August 7, 2009 –       Money 101: Knowing the Basics

September 4, 2009 – Kids & Money

October 2, 2009 –      What is Financial Planning?

November 6, 2009 –   Protecting What You Have

December 4, 2009 –    Investments: The Basics

January 8, 2010 –        Investments: Advanced Concepts

February 5, 2010 –       Managing Your 401(k)

March 5, 2010 –            Leaving a Legacy

April 2, 2010 –               Women and Money

May 6, 2010 –                Financial Planning and Small Business Owners

June 4, 2010 –               Your Retirement

July 1, 2010 –                 Financial Windfalls

Post from: Yielding Wealth

That legislation, which is part of the committee’s health bill, would let workers choose to have government deduct money from their paychecks — maybe $65 to $100 a month — and put it in a savings account. When they get old or disabled and need care, they could then use that money.

Anything that encourages automatic savings is generally a good idea. I would be interested to know whether the savings account would offer a high yield, and whether you could direct some of the money to be put into conservative investments. Of course, since it would be a long-term investment, I would favor index funds. I think that something similar to retirement accounts now — complete with tax advantages and the ability to direct some investments — would be in order. But it doesn’t look like that has really been thought out.

In any case, it is fairly obvious that health care reform on all fronts is needed. The private sector has largely dropped the ball, and offering a public option for health insurance (perhaps something similar to what our elected officials have access to) is a good first step. And you wouldn’t be forced to choose it if you could get a better deal elsewhere. A public option would introduce something akin to competition in a market where, quite frankly, there is very little.

Image source: NESRI via Flickr

Post from: Yielding Wealth

You Need a Budget has put together a contest for moms who budget. I am a mom, and I do budget (loosely), but I’m really not that into running a “tight ship”, as the contest states. But you might do well in this contest. All you have to do is share your creative budgeting techniques, and you could win. Some of the prizes being offered include:

• A trip to the spa at the Four Seasons in Dallas.
• Personal finance gift package.
• YNAB gift packages.

The contest started yesterday, and you have until August 3, 2009, to fill out the entry. you get extra entries for social media (Twitter, YouTube, Facebook, etc.). The grand prize (Four Seasons) is awarded after voting from America. If you are a man with a female partner, have her sign up (or do it in her name).

My creative budget technique? I enter credit card transactions in my check register. That way, when I don’t spend more than I have. When the statement comes, I write the check for the entire amount, knowing the money is there. I don’t pay interest on my credit card, and I get the reward points.

Post from: Yielding Wealth

• Cashier at a craft store (high school): Learned that it can be inconvenient to work on someone else’s schedule. But I also learned the value of doing the best you can at whatever job you are doing, and that others value your competence.
• Piano teacher (high school): Learned that it is much more pleasant to set your own schedule and be able to set your own rates. Of course, when you teach lessons, you still have to consistently provide the service you are being paid for. But I could decide my own hours, and choose to take fewer students.
• Cafeteria worker (college): Learned that work study is a great way to help you get through college. Also learned the value of a job with benefits. No, my part-time work study job at the cafeteria did not include health benefits. But it did include free food — anytime I wanted it. Talk about a benefit!
• Radio DJ and underwriting director (college): Learned that I enjoy media and communications. I also learned the value of getting paid for doing something you enjoy. Even making a little less is worth it if you enjoy your work.
• Resident adviser (college): Learned that a home business can be a great thing. I got paid for doing something based out of my dorm room. I could set my own schedule, and go about my business from my living quarters. Convenient and helpful.
• Cashier farm and ranch store (post-college): Learned that sometimes it really is who, and not what, you know. I don’t know about farm and ranch products. But I did know the owner of the business. And that meant I got a cashier job. Networking is valuable when you are looking for a job.
• Office coordinator and Classified sales for local newspaper (post-college): Learned that I would rather write for a newspaper than sell ads for one. This job set me on the path to freelancing by inspiring me to go back to school and get my M.A. in journalism.

It’s pretty ease to see how my other jobs taught me things that I use now. Indeed, my jobs taught me the value of having flexible hours, working for myself and a number of other skills. I still network, and I still try to work hard and do my best.

What did your previous jobs teach you?

Image source: Quadzilla99 via Wikimedia Commons

Post from: Yielding Wealth

Happy 4th of July!

Post from: Yielding Wealth

Happy Friday!

Post from: Yielding Wealth

Unfortunately, the program has been seeing limited success. It relies on voluntary help from mortgage lenders, and it excludes those with even higher loan to value ratios. Yesterday Obama made a move to expand the Making Home Affordable program. Now, those with a loan to value ratio of up to 125% are eligible. There are also continuing incentives to encourage mortgage lenders to deal with homeowners.

As far as the housing market is concerned, this new move is unlikely to have a huge impact immediately. It probably won’t even arrest falling home values, or do much in terms of stabilizing the overall housing market. But it does have the potential to help prime borrowers who are looking to refinance to a lower rate. Mortgage interest rates are still relatively low, and refinancing could save folks who made good homebuying decisions a great deal of money.

It even benefits people like me. I bought my home two years ago with 5% down and a 30 year fixed rate. Obviously, I haven’t had time to make up a lot of ground in terms of home equity. My home has lost some value in the last two years, and I have a loan to value ratio of about 94%. (The new rules don’t change my eligibility.) We can easily afford our mortgage payment, but I wouldn’t mind if I got an interest rate that is 1 percentage point lower. Plus, there are places in town offering no-fee refinancing. We could refinance to a 15-year loan and only pay $200 more per month, saving us a great deal over the long haul.

Image source: woodleywonderworks via Flickr

Post from: Yielding Wealth

But it appears that I am in the minority. Consumer Reports has a graphic in the August 2009 issue that shows that only about a quarter of consumers try to negotiate. However, those who do negotiate tend to have a pretty good success rate:

Consumer Reports also offers these tips on how you can increase the chances that your haggling will prove successful:

1. Know store policy about discounts and matching deals, and research prices for similar items online and off.
2. Time your visit so that you arrive later in the month. Additionally, avoid times of the day that are busy. You want your salesperson to be thinking of his or her quota. And you want him or her to have the time to negotiate with you.
3. Show fixable flaws to the salesperson (or take the display model).
4. Avoid asking for a discount in front of others. Salespeople don’t want to have to give a discount to everyone who sees your successful negotiation.
5. Ask for a manager if the salesperson can’t deal.
6. Offer cash. In some cases, you can get a cash discount by asking. It means the business doesn’t have to pay a transaction fee for accepting your credit card.
7. Walk if you don’t get the deal. Part of negotiating is being able to walk away if you know you can get the same deal elsewhere. At the very least, when you walk you know you can get the same item for the same price someplace else.

For an interesting personal story about negotiating, Man Vs. Debt has a pretty cool story — and some good tips for beginning negotiators.

Do you haggle?

Post from: Yielding Wealth

Tuition is up only 4.3% for the coming school year, the lowest rate of growth in 37 years, according to a survey of 350 private schools by the National Association of Independent Colleges and Universities. This is down substantially from the 5.9% increase for the 2008-2009 school year. Of course, this is for tuition only and does not include room and board inflation.

To further help some folks, financial aid is seeing an increase of 9.2%. So that means that, for some, it may actually be manageable to keep up with tuition hikes this year. But, as the BloggingStocks article points out, room and board have likely gone up as well. This might offset some of slowed inflation in tuition and fees.

Money troubles and higher education

It is getting more and more difficult for the schools themselves, as well as the students. This is because new money is down as benefactors reduce their contributions. (After all, the number of billionaires is decreasing, and those who are still billionaires have, well, billions less.) Not only that, but many universities have trusts and other investments that are significantly reduced in value, thanks to a bear stock market. While these investments will eventually rebound, for now it means less money to go around — and in some cases staff cuts and project terminations. The project my husband is working on here at USU got cut. He is fortunate in that a graduate in the department moved on and vacated a spot on a different project. He was successfully shifted, and retained his position. But not everyone is so lucky.

Image source: Widosu via Wikimedia Commons

Post from: Yielding Wealth

Yesterday (6-25-2009) I got a notice saying my “minimum” monthly payment was going from 2% to 5%. That means my payment of $345.00 will start to be $810.00 in August. I will not be able to afford that. Mind you, I always pay my bills, don’t get late payment charges and the last time I checked, my credit score was like 797. Yes! I’m having financial troubles and am just barely holding on. This will send me over the edge - especially if my other credit cards follow this one. … HELP!

This is probably a common refrain across the nation right now. And, sadly, this new rule is aimed exactly at folks like Lisa. Chase will keep your minimum payment at 2%, if you agree to allow the company to raise your interest rate. The most common recipients of this change to credit card terms are those with low introductory rates of between 2.9% and 5.9%. You can see where this is going. The higher interest rate means Chase gets more money, and allowing you to keep the lower minimum means that you make payments for longer — meaning Chase gets more money. The way I see it (and every situation is different), there are three options here:

Option #1: Suck it up and make the new minimum payment

If you don’t agree to the higher interest rate (and keeping the current minimum payment), you will have to make the new payment. Since you have about a month, now is the time to do some serious surgery on your personal finances. Look over your budget and see where you can make cuts. This may include cuts to entertainment, cell phones, eating out and other negotiable expenses. (Note: Your housing payment, especially if you have a mortgage, is not negotiable. Always make sure this is paid.) Figure out which expenses you can cut and get it so you can make the new minimum payment. It’s not pleasant, but in the long run, you will save money in interest and pay off your debt faster.

Unfortunately, many people do not have the option to cut back so dramatically. The current economic conditions mean that some folks, due to cutbacks or layoffs at work, do not have the ability absorb an increase of the magnitude proposed. In such cases, you might go with:

Option #2: New loan

In some cases, it might be wise to get a new loan to cover the amount of what you owe. Pay off the credit card, and move on. Of course, you still have a loan. You might try switching to a different credit card with an introductory rate of between 0% and 3.99%. You could also consider getting a debt consolidation loan from somewhere. If you have reasonably good credit, you might be able to get a personal loan with an interest rate of between 7% and 12% from your bank or credit union. (While this is higher than your intro rate, it is likely to be a lower rate than what the credit card will offer you in exchange for keeping the minimum low.)

Another possibility is to use P2P lending, such as Prosper or Lending Club to help you lower your payments. In any case, though, I would think twice (or thrice) about using a home equity loan to secure your credit card payment. Do that last.

Option #3: Debt settlement or bankruptcy

If nothing seems to be working at all, you can reach for the final tool of desperation in these cases: Debt settlement or bankruptcy. You can usually reach settlement for unsecured debt, allowing you to pay less than you currently owe on your credit card. As an extreme last resort, bankruptcy can help lower your payments to something affordable (even though in recent years bankruptcy laws rarely allow you to walk away). In both cases, your credit will be shot, so it is not a decision to be taken lightly.

What will you do if your credit card minimum is raised?

image source: daylife

Disclaimer: I am not a financial professional. Any information you get from this site is not intended as advice. It is likely to be incomplete, and it may not apply to your individual circumstance. Do your own research, consider your situation and/or consult a professional before making money decisions.

Post from: Yielding Wealth