Wednesday, May 14, 2008

Opening Your Eyes to the World of Money

Being blinded by money schemes no more. When you become awakened to the world of marketing and banking, you notice the hypocrisy of it all. Rejecting the idea of credit is the start. Once you have determined to live a life without credit you notice a few things about marketing for credit. You see commercials that show fathers dancing with daughters at her dream wedding in Hawaii, or kids graduating college while giving them keys to a brand new vehicle, picking up baby items with pregnant mom and flashing your credit card. You see people buying "green" friendly products at a time when gas is at an all time high and credit cards marketing with cents off gas incentives, while all the while charging you 29.99% interest. Playing to your wants, instead of your needs. When you consider the average American owns at least two credit cards, carry a maxed out or almost maxed out balance, paying only minimums and being charged more for finance charges than their actual minimum payment, we should all think twice about charging up our next television set. By the time you've paid for your $4200 dollar flat screen television plus interest over the average two years of aggressive payments (seven years of minimum payments) it will take you to pay the television off, you've paid twice that amount and it is time for a new television set. Really be careful too, when paying just minimums. When your finance charge is more than your minimum payment, your balance can go up instead of down. Many Americana's credit payments (including loans, vehicles, student loans, lines of credit, and credit cards) is as much as their entire mortgage put together.
In the time of our great grandparents, it was looked down upon to borrow money. In the time of our grandparents, it was only OK to borrow money for major things, like a home. In the time of our parents, credit became a way of life. Now this generation, we are so much in debt that we cant claw our way out. Wake up to the hypocrisy of it all. We get excited that they "accept" us as customers, when we are paying them thousands upon thousands to loan us hundreds. Save up your money and pay yourself the interest. Move forward from the credit vortex.

Tuesday, May 13, 2008

Spending Only What You Make

Here is a money tip, spend only what you make. If you only spend the money you have and no extra, you will not have a debt crisis. For many "keeping up with the Jones'" is a real problem. By the time you accrue all the toys that they have, you can't pay your light bill. Remember, living like no one else now so you can live like no one else later is the best route you can go. If you can wait until you can afford to pay for a Lexus with cash, you are much better off than if you must sell your first born for it. If you are in a debt crisis, you may consider selling that Lexus and driving a used Kia you paid cash for. An extra $400 dollars a month (moderate average on car payment) for five years will buy you a $24,000 cash car, put that into a 12% mutual fund for five years, you are looking at 34,000 and some change. I think you could afford that Lexus then. By the time you have $34,000 dollars cash, that Kia may look pretty good!

Thursday, May 8, 2008

Baby Step 3

3-6 month emergency fund Once you have a $1000 emergency fund, you are debt free, next you should save 3-6 months of expenses for a fully funded emergency fund. Total all your utilities, food, gas, other expenses and save that much in an interest bearing account. If you are out of work for any length of time, this will keep it from being an emergency and keep you from living off of debt until you get to go back to work.

Wednesday, May 7, 2008

tips on car burglaries

Just this month alone, the county I work for has had 107 vehicle break-ins. Here are a few tips on how to avoid being a victim.
1. LOCK YOUR CAR -many times simply locking your car will deter a criminal
2. PARK UNDER A LIGHT OR IN A GARAGE -theives don't want to be where people can see them committing the crime, parking in a well lit area may help the criminal move on to someone else.
3. ALARM SYSTEMS -a simple alarm system installed can help, that little blinking light is like a force field.
4. DO NOT LEAVE PERSONAL BELONGINGS IN YOUR CAR - many people are victims to their own comfort level. When a theif sees a purse in the floorboard or a wallet in the door, you are assuring you will be a victim. THIS INCLUDES LOCKING IT IN THE TRUNK. If a theif gets in your car, they will surely go through the trunk as well.
5. DO NOT LEAVE CASH OR CREDIT CARDS IN YOUR GLOVE BOX. If a theif gets in, they will check this and the center console for just these type of things. THEY WILL TAKE YOUR GUNS TOO. Many people keep a pistol in their vehicle, if you dont take it inside with you, it will be gone too. FACE PLATES ON RADIOS ARE PRIME. If you have a removable face plate, take it with you.
These will not assure you will not be a victim, but it will assure that you will surely be able to get your life back together without further crimes happening to you, such as identity theft or credit card fraud.

Pay yourself first

Be sure to pay yourself first. When you are paid, take 5-10% of your earnings and transfer it to a interest bearing savings account, money market account, or mutual fund. Most money markets and mutual funds have a $500 to $1000 minimum balance, but they will earn more per dollar. Meanwhile, while getting your minimum balance, you can put it in a interest savings account, such as ING Direct (, which charges no penalties for transfers, has no minimum balances, and will even let you open accounts for specific sinking funds such as christmas or a new bicycle for your kid.

Does your gas work for you?

In order to get every drop you pay for fill up in the mornings when it is cooler outside. The hotter gas particles are, the more they expand. By filling up your tank in the morning, you get more gas because the particles are closer together and each gallon of gas will hold more gas particles. You may not notice a big dent in the bill, but you'll be able to get more gallon for your $3.45.

Saturday, May 3, 2008

Creating a budget

Spend every dime on paper before you spend it. That is what a budget is. Put your expenses into categories, need a good software, try excel spreadsheet or Dave Ramsey's gazelle intense software. Spend all your money in these categories until you reach zero. When you hit zero, stop spending money, you dont have anymore. Try these categories and a suggested percentage of your money.
charity 10%
savings 5-10%
transportation 10%
clothes 2%
entertainment 4%
utilities 10%
debt 0% (hopefully)
food 20%
personal 4%
housing 25%
by the way if your mortgage is more than 25-35% of your income, you might want to sell or refinance, otherwise, you are what Dave calls "house poor and you could struggle getting the four necessity payments in (utilities, clothing, food, housing)