This is a reminder for all soon-to-be college graduates: CONSOLIDATE YOUR STUDENT LOANS! It may seem hard to do since you are being bombarded with direct mailings from 100 different student loan consolidation companies. However, many students forget to do the consolidation before they graduate, and this can be a very costly lapse of memory. Find a reputable company and consolidate all of your loans into one large loan. If you do so before you graduate, many companies are offering a fixed interest rate of 4.75%. If you wait until after July 1st, the interest rate will be variable and it could rise past 7%!
I’ve been driving a ’95 Nissan Altima for about the past 2 and a half years now. The first year was great. I had no problems with it. But in the past 9 months, the alternator, the starter, the power windows, the A/C and now the radiator have had to be replaced in this car. I still haven’t fixed the A/C or the power windows. The radiator cracking was like the last straw for me as I had to call my mother-in-law to pick us up off the side of the road while trying to make it back to our house after Easter.
Step #3: List your debts smallest to largest, and start aggressively paying off the smallest debt, and working your way up to the largest debt.
This method of debt elimination is contrary to how many people believe that debt should be paid off. The most popular way to set up a debt elimination program is by listing the debts from smallest interest rate to largest interest rate and then paying off the smallest rate first. First, I will explain the method that I use, and then I will show you why I disagree with the smallest to largest interest rate method.
The second step is drafting and sticking to a written budget. The reason that this is the second step is because you will never know how much money you can contribute to getting rid of your debt without writing out your projected budget. There are two kinds of budgets. One kind of budget is merely just a tracking budget. You keep track of what you are spending and where you are spending it, and then you try to make adjustments at the end of the month to areas where you spent too much money. The other kind of budget method is when you project your monthly expenses and stick to that projection. This is the method that I like to use. It is very simple.
My next five posts will be a five step process for getting and staying out of debt. I am trying to follow this process right now, and I am currently still in involved in steps 2,3, and 4. Here are the five steps to getting out of debt and staying out of debt.
1. Save $1,000 for a small emergency fund
2. List your Debts Smallest to Largest and attack one debt at a time.
3. Get on a written budget.
4. Find creative ways to boost your income.
5. Create an emergency fund of 3 to 6 months worth of expenses.
A huge debate arises when it comes to marriage and money about whether or not spouses should have a joint checking account or separate checking accounts. One popular thing that people do nowadays is they keep one joint account to pay the bills from and then they keep a separate account for each of them to spend money on “personal” things. This is a total cop-out when it comes to managing money with your spouse. A marriage is not a joint venture. You cannot pick and choose which things that you want to share as a couple and which things not to share. You must be handling money as a team.
Someone sent this to me in an email, and I had to post it for all to see. This picture has “we smoked pot” written all over it.
This article sums up my kicking and screaming about the priorities young people should have with personal finance. You MUST pay off your debt before you start heavily investing. Think of it like this, if you have $10,000 in debt at an interest rate of 10%, and you have $10,000 in a mutual fund making 10%, what is your annual net return? NOTHING, nada, zilch. Read this article from USA today. It’s a great one. Twentysomethings have the power to change the world when it comes to personal finance, but it must start with our consumption habits.
Passwird.com has a link and promo code posted that allows you to buy a 3 year subscription to Kiplinger’s magazine for only $4.91! I am not a huge fan of Kiplinger’s Magazine, because there are times when they encourage readers to go into more debt, but this was an offer that I could not pass up. I signed up today for it, and I did not believe it until I checked out. The trick is that you have to type in the promo code that passwird.com provides. And NO, I do not get any kickbacks for this plug, i just thought that many of you would be interested in this offer.
The bottom line with health insurance is that too few people have it, and the people that do have it pay a chunk load of money to have it. The feeling of NOT having health insurance is always an uneasy one. Even if you are in general good health, the possibility of an accident or freak illness is in the back of someone’s mind. There are statistics that show that health related bills account for much of the bankruptcys that take place in America. So what should you do about the health insurance dilemma as a young person? You have options. Some are good, and some are not so good.
Let’s face it, gas prices are not going down any time soon. I am starting to think that oil companies are going to leave the prices where they are at because we have already become used to paying $2.50 to $3.00 for a gallon of gas. In the grand scheme of things, I wonder if that is truly is expensive. In Florida, I pay up to $3.50 a gallon for milk. Although, I don’t drink 14 gallons of gas per week, either.
If you are like me, then you may have started out with a very formal way of thinking when it comes to entrepreneurial ventures. The traditional school of thought is that you must have a business plan, have a substantial amount of capital, and be extremely organized and planned with your marketing plan. I thought that all of these things were essential to starting and being successful with a new business, but then I listened to Steve Pavlina’s podcast about kick starting your own business.
Last night I caught the beginning of the getting-less-funny-as-the-years-go-by Saturday Night Live, but this one I thought it was pretty funny and alarmingly true at the same time.
Today in the news, a man from Los Angeles, California named Arthur Winston retired at the age of 100. He worked in the mass transit system since 1934! I did not even know they had a transit system in 1934. In his 70 plus years of working, he had only taken one sick day. I thought this was a nice story, but what really caught my attention was when they asked him what his secret was to staying alive and kicking for so long.
Per my previous post, it is very easy for us to obsess so much over finding bargain, that it may not be worth it if you factor in the time that it took to you to search and find that perfect bargain. If you are like me, you get very excited when you do get a rock-bottom deal whether in the store or on the internet. Nowadays, it is much easier for us to find bargains on the internet, because there is less overhead to factor in the pricing equation than a traditional brick and mortar retail store. A friend of mine at worked introduced me to some great websites that aggregate many of the best deals on the internet, and they are updated daily. Many of you may already be familiar with these websites, but for the rest of you, I will post the web addresses. I love sites that bring everything together into one website to search quickly and efficiently. So check these sites out! I don’t get any sort of kick-back for you clicking on these sites, it’s my little gift to you, tonight.