Personal Budget Training: January 2008

Sinking Boat

Paul's wife uses drugs and was arrested for DUI. Her bail is set for $1 million. They have two small kids. What should he do?

Labels: Addictions, Dave Ramsey TV Show, relationships

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Grown-Up Decisions

Woods and his girlfriend want to move in with each other to save money, but her mother doesn't approve. What should they do?

Labels: Dave Ramsey TV Show, relationships

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Avoid the return runaround and even get some money for those white elephant gifts you received without having to pay those restocking fees. I have an electric ice scraper that is still in the box that I would like to get out of the house.Read on for some more ideas on what to do with those unwanted gifts you received this year.

Labels: Christamas returns, money saving tip

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Fight Against Bankruptcy

Mary's ex-husband let their house go into foreclosure. Her name is still on the mortgage and utilities. Should she file for bankruptcy to protect herself?

Labels: Bankruptcy, Dave Ramsey TV Show, relationships

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Expensive Habits

Susan is $183k in debt because her husband is addicted to pain killers. Their marriage is suffering, what should they do?

Labels: Addictions, Dave Ramsey TV Show, relationships

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Paying Too Much For Home Insurance?

Stop paying a bucketful of cash for a thimble's worth of coverage. Read on for ways to get the most from your home insurance in this article from Motley Fool.

Labels: home insurance, money saving tip

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Giddy and Debt Free

Nicole has paid off her car, IRA and credit card in one year.

Labels: Dave Ramsey TV Show, Debt Free

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What To Do With All Your Change

If you are like me, you have a place for lose change. Now that I think about it, I actually have six places around my house. I belong to a federal bank and federal credit union, so what do you do with all that change?

Several years ago I discovered Coinstar. It is a company which operates self-service kiosks which convert loose change into cash. Additionally, the kiosks can be used to donate to charities or to purchase gift cards. The kiosks, which are green and the size of a vending machine, are found mostly at grocery stores, but can also be found at drug stores, larger merchants, banks and a variety of other retail locations. There is a usage fee of about eight cents on the dollar for using Coinstar when converting coins to currency, but not when exchanging for gift cards or making donations.

I truly believe time is money and there is nothing faster than pouring a jug of change into the green machine and getting cash or a getting a gift card rather than sitting and counting and rolling coins. Coinstar has a huge impact on the US Treasury in that they put coins back into circulation which results in less coins that need to be printed.

Labels: Coinstar, money saving tip

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Scary Makeover

Caller, Bruno, has scared his wife by clearing out his funds to get out of debt. He wants to know how to convince her to jump on board with the plan.

Labels: Dave Ramsey TV Show, relationships

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Wife Scared About Husbands Excitement

Caller, Bruno, has scared his wife by clearing out his funds to get out of debt. he wants to know how to convince her to jump on board with the plan.

Labels: Dave Ramsey TV Show, relationships

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California Foreclosures Rose Over 400 Percent!

As I mentioned in a previous post that California was receiving funding for more mortgage counselors, it could not have come soon enough. As reported in Reuters, The DataQuick Information Systems report said the 31,676 foreclosures in the fourth quarter were more than double California's previous peak in 1996 and marked a 421.2 percent jump from a year earlier. The fourth-quarter default notices represented the highest number in more than 15 years, it said. I doubt the recent Federal Reserve interest rate cut will do any good.

Labels: foreclosure, Sub-Prime Mortgages

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One Good Question!

Michelle and her husband have a $1.2 million net worth, $350k in the bank and 2 mortgages. Should they pay off their mortgages?

Labels: Dave Ramsey TV Show, investing, real estate

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How to Live Well Without Owning a Car

The author's been happily car-free in St. Louis, Missouri, for three years, walking, carpooling, making use of mass transit and commuting on bike. Car-free convert Chris Balish shows why kicking car dependency could be the soundest and sanest lifestyle change you can make, and provides realistic strategies for making the leap. According to a 2004 American Automobile Association study, the average American spends $8,410 per year (roughly $700 per month) to own a vehicle. The author saved about 40K or more in 4 years of living without a car. Here is a link to Amazon.com to read more about it.

Labels: Chris Balish, money saving tip

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Dying Without a Will

With all the talk about the actor Heath Ledger's sudden death, it got me thinking about if he had a will and who may be mentioned in it. Apparently, he was engaged to actress Michelle Williams, whom he met on the set of Brokeback Mountain. They had a daughter, Matilda Rose, who was born on October 28, 2005 in New York City. The child's godparents are Ledger's Brokeback costar Jake Gyllenhaal and Williams' Dawson's Creek castmate Busy Philipps. Mary-Kate Olsen could be mentioned in the will, but I highly doubt it.

Hopefully, Mr. Ledger had a good agent who took care of this. When there is no valid will, the person is said to have died "intestate." A court appoints an administrator to handle the decedent's affairs, and his or her property is then distributed according to a formula fixed by law. The laws for distribution of an intestate estate are rigid and generally do not make accommodations for those in unusual need. After payment of taxes, debts, funeral expenses and administrative costs, the property goes to the surviving spouse, children and/or relatives.

The laws are specific as to how property is to be distributed, including which relatives have priority and how the property is divided. Although it is an uncomfortable subject, you should look into getting a will for the sake of your family. Here is an article from Bankrate.com for further reading.

Labels: busy phillipps, heath ledger, jake gylenhaal, Mary-Kate Olsen, michelle williams

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How to Invest Your Money

I actually found an article on CNN Money that I agree with 100%. It discusses the advantage of dollar cost averaging over lump sum. This is the strategy I use on my Roth IRAs that enable me to sleep at night.

Labels: investing, IRA, mutual fund, Roth IRA

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Family Charity

Sharon's son-in-law is facing criminal charges for embezzlement. Is it right to chip in with the family to bail him out?

Labels: Dave Ramsey TV Show, relationships

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Starbucks Tests $1 Coffee, Free Refills

In this article from ABC News it announced that Starbucks Stores in Seattle will sell small cups for $1. Faced with growing competition from cheaper rivals, Starbucks Corp. is testing offering small cups of drip coffee for $1 with free refills in its hometown. Small cups of premium coffee at McDonald's Corp., Dunkin' Donuts and other lower-cost competitors typically cost just over $1 Will Other Markets Follow? Which coffee do you prefer?

Labels: coffee, Dunkin' Donuts, McDonald's, money saving tip, Starbucks

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Roy Toy

Roy co-signed for his daughter's house and has bailed her out twice. His daughter still needs help and he doesn't know what to do.

Labels: co-signing, Dave Ramsey TV Show, enabler, relationships

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Are You An Impulse Buyer?

Impulse buying is defined as making an unplanned purchase, more on the lines of spontaneous. This means buying anything at the checkout when grocery shopping or buying a car on a whim.

Planning a purchase of any kind is absolutely necessary if you intend to use your money wisely. That extra pack of gum will not break your budget, but with the prices of groceries today, it does not take a lot to put a dent in your grocery budget. However, buying a car without prior planning can get very expensive. Besides the apparent things like researching for the best price and interest rate, amount of down payment, money for taxes and license, you need time to decide which car is right for you and/or your family.

Here are few tips may help prevent impulse buying:

If you see something you like, leave the store without it. Go home and look at your budget. Then if you can afford it, go back the next day after you sleep on it. In addition, this will give you time to think about whether you really need it.

Always go to the grocery store with a list. Buy just what is on your list. If you see items you would like to have, make a note to put them on your list for your next trip. And do not go hungry, you end up shopping with your stomach.

Consider the entire price of an item before buying. This includes taxes and any other accessories needed to make the product complete, including any warranties.

Planning and budgeting is dull for some of us, but when you budget your money and plan purchases, you will certainty be able to make better purchases and feel groovy about it.

Labels: Budget, buying

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Surviving a Tough Economy

Alexis Glick talks to Dave Ramsey about his advice for surviving this tough economy.

Part I:

Part II:

Labels: Dave Ramsey TV Show, investing

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Financial Advice in an Emergency Situation

Toby was about to pay off his house before he lost his job. Should he use his emergency fund to pay off the house?

Labels: career advice, Dave Ramsey TV Show, emergency fund

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Consuming Debt

A 35 year old woman is overwhelmed with credit card debt.

Labels: Dave Ramsey TV Show, Debt Reduction

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Audits are increasing....

Although millionaires were prime audit targets, the IRS said its audit rates were generally up in all income levels. The rates were:

There was 9.25 percent for those with incomes of more than $1 million, up from 6.3 percent in 2006, 2.87 percent for those with incomes above $200,000, up from 2.57 percent, and 0.93 percent for those earning under $100,000, compared to 0.89 percent the previous year. Overall, the IRS looked at just under 1.4 million returns in fiscal 2007, up from almost 1.3 million audits the prior year. The FY07 audit number is the highest since 1998.

Of course, the numbers the IRS is really interested in is how much money the increased audits brings in. The extra examination efforts in FY07 accounted for $59.2 billion. That is up from the $48.7 billion collected in 2006 and substantially more than the nearly $34.1 billion that audit activity brought in back in 2002.

Here is a chart that shows their efforts over the years.

So expect the IRS to keep the audit pressure on.

Labels: Audit, Income Tax, IRS

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E-mail scam targets taxpayers

It is still true that if it sounds too good to be true, well you know the rest. Apparently taxpayers are being targeted by a scam offering them IRS refunds. The e-mails look like they are from the IRS, and they request the taxpayer's Social Security number. In some cases the e-mails promise refunds; in others they tell the recipient that he/she is under investigation. The IRS does not send unsolicited e-mails or ask for personal or financial information online. It is recommended recipients of these e-mails do not open them, but forward them to the IRS.

Labels: IRS, Scam

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Screaming I'm Debt FREEEEEEE

A caller paid off 42k in one year and is now debt free.

Labels: Dave Ramsey TV Show, Debt Free

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Subprime Market Gets Some Help

The subprime disaster is now getting foundations to help out, along with a lot of financial institutions. California mortgage counseling agencies will get $4.6 million for advising distressed homeowners, reports the San Francisco Chronicle. California expects to see 500,000 homeowners struggle to keep their houses over the next two years. And I am sure the contributing financial banks and companies listed below will be sweating this out to the end.

The grants will be given out over the next two years. The coalition expects to add 46 new mortgage counselors to the 300 already working in the state. The $4.6-million was pledged by Merrill Lynch, HSBC, Wachovia Bank, Comerica Bank, Wells Fargo Bank, Countrywide Financial, Citibank, Bank of America, the San Francisco Foundation and the California Community Foundation.

Subprime lending is the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history. Subprime lending is highly controversial because it is alleged that the subprime lending companies engage in predatory lending practices such as deliberately lending to borrowers who could never meet the terms of their loans, thus leading to default, seizure of collateral, and foreclosure.

If someone cannot afford something, then why sell it to them? Answer, greed.

Labels: Greed, Sub-Prime Mortgages

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Stand Up For a Budget

Dave Ramsey answers a letter concerning a married couple who doesn't agree on money issues.

Labels: Dave Ramsey TV Show, relationships

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Are you Addicted to Amazon??

It's easy to run up your credit card by buying books, DVDs, and music, especially from a user-friendly site like Amazon. You think to yourself, "Oh - it's just $14, and much cheaper than I could get in town" or "I'm getting a good deal, and I get free shipping - so it's worth it." You convince yourself that you'll "pay it off at the end of the month." And, after all, it's really easy just to click that "purchase" button, with your credit card information already set up. There's no real "sting" to it, when you don't see your cash going out the window!

What's the solution? Change your account settings on Amazon! You can now pay straight from your checking account. Or, put your debit card in there, only make sure you aren't relying on overdraft! Make sure you've planned your purchase into your budget, and that you've written it in your checkbook.

When you get ready to purchase something from Amazon or other similar sites, make sure you've done your planning in advance. If you find yourself "impulse buying" - stop and wait. Give it a day. See if it's something you "really" need.

Three things will happen: 1. You'll quickly realize how much you spend shopping online through places like Amazon, and you'll adjust your spending habits accordingly. 2. You'll avoid running up unreasonable debt for things you could probably check out (for free) from a local library! 3. You'll avoid impulse buying!

Get smart with your money, and eliminate your zombie spending habits!

Labels: Credit Cards, Financial How-To, shopping

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Starting Investing

Dave Ramsey gives advice to a new father who has 3k to invest.

Labels: Dave Ramsey TV Show, investing

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Valentines Day Gift Ideas

Are you and your loved one going through a tough time financially? Even if you are not, is the thought of saving money more attractive to you than spending a small fortune on Valentine's Day gifts? If so, I encourage you to try something different this year. Take the Valentine's Day Challenge. Set a small spending limit $5, $10 or whatever fits your budget and agree with your spouse to give gifts that are low in cost but high in creativity. You will never believe what ideas you can come up with for gift. Remember, it is not only the thought that counts, but effort too. Put on your thinking caps and leave a comment here with your ideas.

Labels: Debt Reduction, Valentines Day

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Refinancing Qualms

A single mom filed for bankruptcy a year ago and her ex-husband wants her to refinance her mortgage.

Labels: Dave Ramsey TV Show, Refinancing, relationships

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Paying Off Debt

One way to get that debt and clutter out of your life is to sell some of it. Look through your house for stuff that you really do not use anymore. That stuff may be very useful to other people, so you should consider selling it online at auction web sites like eBay.com and use the proceeds to reduce your debts.

Your best bet is to look through your house for items you believe may be worth selling and be able to ship easily. Keep your eye out for items that you can probably sell for $10 or more.

Next, research the value of your item by going to eBay.com and do a search for your item. Check the current items for sale and the completed items. Look at the condition and prices that your item has sold for in the past so you can get an idea of its true sale value. Also, read what other people wrote about that item so you have a starting point for writing your description. Be sure to take photos of each item for posting. Do not forget to put a realistic amount for shipping and handling to cover your costs.

Labels: auctions, Debt Reduction

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Online Payments

How do you pay your bills? Do you still write checks each month, stuff them in an envelope and put on a postage stamp or have you checked into the world of online bill paying or automated payments?

Bills can even be paid these days with a simple phone call and telephone transfer. Most people have at least a couple options available for bill paying. Customer service is on the rise for bill paying, business will take your money any way you want it. No matter what method you choose, there are several things that should be taken into consideration.

1. Fees:
If you would like to pay your bills online or via telephone, make sure to ask about any fees you might be charged for this convenience. My main bank charges no fees. I have a credit union that charged fees, I think they do not right now.

2. Time to Post:
Also, ask how long it takes for the payment to be posted. Some places take the money out of your bank immediately, cut a physical check to your creditors and then mail it. Some simply do electronic transfers from your account. Most will show you the date the transaction will take place, so you will still need to plan ahead.

3. Security:
Check with your bank on what security measures they provide for electronic bill paying and what charges you may incur from them as a result.

4. Personal Time:
Automated payments and online billing can save you time when paying your bills. If, however, you have money incorrectly taken out of your account, for whatever reason, sometimes it is a very difficult and time consuming process to get the money returned back to your account.

Bottom line, online bill paying saves me time, postage and it also keeps track of my transactions. Do you pay any bills online? What are your billing experiences?

Labels: Financial How-To, online payments

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HYIP, the new pyramid scam

About 20 years ago I remember there were several pyramid schemes (not to be confused with legit multi-level-marketing organizations) going around. Today, they are still around in one form or another, now it is as a HYIP. High-Yield Investment Program (HYIP) disclose little or no detail about the underlying management, location, or other aspects of how money is to be invested and little information on how returns are actually generated.

These online HYIP schemes rarely last for more than a couple of months and typically accept small deposits while promising astoundingly high returns (the usual is 200% in three days). Promoters claim that the transactions must be kept strictly confidential by all parties, making client references unavailable. The Securities Exchange Commission warns about them and also prosecutes them. If it sounds too good to be true, it probably is.

Labels: HYIP, investing, money saving tip, Scam

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How To Get a Double Tax Deduction

If you want a 2 for 1 from the IRS, the next time you contribute money to your IRA sell a stock that has decreased in value (if you own any stocks). This money will fund your IRA and write off a capital loss at the same time.

Labels: Financial How-To, IRS, money saving tip, tax tip

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Identity Theft of Your Child

I came across this article the other day and thought it would be of interest. As a parent I am careful to monitor our children's activities online because I am concerned. It is too easy to be approached inappropriately online. As parents, we are concerned about sexual predators. But something we have not considered is that our children may also be in a different kind of danger, the danger of identity theft.

Children are the perfect target for identity theft. With their spotless credit record, they are the perfect targets. This could go undetected for several years since they are not using their credit. We should be careful who has access to their social security numbers and birth certificates. You can read the rest of the article here.

Labels: identity theft, personal finance

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How To Make Your Child or Grandchild A Millionaire

If your teenage child or grandchild is gainfully employed, they are able to contribute up to $4,000 a year to a Roth IRA. If a you want to give them a present, contributing to their IRA and it will pay big dividends. If $4,000 is deposited on a teenager between the ages of 16 and 21 every year and the Roth IRA earns a measly 10% per year, at age 65 the amount in the fund will be $2,045,042!

Labels: IRA, money saving tip

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Divorce Planning

Dave talks about how to financially prepare for a divorce.

Labels: Dave Ramsey TV Show, Financial How-To, relationships

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Musical Motivation

A recent study indicated that 83% of people who make more than $150,000 a year had some type of musical training when they were children. Some skeptics think the key is helping children foster their problem-solving skills which are developed through interaction with other children and not through music. Others say music is a mathematical skill, and the kids also did well in math, which may be the reason why they earn more. I'm still waiting for my kids lessons to pay off.

Labels: personal development, salary

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Tata Motors unveils the Nano

Named the People's Car, this small automobile will sell for about $2,500, which is less than half the cost of its closest competitor. The People's Car has a rear-wheel drive, all-aluminum, two-cylinder, 623 cc, multi point fuel injection petrol engine. The Nano is said to be capable of almost 60 miles per gallon of gas and will create little more pollution than a motorbike.

What is amazing is that the engineers were able to beat the competition in price by such a wide margin. I assume that automakers everywhere are watching progress in the project, while some manufacturers are actively vying for an early spot in the low-cost car market. I wonder if this will ever make it over here like the Yugo. What would the result be if one of the US automakers introduced such a car? How about calling it the Gnat?

Labels: Effiency, money saving tip, Tata

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Thursday, January 31, 2008

Sinking Boat

Grown-Up Decisions

White Elephants

Wednesday, January 30, 2008

Fight Against Bankruptcy

Expensive Habits

Paying Too Much For Home Insurance?

Tuesday, January 29, 2008

Giddy and Debt Free

What To Do With All Your Change

Monday, January 28, 2008

Scary Makeover

Wife Scared About Husbands Excitement

California Foreclosures Rose Over 400 Percent!

Sunday, January 27, 2008

One Good Question!

How to Live Well Without Owning a Car

Saturday, January 26, 2008

Dying Without a Will

Friday, January 25, 2008

How to Invest Your Money

Thursday, January 24, 2008

Family Charity

Starbucks Tests $1 Coffee, Free Refills

Wednesday, January 23, 2008

Roy Toy

Are You An Impulse Buyer?

Tuesday, January 22, 2008

Surviving a Tough Economy

Financial Advice in an Emergency Situation

Consuming Debt

Audits are increasing....

Monday, January 21, 2008

E-mail scam targets taxpayers

Screaming I'm Debt FREEEEEEE

Sunday, January 20, 2008

Subprime Market Gets Some Help

Saturday, January 19, 2008

Stand Up For a Budget

Are you Addicted to Amazon??

Friday, January 18, 2008

Starting Investing

Valentines Day Gift Ideas

Refinancing Qualms

Thursday, January 17, 2008

Paying Off Debt

Wednesday, January 16, 2008

Online Payments

Tuesday, January 15, 2008

HYIP, the new pyramid scam

Monday, January 14, 2008

How To Get a Double Tax Deduction

Sunday, January 13, 2008

Identity Theft of Your Child

Saturday, January 12, 2008

How To Make Your Child or Grandchild A Millionaire

Friday, January 11, 2008

Divorce Planning

Musical Motivation

Thursday, January 10, 2008

Tata Motors unveils the Nano