May 19, 2012

Weekly Roundup

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As always here are a few of my favorite posts from the week:

Filed Under: The Saturday Six, Uncategorized ·
May 18, 2012

You’d Be Shocked: What 18-20 Year Olds Do NOT Know About Money

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When I hear suggestions of basic financial education being taught in high school I think of things like understanding interest, the importance of a credit score, and how to make a budget. While basic financial education would be highly beneficial to high school students, what really needs to be taught is financial common sense.

Everything on the following list I have either witnessed and/or been asked.

Here is what 18-20 year olds DO NOT know about money

  • How to write a check
  • That you have to include a payment stub or write the account number on the check for the bill you are paying.
  • That you then have to put a stamp on the envelope that you are mailing your check in.
  • Credit Cards are not free money.
  • Overdraft protection on your checking account is not free money.
  • Writing a bad check is not a good idea; and yes you will be charged an overdraft fee.
  • That you are required to carry auto insurance. (And yes, those three speeding tickets you got last month are going to cost you.)
  • You need money to retire.

Now, I have made some pretty dumb mistakes when I was younger. I maxed out my credit cards as soon as I got them and fell prey to Rent A Center, paying nearly $1500 for  a $400 couch.

Fortunately, I was blessed with a little bit of common sense and was at least able to successfully write a check and keep all of my bills paid.

I think that it is crucial now more than ever for some kind of basic (very basic) financial education class to be taught in school. At the very least high school students should be taught how to write a check, balance a checkbook, and pay a bill.

{Photo Credit}

Did you know these things when you were that age? Am I leaving something off the list?

 

Filed Under: Habits, Just Because · Tagged: , , , ,
May 16, 2012

Diversifying Income

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I have been thinking about diversifying my income a lot lately. Just like retirement funds, instead of putting all of my eggs in one basket, I’d like to have multiple income streams.

As an employee I am already carrying two part time jobs, so in that area I am  diversified . But I don’t want to be someone else’s employee for the rest of my life. I’d rather create some of my own income streams.

Here’s what I’ve been thinking:

Micro Niche Site

Making website requires so little capital, that time is the only thing I really have to lose. I’ve heard stories of people making decent money with adsense and affiliate links on micro niche sites. Granted, I will have to do some keyword research. I am not too savvy when it comes to SEO.

I realize that this will be ultra time consuming at first, but it could pay off pretty well in the end. I have actually come up with an idea that I think could be great. A topic that there is virtually nothing on (except forums) and a perfect domain name to go with it.

Rental Property

Without a doubt, I will purchase a rental property in the next year. In my area the houses that are for sale are very inexpensive right now.

My plan is to find an inexpensive house so that the monthly rent will be at least $200 – $300 more than the monthly mortgage, insurance, and property tax. Save all of the profit for the first year to cover misc. repairs or months when I may be without a renter.

After I have a cushion saved I can either pocket the profit or save it for a down payment on another rental house.

Buying Items and Reselling Them

I’ve done this a couple of times. There is money to be made on all kinds of items. From televisions, to houses, to go carts, or even cars. Really the list is limitless. As long as I can find undervalued items, I can make money by doing this.

Of course there will be sometimes when I’ll have to take a loss, but the goal is just to have more gains than losses.

So those are the things I have been thinking about. In the short term they may not make huge profits, but if I continue to experiment on diversifying my income, I will eventually figure out which is the right fit for me.

{Photo Credit: 401K}

Do You Have Plans On Diversifying Your Income?

Filed Under: Earn It Posts, Earn Money · Tagged: , , ,
May 14, 2012

What Do Personal Finance Books Do for You?

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It was about a year ago when my interest in personal finance sparked. I had heard so many people speak so highly of Dave Ramsey, that I just had to read his books. I started out with The Total Money Makeover and then went on to read Financial Peace and More Than Enough.

When I read The Total Money Makeover there were some things that I didn’t understand right off the bat. Like Dave suggesting that you shouldn’t care about your credit score and that all debt was bad. After all, I was reading this book right after my house flip that I had  used debt and my credit score to acquire.

Even though some of his ideas didn’t feel right to me, I thought “what do I know, he is the expert.” So, I took the money I had in my savings account paid off my car and credit cards and had just over a thousand dollars left in the bank for my beginning emergency fund.

I then began to conform to his way of thinking, or at least I thought I was. I tried taking my frugality to the extreme. I attempted to refinance my house to a 15 year loan with a lower interest rate. BUT the extreme frugality fizzled pretty quickly and my husbands credit score wasn’t good enough for us to refinance.

At this time I had become a regular at the library, devouring every personal finance book I could get my hands on. I wanted to know others views on the subject, instead of just following the first plan I read.

I’ll admit, a lot of the books felt very repetitive. Obviously most everyone agrees that debt is bad, you need to save money, and live below your means. But, isn’t that obvious?

Now I love when I can get my hands on a book with a unique viewpoint. Recently I’ve been reading books by Robert Kiyosaki and it is a breath of fresh air to hear another side of the story.

It’s great if a book like The Total Money Makeover can improve somebodies financial situation. However, following someone else’s plan didn’t satisfy me. I have read from various authors, had my own financial trial and errors, and I continue to learn.

Learning about personal finance from different perspectives and mapping out my own plan, even if it is constantly changing, has kept me interested and motivated financially.

What do you think about personal finance books? Do they make an impact on the decisions you make?

 {Photo Credit}
Filed Under: Books, Credit Score · Tagged: , , , , ,
May 13, 2012

Weekly Roundup

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It’s been a busy week around here. I wish I had an update on the Craigslist project, but I haven’t even got the go-carts back up for sale yet. I hope to do that this week. Hopefully I’ll have some sort of update by next weekend.

Some of my favorite posts of the week:

Have a Great Weekend and A Happy Mother’s Day!
Filed Under: The Saturday Six ·
May 8, 2012

Cosigning for a Family Member?

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Have you ever had someone close to you ask if you will cosign on a loan for them?  Really it’s a no brainer – if the person doesn’t have the credit score needed to get the loan why would you risk yours for them?

Well, this “no brainer” has left me feeling slightly guilty. My younger brother who has  pretty bad credit has actually been trying to improve it for about a year.

He moved out on his own at a young age – probably before he was financially capable of being on his own. He only got one credit card and once he maxed out the $300 limit, he let it go to collections.

This wasn’t the only bill that he let to go to collections. There was also an electric bill and a cable bill. Last year he decided he wanted to turn his mess around so we got a copy of his credit report and I called and negotiated with the collection agencies and settled all of the bills.

A couple months after that we decided to try to get him a credit card to improve his credit score. The problem being he didn’t qualify for a single one. Needless to say his credit score is still pretty rough.

About a month ago his car broke down. He has been having to drive one of my dad’s vehicles because he cannot get a car loan.

I have tried to help him in every way to raise his credit score and I will continue to do so. He has become more interested in the money game and has become a lot more responsible  in the past year.But I still feel like it would be a risk to co-sign for him – especially on a five year loan. Who knows what will happen in the next five years.

So I guiltily told him I could not co sign for him. I am however thinking of adding him to one of my credit cards to see if that boosts his score enough to get a loan in the next couple of months.

Have you ever been in a situation like this? What did you do?

{Photo Credit}
Filed Under: Credit Cards, Credit Score, Spend It · Tagged: , , ,
May 7, 2012

Should You “Pay Yourself First” if You are in Debt?

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I had wiped away all debt over the past year (except for the mortgage) only to rack up some HUGE medical bills. So the question is does it make sense to pay myself first, or should I be applying all of my extra money toward the hospital bills?

I no that many may disagree, but I like the viewpoint of Robert Kiyosaki. No matter who you owe always pay yourself first. By doing this you will look for ways to earn or scrape up enough money to pay your debts and you’ll keep the habit of paying yourself first.

I know that I obviously owe the hospital money, but I don’t feel the urge to repay as quickly as I would had I intentionally racked up the debt. While I don’t want this debt to be hovering over me for the next 10 years I feel like I should focus on building my savings.

If I were to put every extra dollar over top of my regular expenses toward the medical debt it would take me approximately 5.5 years to get it paid off.

I had been working so hard on my financial goals and doing so well only to get hit with a medical emergency and no health insurance. Which granted is my fault for not purchasing my own health insurance but now I’m fighting myself on what to do.

Does anyone have any advice to offer? What would you do if you were hit with $50,000 + in medical debt?

 {Photo Credit: 401k}
Filed Under: Debt, Saving · Tagged: , , ,
May 5, 2012

Weekly Roundup + Online Earnings Update

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It’s been awhile since I did an update on my online earnings. Here is a rundown since the last time I posted.

  • Inbox Dollars now at $20.45
  • Sent two textbooks to Amazon trade in -$186.36
  • I did an ING offer where I earned $50 to open a sharebuilder account and purchase a stock. It cost $9.95 to purchase the stock which left me with a $40.05 profit.

Total online earnings for the year are now at $364.01.

And now to some of my favorite posts of the week….

 

HAVE A GREAT WEEKEND! 

Filed Under: The Saturday Six, Uncategorized, View My Online Earnings ·
May 2, 2012

Money: It’s All a Game

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Baseball, golf,chess, money. What do all of these things have in common? They are all games of skill – the more you practice the better you will get. The better you do, the better you want to do.

They increase your competitiveness and always leave you yearning to beat your next opponent. Only in the game of money you are playing against yourself.

You Control the Outcome

The nice thing about the game of money is that you are the judge. You decide whether you win or lose. Depending on the goals you set and your level of self control this can be a good thing or a bad thing.

For those of us lucky enough to develop an interest in personal finance at a young age, we can win the game of money. We have the knowledge and the time, we just need to put our plan into action.

For those who didn’t develop an interest in their own game of money until facing financial demise, there is still a way to win the game. It may be a long hard road to travel, but you still control the outcome.

Money is a Never Ending Game

Rather than one finish line to cross, there are several. Every victory leaves you wanting another. It’s not about greed or really even about becoming rich. It’s about the sense of accomplishment you get from achieving your goals.

There is always something new to be learned. Always an area where you can improve your skills. This is a game just like any other – the more you practice the better you become.

It’s Never to Late to Get in on the Action

There are no age cutoffs or prerequisites to join in on the action. That’s the beauty of playing for yourself. The only requirement is for you to have an interest in your own financial well being.

No matter your situation you can acquire the knowledge and hopefully the passion to start winning.

{Photo Credit}
Filed Under: Challenges, Just Because · Tagged: , , , , , ,
Apr 30, 2012

Minimize Your Fear of Failure to Reach Your Full Potential

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Fear of failure can be the biggest road block to financial success. Fear or failure is common, I would be lying if I said it wasn’t. However until you minimize your fears you will never be able to reach your full potential.

Follow Your Instincts – Not Someone Else’s

There are a lot of naysayers in this world. People who are telling you that something that they have never even attempted cannot be done. In these circumstances you need to follow you instincts instead of theirs. After all, opportunity is knocking at you door, not their’s.

There is validity in taking advice from people who are close to you and care about your best interests. They might be trying to do you a favor, but remember they are just giving you advice, you still have to make the decision about what’s right for you.

Weigh Pro’s and Con’s

There are ups and downs to every situation. You just need to be clear that risks you are planning to take have at least the same amount of pros as cons. Preferably more pros than cons.

In dealing with the fear of failure you need to think into the future. If things went wrong where would you be? If things went great what would that do for you?

Depending on what situation you are in (a new job, your own business,a new investment) get yourself prepared for the worst possible situation. For instance if you want to start your own business have enough of a cash buffer to get you through the first few months, which are sure to be your roughest.

Find Support

Once you have made the huge decision to face you fears lean on your family and friends for love and support. There are sure to be tough days and support will help you to keep pushing on.

Final Thoughts

If you never face your fear of failure and take that leap to do what you’ve secretly been yearning to do, then you will always wonder what if….

Don’t spend your whole life wondering what if. It’s better to take a risk every once in awhile rather than always playing it safe and never reaching for your dreams.

Filed Under: Earn Money, Habits · Tagged: , , , , , ,
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