Personal Finance 101: 2007

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!

Sunday, June 10, 2007

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

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

Friday, June 8, 2007

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

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.

Thursday, June 7, 2007

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

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.

Wednesday, June 6, 2007

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

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.

Tuesday, June 5, 2007

Financial Education in our Schools! We need it!

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

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.

Monday, June 4, 2007

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

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.

Saturday, June 2, 2007

How to effectively set and track goals

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

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

Friday, June 1, 2007

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

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.

Thursday, May 31, 2007

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

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

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

Wednesday, May 30, 2007

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

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.

Tuesday, May 29, 2007

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

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?

*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!

Monday, May 28, 2007

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

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.

Sunday, May 27, 2007

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

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.)

Saturday, May 26, 2007

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

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:

Friday, May 25, 2007

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

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?

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

Name:
Email Address:

Friday, June 22, 2007

Monday, June 18, 2007

Friday, June 15, 2007

Thursday, June 14, 2007

Monday, June 11, 2007