You’re in line to pay for some gas at the local gas station, and the cashier asks you, “Will this be debit or credit”. You’re saying to yourself, “I’m paying with a Visa debit card, does it really matter?”. The answer is YES. It does really matter what you choose when they ask you for debit or credit. There are two reasons why you need to make sure to choose debit if you are using your debit card to pay for a purchase.
By Erik Folgate
If you are a frequent reader of this site, then you know that I am a big believer that behavior has much to do with having success with your financial future. My goal is to help you understand personal financial issues along with helping you identify the behavioral problems that hinder you from becoming wealthy. I identified my behavioral problems in college. I had no concept of what it meant to carry a balance on a credit card and I was horrible about saving money and looking for bargains. You can spit out every financial equation and explain how the stock market works, but that won’t make you wealthy. What will make you wealthy is focusing on the psychological aspect of changing the way you handle money. Saving first, demanding a better deal when you buy something, and always preparing a monthly budget are behavioral habits that will help you become wealthy.
The ETF (Exchange Traded Fund): The ETF seems like it was created for those active traders that like the way mutual funds perform, but they hated the way they traded.
Liquidity: The ETF is very liquid. It trades like a regular, single stock. Whereas, a mutual fund can only be traded once a day. If you sell a mutual fund, you get the price that it ends in at the end of the day. Active traders that trade on a margin or short sell like the ETF and the way its liquidity.
If you’re still confused about what the Fed did last week to supposedly “buy the economy some time” from going into a recession, then check out this article from Kiplinger’s Online. Kiplinger’s does a good job of answering the most frequently asked questions that may be on your mind about what the Fed actually did by cutting the discount rate and what it means to the economy and to us.
The Democrats are now diving into the discussion about cleaning up the mortgage industry and subprime lending. I’ve written quite a bit about the importance of avoiding the curse of being house poor. The rising foreclosure rate is due to two major factors. Mortgage lenders are loosely regulated and consumers made uneducated, selfish financial decisions. So now it’s the democrats to the rescue! I read the article from CNN Money, and i was a little surprised to see that I actually liked some of their ideas. I am definitely about capitalism, but financial agents need to have a fiduciary duty to their customers. It should not matter if it’s an insurance agent, mortgage lender, or stock broker. Christopher Dodd proposed these ideas to help regulate the subprime industry:
You’ve seen all of the articles and news segments about the skyrocketing percentage of homes going into foreclosure around the country. It’s not hard to figure out why the foreclosure rate has risen so drastically. Mortgage lenders took advantage of buyers, and buyers threw away all logic and reasoning when figuring out how much house they could afford. However, looking back at the past will not get us anywhere. The damage is done and now this country needs to clean up the housing market mess. Ask someone who has gone through a foreclosure how much fun it was. They will most likely tell you that it was an extremely emotionally draining time period in their life. Losing your home is a nightmare come true. However, there are ways to avoid the full foreclosure process. Here are two options to consider if you’ve found yourself in a position where you can’t pay your mortgage payment.
This article from Ken Bensinger from Smart Money, is refreshing to read knowing that other people are getting the hint that consumer debt is out of control. The part that I found most interesting is that he points out that so many Americans fall into the trap of paying off debt with more debt. The idea of refinancing a mortgage to roll debt into your mortgage or buying a HELOC to pay off credit cards or students loans is not solving the problem. Credit consolidation companies don’t solve the problem either. They help your situation, but they don’t solve your problem. If you’re swimming in debt that you can’t handle, the problem is YOU.
Check out this article on consumerist.com about an interview with George Monbiot’s perspective on ethical shopping.
I think he hits the nail on the head and he says that trendy “green” consumerism is doing nothing more than dividing shopping into ethical products and unethical products, but it doesn’t actually do anything to help the environment. Doesn’t it seem like so much activism these days comes down to what he is saying? It ends up being more about the political statement rather than the actual cause.
The Fed met today, and for the first time in a year, they did not raise the interest rates. I think this is a smart move by the Fed. This shows that they are confident in our economy and the steady, consistent growth it has shown in the past few years. It is unprecedented that our economy has survived the most gruesome terrorist attack in American History, record oil prices, and a housing bubble that swelled up to the size of a hot air balloon and popped faster than you could say, “Do you want to buy my house?”. Much of this has to do with the Bush tax cuts that were put into effect in 2003. The tax revenue has been up, more jobs created, and more disposable income for consumers to save and spend.
You don’t need to feel ashamed or down on your luck if your budget is busted. You’ve taken the first step to financial recovery if you’ve taken the time to write down a budget and stick to it. Here are a few tips on what to do when your budget doesn’t cover all of your expenses.
Prioritize Your Life and Money
By Erik Folgate
So you go out one weekend to look at furniture. That couch with the funky smell and the 1970’s style dining room table just aren’t cutting it anymore. You don’t really have the money to spend on new furniture, but you deserve it, right? You walk into the furniture store to the smell of fresh popcorn and oven-baked cookies, two of the most alluring smells on earth. You go and get yourself a snack and you start browing around the store with no real intent on buying anything today.
If you’re like me, then insurance costs are becoming quite a problem for your monthly budget. I live in Florida, and it seems like the insurance rates continue to rise and there is no sign of it stopping. You can call me conservative or republican, but I support individuals taking the initiative to help the problem of rising insurance costs rather than waiting for the government to do something about it. Insurance companies reward those people and those real properties that are less of a risk to them. Here are some ideas that I conjured up for how you can save money on your insurance premiums by reducing the risk in your life.
By Erik Folgate
At Money Crashers, there are two main goals that I am trying to achieve:
- Educate and inform you about managing money, investing, buying insurance, and spending wisely.
- Help you change your personal financial behavior.
By Erik Folgate
The Answer is YES! Here’s the good news and the bad news about disability insurance.
The Bad News:
- Disability insurance is one of the most overlooked insurance coverages in America. We all think we’re invincible, and that will never happen to us. But let’s get real, people go blind, deaf, get paralyzed, or contract certain diseases every day that disable them from doing the job that they are equipped to do.
- We have a lot of pride on our hearts. Pride might prevent you from buying disability insurance. You need to be realistic with yourself, especially if your job is a little more risky than others.