretionary spending, or even for regular monthly bills that are in one person’s name or the other’s.  The big motivations for doing this are freedom (”This is my money to spend, save, or invest how I like”), protection (”It’s in my name alone”), and convenience (each person has a checkbook and access to funds at all times).  There may be other tax-related advantages that apply to some couples if they have their funds separated, but I don’t often read about these.  Most of what I read about talks about the budgetary advantages of maintaining separate accounts, mainly as a means to simplify and define who spends how much.

I don’t buy into this.  My wife and I for the large part pool our finances.  She has access to most everything I have and do, and I have access to everything she has and does.  Separate checking accounts might keep a spendthrift husband from ruining his joint finances with his frugal wife (or vice versa) for a while, but this is a quick fix rather than a long-term solution.  Seguir leyendo Separate checking accounts, or keep them joint?…

10 Ways To Completely Ruin Your Credit

This post is inspired by one of my readers, whom I will call Mr. M. This is not the usual list of improvement tips, so don’t follow these. If anything, please do the opposite. Here are 10 ways to completely ruin your credit score, waste a lot of money, and get yourself in trouble:

1. Respond to every pre-approved offer you can lay your hands on; especially those in-store cards
2. Buy everything you ever wanted with credit
3. Pay your bills late
4. Don’t pay your bills if you can’t afford it
5. Let your accounts go to collection
6. Don’t pay your landlord
7. Don’t pay your taxes — who cares about tax liens
8. Use your bills as firewood when they turn off your electricity
9. Use payday loans as an emergency fund
10. Declare bankruptcy

Are you doing any of these?

Source: http://www.paidtwice.com/2007/10/17/10-ways-to-completely-ruin-your-credit/

A Negative Side Effect to Paying Down Credit Cards

About six months ago, my wife and I sent the final payments into our two biggest credit cards. We had struggled with the credit card debt for the better part of five years, but, with the help of a large bonus and other miscellaneous cash, we were able to crush the remainder in one fell swoop. This would be the end of our dealings with the credit card companies, right? Wrong.

Last Friday I received yet ANOTHER set of cash advance checks to use for “special vacations or emergencies.” They keep telling me that “because of my strong financial history” they are offering me this great deal of quick cash at “only” 14.99%. Only 14.99%? I have kindly called them several times explaining that I didn’t have any use for their money anymore, and that they could stop sending these checks for security purposes. Seguir leyendo A Negative Side Effect to Paying Down Credit Cards…

Is God bad at Math?

I was just reading the comments from Forbes 400 Richest Americans and Jason Dean brought up a good point about giving:

Warren Buffett gave very little (relatively speaking, of course) to charity until his recent huge gift to the Gates Foundation. His rationale was that he could grow his money more effectively if he held on to it, thus making for a larger (eventual) gift. He was right. So in a way, it could be argued that Bill Gates is making a mistake by giving so much to charity at this stage in his life. Perhaps his wealth could be better served creating more jobs and more wealth through investment, compounding his massive wealth, for an eventual mammoth gift at an older age, like Buffett.

Mathematically, I agree completely - If you have $10,000 now, you could give it or you could invest it for 30 years (at 11%) and have over $250,000 to give. Seguir leyendo Is God bad at Math?…