Guest post by Mrs. BudgetsAreSexy ;)

Life as a graduate student is notoriously tough. Generally, you're operating on a slim-to-nonexistent source of income, yet with the workload of a full time job and the expenses to go along with it.

I consider myself very fortunate to be a married grad student. It's great to know that I am not forced to work out housing and other living expenses all on my own; however, even with this "safety net" of sorts, I still strive to maintain my own expenses as much as possible. My husband may be "Mr. Money" on this blog, but I try not to call him that at home - wouldn't want to crouch his fiscal style if I can avoid it! ;)

Many of you may be aware of how we generally operate financially as a married couple. Typically, we get our paychecks deposited into our separate personal accounts, and we each deposit a certain amount of these into a "common account" for home-related items like the mortgage, groceries, etc. This worked out great when I was working with a full-time job, but as a student, my tiny TA stipend just isn't enough to cover the same monthly needs. Thanks to personal savings, some financial help from family/selling off some inherited stocks, I was able to put together a good chunk of money to pay off my "share" of the common expenses for most of the first year or so of my being in school (much of which is noted in the "cash savings" area of J's net worth updates).

As with any savings, however, they start to dwindle when you actually need to use the money! Thus, I have made a tremendous effort during my grad-student days to continue to build up my portion of the "home fund" for the duration of my schooling. Below are a few of my favorite frugal-living tips on a grad student (or any kind of student) basis:

1. Save, save, save. It's the same tip that everyone tells you, and there's a good reason for that: It's just hands-down the most important. Since my portion of our "shared" expenses comes out of the stockpile of cash I accrued before starting school, the rest of my salary (a whopping $12K annually), almost entirely goes directly into my savings account. If I have an immediate personal expense, I pay for it out of this money, but otherwise, it's all stuffed into my own "home fund in waiting" account.
2. Conserve your travel expenses. If you're a commuting student, trying to condense your class schedule into 2 or 3 days a week can save a ton on daily commuting costs.
3. Keep an eye out for extra work opportunities. If you can find some good RA or TA jobs on campus, even the pittance that these jobs pay can definitely add up in the end - I think I added a solid $3K to my salary last year based on RA jobs alone. (Just remember not to take on more work than you can handle!)
4. NEVER buy your textbooks at full price. EVER. Go through Amazon, Half.com, or any other online textbook source - or if you don't need to keep your books, get them from your campus library! Take the extra time to shop around for good book deals; it def. pays off in the long run.
5. Avoid falling into the campus Starbucks/fast food/vending machine traps. Pack snacks, drinks, and a lunch from home as often as possible.
6. Alcohol can be a major drain on expenses when you're in college. Though this would apply more to most undergraduate than graduate students, my advice would be to A) drink less, B) drink cheaper stuff, or C) drink at home or at a friend's house. If you must go out on the town, options A or B can at least keep the cost at a more manageable level!
7. Become well-versed in the art of window shopping. And if you're shopping online, make use of the "save for later" option instead of buying things on impulse. You'd be surprised how waiting a couple of days can give you the necessary perspective on whether or not you "really need" a certain item.

All in all, life as a grad student doesn't have to be a total sacrifice - besides, so much of your time is spent on schoolwork that you tend not to worry about a ton of frivolous spending anyway! Just stay focused, save as much as possible and remember that light at the end of the tunnel. Now back to the paper-writing cave I go...

Labels: advice, grad school, money management, one of my lists, saving

I'm reading this killer book by Leo Babauta called The Power of Less, and in it he suggests to spend 15 mins. a day on a new habit to work on. It's brilliant! Just enough to get you to take action, but not enough to wear you out. I actually look forward to this "work on me" time!

I've been using it to declutter our house more (and subsequently my brain), but you can surely apply it to anything in life - even finance. It's been about 12 days now and I'm still going strong, baby! Incredible. And perfect for us A.D.D. folk ;)

What I love the most about this concept is that it gets you to STOP all the craziness of your day - whether it's in the morning, day, night, whatever - and helps you to FOCUS on a simple task. Whatever you choose it to be. It's fascinating because you'd think out of 24 hours each day that 15 minutes wouldn't mean jack, but sometimes we just go and go and go w/out ever stopping and consciously prioritizing our time and wants in life. Like everything's one big "swoosh," ya know?

15 minutes doesn't seem a lot of time (power of less, eh?) but it can do wonders if spent wisely. Think about it - what would you do with an extra 15 mins every day? If a genie stopped time and said GO! Do whatever you want for 15 mins and then we'll start the day up again! Would you use it to better your lifestyle?

I encourage you to take a few minutes right now and really think about what goal you'd love to achieve this month. It could be the smallest, or simplest one out there - it doesn't matter. What's important is that it's a habit that makes you happy. A habit that gets you towards a healthier YOU.

Here are some ideas if it helps. Some are financial, and others not:

• Declutter your house. In these past 12 days I've cleaned out my closet, drawers, cabinets under the sink, kitchen cupboards, and just last night my file cabinets! (although that took 3 hours - but the point is I would have never started had it not been for this new mindset)
  
• Review a bill each night. I guarantee you'll find places you're overspending.
• Run/walk around the block. Much easier to do knowing it's only 15 minutes, right?
• Do art.Pick up a brush, sharpie, block of clay, whatev. Just go for it!
  
• Eat healthier. Prepare 1 meal ahead of time each day so you know you're eating well.
• Clip/download coupons. Buy the same stuff every week? Spend a few mins finding deals!
  
• Review your cash flow. Jot down what went out, and what came in for the day.
  
• Read before bed. If you're a slacker like me, this will really get you in the habit of reading more :) Plus, I find it's a great way to let your mind release that day's stresses before zonking out.

The list goes on and on my friends! I asked my newsletter subscribers this very same question and the results were outstanding (some of which are listed above). I may be in the "new & shiny" excitement phase right now, but I honestly couldn't be happier. And I want YOU to be happy too! So again I ask - how could 15 minutes improve YOUR life today?

Labels: advice, goals, life, minimalism

This is a guest article by Flexo from Consumerism Commentary. Flexo is currently on a ten-day, ten-venue tour.

Please do not be cynical. I hate cynicism. For the record, it's my least favorite quality. It doesn't lead anywhere. Nobody in life gets exactly what they thought they were going to get, but if you work really hard, and you're kind, amazing things will happen. I'm telling you, amazing things will happen.

Though I'm not generally a fan of "late night TV," I tuned in the other night and found myself watching Conan O'Brien's last stint on the Tonight Show. As he signed off, and before he picked up a guitar to perform Freebird with Will Ferrell and Max Weinberg, those were the heartfelt words he spoke as advice to the millions of people in his audience. It was a classy exit if there ever was one.

Perhaps his comments refer to Conan's publicized attempt to negotiate better severance benefits for his staff. NBC subsequently claimed, cynically, that Conan's "niceness" was more of a public relations stunt than genuine concern for the crew and talent, although Conan is supplementing his staff's severance with over one million dollars from his own severance deal.

Say what you want about Conan O'Brien's comedy act, whose biggest bits are a cigar-smoking dog-puppet and a masturbating bear, but his career momentum led him to helm the Tonight Show, the holy grail of television entertainment, with 700,000 fans of the "I'm With COCO" movement on Facebook. So it's worthwhile to listen to his advice.

Work really hard

There's no way of getting around this. Success at anything requires significant effort regardless of the goal. If you want to get out of debt, it's not going to happen if you keep your same spending habits and don't come up with ways to earn more money. If you want to own a prominent business, you're not going to get there with only two hours a few days a week. To achieve greatness in any field, you must have the dedication to make it happen by directing your energy and effort towards greatness relentlessly.

"Nobody in life gets exactly what they thought they were going to get." Unfortunately, no one person can control everything about their own lives, so sometimes we have to deal with unexpected problems, like being fired from the biggest late night television program. But also, as someone works hard on the path to success, it's possible to discover something new, something that redirects us onto a new path. That change should be embraced, not feared.

Be kind

Books and seminars focusing on success often forget the power of using kindness to recruit people as fans and supporters to your cause. It's true that nobody cares about your success as much as you do, so you must start from the position that no one is going to help you achieve your dreams. There are two paths you can take once you start. The first option is to focus solely on yourself, be ruthless on your path to the top, and take every advantage given to you even if it is in the expense of others. After all, who knows when you might get another opportunity.

The second path is to be an advocate for other people, use your rising prominence or expertise to support their dreams, and spend some effort on external issues. Karma is real, whether it's some kind of universal force or just an observation of human behavior. Being kind and supportive increases the possibility that the world will be kind to you and supportive of you. And although no one else will help you succeed and the hard work won't go away, you'll find it's easier when the community's on your side.

Don't be cynical

Conan O'Brien has been forced out of his position as the King of Late Night Television Comedy, no longer sitting on the throne of the Tonight Show. Where does someone go once they've reached the pinnacle of their career? They can't go back to mediocrity -- the choices are generally retirement or death.

Is this where hard work and kindness will lead, being pushed out of the best job in entertainment in favor of a comedian whose most popular skit mocks the stupidity of random people on the street? As far as setbacks go, this is major. But in the face of any negative force, focus on what can be done to make the situation positive. This is not about media spin or convincing others what you want them to believe, it is an actual mindset.

Take Conan's advice now. Work really hard, be kind, and don't be cynical. Even if you don't have an ultimate goal of being the best in the world, this is a sound philosophy for making the most of your time on this planet, being a positive force in the world around you, and cultivating success for yourself.

Watch Conan's exit from the Tonight Show

For those who missed it, here is Conan O'Brien's final thoughts about NBC, his audience, and what it takes to succeed.

Labels: advice, career, guest post, life

There are 3 simple steps I like to tell people when they're interested in managing their money. 1) To seek out the info, 2) to act upon it, and 3) to use time to your advantage.

Right now (unless I've already bored you) you're in step #1 - you're here reading this because you genuinely want to better your financial situation! And for that I congratulate you ;) You could be on facebook, or watching the latest viral video right now, but you're not. You're here with me on this personal finance site. So good work, step #1 has been completed.

Step #2 involves acting on what you've learned from your research. What will you do when you're finished reading this? Will you click away and totally forget what you just read? I hope not! Or else you just wasted 5 minutes of your life ;) Luckily there aren't many "actionable" items from today's post, but when you move to the next one on your list - My Money Blog, MSN, Consumerist, etc - make sure to pause for a second when you're done and reflect on what you've just learned (or what you'll need to do to make something happen!).

It's kinda hard in this fast paced world of ours, but taking that last step before switching over to the next thing really helps allow the stuff to sink in. And if you're too busy to act on it right then, draft up an email and type out what's important right there in the headline - then send it to yourself. I do this at *least* 4 times a day, and I can't express how helpful it is with keeping me on track.

The last step I like to advise (and my personal favorite) is to use time to your advantage! How often do you look back and wish you would have started saving 5 years earlier, or contributed to your 401(k) from day 1? Probably a little too much than you care to admit, and it's crazy frustrating. But you know what? We can change that! We can't do anything about the past, but we can sure rock out the future. If you're trying to get rid of debt, or start saving for a new home or emergency fund, get on it TODAY! Tomorrow you'll be much happier and every single day that follows will only help move you closer to financial freedom.

5 years ago I about $3k in my 401(k) and couldn't care less. Now it's at $110k+ and I appreciate every last paycheck that continues to fund it! $50 here, and a few hundred there is nice, but watching it grow and compound over time is simply incredible. The only way you're gonna get there though is by starting. Do yourself a favor and get on with the game plan! That way when we look back to THIS day, you can give yourself a hearty pat on the back and be that more thankful for taking action when you did ;)

Labels: advice, money management, one of my lists, personal finance

If you're in college and reading this,YOU ARE SMART! Not only for getting into college (naturally) but for wanting to get a head start on your finances. When I was your age the only thing I cared about was women & beer pong - and in that particular order. As long as I had enough to survive, I didn't want anything to do with financial management ;)

Unlike me though, you want a head start in life and you're doing something about it! So today's post is directed at you, along with a fellow student of yours looking for some help. We'll call her Miss Roxy for the fun it. Here's her dilemma, along with my thoughts on it:

"I'm 19, in college, planning on marrying in summer of 2012. I can't save much right now, but I know eventually I'll have a job and I want to put away for retirement. The problem is, I'm not sure how to. I know that sounds silly because there are posts about this all over the place. But the problem is, there is a chance that my future husband and I might be moving to a different country within the next ten years. How does that effect my retirement savings and can you help me?"

First off, good for you in trying to plan all this stuff out! I couldn't tell you what I was doing for lunch each day, regardless of planned weddings, moving, etc so good job. That being said, I think life is too crazy and will change when you least expect it - esp. in the next 10 years. That doesn't mean planning for retirement and the wedding shouldn't be done right now (it totally should!) but just that I wouldn't worry about having the *perfect* game plan at this point in your life. It'll always be a work in progress.

THAT being said (again, haha...) the answer to your question depends on a slew of variables. Here are a few things I wish I had thought about back in the day:

5 Financial Tips to Get Your Mind Right

1. Save save save! Every time you get paid, get cash presents, win the lottery, etc, stash at least 10% of it away. You do this for the rest of your life you'll have plenty of money, believe me. It's one of the simplest things anyone can ever do.
2. Find as many income streams as you can. Work side gigs while in college, get a good job when out (and if it takes a while to find one, at least work others in the meantime!), etc. Without income you can't do squat. This applies to both you and Mr. Roxy ;)
3. If you're looking for an investment vehicle, besides a saving account, try a Roth IRA. You can put in $5k a year that will grow TAX-FREE for the rest of your lives. As long as you don't hit the maximum income to be able to contribute (it's over $100k so you don't have to worry about that right now), it's one of the first places people usually advise to put money in.
4. Contribute at least up to your employer's match in your 401(k) plan. This doesn't apply now as you don't work full-time yet, but once you do make sure to contribute at least whatever they're matching as it's FREE money for doing nothing saving (which you should be doing anyways).
5. Create a simple budget and review it once a month. It's boring at first, but once you get into the habit you catch yourself spending more than you should be ;) Give free budgeting sites like Mint.com (affiliate) a shot, or see if any of the excel spreadsheets I gathered does the trick! As long it gets you to take action, it really doesn't matter which.
   

You & your man follow a few of these, and you'll be just fine :) People make this stuff a lot harder than it actually is. When it comes down to it, it's all about spending less than you earn, and saving the rest. That'll leave you with plenty of money for the wedding, retirement, and whatever else you're planning up.

Anyone want to add anything else? Maybe some tricks/lessons YOU learned in college?

Labels: advice, money management, one of my lists, reader mail, retirement

That's what a friend told me the other day when I mentioned I blog about money ;) It's such a simple line that I couldn't resist sharing... "If you can't pay for it, don't buy it." Yes, I like that.

The only problem with these sexy one-liners, though, is that it's much easier to say/think than to actually DO. Or hold yourself accountable for that matter. What does "I can't pay" really mean to you? That you don't have enough cash in your pocket? That your credit cards are maxed out? That you're over budget and afraid J. Money will yell at you (I wouldn't, but I like the way you think)? There are a ton of ways you can opt out here by simply saying it doesn't apply to you.

But what if we cut up a sticky and plopped it right there in your wallet or purse? In big black sharpie it would read "Sure you want to buy that?" What do you think would happen if you saw that every single time you took out a credit card or dug for cash? I know it would get ME to stop and think for a quick second or two. I'll probably continue on buying whatever it was I wanted 95% of the time, but at least then it's a conscious decision I'm making ;)

I guess what I'm trying to say is that these awesome sound bytes & ways of thinking are great to ponder from time to time, but we'll usually forget it the second we click away. You make it into something actionable though, and you never know what might happen!

Labels: advice, debt, shopping

Nothing I'm about to say will come as a shocker, but it needs to be said ;) And that's because I'm getting dangerously close to a few of these! I know human nature will always play its part, but without reminders every now and then we tend to keep going until caught. So today, we tackle the law. And how staying on the right side of it will keep more money in our pockets.

Don't park illegally. You'll be faced with fines from $25 to $250 an occurrence! Or even worse, you'll get towed. And that's definitely no fun to work out - for both you and your wallet (especially if you live in a city like NYC or DC, bleh.) The Mrs. learned this the hard way the other month and she didn't even have to go far. She parked in an emergency lane IN OUR NEIGHBORHOOD and was promptly handed a $250 ticket. She was pissed off to no end (she had parked there late at night because she didn't want to walk far alone), but it sure did teach us a lesson!

Don't Speed. Not only will you get slapped with fees, but it's a one way ticket to higher insurance rates! That one speeding trip costs you years of extra premiums for nothing. I know we never *try* to get caught, but some of you test the limits a lot more than others and you know exactly who you are ;) The last speeding ticket I got (knock on wood) was 10 years ago and the only reason I remember it was because I never told my dad and yet he "somehow" found out! haha...Cops, insurance companies, parents - none of them like it.

Don't Cheat The Government: Guess what? If you don't pay our taxes you'll be slammed with even more once you're caught! And possibly jail time. You still locked up Mr. Snipes? Stay on top of it the best you can or hire someone to do it for you. It may cost a little more, but it'll save you a lot more down the road.

Don't Go To Jail: Not only does it suck, but you can't earn any money in there. Or at least anything decent (I've been told you can earn a dollar or two a day doing chores?). That means all your debt & bills out in the real world will keep piling up awaiting your beautiful return.

And Lastly, Pay Your Bills on Time! It's not illegal if you don't, but it's a surefire way to keep burning money for no good reason at all. Banks and credit cards LOVE people who pay late so they can legally jack up the fees & interest rates! And unfortunately the only person at fault here is you :( So please, don't let them bend you over like that - stick with the game and pay attention.

Labels: advice, bills, car stuff, saving, taxes

So I got an email from a friend of mine this weekend, and she's faced with an interesting quandary.

Usually I can come up with some sort of advice (especially when it comes to money) but this one's got me stumped, and I'm hoping you guys can chime in and offer her up some of your own words of wisdom :)

Here's what she wrote, followed by my own helpful-but-not-really thoughts on the matter myself:

Hey J,

It's Brandi from - Brandi's Healthy Journey.

I have a dilemma... kind of. If you haven't read up on the blog recently my car exploded on the highway. I've had tons of people helping me out by lending me a car, taking me to work etc etc. This includes a few people looking for car options for me. These people have been great in sending me links to cars. Taking what I know I can afford and listening to what I want.

However, without asking me, my grandfather just today went out and bought me a car. He BOUGHT me a CAR. And he won't tell me how much it was (prolly at LEAST 2000 more than I told him I would pay) and he will only let me pay him the original $2500 I was budgeting for.

Now this has graciousness and awesomeness written all over it. However, to me it doesn't feel like a gift. I feel as if I'm going to owe him. I can't afford to owe him more than the $2500 I budgeted for. I also can't live with myself knowing that I do owe him. I didn't WANT this. I was working through it on my own. I was proud of how well I was handling it and I was going to be really proud when I found myself a deal I could handle and do it without having to owe anyone money. Well at least serious money.

So I'm asking u for advice. I don't know what to do. I tried talking to him about WHY I didn't want to buy a more expensive car before he went and did this and he did it anyway. Am I just being proud? Am I being stupid and ungrateful? I just feel as if he's cut the legs out from under me. I told him what i was looking for and what I wanted and that I would pay for it. And now, I feel as if he disregarded everything I asked and just did what he thought was best because 'I didn't know any better'.

What should I do? What CAN I do?

Thanks Dude,
Brandi

Tough one, right? My instinct was to tell her to accept it now that it's already happened, but to make sure her grandfather truly knows how she feels about the whole thing (that she's thankful, but also very upset). Unfortunately though it wouldn't solve her problem with the budgeting aspect, nor the feelings on paying him back (or not).

I then wondered if there was a way she could just return the car? If that were a possibility, she could remain thankful but politely decline the car, show she's a strong person, and then find the car she really wants without any more "paying back" worries! She thinks the only way she could return it at this point, though, is if she were to sell it her herself and then pay him back with the proceeds. Plus, she still doesn't know how much her grandfather even paid for it, nor how insulted he would be.

So, my dear readers, what do YOU think? She's given me permission to post this up, and is really looking for some honest to goodness feedback here :) Thanks guys!

Labels: advice, car stuff, in the real world, reader mail

While I find finances and spreadsheets REALLY freakin' interesting, there are definitely times when I could care less. It doesn't mean I get myself into trouble or anything, but just that I work best while going with the flow.

I think that's the key to financial management sometimes - you gotta do things when you're in the mood. If you know you work better with numbers early in the morning, maybe it's best to start on it first thing? Or say you have to battle it out with a service rep to get a $35 late fee off your credit card bill - why not schedule it for a time when you can really put your heart into it? Or perhaps a time when you're incredibly pissed off and won't take no for an answer! haha..If you go this route, mind you, just be sure to stay cool and professional. As a manager of a customer service department, I can tell you that you'll get much farther on the call being nice than you would by cursing me out ;)

The downside to this "in the mood" theory, of course, is if you never get to that point. I highly doubt you'd even be reading this if that were the case, but it certainly happens to the best of us. When this happens, try bribing yourself with a dessert or a beer or something. Or maybe get all hocked up on caffeine or energy drinks - that's been known to do the trick as well.

Regardless, I urge you to give it a try. You could even start with other aspects of your life too! Say, with checking email or facebook? I know for me I interact and respond much more quickly and smartier (word?) if I check them before noon. It seems like I gain an ounce of laziness every hour after that until it's time to go to bed ;) So give it a shot. Start paying attention to what your body's telling you and strike when the mood is hot!

Labels: advice, money management, personal finance

I got included in my first e-book! It's a sweet one too >> "52 Ways to Make Extra Money" by Phil over at PT Money. If you click over by Friday you can download it free of charge (there's a download link at the bottom) with no strings attached :) After that you have to sign up to his newsletter to get it. Which is still cool, he's a great blogger, but might as well get it while it's hot. I'd tell you to at least check out my contribution in it, but I'm about to copy & paste it below!

So how and why did I get to participate? Well, he asked, and I accepted - along with some others :) I wasn't sure how I could contribute at first, but then the glorious Craigslist name popped up and I was like, Aha! I can pimp that. My Sell-O-Meter hasn't been updated in a while, but CL is still one of my favorite avenues to make some extra cash. In fact, besides this blog it's really the only one. That and freelance design, but I just haven't had much time for it.

Okay, so wanna see what I wrote? Here we go........
--------------------------

Selling things on Craigslist is like crack (not that I'd know what that's like). You unload a whole bunch of stuff you could care less about, and in return get cold hard cash! And if you're real good, usually within 24 hours. I've sold cars, beds, jackets, and even random art I've found on the street. The trick is spending a few minutes and getting a formula down. In fact, it's a lot like blogging:

1. You have to come up with a killer headline! One that's packed with both umph! and a lot of searchable keywords. If you're selling a bike, for example, don't just put up, "Bike for sale". Try: "Mongoose Maxim 24" Mens' Bike for Sale! Green, Awesome, and Barely Used." Just enough details to get someone excited, but also friendly to the searches.
And, naturally, killer content. Put all the biggies in the first couple of sentences, and then add another paragraph or two to show WHY it's such a great bike, and why you're getting rid of it. Is it because you're moving? Won it as a prize? Let people know you're human and you can be trusted. Throw up as many details as you can - even if it makes it look long. By adding in measurements and characteristics (which you can often find on google) you've now opened it up to those who might not have originally wanted it. And if the item is broken/scratched/worn out? That's fine too - just be 100% upfront and honest. You'll be amazed at the things people will buy off you.
Add in pictures (max out the #)! People want to see pictures!!! We want to see what it looks like at all angles, good & bad. We want to get a feel for what shape it's in and how pretty it is or isn't. Even if it's all dingy and dirty - highlight it! Humor and honesty can go a long way here ("The dirtiest bike you've ever seen! It could be all yours for just $___!". It may sound counterproductive, but again it's all about honesty and not wasting anyone's time. If it's jacked up, they'll find out sooner or later believe me.
Price, Price Price - The same as location, location, location - it matters. List how much you paid for it, but DON'T try and sell it for that! You're not tricking anyone, price it for what you think is fair and they will come. Search around for similar listings and then go off those.

You're bound to sell stuff 10x faster by following these rules. And if you REALLY want to impress your buyers, copy & paste the questions you're asked right back into the post! It may take a few more minutes, but it only helps your cause that much more. And by "cause", I mean "more money in your pocket!"

----------------
There you have it - I'm no longer an e-book virgin! Or at least un-kissed. I know it wasn't MY book per se, but I at least got to 2nd base right? As soon as I find a topic that won't bore you to death I'll even come out with one of my own. Perhaps with some e-condoms thrown in ;)

To download the other 51 ways, click here (and look for the link at the bottom).

Labels: advice, craigslist, money hacks, one of my lists

If you don't already have a will or trust set up, it's time you get one! I know it sounds morbid, but it's so SO important to have - and you only have to do it ONCE :) Well, you have to update it every few years, but that's a helluva lot easier to do than getting the original one down.

I've been trying to start ours for 2 years now, and it finally looks like we'll git 'er done this week. Not that I think something bad's about to happen or anything (knock on wood) but because Suze Orman is giving away a FREE Will and Trust kit!!! If that's not enough to get us off our lazy asses, I don't know what is.

I've only just begun filling out the online forms, but so far so easy. The first few screens you enter basic info like your name, address, general finances, etc, and then when you're finished it pops you out a list of all the forms that need to be prepared (based on your state and this info). Here's what it said WE need to do:


I haven't continued on as yet (best to allot for the time needed to fill out each of these bad boys) but once you sign up it allows you to create a username and password - perfect for those like me who needs to come back a little later :) The entire kit is online, although you can pay to upgrade, and it asks for your comfort level as to what you'd like the site to save, and what you'd rather it not. I'm giving it every last bit so that when I'm finished I can just print them out & lock 'em in my safe! Then when we produce little rugrats and/or the winning lottery ticket, I can just log back on and update whatever needed - perfecto presto.

Wills and Trusts are very very important so that all your money & assets go to the exact people you want them to go to! The last thing you need is the gov't or state stepping in and claiming your houses or funds because the paperwork wasn't set up properly (or at all). I'm no expert in this field so I can't tell you when a state does or doesn't get your property, or *who* exactly is entitled to them if you have no will, BUT I can tell you it's not worth the risk. You want your assets going to your loved ones safely and securely without anyone fighting over them & breaking up your family when you're long gone.

So GO TO SUZE'S SITE and sign up for this free kit while it's still FREE!!! It ends this Saturday, October 3rd so hurry up - you can always go back later and fill out everything once you create your account. The code you'll need to get this for free is 898989 and you enter it after clicking that orange "Gift Code" button on the right side.

I know this stuff isn't fun to think about, but again it's very very important. Remember, once you do it the first time all you have to do is update it whenever major life changes occur (marriage, kids, deaths, etc). And luckily, by the time one of these events occur you'll have forgotten how boring it all was anyways! haha...So please, spend a few minutes and get started on it. It's all for your loved ones.

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Big thanks to Common Sense With Money for the heads up on this!

Labels: advice, estate planning, tools and resources

Once you're contributing up to your company's 401(k) match, do you continue upping the % or do you jump to the IRA?

This is one of the questions I get asked the most as a PF blogger (the other is probably how to start blogging or the order to pay off credit cards), and it usually comes down to personal preference. Since I mostly respond back the same way all the time, I figured I'd copy & paste the question and my answer below and see if maybe YOU have some better advice on it this time around? That way I could refer them back to this post in the future :) Here's the question from Mr. Wants-to-take-advantage-of-retirement-plans:

"I'm like you, turned 30 this last year, and getting my finances in line (I'm in the black, which is a good thing, but I can do better)....got a question for you regarding 401k's and IRA's. I currently participate in my companies 401k program, but I am only contributing the amount that the company matches (i.e. 60% on my first 6%...). However, my 6% doesn't even get me close to my annual maximum ($16,500 or so... whatever it is...(J: Yup, that's correct!)).

Would you suggest hitting the $16,500 in my 401k before setting up a separate IRA account? Or would you just contribute to the 401k up to the employer match amount, and then max out an IRA each year?"

First of all, GOOD WORK on matching up to that 6% already - 90% of people never even consider it. Second, I like that you're asking this as a lot of people wonder the same thing (me too, at times) and to be honest it's a tough call. You're right in that I'm not a professional, so I can only tell you what I would do in your shoes :) And that would be to compare the funds available in your 401(k) vs. the IRA, or even better, Roth. The Roth is the bad boy these days and much more pimped out than the Traditional - but still do your research to make sure it works for ya.

But back to the funds. *Most* 401ks from smaller companies usually suck as the funds to choose from aren't as good as if you had the open-sea of EVERYTHING out there like you do with IRAs. My company has a great match at that 100%, but the funds are pretty shitty from what people tell me. So, if I were only getting the 6% match then I'd do that, or maybe even up it to 10% to keep it even (I always round up) and then work on maxing out my Roth. This way, you could pick much better places to put that money and in all types of products - mutual funds, stocks, bonds, whatever you want really. It might depend on which institution you go to open one up, but it's nothing Google can't help you with. I'd start at Fidelity or Schwab and go from there. (Or, USAA if you qualify - that's who I use for my Roth) .

Not only should your money get into better places this route, but you hit that max a lot quicker giving you that feeling of Awesomeness. The Roth & Traditional IRA max out at 5k this year, so you could break up the payments from now until the end of the tax year to make sure & evenly distribute the money until maxed. In all honesty, you've already gotten 80% of the smart investing part down as either route you take is bad ass :) But that's what I'd do - keep your 401(k) contributions to 6-10%, and throw the extras into an IRA. What would you guys advise?

Labels: 401k, advice, reader mail, retirement, roth ira

Every now and then I like to see what people are typing into Google to get to my site. Mainly for some good laughs (you'd be amazed at the different variations of sex terms hitting this site), but also to see if I'm answering any of the questions being entered.

Overall I think I do a good job, but most of the time someone is asking for specifics and facts over general personal finance. Unfortunately I'm no expert so I can never say Absolutely - do this! or No way, you'll go to jail! But I can give you my two cents on just about anything, and it's always free of charge :) So today, I copy and paste some of these terms searched in the ol' Google machine and give you my complete and honest opinions as always:

How much is a leased car worth in your net worth?
$0.00. Same with renting an apartment. You're paying for a service and you don't own anything (unless, of course, you end up buying it out at the end), so at this point it's just another bill you have to pay. I wouldn't put it in your net worth.

Would it be crazy to quit my job
Yes! Unless you already have another lined up. Or you're just plain miserable and would be happier working at McDonalds just to get away from your boss. Not that there's anything wrong with that :) Better yet, hit up Starbucks like I would in that case.

What kind of dress to be worn to attend a wedding
Hah! Contrary to popular belief, I'm actually a guy. I know I use a lot of :)'s and !!!!'s, but I have no idea what kind of dress to wear. Actually, I take that back - wear a freakin' HOT one.

Average net worth in the u.s.
Love these questions! I took a snapshot of the average net worth in the US last year which I liked, or you could check out CNN Money's net worth tool that determines the average worth around YOUR age & yearly income.

Best online budgeting sites
You've come to the right place ;) Here's a great list of free budget templates I've collected over time. OR, if you're truly going for an online budgeting site over spreadsheets or google docs, check out Mint.com. An excellent & free resource for budgeting, learning about mutual funds (bet you didn't know that?), and are now sporting an investment guide.

Should i quit my job my hubby makes alot
Lucky you! Perhaps you can help that person above and start your own side business: How to marry a rich man ;) But in all honesty, you should only quit if you're not enjoying yourself or you'd rather be spending your time doing something else. You're fortunate enough to not have to work for money, so if I were you I'd totally do what makes you happy and use that passion to do something good in the world. At the very least, being out there mingling and networking with people is usually better than being at home doing nothing.

Best pickup line millionaire
Coming right up! How's this: "Call me your mutual fund, honey...'cause with you, I'm showing interest." No? Try these other sexy pickup lines.

Things you do to save money while broke
Walk to places more, read the books you already have, use all the food in your house that you already have - like those boxes of muffins 2 years old or that big sack of flour taking up all that room ;) You could also try picking up hobbies that are not only cheap, but that save you from spending money down the road! Planting vegetables and eating them, drinking tap water over buying bottles, or my favorite - taking things off your walls or from your drawers you don't like and selling them on Craigslist/eBay!

Personal finance is not that hard
I agree! Have you been reading my posts on this? ;)

Why do good poker players lose money at online poker
Because they're too emotional. You can be great at anything in the world, but as soon as you start listening to your feelings and emotions (good & bad) you change your game. This is why I myself suck at poker 90% of the time. I get too excited and/or bored and start playing differently just to entertain myself. Unfortunately you are who you are and you can't really change this much, but maybe if you pay closer attention you'll catch yourself and tweak your game plan before going All In w/ a 7, 2 off suit.

Seth Green worth
A few laughs? I really don't know. This search comes up every few days, very strange.

Max out 401k?
Yes - great idea! You get free money from your company (hopefully), and you reduce the amount of taxes getting taken out of your paycheck every 2 weeks.

High interest savings account do we combine our money or get two separate accounts
I'm thinking you accidentally added the "do we combine our money or get two separate accounts" to your first search of "high interest savings account" here, but regardless I have a post on how we manage our marriage financials.

What to do if you they want you to take a pay cut
Accept it so you don't get fired, and then start looking for what else is out there! Unless you really REALLY love your job or you believe them when they say it's only temporary, it may be a sign of worse things to come. And believe me, I know about this. Spend 20 mins a day poking around Craigslist or emailing friends to see what kind of opportunities are around town. Just don't do it at work ;)

Minimalist living
Something I'm slowly working on! Check out my latest post on the minimalist lifestyle - there's even a fancy doodle.

Would you rather have a well-paid job or that which make you happy?
Usually, I choose the well-paid job. Lately, I've been gearing towards the one that makes me happier though. Right now I'm blessed to have a job that I'm both happy at AND paid well, but in this economy it could change at any time. Check out this very would you rather question I posted back in July to see what others thought.

Gym women free sex
Woahhhh there partner! If you're going to the gym to look for free sex, you better be ripped. And also be a lot smoother than the ones using those sexy pick up lines we already mentioned - they won't work.

That's it for this round - hope you learned something today! If you liked this let me know and I'll start doing it more often. It's kinda fun answering a whole bunch of different questions than just focusing in on one specific theme. Happy Hump Day!

Labels: advice, in the real world, personal finance, randomness 3000

I've had both good and bad experiences loaning out money to family members, but renting from them and paying their mortgage is beyond my comfort level. In theory it should all work out fine (after all, you're blood right?) but in the real world people tend to get hurt or taken advantage of.

Unfortunately, an ol' college friend is experiencing just that - getting stepped on because he doesn't want to ruin his relationship with both his brother and his dad. My friend means well, but it's time he starts to consider his options before he loses even more of his sanity...and money! Here's a play by play of what's going on:

• My friend Good Brother (as he shall be named from this point forward) decided to live with Bad Brother and pay him rent (aka part of Bad Brother's mortgage) as well as 50% of the utilities.
• For 2 years Good and Bad Brothers were happy.
• Then one day Bad Brother decided to go back to school and move half-way across the country.
• Good Brother was sad to see him go, but happy Bad Brother was pursuing his dreams.
• Bad Brother asked Good Brother to help him fill the occupancy while he'd be gone (2+ years), and since Good Brother is, by nature, Good, he had no problem helping him out.
• Good Brother tried and he tried and he tried, but the recession had finally hit and he couldn't find a suitable renter. It had now been THREE months and it just wasn't working.
• He explained to Bad Brother that his asking price was too high (all the while paying 100% of the utilities now), and that his brother needed to lower the price and the rental terms.
• Bad Brother wasn't having it and decided to try himself - only Bad Brother was more talk than he was action (and Good Brother didn't realize he was being taken advantage of yet) so they let ANOTHER three months pass only to remain where they originally started- without a 2nd renter.
• It turns out another culprit had come into play - lack of motivation. The reason? Crazy Dad.
  
• You see, trying to make things better and "help out," Crazy Dad had decided to subsidize the amount of the 2nd half's rent so that his son (Bad Brother) would have enough to pay the mortgage each month. While nice in theory, this has only caused more delays in finding a roommate as the sense of urgency has quickly disappeared.
• On top of it all, Crazy Dad and Bad Brother believe Good Brother needs to be held responsible for filling the vacancy - family duties and all.
  
• Good Brother is now pissed.
  

As it stands - now SIX MONTHS later - Good Brother is still paying 100% of the utilities & the vacancy has yet to be filled. Only now, Good Brother is starting to realize that it's not his responsibility to find this elusive roommate, and he's thinking of moving out. Why should he continue paying an extra $150 every month or continue getting bashed for not finding a roommate? Is this really HIS responsibility? Personally, I think not. The one who owns the house should be the one maintaining and paying for it - no one else. Ask his father or brother, and they'll tell you differently though.

Now, there's probably more to it than what Good Brother tells me, but the reason I post all this is to illustrate the importance of being careful. Mainly, being careful when it comes to mixing money with family members. Some of the times things work out great! But it's those other times that really put a strain on your relationships, and the times I hope you're able to avoid.

So please please PLEASE think it through when considering money arrangements with your loved ones. If you decide to go for it, write down in complete detail the arrangements you'll be making so everyone's on the exact same page. We all think it could never happen to us, but money has a strange way of breaking families apart. So please, be careful out there :)

Labels: advice, home ownership, in the real world

I forgot to brush my teeth today, can you believe that? It's something I do twice a day going on 25+ years now, and yet this morning I forget to brush them. I couldn't tell you why either, all I know is that it sucks. In fact, it makes me wonder how many other times I may have forgotten! And of course, this naturally reminded me of finance ;)

Forgetting to brush your teeth is like forgetting to pay your electric or credit card bill. You deal with them time and time again, but every now and then you simply forget! It doesn't matter how organized or pimp you are, it just happens and you suck it up. The difference being, when you forget to brush your teeth you're left with only stinky breath. When you forget to pay your BILLS, you're left with a stinky late payment charge as well as a stinky kick in the pants. Personally, I prefer the bad breath.

What can a busy person do about this? Automate!

It won't help you in the teeth department, but automating your finances is one of the best (and easiest) ways to stay on track. Methods like auto bill pay, auto deposit, auto reminders, or even just ghetto ones in your Outlook or on your iPhone - it all helps. If you're REALLY good, you can automate almost 99% of your financial life! Check out this graphic from my girl Jenny over at Life After College:


Talk about a game plan! She sets it all up ONCE and then she's good. It's just a matter of checking in every now and then and making sure everything's kosher (thanks for letting me share this Jenny!). The more you can automate this stuff, the less likely you're going to forget something - and it also helps with big savings accruals over time! If you're still not convinced, try flipping through the The Automatic Millionaire and see what that does for you. It was CRAZY good in getting me off my a$$.

Now if you excuse me, I've gotta get on over to CVS and find me some toothpaste! One day the internets will be able to do that for me too ;)

Labels: advice, in the real world, money management

I got a pretty impressive email the other day, and I'm hoping it inspires you!

It comes from a reader here at Budgetsaresexy (we'll call him Smart Budgeter), and he does a wonderful job at summing up a few points that we often don't hear about - or at least in this way. And what's even more interesting is that he uses & reloads GIFT CARDS to work it all out! Hah! Whatever work...Check it out:

J - I am budget crazy! Have been on a solid budget for about 2 years now. In the beginning, the hardest part was figuring out where the leaks in our spending was. For us it was grocery/and loose spending at the supercenter. Now we purchase/reload gift cards at the start of every paycheck cycle. We prepare a 2 week food menu and shop all at once. What ever balance is left on the gift cards is spent on non-need items like new towels, or treats (toys) for the kids. This tactic has made the biggest impact on our ability to stay disciplined to our budget and I suggest it to everyone I know. Take care - Smart Budgeter

If you haven't found them already, there are at least 3 great points to take from this:

Find out where your spending leaks are.

The only real way to do this is to track your spending for a month or two and see where it's all going (I know, it sucks, but you only have to do it once!) When you find it, you can then work on improving it and feeling good about it all. When I did this I learned that I was spending $300-$400 a month on clothes, electronics, $40 bottles of water, and all sorts of random stuff that I could care less about. That may be higher or lower than what you spend, but for me it was horrible and I wanted to change it.

Do something about it!

Luckily, the only thing I had to do in order to quit shopping was to STOP going into stores ;) Since I don't shop much online, that pretty much cut out a good 50-75% of it (once I actively made an effort to not "shop for fun"). When I do shop now though, I'm always cognizant of the amounts I'm willing to spend in order to be happy with everything (roughly $100/mo) Sometimes I stick with it, and others I splurge - but at least it's a conscious decision I'm making now.

Reward yourself and allow "extras" every now and then

For Smart Budgeter, it's all about treating his kids or picking up things he'd LIKE to have, but that he doesn't NEED. For me, it's a tiny allowance for lottery tickets, coffee, and an occasional new outfit (yes, I'm sorta like a girl in that way). As long as it makes YOU happy, it really doesn't matter what it is - just that you allow yourself to be human. Allowances like this keeps you motivated and sane, so be sure to include them :) Now get out there and start plugging those leaks!

Labels: advice, budgets, money management, reader mail

Guest post by Nicole Ouellette

Having your own business isn't all rainbows and unicorns but I personally wouldn't have it any other way.

When I quit my full-time job with health insurance a few weeks ago, more than one person thought I was insane. Of course they never actually said that: "Wow, you're gutsy! I'll give you that!" - "How is un ... I mean self - employment going?" - "Your father is probably rolling over in his grave..." (To be fair, Mom followed up that comment with lots of support. Still I know she's right; my father would've never approved of this.)

Then there are the people who think I sit around all day eating bonbons and flitting around my apartment in a bathrobe. Man, if someone would pay me to do that, that would rock! (Aside: It's hard to flit in 220 square feet of space shared with a dog.)

I'm here to tell you the truth, friends. The truth of quitting your job and going it alone.

1. Plan like hell.

No matter what, you still will not have planned enough but plan as much as you can. Who are your clients? How much do you have to charge to pay your life? In my case, not every hour I spend is billable so I planned 15 to 20 billable hours a week when I calculated my prices. Make a business plan (which you will probably hate doing), but in the end, it may save your butt.

2. Have some money to back it up.

I have been saving money and living frugally for almost 2 years. In addition, my father died and left me some money, which gives me more of a cushion than the average 28-year-old has the luxury of having. (For the record, I would give up this entire business in about 1 millisecond to have him alive again. (J: of course, that is so sad!))

So start saving now and with your business plan and nest egg, you can probably get yourself a small business loan, whether it be from people you know or a bank. I'm getting my stuff ready in case I want to do this at the end of the summer.

Also be prepared to transition, moneywise if need be. Right now, I'm working a part time job this summer to keep paying my rent and food as I ramp up my full time workload. My savings are only to be used if completely utterly necessary.

3. I won't lie, it does rock in a lot of ways.

On a roll at 5 o'clock? Sometimes I work until 11 at night. Lunch with a friend? It can happen. A flexible schedule is fantastic and something I've always wanted.

4. But I've never been so worried in my life.

I am a super laid back lady (to the point of almost being annoying) but lately, I've been having nightmares, worrying, and crying way more than normal. Doing this is scary because there is no guarantees that it's going to work. And while I will try not to take failure personally, I'm sure I will on some level if it comes down to that.

5. Oh and I'm totally operating in the negative.

I did some math last week and freaked out. I know there is bound to be some ebbs and flows in the business but I guess naively, I thought I'd be different. Good news is those two years I lived below the federal poverty line awhile back may have been some good training for me for the months to come.

6. If you don't believe in it, no one else will.

Is it hard to get up every morning and be ready to sell sell sell? Is it weird to do something my now-dead father (whom I held in very high esteem) would completely hate? It sure is. But I will tell you that the only person who needs to believe it in their heart of hearts is you. If you can believe it, it will translate. (You know, unless you have mental delusions or something.)

So before you quit your job, really dig down deep and ask yourself "Can I really do this?" The answer may be more obvious than you think. It's you who will have to work 12 hours a day or make personal sacrifices to free up business cash. No one is going to hold your hand or make you get up at 7 every morning. It's all you, for better or for worse.

Know thyself. Know thy customer. And know that no matter what, you can reinvent yourself whenever you want with a little planning and a lot of hard work.

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Nicole has been a personal finance blogger since 2007, and helping bloggers and business owners since 2008. She recently quit her newspaper job in May to take her company Breaking Even Communications full time. Nicole would love it if you read her blog Breaking Even and love it even more if you subscribed to it via RSS or email.

Labels: advice, career, guest post, in the real world

As I mentioned in my last post, Borrowing from yourself first is key. There's no financial point in taking on more debt when you have the means sitting right there in front of you.

Psychologically it might be a different story (who wants to deplete their nest egg?) but desperate times call for desperate measures....or something like that. The point is, emergencies and other *needs* justify the right to dip into your savings accounts or emergency funds. It may suck, but you could always fill it right back up as needed! You already did it once, right? (I'm sure you'll tell me if I'm wrong :))

The Best Order To Take Out Money.

So let's say something comes and you need X amount of dollars in X amount of days. Where would you start? Your savings? Credit cards? 401(k)? (Lord I hope not) With all the options we have at our disposal, I thought it would be a good exercise to run down the list in the order I'd personally hit up myself. After all, not all tools are worth using just because we have easy access to them! It's all about starting from the smarter routes first, and checking them off as the amount of money (and the emergency) grows. In my opinion, here's the best order to take out money:

1. Savings Accounts

I keep only what I need for bills and monthly expenses in my checking account, so all extra cash goes right into our savings accounts (after investing, paying extra towards mortgage, etc). This is the first place I'd look because this money isn't *needed* or being used for anything in particular. It helps with all splurging desires, over budgeting issues, or anything else that requires smaller amounts of money not accounted for. (we usually have anywhere from $500-$2,000 in there at a given time)

2. Emergency Fund

I'd hate to do it, but life ain't perfect and I ain't trying to break my debt-free (besides mortgages) record right now. We have $10k stored in our emergency fund to cover worst-case scenarios and to help us sleep better at night. It also works great for floating money and instances when someone asks to borrow money - and I offer it ;) Again, pulling money from here isn't desirable, but it's there for a reason and you could always fill her right back up when issues pass over.

3. Fun Fund

It sounds weird listing this as #3 here, but I never like playing around with the money stored in my fun fund: A box at home specifically set aside for true-life actual FUN. As hardcore as I am about saving/investing/being frugal, I've gotta allow myself a little breathing room to really *enjoy* what money can buy us in life. Plus, I never have much in here anyways ($200-$500 max), so it would have to be getting bad if I started extinguishing options #1 and #2 above. And in which case I'd need this money even more to help pep myself up at that point ;)

4/5. Family Members/Credit Cards

I'm not sure which I'd choose first if it came down to this, so I'll put both here under the assumption it's going to take some time to repay. If it's 3 months and under, I'm rolling with my friends/family. If we're talking 6 months or even a year+ to pay back, then it's on to the credit cards! We have some serious limits on both our house cards & personal cards, so I reckon we could grab up to $70k here. Not optimal, but with rates hovering around 6% for us it would be better than what's next on the list. Plus, USAA is always rockin' out special rates when you call BEFORE using it (either purchases or cash advances) so I guarantee we could lock one in around 4% at the most. *If you have jacked up credit or jacked up credit CARDS however, consider this your #7 option - It could seriously screw you up.

6. Bank or Credit Union Loan

The only bank loans I've ever taken out were for our mortgages, so other than those I'm not sure what loopholes or rates you're really going to get. I'm assuming if I need money for something non-housing related I'd take out a personal or business loan (if applicable). And I'm guessing that would run us at least 8-9% with GOOD credit. But again, I have no direct experience with this one so I'm hoping someone else could share. Regardless, you're still swimming above water here. Update: Be sure to check out local Credit Unions too! Totally forgot about those - you can usually get a loan a bit cheaper than your average bank. The last car loan I had was through a credit union and I want to say I got it for only 4% when rates were 6%+ a couple years back.

7. Home Equity Line of Credit

Or a "HELOC" as many of us like to call it. I drop this guy here at #7 due to the recent fiasco going on with the housing industry. If you're in the same situation as I am and your house is underwater, you can forget even having this option. Homeowners that have equity in the house, however, can usually pull from that by either taking out a loan against it or by refinancing and "cashing out" the difference. Neither option is that great since you're backing it up with YOUR HOUSE, but it's still better than the options that are soon to folllow. HELOCs can have interest rates ranging from the mid 2%'s (it's rare, but it's possible in this economy - ours is at 2.8% currently, un-locked) up to 10%+ depending on your situation and your credit. Just be sure to do your research before jumping in and using your house as an ATM.

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*****Now, from this point forward $hit has either hit the fan or you're up to some cool business plan that requires a major investment - or at least I hope ;) Either way, here's how I'd personally proceed:
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8. Roth IRA/Traditional IRA?

This is where it starts getting scary! Anytime you're forced into pulling from your retirement funds things BETTER be bad. Don't be one of those idiots who uses their 401(k) as an Emergency Fund - that's not what they're intended for!!! But if you've exausted all other options, then yes start pulling from your Roth. Take out only what you've contributed so far over the years and you won't pay a dime in taxes (you already paid that before you xfered in the money). Be VERY carefull here though because when you start pulling out everything, including any profits you may have earned over the years, you'll start accruing hefty fines! It may not matter to you at this point, but just keep it in mind. Read the IRS' online IRA resource guide for further information - I'm not a professional!. You could also pull from your Tradional IRAs as well if you have those accounts. I don't so I'm not too familiar with them, but it would still fall under #8 here in the list. Check out more on the IRS's site concerning Traditional IRAs.

9. 401(k)

By this point you're running out of options and your 401(k) is basically your last resort. The first thing to do is to see if you qualify to take out a loan against it. In a perfect scenario this would mean taking $XXXX out, and then paying $XX back on a scheduled basis until it's filled back up. It'll cost you a relatively small setup fee, but you won't have to deal with tax penalties and the lot. You WILL, however, have to make sure you remain at your employer the entire time. If you quit or get laid off, you're usually responsible for paying it back ASAP. Call your plan holder for additonal details, or start researching the IRS' website on 401(k)s (again, don't take my word for it)

10. PayDay Loans/Cash Advances

Most of you know how much I despise payday loans, but it's still "an option" even if not much of one. At the very least it's worth a little research in seeing what the best offers are here. Make sure to determine *exactly* how long you think it will take to pay it all back! The more you extend it or stop paying it back, the higher your fees and interest rates go (we're talking 30-40%+). In other words, this is one of your last options.

There you have it - the best order to take out money! There are some other avenues I've skipped along the way (certain types of insurances for example), but they're a bit out of my scope for this blog and probably don't affect most of the readers here anyway. I do hope this list helps though!! Once again it all comes down to personal preference and what YOU are comfortable with - don't go and do something drastic before consulting a professional (have I hinted, enough?) :) Now let's just pray you never have to make it past option #7!

Labels: advice, debt, money management, one of my lists

Borrow from yourself first, that's what I say. It sounds funny, but think about it. What if you needed $1,000 or $2,000 in cash right now, where would you get it? Would you pull it from your emergency fund? Take out a payday loan or credit card advance (please say you wouldn't)?

I ask this because people do the oddest things when it comes to getting their hands on money. They'd borrow, steal, and even cheat sometimes before pulling from their own cash reserves. I once knew a guy who'd take out an 8% loan every time he "needed" something instead of dipping into his $5k+ savings account. Why? I'm all for doing what makes you comfortable, but financially I just don't think it makes any sense.

We have savings accounts, rainy day accounts, and emergency funds set up for a reason - to have cash available at a time of need.

If you don't pull from it then, then when? We all validate "emergencies" in different ways, but it really IS OKAY to pull from your stash when needed :) I know that sounds crazy, but that's seriously what they're there for.

In fact, I had a brilliant idea of listing out all the possible ways you could get your hands on money - in order of need & financial smartness - but after an hour and a half (and going) I realized it's better set for another day. And that day being Monday ;) So go out and enjoy your weekend for now, and we'll get back to this tantalizing list of options upon your return. I'm hoping you like it as much as I do!

Labels: advice, debt, loaning money

Fighting the collection agencies? My girl Kim (aka Little Miss Fortune) just put out a brilliant piece on how to settle and save BIG! $14,000 big in her case. And not only that, but she was just featured on a CNBC Segment to show how she did it :) As you can tell, I'm definitely impressed over here.

Here are a few of the tips she shares to help YOU beat the collection agencies:

• Go into the conversation knowing you should be able to settle for about 60 percent less than your full balance.
• Call on the last day of the month, when the debt collectors are scrambling to meet their quotas.
• Mind your manners! You'll get a lot farther by being calm and pleasant than you will by being angry and defensive. (It's okay to feel angry and defensive. Just don't let them know!)
• If you have a lump sum to offer, start low and let them talk you up. (I told one person I had $3,500 and wound up settling for $4,100.)

I'm proud of you Kim!!! Lets keep from getting back into debt now, eh ;)

Labels: advice, debt, in the real world, money hacks

How much is a house really going to cost me? A lot more than you probably think ;) Although it's still doable if you're ready to jump in! I was asked this same question by a fellow reader recently, and thought I'd forward my answer over for anyone else just starting the home buying process:

"Wow, that's certainly a loaded question! Here are my quick thoughts - First, it'll probably cost you a lot more than you originally think. Between the down payments (usually around 20% of purchase price these days unless you go FHA or other routes), the closing costs (usually around 3-5% of purchase price), and moving, picking up new furniture & household items, and then future taxes/homeowner dues/condo fees, it gets pretty crazy.

All that said, however, it could definitely be worth it while the prices are so low! If I didn't already own I'd be all over it (although I surely have my moments). In all honesty, I recommend finding a local realtor and scheduling a meet-and-greet w/ him or her to get all the info. from the beginning. It doesn't cost a penny (if they say it does, hang up and go somewhere else!), and that person could work on your side to help you through the whole process. As a previous realtor myself, I can tell you it's well worth your time.

You could also check around other blogs and click on "home ownership" or similar labels to get a general idea as well :) Try mymoneyblog.com - he has a great pool of info. Hope this helps! And good luck, let me know what you end up doing."

Labels: advice, home ownership, reader mail

I'd like to share a few tips when driving around in cabs...A friend of mine lost his iPhone in a cab the other day and was going frantic. Not only was he on his way out of town for 3 weeks, but he's currently unemployed and was dreading the idea of picking up a new one. As with most people, his cellphone is his lifeline - esp when away from home.

But guess what? The cabdriver/good samaritan found it in his back seat! Not only did he remember my friend for the nice conversation they had, but he made a point to tell his girlfriend (who met him to get it back) that he was an excellent tipper :) While it wasn't the only reason he gave it back, the generous tip certainly stuck in his mind. So tip #1: Tip your cabbie well, especially if given good service.

Oddly enough, that same girlfriend had previously lost a wallet in a cab herself (different cab). AND, he too returned it with all id's and bills intact. Besides tipping well herself, she was also sitting in the front seat - making it super easy for the cabbie to find it! This brings us to Tip #2: Sit up front whenever possible. Your stuff will be found much easier if you leave it behind.

Of course, you could also just NOT lose anything, but we all know life doesn't work as nicely as that. Better to control those things you can, like tipping & sitting in the front seat :)

Labels: advice, in the real world, tipping

This question popped up in an email i got from AskMen.com, asking if I wanted to participate in a survey.

Now normally I just glance over and then delete/archive as my A.D.D. brain can only take so much. But seeing how it was the "Great Male Survey of 2009", who am I to turn it down? Okay, well in reality they were smart enough to bold out some of the financial questions in the email ;) While most of them got my brain thinking, there was one question that really stood out:

How do you measure your own financial success?

Good one! First, each of us should probably define what "financial success" is. Is it money? Job title? How big your house is (better not be)? Everyone has their own thoughts on it. The first thing that comes to MY mind is net worth and my budget (naturally). Net worth because it gives me an overall financial snapshot of how we're financially holding up in life. It's something I can track on a monthly basis and see how successful (or not) we're doing. I think of my budget next because if I'm sticking to it and it's working, then I've had a successful month ;)

Okay, so keeping in mind what you feel financial success is, here are some of the answers given for the question (along with my own experience on the right of each "answer"):

1. Against that of my friends. - No way! Well, maybe partial-way ;) What they do doesn't affect me financially by any means, but I do notice that whenever one buys a new car or a bigger house, I tend to analyze how exactly they were able to do that. Stupid, but true.
2. Against that of my industry colleagues. Hmmm, nah I don't really compare anything here. I probably get paid more for what I do at my current job than similar positions in my industry, but that's just cuz I lucked out and found a perfect fit.
3. Against that of my father. Wow, good question. I feel like I would maybe down the road when I get into my late 30s or 40s, or probably even when I have kids, but at this moment of time it's not a thought for me. I do, however, totally listen to his thoughts on personal finance and investing!
4. Against my own financial goals. Ding, ding, ding, we have a winner! I 100% believe this is where we should all fall. I say "should" because most of us still keep those previous people in mind whether we want to or not, but that's just human nature.

Overall, it's a good idea to track your success through the goals you set up for yourself, not anyone else's. At least in theory ;) As long as you're WORKING on bettering your situation though, I say you're moving in the right direction. Maybe one day the Jones's will follow you?

Labels: advice, goals

My #1 financial goal each year is to max out my 401(k). It's the one thing I strive for more than any others, no matter what's going on w/ the world. Some years it's easy and I bask in my glory, and other times I want to carve my eyeballs out with a rusty spoon. If I can complete just that one goal each year though, poppa J is happy :)

He knows that socking away $16,500 every year (or whatever the current limits are) will bode well in the future and allow him to sip long island iced teas on the beach some day! Plus, the fear of working himself to death is just too much to bear in his old age.

Regardless of what it is though, I believe everyone should have a major financial goal to complete each year. Whether it's saving up $5k in an emergency fund, wiping away an entire credit card, or just taking a new financial course every year. Whatever it is, strive for it and make it happen no matter what it takes. You'll be amazed at what you can actually pull off when you push yourself.

In fact, I had to cut down my average 401k contribution to 1% for a while due to some accounting issues that were outside of my control. Because of this, my total contributions thus far is hovering around $3,700 instead of the $8.5k it should be at now that '09 is halfway over (scary!). You know what that means? If I still want to reach my goal of hitting $16.5k, I have to bump up my contributions like crazy to catch up! And let me tell you, it's a lot more fun having 30% taken out than 90% which it's currently at (we're talking a drop from $1740 every 2 weeks to $69 and change!). Wha???

The point is, willpower's a beast when put to good use. Focus your energy into a specific goal and make it happen. If you accomplish more? Great! But at least have that major win in your pocket. Saving and investing isn't hard in itself, it's just a matter of doing something about it. So get that game plan in action and tell us what you're working on! What is YOUR #1 financial goal this year?

Labels: 401k, advice, challenges, goals, retirement