Thursday, August 27, 2009

One Dream Wish

As a teenager, I had a pair of cowboy boots that I loved. I have always loved cowboy boots. Sadly it has been 20+ years since I have owned a pair. It is one of the things I plan to treat myself to when I get debt free. A nice new pair of Western boots to reward myself for a job well done, after several years of fighting my poor finances.

Wednesday, August 26, 2009

Talking About Money With Your Partner

With a girlfriend that is going to become a bigger part of my life, in the very near future, this is a very topic to think about seriously. We have already merged our cell phone plans, my cell phone provider also has home service, if the customer has high speed internet (not provided by them), for only another $10. So I have three lines home, her phone and my phone. This will save us money, as she disconnects her home phone and more and more of our bills merge together.

I have talked with my insurance agent about adding her (and her car) to my policies. The additional cost would only be an extra $300/yr. Still, the video below has some additional thoughts when talking to your spouse or significant other about finances.

go ahead share your thoughts with me now, my ears are open. I'm always eager to hear what you think.

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Planning For Retirement

The Today Show discussed ways to build your retirement savings. Listen to the video below, to hear what they had to say.

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RIP Ted Senator Kennedy (1932-2009)

Just before 6 AM EDT, this morning word broke that the last surviving son of a political dynasty has passed away. Senator Edward (Ted) Kennedy had been from suffering brain cancer, until death at the age of 77.

Massachusetts Sen. Edward M. Kennedy, the liberal lion of the Senate, has died after battling a brain tumor. He was 77. Kennedy's family announced his death in a brief statement released early Wednesday.
- Topeka Capital Journal

Two of his brothers, were assassinated, while they either were President (John Kennedy) or was running for President (Bobby Kennedy).

Kennedy was elected to the Senate in 1962, when his brother John was president, and served longer than all but two senators in history. Over the decades, Kennedy put his imprint on every major piece of social legislation to clear the Congress.

- Topeka Capital Journal

Though I didn't agree with his policies very much, he's still one of the most prominent politicians of our time.

President Barack Obama issued the following statement, upon hearing the news:

"Michelle and I were heartbroken to learn this morning of the death of our dear friend, Senator Ted Kennedy.

For five decades, virtually every major piece of legislation to advance the civil rights, health and economic well being of the American people bore his name and resulted from his efforts.

I valued his wise counsel in the Senate, where, regardless of the swirl of events, he always had time for a new colleague. I cherished his confidence and momentous support in my race for the Presidency. And even as he waged a valiant struggle with a mortal illness, I've profited as President from his encouragement and wisdom.

An important chapter in our history has come to an end. Our country has lost a great leader, who picked up the torch of his fallen brothers and became the greatest United States Senator of our time.

And the Kennedy family has lost their patriarch, a tower of strength and support through good times and bad.

Our hearts and prayers go out to them today--to his wonderful wife, Vicki, his children Ted Jr., Patrick and Kara, his grandchildren and his extended family."

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Tuesday, August 25, 2009

Recommended Budget Percentages and Guidelines

I thought today, I might take some time and help define, the recommended budget percentages. These personal budget category percentages will help you get your budget into line and on track.

One of the hardest things to do when you're creating a household budget, is to try and see where your money is going. The first thing you need to do is track your spending and see where you are overspending.

The chart below shows what some budget category percentages should be, based on four different sources. Each source has a slightly different range and your budget will change based on your income and spending needs.
Dave Ramsey
Typical Credit Counseling Advice
Consumer Credit Counseling Services
Charitable Giving 10-15% 4% -NA- 10-15%
Housing 25-35% 24% 20-30% 30-40%
Utilities 5-10% included in Housing 4-7% included in Housing
Food 5-15% 14% 15-20% 5-15%
Transportation 10-15% 17% 6-20% 10-15%
Medical 5-10% 6% 2-8% 5-10%
Clothing 2-7% 6% 2-4% 2-7%
Invest/Savings 5-10% 13% 5-10% 5-10%
Debt Payments 5-10% 13% 15-20% 5-10%
Misc. (Personal,Recreation,Life Ins.) 5-10% 5% 5-10% 5-10%

For example, a person with a lower income will have a higher percentage on basic needs than a person with more income, who may put more money into savings, recreation, or charity. Or, if you live in a more expensive area, you’ll spend more on housing, etc. Remember, these are only guidelines, you situation may call for numbers outside these percentages.

Coming in the next week or so, will be my own downloadable budget form for you to use, when planning your budget. For now, take a look at the budget guidelines, and as always, feel free to share your comments.

go ahead share your thoughts with me now, my ears are open. I'm always eager to hear what you think.

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Wednesday, August 19, 2009

Consumer Activists Warned Us of This

Remember a few months ago, when the credit card reform bill was working it's way through Congress? There were a number of consumer activists and bloggers (including myself) raising concern that the credit card companies would raise interest rates, before the law takes affect.

We were told, that was just fear mongering, and that wouldn't happen. Now ABC News, reports that we were right.

Scott Talbott of the Financial Services Roundtable, the trade group that represents some of the country's biggest credit card companies, said that rising rates are due to the treacherous economy, higher borrowing costs for banks, and consumers with riskier profiles.

The idea that banks are raising their rates in response to credit reform is "a red herring," he said.

No one disputes that rates are on the climb.

A recent study of 150 credit cards by BillShrink found that interest rates on purchases and balance transfers for card holders have grown nearly 20 percent from January to July of this year.

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Top 10 Investor Traps

Recently, Federal and state regulators across the country issued a list of the Top 10 Investor Traps. Below are those ten traps. Provided to help you (and me) to be aware of these schemes.

1. Entertainment Investments
These unregistered investments, encompassing a variety of products including movies, infomercials, internet gambling and pornography sites, promise high returns while offering little disclosure of risk.

2. Gold Investments
Gold scams made the Top 10 list the national association for state securities regulators.

To wit: “With the high price of gold, investors should beware of gold bullion scams in which the seller offers to retain ‘purchased’ gold in a ‘secure vault’ and promises to sell the gold for the investor as it gains in value. In many instances the gold does not exist.”

Of course that means your money no longer exists.

3. Leveraged Exchange-Traded Funds (ETFs)
his relatively new financial product has been offered to individual investors who may not be aware of the risks these funds carry. The funds, which trade throughout the day like a stock, use exotic financial instruments, including options and other derivatives, and promise the potential to provide greater than market returns as the value of the underlying assets rise or fall. Given their volatility, these funds typically are not suitable for most retail investors.

4. Life Settlements
State securities regulators long have been concerned about viatical settlements, but now, the rising popularity of similar, related products among investors, life settlements, has prompted a recent congressional investigation. Viatical settlements involved the purchase of life-insurance policies of terminally ill persons, whereas life settlements involve the purchase of life-insurance policies of ordinary (non-terminally ill) persons, usually seniors. While viatical settlement and life settlement transactions have helped some people obtain funds needed for medical expenses and other purposes, those benefits come at a high price for investors, particularly senior citizens. Wide-ranging fraudulent practices in the life settlement market include Ponzi schemes; fraudulent life expectancy evaluations; inadequate premium reserves that increase investor costs; and false promises of large profits with minimal risk.

5. Natural Resource Investments
Regulators expect to continue to see a rise in energy and precious metals scams promising quick, high returns. Investors anxious to recover losses quickly likely will be hooked by oil and gas schemes, natural gas and the development of new energy-efficient technologies.

6. Ponzi Schemes
Despite the heightened awareness of Ponzi schemes following Bernard Madoff’s multi-billion dollar fraud and 150-year prison sentence, these scams continue to trap investors. The Ponzi scheme is a house-of-cards swindle in which high returns are paid to initial investors out of the funds of later investors, who end up losing all or most of their money to the promoter. Struck urged investors to beware of investment opportunities promising high and steady rates of return. “While some Ponzi investors may have a slight chance of realizing a return on their investment, most investors have from the outset no hope of recovery. Ponzi schemes are the securities world’s equivalent of a purse snatch,” Struck said.

7. Private Placement Offerings
Private placements offer businesses the opportunity to raise capital by selling securities to a relatively small number of investors as opposed to a public offering made through national securities markets. State securities regulators have observed a steady and significant rise in the number of private placement offerings that are later discovered to be fraudulent, especially those made under a federal registration exemption (Regulation D, Rule 506). Companies using this exemption can raise an unlimited amount of money without registering the offering with the SEC, and federal law preempts the states from requiring registration, so the exemption creates a method to raise capital with very little regulatory oversight. Although properly used by many legitimate issuers, the exemption has become an attractive option for con artists, as well as individuals barred from the securities industry and others bent on stealing millions of dollars from investors through false and misleading representations.

8. Real Estate Investment Schemes
These often claim secret or exclusive techniques for building wealth, and offer loans or suggestions to finance the investment, such as remortgaging houses. If real estate is bought for a set price and ownership is on a set date, that is likely a real estate transaction. If the seller continues to own the property and only sells an interest, then it might be a security.

9. Short-term Commercial Promissory Notes
Many seniors have lost their life savings by investing in short-term commercial promissory notes that are nine months or less in duration. These notes may be touted as being “insured” or “guaranteed,” but the insurance companies generally are located outside of the United States, are not licensed to do business in the United States, and lack the resources necessary to deliver on the promised guarantees. Unlike publicly advertised promissory notes, promoters of these notes usually attempt to use commercial paper exemptions as a basis for selling the products without registration. The commercial paper exemptions apply only to high-grade commercial paper traded by major corporations – not to these risky notes pushed to the public by a sales force paid with extremely high commissions.

10. Speculative Inventions and New Products
New products are for venture capitalists who know how to assess the risks. They are not good investments for your retirement money even though they may promise high returns.

go ahead share your thoughts with me now, my ears are open. I'm always eager to hear what you think.

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Tuesday, August 18, 2009

RIP Robert Novak (1931-2009)

FOX News has just confirmed that Conservative Columnist/Journalist Robert Novak has died. He was a syndicated columnist, journalist and conservative political commentator who wrote the longest-running current U.S. syndicated political column (45 years, as of February 2008).

Over his career, Novak became well-known as a columnist (writing Inside Report since 1963) and as a television personality (appearing on many shows for CNN, most notably on three former programs, The Capital Gang, Crossfire, and Evans, Novak, Hunt, & Shields).

Novak announced that he had been diagnosed with a brain tumor and that his prognosis was "dire" on August 4, 2008, and that he was retiring.

However, on August 27, 2008, he resumed writing opinion columns distributed by Creators Syndicate.

He was 78.

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TED Report - Aug 2009

Well it has been about 2 months since I had The Energy Detective (TED) installed. One of my best friends, is an ardent conservative, and when he hears me refer to my TED, he likes to call it the TEDDY, as in Kennedy. However, it is a useful tool to get an idea of how much energy you are wasting using. If used properly, it will give you a good estimate, as to what your home electric bill is going to run.

This month, the last I looked at it (Aug 8, 2009 @ 8 pm) before it cycled into another month (on the 9th), I had used 806 KWH for an estimated expense of $74. The actual bill read 759 KWH used this past month for a total of $85.06. However that included $8.58 for the Parameter Area Light (PAL) and $2.23 sale tax. Which means the estimated $74 was right with the actual $74.25 of actual electricity used.

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Wednesday, August 12, 2009

Can You Have To Many Savings Accounts?

Recently, the Debt Hater over at Debt Hater asked, "How many savings accounts do you need".

Which made me stop and think, does she have to many savings accounts? Do I?

I have seven. I know, cluck your tongue and shake your head. I'll break it down:
Emergency Fund: 3 accounts. One hi-yield online account, one online CD, a Suze Orman Save Yourself account with TD Ameritrade
Travel: 1 account, hi-yield online
Annual expenses (such as Christmas shopping): 1 account, hi-yield online
Retirement: 2 accounts. One 401k with employer, one IRA with regular bank.

OK, so she has 7. How many do I have and for what purpose? nine (9), yep that's right and I am thinking of opening a new one. Only thing is mine are used as my budget envelopes. So what are they?

  1. My Simple IRA (through work) is at Security Benefit

  2. Rollover IRA (funds I rolled over when my employer was bought out)

  3. My Share Builder account
  4. Christmas Club is at a local Credit Union

  5. Home Maintenance Savings is at the same Credit Union

  6. Travel Savings is the fund for travel expenses

  7. Insurance/Emergency fund is at another local credit union

  8. Clothing fund is at yet another local credit union

  9. Charity Savings is a fund at still another credit union for charitable donations

Now, why would I consider opening another savings? Since, I use cash for gas, I thought it might be a good idea, to go to a local bank (Capital Federal) and open a savings. The reason, to even talk to a teller, you have to to have an ATM card and swipe there at the teller window. So if I opened a savings account there, could I make that ATM card my gas card? So that I wouldn't have to carry cash for that. That would allow me to make my regular checking account, into an account just for paying bills. However, it would mean I would need another account just for food.

What do you think? Is this a good way of doing the budget envelopes while saving money at the same time?

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Tuesday, August 11, 2009

Marriage? Is It Right?

Recently, I have been thinking about marriage. My girlfriend is the most wonderful woman I ever met. No other woman I have dated has seemed so perfect to me, as the lady I am dating now. However, is marriage right for us? Now?

Financially, it would be good. Eliminate her rent payment and utilities. Leaving the two of us with just her debt and my debt, as well the utilities I already pay on this house. However, finances is not the only thing to consider for marriage. Even though, for the purpose of this blog, it is a major topic.

Still though other things to consider is:
  • Happiness

  • Although expecting a spouse to make you feel happy all the time is unreasonable, being with the right person can bring happiness and a sense of personal strength to your life.
  • Support and Encouragement for each other

  • If your future spouse says "I love you" not only in words spoken, but by loving actions.

  • They are someone who you like and who is your friend

  • kind, considerate, and polite

  • my current girlfriend is always telling me that I don't need to hold the door open for her, but at the same time she is very appreciative of it.
  • Communication is key

  • The right person will trust you and not monitor your phone calls, or computer usage, or limit the amount of time you spend with others you care about.

  • The right person will trust you and not spy on you

  • I love her and want to spend the rest of my life with her. As I said before, she is the most wonderful woman in my life. I want to get this house fixed up for her. Unfortunately, it may mean incurring a little more debt to do so, but some things can't wait, if she is to be in the house to.

    go ahead share your thoughts with me now, my ears are open. I'm always eager to hear what you think.

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    Friday, August 7, 2009

    Passion Saving

    I recently finished reading Passion Saving (The path to plentiful free time and soul-satisfying work) by Rob Bennett.

    Bennett doesn't follow the normal advice. He says
  • Avoid Sacrifice
  • Stop putting money aside for your old age

  • he claims that the
    aim of this book is not to help you to try to save as you always have, and succeed where before you failed. It's to urge you to adopt an entirely new way of looking at money management.

    Once I started reading the book and got past the introduction, I started getting the feeling he really wasn't that much different then Dave Ramsey. Sure the media loves playing up the phrases, "Stop putting money aside," "Avoid Sacrifice," and "how to spend more then you earn" (also a Chapters title), but in reality he seems to really be saying that he thought saving meant doing w/o things he wanted to own. Instead he learned, that saving done right, is about making your life richer and fuller.

    When you feel you have an obligation to spend, you rarely produce "much in the way of saving, because for most people, most of the time, the urge to spend wins the tug of war."

    Dave Ramsey is often heard telling listeners and followers to save up for that new car, jet ski, vacation or whatever you want rather then borrowing for it.

    Bennett says,
    Spending and saving are not opposites. They are two sides of a single coin, alternative means of achieving the same general purpose. You save for the same reason you spend, to achieve your life goals. Saving doesn't come from holding your spending drive in check. It comes from seeing how that drive can in some circumstances be better realized by putting off spending for another time. The purpose of saving is to permit future spending.

    I would agree with part of the concept that says we shouldn't have to force ourselves to save, rather it should be fun.

    Also, I would agree that we should take baby steps (as Dave Ramsey calls them) towards retirement, rather then trying to save for the final goal.

    Each of his (Bennett) points, I would be like, "yeah right. That's stupid." But, once I read where he was coming from, I began thinking, "well maybe, it's not so stupid."

    I highly recommend that you get a copy of Passion Saving, by Rob Bennett and read it for yourself today. It might just give you a new way of looking at saving. That motivation, to finally do what this blog encourages you to do, saving for everything.

    Money is coined liberty.
    - Fyodor Dostoevsky

    go ahead share your thoughts with me now, my ears are open. I'm always eager to hear what you think.
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