Thursday, October 24, 2013
WE'VE MOVED
Debt Free Principles is now Debt Free Guys located at www.debtfreeguys.com. Please stay connected with us there, Twitter and Facebook.
Monday, October 21, 2013
Real Wealth
Robert Kiyosaki, Rich Dad, defines being wealthy as having your investments exceeding your expenses. This can be done through your own business or businesses, investments in the stock market, real-estate and/or minimizing your expenses. The day you don't have to rely on someone else for enough of a salary to cover your expenses you're wealthy.
Foreclosing or Walking Away from Your Home Has Consequences
Home owners that foreclosed, walked away or defaulted on a previous mortgage are finding it hard to get financing now that the housing market seems to be turning around. They shouldn't be surprised. Their activity stays on their financial records and often impacts FICO scores, which is the gauge lenders use to determine lend-ability. That's why it's key to always live below your means and have emergency savings.
More - Mortgage Relief Program
More - Mortgage Relief Program
In the Market for a Car?
Buying a used car is likely the most cost effective. Do your homework first, however, and make sure you're getting what you're expecting.
More - You Can Afford the Car But Can You Afford to Drive It?
More - You Can Afford the Car But Can You Afford to Drive It?
Retail Shoppers Have Disappeared
The government shutdown impacted retail sales. With the next scheduled crisis just after the holidays, current spending levels authorized through 01/15/2014 and the debt cushion extended through 02/07/2014, shoppers aren't likely to loosen the purse strings this holiday season.
More - "Do you want to save 10% on your purchase today?" "No."
More - "Do you want to save 10% on your purchase today?" "No."
Sunday, October 20, 2013
You Can Afford the Car But Can You Afford to Drive It?
Most of us typically dream about
driving a nice car. It seems that Americans especially have always had an
affair with their cars. We have been barraged with images of vehicles from the
time we are children into adulthood in toys, cartoons, posters and every other
commercial during a typical Sunday football game.
I personally dream of some day
driving my own Audi S4, but there are many other models that bring a twinkle to
our eyes; Corvettes, Cadillacs, a 69 Camero, Mini Coopers, Jeep Wranglers,
BMWs, the new Tesla and yes even the oh so humble Toyota Camry. I need someone
to explain that last one to me though.
So you know what car revs your
engine and you have it picked out and have been saving or planning ahead for
it. So you can afford the car, but can you afford to drive it?
Per the U.S. Bureau of Labor
Statistics the average American household has 1.9 cars and spent $8,998 on
transportation costs in 2012. That is almost 17.5% of all our expenditures.
Yes, you read that correctly, we spend over 17% or over half of what we spend
on our homes on getting to and from them. What costs so much?
The reality with almost any
purchase is that there are opportunity costs associated with them. What is an
opportunity cost? That would be the additional costs to ownership. For our cars
this includes among other things, gas, insurance, taxes, license and
maintenance.
Here are 4 ways to save on car
expenses:
1. Raise
your insurance deductible- put away your deductible in an emergency account and
raise your deductable from $250 or $550 to $1000. This can save you $10, 20 or
even more on your monthly insurance premium. Insure yourself rather than paying
the extra to an insurance company
2. Shop
around for insurance – there are many providers out there shop around and pit
them against each other. There are many online tools you can use to shop for insurance
3. Premium
gas – your owner’s manual says you need the top of the line gas, but do you
really? Switch between the top grade and medium grade every other time and save
yourself a few dollars each fill up
4. Refi
– you do it with your home, why not try it with your car. If you are still out
a few years on your loan shop around for a lower rate on your loan. Switching
banks can save you a few dollars a month on your loan
Saturday, October 19, 2013
Is Dining Out Killing Your Budget?
I don’t know about your area, but
in Denver it seems like there has been a recent explosion in the number of new
restaurants. From my personal observation the increase seems to be tied to more
and more low to mid cost restaurants opening; i.e. Chipotle, Panera Bread,
Noodles & Co and Garbanzos.
According to the U.S. Bureau of
Labor Statistics the average American household spends $2678 or approximately
40% of our food expenditures away from the house. Yes, you read that correctly,
40%. Now we are all aware that food typically prepared away from costs more
than what we can buy and prepare for ourselves. So how do we cut back?
Four tips to reduce your dining
out costs:
1. Coupons
and deals – use local coupons and deal finders such as the Entertainment
Book, Groupon and Living Social to get 50% or more off.
Two things to keep in mind, the deals are usually there to lure you into
spending, so don’t end up spending more by adding on items like alcohol and desserts,
and remember to tip your server on the full amount not the discount. You
received the same level of service; the restaurant should take the hit not the
waiter/waitress.
2. Downgrade
– moving from sit down restaurants to quick casual can help save, not only on
the need to tip, but also the overall cost. Why go to an upscale restaurant to
order a burger and fries, when you can find an equivalent for cheaper.
3. Reduce
your portion intake – do you usually have a take home bag after a meal out?
Then you probably have the “eyes bigger than your stomach” syndrome. Why not
forgo the appetizer and just have the main meal, or split one appetizer between
several people? The same goes for desserts.
4. Reduce
the frequency – by cutting out one or two dining out trips a month by planning
and preparing ahead. An hour or two preparing quick meals in advance can save
you from needing to stop. We suggest making a big pot of chili or soup and
putting some in the freezer for those nights when you just don’t feel like
cooking.
Dining out
doesn’t need to take a big bite out of your budget. Implement the four tips
above and you could save 10, 20 or 50% off of your budget, giving you more
money to put towards debt and your financial future.
More - Are you spending too much?
Interest Rate? What Interest Rate?
The gap between 30-year fixed rates and one-month CDs or a saving's account rate is widening, making it more difficult for savers. This especially hurts the middle class and retirees
Friday, October 18, 2013
Tips to Create a Budget
8 tips to creating a budget. They key points are to be flexible and consider both sides of your balance sheet, if necessary.
Tips for Cutting Back Credit Card Spending
Three tips for cutting back spending on your credit card.
"Do you want to save 10% on your purchase today?" "No."
Did you ever regret agreeing to sign up for that retail credit card? Here are four steps to correct that.
Fix it for Free
There's nothing cheaper than free. Learn how to get help fixing things for free. Fixya's a pretty cool website. They cover auto repair, cell phone repair, even children's toys.
NFL/Netflix Deal
The NFL is squashing rumors of a possible deal letting games to be streamed through Netflix or Google. In businesses, rumors typically come from a shred of truth. Cord-cutters stay tuned. If/when this happens, it will provide much needed competition to cable TV.
More - Cutting the Cable Cord
More - Cutting the Cable Cord
Interview Prospective Realtors As Potential Employees
We don't think many people who are selling or buying a house consider "interviewing" prospective realtors. It's good advice, though.
Thursday, October 17, 2013
Downsizing Your Home to Save $$
"Rightsizing" was the trend just as the house market started to crash. Though retirees continue rightsizing, it's still not a bad option for younger homeowners. Cutting back on overhead can be profitable for a lot of people.
The Washington Threat
Business leaders around the country are starting to see Washington DC as the biggest threat to the U.S. economy. This affects jobs. Because of the recent "crisis" many businesses saw consumer spending drop. This happens crisis after crisis and Washington is nothing anymore if it's not a crisis.
Despite Washington's Best Efforts to Ruin The Economy
Retail stores are poised to hire temporary workers this holiday season. That's a relief for many. Expectations are that many of these positions may lead to full-time work.
How Fiscally Responsible
They didn't even wait until a deal was passed. The debt ceiling deal included funding a $3 billion project for Kentucky. Pork! What's the point of having a debt ceiling if we're just going to plow through it every several months?
Kicking the Can Down The Road
Yes, an 11th hour deal was made to fund the government but only temporarily. As we said last week, we'll be having the deja vu yet again early 2014. Yawn! In the meantime, pay attention to see if spending is even cut back.
Wednesday, October 16, 2013
We Need More Austrian School of Economic Thinkers
Said Einstein, "We cannot solve our problems with the same thinking we used when we created them." Will economic manipulation play out better this time?
Preparing Your Child for the “Real World”
We’re
reading more and more about the escalating
costs of college and how unprepared young adults are to manage
their own money. We’re not judging. We were financial nightmares ourselves. In hindsight, we feel we weren’t given
sufficient tools to be prepared. Blame
that on upbringing or education or whatever.
Personal finance education isn’t
coming from school anytime soon. What’s
a parent to do? What if you treat your high school-aged child as a
roommate? Ha!? What?
Why would you do that?
Hear
us out. Studies show that when students
first get into college, they’re not financially mature. They don’t understand the value of a dollar. They don’t understand why they should be
cautious about, spending, school sponsored credit cards and debt. They aren’t prepared to pay bills or share
expenses with their roommates.
As
CNNMonday reports, the
average allowance paid by the 61% of parents who pay one is $15 a week. Most
kids don’t save this money. 81% of
parents say they’ve discussed money management with their kids. What does this really mean when allowances
are spent almost as soon as they’re received?
This suggests there aren’t enough
real-life examples for children, only theory. CNNMoney suggests using allowances as a
“gateway to budgeting”, reserving the money for going out with friends and
short-term expenses.
What
if parents took this further? The idea
is to provide a real-life example of the value
of a dollar. If, when students get
into high school, they are treated as a roommate, they’ll more quickly become financially mature. Maybe home shouldn’t be a free ride.
What
do we mean, exactly? Have teenagers pay bills. Maybe have them pay all or a portion of
their phone bill. Make them responsible for covering a portion of the groceries they
eat, maybe provide cabinet space for their own food. Make them pay for gas, car insurance or part
of the car payment. They could even pay “rent”
and if they miss a payment, they sleep on the couch.
This
may require a bigger allowance or them getting a part-time job. Of course, children can’t be responsible for
covering all of their expenses without a full-time job. Parents
are still responsible for providing most needs, so make sure they eat and
sleep well.
Parents
are also solely responsible, apparently, for providing their children with personal finance education. We think this may be a helpful way to do so.
Worth Repeating
"The greater part of our happiness or misery depends upon our dispositions, and not upon our circumstances.” - Martha Washington
College Degrees Aren't Worth It
So say two-thirds of American. 68% believe that degree programs currently cost more than they are worth, and 36% said that the cost of a degree has risen disproportionately to its value in the last five years.
5 Retail Tricks to Turn on the Retailer
Retailing has become a science meant to induce you to buy more. Here are tips retailers use on us that you can turn around and use on them and save money.
Know Your Goals and Stick to Them
In
2006, we got the bug to stop renting and buy our own home. Who didn’t, then, right? Like most couples, we wanted a place of our
own. We first educated ourselves on the
process and the real estate market in the Denver Metro Area. We didn’t want to live far outside because
this is a great location between our work, family and friends.
We looked
at homes in our area when there was an “open house”. We distinctly remember one home located in Denver’s
Capitol Hill. It was going for just over
$950,000. We knew before walking inside that
we couldn’t afford it, but we wanted to see it anyway. It was a beautiful home with a nice
yard. The kitchen and dining room were
recently remodeled. We liked it, but it
was more than we could afford and we
decided to leave.
On
our way out the door, we passed the selling agent. She was a blond woman, about our age, lying
in the recliner in the front living room.
While chewing gum, we swear, she asked us if we were interested in
submitting an offer. She had no clue who
we were! One of us, we don’t remember
who, said, “It’s a nice house, but we can’t afford it.” In her best Valley Girl accent, she said
matter-of-factly, “Just get a no-interest ARM.”
It
was all we could do to not laugh. We
were raised right. What was she
thinking?! We were novices to the real
estate market, for sure, but our backgrounds are in financial services and we
had an understanding of how interest rates work. Neither
of us wanted to stress about where mortgage rates would be in five+ years. Bill Gross can’t even predict that.
After
more self-educating, we did some soul searching. We asked ourselves, “What’s most important to us?” We
had three objectives and still do; we want to travel, save for retirement and not
be house-poor. We have a tough time
sitting at home and when we’re finally forced to, we want to do so comfortably.
Based
on our income in 2006, we calculated the maximum we could afford and meet our
goals was $130,000. You may think that’s
a lot or a little. We decided this would
let us make monthly payments on a mortgage, while still having money to travel,
save and enjoy our life.
We
searched far and wide and quickly learned it was hard to find a decent place
for $130,000 or less in the Denver area.
We should, also, add that neither of us is particularly handy. We can paint like bad-asses, but can’t do
much beyond that. Our real estate agent knew
our income and frequently suggested increasing our maximum. We held fast. We knew what we could afford
and were determined to make it work.
After
looking at several places, we found a condo we liked and would work. Our negotiations eventually broke down. We were frustrated. We took ourselves out of the market for
several months. After time passed, we
became re-engaged. We started looking at
homes and nothing suited us. The more
and more we thought about it, the more we wished our negotiations on the condo worked
out. We decided to wait for another
condo in the same building to go on the market.
We practiced patience and eventually
a condo became available. This one was
four floors higher and faced west, the opposite direction, with a city and
mountain view. It was much better than
the previous place. We submitted an
offer and after some negotiating, our offer was accepted. We closed on April 20, 2007.
We
have a two-bedroom/two-bathroom, 1,008 square foot condo and a huge,
west-facing balcony. It’s small relative
to most of our friends and family. It
was a fixer upper. It still is a little.
Since
our purchase, we’ve been to London, England; Ibiza and Sitges,Spain; Sydney,
Melbourne and Cairns, Australia; Auckland, Waiheke and Kaikoura, New Zealand; two
times to Puerta Vallarta and once to Playa del Carmin, Mexico; several times
each to San Francisco, CA, Philadelphia and Hershey, PA. While doing all this travel, we’ve saved a
bunch for retirement and feel comfortably on track. We’re
meeting our goals.
To
this day, we still talk about the real estate agent in that $500,000 house in
Capitol Hill and think how bad our
situation would be if we had taken her advice. We’ve all seen the stories since 2008, so
it’s not hard to imagine.
The
point of this story isn’t to show off our great life. We want to share what we learned. The lesson we learned is that it’s up to each person or couple to decide
what they want and make their life fit what they want. Most of us aren’t rich and we need to
weigh trade-offs. For us, we need to
decide what’s important. We may need to practice patience, save
extra money and ignore what others say.
If you want a house full of kids, do it, get earplugs and consider you
may give up some things to fulfill this dream.
If you want a large, fancy house with no kids, that’s also great and you’ll
likely have trade-offs, too. If you want something else, don’t let other
people’s objectives or dreams influence yours.
Oil Subidies Meet Farm Subsidies
Many complain about oil subsidies, and they should. When they do, we often mention farm subsidies.
Revolution Partie Deux
Are we seeing an American-style French Revolution? We're not likely to see people taken to the guillotine, but that doesn't mean we shouldn't pay attention. The clowns politicians in Washington should take note of numbers 12 and 13.
Debt-Limit Deal Coming Down to the Wire
Looks like Mr. Boehner has lost control of his House. It's just astounding that we're even at this point, again. These leaders continue to fail at their job and continue to get elected.
Tuesday, October 15, 2013
A Financial "Disorder"
Call us skeptics. A disorder or disease suggests lack of responsibility and makes it more difficult to fix financial problems one may have.
It's Luke Deja Vu All Over Again
We've seen this play out before and we're doing our best to do it over again.
Save Money This Holiday Season
If you have a credit card with unused miles, most will let you spend them in their "shopping mall". This is good advice if you have miles and need to cut back on your spending this holiday season. Use credit you've already earned and don't use cash or your credit cards.
If You Have to Ask Then, Yes You're Spending Too Much
A list of five things on which you're overspending. Gifts, weddings and cars are certainly included.
An Answer to the Higher Education Bubble . . . the Internet?
With the costs of college skyrocketing, students are beginning to look elsewhere.
Oops! Broke the Coffee Grinder this Morning.
Maybe
it was too early in the morning? I attempted
to make my morning coffee today and, sadly, I had no ground coffee left. I know!
I sound lazy. To my credit, it
was 5 AM. Anyway, I had some sort of
crazy hand spasm that caused me to drop the lid of our coffee grinder.
Necessity
is the mother of invention, right? Okay,
maybe I’m giving myself too much credit now.
I used tape to piece the grinder lid back together. I wasn’t going to go without coffee today.
Now that
we think about it, this will save us from having to buy a new grinder. $20 savings, right there! Sure, it’s only $20. But, why spend it when it’s not
necessary. No one sees our grinder but
us. Plus, we’re curious to see how long
we can make this last.
We Know Orange Juice Purchases Have Declined for Our Household
OJ purchases at a 15 year low due to competitive products and higher costs.
Since We Talked About Holiday Toys, How About Holiday Beers
Here's a list of holiday beers to save up for this year. A six-pack of one of these is a nice, affordable gift for dad.
This is a Travesty - A Chocolate Price Spike
The main ingredient in chocolate, cocoa butter, is up 70% in the last year. Your Hershey bar may get smaller and your higher-end, dark chocolate will likely increase in cost.
Noble Prize Winner Warns of "Bubbly" Houseing Market . . . Again
An American economist, Robert Shiller (of the Case-Shiller Index), who just won a Noble Prize, again, "expressed alarm at the rapid rise in global housing prices." He blamed the bubble on the U.S. Federal Reserve's $85 billion Treasury purchase per month program known as QE3 and housing market speculation.
1 in 10 Admit Secret Credit Card Purchases Played a Role in Their Divorce
Family finances play a big role in a relationship. Managing the family purse strings should be a team effort. Often, though, dishonestly about finances is a symptom of other issues.
Monday, October 14, 2013
If The Queen Can Cut Back, So Can You
Looks like The Queen's private train may be too costly to repair. Are we watching The Queen live below her means or be money conscious?
DIY Home Sales
More and more homeowners are selling their homes sans real estate broker. The 85 year old woman in the condo below us sold her condo completely on her own. No problems. In addition to not having to pay broker-fees, she sold it above market value. The buyer probably should've used a broker.
Are Politicians Profiting Off Of the Market Volatility They’re Creating
When
I got home from grocery shopping, I checked to see how the stock market
closed. It closed up today. The consensus is that the market closed up due to speculation
that a debt-deal was eminent. Lately every
day is different. One day it’s down due
to a lack of an agreement. The next it’s
up due to the speculation of an agreement.
This made me wonder if our politicians are investing long and short contingent
on the sentiment they share with the media.
60 Minutes did a story in 2011 on high-level government
officials profiting from insider trading, making
government deals and investing accordingly before the information was
public. This got Washington up in arms
and they finally decided to pass the “Stop Trading on Congressional Knowledge”
Act or the “STOCK” Act. You know someone
gets paid a lot of money to come up with acronyms in Washington? That’s an “essential” job, of course.
Congress
passed the bill and everyone patted themselves on the back. That was, until, they realized enforcing it
was going to be hard. So, on the DL
(down-low), Congress, both Democrats and Republicans, quickly passed
an amendment on April 12 and 13, 2012, gutting key provisions of the act
and President
Obama signed it into law the following week.
Essentially
the amendment to the STOCK Act removed requirements to create a searchable database
listing disclosures of high-level officials and file their disclosures
electronically. This makes oversight
virtually impossible. Yes, insider
trading is still illegal, but without critical oversight, who knows who’s profiting
off the rollercoaster we’ve been riding.
Insider trading was illegal prior to 2011 and clearly the oversight and
adherence to the law was questionable.
This
makes us wonder if politicians are profiting off of the market volatility they’re
creating with the government shutdown and debt deal negotiations.
Save Money When Buying Fruit
Americans
are reported to throw
away about forty percent of food annually. That’s not far off from throwing away half of
our food. As we mentioned
last week, some of this may be due to confusion when differentiating
between what is safe and unsafe to eat.
If
you buy fruit during your weekly grocery trip, like we do, you have a lot of
fruit around the house. Fruit is great for snacking
and to keep you healthy. It’s, also,
great for enhancing meals, like mango salsa with homemade tacos or a pear
chutney over a pork loin roast. Yum!
So, if you’re a fruit-eater, you know it’s sometimes difficult to eat your fruit before it spoils. Here’s a solution.
When we get home from the grocery store, we put all of our fruit in a freshly cleaned sink. Then we mix a combination of one part white vinegar and three parts water. We let the fruit soak for about ten minutes, drain the sink and let the fruit dry. Then, depending on the type of fruit, we store it in a fruit bowl on our counter or in our fridge.
The
water-vinegar mixture kills about 98% of the bacteria on fruit. This slows down the spoiling process and helps
fruit last up to a week or more after getting it home. Before it’s time to eat the fruit, we’ll rinse
it off again.
This
means we don’t waste our fruit, which saves us money or gets us a better return
on our fruit investment.
Considerations When Applying for a Store Credit Card
In general, the rewards for signing up for retail store credit cards aren't worth it. If you're considering one, ask yourself these questions.
Worth Repeating
“He who is not contented with what he has, would not be contented with what he would like to have.” - Socrates
Lower Gas Prices Mean More $$ in Your Wallet
Gas prices have been down for most of the year. If you have a budget, you should be seeing savings on the line-item for gas. Put this extra money towards your credit cards and pay them down sooner.
Taking Living Below Your Means to the Next Level
This is taking the moto of Living Below Your Means to the extreme . . . but, hey, if it works for you . . .
Sunday, October 13, 2013
Great American Beer Festival Winners
We're fortunate to live in Denver, home of the annual Great American Beer Festival. We didn't go this year. We do have a list of winners and will try them throughout the year. If we're staying home to save money, we'll spend just a little more on quality beer or wine. Being Money Conscious doesn't mean having a bad life.
Be a Financial Role Model
Another way to help your child(ren) learn about money is to be a good financial role model. Mostly this requires talking.
Money Mistakes to Avoid in Your 20s
Unfortunately, some people are still making these mistakes in the 40s and 50s.
Saturday, October 12, 2013
4 Tips on Teaching Kids About Money
It's never too early to start teaching your kids personal money management.
Cut Your Cable Cord and Still See NFL Football
Apparently this technology has been around for a while, but we're not the savviest techies. We're not sure how legal this is. Watch free NFL Football at your own risk.
More - Cutting the Cable Cord
More - Cutting the Cable Cord
Friday, October 11, 2013
Cash is King
Cash is king, but you still have to rule over the process. That means opening a bank account with no charges for using ATM, at least not your bank's ATM, free checking, no hidden fees and no fees to use a teller. These kinds of accounts are out there. It just requires research. If you can't find any, reduce the number of times you go to the ATM. Plan your budget in advance and withdraw what you need and nothing more.
It's Time to Cut the Cable Cord
If you haven't cut your cable cord yet, now's a good time. We have Apple TV and like it. We cut the cord three years ago and haven't missed it, except for the occasional football game that we can't get. If the game is important enough, we'll walk to a local bar. It's more social and gets us out of the house. We just have to be conscious about no overspending on beer.
If You Think You Have it Tougher Than Your Parents You Probably Do
You especially have it tougher than your grandparents. Check out the graphic here. Of all, the home size it was surprises us most as this is something homeowners can pretty easily control.
Managing Your Personal Finances During Ceiling Negotiations
We can all be proactive and mitigate our risks of being impacted by the debt ceiling crisis. Pay off credit cards, have emergency savings, have a budget and be money conscious.
Maybe It's TIme to Vote All Our Fearless Leaders Out
Polls are showing more and more disgust with US politicians and the eagerness to vote them out. Unfortunately, we've heard this before and that doesn't seem to happen like it needs to happen.
Thursday, October 10, 2013
Credit Card Usage Down Again
Consumers continue their third straight month of declining credit card usage. This is a positive trend.
Broke? There's An App for That.
There's now an app that keeps track of your budget in real-time. Just cause some don't keep a budget for whatever reason doesn't mean "the budget is dead, though. It just means it needs to be reworked. This group has a solution, but does seems like they just shoved Quicken into an app.
A Cure for Social Security?
Rather than spending research dollars to find treatments for the diseases of old age, maybe we spend those dollars on research to slow or reverse the aging process. Healthier sixty and seventy year olds can work longer and be less of a stress on Medicare, Medicaid and Social Security. This approach may even provide a better return on investment than researching treatments for cancer and heart disease.
Kicking the Can Down the Road
The government doing what the government does best. It's like that couple that's always on a break cause neither is courageous enough to officially end the relationship or that person who's always telling you they're going to start dieting and working out "next Monday".
Back-To-School and Retail Sales Likely Down for September
This may indicate good sales this holiday season. If there are, how about buying only what's on sale and cutting back this year? Use your extra money to pay off credit card or other debt or just appreciate not having buyer's remorse in January.
Now It's Time to Focus on Something Important
Hershey is coming out with a new brand of candy, it's first in 30 years. "Lancaster" will be a soft, caramel crème. Sounds delicious!
More Wine for All We Say
Millennials are changing the wine industry. Money quote: "In the same way [millennials] don’t trust the banks, insurance companies or the government, they don’t care what critics say about a wine or how many medals a bottle has won.” They are more about the experience of finding and drinking the wine, how they found it and how it tastes, not how much it costs or how many medals it earned.
Jobless Claims Increase
Jobless claims are up 66,000 to 374,000 through October 5th. Looking at the market, you wouldn't know this was a bad thing. Wall Street is more concerned about E Capitol St. NE.
Save Money by Not Confusing "Sell By" Dates with "Expiration" Dates
The average American family of four throws out about $1,560 worth of food that's likely still good to eat. With a household income of $50,000, that's a 3% raise.
Wednesday, October 9, 2013
The Fine Print of Credit and Debit Cards
MarketWatch shares details many overlook when they receive a credit or debit card. These can all be avoid, of course, by using cash. Cash is King.
Patience and Frugality May Be Better Than an MBA
A retired secretary born in rural Illinois in 1909 dies with a $7 million estate and donates it all to charity. That same year, 2010, an ex-CEO of Merrill Lynch who got his undergrad from Dartmouth and MBA from the University of Chicago files for bankruptcy. Maybe we need to change our approach to financial literacy.
Young Chinese Don't Want to Work in Factories
There will likely be growing pains for China and more expensive iPhones for all, but we hope they succeed. As Martha says, "It's a good thing."
Cars Are No Longer Cool in Japan
The younger generation in Japan isn't buying cars. Wages and full-time jobs are down. This makes cars and fees to park cars too expensive. Young Japanese would rather buy tech gadgets anyway. Personally, we think they're making the right decision. They're balancing their needs versus wants and living within their means. Of course, Japanese automakers aren't happy.
Is a Good Credit Score Necessary for Decent Coverage Under The Affordable Care Act?
People in Florida are being asked to provide their credit score when signing up for the Affordable Care Act (a.k.a. Obamacare). Health providers want know if you're defaulting on your loans before committing to take you onto their plan. Credit scores are required to apply for some jobs now. Get your score up and as high as possible.
Automaker Relying More on Subprime Loans
"[GM] is relying increasingly on subprime loans [to have their cars financed], 10-Q financial reports show." If your FICO score is close to or below 660, be cautious about what you're buying and your loan agreement. We've seen this story play out before and the individual doesn't win when the market tanks. Be money conscious and contact each of the credit rating agencies (Experian, TransUnion and Equifax) for a free copy of your credit report. You may also contact freecreditreport.com for a report, but it's only free if you cancel before the 7-day free trial ends. Otherwise, you're charged $19.99 monthly
Tuesday, October 8, 2013
Obama Likely to Nominate Janet Yellen for Fed Chair
President Obama is likely to announce Janet Yellen as his nomination to replace Ben Bernanke. Yellen is likely to accept and run the Federal Reserve much the same way Bernanke has, continuing QE3 ($85B/month Treasury purchase program, historically increased transparency).
Credit Over Debit
Are there times when using a credit card is preferable to using a debit card? Why, yes, at least five.
US Car Sales Growth May Continue Through 2014
Car sales have started to improve. Estimations expect this to continue through 2014 due to the age of the average car on the road being about 11.4 years old and about 500,000 more car leases set to expire this year over last. If you're in the market for a new car/new-to-you car or will be, pay attention and prepare yourself to make the right decision for your finances.
Dinner Party for Less Than $100
Last
weekend we hosted a dinner for three for $99.64. We had a steak dinner, dessert and wine. We still have leftovers. How did we manage this?
·
We made everything from scratch or close to
scratch
·
We were Money Conscious when grocery shopping
·
We bought three bottles of not-so-expensive
wine and a box of wine (not your grandmother’s Franzia)
For
an appetizer we got a wedge of brie for $3.70, a medley of olives and other
pickled vegetables from the olive bar for $2.94 and organic, whole wheat bread
for $2.99. We already had ginger-peach
marmalade and water crackers for the brie and olive oil and vinegar for the
bread.
We
got a cheap bottle of Vino Verde (I can’t remember the name - It wasn’t great) for $7.99 that we
drank while cooking and waiting for our guest.
For dinner we bought a bottle of Zin 91 for $13.99, a bottle of Piping
Shrike Shiraz for $16.99 and a Black Box merlot for $24.99 to drink after we
finished the other wines. Your taste
buds can’t tell after three bottles, can they?
Plus, we now have leftover wine that’s perfect for weeknights or our
next dinner. Our guest brought a bottle
of Barco de Piedra Tempranillo for $15.99.
This didn’t add to our personal costs, so I’m not including it. It was yummy, though.
For
dinner we grilled a New York Strip steak.
We chose a New York Strip because they’re leaner, but not too lean. We bought 1.02 pounds at $10.99 per pound, totaling
$11.21. A serving of meat should be
between a quarter to a third of a pound.
We know! Most people will scoff
at such a small serving. Not only are we
living on a budget, we’re also controlling our caloric intake. A third of a pound was more than enough for
all. We seasoned the steak with a dry
rub and set it on the counter for a couple of hours to get to room temperature
before grilling it. This prevents
toughness. Our side dishes included
broccoli with olive oil, salt and pepper.
The broccoli was $1.99 per pound.
We bought two pounds exactly, totaling $3.98. We bought a bag of red, yellow and purple
potatoes for $2.99, a white onion for $0.59, and three bulbs of garlic for $1.00. With these ingredients, we made a sautéed medley
of potato quarters. We only used one bulb
of garlic. We had enough broccoli and
sautéed potatoes for everyone and still have leftovers. We’ll finish these this week. This will prevent us from wasting food and
eliminate cooking.
For
dessert we bought a bag of store-brand ginger snap cookies for $2.29 and a pint
of Hagen Dazs vanilla bean ice cream for $3.99 (on sale for a dollar off). We used these ingredients to make ginger snap
ice cream cookies. While cooking, we
discovered a bar of dark chocolate that we got as a gift. Just before serving our ice cream cookies, we
melted the chocolate down and dipped half of each cookie into the
chocolate. Each person had three
cookies. Being an ice cream lover, I
finished the pint last night. The bag of
cookies is almost gone three days later.
Our
guest visited for over four hours. It
was a relaxing evening with a lot of talking and laughing. We would’ve easily spent $300 at a restaurant
for as much food (and wine) as we had. The
wine would’ve cost over $100 alone.
Not only was our food delicious, it was healthier than what most
restaurants serve. We used salt, but not
a lot. We used olive oil in place of
butter. Lastly, we controlled our
portions.
The
best part was that we didn’t have buyer’s remorse the following day and half of
our dinner was already made for the next night.
Consider
hosting a dinner at home instead of going out and over-spending. If you don’t want to take on all of the work
or you want to split the costs more evenly, have your guest(s) bring food.
Don't Be Like Our "Fearless" Leaders in Washington
"There's an absence of any signs that political leaders are willing to face this problem and address and restructure these obligations," billionaire Paul Singer said. If you're having financial troubles, don't follow Washington's lead. Face the problem and come up with a plan to address them.
How Are Fleetwood Mac, Adele and Your Problems Alike?
I
was exercising at the gym this morning and “Big Love” by Fleetwood Mac came on
my iPod. I was about the change it when
I decided to listen. Lindsay Buckingham’s
guitar skills on that song are amazing.
When I was listening and doing bent-over-barbell-pulls, it struck me as
ironic that two of my favorite albums came from dark places for the artists. Then, I thought, maybe their stories can be
an inspiration for others.
In October
1997, Fleetwood Mac appeared on the cover of Rolling Stone (issue 772) with the headline “The
Lovingest, Fightingest, Druggingest Band of the ‘70s Comes Back”. It detailed their meteoric rise to success
and fame, the drugs, jealousy, cheating and anger that came with that success
and fame and their ultimate (temporary) break up. Twenty years after the rollercoaster started,
they were back on top and about to release their Grammy Award winning album The
Dance. At the height of the
negativity, they created arguably one of the greatest albums of all time. That album, Rumors,
was created when the two couples of the band, Buckingham & Nicks and John
& Christine McVie, were in the middle of breaking up. Drugs, fighting and cheating were
everywhere. There were times when some
thought the album wouldn’t happen.
Despite
everything working against them, much of it their own doing, they
persevered. They stuck it out, got back
up when they fell and were more focused on the end result than the present
situation.
Adele’s
relationship with a man ten years older ended around April 2009. Adele seemingly put more stock in this
relationship than her partner. When they
eventually broke up after he heard the first recording, “Take it All”, for her
new album 21, she was
apparently devastated. Not being one to
let a bad situation ruin her, she channeled her emotion into writing new music
for her upcoming album. When the album
was released in January 2011, no one could have known the success that was
about to come. Winning both a Grammy and
a BRIT Award, the album topped the charts in over 30 countries for both 2011
and 2012. Your humble bloggers will
even go out on a limb and say 21 will
be the top album of the ‘10s (is that what we’re calling this decade?).
What
does all this have to do with me, you say?
If you’re drowning in debt or money problems is ruining your
relationship, or you’re dealing with other personal struggles, and you don’t
see a chance of recovering, consider these success stories. They aren’t the only stories out there about
a group of people or a person hitting a low point and using that low point as a
springboard to success. Use your fear,
your anger, your frustration or whatever emotion(s) you have to inspire you to
success. Whatever your financial
problems, whatever your problems, you can overcome them and the outcome will be
better than you can imagine.
We
had over $51,000 worth of credit card debt and were living in a basement. Rather than resigning ourselves to failure,
we did what we had to do to climb out of debt, buy a home, and increase our
travel and retirement savings. If all these
people can turn failure into success, so can you.
Is
that corny enough for you?
Worth Repeating
“He is richest who is content with the least, for content is the wealth of nature.” - Socrates
What Male Models Earn?
You hardly ever hear about male models and you never hear how much models earn. Woman own this market for sure. "The top 10 top-earning male models earned a combined total of $8 million from September 2012 to September 2013, a measly amount compared to the $83 million their female counterparts raked in over the past year." Still the men are making decent income. Hopefully they're managing their money wisely.
Business Travelers Are Dining on the Cheap
The most popular restaurants for business travelers are Starbucks, McDonald's, Subway and Panera, in that order. Supposedly this is cause these restaurants are quick and easy, but we think it has more to do with tighter corporate budgets. A few years ago, I was traveling on business to a different state and my boss asked me to bring my own food. Ha!
Same-Sex Spouses Should Review Retirement Plans
Same-sex couples have a lot more considerations now. For the foreseeable future, most same-sex couples should considering using a tax or financial professional, especially those whose relationships aren't recognized by their state. Having their relationships recognized by The Federal Government and not their State Government could be confusing.
US Small Business Confidence Dips
US small business confidence dips slightly, but still remained positive about their business prospects. Investors and small business should focus more on earnings season and less on Washington's games.
A Guide to Credit Cards for High School and College Students
Here's A Guide for Credit Card Newbies that all students should read and then follow.
Social Security: Don't Say You Haven't Been Warned
10 Things Social Security Won't Tell You. Basically, try not to rely on Social Security. Think of it more as a perk.
Monday, October 7, 2013
Americans Cut Back on Credit Card Usage
We're sure much of this has to do with the drama spewing out of Washington, D.C., but it's still a good thing.
Small Boosts to Your Retirement Plan Has Huge Benefits
After most people pay off their debt, they use their extra money to improve their quality of life, i.e, start spending it. What if you didn't do that? What if you put at least half of that towards your company sponsored retirement plan, Tradition IRA or Roth IRA. The benefits are huge if you contribute this extra money regularly. Take a look.
Teaching Children About Money
It's never too early to teach your children about money. Money management won't be taught in school This subject is completely up to you. Here are some age-appropriate tips.
Social Security Recipients at Risk
Here's another reason to not rely on Social Security. Studies suggest that Gen Y and Millennials don't expect to be around for them and are planning otherwise. Unfortunately, many current recipients may not have planned accordingly. All generations should plan as if Social Security won't be around to help them. For your own security, consider it a perk.
Free Money for College
The best way to avoid the effects of the student loan crisis is to get others to pay for as much as possible.
What's the Worst Kind of Debt?
Here's a list of the pros and cons of various forms of debt. We would argue that some debit, such as credit card debt, is worse than others. This article takes a more middle-of-the-road approach.
How Much Do You Need to Save for Retirement?
The keys to saving for retirement are, 1) start early, 2) save consistently and 3) monitor your savings rate and adjust accordingly.
Credit Cards with No Interest until 2015
Here's a list of credit cards not charging interest until 2015. If you're interested, be sure to understand the transfer fee and what rate to expect when they do start charging a fee.
Saving for Retirement Is Harder
Retirement: Saving for retirement can be less difficult if one lives below their means and commits to saving regularly. Also, only in the most dire circumstances should one cash out their retirement prematurely.
This Will Help The Family Budget
Gas prices are down. Don't go out and buy a gigantic car, though. Using the extra cash to pay off debt or build up your emergency savings.
Economies Still Feeling the Effects of Lehman Brothers
People around the world of paid down their debt and are hoarding cash. For an individual or family to do this is a good thing. When millions do this, it can be bad for economies.
Saturday, October 5, 2013
"To Not Want or Fret Over a Bill . . . Is One Less Stress"
Some people are choosing to not run the rat race and cutting out the middle man to have their life of leisure sooner.
RSVPing "No"
43% of Americans say they've declined attending a wedding because of expenses. We have and I think some brides are still angry with us. If you can't afford it, you can't afford it. 43% seems a little low, too.
The Debt Ceiling Discussion in Pictures
CNNMoney has, essentially, put together a PowerPoint describing the issue with the debt ceiling.
Friday, October 4, 2013
2013 Shipping Wars Are Starting
Maybe you should avoid the malls altogether this holiday season. We stay away from all malls from mid-November through mid-January. It's not that hard, actually, and avoids a lot of stress.
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