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.

Free Money Finance has been sharing information about jobs had in high school and college. I thought this was a really cool idea. After all, I wasn’t always a freelance writer. I did other jobs, too! And learned plenty from them. Here is a sampling of some of my former jobs:

• 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

There is a wealth of good personal finance reading out there in the blogosphere. Some of it is good common sense, and some of it is thought-provoking. Here are some of the things that caught my eye this week:

• Ten Things You Should Do When You Get Laid Off from Consumerism Commentary.
• Why Everybody Needs A Side Hustle from Frugal Dad.
• Be Successful by Learning Delayed Gratification from Bargaineering.
• Should There Be Mandatory Personal Finance Classes in High Schools? from Bible Money Matters.
• Find a Bank That Works For You from Green Panda Treehouse.
• Poor Money Choices Ruined My Parents’ Life from Lazy Man and Money.
• Best Free Events to Enjoy Almost Anywhere from Gather Little by Little.
• Things You Own End Up Owning You from My Two Dollars.
• 12 Common IRA Mistakes To Avoid from Good Financial Cents.
• 8 Ways A Recession Can Benefit You In The Long Run from Saving Advice.
• CDs vs. Bond Funds from The Oblivious Investor.
• Do You Keep Money Secrets From Your Spouse? from Free From Broke.
• 7 Tips for Talking to your Fiancé About Money from Mrs. Micah.

Back in the day, when big banks had balance sheets that made them appear flush with cash and full of value, banks offered some of the best dividends. However, between the financial meltdown and TARP, financial institutions found it necessary to cut dividends. For many investors, though, the fact that some banks have made arrangements to repay TARP and move forward, hope has been rekindled for an increase in dividends. But it is probably not likely. Financial institutions probably won’t be able to offer the same kind of dividends for quite some time. Some of the factors that may make banks reluctant to raise their dividends include:

• Losses are still expected to mount for some financial institutions. Credit card charge-offs are increasing, and commercial real estate continues to fall in value. And foreclosures could still continue to cause problems.
• More regulation may be coming. Even with TARP and its requirements behind big banks, the President has proposed regulatory overhaul, and banks are wary of what it will entail, and concerned about how it might limit profitability.

However, it is possible — even likely — that, in the future, financial institutions will raise their dividends to some degree. But I doubt they will return to previous levels anytime that could be considered soon. It will take years before banks feel good enough about economic recovery to boost their dividends.

Image source: sxc.hu

Some of you might be aware that I have a Major Client. This Major Client accounts for about 1/3 of my monthly income from my freelance writing business. However, what I’ve been suspecting might be coming for a couple months has finally arrived. My Major Client is cutting back rather dramatically. Although it’s better than I thought it would be; I thought I’d get dumped altogether. However, instead of doing that, they’re cutting me down to 45% of my current load. That’s a pretty substantial cut, though, from this Major Client.

I am fortunate in that this client pays a month ahead of time (due to the fact that the amounts of money involved are reasonably significant). I’ve been paid for this month’s work already, and the new contract takes effect July 1. So I have a little time to prepare for what I consider a freelance layoff. Here is what I have in terms of financial support during this time:

• Some savings to help cover costs, if necessary.
• We don’t spend all of our income each month, so there is a financial buffer.
• We have close to 6 months of food storage if it becomes necessary to economize by cutting back dramatically on the grocery bill.
• My parents are usually willing to provide a loan, and since their jobs are secure, it would be a last ditch effort. But better than using credit. My parents don’t charge interest.

What I plan to do in order to replace the lost income (or at least not add additional strain to our budget):

• Reduce the amount of sod for our yard. We’ll sod only the front and seed the back yard to save money. (Happily, the yard has already been budgeted in and is mostly paid for.)
• Look for new writing gigs.
• Write for a few paid content sites until things firm up. (I don’t particularly enjoy doing this — it’s like when I first graduated from college to be a…cashier. But you do what you have to do.)

I feel blessed, though. A lot of people do not have the luxury of nearly 22 days to prepare for a dramatic drop in income.

What would you do if you were faced with a drop in income?

image source: Esther_G via Flickr

Last weekend, my brother graduated from college. Lucky for him, he already has a job. But many people aren’t so lucky. My cousin, though not a grad, is out of school for the summer and can’t find work. She’s stuck as my nanny until the school year starts up again. But being my nanny isn’t the only “interesting” job out there.

Beth Cook, who represents Craig’s List, points out that there are a number of jobs available. And that Craig’s List can be a good place to look. They may not pay a ton, but in this economy, sometimes money is money. Here are some of the more interesting suggestions Cook offered:

Dog Walker

Trouble Sleeping Study

Cooking / Baking Focus Group

Personally, I think being part of a cooking/baking focus group would be awesome. And there are other focus group opportunities out there. My husband’s brother (who designs video games) has participated in looking for game focus groups. Of course, I’d expect such jobs to be competitive.

There are also some entry level jobs for those of you who are more interested in “real” work:

Marketing/Sales

Television Prod. Coordinator

Web Production Artist

To do these jobs, though, you need training. If you are graduating, your university likely has some sort of career center or job placement help department. Check it out and see what’s available. Colleges have an interest in helping grads find work, since it helps them recruit when they have a high placement rate.

And, if you can’t get a job, there’s always an internship. You won’t get paid much (if anything), but you will get experience. And that can give you an edge later on.

It’s been a reasonably big week for me in terms of personal finance carnival participation. I’ve participated in:

• Carnival of Personal Finance on Weakonomics.
• Carnival of Pecuniary Delights at Money Ning.
• Carnival of Cashflow Consciousness at Money Energy.

Also, I was rather flattered to be included in the round up at Your Money Relationship.

Carnivals are a great way to look for some of the best personal finance articles from around the Web. I strongly encourage you to get as much good info as possible to aid you as you map out your financial future.

image source: joiseyshowaa via Flickr.

Not too long ago, I jumped on the P2P lending bandwagon, giving Lending Club a try. There are a number of P2P lending sites, allowing for variations that include microloans to the poverty-stricken and student loan P2P lending that focuses on helping students with college costs. And now, if Prosper has its way, it will be possible to for ordinary people to lend money to banks.

Of course, you sort of do that right now. When you put money into a CD or an interest bearing bank account, you are essentially lending the bank money. The bank pays you a yield (often small) for keeping the money there and lends the money to others at a much higher rate. With the new scheme introduced by Prosper, though, you could fund bank loans.

Here’s basically how the process would work:

1. The bank gives out a loan, as usual (the bank will have a limit of $25,000 for loans it wishes to list for funding).
2. After the bank has received three on-time payments, it can offer the loan for bid on Prosper.
3. Investors can partially fund the loan, as P2P lending generally works.

The idea is to provide a place where banks can sell their higher-quality loans. It is an interesting idea, providing a sort of secondary market for regular folks.

What do you think? Would you buy a loan from a bank?

image source: sxc.hu

I’ve often said that I’m a boring investor. And I’m not alone. Mike Piper, The Oblivious Investor, is also a boring investor. He’s written an entire book, Oblivious Investing: Building Wealth by Ignoring the Noise on a simple buy-and-hold investing strategy that focuses on index funds. It’s not exciting, but you’re more likely to build enough long-term wealth than if you run around, trying to earn big-time returns in the short-term. The book is fairly short, only 113 pages. You can easily read it in an afternoon.

Oblivious Investing by Mike Piper

Oblivious Investing is set up as a parable. It follows the stock market exploits of Shannon as she learns how to engage in “oblivious investing” with the help of her Uncle Toby. Some of the dialogue in the book is kind of cheesy, but that doesn’t matter; the principles in the book are sound.

Piper takes the reader through an ordered approach to developing a long-term investing plan based on index funds. Each chapter starts with questions that will be answered, and ends with a succinct summary of the main point addressed. You learn how valuable investment planning skills such as:

• Figuring out your goals.
• Figuring out the timeframe you need to meet your goals.
• Understanding index funds.
• Why trying to time the market is a bad idea.
• Learning to ignore the “noise” around you.
• Understanding market fluctuation.
• Putting faith in long-term results, rather than focusing only on the short-term.
• The natures of volatility and risk — and why they are often confused.
• The all-inclusive “more”.

With the stock market in turmoil right now, Oblivious Investing comes at just the right time. The book is an appeal to think rationally and calmly about your investment strategy, and to prepare for the long term. At the back are a number of helpful, easy to understand charts that illustrate the points made throughout the book. Here are some of my favorite words of wisdom from Oblivious Investing:

“And the time frame for each goal isn’t form now until the time you start spending the money; it’s from now until the time you finish spending the money.”

“Perhaps we should call an action risky if it decreases your likelihood of meeting your financial goals.”

“Because I kept investing money during the entire time that the market went down, most of my shares were bought at fairly low prices. So now that the market has gone back up, my account balance is looking really good.”

And, finally, what this book is all about:

“Oblivious Investing is not about being uninformed. It’s about creating an intelligent investment plan and then consciuosly choosing to ignore anything that could trick you into giving up on it.”

One of the ways that you can earn passive income is through dividend investing. Companies that pay dividends actually pay out a portion of their profits to shareholders. If you invest in a company that pays dividends, you receive a dividend monthly, quarterly, semi-annually or yearly (depending on how the company does things). These dividends are paid out to shareholders, and are different from earnings from selling or trading stock in the company.

Dividends can be incorporated into a long-term plan for yielding wealth, as well as provide regular income. Indeed, there are some investors that invest solely in dividend paying stocks, watching their portfolios grow over time and receiving an income stream when dividends are paid out. There are some who manage this well enough that dividends provide a large portion of their income.

DRIPs

It is possible to compound the earnings you receive from dividends through programs known as dividend reinvestment plans (DRIPs). DRIPs are set up with some dividend paying companies who take your dividends and automatically reinvest with the company, buying more stock. I have some DRIPs in my Roth IRA. Every time a dividend is paid, it is automatically reinvested, allowing me to buy a couple extra shares of stock. It’s basically like getting free shares. And it’s a good way for me to automatically increase my investment.

For the most part, though, dividend investing isn’t going to result in immediate results. In this economy, you might disappointed (although there are some companies that have actually increased their dividends). Dividend investing — especially when you make use of DRIPs — are part of a long-term strategy. However, the cumulative effect can provide a reasonable passive income for those with the patience to make it work.

image credit: sxc.hu