Personal Finance 101

Personal Finance 101 Posts of the Day 6/22/07

2007-06-22T23:50:00.000-05:00

Mortgage Blog gives 10 tips to save money.

Personal Finance 101 Posts of the Day 6/18/07

2007-06-18T22:07:00.000-05:00

All Financial Matters requested budgeting suggestions for a reader. Read the comments - lots and lots of good ideas there!

Personal Finance 101 Posts of the Day 6/15/07

2007-06-15T22:43:00.000-05:00

Ask Mr. Credit Card gives 101 tips to improve your finances.

Personal Finance 101 Posts of the Day 6/14/07

2007-06-14T20:35:00.000-05:00

All Financial Matters lists some online financial tracking programs.

Personal Finance 101 Posts of the Day 6/11/07

2007-06-11T20:47:00.000-05:00

Jane Chin talks about how couples manage their bank accounts.

Carnival of Personal Finance

2007-06-11T00:40:00.000-05:00

So, for the first time I entered an article into a blog carnival...and it was accepted...and it was an Editor's Choice. Woo hoo, doing a happy dance. Check out all the great entries at Getting Green!

Personal Finance 101 Posts of the Day 6/10/07

2007-06-10T11:22:00.000-05:00

Enough Wealth has some tips for newbie investors (US residents, substitute Roth IRA for Superannuation).

Personal Finance 101 Posts of the Day 6/8/07

2007-06-08T01:01:00.000-05:00

Online Savings Blog gives some ideas on ways to save money in your budget.
Around the Sun talks about taking Public Transportation.
Financial Tips for WAHMs talks about debt repayment methods.

Personal Finance 101 Posts of the Day 6/7/07

2007-06-07T01:40:00.000-05:00

My Money and My Life has a break even goal for the summer. Good luck!
The Credit and Credit Card Blog talks about the pitfalls of revolving debt.
Consumerism Commentary talks about saving for your kids instead of yourself.
Personal Investing Advice has some tips on saving for the future.
All Financial Matters created a directory of past posts. Very useful!
The Dough Roller teaches his kids to use Quicken.

Personal Finance 101 Posts of the Day 6/6/07

2007-06-06T00:49:00.000-05:00

We're In Debt reminds you to make sure your spouse knows about the finances.
Clever Dude talks about setting up house without breaking the bank (or getting divorced).
The Dough Roller bashes one of Kiyosaki's Yahoo articles. (Kiyo is dangerous!)
$1 Million to My Name has a series on retirement mistakes. Part IV covers IRAs and 401ks.
Advanced Personal Finance talks about why you might want to wait to convert to a Roth IRA.
Ask Uncle Bill has a list of 10 Financial Mistakes to avoid.

Financial Education in our Schools! We need it!

2007-06-05T02:41:00.000-05:00

My Credit Group recently posted in support of adding a financial education requirement to our high school curriculum. It's a great read and here are my comments on the topic:

I’m right there with you. In fact, one of my long term goals is to start a non-profit with a mission of getting financial education into the curriculum. In the mean time, I’m in the progress of signing up to volunteer with a local non-profit which offers free financial literacy classes to children and teens. These people are our future. They need to learn how to balance a budget better than the current people running our country!

Regarding Flexo’s point about what should be removed, I don’t think anything should be removed, this should just be added. In my school I had to take about 12 elective classes to get enough credits to graduate. So…make it 11 electives and make financial management a requirement. Nothing gets dropped and a great skill gets added. I’d also argue that the kids going to college need it just as much, if not more than ones not going to college because on campus they’re stopped every 10 feet and given a credit card and free t-shirt.

I meet with clients all the time who are 10 years out of school and *still* paying off that 2 am pizza craving.

Thanks for a great post!

Personal Finance 101 Posts of the Day 6/5/07

2007-06-05T01:11:00.000-05:00

Queercents has a great expense tracker that you can download!
No Credit Needed talks about getting out of debt one dollar (drip) at a time.
Money and Credit talks about the need for financial education.
Don't Mess with Taxes talks about kids and money.
Money Smart Life has a great intro to ETFs.

Personal Finance 101 Posts of the Day 6/4/07

2007-06-04T00:52:00.000-05:00

Broke Ass Student reminds you not to sacrifice tomorrow for today.
Grad Money Matters lists 5 budgeting blunders to avoid.
My Two Dollars asks if your family could live on one income.
Frugal Law Student rehashes some pratical advice for young people.
$1 Million to my name - Part V in the retirement saving pitfalls series - Buying too much house.

How to effectively set and track goals

2007-06-02T12:17:00.000-05:00

A thread on the recently established Get Rich Slowly forums got me thinking about goal setting so I thought I'd post my goal setting instructions and worksheet for those who might be interested. The worksheet is in excel and is hosted on the Personal Finance 101 website and you can dowload it from there for free. Let me know if you have any questions/comments.

Get the goal setting worksheet

Why set goals?

Setting goals is one of the most important things you can do to ensure financial success, but it is usually the last thing people think about. If you don't set goals, how do you know if you are actually being successful? If you are going to get to where you want to be in life, you have to know the path to take. Goals are your roadmap and if you set them up right, they will take you from point A to point Z with as few detours and as little pain as possible.

How to set goals

The key to goal setting is to make your goals concrete and measurable and to make meeting them automatic. By this I mean, your goal should have a date and amount associated with it. You don't just say “I want to pay down my debt.” You say "I want to reduce my debt by $5,000 over the next 12 months." By giving yourself a set $ amount and date to meet, you will be able to judge whether you are actually meeting your goals or not and make adjustments accordingly.

By making it automatic, I mean using technology to your advantage. Set up automatic payments for all of your bills so that you are never late. Set up an automatic deduction from your pay check that goes directly to your savings account so that you are paying yourself first and will be less likely to spend the money instead of saving it.

Just doing those two things 1) Making your goals concrete and 2) Making them automatic, will drastically increase your chances of success.

The timeline

Goals can be divided into 3 categories: Short-term, Mid-term and Long-term. Short-term goals are goals that will be completed within the next 12 months. Mid-term goals are ones that will be completed within the next 1-7 years. Long-term goals are goals that will be completed 7+ years from now. Some examples could be:

Short term – establish emergency fund of $1000

Mid-term – pay off consumer debt within 3 years

Long-term – have enough for retirement

One of the biggest challenges is being realistic! If you only make $40k/year, it won’t really do you much good to set goals that will cost you $20k/year to meet. Be honest with yourself about what you can do. If you find that you are ahead of your timeline for meeting your goal, you can always add another one or meet your goal early but if you find that you are behind, it can be disheartening and cause you to give up all together.

The process

As I mentioned above, to set your goals you have to set specific criteria as well as an action plan. If you open the accompanying excel workbook and click on the Goal Summary tab you'll see that I have taken the liberty of filling in some goals for you that should be on everyone’s list. Remember, that your goals don’t all have to be responsible. Your goal can be to buy a new TV or to go on a vacation. As long as you are meeting the core responsible goals, there is nothing wrong with enjoying your life and money. Setting a goal plan just means that you will be more likely to meet all of your goals without having to scramble and sacrifice something else that is important.

For your goals, fill out the following information for each goal:

Goal Name
Start Date
End Date
$ Needed
First Step

If you are married or in a similar relationship, you should do this with your partner.

Once you have set at a few goals in each category, print out that page and put it somewhere you will see it every day. It will remind you of what you are working towards and keep you on the right path. I would also suggest writing your most important goal on a sticky and attaching it to your credit card so you have to see it any time you want to use your card. That way you will know that every penny you spend on that card is a penny that is not taking you closer to your goal.

Make a plan

Now that you know what your goals are you need to plan how to meet them. In the same workbook is a tab called Detailed Goal. You should make as many copies of this as necessary – one for each goal. I would recommend re-naming the tab for each worksheet to reflect the name of your goal.

To develop your goal plan, you need to figure out what the steps are to meet your goals. The first step should be to implement whatever your automatic transaction will be. For example: if you want to buy a car in 5 years and you plan to spend $10,000 on that car, you can figure out that you will need to save $2,000/year or $167/month. So, your first step should be to set up an automatic transfer to your savings account for that amount per month. Since this is a longer-term goal, you should set up milestones so you can check back in to make sure that this goal is still a priority and you are still on track to meet it. I suggesting setting a milestone at least every year and preferably every 6 months. This allows you to take a minute to review your goals to make sure you're going the direction you want to go. Put your milestones on your calendar with reminders so you don't forget to check back in.

Implement your plan

So, you’ve gone through all the planning, now you just have to execute. The key to achieving your goals is to make them as easy to do as possible. This means making everything automatic. Set up all of your goals so that you don’t even have to think about them. Use auto bill pay and auto deductions to your savings/investment accounts. It takes a bit of time at first but it will be worth it in the long run.

Monitor/Add to your goals

Your goals are always going to be changing. You should keep adding goals as they come up. When you add a new goal, you have to look at your existing ones and figure out which is more important. It may be that your new goal is more important than one of the old ones so your old one gets pushed down the list. Look at your goal list as a fluid thing and don’t try to be too rigid with it. There is nothing wrong with reprioritizing as thing change.

How to manage your goal money

Everyone has a different method. It all depends on how much time/effort you want to put into it. Personally, I'm a fan of lazy accounting so I use ING for my goal savings accounts. I like the fact that with ING I can set up multiple sub-accounts and name them whatever I want. So I can have a car account and a vacation account and a furniture account, all separate, so I can tell at a glance how much money I've put towards each goal. It' makes things very easy for me and if you dislike book keeping as much as I do, this method may work for you as well.

Good luck with your goals. Just the fact that you're thinking about them puts you one step closer to success.

Personal Finance 101 Posts of the Day 6/2/07

2007-06-02T01:08:00.000-05:00

Mom's Finance talks about making your budget automatic.
The Suns talk about their experience using Zecco. (not great)

Personal Finance 101 Posts of the Day 6/1/07

2007-06-01T02:59:00.000-05:00

Plonkee talks about what to do with a windfall.
$1 Million to my Name - Part IV in the retirement saving pitfalls series - going into credit card debt.

Personal Finance 101 Posts of the Day 5/31/07

2007-05-31T22:59:00.000-05:00

Advanced Personal Finance talks about the benefits of tax diversification.
Life Learning Today has a great post on the basics of investing.
We're In Debt talks about how they use their joint checking account.

Couples and Money Survey

2007-05-31T16:23:00.000-05:00

As part of the research and development process for my new Personal Finance 101 - Couples and Money class I am conducting a survey of people in relationships. I would appreciate it if you would take a few minutes and give me your experience on handling money with your partner. Thanks in advance for your help.

Take the survey

Personal Finance 101 Posts of the Day 5/30/07

2007-05-30T11:06:00.000-05:00

Zen Habits gives 10 tips to simplify your budget.
Ask Mr. Credit Card asks how much do you need to feel rich?
Life, Lived talks about ways her family saves money.
The Frugalist gives 21 reasons why it's good to be frugal but not cheap. (I call myself a cheap-a$$ but according to this I'm just frugal. Whew!)
Mint gives a list of 20 mistakes to avoid during credit repair.
$1 Million to my Name - Part III in his retirement saving pitfalls series - relying on an inheritance.
My Financial Awareness talks about things to consider when establishing an emergency fund.
Mad Money Analyst talks about why starting to save for retirement now is important.
Advice and Rants gives suggestons on how to join forces with your friends to be frugal.

Personal Finance 101 Posts of the Day 5/29/07

2007-05-29T23:03:00.000-05:00

Advanced Personal Finance talks about some of the financial mistakes that he's made. (I made more than one of those mistakes myself.)
Frugal Law Student has a crazy-long-list of financial resources. (Seriously, if you can't find it there it may not exist.)
$1 Million to my Name talks about the magic of compounding.
A financial revolution does a good comparison of ETFs and Mutual Funds.
$1 Million to my Name - Part II in his retirement saving pitfalls series - waiting to get started.

In search of... Can you help?

2007-05-29T23:00:00.000-05:00

*Note: This post is a sticky, there are newer posts below*

I have 3 projects I need help with and I'm hoping one of you might be able to help.

1 - I'm looking for a writer for an e-book. I have a series of financial e-books I want to publish and need someone to translate my thoughts and words to paper. If you or someone you know would be interested, please visit my website for details about what I'm looking for.

2 - I'm looking to expand my public speaking resume so if you know of any groups/non-profits/associations in the Metro Portland, OR area who would be interested in having me do a pro-bono presentation, please contact me at mandy@personalfinance101.org.

3 - I'm looking for couples to interview about their money habits. Couples of any sort: married, living together, same sex, whatever. This is research for development of a new class aimed at teaching couples to talk/work together to establish good personal finance habits. If you would be interested in participating, please contact me at mandy@personalfinance101.org.

Feel free to spread the word.

Thanks!

Personal Finance 101 Posts of the Day 5/28/07

2007-05-28T16:54:00.000-05:00

Money Smart Life gives suggestions about how to use credit cards to simplify your finances.
Rock Your Stock lists his picks for the top 5 investment books of all time.
The Digerati Life lists 12 cheap ways to stay healthy. (your health is your most valuable asset - protect it)
The Money Mythos thinks people need more than index funds for investments. (I'm not sure this is the case for most people but you can make your own decision)
Money, Matter and More posts an open letter to high school graduates.
Blunt Money lists 10 common financial mistakes.
No Credit Needed gives 10 ideas for creating a budget.
Young Professional Finance Blog talks about financial education - or the lack thereof.

Personal Finance 101 Posts of the Day 5/27/07

2007-05-27T13:00:00.000-05:00

Accumulating Money talks about in-service 401k rollovers.
Boston Gal posts about how to keep your investment advisor from robbing you blind.
The Simple Dollar tells us how to get past the need for keeping up with the Jones’.
How I Save Money talks about how to simplify your budget.
Not Made of Money talks about some store brand products his family uses to save money.
Bankruptcy Law Network talks about borrowing money from a 401k to pay for debt.
Fil-Am Personal Finance had a good post illustrating the benefits of starting saving early.
Financial Jungle talks about closet index funds. (This is a really important think to look at wth all of your funds. Holding overlap can really mess with your asset allocation and cause you to get off track for your goals.)

Personal Finance 101 Posts of the Day 5/26/07

2007-05-26T13:02:00.000-05:00

Ask Mr. Credit Card talks about the importance of diversification.
Money Ning reminds us to keep an eye on mutual fund fees and expenses.
Bankruptcy Law Network has a series on how to deal with debt collections:

Personal Finance 101 Posts of the Day 5/25/07

2007-05-25T22:29:00.000-05:00

The Happy Rock talks about what you need for a financial system to work.
Blunt Money talks about how to put your finances on auto pilot.

What words/emotions do you associate with money/finance?

2007-05-25T16:27:00.000-05:00

I have received the first 119 responses to my survey about couples and money and the results are interesting so far. One of the things that really stood out is the question where people list the 5 words that they associate with money/finance. Seeing how others view money in always an eye opener. I'll post the full results once I've had a chance to play the numbers, but here is a glimpse. (If you don't want or don't qualify to fill out the survey, leave your 5 words here in the comments.)

Note:

Several people used security and stress more than once in their answer
Several people included contrary words (fear and happiness) in their answers
I combined words that are substantially similar (ex: happy/happiness or stress/stressful)

Question: Which are the top 5 emotions/words you associate with money?

In order of most mentioned:

31		security
17		freedom
17		stress
14		fear
14		happiness
9		power
8		fun
8		worry
6		frustrating
6		greed
6		necessity
6		safety
5		comfort
5		excitement
5		Independance
5		joy
5		stability
5		time consuming
5		work
4		flexibility
4		hope
4		important
4		invest
4		luxury
4		relief
4		savings
3		anger
3		anxiety
3		challenging
3		debt
3		dread
3		enjoy
3		future
3		generosity
3		guilt
3		hate
3		opportunity
3		Peace of mind
3		responsibility
3		sadness
3		spending
3		tool
2		annoyance
2		caution
2		confidence
2		confusing
2		content
2		control
2		Enough
2		Envy
2		house
2		jealousy
2		Living
2		needs
2		never enough
2		options
2		patience
2		Peace
2		planning
2		reward
2		satisfaction
2		Scary
2		status
2		Success
2		travel
2		wants vs. needs
2		wealth
1		"make more, spend more"
1		Abundance
1		acheivement
1		Addictive
1		adventure
1		always feels like I'm doing something underhanded when I want to buy something that isnt a 'necessity'
1		ARRGH
1		aspirations
1		asset
1		assurance
1		backup
1		bills
1		bit-by-bit
1		boring
1		Broke
1		budget
1		Burden
1		can we.
1		car
1		choices
1		cold
1		conflict
1		controversial
1		Create memories
1		credit
1		deadlines
1		decent life
1		demise
1		depression
1		desire
1		Difficult
1		disappointment
1		dispair
1		Distrust
1		divisive
1		dollars
1		dreams
1		Drowning
1		drudgery
1		ehh?
1		embarassment
1		emergency
1		empowerment
1		enabler
1		evil
1		ex wife
1		food
1		Frightening
1		Fulfilling
1		Fundamental to lifestyle
1		goals
1		Good
1		Grease
1		groan....
1		Growth
1		hard to learn about
1		hassle
1		havingness
1		headache
1		Helpful.
1		I dont associate emotion with money it is simply something you need a certain amount of to live a certain lifestyle
1		I'm pretty emtionless about it at this point, but that's because I've conquered the FEAR.
1		inflation
1		insecurity
1		insincerity
1		it's-only-money
1		legacy
1		leisure
1		Logic
1		love
1		Major frustration in my life and that of my wifes life.
1		Management
1		market
1		more
1		My time's more valuable than my money. We have plenty.
1		no worries
1		None
1		none of it is emotional
1		now what??
1		numbers
1		obligation
1		Obsessiveness
1		open
1		optimistic
1		over-emphasized
1		over-rated
1		overspending
1		Pain
1		pain in the ass because we are always struggling
1		Partnership
1		passion
1		philanthropy
1		pity
1		Pleasure
1		poor
1		positiviy
1		possibilities
1		Potential
1		preferable future
1		pressure
1		Pride
1		priority
1		protection
1		quality of life
1		question
1		regret
1		Required
1		resource
1		respect
1		retirement
1		rich
1		righteous
1		rip-off
1		root of all evil
1		secrecy
1		self-assured
1		self-control
1		Sensitive
1		speculation
1		stewardship
1		survival
1		sweet
1		taxes
1		tedious
1		tentative
1		the Future
1		the root of all evil
1		thief
1		This recently changed from emotions such as fear and dread to empowerment and security.
1		thrifty
1		Tough
1		tricky
1		ugg...
1		useful
1		value
1		want
1		We don't need a lot of "stuff" so we don't need a lot of money.
1		weight
1		well-being
1		Without direction

In alphabetical order:

1		"make more, spend more"
1		Abundance
1		acheivement
1		Addictive
1		adventure
1		always feels like I'm doing something underhanded when I want to buy something that isnt a 'necessity'
3		anger
2		annoyance
3		anxiety
1		ARRGH
1		aspirations
1		asset
1		assurance
1		backup
1		bills
1		bit-by-bit
1		boring
1		Broke
1		budget
1		Burden
1		can we.
1		car
2		caution
3		challenging
1		choices
1		cold
5		comfort
2		confidence
1		conflict
2		confusing
2		content
2		control
1		controversial
1		Create memories
1		credit
1		deadlines
3		debt
1		decent life
1		demise
1		depression
1		desire
1		Difficult
1		disappointment
1		dispair
1		Distrust
1		divisive
1		dollars
3		dread
1		dreams
1		Drowning
1		drudgery
1		ehh?
1		embarassment
1		emergency
1		empowerment
1		enabler
3		enjoy
2		Enough
2		Envy
1		evil
1		ex wife
5		excitement
14		fear
4		flexibility
1		food
17		freedom
1		Frightening
6		frustrating
1		Fulfilling
8		fun
1		Fundamental to lifestyle
3		future
3		generosity
1		goals
1		Good
1		Grease
6		greed
1		groan....
1		Growth
3		guilt
14		happiness
1		hard to learn about
1		hassle
3		hate
1		havingness
1		headache
1		Helpful.
4		hope
2		house
1		I dont associate emotion with money it is simply something you need a certain amount of to live a certain lifestyle
1		I'm pretty emtionless about it at this point, but that's because I've conquered the FEAR.
4		important
5		Independance
1		inflation
1		insecurity
1		insincerity
4		invest
1		it's-only-money
2		jealousy
5		joy
1		legacy
1		leisure
2		Living
1		Logic
1		love
4		luxury
1		Major frustration in my life and that of my wifes life.
1		Management
1		market
1		more
1		My time's more valuable than my money. We have plenty.
6		necessity
2		needs
2		never enough
1		no worries
1		None
1		none of it is emotional
1		now what??
1		numbers
1		obligation
1		Obsessiveness
1		open
3		opportunity
1		optimistic
2		options
1		over-emphasized
1		over-rated
1		overspending
1		Pain
1		pain in the ass because we are always struggling
1		Partnership
1		passion
2		patience
2		Peace
3		Peace of mind
1		philanthropy
1		pity
2		planning
1		Pleasure
1		poor
1		positiviy
1		possibilities
1		Potential
9		power
1		preferable future
1		pressure
1		Pride
1		priority
1		protection
1		quality of life
1		question
1		regret
4		relief
1		Required
1		resource
1		respect
3		responsibility
1		retirement
2		reward
1		rich
1		righteous
1		rip-off
1		root of all evil
3		sadness
6		safety
2		satisfaction
4		savings
2		Scary
1		secrecy
31		security
1		self-assured
1		self-control
1		Sensitive
1		speculation
3		spending
5		stability
2		status
1		stewardship
17		stress
2		Success
1		survival
1		sweet
1		taxes
1		tedious
1		tentative
1		the Future
1		the root of all evil
1		thief
1		This recently changed from emotions such as fear and dread to empowerment and security.
1		thrifty
5		time consuming
3		tool
1		Tough
2		travel
1		tricky
1		ugg...
1		useful
1		value
1		want
2		wants vs. needs
1		We don't need a lot of "stuff" so we don't need a lot of money.
2		wealth
1		weight
1		well-being
1		Without direction
5		work
8		worry

Personal Finance 101 Posts of the Day 5/24/07

2007-05-24T23:14:00.000-05:00

Money Under 30 talks about the advantages of secured credit cards.

Personal Finance 101 Posts of the Day 5/23/07

2007-05-23T13:03:00.000-05:00

Zen Habits lists 6 free alternatives to MS Money and Quicken.
Young and Broke talks about financial planning for 20-somethings.
Q&A on Vanguard’s new fee structure.
Cash Money Life talks about the advantages of debit cards.
Mighty Bargain Hunter talks about the disadvantages of debit cards.
Money, Matter and More thinks there should be a credit card qualifying test.
$1 Million to my Name - Part I in his retirement savings blunders series - pre-paying your mortgage.
My Debt Relief Plan talks about how getting organized can help with your debt.

Personal Finance 101 Posts of the Day 5/22/07

2007-05-22T13:50:00.000-05:00

Ask Uncle Bill talks about how to save a million dollars.
Blogging Away Debt has some tips for living within your means.
Mad Money Analyst talks about why you should start saving for retirement now.
Queercents talks about setting goals and getting organized.

Personal Finance 101 Posts of the Day 5/21/07

2007-05-21T13:05:00.000-05:00

MSN Money talks about the evils of bank fees.
Bankruptcy Law Network talks about why you should opt out.
Pro Bargain Hunter talks about how to get a good deal when shopping.

Personal Finance 101 Posts of the Day 5/20/07

2007-05-20T13:05:00.000-05:00

Samerwriter bashes Kiyosaki.

Personal Finance 101 Posts of the Day 5/19/07

2007-05-19T13:07:00.000-05:00

Personal Finance Blog Articles talks about how to set up a household budget.
Bankruptcy Law Network talks about what paying off debt instead of filing for bankruptcy can cost you. (note: I am not advocating bankruptcy, this is just a good viewpoint to consider.)
Funds Zine talks about emergency funds.

Personal Finance 101 Posts of the Day 5/18/07

2007-05-18T13:40:00.000-05:00

Accumulating Money talks about the drawbacks of active investing.

Personal Finance 101 Posts of the Day 5/17/07

2007-05-17T13:08:00.000-05:00

Vanguard talks about why you should get kids investing in a Roth early. My grandfather did this for me and it’s one of the single best things he’s ever done for me. If you need help motivating them, consider offering a ‘matching’ program of some sort. Most people like free money.
Bankruptcy Law Network points out some sneaky credit card tricks to look out for.
Wealth Building World wonders if paying off your mortgage early is actually costing you money.

Personal Finance 101 Posts of the Day 5/16/07

2007-05-16T13:09:00.000-05:00

Tired But Happy talks about how couples deal with different spending expectations.
Ask Mr. Credit Card gives credit card and money advice to new grads.
Mint gives 5 easy steps to tackle your debt.

Personal Finance 101 Posts of the Day 5/15/07

2007-05-15T13:10:00.000-05:00

Wise Bread has a post on 10 frugal ways to get to $1 Million.
SmartMoney talks about what retirement is going to be like for Generations X & Y. (Hint: It’s not pretty)
All Financial Matters re-posts the 13 unbreakable laws of finance.
3 Debt Consolidation talks about the difference between good and bad debt.

Personal Finance 101 Posts of the Day 5/14/07

2007-05-14T13:11:00.000-05:00

Frank discusses his views on giving money to your parents.

Personal Finance 101 Posts of the Day 5/13/07

2007-05-13T23:34:00.000-05:00

FILAM Personal Finance talks about some of their short and mid-term goals.

Personal Finance 101 Posts of the Day 5/12/07

2007-05-12T13:13:00.000-05:00

Debt Regret posted about 7 net worth killers.

Personal Finance 101 Posts of the Day 5/11/07

2007-05-11T13:13:00.000-05:00

Smart Money Daily has a great article about recovering from bankruptcy.
Make Your Nut gives more advice to new grads.
Free Money Finance lists 18 ways to save on a small income.
Money and Such give some tips on how to save on travel.

Personal Finance 101 Posts of the Day 5/10/07

2007-05-10T13:15:00.000-05:00

Money Walks talks about the time value of money.
Grad Money Matters gives advice to new grads.
Frugalist lists 147 tips to live healthier, happier, greener and better.
Debt Free lists some common credit report mistakes to watch out for.
BBB Consumer Education talks about whether debt management plans are right for you.
My Two Dollars gives some tips on how to deal with your debt.

Personal Finance 101 Posts of the Day 5/9/07

2007-05-09T13:16:00.000-05:00

Advanced Personal Finance talks about why he doesn’t have an emergency fund.
Adventures in Money Making gives us 5 ways to go broke.
Five Cent Nickel talks about why credit cards rock.
Get Rich Slowly talks about eating well for less.
Free Money Finance talks about how to save money on a small income.
Make Your Nut gives advice to new grads.
Wealth Building World talks about the importance of saving.
Personal Finance Articles talks about why it's important to budget.

Personal Finance 101 Posts of the Day 5/8/07

2007-05-08T13:17:00.000-05:00

My Retirement Blog gives 5 reasons to start saving for retirement now.
Becoming and Staying Debt Free gives some great cheap/free date ideas.
No Credit Needed talks about how he's going to teach his kids to manage money.

Personal Finance 101 Posts of the Day 5/7/07

2007-05-07T13:18:00.000-05:00

Ask Mr. Credit Card provides a great retirement plan cheat sheet for 2007.
Make Love, Not Debt talk about how to merge finances.
Blueprint for Financial Prosperity talks about 5 ways to save money without noticing. I love that he mentioned drinking water. Just make sure it’s water you get from a tap/brita filter otherwise buying bottled may cost more in the long run.
Consumerism Commentary talks about how much you really need for retirement.
Personal Finance Advice talks about why he loves not having a car. I agree! I haven't had one for more than 5 years and I love it!

Personal Finance 101 Posts of the Day 5/4/07

2007-05-04T13:19:00.000-05:00

The Art of Making Money talks about how couples handle finances.

Personal Finance 101 Posts of the Day 5/3/07

2007-05-03T13:20:00.000-05:00

The Simple Dollar talks about how to deal with not meeting your goals.
All Financial Matters asks his readers to give their best advice to new grads.
Kiplinger’s talks about how to save money during wedding season.
Credit Card Lowdown tells us 10 common sneaky fees credit cards charge.
English Major gives some reasons why younger people don’t save.
My Two Dollars talks about how he and his partner manage their finances.
The Simple Dollar talks about what he did after hitting rock bottom financially.
Get Rich Slowly gives some great tips on how to track your money.

Car Sharing: Would it work for you?

2007-05-03T12:30:00.000-05:00

John and Queercents writes a useful article about the benefits of car sharing programs.

Those who don't live in a city might not know what this is all about. Basically joy join a service that allows you to rent a car by the hour or more and you pay according to how much you use it. The price includes gas, mileage and insurance and is much easier and cheaper than owning a car in most cities (John has a much better, much more in depth description on his post.).

Personally, while I think these services are useful and much better than owning a car, I don't think they're worth it. Having lived in a city for the last 4 years, I looked into joining Flexcar but decided against it. I ran the numbers and for me, it was too expensive unless I was using the car for 2 hours or less. I can easily rent a car for a full 24 hours through priceline and it will only cost me $25 or so. I probably do this once a month, if that often, and I just save up all the errands that require wheels to perform.

The only times I really wish I had a car for a short time is when I'm grocery shopping. But even with that, if I'm doing a small shop I just use my shopping cart and if I'm doing a monster shop I use peapod or similar. Their delivery charge is less than a car service would be for the time it takes to shop and I find that I spend less because I don't have impulse buys.

They are a great idea though and much better than owning a car in a city. They just aren't the best idea for me.

Are you looking for a CRM system?

2007-05-02T12:44:00.000-05:00

Note: This is a paid review Get Reviewed At ReviewMe!

I’ve recently been expanding my networking efforts for Personal Finance 101 in preparation for my move to Portland. Because I’m bringing many new people into my network I’ve decided to evaluate different CRM options. For those who aren’t aware of what CRM is, it stands for Customer Relationship Management and it’s a program you use to track your interaction with your contacts and customers.

There are a few things I’m looking for in a CRM program:

It has to be hosted. I want to be able to access it from anywhere, not just from my laptop.
It has to have marketing campaign tracking integrated so I can track what does and does not work. It’s important to me to be able to use this to send out newsletters, announcements, etc.
I need to be able to get a single user license for a price that won’t break the bank of a start-up.
It should be customizable so I can add/remove fields that I do/don’t need.
Ideally it will be integrated with my e-mail system so I can use it to track those contacts.

There are a few other things, but those are the main concerns.

Since I’ve been evaluating CRM systems anyway, when a chance came up to review Relenta’s Contact management product, I jumped on it. I signed up for the demo and here’s how it fits into my needs as listed above:

It is hosted on their servers though it looks like they also have a self-host option
They do offer e-mail campaigns. They need to update their screen shots page though because it isn’t shown there and were I not getting paid for this review I probably wouldn’t have dug further to find that out.
Their pricing is comparable to the industry leaders (With limits. See below in the “Things I didn’t like” section)
They offer paid customization services
They offer POP e-mail integration.

Things I liked:

They allow you to upload documents. This is helpful if you are traveling and need access to marketing materials or other information.
The have an actual calendar to look at to track your activities which is nice though they don’t mention whether it syncs with Outlook or other calendar programs.
They have a free account that you can sign up for to try it out. Or you can do the 30 day trial.
They have blog on their website that outlines some of the upcoming features. The one I like the most is the web-based form builder for your website. This would be great to dump the info directly into the CRM system.
I like the way they list the groups along with how many members there are of each group.
The product is cheap if you can go with one of the smaller packages. Good for businesses which are just starting and will be growing.

Things I didn’t like:

The number of contacts and emails you can have is limited by the program that you’re on. They’re the only company I’ve seen that does this and I don’t think I like it. The email limitation is what particularly bothers me. They don’t specify whether the email limit is monthly or annually, but if it’s monthly what happens if I just have a crazy month and go over the limit? I do event planning sometimes which can lead do hundreds of emails back and forth a day when it gets close to the date.
There are storage space limitations based on your program which could be easily exceeded if you upload your marketing materials.
The free account is useful, but they do have their logo at the bottom of the emails you send out which would look unprofessional. You’re probably better off paying the $15 for the personal account and trying it for a month if you’re actually going to use it to send e-mails.
They don't make it clear how the program limits work. They do offer additional storage, e-mails and contacts for a price but it's not clear if that is a one time cost or a monthly cost.

Conclusion:

I’m going to try it out. I’ll sign up for the Personal Account which gives me 50 MB of storage space, 500 contacts and 5000 e-mails. It costs $15 per month and there is a 30 day free trial. What really sold me is the e-mail integration. It’s great to be able to click on a contact name and have a list of all of the e-mail contact you’ve had with them. My only concern is the email limits but I’ll cross that bridge when I come to it. I am also loving the web form option that they are going to be launching. It will be great to not have to manually enter in that information.

Personal Finance 101 Posts of the Day 5/2/07

2007-05-02T00:00:00.000-05:00

Free Money Finance talks about how to NOT sabotage your investment plan.

Who's your favorite/least favorite finance guru?

2007-05-01T23:32:00.000-05:00

JLP over at All Financial Matters asked today who everyone's favorite/least favorite financial guru's are.

My votes:

Least: Kiyosaki. The man is dangerous. He is a marketing guru with zero financial knowledge and the things he writes in his Yahoo posts are shameful. Really. I'm tempted to start a letter writing campaign to yahoo to request that he be fired. Anyone with me?

Most: Bogle. The man is an icon and provides a great service. Sure, I may be biased by the fact that I used to work at Vanguard, but I was an investor long before I was an employee.

My 2nd choice of favorite is probably David Bach. I like the common sense, down to earth way he has of delivering info. I think it's great for people who are just starting out. His book The Automatic Millionaire is one I recommend that everyone read and his book Smart Couples Finish Rich is one that I give to/suggest that all couples read before they get married.

Personal Finance 101 Posts of the Day 5/1/07

2007-05-01T13:21:00.000-05:00

Get Rich Slowly provides a great list of financial resources.
Young and Broke talks about how to be a good saver.

Personal Finance 101 Posts of the Day 4/30/07

2007-04-30T13:31:00.000-05:00

Kiplinger’s talks about some specific finance situations that impact women.
The Digerati Life gives 10 ways to simplify your finances.

Personal Finance 101 Posts of the Day 4/29/07

2007-04-29T13:30:00.000-05:00

No Credit Needed talks about credit card fees.
Blueprint for Financial Prosperity talks about asset allocation.

Personal Finance 101 Posts of the Day 4/28/07

2007-04-28T13:29:00.001-05:00

Ask Mr. Credit Card gives some tips on how to reduce credit card spending.

Personal Finance 101 Posts of the Day 4/28/07

2007-04-28T13:29:00.000-05:00

Ask Mr. Credit Card gives some tips on how to reduce credit card spending.

Personal Finance 101 Posts of the Day 4/27/07

2007-04-27T13:27:00.000-05:00

The Frugalist gives 10 alternatives to credit cards for those who don’t want/can’t get one.
Make Your Nut talks about the benefits of shopping at an ethnic market.
MSN Money talks about 4 keys to good credit.
We're in Debt talks about why renting to own is bad.

Payday Loan Victims

2007-04-26T16:13:00.000-05:00

I read the following post about payday loan victims on All Financial Matters and I have the following comments to his views:

I agree! One thing I talk a lot about a lot in my Personal Finance 101 class series is that YOU are the only person who cares about your money and YOU are the only person who is responsible for the decisions you make regarding your money. Way too many people these days blame others when realistically the problem was caused because the person was uneducated and did nothing to change that situation. Education, or lack thereof, is a personal choice but again, it's typically blamed on others.

Personal responsibility is something that is definitely missing from today's society and I see it everywhere from the cashier at CVS to my co-workers.

The only advantage is that for those of us who are responsible, we stand out above the crowd and more doors open for us.

So what it comes down to is: take responsibility for your mistakes. Admit that you made bad choices, figure out how to change things going forward, and move on with your life. It'll take time and effort and, probably, sacrifice, but it'll be worth it in the long run.

Personal Finance 101 Posts of the Day 4/26/07

2007-04-26T13:26:00.000-05:00

Vanguard announces changes to its fee policies.
Bargain-Value lists 13 mistakes they made with money.
Frugal Journey talks about the things they get at the Dollar Store.

Horrible about posting! :-(

2007-04-26T12:56:00.000-05:00

I know, I've been really behind in posting lately. I spent the last week in Oregon preparing for my move and I'm really focused on that right now. I'll do my best to keep up in the future but I'll probably be spotty until mid-May. So, thanks for hanging in there and to my new readers, thanks for coming by! I promise, I'll get better soon!

pf101

Personal Finance 101 Posts of the Day 4/25/07

2007-04-25T13:24:00.000-05:00

Ask Mr. Credit Card talks about the impact of credit on insurance rates.
Free Money Finance talks about how much you should be saving.
Zen Habits gives suggestions on brown bag lunches.
Queercents talks about the pitfalls of renting your fist apartment.
Make Your Nut talks about how expensive it is to NOT brown bag your lunch.
The Simple Dollar takes a look at couples and money.
Laws of Finance talks about the benefits of paying your credit cards online.
How I Save Money lists 25 ways they save money.
Prime Time Money talks about why paying off debt brings you success.
Personal Finance Advice talks about the different debt payment strategies.
Finance is Personal gives some advice to those just starting out.

Personal Finance 101 Posts of the Day 4/24/07

2007-04-24T13:22:00.000-05:00

Free Money Finance reminds us not to count on an inheritance to fix us for life.
Willster’s Financial Blog talks about pre-paid cell phone plans. I plan on doing this when my current contract is up. I get VOIP for $30/year from yahoo so there’s no reason I can’t use that for most of my calls since I usually have my laptop with me.
CFO talks about how to stick to a budget while using credit cards.
Principled Discovery talks about what our junk mail says about the financial future of the country.
Accumulating Money talks about the evils of payday loans.

Personal Finance 101 Posts of the Day 4/23/07

2007-04-23T12:58:00.000-05:00

Credit Card Blog lists 10 reasons why everyone needs a credit card.
Debt Consolidation News talks about how to get a pre-nup signed. I know it’s a touchy subject for a lot of people but I’m personally in favor of pre-nups. People argue that it means you’re assuming the marriage will fail but IMO, all you’re doing is being realistic. There is a chance that the marriage will end and if you address that in advance it probably means you have great communication which will probably help your marriage last.
Blueprint for Financial Prosperity has a great post on why it may make sense to NOT roll over a 401k to an IRA. I agree with him and I get asked this question all the time in my classes. There are times when it makes sense to leave your money in a 401k. Typically they are when you have access to investments that would otherwise be closed to you.
Free Money Finance talks about asset allocation.
Enhanced Life talks about the excuses people make for not saving.
Life of a Resident Alien gives 22 tips on how to build an emergency fund.
An Engineering Approach to Money talks about why it’s good to fund your Roth early.
3 Debt Consolidation talks about different debt consolidation methods.
Canadian Financial stuff talks about how even our northern neighbors hate payday loans.
Queercents talks about developing a spending plan.

Personal Finance 101 Posts of the Day 4/21/07

2007-04-21T19:51:00.000-05:00

Blunt Money talks about how to set goals.

Personal Finance 101 Posts of the Day 4/20/07

2007-04-20T19:48:00.000-05:00

Ask Mr. Credit Card talks about how to choose a consumer credit counseling service.
All Financial Matters has great advice for college grads.
We’re in Debt lists 7 warning signs you’re spending too much.
Free Money Finance talks about ways to earn extra money.
My Two Dollars talks about the financial benefits of doing what you love.
Mint talks about how to jump start your credit when you’re young.
Your Credit Score Secrets outlines 5 steps to fix your credit score.
Laws of Finance reminds us of an often overlooked budget item.

Personal Finance 101 Posts of the Day 4/19/07

2007-04-19T19:46:00.000-05:00

Ask Mr. Credit Card talks about how to increase cash flow for debt relief.
The Consumerist talks about why financial planners are bad.

Personal Finance 101 Posts of the Day 4/18/07

2007-04-18T13:00:00.000-05:00

Web CFP talks about the tax consequences of mutual funds.
Young and Broke talks about why young people aren’t saving.
Credit Card Lowdown talks about 10 common credit card scams.
Edith Yeung talks about the 7 habits of highly effective money managers.
Money Walks talks about the difference between being frugal and cheap.
Zen Habit tells you how to make your finances automatic. I’m a huge supporter of this and it’s something I stress in my Personal Finance 101 classes.
Get Rich Slowly tells us how to fight the urge to splurge.
Everybody Loves Your Money talks about keeping up with the Jones’.
Aridni talks about 3 steps of financial planning.
Debt Consolidation News gives us the lazy man’s guide to budgeting.

Personal Finance 101 Posts of the Day 4/17/07

2007-04-17T19:37:00.000-05:00

Pro Bargain Hunter compares personal finance blogs.
The Wise Bread lists his own take on the 7 deadly sins.
My Simple Life lists 20 ways to keep from spending money.
The Simple Dollar suggests ideas on things to do during a money-free weekend.
Smart Money talks about how to save money when going out.
The Motley Fool talks about putting your retirement savings on auto pilot.
The Motley Fool talks about rolling your 401k to an IRA.
Personal Finance Advice talks about ways to cut grocery costs.
Free Money Finance debates debt payment methods.
Journey to Financial Freedom takes a look at payday loans.

Personal Finance 101 Posts of the Day 4/16/07

2007-04-16T19:34:00.000-05:00

Everybody Loves Your Money lists the 13 top money saving ideas of all time.
Frugalist lists 15 ways that being frugal makes you happier, healthier and sexier.
The Digerati Life explains how much a car really costs.

Take control of your employer retirement plan!

2007-04-15T17:51:00.000-05:00

This post is inspired by Broke Now, Rich Later's post on getting a Roth 401k offered at his company.

I love to hear about people like BNRL who are taking control of their retirement options at work. There are too many people who are stuck with horrible investment options at their jobs but prefer to complain about it than to do anything. They just assume that since it's what's in place, it's what the company thinks is best.

In reality, what probably happened is that a representative of your company who knows nothing about benefits was sold a policy that sounded good at the time. They may not have known about things like sales loads, expense ratios or asset allocation options so they trusted the sales person to set them up with a good plan. Unfortunately, what likely happened is that the company got stuck with an expensive plan with bad investment options (like the one I saw recently with no international but 5 bond funds) and, that's what will reamain until someone who knows better comes along and makes an issue out of it.

You should be that someone. For your benefit and the benefit of others in the company.

Will it be easy? Nope. It will take time, effort and persistence. And, it may never happen. But you don't know if you don't try.

If you are going to go down this path, there are things you should be prepared for.

Whoever chose the plan, if they're still there, probably won't like that you're trying to change it because it will make them look bad. So, be *very* delicate in how you approach this. Don't make them wrong, just point out alternatives.
You should be willing to do this on your own time unless your company assigns this to you as a project.
You'll get much further if you have people standing behind you so rally the co-workers but don't be obnoxious by complaining about how horrible the benefits plan is. This will not make you any friends in management and those are the people you need to convince.
People like numbers but they like charts and graphs too. This is a sales pitch and you should treat it as such. Offer concrete examples and run the numbers of how this will impact the company and each investor bottom line. For example, if the cheapest fund in your selection is a S&P fund with a 1.15% ER (don't laugh, this is a real example) then run the numbers. Show the difference that a 1.15% ER will have on $10k invested over 30 years. Compare that to $10k invested in VFINX (Vanguard's S&P fund) with an expense ratio of .18% and you will have a nice fat number to show them.
Follow the chain of command. Nothing will tick people off more than if you skip them and they hear about it from someone else.
Provide expert commentary. If your company is ok with it, find a consultant to hire to set up the new plan. If you're flying solo and have to convince them, do your homework and bring in supporting documentation from known sources.
If at first you don't succeed try, try again. If you're automatically shot down, then you need to really rally the troops. Start a grass roots campaign for financial education and get a petition going. Make your point clearly and without emotion. Whatever you do, don't lose your cool.

There are other things, but that should get you started. I'm hoping that BNRL will post about how things are going for him so others can get ideas to use.

If you do decide to go down this path and they agree to change the plan/policy/whatever, see if you can shoot for the stars and get them to implement an auto-enrollment policy. I am a huge supporter of these for two main reasons (the first one is most important to me).

It will get the people who otherwise wouldn't enroll on their own to start investing. People don't enroll for lots of reasons, most of which are excuses so if you make it opt-out instead of opt-in, most people won't complain. True story: Recently I was presenting a basic financial education seminar at a local small business. At the end of the seminar I did a little poll to see how many people in that office were enrolled in the 403b plan which had just started a matching program. I was not surprised to learn that a full 2/3 of the people attending the seminar were not enrolled in the plan. ALL of them intended to enroll but just hadn't gotten around to it or didn't understand the process. The solution: everyone got their forms, sat around the table and we got them all enrolled right then. If that company had an auto-enrollment program, all of those people would have been participating the whole time (some had been there for 3 or more years) and they would be much further along the road to retirement.
It will benefit the company by getting more money into the plan. This will do a few things: 1 - they will probably get better deals on plan fees. 2 - it will help with non-discrimination testing. 3 - it will allow highly compensated employees to contribute more if they've been phased out.

If you decide to take this all on, then good luck! If you have any questions, just ask I'll be happy to help in any way that I can.

Personal Finance 101 Posts of the Day 4/14/07

2007-04-14T13:04:00.000-05:00

Frugal Zeitgeist talks about marriage and money.
My Money Blog discusses renting vs. buying.
Money Walks gives ideas on how to teach kids about money.
Free Money Finance talks about the 10 best money moves you can make.
Blogging Away Debt wonders who’s responsible for your debt.

Personal Finance 101 posts of the day 4/13/07

2007-04-13T20:13:00.000-05:00

Uncle Bill shows us that negative savings isn't always negative.
Grad Money Matters talks about whether you should loan money to friends and family.
Personal Finance Advice wonders if you can save too much for retirement.
Aimee’s Blog talks about marriage and money.
Crazy Money talks about the dangers of mental accounting.
3 Debt Consolidation talks about DIY debt reduction plans.
Smart Money lists 5 sneaky bank fees to watch out for.
Aridni talks about the value of your time. This is a great thing to keep in mind. You should use it in lots of areas but particularly when you're spending time doing research for investing. Whenever I have a 'stock picking guru' bragging about his returns I ask him what his return was minus taxes, fees and the value of his time spent on research/execution. That always stops them dead because most people don't think to include the time they spend researching as an expense for investing.
Money and Happiness Blog talks about some of the best kept finanical planning secrets.

Personal Finance 101 posts of the day 4/12/07

2007-04-12T17:17:00.000-05:00

Young and Broke talks about how people aren't saving these days.
Broke Now Rich Later tells us how he's campaigning for a Roth 401k at his job.
Consumerism Commentary asks if personal finance should be required in high schools. He says no but I strongly disagree.
The 6 Month Project talks about ways to trim your budget.
Mighty Bargain Hunter talks about pre-packing your lunch to take to work.
The Thinking Men talk about how you can get a free credit report.
Yahoo Finance has an article about how deluded people are about their retirement prospects.
Free Money Finance asked his readers for suggestions on how to save on a small income (read the comments).
Fool for Travel gives some great tips on how to save money while traveling.
MSN Money talks about payday loans and their huge interest rates.

Personal Finance 101 Posts of the Day 4/11/07

2007-04-11T13:06:00.000-05:00

Ask Mr. Credit Card discusses debt repayment plans.
3 Debt Consolidation talks about debt reduction mistakes.
My Personal Finance Odyssey talks about the US savings rate.
5 Cent Nickel talks about how to prioritize your retirement contributions.
The Bargain Queen gives us a lesson in bargain shopping 101.
Make Your Nut talks about credit scoring and the 7 year myth.
Canadian Dream lists 10 signs your retirement plan isn’t going to work.
Everybody Loves Your Money talks about finding the balance between living for today and saving for tomorrow.
Free Money Finance talks about how Social Security is a rip-off.
Queercents talks about 101 ways to save a buck or two.

Personal Finance 101 posts of the day 4/10/07

2007-04-10T17:19:00.000-05:00

Young and Broke lets us know that Minnesota is going to require financial education in school. And can I just say: About freaking time!!! Hopefully more states get with the program!
Care One lists 101 ways to save one dollar a week.
Ask Mr. Credit Card talks about what he’s learned from 10 years of marriage.
Web Financial Planner wonders how rich is rich enough.
Queercents talks about the US savings rate.
Investments and Loans tells how to build your emergency fund.
Debt Consolidation News talks about why home ownership may not be for everyone.
Free Money Finance talks about the disconnect between what teens know and what they think they know (shocker!) about money.
Free Money Finance talks about taking responsibility for your financial decisions.

Personal Finance 101 Posts of the Day 4/9/07

2007-04-09T22:45:00.000-05:00

Get Rich Slowly talks about choosing to fund a retirement account vs. paying off debt.
Debt Free talks about the statute of limitations on old debts.
Blueprint for Financial Prosperity asks if married couples should combine finances.
Living Almost Large talks about the risks of being a stay at home parent.

Credit reports. What's on yours?

2007-04-09T17:45:00.000-05:00

Oh Cash has a good post about what's included in your credit report and how you can improve your score.

There's a lot of great information in this post I just have a couple of comment.

It's usually not a great idea to close old credit cards. This is bad for a couple reasons. 1 - it removes that account from your average age calculation which will lower your score. 2 - it removes that credit limit from your utilization which can hurt your score. Instead, you should try to keep your oldest card open as long as possible. If you must close credit card accounts it's best to close the newest accounts with the lowest limits.
Another way to increase your score is to have someone with good credit add you as an Authorized User to their account. With most companies this effectively gives you the history associated with that card which can give you a quick and easy boost. This is a better option than getting a co-signer since with an AU you are not financially tied to anyone.

The biggest thing to remember is that it's important to check your credit on a regular basis. You can get 1 report free from each of the big three credit agencies by going to www.annualcreditreport.com. I usually suggest spreading them out and getting one every 4 months. This gives you ongoing access to your report throughout the year.

Personal Finance 101 Posts of the Day 4/8/07

2007-04-08T22:07:00.000-05:00

Sameer Writer talks about the advantages and disadvantages of socially responsible investing.
Mint talks about what to do now that you’ve graduated.
The DINKS talk about how to pay off debt.
The Frugal Law Student talks about what it means to be frugal when you’re wealthy.
Investments and Loans talks about the evils of credit cards.

Personal Finance 101 Posts of the Day 4/7/07

2007-04-07T13:08:00.000-05:00

Personal Finance Odyssey talks about applying the 80/20 principle to personal finance.
Debt Consolidation News talks about how to get your expenses under control.
Ask Mr. Credit Card gives tips on how to choose a debt consolidation company.
1031 Exchange Lowdown talks about things that keep people poor.

Personal Finance 101 Posts of the Day 4/6/07

2007-04-06T13:11:00.000-05:00

Fire Finance talks about the risks of payday loans.
Money Walks give 10 tips on how to master your savings skills.
Ririan Project lists 22 myths that can cost you money.
Wealth Building Lessons talks about how to increase your FICO score.
Saving Simply talks about why tax refunds are bad.
Bankruptcy Law New York posts about why he hates pre-bankruptcy credit counseling.
Money Walks talks about how to become a saver.

Personal Finance 101 Posts of the Day 4/5/07

2007-04-05T13:14:00.000-05:00

Debt Free talks about how to save money every day.
Interest.org has a great article about credit card tricks and tactics that you should know.
An old post from Matt Hutter talks about how to save money on credit cards.
The Frugal Law Student tells us 5 things you should never buy new. #2 is my downfall. I buy 90% of my books used but I never borrow them from the library.
Frugal Zeitgeist talks about why cheaper isn’t always better.
My Financial Journey talks about finding the balance between living and saving. I highly recommend every frugal person read this! It’s important information.
Advanced Personal Finance talks about what financial records you need to keep and which you can toss.
Frugal for Life talks about the benefits of frugal living.

Personal Finance 101 Posts of the Day 4/4/07

2007-04-04T21:08:00.000-05:00

PF Blog asks if $1M is still enough
Money Smart Life asks if you should use your emergency fund to pay off debt.
12 Years wonders what ever happened to frugality.
Grad Money Matters tells us to stop blaming our credit cards!
Personal Finance Advice talks about debt reduction mistakes.
Money, Matter and More talks about how to save money and time by making left turns.

Personal Finance 101 Posts of the Day 4/3/07

2007-04-03T13:16:00.000-05:00

Money and Such has a funny post about when to ditch your financial planner.
The Finance Buff talks about who pays for credit card rewards.

Interest Only Loans

2007-04-03T12:03:00.000-05:00

All Financial Matters has this to say about interest only mortgages. Here are my comments on the topic.

I agree, that IO loans are a great option for people that use them correctly. I personally wouldn't invest the money in the market, though that would probably be the most financially agressive thing to do. What I would do would be to have the IO loan with the low IO payment but continue to pay as if it was the 30-year loan. This would substantially reduce the length of my mortgage.

IO loans were initially developed so people with unsteady income (sales people, etc.) could have a low fixed rate which would allow them to make minimum payment and also catch-up payments throughout the term of the loan. This would keep them on track for paying it off in 30 years (or fewer) and wouldn't be such a shock to the system when it reverted after the IO portion finished.

It was NOT intended to do what it has been used for recently (sorry commenter Joe) which is to let people get into houses they can't afford with traditional mortgages. All this new use has done is guarantee that when it comes time to adjust a lot of people are going to be in trouble and will have to sell (if they aren't upsidedown on their mortgage). It's like a credit card. If you don't make more than the minimum payment you're going to get in trouble.

Personal Finance 101 posts of the day 4/2/07

2007-04-02T12:20:00.000-05:00

Blueprint for Financial Prosperity talks about Saving Beyond 401k and Roth IRA.
Resident Alien lists 25 rules to grow rich by.
Free Money Finance talks about how it’s the little splurges that can get you.
Grad Money shows us how to get into the swing of cooking at home.
Consumerist talks about how to stop living paycheck to paycheck.
Make Love, Not Debt talks about how they developed their budget without killing eachother.

Personal Finance 101 Posts of the Day 4/1/07

2007-04-01T13:18:00.000-05:00

Picture of Wealth talks about relationships and money.
The Simple Dollar talks about retirement benchmarks.

Refund Anticipation Loans Part 2

2007-04-01T01:29:00.000-05:00

In January I wrote this post about how tax prep firms were getting into the Refund Anticipation Loan (RAL) business.

Now, according to this NY Times article, fewer people are making this financial mistake. Apparently the number of these loans has decreased 22.5%. All I can say is THANK GOD! These loans made me sick because they allowed people who know better to prey on those who don't. Lack of knowledge isn't a great excuse, but there is a level of trust involved when someone hires a financial professional of any sort (tax, investment, etc.). People assume that the person they're hiring isn't going to screw them over. Unfortunately that is what often happens.

The solution? Education! Education! Education! I keep talking about it, eventually I'm going to do it. I want to start a non-profit that is dedicated to getting financial education in our school systems. Until that happens though, I call on all of you! Particularly those of you who have kids. Get involved with your kids school and get the parents together to lobby for financial education requirements. The squeeky wheel gets the oil so come on people! Squeek loud!

Personal Finance 101 Posts of the Day 3/30/07

2007-03-31T23:08:00.001-05:00

All Financial Matters show us why fees matter. Just one more reason to go with Vanguard and their $10/year/fund fee for low balances. I can't imagine paying $199/year on top of the Annual Expense Ratio, no matter what my balance.
Blueprint for Financial Prosperity asks: Do you buy online to avoid paying taxes? My personal answer is no. Taxes don't play a part in my decision (though they should since taxes in DC are high) price does and it's a fact that most times you can find things cheaper by spending a bit of time shopping around online. I will say that I'm looking forward to my upcominig move to Portland which has no sales tax. That will be a nice switch!

Personal Finance 101 posts of the day 3/31/07

2007-03-31T17:30:00.000-05:00

Weblog on Business and Finance talks about Asset Allocation.

10 Reasons You Aren’t Rich

2007-03-31T01:11:00.000-05:00

From The Street, 10 Reasons You Aren't Rich covers some of the traps that people fall into that hold them back. (My comments in italics)

You Care What Your Neighbors Think This is huge! One of the reasons I'm leaving Washington, DC is that so many people around this area care about things like what you drive, where you work, etc. It gets old and really, the people worth knowing aren't the ones who care about what kind of car you drive or what kind of shoes you wear. Live your life in a way that makes you happy and comfortable and who cares what others think!
You Aren't Patient In today's world of easy credit and instant gratification it can be hard to wait to buy something until you have the cash. But, the advantages of waiting are: 1 - you save money in interest, 2 - you tend to appreciate things you have to work hard to get instead of those that come easily, 3 - waiting gives you time to decide if you *really* want something rather than just following your impulse, 4 - saving up gives you time to do your homework and find the best deal on whatever it is that you want.
You Have Bad Habits This includes your "Latte Factor." The three hardest things to give up are: coffee, alcohol and cigarettes. It's not a coincidence that they're also the most expensive and the worst for your health. Cutting back on those vices not only saves you money today but also in the future on health care costs.
You Have No Goals My Goal Setting 101 class is my least popular class but it's the one that I think people get the most from. The first question I ask is: "If you don't know where you're going, how will you know when you get there?" The answer to that question is: You don't. Without goals you're just floating along rather than moving forward with a purpose. IMO, goal setting is the most important part of financial planning but is also the most overlooked.
You Haven't Prepared This is why you need an emergency fund. It's a fact of life: Stuff happens. No matter how prepared you are, you aren't prepared for everything. But, you can do your best. The easiest thing you can do is establish an emergency fund. This fund should be in a cash account (or equivalent) that can be accessed quickly and without penalty. You should aim to have at least 3 months worth of expenses in your account though some people like to keep much more. When you figure out how much you need, take an honest look at your life. Is your job steady? Do you have dependents? Do you own a house? Do you have adequate insurance? The answers to those questions will help you figure out how much (or how little) you need to have in your account to be secure.
You Try to Make a Quick Buck When people approach me about the best way to turn $1,000 into $10,000 in a week I have 2 standard responses: 1 - go to Vegas. At least there you get free drinks while you gamble with your money. 2 - Re-read The Tortise and the Hare but this time, learn the lesson. When it comes to investing, the vast majority of the time slow and steady will win over the long run. Set your investment up, make it automatic and then forget about it except for when you re-balance twice a year.
You Rely on Others to Take Care of Your Money I'm a huge proponent of DIY. It's why I started Personal Finance 101. I saw the aftereffects of too many people who had gotten screwed by investment advisors who sold them bad products. There is no reason why someone can't manage their own money, particularly now that Target Retirement Funds exist. If you're just starting out, there are 2 books I recommend that every newbie read. The biggest thing to keep in mind: You are the only person who cares about your money!
You Invest in Things You Don't Understand I did this when I first started investing. I started buying stocks without knowing what I was doing. I just listened to what others were buying and followed the herd. Not only did I lose a *ton* of money to transaction fees, I lost a ton in the investment itself. Since then, I've sold off the losers, held on to the winners (I did get a couple right) and have stuck to funds. I have realized that not only do I not have the knowledge to pick stocks, I don't have the desire to learn the skill so funds are the way to go.
You're Financially Afraid I see this all the time, especially in those who lost a lot of money in the dot bomb. So many people who lost money during that time are too scared to invest in stocks again. Every time I ask them about their experience, they were always almost 100% in tech stocks and freaked and sold when stocks went down. When I explain to them what would have happened had they A - been diversified and B - stuck to an investment plan instead of freaking out they start to calm down. For those who are worried about investing in anything risky I usually suggest starting with a balanced fund like the Vanguard STAR fund. That fund is 60/40 stocks/bonds so, while it earns more than bonds it's not as volatile as stocks. I then suggest they start adding small amounts into more agressive funds once they're used to being a bit more agressive. I also forbid them from checking their accounts more than once every 6 months. Frequent account reviews are the worst thing people who are risk averse can do. Any little dip will freak them out and trigger a panic reaction.
You Ignore Your Finances I'm a big supporter of a hands-off money management style. But, that's very different from ignoring your money. To have a hands-off style, you first have to have a plan. Then, you can implement that plan, make it automatic and just check back a few times a year to make sure you're on track. Find the balance that works for you - somewhere between checking every day and checking once a year is good.

Personal Finance 101 Posts of the Day 3/30/07

2007-03-30T13:19:00.000-05:00

Mint posted on ways to reduce your expenses.
Free Money Finance talks about why shopping with a list is important.

Personal Finance 101 Posts of the Day 3/29/07

2007-03-29T15:04:00.000-05:00

Free Money Finance asks: Does having control of your finances make you happier?
Money Walks talks about saving money by buying in bulk. I'm a big fan of buying in bulk but only if you're going to use it. A good way to get around this, especially if you're single, is to shop with a group of friends and split the take. Then you all get to take advantage of the savings.
My Money Blog talks about lazy investing (which I'm a huge fan of!).
The Simple Dollar talks about asset allocation and rebalancing.
Learn why you shouldn't buy a new car (and definitely don't finance one!).
Punny Money gives us a list of the 20 dumbest personal finance questions of all time. Now personally I'm a "there are no dumb questions" kinda gal, but I'll admit that I've been asked some questions that are...less than smart.
3 Debt Consolidation talks about credit ratings and FICO scores.
The Digerati Life talks about spending money on looking good.
Personal Finance Advice talks about how we waste money when we think we’re saving.

Why I hate Sharebuilder as a Broker

2007-03-29T04:23:00.000-05:00

Dual Income No Kids just posted about their plan to use Sharebuilder for a $75 purchase. I probably overstepped my bounds but I REALLY hate Sharebuilder so I had to respond. My response is below:

Hi,

Just a quick comment about Sharebuilder. I started investing through them and I kick myself every single time I see the statements because I lost so much to fees and selling is so expensive. I'm really not a fan of this brokerage for several reasons. The biggest reason is that the price sounds good, but really it's not. You're paying almost 5% commission on that $75 transaction which is not even close to being a good deal even though $4 sounds great. That doesn't even take into account the sales fee which is about $15. The rule of thumb that I teach my students is that if your transaction expenses are more than what you would pay annually for a good fund (less than .5%) then you don't have enough money to invest in individual stocks. You'll get eaten up by fees and it's a fact that high fees are one of the things that can most damage your investment returns.

On top of that, you aren't diversified because you're only buying one stock at a time and you have zero control over when you buy.

A much better idea would be to invest in a no-load fund through Vanguard or Fidelity. Or, if you don't have enough for the minimum to start an account with those brokerages, T-Rowe Price has a program where you can start a Roth with as little as $50 if you sign up for automatic contributions.

The benefits of this would be 1 - you wouldn't be wasting money on transaction fees (who wants to have a 5% guaranteed loss the second you purchase the stock?!), 2 - you would be diversified instead of risking your money on just a couple stocks.

If you really insist on using Sharebuilder I'd consider buying an ETF instead of an individual stock. You'll still be losing a big chunk to transaction costs but at least you'll be diversified. Personally I love DVY and since Sharebuilder allows free DRIP it's good for that brokerage.

So, sorry for butting in but I hate to see people spending more than is necessary.

Good luck and if you have any questions don’t hesitate to ask.

Mandy
pf101

Personal Finance 101 Posts of the Day 3/28/07

2007-03-28T19:11:00.000-05:00

7CM reminds us to Take a Money Day to Organize Your Finances
Financial Baby Steps asks Should Personal Finance Be A General Education Class?. My answer is a resounding YES!!! The reason I started my business was because I kept hearing from way too many people who started their adult lives without even basic financial education and got themselves into trouble. It's horrible! My goal is to eventually start a non-profit geared towards requiring financial education in both high school and college. I think that the basics about credit and debt should be taught in high school before they start getting credit cards and digging a hole. In college they should expand on their basic education by teaching students about investing, retirement planning, goal setting and how to manage debt. Hopefully our government will wake up and take care of this.
Wealth Building Lessons gives is Ben Stein’s Basic Rules of Retirement.
Financial Hack talks about the benefits of low-cost living.
Endless Gibberish talks about why they like credit cards.
Ask Mr. Credit Card talks about drastic things you can do for debt reduction.
My Wealth Builder illustrates how carrying debt can keep you from being wealthy.

Would you use a coupon on a first date?

2007-03-28T15:14:00.000-05:00

John at Queercents wants to know.

It's an great question that I've never really thought of before. Dating is amazingly expensive in the beginning which makes me really uncomfortable. I'm not a fan of tradional dates, particularly not for first dates. I almost always have a first date at a coffee shop. There are a couple reasons for this:

It's quick and easy and low pressure. This means I'm not stuck having dinner for 2 hours with someone I don't like after the first 5 minutes.
It's cheap and easier to avoid that whole "who pays" question.
If things go well, there's always the option of extending the date to dinner or another activity.

If coffee isn't an option (for whatever reason) there are lots of other alternatives that are cheap/free so why not try to keep things on the cheap for both of your sakes? Try a museum, art exhibit, walk around town or a browse through a book store. Not only will you save money but you'll also have a built in conversation as you'll be able to talk about what you're seeing.

I recently had a first meeting in a book shop and we had a great time browsing and looking at all sorts of books before moving on and getting a drink. That's my idea of a great date.

Show me your creativity instead of your money and I'm much more likely to agree to date #2.

Credit Cards vs. Debit Cards

2007-03-28T14:44:00.000-05:00

Smart Money has an article about how Credit Cards Offer Better Protection Than Debit Cards.

This is a conversation I've had several times and it's just one of the reasons that credit cards are better than debit cards in my opinion. Aside from the fraud protection, credit cards offer other benefits like:

Rewards on purchases. I make about $400/year on rewards from purchases. This is free money and anyone who has taken one of my classes knows I'm all about free money.
Interest earned on delayed payment. Debit cards take that money out of your account immediately which means you get no benefit from it. By using a credit card, you get a few weeks to hold on to that money and earn some more interest from it. With high yield savings accounts like HSBC, Emigrant and others offering rates over 5% and ING's new 4% checking interest rate, this is a chance to make a little extra cash.

So basically, I'm a big fan of credit cards. As long as you can pay off your balance in full each month, I don't see any reason to use a debit card over a credit card.

Personal Finance 101 Posts of the Day 3/27/07

2007-03-27T23:38:00.000-05:00

Debt Consolidation News has a good post about 50 common sense spending tips. I agree with most of them. Except # 20. I've taken long distance bus trips and no thanks, never again. I'll pay $250 for the flight to save 14 hours of my time. It's worth it not only for the comfort but also for the time savings.
Save Money gives 4 Ways to Keep Your Credit Score High.
The Simple Dollar talks about how to Follow Your Dreams. I love this post. Not enough people focus on goal setting. My Goal Setting class is the least popular of the Personal Finance Classes I teach but I really think it's the most important. You need direction if you're going to succeed and the key to that is to make your goals/dreams measurable and give yourself a timeline.
The Consumerist tells us about 8 Free Personal Finance Management Programs (and a few paid ones)
Anxiety Ended talks about how to save money and reduce anxiety.
No Credit Needed talks about how to keep grocery costs under control.
Personal Finance Advice talks about how to eat out without spending a lot of money.
Kirby on Finance wonders if your ego is your own worst enemy.
Financial Hack tells us 10 ways to simplify your finances.
Free Money Finance doesn’t seem surprised that financial planners give bad advice.

Reader question: How do I open an IRA?

2007-03-27T14:02:00.000-05:00

Hi Mandy,

How are you? A quick question..I plan to contribute 4000 to IRA this year (I believe this is the max)...Can I contribute anything additional to Roth IRA?

Would you suggest that I put in Roth IRA or traditional IRA?

Also what is the yield I get out of this account?

I am planning to open it with Citibank, since it is close by

Thanks,

ANSWER

Hi,

You can only contribute $4k total to both accounts. Since I believe you have a 401k at your job, odds are very good that you cannot deduct your traditional IRA contribution so I'd strongly suggest you do the Roth instead. And even if you can deduct it, typically a Roth is a much better investment in the long run. See my article: What's so great about a Roth IRA?

Also, you should never invest through a bank. They are the worst places for investments since they typically offer loaded funds that have high annual expenses and underperform. Instead you should open your account with Vanguard or Fidelity.

As for what kind of yield you can expect, that is completely dependent upon what you invest in. IRAs are only accounts within which you buy an investment. You can choose almost any investment. Considering your age, you should be as aggressive as you are comfortable with. Since your balance in this account will only be $4k to start (assuming you don't have an existing IRA that you could add to) you probably don't want to invest in more than one fund (to minimize fees). If you're ok being very aggressive, or it's balanced out with your other investments, you could choose a total stock market index fund as it will give you great diversification and be 100% stock. If you prefer to be a bit more conservative and/or you just don't want to think about it again besides to put more money in, you should consider a Target Retirement Fund.

Target Retirement Funds are funds that hold a basket of funds that ensure that you are completely diversified and have an appropriate asset allocation based on your expected retirement date. They are a one-stop investment and you can put your money in and never think about it again because it automatically gets more conservative as you get older.

Final thing, assuming you didn't make a contribution in 2006 (otherwise you'd just add to it right?) when you open this account you should identify this money as 2006 money. You have until tax day to do this. Then you still have all of 2007 to contribute another $4k.

Let me know if you have any questions and unless I hear differently from you I'm going to post this (with your name removed) onto the meetin forums since it's a great question that lots of people probably have.

Have a great day!
Mandy

FOLLOWUP QUESTION

thanks Mandy,

I was planning on Citibank since some of my friends have opened accounts there...they don't charge any fees too.

Does Vanguard charge any fees?

However the trick is to find the mutual funds that I should be investing in.

I do not mind being aggressive...but i need to know how and what to look for in mutual funds...Any pointers on links, details that i should look for?

and no, I do not have a 401K account, since my company does not contribute...

thanks,

FOLLOWUP ANSWER

Ok. Well, since your company offers a 401k and you just choose not to participate you still may not be able to take the deduction. Check your tax form and see if there's a mark on it that indicates you're covered by a retirement plan. If that box is checked then you can't take the deduction.

Even if you can take the deduction you should still probably consider the Roth. The advantages are much better with a Roth than a Traditional IRA.

Regarding Citibank, they may not charge fees up front, but odds are great that the products they offer are loaded funds (means you have to pay a sales charge to buy them) and have high annual expenses (anything over .5% is too high unless it's a very specialized fund).

Vanguard charges $10/year/fund for investments under $10k which is why you only want to do one fund at a time. $10 may sound like a lot compared to Citibank's $0, but when you take into account that a load is typically 5%, that means on a $4k investment you're paying $200 just to buy the fund. That doesn't even include the difference that a .25% expense ratio will make over one that's 1%.

The main things you should look for in a fund are: Load (never pay a sales load. They're a waste of money), ER (stands for annual expense ratio) and should definitely be below 1% and ideally below .5%. You also want to look at what the fund is invested in. Funds can invest in almost anything so you want to make sure that whatever it is invested in meets your needs.

As a younger person you want your investment to be much more heavily weighed towards stocks than bonds. You also want to make sure that you have a little bit of everything (small, mid, large-cap and international) which will keep you diversified and boost returns and lower risk.

Since you're just learning how to pick funds, I would definitely recommend the Target Retirement fund. I would choose the 2050 fund which is the most agressive. I would do this just to get the account set up and then you can spend some time learning more about how to choose funds. After learning more you may decide to just stick to the target fund (they are great investments) or take a more active hand in your investment choices.

On my book recommendation page I list 2 books which I think are must reads for everyone. The first is The Automatic Millionaire and the second is Investing for Dummies. I'd recommend reading both since they'll give you a great educational foundation to get you started.

Mandy

Personal Finance 101 Posts of the Day 3/26/07

2007-03-26T15:55:00.000-05:00

All Financial Matters has a great summary of why renting furniture is a bad idea. I agree 1000%. I've said it over and over that financing a depreciating asset (car, computer, furniture, jewelry, etc.) is always a bad idea. The value of the product drops so quickly that it's guaranteed that you'll be upside-down on the loan almost immediately. It's a much better idea to save up your money and buy with cash. This is why you set financial goals, to plan for these purchases.
Credit Card Lowdown lists 20 moronic things people do with credit cards.
Money for the Rest of Us talks about how to find cheap flights.
Broke-ass Student talks about things to watch out for with credit cards.

Personal Finance 101 Posts of the Day 3/25/07

2007-03-25T03:27:00.000-05:00

Ask Mr. Credit Card lets us know about common credit report errors.
Money Under 30 talks about letting go of your past so you can move forward.

Personal Finance 101 Posts of the Day 3/22/07

2007-03-22T00:04:00.000-05:00

Blueprint for Financial Prosperity posts about why budgeting to the penny isn't a great idea. I agree 1000%. I actually just taught a budgeting class tonight and covered several of the points that BFP made. The biggest one IMO is that the harder you make things the less likely you are to stick to them. That's why I'm such a fan of making things automatic.

Broke Now, Rich Later has an interesting post about emergency funds. I'm not a huge fan of large emergency funds unless you're high risk. I think they're kind of a waste because there are other things you could do with your money that's more productive. I think that if you have decent credit lines that are empty you might be better served by putting your money into a balanced fund. They're more agressive than cash but not ultra volatile so odds are against you taking a huge loss at the wrong time. I particularly think that having an emergency fund while you are carrying credit card debt is a waste of money.

No Credit Needed tells us 10 things they've learned about their finances.

My Retirement Blog gives us 1-5 of 10 things your 401k provider won't tell you.