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My Citibank card, after I took a hole punch to it.
Yes, you heard me. We received our economic stimulus rebate on Friday and promptly paid off the evil Citibank card. Our balance is zero. Now we just have to cancel the card, which I hope to accomplish today. Since my husband is the primary card holder, he needs to cancel, and it seems like he hasn’t been home to do it for the last couple of days. The important thing is, we’re out of credit card debt forever!
Over the last year, our tenacity has paid off. It’s hard to believe, but it was this week last year that my husband lost his job the first time. We had no idea what the future would hold. We had no idea what we’d do for income. We had no idea what we’d do for health insurance.
What we did know is that we were sick of being in debt, and no roadblock, not even a job loss, was going to stand in the way of getting out of debt. We made a commitment to take on no new debt, and we stuck by it.
We cut costs by canceling things like our Blockbuster and YMCA memberships. We trimmed bills by line drying our clothing, baking from scratch, making our own cleaning products, and planning trips into town to save gas.
We increased our income by taking on odd jobs and blogging. We insured we wouldn’t use our credit cards anymore by first freezing them, and then getting brave and shredding them.
We continued to make steady payments to Citibank, even though our payments weren’t as high as we had initially planned.
Our goal was to pay of the VISA by September of this year, and we hit our goal 4 months early. It’s definitely time to celebrate!
What have we learned from this experience?
Now that we’re out of credit card debt, we need to build up a better emergency fund, and then attack our student loan debt, currently at $6969. Our new goal is to be completely out of debt by January 1, 2010.
Are you serious about getting out of debt? Do you stick to your goals in the face of adversity?
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Free Money!
By Xin Lu
[Image]At any port you can probably see hundreds to thousands of empty shipping containers just sitting around waiting to be loaded. In recent times these containers have not only transported goods across oceans but have also been transformed into energy efficient dwellings with some great design and ingenuity.
In the past decade many habitable container projects have been completed around the world. At fabprefab there is a selection of these projects for shipping container enthusiasts. The picture used here on this article comes from a funky development called Container City I in at Trinity Buoy Wharf in London, England. The Container City site explains that shipping containers can be linked together to create strong steel modules that can be used to create many different types of accomodations. This type of construction takes very little time to build and the cost is low because 80% of the materials used is recycled. The shipping containers can be painted with insulating paint and use energy efficient appliances. Additional earth-friendly features could include water harvesting, solar panels, and green roofs.
In America at least two shipping container complexes recently made the news. One is called the City Center Lofts in Salt Lake City, Utah. The plan is to erect a seven floor residential building that includes an art gallery. Another project is slated in Detroit and the plan is to create a 17 unit condominium project at a cost of 1.8 million dollars. The condos will range from 960 square feet to 1920 square feet and will be priced at $100000 to $190000 each. That might be a little expensive for Detroit since homes were selling for less than cars there .
I think it is awesome that people are creating new homes from recycled industrial products. However, another recent news report states that the United States is having a shortage of shipping containers since the weak dollar is pushing up the demand of exports from the United States. Perhaps the next commodity bubble is in shipping containers?
Permalink | Comments | Xin Lu's blog | Channel: Personal Finance, Frugal Living, Green Living, Lifestyle, Real Estate and Housing
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Wouldn't we all love to have this dilemma? Inspired by a letter to the editor at Money magazine, "Flexo" at Consumerism Commentary wonders when it's appropriate to tell your boyfriend/girlfriend that you're wealthy.
The letter writer apparently had been burned by some guy looking for a sugar momma.
Flexo says, "It's probably not appropriate if you're on the first few dates, but if you're starting to pick out rings or talk about living together, I don't see how these decisions can be made without full financial disclosure."
Still, when exactly should you confess your riches? As a personal-finance blogger, Flexo hasn't had to confront the issue. His girlfriend, "A.," can check out his blog anytime she wants to review his financial situation. (He does keep a secret "A. Fund" hidden in his savings so he can surprise her every once in a while.)
His readers offered varying opinions. "FrugalTrader" from Million Dollar Journey opined that "once the relationship gets serious, financial compatibility is just as important as any other aspect in a relationship." "The Mighty Quinn" opted for after the engagement but before the wedding. James from Dual Income No Kids has no problem with a money discussion on the first date. Rachel wrote that she and her future husband talked about their finances on their third date.
We like this comment from Stephanie of Poorer Than You: "I think financial disclosure in the early stages of a relationship doesn't have to be about numbers -- it should be about values."
Reader Mike said, "Tell him when he asks why he's signing a prenup."
[Image]Can you really double your salary without having to work more? What a premise!
[Image]I’ve never met anyone who didn’t want to get paid more for the job they were doing. I’ve heard it described time and again that the best job out there, is one that offers you the most money for the least amount of work that you need to do. If you’re delivering the goods day in and day out, I don’t see why you shouldn’t feel that you deserve just a bit more.
Conventional wisdom tells us that if we work harder, we’ll end up making more money. Although reward is certainly very often tied to more effort and more contributions, effort and reward don’t always go hand-in-hand. Just ask the guy who’s been sitting at the back cubicle for the last 5 years, pulling all those all nighters. Do you even remember his name? [Image]
Anyway, enough snark. There are things we can all do to increase our employment income without necessarily having to do any more work or having to change our job description. Some ideas are easy to implement, while others may sound a bit more radical but may float your boat anyway:
Want More Salary? Work Smarter, Not HarderSo you’d like to get paid a bit more for your time, effort and services. Well, if you use a little bit of strategy, be a little more scrupulous and do a little more planning in advance of getting a job, you may just snag a better paying position.
Know the market rates for your job.Knowing the market rates and the going salary ranges for the job and career you are interested in is key. It’ll help set your expectations and also give you a goal to try to reach or surpass when you negotiate your pay. If you’re not equipped with any idea of expected salary information, you’ll just be flying blind.
Know your strengths.Everything begins with knowing yourself. In order to make a convincing argument for better pay for the kind of job position you’re interested in, then you’ll need to know what it is you excel at. By “selling” this expertise to someone else, whether or not you’re actually going to need it at your job, you can still command quite a premium above perceived market rates. Know what you can do well and try to sell it.
Make a good first impression and market your degree!You’ve probably heard that saying that you make your money upon the purchase of an investment (and not on the sale). Your price point at the time of purchase sets a floor on how much profit you’ll make on your investment. By the same token, you set your price point when you walk in for your job interview. As you talk up your education and experience, the hiring manager will be sizing you up. That first impression can make quite an impact on your salary offer. Make the hiring manager like you all the more by presenting yourself in the best light possible: bring your assets to the table, including your educational background and any degrees that you hold. Doing so may help you get a bump on your market rate.
Make yourself invaluable.Do you need to do more work to make yourself more invaluable? Not necessarily. Again, this falls under the “work smarter” recommendation. Employees are measured according to many factors, including how their managers may perceive them. If you’re able to work smarter and you’re contributing to the bottom line, then you’ve got some leverage at work and may be rewarded accordingly — even if you’re not actually working any harder. Interestingly, perceptions and impressions hang around for a while, so to give yourself an edge and to make yourself valuable to the company, perhaps some thinking outside of the box will help to boost your reputation.
Rub the “right” elbows.Building those great relationships with your colleagues and bosses will add to the goodwill you’re building at your company. Goodwill can translate to extra bucks the next time your performance evaluation comes along. Something as simple as being a pleasant, good-natured and cooperative employee can go a long way to influence your boss’ perceptions and ultimately his or her gauge of how much you and your work is worth to the team and to the company.
Become a “consultant”.Working for a company offers you stability, a steady career path with potential for growth in your chosen field, perks and many other side benefits. For some though — including myself, at one point in my life — I traded all of those positives for more money, as I took a chance at being a “consultant” or “independent contractor”. Consultants who perform similar jobs as full time employees tend to get paid more, and fetch a premium for a variety of reasons: they don’t command the same overhead as a real employee, don’t get paid benefits by a client, and are usually paid by the project, so they can afford to charge more money, usually on an hourly basis.
As a consultant, your tradeoff is between income stability (e.g. a steady paycheck) and flexibility / freedom. You could be earning a higher income but it’s also to compensate for the risk of working as an independent contractor. So if you’re after more money but would like to keep the same job, you can quit your 9-to-5 post then turn around and sell your services as an expert consultant — just be aware of the risks and tradeoffs involved.
Follow the money.Certain professionals are in higher demand in certain parts of the country. Location can play a part in determining just how much you get paid based on the demand for the type of work that you do in that particular neighborhood. Though cost of living expenses can neutralize the effects of higher salaries somewhat, it’s not entirely a wash in many locales. Why? Because the demand can pretty much outstrip all other factors. Cases in point? Tech jobs and software developers in Silicon Valley, country singers in Nashville [Image] and investment bankers in the heart of Wall Street. If you’re after more money for the same job, consider moving cross country if need be — where the demand exists.
Work in a well-paying industry.As in the case of “location”, you may find that the same job commands different salaries depending on which industry carries this job. An IT engineer working for the financial industry may be paid differently from one that works in the retail industry or one in the high tech industry. Again, particular growth industries may be more apt to offer better compensation packages to employees due to better profit margins.
Work for a top company.It shouldn’t be unexpected for a small company to have less to offer its employees than do larger companies with deeper pockets. I had worked for a variety of companies of various sizes in Silicon Valley, and though the market rate for my job role was pegged within a given range, I found discrepancies in the salary offers I received across the board. Smaller companies I worked for tended to underpay but would offer a nifty equity / options package to more than make up for lower salaries (or so I thought). The larger and more successful the company, the better the salary, perks and benefits, as you’d expect. So it may be worth knocking on the doors of those companies listed in the Fortune’s Best Companies List before trying your luck elsewhere [Image] .
This is a post from The Digerati Life.
[Image] [Image] [Image] [Image] [Image] [Image]"Him" at the Him-and-Her blog, Make Love, Not Debt, is depressed -- clinically depressed. He reached the decision to get professional help after it began to affect his relationship with "Her."
But, before that, he tried to spend his way out of depression. He explains that "trying to thwart depression by doing everything except getting treatment can affect one's finances." His post is called "Depression is expensive, denial much more so."
"When I first started feeling pretty crummy, I thought to myself, 'Maybe if I go out with friends/eat at a nice restaurant/buy myself something I've put off for a while now, that I'll feel better,'" he writes. "I actually chose all three of those routes. ... I don't even want to think about the amount of money I threw at the problem."
The solution can be costly as well. Under his health insurance plan, he's pretty sure he'll have to pay for most of the psychiatrist's fee and perhaps part of the cost of the antidepressant that was prescribed.
But it will be well worth it. He says that "if you're feeling depressed or just not right, there's no shame in going to a psychiatrist/therapist/someone who loves you to talk about it."
[Image]Pro·lif·ic (\prə-li-fik\) : Marked by abundant inventiveness or productivity.
–Merriam Webster Online
The prolific life has been characterized by abundant inventiveness and limitless creativity. Prolificacy has also been unnecessarily enshrouded in a veil of mystery and the sources of artistic inventiveness are too often viewed as out-of-reach for the average person. Perhaps it’s for this reason that artistic inspiration has frequently been attributed to muses, the channeling of spirits, beelzebub, etc.
In spite of perceptions surrounding prolific creativity, there are several documented commonalities that consistently appear in the lives of prolific people. Indeed, the psychological literature has some definite insights into commonalities of the prolific. My investigation into this literature has yielded these . . .
7 Common Characteristics of Prolific People
Highly prolific people tend to:
[Note: Not all of these characteristics are present among all prolific people. These characteristics simply appear at a high frequency among prolific persons].
With these characteristics in mind, here are some tips for developing a prolific life:
Clay Collins blogs at The Growing Life and is the author of Quitting Things and Flakiness: The #1 Productivity Anti-Hack and The James Dean Guide to Being a Body Language Bad*ss.
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If you liked this article, please share it on del.icio.us, StumbleUpon or Digg. I’d appreciate it. :)
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Earlier this week I wrote about Mary Hunt’s notion of a Freedom Account, a second checking account for handling irregular expenses. This isn’t really an emergency fund, but a separate account to keep things like insurance bills from thwarting your finances.
VH at Funny About Money posted a response describing how she uses targeted accounts for the same purpose. “When savings for specific purposes are collected in separate accounts, to tell how much you have for a given need,” she writes, “all you have to do is look at the bottom line. To my mind that’s a lot easier than trying to keep track of a bunch of separate theoretical subtotals in a spreadsheet.”
In a similar vein, Jim at Blueprint for Financial Prosperity recently wrote about what he calls an opportunity fund, an account with “a cash reserve on standby in case you see in opportunity that you don’t want to miss”. I think this is an interesting concept, and something I might try to implement.
While I like the idea of having different accounts for different purposes, I do worry about going too far. One of my goals is to simplify my life. Multiple accounts make it more complicated. After a certain point, it seems to make sense to have just one giant savings account with all my money.
Finally, long-time reader icup sent me a series of articles from his local newspaper, The Centre Daily Times. “Paycheck to Paycheck” looks at how regular folks deal with financial stress. So far six parts have been published:
I love to hear how real people cope with everyday personal finance. It’s so much more interesting to me than the theoretical best-case scenarios provided in books and magazines. (There’s even an entire blog carnival devoted to money stories. I should visit it more often.)
Finally, Five Cent Nickel recently ran the numbers to show how you can save money with compact fluorescent lightbulbs. (And then followed up by answering critics of CFLs.)
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[Image]When I was first going through my financial turnaround, I was heavily inspired by Amy Dacyczyn’s The Complete Tightwad Gazette, not only as a person discovering frugality, but as a writer. As I said in my review of the book, “Highly recommended, and the single best book on frugality I’ve read, bar none.”
The Tightwad Gazette was a newsletter written by Amy in the 1990s, with the last issue going out in 1996. I saw the newsletter a few times when it was in print, but I didn’t really dig into it until later on, when I was in bad financial shape and I turned to my local library to find out ways to help me out of my debt crisis. There, I found The Complete Tightwad Gazette, and it was a revelation - a thousand page tome full of ideas on how to save money, conveniently written in bite sized pieces almost like blog postings. Needless to say, I ate it up and was duly inspired, not only as a person looking to save money, but as a writer, too.
It was a great privilege for me to get to interview Amy, who has inspired me in many ways over the last few years. Since our conversation went on for a very long time and touched on a lot of topics that are way outside of the range of this blog (the publishing industry, etc.), I’ve just selected several of the most relevant pieces for your enjoyment.
What have you been up to over the last ten years since you stopped writing The Tightwad Gazette?
I’ve done a lot of different things. For about six years, I ran a church thrift shop on a volunteer basis a couple of days a week … I kind of burned out doing that. Other than that, I’ve mostly spent my time taking care of my kids, maintaining my house, and doing much of the same things I wrote about in The Tightwad Gazette.
Are you familiar with the waves of people online who write quite enthusiastically about frugality, essentially recreating The Tightwad Gazette’s philosophy online?
That’s something I’ve picked up on in the last year or so. When I retired, I really, really retired and I haven’t been out looking at what’s on other websites and I haven’t gone out looking to see what others are saying about me on websites. I was actually surprised to discover that there are people out there still writing about frugal topics with a hardcore passion and sharing it so openly.
I first really became familiar with The Tightwad Gazette via my local library…
That was absolutely intentional. When I was writing the newsletter, I didn’t ever repeat any material, but I knew that the material had a lot of archival value. Once I started publishing the books, which were basically compilations of the articles from The Tightwad Gazette newsletter, I knew the newsletter would have a finite life span - that I wouldn’t just start repeating articles and sending them out again. The decision to do books was made so that they would be around for the long term in libraries and other places and it would be free and accessible to anyone.
One librarian in Maine says that The Complete Tightwad Gazette is the most frequently stolen book in the Maine library system!
Have you ever considered writing The Tightwad Gazette again, perhaps in online form? I think it’d make a killer blog.
No, no. I’m really retired. Every once in a while I run across something that I think would be a cool topic and I wish I were still writing the newsletter, but there’s not that much that I’ve come across that’s enough different from the stuff I already wrote about to make a new newsletter. It really was a grind, a lot of work … I like privacy. It was a crazy time and I’ve never really regretted retiring. After six and a half years, I was really ready to retire.
What’s the best tactic for saving money you’ve come across since you stopped writing The Tightwad Gazette?
The internet, without a doubt. There are countless ways to save money and stretch your dollar online: selling used stuff, buying used stuff you need, comparison shopping, inexpensive entertainment, inexpensive educational materials - for the price you pay for it, the internet is a spectacular bargain if you use it well.
The advice I wrote about the internet in The Tightwad Gazette in 1995 and 1996 are now embarrassingly dated - those pieces should basically be ignored today. Now, I’m online every day - I use eBay to sell stuff, get medical information, get legal information, order books through inter-library loan, and so on. I got interested in music and CD buying and selling - I used online resources to find what contemporary music I liked, then I was able to buy it through discount music sites, paying $1 to $5 per CD with shipping.
I’m a natural research - anything that interests me, I’ll go off on a tangent researching a topic and studying it for hours. The internet is amazing for that, with resources like Wikipedia - you can learn a ton and it’s all free.
I’m actually thinking of joining Netflix. It’s only $9 a month and since there’s no library in my town I have to use the state library system to get items, but I have to pay for shipping one way on that. Since we watch a lot of films, Netflix seems to be cheaper - we’re going to give it a try. $8.99 gets you six movies a month … that seems like it will fit our needs. We have a lot of free time now that our children have moved out.
I joined a gym - I can’t believe I actually joined a gym, but I have. I’m 52 now, and I found after trying a gym that it was much better at motivating me to get exercise than my home equipment was, and I need the exercise for muscle tone and so on. I tried several and found a gym that I liked - it’s not a choice I would have ever made until I could actually afford it, though. That’s the one luxury I’ve really added to my life over the last ten years.
Any final thoughts? Maybe some writing tips?
Writing is often one of those lightning in a bottle things. There’s some combination of elements that you’ll put together that is unique and it will appeal to people for some reason. It’s not really something you can predict - it just has an appeal. Who knows? It’s just a unique combination of what you’re doing that works. If it ain’t broke, don’t fix it - but if you haven’t found it, tinker all the time until you hit upon something that works.
(A note from me here: between many of these questions, Amy gave me a lot of great advice about the grind of consistently writing good content over a long period of time, some specific advice on how to handle negative readers, and also some suggestions about publishing and various models (newsletters versus blogs and so on). One good idea that might come out of that talk: a “Best of The Simple Dollar” compilation might be a great way to keep the best material from the site around after I’ve stopped writing it at some point in the future. Many, many thanks to Amy for all of her advice and thoughts!)
[Image] [Image] [Image] [Image] [Image] [Image]If you were born between 1978 and 1994 (some sources say 1979 and 1994, or 1977 and 1988), you're an official member of Generation Y and you're terrible with money (or, some sources say great with it) and don't really care about it (or are obsessed with it).
In fact, "G Blogmaster" at Can I Get Rich On A Salary notes that one survey says 31% of Gen Y folks contribute to a 401(k) and another says 70% do. "Phew! Glad we got that all cleared up," he says. "Really gives me a lot of confidence in surveys."
G lists a number of seemingly contradictory observations and conclusions about this age group in a post called "Gen Y is stupid, smart, lazy and diligent about money." One of his sources is an MSN Money story called "Why Generation Y is broke." Conversely, an article at USA Today says Gen Y workers "are generally savvy when it comes to money and savings."
One article he cites says members of Gen Y openly discuss their finances. Yet another source says one in five would rather go to the dentist than discuss financial planning, and one in eight "would rather have a colonoscopy than discuss estate planning." Now, that's extreme.
"Why all the contradictions -- or perhaps paradoxes?" he asks. "To some degree, I think it really doesn't matter. Part of me thinks the desire to categorize people into neat little boxes just relates to marketing ... and now specifically to Gen Y."
One thing we do know is there's a subset of Gen Y dedicated to consuming less to help the planet. Someone gave it the acronym YAWN-- young and wealthy but normal. "Arduous," in true Gen Y fashion, rebelled, and asked her readers at Arduous Blog to come up with a better one. "Mr. Green Bean" proposed APLS ( pronounced "apples") for affluent persons living sustainably.
Arduous says, "If we don't want to be stuck with YAWN, we've got to go wide with APLS. So do all you can to make APLS stick."
[Image]Self-sufficiency is producing the actual stuff you use--your own food, your own clothes, etc. It's not a common lifestyle. Most people chose instead to follow the path of self-reliance. Rather than directly producing the things they use, they produce something they can sell for money, or else they work for someone who will pay them money, aiming to earn enough to buy what they use.
Actual self-sufficiency takes on nearly mythic significance in the United States, because so many iconic figures in our national history were self-sufficient:
The notion shows up in popular culture other places as well, as in the wonderful British TV series "The Good Life," (available in the US on DVD as Good Neighbors) about a couple ditching an affluent lifestyle in favor of being self-sufficient in their own little suburban plot.
The thing is, though, self-sufficiency turns out to be a hard way to live. It takes capital (in the form of land), it takes skills that most people don't have, and it takes lots of hard work. During the 1960s and 1970s there was a back-to-nature movement of people trying to be self-sufficient, often in the form of a commune (which is rather easier than trying to be self-sufficient at the level of the household or the individual). Some of those old communes are still around, but most people who tried self-sufficiency gave up pretty quickly.
The appeal of self-sufficiency never disappears, though. Just recently, as a response to environmental degradation and soaring prices for food and fuel, self-sufficiency is once again showing up, under names like urban (or suburban) homesteading. More and more people are turning their lawns into gardens, getting a few chickens (even a goat) and producing a large fraction of their own food.
As I said, though, it's a hard way to live. You can have a higher standard of living if you work for money and then buy the stuff you need--and not just a little higher; stuff that's mass produced by low-cost labor is incredibly cheap. For example, I've seen perfectly good wool sweaters at the store for less than the cost of the yarn to knit a nice sweater.
The whole structure of the economy is designed for people to work for wages and then buy what they need--and that design turns out to favor the wealthy. The poor and middle-class get a higher standard of living, and the rich get richer.
Sometimes, of course, that standard of living creeps up high enough that the household is no longer really even self-reliant. Depending on how you measure it, personal saving in the United States has been close to zero (or even negative) since 2005--and, since we know that a small number of wealthy people are saving plenty, that means that large numbers of poor and middle-class people have been spending down their savings or sinking into debt.
It's easy to make the case that our economy is structured specifically to tempt poor and middle-class folks to enjoy a higher standard of living than they can actually support. When they do, they not only make rich folks richer, they also trap themselves in the money economy. Even if you have the skills, the inclination, and the willingness to do the hard work, you can't move yourself toward self-sufficiency when you've got debts that have to be paid with money.
Once trapped in the money economy through debt, people end up stuck being little money-producing machines for the rich. It's not too extreme to call it wage slavery or debt peonage (albeit at a rather high standard of living). In any case, it is definitely not freedom.
You don't need to be self-sufficient to be free--it's good enough to be self-reliant, as long as you're careful with debt. In fact, unless you've got some capital already--such as family land--a period of self-reliance during which you live below your means and accumulate capital is probably a necessary step toward self-sufficiency.
Even then, there's some value to the tactics of self-sufficiency. Hobbies that produce something useful can often pay their own way, and are certainly better than hobbies that leave you seriously out-of-pocket. It's worth having a garden, even if you don't grow all your own food. It's worth knitting a sweater or sewing a dress, even if you don't make all your own clothes. It's worth learning how to fix a bicycle, even if you also own a car.
Think of it as strategic partial self-sufficiency. Think of it as a step on the road to freedom.
Permalink | 4 comments | Philip Brewer's blog | Channel: Personal Finance, Frugal Living, Career and Income
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Several readers wrote to sound the alarm that student loan giant Sallie Mae has screwed up, and their error may cost you money. Bethany writes:
I had been keeping an eye on my credit, making up for my past mistakes by paying on time meticulously and paying off my credit card debt. Yesterday my Equifax score dropped 76 points because Sallie Mae changed the way they report graduated loans. Turns out, I am not the only one.
Another reader named Rebecca saw her score drop from 770 to 650 overnight.
What happened? Bankrate offers a summary of the problem:
Last Thursday, May 8, Sallie Mae made an error in the way it reported some student loans to credit reporting agencies. Essentially, it reported graduated or extended repayment plans as arrangements for partial payment, causing Equifax, one of the three national credit reporting agencies, to code the accounts as delinquent, even if they were current.
[...]
Borrowers with extended or graduated repayment plans who applied for credit or pulled their credit scores in the last three business days may have had “one or more of their accounts show up as delinquent, and had an adverse credit rating,” says Tom Joyce, spokesman for Sallie Mae.
Why is this a big deal? Because your credit score not only affects how much you pay for loans, it can also affect the interest rate on your credit cards and how much you pay for insurance. If you’re in the process of buying a house and your credit score drops by 120 points, it could cost you a small fortune.
This appears to be a temporary glitch in the system. One commenter at the myFICO discussion forum received a call from the Sallie Mae customer advocacy group. Sallie Mae intends to fix the problem by the end of the week, and it’s possible that Experian could have updated information in their system within ten days.
What should you do? If you are concerned that your credit report may have been affected, you should probably obtain your free annual credit report from Experian to see if there’s an issue. (But note that your credit report and credit score are different things — it costs money to get your credit score.) My guess, however, is that there’s not much you’ll be able to do other than wait a few weeks for the problem to be fixed.
The discussion thread at myFICO contains the best, breaking news on this story.
More information about credit reports and credit scores:
I can’t help but think there are real problems with a system in which a glitch at a single company can potentially cost millions of people millions of dollars.[Image]
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I was intrigued by the "What busts your budget?" item that Karen Datko posted at Smart Spending last week. In it, a number of personal-finance bloggers described some costs that hurt: gasoline, haircuts, dentist appointments, new shoes for the kids, (unnecessary) new shoes for the moms, soft drinks, veterinary care and the like.
A guy calling himself "Caja del Oro" left a comment describing his own budget buster: all those "deal of the day" Web sites. It's not that the deals are particularly expensive -- it's that they're too darned cheap, and therefore irresistible. "Most of the time I don't even know I 'want' something until one of these sites offers it at a discount," Caja laments.
Recently he bought 120 single-serving bags of Sun Chips. That's two whole cases worth. And all 120 bags have a July expiration date.
"Now we've become the Sun Chips Fairies, giving bags away to friends and family, who are always appreciative and slightly confused," Caja says.
"I'm mostly successful in avoiding the siren song of these sites, but every now and then, out comes the credit card and there goes my budget."
It's like you're losing money by not buying
How is it that we convince ourselves that it's not only OK but fiscally prudent to do stuff like this?
One word: price. Sometimes I'm tempted by a really cheap item in the daily "hot deals" feature we run from partner blog dealnews.com. A cross-cut shredder for $14.94 including shipping. The collected films of the Coen brothers for $22.47. An eight-piece wrench set for $7.95.
Then I remind myself that I can use my daughter's shredder any time I want, that the city library provides movies free of charge, and that the last time I needed a wrench was to change my car battery and the staff at Schuck's lent one to me. Thus my credit card remains in the holster and my budget stays unbusted.
That doesn't mean I never buy things. Recently tuna went on sale three for 99 cents and I wound up with more than three dozen cans of the stuff. Then again, I carry a lot of brown-bag lunches, and canned tuna is a lot more shelf-stable than chips.
Little things can cost a lot
Some people have this problem in dollar stores -- if it's "only" a buck, why not buy it? Especially if you're a big fan of that 99 Cent Chef dude. Yard sales are just as bad, loaded as they are with cheap paperback books, kitchenware, video games, candleholders and other stuff you have no room for in your house.
I can think of a couple of reasons not to get something that's really cheap. For starters, you might not really need it -- and if you don't need it, why are you buying it?
In addition, "cheap" can turn into "budget buster" if you do it often enough. A $3 cup of coffee is a nice treat. Do it every day, though, and you'll be spending $21 a week or $1,092 a year -- and even more if you leave a tip.
Now comes the green-vegetable part of the story, i.e., the part you do because it's good for you: Before buying, get in the habit of asking yourself a few questions.
Do I really need this?
Will it improve my life?
Do I already own something that will serve just as well?
Can I delay this purchase?
If not, is there any way to get it cheaper -- or even free, such as going through craigslist or Freecycle?
Too often our budgets are busted despite our best efforts. Root canals and car trouble will always be with us. That's all the more reason to control spending where we can. How many Sun Chips does a person really need, anyway?
[Image]The best credit card for you will likely change along with your financial circumstances. As you graduate from college and get a job, you’ll want to do a review of your finances and your current credit cards to make sure you’re taking advantage of the benefits your new salary might bring.
Many people unfortunately rely heavily on credit in school because they don’t have much money coming in. However, once you graduate and find a job you’ll finally have a regular income. Not only will this allow you to start paying off the debt you might have accumulated during your college years, it may also mean you’re eligible for cards with better features. Here are some tips to follow as you search for the best credit card for a new college graduate.
Tip 1: Upgrade your Credit Card
If you have a student credit card, chances are the interest charged on unpaid balances is higher than it needs to be. In order to offset the higher risk of students defaulting on credit card debt, student cards tend to have higher rates and lower credit lines.
Although student lines of credit are excellent to have during school to help to establish a credit history, now that you have a salary coming in, you’re likely eligible for a new card that offers more benefits. Things to look for are a lower interest rate and a rewards program. Of course the quality of card you’re eligible for will depend on your credit score.
Tip 2: Don’t Close Your Student Line of Credit
Many people make the mistake of closing their student line of credit because they have a better line of credit opened. Ironically, this is a move that could actually cause your credit score to drop. The problem is that lenders look for long term credit history on your credit report since a credit history helps establish your ability to repay on time and makes companies more willing to extend you credit.
You can check your current report for free once a year with AnnualCreditReport.com. You can also check out your FICO score in addition to your credit report at myFICO.com. There is a fee for the service but they do offer a free trial.
Tip 3: Watch Out For Balance Transfers
With your lower interest rate on a new credit card, you may be tempted to move your existing student credit card balance to a new line. This may not be a bad idea but watch out for the high balance transfer fees often in place. You also want to look for a card that offers a low APR on balance transfers (even a 0 percent APR) so you save money.
Tip 4: Use Credit Responsibly
Now that you have a better credit card in your hand use it wisely. Don’t create more debt for yourself with irresponsible spending. As a new college graduate, you are likely looking for a home, furnishings, a car, or even to start your own business. You’ll have plenty of opportunity to spend money, if you charge things on your card make sure you have the cash to cover them. Pay off your credit card each month to continue to build a credit history and to avoid interest charges.
Tip 5: Research Your Credit Card Options
There are many different cards available with a wide array of different card features. Make sure you research your options before applying for a new card. You can call up your current card provider, explain your situation, and ask what cards you’re eligible for now that you have a regular income.
There are many sites online that you can use to review and compare different credit cards. Some of the things to look for are:
College Graduate Finance Guide
This article wraps up the personal finance tips for college graduate series. Here is a summary of all the financial topics we covered:
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[Image] [Image] [Image] [Image] [Image] [Image]After receiving several dozen “This series was great” emails alongside several hundred “Please make it stop!” emails when it came to the Born to Buy series, along with several requests to “Review some other book … please,” I’ve elected to go back to the old-style book reviews that many readers seemed to quite like - one shot reviews of personal finance and personal productivity books delivered twice a week in a yummy and easy-to-digest package. For newer readers who didn’t see these, the last two I did before starting the Born to Buy series were Larry Winget’s You’re Broke Because You Want To Be and Laura Stack’s Find More Time. Friday mornings usually bring a personal finance book review and Sunday afternoons usually bring a personal productivity or development or career-oriented book review. I have a big pile of them to review with some really intriguing ones in there (including one that ticked me off almost as much as Rich Dad, Poor Dad).
Anyway, now that that’s settled, on with some good personal finance articles! For this week’s roundup, I sent a message out to a whole lot of personal finance bloggers that I know and asked them to give me their best shot - send me a link to what they considered to be the best article on their blog. I got a mountain of responses - more than I expected, by far.
I expected, actually, to read a lot of rubbish. I was pleasantly surprised - there were a lot of really good articles in there. There wasn’t much separation of the wheat from the chaff - these were mostly all good stuff.
Here, I present to you ten of these great articles that really show off the best of some of the blogs in the personal finance niche. I’ll be doing future editions of these if this one proves to be popular.
24 Signs That You Could be in Financial Trouble and How to Get Out of It This is an excellent series that is a great one to send to people that you’re concerned about in terms of finances. I know when I read through it, I thought of myself just a few years ago. (@ generation x finance)
There’s No Shame In Not Being Able To Afford It This article addresses the guilt and shame people sometimes feel about objects that they simply can’t afford. Sometimes, people stretch too far in order to be able to “afford” something that they really can’t, and that can result in disaster. (@ paid twice)
Rent Forever, Don’t Buy a Home This is an excellent “devil’s advocate” piece arguing on behalf of renting instead of homeownership. (@ blueprint for financial prosperity)
5 Strategies to Survive an Economic Slowdown I think the best advice is to always protect yourself - have proper insurance and a nice, healthy emergency fund. (@ moolanomy)
Teach Your Kids About Money With Only 4 Quarters This is actually pretty clever, and you could do it in parallel with a “four bank” system of saving, where your child has four banks - one for spending anytime, one for saving for something big, one for charity, and one for gifts for others. (@ frugal dad)
Things I’ve Learned About Money by Not Having a Lot of It I grew up in this kind of household. It taught me some valuable lessons. (@ being frugal)
100 Ways to Cope with Inflation I so agree with the idea of buying in bulk. Visiting our basement is practically like grocery shopping for “free” at this point. (@ the honest dollar)
Financial Strategies for Infants and Young Children This one really hit home for me. I’m constantly thinking about my own young children and how to teach them the value of a dollar. (@ my dollar plan)
Sixteen Ways Being Disorganized Costs You Money It took me a long time to really understand this - a plan for organization and efficiency helps you out time and time again. You get far more out of it over the long run than you ever put in. (@ mighty bargain hunter)
Cheap Alternatives for the Must-Haves in your Life For me, the best “cheap alternative” I’ve found for my favorite must-have is PaperBackSwap. (@ girls just wanna have funds)
[Image] [Image] [Image] [Image] [Image] [Image]Here at Wise Bread, we’re not just about saving money and reducing budgets. We’re also about providing ways to live a more luxurious lifestyle within a reduced set of financial parameters. In other words, we show you how to be a high end cheapskate. Want some ideas? Read on.
Decanters.
Don’t feel like justifying your brand choices to new acquaintances? Prefer the look of fine crystal or cut glass to bottle labels? Decanters are a great way to add class to your bar or entertaining area and make sure the brands of spirits you choose are nobody’s business but yours.
Heirloom and Estate Jewelry.
Whether it’s handed down, purchased at auction or picked up at pawn shops, previously owned jewelry is a great way to establish a nice collection for a significantly reduced price. Think pearls and studs for women, pocket watches and tie clips for men.
Maximize High End Gourmet Purchases.
The way I see it, there are two ways to get the biggest bang for your gourmet buck.
DIY.
Got some great skills? Architecture, carpentry, gourmet cooking, vehicle restoration, custom interior painting, landscaping, gift wrapping, gardening, flower arranging, crafting, furniture restoration, artistry, photography, sewing . . . you get the idea. A personal area of expertise can really bump up your lifestyle a few notches.
Bartering.
While swapping casseroles for homemade jellies is great (I do it myself.), consider stretching your parameters a bit. How about a custom interior paint job in exchange for a bathroom remodel minus the cost of supplies on each? A few quarts of gourmet hummus swapped for an hour of professional massage therapy? Refurnished serving buffet for a professionally painted family portrait? Using those DIY skills as a form of currency can help you get what you want without laying out cash.
Using Unexpected Budget Ingredients in a High End Manner.
Frozen spinach for a Mediterranean cheese log, boxed wine for marinades and mulling, basic dry goods for biscotti on the cheap, repurposing and refinishing thrift furniture, salvage and hardware materials for custom storage and DIY pot racks . . . lots of options are out there to implement the unexpected for a high end result.
The Classics.
Whether you pay closer to full price and own fewer clothing items or hunt for classic wardrobe items online and at thrift stores, the styles will be stable and the quality above par. Having fewer items to take care of that will stand the test of time is in my humble opinion, the way to go. You can also apply this strategy when power shopping for vehicles. Certain classic models (even used) hold their value better than others. An example? Volvo.
Explore Every Penny Pinching Method Available.
Particularly when they are methods that won’t necessarily show, like perfume or brand changes on basic items. Some other great resources and ideas?
Got any more ideas for luxury level tightwaddery? Chime in and share the love!
Permalink | 8 comments | Myscha Theriault's blog | Channel: Frugal Living
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We have to save vicariously through the superstars of drugstore shopping. The closest stores like CVS and Walgreens are 110 miles away.
Bloggers at sites like The Centsible Sawyer, Mommy Making Money and Money Saving Mom are buying toiletries, diapers and other necessities for a teeny fraction of what they normally cost. Cathy at Chief Family Officer, a superstar-in-training, has dubbed their use of coupons, rebates and other store discounts "The Drugstore Game."
As these champions of saving might say, the proof is in the free pudding.
If you need proof, go to Denise Sawyer's post about "CVS superstars ... and wild women at Walgreens" and click on the links to read testimonials from other serious savers. For instance, "Sarah Z" at Raising Weeds bought a Venus Embrace razor, Tums and two toothbrushes for $0 and also earned $15.67 in ExtraCare Bucks at CVS.
We've written about this phenomenon before, but think that in today's economy it deserves more attention. If you're new to this, there is plenty of help available online.
Money Saving Mom offers "CVS 101" to get you started and additional help with "Q&A: Making CVS work for you." Plus, read her "Walgreens 101."
Cathy offers more advice with her post about The Drugstore Game.
Apparently prompted by readers' questions, Mommy Making Money explained why it sometimes makes sense to buy things you don't need to use the CVS system to your best advantage. For instance, she bought toothpaste even though she has 10 tubes at home.
Here's my thinking: Buy one toothpaste at $2.99, and use the $1.50-off coupon. Pay $1.49 and get back $2 ECBs. I now have 51 more cents than I started with, which I can apply to something else that I do need. I can include that item in that same order, or save the ECBs for next time.
Click here to read her full explanation. And if you really can't use the stuff, she writes, you can give it to someone who does, use it for gifts, or sell it on eBay.
[Image]Here are today's hot deals from partner blog dealnews.com:
Adidas men's Ketchikan TR athletic shoes for $29.98. With $5.99 for shipping, it's the lowest[Image] total price we could find by $24.
Dolce & Gabbana men's Geronimo Collection watch for $186.88. With free shipping, it's the lowest total price we could find by $63.
Bolle Warrant sunglasses for $29.97. With $3.99 for shipping, that's $110 off and the lowest total price we could find.
Char-Broil Premium 48,000 BTU stainless steel grill for $249.99. Coupon code GRABD08 cuts it to $199.99. Choose in-store pickup to get a more-feasible $40 handling fee; if you choose to have it shipped to your door, that costs $174.99. It's the lowest total price we could find, although it was $75 less in March.
Neoprene sleeve for 15-inch notebooks for $14.25. Apply coupon code AC20728450POFF to slice it to $7.25. With free shipping, it's the lowest total price we've seen for this case since April.
[Image]This is a guest post from Jason Gingerich, a volunteer with the Archimedes Movement to work for a comprehensive solution to America’s health care crisis. He also works for a non-profit organization that offers health insurance, among its other products. The views expressed here are not necessarily those of his employer.
[Image]In America’s current healthcare system, in most cases, you’re better off with the crowd. Usually, that crowd is your employer or a government pool like Medicare or Medicaid. But sometimes, due to choices you make, or circumstances you can’t control, you end up on your own, with full responsibility for your healthcare expenses. Here are some circumstances under which you might end up needing to seek affordable individual health insurance:
In some other circumstances, you may have the option to participate in group medical insurance, but it’s not in your financial interest to do so.
In any event, if you are shopping for individual health insurance, you need to keep in mind several important things.
Initial considerations
First of all, if you’re choosing to voluntarily switch from group to individual coverage, you need to carefully consider what you’re giving up: government protection from discrimination by insurance companies.
In the group insurance market, the government prohibits discrimination against people by age or health condition. Your employer can’t legally charge you more in premium, deny you coverage, or offer you a reduced benefit plan because you’re sick. In the individual market, insurance companies put you through a process called, “underwriting,” which means they’ll only offer you coverage if they think they’ll get more from you in premium than they’ll pay in claims.
You can look at it as a gamble — the insurance company is betting that you’ll stay healthy (if it’s not a good bet they’ll deny you coverage); you’re betting that you’ll get sick and need healthcare. Underwriting helps them detect if you’re trying to “game the system,” by looking for insurance while you’re expecting big medical bills.
The side effect of this is that older or less healthy individuals end up paying higher premiums, and can even have trouble obtaining any coverage at all. So the game is very different if you’re a 50-year-old female who smokes and suffers from diabetes (you can pretty much forget about getting commercial insurance) than if you’re a 25-year-old male with no previous health problems (companies will be lining up to offer you coverage).
This is one of the wonders of America’s healthcare system — those who need coverage the most are least able to obtain it. It’s also the Achilles heel of presidential candidate John McCain’s health reform proposal — his plans would drive more people into the individual insurance market without adequately addressing this issue. (The Democrats’ plans have problems of their own.)
[Image]Shopping for insurance
But right now, you’re not trying to solve the nation’s health care crisis, you’re just trying to take care of yourself. Here are some things to consider as you shop.
What if you cannot find coverage?
Now that you’ve done all this work, you still could find yourself in a situation where you can’t afford — or simply can’t purchase at any price — health insurance that meets your needs. You’re not alone. In 2006, 47 million Americans found themselves in a similar bind, and the number has only increased since then as costs have risen and employers have reduced coverage. You still might be able to find help. Here are some options for you to consider:
Does this seem daunting? For more and more Americans, it is. Seem hopeless? For many people right now, it might be.
An archaic system
The reasons for this state of affairs are complex. It’s based on a patchwork of systems that has grown up over time, and changing technology has made them obsolete. Long-term, more and more people are going to face this difficulty — not just poor people. Medicare is projected to run a deficit in 2018, and Medicaid coverage will need to drop unless more money is made available.
While this article has been focused on how to meet your current needs, perhaps my best advice is to write your elected officials and urge comprehensive change. To effectively solve our health care problem we need comprehensive reform, which must include cost controls (conspicuously lacking in the proposals from the Democratic presidential candidates) as well as coverage for everyone (conspicuously lacking from the Republicans’ proposals).
In the meantime, the best you can do is to research your options, and make the best choices you can.
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Related Articles at Get Rich Slowly:
This post comes from partner blog The Dough Roller.
With gas prices nearing $4 a gallon, saving money on gas is more important than ever. Fortunately, there are a lot of relatively simple and inexpensive things you can do to save money on gas.
What follows is a list of 25 ways to reduce what you pay at the pump.
Car maintenance
Replace a dirty air filter. According to the Federal Trade Commission, replacing a clogged air filter can increase gas mileage up to 10%.
Keep your car's engine tuned. Having your car's engine tuned according to the owner's manual can improve gas mileage by 4%.
Get regular oil changes. Clean oil in your car's engine improves gas mileage by reducing friction. You should also look for oil that says "energy conserving" on the performance symbol of the American Petroleum Institute. It contains friction-reducing additives that can improve fuel economy.
Keep tires properly inflated. Properly inflated tires can increase your miles per gallon by up to 3%.
Use the right motor oil. Make sure you use the proper grade of motor oil, which can save you 1% to 2% at the pump.
Rotate tires and check alignment. Rotating the tires for even wear will improve your car's performance and gas mileage, as will keeping the car properly aligned.
Buying gas
Buy the recommended gas for your car. Most cars run on regular octane gas. According to the FTC, there is no reason to buy a higher grade of gas than what is recommended in the owner's manual. If you want to read more on this, check out the FTC's "Low-down on high- octane gas."
Steer clear of gas-saving gadgets. You've probably read about any number of gadgets that promise to increase your car's gas mileage. Most of these gadgets don't deliver on their promises, and some can even harm your car. For more information on these gadgets, you can read the FTC's "Gas-saving products: Fact or fuelishess."
Find the cheapest gas near you. Check out GasNearU or Gas Buddy to find the least expensive gas in your neighborhood.
Use gas-rebate credit cards. Some credit cards can save you up to 5% on gas. Three of the best cards in my opinion are the Discover Open Road Card (5% cash rebate on gas and car maintenance purchases), Chase PerfectCard MasterCard (6% rebate on gas purchases first 90 days, 3% thereafter), and BP Visa Rewards Card (10% rebates on gas purchases from BP during first two billing cycles, 5% thereafter).
Driving smarter
Keep it under 60. At speeds above 60 mph, miles per gallon starts to decrease significantly.
Avoid jackrabbit starts. Peeling out when the light turns green so you can be the first car at the next red light is like throwing money out the window. Gentle driving can save you up to 5%.
Unload. Remove unnecessary weight from your car (no, this doesn't include your spouse). Lightening the load by 100 pounds can improve your gas mileage by 2%.
Avoid using the roof rack. Items on top of your car, in addition to weighing you down, increase wind resistance, which lowers your gas mileage.
Use cruise control. Using cruise control on the highway when it's safe to do so improves fuel economy.
Use air conditioning on the highway, not in the city. If it's hot outside, using the air conditioner on the highway improves gas mileage over rolling down the windows because of air resistance. But in stop-and-go traffic, it's best to let Mother Nature cool you down.
Remove snow tires. Deep tread and big tires consume more fuel. When winter is over, remove the snow tires for better gas mileage.
Driving less
Telecommute. For many, it's the commute to and from work that burns the most gas. Telecommuting even one day a week will reduce those costs 20%, will reduce wear and tear on your car, and save lots of time, too. And telecommuting is a great way to start what I like to call