Wednesday, April 30, 2008
Many homeowners that have lost their homes are victims of predatory mortgage practices. Michelle Singletary discusses how these unscrupulous lenders should pay for the harm they have done in her column: Prosecute the Mortgage Sharks
My hometown of Philadelphia put in place a moratorium on all foreclosure auctions for April and implemented other measures aimed at helping slow foreclosures. The Mid-Atlantic area where I reside seems not have been hit as hard as other areas such as Florida and California. The homeforclosure issues across the nation certainly speak to larger issues in the American ecomony. Let's hope these economical issues will change for the better soon; the Fed cut interests rates again, Will the home foreclosure rates in your area spur you to buy a home quicker or wait until the economy is in better shape?
Monday, April 28, 2008
Saving While Paying Off Debt
You should save even while you are paying down consumer debt. This will prevent you from incurring more debt. For example if you are working furiously to pay off your credit cards without saving any money and your roof leaks during spring torrential rain down-pours, you will be forced to use your credit card to fix that leaky roof and incur more debt. Most minor emergencies can be handled with $500-$1,000 in emergency savings. So instead of spending that tax stimulus rebate or refund that you should soon be receiving if you filed your taxes, stash that away to build up that savings cushion quickly. Read this MSN Money article on Why You Need $500 in the Bank for more ways to build this emergency savings quickly.
Once you have paid off your consumer debt, try getting that emergency savings up to at least three months of your living expenses. This could take a while, but it’s important to have a goal in mind so you stay disciplined. The nation's shaky economy should be more incentive to start adding to or opening up that savings account.
What Qualifies As An Emergency?
Everyone's life situation is different, so an emergency for me may just be an inconvenience for you. Some emergencies could include:
-Health Expenses and Prescriptions
-Unexpected Rise In Utility Bills
-Home Maintenance/Improvement (leaky roof, broken water heater, etc)
-Family Tragedies (Funerals, Sickness)
-Car Problems (Only if you cannot get to work, school, etc. by public transportation)
Stop Using those Credit Cards (Unless you pay off balances in full monthly)!!!
This is the only way you will increase your networth and leave more money in your budget to set aside in savings.
Separate Savings for Specific (Non-Emergency) Goals
Whether you are saving for that summer vacation, a new car, a down payment for a home, or your children’s college educations; it is good to save for your goals in life. You don't actually have to have several accounts. Online banks like ING Direct allow you to have separate categories for one account. You can also use this same idea with certificates of deposit (CD's) for savings goals that may be a couple of months to a years off. For those who are more visual, this may help you to see the progress on your savings goals. This way of saving can also force you think more closely about how and what you spend you money on because you won’t have the instant gratification of using a credit cards for purchases.
Make Saving Automatic
Some people are disciplined enough to save consistently every month on their own. But many people including myself will forget about saving if its not done automatically. Have savings taken out our your checking account every pay period and transferred into a separate savings account so you don’t even see the money; this way you won’t be tempted to fritter it away on other things.
Thursday, April 24, 2008
For this reason, I have started looking on the Internet for ways to pay for graduate school (without) student loans, so I wont have to add to my loans while pursuing a graduate degree. Here is an article from U.S. News & World Report on Paying for Grad School.
I would encourage any student attending undergraduate or graduate school to do their best to finance their education without the student loans. If student loan debt cannot be avoided, live like a student a little longer until you make some headway in paying off those student loans.
Tuesday, April 22, 2008
Collages. If you are crafty and like to try easy projects, make a collage. You won’t have to spend a dime to do so if you have a cardboard box, old magazines, old newspapers, scissors and some glue or tape.
·Cut off a large piece of the box that will serve as your “canvas.”
·Peruse old magazines and newspapers for pictures for your collage. You can pick a theme like flowers or a color palate,or just use whatever strikes your fancy and cut it out. You can also pick out inspirational words or phrases or even use pictures of pets or loved ones to decorate your collage.
· After you have cut out all the items you want to use for your collage and arranged them on your piece of card board, glue or tape them on the cardboard.
·Let it dry and then hang your whole-made piece of art!
Frame cheap posters. Go to Allposters.com or the many stores out there that sell inexpensive posters. Buy a cheap frame from Target or even the Dollar Store and hang and enjoy!
Fabric. If you have a nice piece of fabric or cloth you can stretch it on to an inexpensive piece of painting canvas from an art supply store, or simply hang it on the wall unframed as decoration. If you don’t have fabric, buy a few yards at a fabric store, many styles are pretty inexpensive and this way, you can decorate a large or small way in one step.
Framed pictures from calendars. Tear out some pictures from your favorite old calendar and frame it.
Mirrors. Target, Ikea, and other stores with inexpensive home décor sell wall mirrors that are pretty inexpensive. This idea may work well for you if you have a small space you want to give the illusion of being larger.
Collections (hats, handbags, earrings. Etc.). Use hat collections, hangbags or scarves to decorate your walls. Just measure and hang. This could also be good conversation starters when you have company over.
I’m sure there are dozens of other ideas, but here are just a few ways to decorate you walls without spending a lot of money.
Friday, April 18, 2008
I consider myself to be a fairly intelligent person, so why do I have debt? Here are a few reasons why I have debt that are not unique to other 20-somethings out there:
Student Loans. My parents did not have the money to pay for my college education out-of-pocket (not a unique situation these days), so I took out student loans to finance my college education. I was also a decent high school student, but did not receive much in scholarship money. But I did not want this to prevent me from attending college. I know this debt is well worth the expense, but it IS still debt that I will be paying for at least the next few years—unless I get some crazy, unexpected windfall sometime soon. For this reason, I am trying to figure out how to NOT accumulate more student loan debt in reaching my short term goal (during the next 5 years) of obtaining a graduate degree.
Supporting Yourself Isn't Always Cheap. I got my first job out of college the summer after I graduated and relocated back to the city I attended college in (Washington, DC). Because my family resides in another city, I didn't have the option of living at home for a while to save up money. For the first several months of my first job, I had roommates; I have lived on my own for the past 10 months. I love my independence and enjoy the feeling of knowing that I received only a moderate amount of help from my family in learning how to support myself.
But because I didn't have the fall back of living at home for a while (which would have been a pretty good decision in hindsight), combined with the fact that I live in a city where housing isn't cheap, a big chunk of my take-home pay goes to rent, utilities and other living expenses.
Former Spendthrift. I wasn't always committed to finding ways to live in style on a small budget. So as a result of my spending habits in the past, I have credit card debt… If I stay on track, I can pay all of my credit cards off by March 2009, but this will take discipline. I am fully committed to paying off my credit cards and not ever have credit card debt again once they are paid off. I think credit cards are great and would encourage people to use them, ONLY IF they can pay balances in full when the bill is due.
So, I pose the question to you, why do you have debt and what is your plan to get of it?
Wednesday, April 16, 2008
Maybe Money Does Buy Happiness After All, The New York Times
The Cheapest Way To Save The Earth, MSN Money
A Young Warren Wannabe, Kiplinger.com
Tuesday, April 15, 2008
Everyone has a budget buster. My top budget busters are:
2. Hand bags.
3. Books (What can I say, I'm a nerd).
4. CD's (my iPod is broken so I am going old school until I save the money to replace it).
5. H&M, Ann Taylor Loft, Forever 21, Banana Republic and other stores that sell reasonably priced but cute clothing.
6. Comcast On Demand movies (a good cure for weekend boredom).
I am steering clear of all of my budget busters for a while and will have to just be content with looking at pictures of cute shoes and not actually purchasing them...sigh.
Monday, April 14, 2008
According to a recent Washington Post article (click on the link above to read the whole story):
"In a recently released U.S. PIRG survey of 1,500 students at 40 colleges in 14 states, nearly two in three students reported that they had at least one credit card. Fifty-five percent of cardholding students said they used their card for day-to-day expenses. Reflecting escalating college costs, 55 percent said they charge their books and nearly one-quarter said they pay their tuition with a card. On average, those freshmen whose parents were not helping them with their bills had a balance of $1,301. Seniors had more than twice that, $2,623."
Sometimes, taking on debt as a student simply cannot be helped, but PLEASE keep in mind that credit cards should be used with caution and that it can take years to climb out of credit card debt. Credit cards may indeed prove to be the best way for some students to finance expenses associated with colleges but make sure to explore all options before resorting to credit cards:
1. Student Loans (AFTER YOU HAVE EXHAUSTED YOUR SCHOLARSHIP SEARCH). Student Loans should be taken out only if you have looked high and low for scholarships and aid. The student loan industry has been under fire lately, but low interest federal loans if you are eligible are still the best way to finance college if you or your parents don't have the cash up front. Federal loans normally have lower interest rates than private loans and can normally be consolidated in the future to lock in on a lower rate.
2. It Takes A Village To Put A Child Through College. Your "village" (Family members friends and supporters) may be more receptive than you think to help you with the expenses associated with college. Reach out to them and explain why you would like their help. Many loved ones would like to feel that they have invested in your future. Instead of asking for the iPod or Play Station 3 video game, ask your favorite Aunt or Uncle to purchase a text book, or make whatever small contribution they can afford to give you to go toward tuition. And be sure to send out thank you notes to your "village" to express appreciation.
3. Work and Pay For School As You Go. If you are are working full time, try taking only as much course work as you can afford to pay for out-of-pocket. This method may take you longer to complete your degree, but you won't have to worry about credit cards or loan payments to pay off in the future.
**If at all possible, credit cards should only be used when you know you can pay off the balance in full when the bill is due. In a perfect world everyone would be able to do this, but its never too late to start the practice if you haven't done this in the past.
Friday, April 11, 2008
With the bottom falling out on shady home loan practices and the ensuing credit crunch, budgeting and managing debt are more important than ever. Here are just a few of the money management and investing websites that are out there:
Mint.com "is fresh, intelligent online money management. Not only is Mint free, it saves you money. Mint is virtually effortless. In addition, Mint goes beyond visibility and analysis providing personalized money–saving and money–making suggestions. Plus, Mint is proactive—alerting you when you are exceeding your personal budget, have a low balance, need to pay a bill, and more. Mint is safe and secure and provide bank–level data security." Check out their website for more information: http://www.mint.com/.
Thursday, April 10, 2008
"Young people's financial know-how has gone from bad to worse.
High school seniors, on average, answered correctly only 48.3 percent of questions about personal finance and economics, according to a nationwide survey released Wednesday by the Federal Reserve. That was even lower than the 52.4 percent in the previous survey in 2006 and marked the worst score out of the six surveys conducted so far.
With home foreclosures at record highs, Fed Chairman Ben Bernanke stressed in a speech that young people must sharpen their financial knowledge so they are in a better position to make sound investment decisions throughout their lives. "
If you don't get sound financial values/education at home, where will you learn the skills to manage your own finances when the time comes? I can't understand why personal finances are not taught more in schools starting with elementary-age children. Sometimes waiting until high school or college is too late for teens and young adults. Think about it, teens are bombarded by innovative advertising and marketing (geared specifially toward people in that age group) encouraging them to spend money (they probably don't have). By high school or college, poor judgement in financial decisions (credit card debt!) could lead to mistakes that take teens and young adults years to fix. Let's hope the next time the Federal Reserve does this survey, the results are not so dismal...
Wednesday, April 9, 2008
“As the credit crunch roils financial markets and the U.S. economy sputters, new college graduates are plunging into the rockiest job market in recent years.
The bleaker picture is in stark contrast with last year, when colleges and employers reported robust hiring, and students in finance, accounting and other hot fields were choosing among numerous offers. Now, companies that just a few months ago were planning substantial increases in entry-level hiring have scaled back their plans as economic conditions have worsened. In turbulent areas such as financial services, some firms are slashing the number of fresh graduates they intend to employ, and students are curtailing expectations of finding their ideal position.” Here is a link to the whole article:
For Class of '08, A Scramble for Jobs
Here are a few tips for job hunting in this tough market, whether you are graduating this year or have a few years of work experience under your belt:
Make finding a job a full time job.
Until you get that first offer, you should be blanketing the internet with your cover letter and resume. Carry if with you EVERYWHERE because you never know who you might meet while you’re in Starbucks or on the subway.
PLEASE have SEVERAL people critique your resume and cover letter(s) for errors। Have peers, professionals in the field you want to work in and even a professor your have a good relationship with look at the resume. Your resume won’t even make it to the HR department if it is filled with spelling mistakes. Do practice interviews with this same set of people also to combat nervousness.
Join a professional organization in your field--they may even have a discount for students or recent graduates.
Almost every field of work from Business to Chemistry has a professional organization. You may have even been a member of the organization's pre-professional chapter as a student. So, take an extra step and the money to join one (or a few) professional organizations in the field.
Volunteer or take an internship in the field you want to work in.
If you have to take a “stepping stone” job at first, explore volunteer or internship opportunities in the field you want to have a career in. If you want to be an entertainment publicist, volunteer for the best entertainment publicist you can find. Maybe that person can even connect you with others in the field who are in the position to offer you a job.
Network with your school’s alumni association.
Make sure to get added to the alumni job listerv if your school has one. PLEASE DO YOURSELF A FAVOR and make yourself known--persistent but not pest-like--to the career services department at your school…preferably before your senior your. If you have already graduated, don’t hesitate to contact them, many schools help connect students and alumni with jobs.
Surf job sites that focus on the field you want to be in.
I know you’re already surfing the web, so while you’re on Facebook or reading your favorite blogs, check out job websites. Monster and Careerbuilder are good starting point.
If you aren’t sure what you want to do, explore several options before settling for a job you loathe.
Hey what is another year of living as a student (aka, broke) while you explore a career path that will fulfill you? You have the next several decades to worry about working। You should never settle in life, especially for a job. Most people spend more time with their co-workers than they do with family members, so you might as well enjoy them and enjoy what you do everyday.
A good attitude combined with visualizing yourself with your dream job is way more productive then feeling sorry for yourself. So get out there, dust off that suit and start hustling to get that job!
Monday, April 7, 2008
The whole point of starting this blog was so that I would hold myself accountable for the financial decisions that I make. I want to do this to avoid common personal finance pitfalls and to chart my progress toward my goals. I am a goal oriented person by nature and I love making a list and being able to check off task/goals accomplished (I know, I’m a nerd). So chipping away at my debt is the plan. This is not always easy because:
- I like living in style and don’t have a large budget (yet!) to accommodate my taste preferences;
- My loved ones-friends, family (as dear as they are to me) end up costing me money, i.e. family trips, baby showers, wedding showers, birthdays, outings, etc.;
- Like many others in my generation, instant gratification is sometimes much more appealing than the wait and be patient method of purchasing items you want.
So because I know it’s not always easy to achieve goals, here are my short term goals to be accomplished before 2008 ends:
- Save $1000 to go toward my emergency savings;
- Save $1000 to go toward my car fund;
- Pay down at least $2000 of my credit card debt;
- DO NOT take on any other debt of any kind (this means I have to find other ways to finance a graduate degree when I do decide to go back to school…).
There it’s written down, and I will work hard to achieve these goals. I hope to be writing very soon about moving in the positive direction toward these goals.
Sunday, April 6, 2008
"Couples get married without discussing their financial history. Families fight about inheritances even before the deceased is six feet under. Why? Because Mom, Dad and Aunt Grace never discussed their wishes.
And when it comes to debt, some people keep so quiet that by the time they seek help their situation is dire.
http://bankrate.com/ found that 47 percent of survey respondents would rather fess up about their weight, age or monthly mortgage or rent payment than discuss how much credit card debt they are carrying. "
Read the whole article here: http://www.washingtonpost.com/wp-dyn/content/article/2008/04/05/AR2008040500151.html
Why are personal finance discussions so scary to many people? Why are people so afraid of holding themselves accountable for the financial messes (and triumphs) they have been through? Digging yourself out of debt is nothing to be ashamed of. I for one love reading about people's personal finance success stories. That is what led me to reading personal finance blog. It is also what led me to starting my own personal finance blog.
Women seem to be afraid more than men to meet their financial struggles head on and end up paying for this in the end. Whether you are sinlge or married, have children or don't even have a pet (like me!); take small steps to educate yourself on your finances:
Open up ALL of your bills.
Start tracking spending and making a budget.
Start saving while paying down consumer debt.
TALK to your children about your finances so they don't make the same mistakes you did...basically, stop living with your head buried in the sand.
It's not easy but you will thank yourself in the end.