We are currently working on paying off our credit cards, and we had them sitting in 0% interest credit card accounts while we worked on paying them off. They are nearing the end of their 0% introductory rate for balance transfers, so we needed to apply for some more 0% interest rate offers to transfer the balances to the new cards. This is a very effective and legal way to never pay interest on a credit card balance if your only intention is to pay it off quickly. One thing that you need to watch out for is balance transfer fees. Credit card companies started getting smart about people who hopped from one 0% card to another, so they threw in the fee that charges you one time of usually 3% of the balance being transferred over. We found a Bank of America card that did not have any balance transfer fees and 0% until May of 2008.
That title sounds like a cheesy late-night advertisement where some guy with fake hair makes allegations that you can make $20,000 a month, but he never tells you how to do it. You have to spend $495 to receive his audio book set and the workbook. I have a full-proof way to feel like you received a pay raise without purchasing anything other than a pen and a pad of paper. It’s called a BUDGET. I know what you’re thinking, “tell me something that I don’t know, Erik”. We cringe when we hear the word “budget”. It actually has negative connotations. Have you ever heard someone say with a deflated tone, “Yeah, I’m on a budget” or “that doesn’t fit in our budget”. It’s even possible to be made fun of when you say that you’re on a budget. Your friends or family might label you as a tight-wad or el-cheapo. Why is this? Why is it so bad to budget out your money and take control of it? That is exactly what you are doing. Making your money behave the way you want it to, rather than letting it fly around wherever it wants to go. You’re training your money to behave in a certain way. We train our dogs, we condition our children to act a certain way, but no one ever says, “Gosh, tell your dog to stop behaving so nicely”. A monthly budget is nothing more than spending your money before it is actually spent.
There are two kinds of investors. There are investors who have fun keeping up with the market and doing trades. They read the Wall Street Journal every day, and they talk about single company stocks at the water cooler. Then, there are those that just want to invest because it’s the right thing to do and they want to grow their money enough to retire with it. The other investor ultimately wants to make enough to retire with as well, but their approach is different. They have a different level of risk. Before you go any further with investing, you need to sit down with yourself or you and your spouse and evaluate the level of risk you are willing to tolerate. Single stock gurus make millions of dollars every year writing books, speaking to investors, developing websites, and hosting television shows to give advice about the next hot stock or the latest news about a merger or stock split. Mutual funds are not sexy. Very few financial media personalities discuss which mutual fund is the best to buy today. However, we know that mutual funds are an extremely effective investment vehicle, and the best part about mutual funds is that expert fund managers do all of the diversification and stock trades for you. However, there are plenty of you out there that want to put together your own portfolio of single stocks for investment. You might also be someone who has a retirement account with mutual funds, but you just want to pay around with 10 or 20 grand by selecting single stocks on your own. Whatever your situation, be mindful that selecting single stocks on your own is a risky practice. My personal investment strategy solely involves mutual funds, and it will eventually involve real estate when I have enough money to invest in it.
The old cliche, “you can’t teach an old dog new tricks”, really hits home when it comes to personal finance. The older we get, the more set we become in our habits whether its the ability to save money, biting our nails, or cursing like a sailor. One of my passions to help spread good, sound financial principles to young people across America. So few high school and college students graduate without any knowledge about how to manage their own money. They may learn how the stock market works, but they have no concept about personal investment theory, putting together a budget, buying a house, or saving money for the long term. It’s time for my generation to step up and do something about it. We need to take action and help middle school and high school students understand how to manage and save money. One of the best ways to help a teenager learn about saving money is to give them an incentive to save it. One of the biggest items that a teenager craves when they turn 16 is buying that first car. It’s more than wanting a sweet looking car, it’s about freedom. Parents go nuts thinking about the freedom it gives that teenager, and teenagers salivate over the thought of that freedom. You can use the purchase of a car as a learning tool by setting up a savings program for it.
The mortgage business has been a hot topic lately after the recent fallout of subprime lenders and the restrictions put on them by the federal government. It was only a matter of time before the government started putting their hand in this market, because it was being abused by mortgage loan sharks. I am not a proponent of the government sticking their nose in everything, but there comes a time when the government needs to help protect its citizens. I think that consumers need to take the time to educate themselves more before signing the dotted line on a certain mortgage, but banks and subprime lenders need to have a responsibility to give loans only those that can truly afford to pay them back.
Linen ‘n Things periodically sends out a 20% off coupon for any single item usually once a month or so, but if you are like me, you have a hard time keeping track off stuff! I always try to set aside those sweet coupons, but then I go to look for it, and it finds its way into the Folgate household black hole.
You have heard me talk about the use of craigslist for selling your home, and I would be a hypocrite if I didn’t try it myself. We have been trying to sell our condo for the past three weeks now, and we have had TREMENDOUS success with our Craigslist ad. In three weeks, we have had 6 quality leads and one bid on our condo, whcih we turned down, because the offer was too low. What’s the trick? There is no trick. Here is what we did:
- Wrote a quality description with all of the most important information just as a realtor would write on a flier or the MLS database.
You can spend a good deal of money surrounding yourself with professionals to help you do your taxes, plan an estate, buy and sell mutual funds, and buy insurance. However, I think you only need to hire a professional for certain times in certain situations. Sometimes, financial professionals get lazy with their clients, so you need to be proactive in how you manage the professionals that surround you. I’ll run down my take on when to use an estate planner, stock broker, financial advisor, and a CPA for the wealthy, the upper-middle class, and the middle class.
My wife and I were shopping for groceries today. We had put aside $130 in our groceries envelope for the next 12 days. For some reason, I went with her to go shopping this week. It’s not that I’m a male pig. She just doesn’t like me going with her, because we always end up spending more money than we budget. Food is my downfall. I see all of the wonderful goodies at the grocery store, and I just want to buy all of it. My point is that I may write for a personal finance blog and give my opinions about how to manage money, but my wife is MUCH more frugal than I will ever be. She thinks of more creative ways to save a few bucks than I could ever think of. Yesterday, she had the idea of going to get milk at the drug store, because they sell it for $2.49 as opposed to $3.49 at the grocery store. We always buy 2 gallons every two weeks, so that’s a savings of $4 a month, or $48 dollars a year. I know, that’s chump change, but if you think of 9 other things to save a dollar on that you buy four of in a month, then the conversation turns into $480 per month.
The latest news in the housing market is that existing home sales fell 8.4% from February to March. This is the sharpest drop in home sales in 18 years. So, what does this mean? Obviously, the housing market is at the bottom of the cycle right now. But, that was expected after one of the hugest booms the United States ever saw from 2003 to 2005 to home sales. We must remember that other external factors affected this drop in existing sales. March was a cold month for much of the country, and all of the controversy over the subprime lending market led less people to be able to qualify for loans as mortgage companies tightened up on their underwriting guidelines. I have written on this blog in the past that there is nothing to worry about when it comes to the housing market, and I still do not think there is much to worry about. It’s true that you are going to have a harder time selling your house right now, but check out my article on selling your house in less than 60 days and you’ll find tips that are relevant for selling your home in any housing market. You may have to sacrifice a little on your asking price, throw in some upgrades, and maybe pay half of the closing costs, but it’s worth it if you need to sell your house quickly.