Easy Change

To me, its all about retirement. Retiring well, retiring earlier. These are my two goals when it comes to money. And the only way I've been able to work toward that goal is by working on both sides of the expenses/income equation. Reducing expenses comes in the form of paying off debts and scaling back spending and avoiding -- and I mean avoiding like the plague -- any type of installment/interest-based debt. Income generation is either finding ways to make more money in the same amount of time or finding more jobs or income sources. Staying in a budget is the best way to keep track of these changes and ensure that the equation is balanced favorably. Ideally, I'd like to see that I am spending only 75% of my income and saving 25%. That would get me to retirement fast. I'm not sure if that will ever happen; its a lofty goal. Improving The System The system for doing all of these things is my budgetting spreadsheet. I am obsessed with it. That is not a joke or an understateme...

One of my major goals for this year was to take all of the information that I had gathered and get my budgetting spreadsheet updated with all of my personal information. The way that I keep myself in check with money is by using a budget. And the way I stick to the budget is by using a simple excel spreadsheet that I created that has my own personal layout that suits me. It also serves to make sure I get my bills paid on time and keep my accounts balanced. New improvements for the 2007 spreadsheet include bill categorization. During 2006, I had all of the bills itemized which is fine and I will continue to do, but I found that I was really interested in keeping the money in categories -- but probably not the ones you are thinking of -- categories of expenses. For me, there are just three categories: recurring, debt, savings. Recurring expenses or (inescapable expenses) as I like to call them refer to expenses that happen every month and generally cannot be avoided. The sum of these ex...

As 2006 is coming to a close, I have decided to redo some of the work that I have done on my budgetting spreadsheet. I feel like there is quite a bit more that I would like to do with it so that I can better track my expenses and income. With any luck, I will be able to get these items done in time for the start of 2007. The nice part about this year is that now I have been budgetting for a full year and I really think that I have a good idea about what to estimate for next year's expenses. And that is a big bonus in terms of planning. Usually, it is fly-by-the-seat-of-my-pants for most of the winter, which, in combination with the cold weather and dark days, often leaves me tired and depressed. But this year is different. I've managed to figure out exactly what I think will be needed for those nasty miscellaneous expenses that always seem to jump out from behind a tree and scare the daylights out of me during the middle of the year. The nice thing about planning is that it rea...

Six thousand dollars. Unfortunately, that is just a small fraction of the student loan debt that I currently carry, but I am taking some great positive steps. One of the steps that I am taking is to work on getting these amounts paid off by figuring out (one bill at a time) where I can put them to reduce the amount of interest I am paying and therefore improve my overall progress toward paying them off in total as I make each monthly payment. Interest is a huge killer for me, especially on this one loan. It was up near 8.5% because of the variable interest rate. the problem, of course is that The Student Loan Corporation ( STU ) was moving my interest rate around. And I really wish that they (along with other student loan lenders) were more up front about the amount of money that I was wasting in interest and how long I would have to be paying off the loan. Learning my lesson was not easy but I have learned it. Thankfully, I have nice credit and get offers from other credit card com...

So I checked into my Fidelity 401k account this morning and I am noticing new tabs and things that I haven't really looked at before. Of course, one of my biggest regrets is that I didn't start saving for my retirement earlier and with a higher deduction from my check. But that's water under the bridge and all I can do now is try to catch up. So I was checking out the Fidelity site and just seeing what is there and available. And I noticed that one of the things that was there was a quick checkup type thing that you can do. A Simple Calculator The nice thing about the fidelity calculator for retirement is that it lets you see a "monte-carlo" type simulation so that you can figure out how much you will have on the upside and the downside, rather than just giving you a flat average like most plans do. Personally, I am on track to meet my own personal goals, but if I were to rely on fidelity, I would be in way over my head. Inflation Runs Amok Quite simply, inflation...

So I am done with my shopping now, but I realize I spent about 100 dollars more than I wanted to. Some of it was on "incidentals" that were part of a fun day of shopping out with my mom. Other items were small, but somewhat pricey treats for myself that I couldn't pass up once I was in the mall. And finally, I just plain overspent on a couple of people. I am a soft-touch. What can I say? The nice thing is that all of this money was "extra" that was earned from side income and therefore this didn't go on credit cards and also did not impact my normal bills/income cycle for the month. I generally regard the secondary income as "play" money that I either save, spend, or invest and don't worry about it too much. However, it is difficult because I definitely sense that there is a bit of an issue with regard to emotions and shopping. I rationalized many of my purchases by reiterating that I was "making more so I could spend more". Or that...

I just finished reading about an interesting ruling with regard to a tax on telephone and cell phone usage. This ruling stated that a refund for tax will be available for the 2006 tax form. According to the IRS, "the telephone tax refund is a one-time payment available on your 2006 federal income tax return, designed to refund previously collected long-distance federal excise taxes. It is available to anyone who paid long-distance taxes on landline, cell phone or Voice over Internet Protocol (VoIP) service. " Like many items on taxes, there is a standardized refund amount of between 30 and 60 dollars and a form that will help you calculate if you can get more back: Form 8913. Using this calculated method could get you easily over 100 dollars of savings provided that you have documentation (telephone bills) from the last several years. Go to the IRS Site FAQ about this refund to learn more. http://www.irs.gov/newsroom/article/0,,id=161506,00.html Personally, this is just anoth...

Forbes wrote this article that is a bit of a laugh if you have a spare minute. I especially got a kick out of the "Spam" entrepenuer. Here is the article in all its glory if you are interested in reading something fun. In holiday shopping news, I am going to try to finish up my shopping with Mom tomorrow. That will put me squarely on task to start planning the Christmas party I am throwing next Saturday. Wish me luck, bargains and good holiday budgeting! :)

So I've started using NetWorthIQ to track combined net worth. And I like the simplicity of the system but the problem is that there are these categories, that I really like, but it really creates a feeling of "keeping up with the joneses". I click on people who live near me, have the same level of income or type of job and then I find that I am painfully behind them. What does this do other than make me upset and feel "less-than"? Bollox. Anyway, now I am in the process of figuring out what is going to work for me and keep me involved over the long haul. That is my main concern now. I've been able to keep track of the financial stuff via an excel spreadsheet and I think that it is really nice but I don't feel the need to get too much more involved than that. I think that I will never really get to the point that I really need to get into quicken or ms money. It just seems like more work than is necessary for me. Bottom Line: total net worth increased ab...

Unfortunately, this year I feel a little bit under-prepared for the upcoming holiday season. I am still managing to generate some extra income so I am not so concerned about spending a decent amount. However, the problem is that I cannot figure out exactly what is "decent". I need to buy presents for a fairly short list of people, but I would really like things to be nice and well-thought-out. I generally try to make it easy for people to shop for me by creating/updating my amazon wish-list as my birthday and christmas roll-around. I encourage people to buy used items from reputable sellers because I have had very good experience with that before. For music, books, and dvds, it doesn't matter to me if they are used as long as they work. However, depending on the person, the might consider getting a "used" gift to be tacky. So I would check with people beforehand. I generally like it because that means I will get more of the stuff that I want rather than just on...

As I get ready to wrap up another year, it seems there's always more financial work to do. Not long ago I went through my seasonal save-it, pitch-it fight with all the old bank statements, paperwork etc. However, I am realizing that the real interesting thing for me right now is getting ready for tax time and figuring out how much of a refund I will likely get. I know that I am going to get some flack for this but I have extra tax taken out of my check each pay period. Mostly, I do this to make sure that I never underpay my taxes. The other nice feature about this is that it provides some built-in buffer against my side income so that I am not whacked with a large amount of money in tax at the end of the year. This little extra kick in each regular paycheck means that I can generally use the side income as I see fit throughout the year. So now I am in the process of divvying up my expenses and such for the year into categories and getting ready to start filling out the forms on...

A few weeks back, there was a short article on InvestorGeeks about "Why the Poor will Always Be With Us". I found the article thought-provoking, but the point made by <a href=" http://jason.strangerstudios.com/ ">Jason</a> was particularly interesting. Jason Commented: <begin comments> I'm thinking of my father, who in 2001 bought a brand new Jeep Grand Cherokee because he "needed something to make him happy". It didn't matter that a lot of what made him unhappy were financial problems, which the extra $20k he paid for that car vs. a comparable used car would have helped him out with. I'm thinking of the guy you know who lives in assisted housing but has a more jewelry than you do and better stereo system than you do. If either one of the people in the above scenarios had $30k in a "retirement account" they could gain access to, they would find a reason to spend it. The money feels idle and psychologically these peo...

Does everyone remember any childhood trips away from home? I remember going away to camp and feeling a little bit sad and lonely when other campers would get mail to open and whatnot. The same is true for college when you feel like you are far from home and days on end go by without hearing from loved ones.   Xerox has captured this feeling/idea and put it to work to benefit soldiers in Iraq. Regardless of how you feel about the war, I think it is a great way to do a little something that doesn't cost anything but a moment of your time. It is a site where you can add your name, town, and message and Xerox will copy a card designed by a child and include your message and send it to a soldier in Iraq. And it is free.   Go to <a href=" http://www.letssaythanks.com ">lets say thanks.com </a> to fill one out.   http://www.snopes.com/inboxer/nothing/letssaythanks.asp

I just got a mailer from my bank that I was being offered 1000 dollars of free life insurance. The option, of course, is available for me to get more if I would like, all the way up to 300,000 dollars with no medical exam. Unfortunately, the costs are prohibitive so I do not want to do that at this time. Plus I am covered by my work policy and an additional add-on policy that gives me another 10000 dollars in coverage. The standard stuff applies to both policies in terms of accidental death and dismemberment. Quite a morbid clause really, but I guess it is better than being out of luck if you lose a limb. So, after reading all of the paperwork, I feel comfortable that I can go ahead and send it in which is what I plan to do this weekend. I have to wonder though, did they get my name through the gold card that I recently got? Why all the sudden show of generosity from my bank?

So, not too long ago, I was at the sporting goods store and I went up to pay for my purchases. Nothing terribly exciting really, except that when I got up to the counter and swiped my card it was denied. I of course tried again to no avail when I realized that my debit card was expired. I was not terribly happy about that because I it put me off and I had to use a different card. However, life went on and after a nice dinner and a beer, it didn't seem to matter much. The next day, I called my bank to ask about getting a replacement card. They claimed they had already sent me one, which I never saw so they promptly offered to send another one, free of charge. Also, they would upgrade me to a "gold card". I thought, gold card? I don't want any credit junk here. They said it was still just an ATM card, but that it had additional services like AAA (Mastercard's version of roadside assistance). I thought that was great since it was free. However, I am now hard pressed...

On saturday, I went to IKEA in stoughton, MA and it was very different than I expected. It had a european feel, which is to be expected from the Swedish Home Furnishing's Store given their roots. However, I was also impressed with the prices. They were relatively affordable, even for someone who doesn't have tons of money. Unfortunately, though there was not much that was really ideal for my home because the stuff is definitely not at the same level of quality; but I wish that I had known about it when I first graduated college. It is a great place to go if you want to decorate stylishly and then redecorate every 5 or so years.... Or you are on a budget and cannot afford to pay lots of money for furniture.... Or you know that you are going to have to setup house in a very small apartment or rooms (since much of their furniture is scaled down). On the plus side, I bought several items that were only a dollar and it was fun because I got some christmas shopping done since I...

Well, I just recieved a comment from someone from walmart apparently which indicates that they are working to remove the articles from their stores that are offensive; refer to the previous post to get more information. However, I think that this is an excellent first step and I am glad that they appear to be taking this so seriously.

I just came across this article and thought I would share. I think it is definitely worth reading and then doing some research on. I don't know enough to know if it is untrue or not. Clearly, I am not an expert on these matters, but the <a href=" http://www.bentcorner.com/2006/11/09/wal-mart-is-selling-shirts-with-a-nazi-ss-skull-on-it/ ">implication that Wal-Mart is unknowingly selling clothing that perpetuates nazi thinking/neo-nazi stuff</a> is kind of scary from a stock-holder point of view. Again, just check out the article yourself and then make your own decision after you do some research. I'm glad I don't own any shares though. I would not want to have my money in a company that is getting this kind of negative publicity.

Personally, I spend just over 650 dollars per month just in transportation costs; this includes my car payment, insurance, fuel, and my commuter rail pass for taking the public transportation. However, yesterday it was announced that my commuter rail pass was going to increase by 22 percent and that there were likely more increases coming. For me, this puts my transportation costs at over 700 dollars per month. This is about a quarter of my entire net pay each month. This is absolutely insane! I am looking forward to eventually being done with my car payment and I am going to now look into reducing my car insurance bill to try to offset the increase. However, as much as I am concerned about my own wallet, I am also concerned about the social implications. This change will result in approximately 11.9 million fewer riders of the mass transit system which will mean more pollution and increased emissions contributing to global warming. This is a real concern. Furthermore, the poorer you...

There's an expression "Robbing Peter to Pay Paul" that we have in the english language. One of my majors in college was Spanish and my favorite part of the language is the fun idioms that there are. Its no different in English. In fact, I think that some of them are even funnier in your native tongue because you can really get all of the implications. Anyway, I have a loan that I've successfully paid down to about 6500 bucks; it was a student loan from college but it doesn't fall into that nice stafford loan category. So, instead, I am stuck paying on it monthly and there's no tax deduction for the interest being paid. Recently, the interest rate (which is variable - don't ask me why) shot up to 8.5%. That was the final straw for me; I knew that I could get a 0% interest credit card offer and save myself gobs of cash, albeit by taking a small ding on my credit score. However, after a month or two of contemplating, I finally got an offer from the Credit Ca...

Whenever you think of the talk, you think of safe sex right? The birds and the bees? Well, when it comes to personal finance and talking to your parents, the talk is when you talk about how they plan to handle the difficult stuff like what to do when they retire and all of that. Yesterday, I gave my mom a call and she was not busy and thought it would be a good idea for me to come over and we would talk about "money stuff". So, when I got over there I was totally impressed. Without even asking, she had written out exactly what her income and expenses were. She had a paystub to show me what she is currently contributing to savings and retirement accounts and was quite at-ease about the whole thing. This made me very happy and comfortable because I know that despite some of the debt hurdles and other issues she is facing, there is a reasonable plan to deal with them. We talked about how she would handle her debt and also discussed a couple of small steps for her to do. Next tim...

Well, a big project just wrapped up at work and I was super busy doing all of the work for close to a month. So, on friday, my boss came by with a small bonus giftcheque. It was a really nice touch and made me feel good that all of my hard work hadn't gone unnoticed. After a little bit of thinking I decided that it would be mad money. I have been doing really well lately and I'm continuing to save and pay down debts etc, but once in a while, I think it is really good to keep some perspective and really enjoy yourself. This little unexpected bonus was just the right way to do it. So, I went to see my cousin later that day and we splurged at Starbucks. It was a fun time and a nice way to spend some of it and a nice way to start the weekend.

Most of us remember last month's ban on spinach due to E coli, one of those nasty intestinal bugs that can easily cost you significant cash by putting you out of work, into the hospital, and for some who are really unfortunate, even kill you. The situation is not much better for those who drank contaminated carrot juice made by bolthouse farms, the producers of one of my favorite drinks - a strawberry/banana blend of juices which are quite tasty. In the end, there is not much to say about the ideas of prevention because in these circumstances, there is not much that can be done at the consumer level with regard to prevention. So, as was done by many, these products are simply avoided or banned by federal agencies to ensure that people don't get sick. <b>What does this mean to your Investments?</b> It does not take much imagination, however, to recognize that this is going to have a significant impact on your investment portfolio if you hold stocks of these compani...

So its been about two months; I've started exercising regularly and I have to say that I am pleased with how it is going. I feel much better about myself and I am noticing that I am not quite as out of shape as I used to be. Of course, there is a long way to go still, but I think that I am on the right track. Figuring out why I didnt like exercising was pretty much three reasons:  - I didn't have a good time to go. Before work was too early, and going to work out after work was stressful when all I wanted to do was chill out and eat something after work.  - The idea of paying for a gym membership also drove me nuts because I never used it. I really didn't need my gym membership . So, recently, I rescued a weight bench from someone's basement and I've started exercising. Slowly but surely it is working. I can do it when I am in the mood or if I am bored. It cost me nothing. And best of all, it is convenient and impossible to ignore since I walk by it on m...

Well, I used to put the ING referrals up by hand, but now I have put up a box on the right hand side of my layout so you can just enter your email and ask for a referral link. This is much more efficient instead of having to repost them when/if they expire. So, let me know if you want a link.   In other news, I've switched to a blogger beta&trade; account which I like much better since the tagging available and I like my non-standard layout now too. Maybe I will get around to creating a banner for myself soon too. That would be good.

Well, I have figured out a plan to start tackling the next debt. It calls for about 340 dollars per month going toward this debt. The difficult thing will be sticking to it through the long haul. If the income side of things continues as I am forecasting, and I am being conservative here, then I will be doing this routine for about 19 months. That assumes no major changes or shifts in the meantime. Of course, there is always a chance that more work could come in faster, but I dont want to plan on that. So, for right now, the plan is to have this student loan paid by the end of June 2008. I'll work like heck to get it paid off before then, but I am curious if I will be able to make it or not :) The one thing that I havent figured out yet is whether or not a 0% interest credit card transfer is something I should try for or not. By my calculations, in less than 6 months I will be down to something like $25 dollars or less in monthly interest. I just wonder if the potential ding to my ...

Well, the unbelievable has happened; the absolute final credit card payment was sent and now I am wondering what is next. For the past several months I have been saying that we are working toward the credit card debt getting paid off but now I am looking at our other debt and it would be great to get that paid off too. So the question is, what is next? I currently have three student loans but one of them is a very high interest rate (it might as well be a credit card; its a variable rate that currently is squatting at 8.5%) whereas one of the others has no interest and the third loan is tax deductible and I get the full benefit of that deduction every year. So, that makes the next target my student loan. I just wish the balance wasnt so much. Right now it hovers somewhere around 6500 dollars, but that seems like it will take forever to payoff. Currently I am taking extra money that I earn on the side and throwing gobs of it at this debt, but it still seems like it will take a long time...

This past week I was getting ready for the year end madness with my taxes by reviewing my business checking account and figuring out what was deductible and so forth. The bad news, I discovered was that last winter in Janaury, I went out to eat at a bar in Boston. However, the amount that the bar charged me seems too high. Given that the account did not have much activity on it for several months during this time of year, I got lazy and wasn't keeping track of it. Figuring out if there was an error should be easy, I thought. I will check with my bank and try to get a receipt. Well, it turns out that any charges on my bank statement must be disputed or questioned within 60 days or there is nothing that can be done. So, the nice customer service rep at my local branch explained the situation to me and now I believe I might be out 40 bucks. Again, not the end of the world, and I've learned one valuable lesson about keeping up on my account statements. At 40 dollars, maybe that is...

So, my plan is working perfectly. Some of the highlights this month include: 1. Started a ROTH IRA 2. Opened a separate investment account at an online brokerage 3. Finishing up the last credit card payment this month. I will continue to work extra and save money in this way for retirement and I will be grateful for the compound interest when I am fifty and have a nice nest egg. In other news, this morning outside of South Station Bank of America was giving away free $3.00 Starbucks cards to promote $0 equity trades given certain conditions/qualifiers. I won't be trading there, but I'll take the free gift!

Over the past few weeks I was wondering about this. Recently, I opened a paypal account so that I could receive income as I did some work on the internet. This account is currently just receiving money since I don't purchase anything using it. While at first I was a little anxious to get the money into my "real" bank account as soon as possible, I soon found that the money that I was getting in the account could be setup to compound at a nice interest rate by setting up a money market option. So far I haven't even earned a dollar on the money, but it is far better than having no interest at all. The trick to the interest seems to be waiting more than a month since the interest is not paid out all that often on these high-yield/online accounts etc. For household savings, we have an ING account as well which pays interest and including the account bonus that was earned, that account has earned over 40 dollars in interest. This is totally free money because it took no ad...

The title of my blog here is easy change but recently I might have bit off more than I could chew. I stopped playing World Of Warcraft . Although it was a bit of a difficult decision, I think that it is for the best over the long run. It will save me money, close to two hundred dollars a year, in fact. And what's more, I am spending more time taking care of the chores, working, and exercising. This brings me back to one of my original wants when I started this blog not long ago though, which is a new bike. Since walmart has them at prices under 100 dollars, and I've been doing really well lately with money, working, and debt....it might be the perfect little purchase. I will say this though. I do hope that I can keep this up and not get too overwhelmed. I think that the key to this is to make sure that I am still enjoying myself doing what I am doing. And the nice thing is that I've replaced WOW with not just one activity (work), but also some different extra activities tha...

It sounds really silly, but very often I am ordering pizza out. However, there was often a desire to buy a full large pizza for each person, even though it was probably more than was needed. Recently in our house, we've gotten better at this and we split one pizza. It controls the amount of the food that we eat so that we dont go overboard in terms of calories etc AND it saves money since one pizza is not being bought. After we eat our portion, we are often satisfied but not overstuffed and it was just the right amount. So, when purchasing any kind of take-out food, really consider whether or not the amount you are ordering is realistic. No one cares if you split something when you are eating at home. What's more, some people can really take this advice to the bank when New Years rolls around. There's always too much leftover chinese food!

Not long ago, I read an interesting article where Steve Pavlina explains how to improve technical skills . This got me to thinking about the opposite side of the cashflow equation: the income side. Most people in the personal finance community seem to focus on saving money, and being frugal, and minimizing expenses. All of these are items that are generally about the expense side of things. But the income side should not be forgotten, just because it is often more difficult. Getting a higher-paying job is often the most straightforward ways to improve your income. However, most people often stick in their current position or field when taking the next position. However, this is not always where the most money is made. After taking Steve's tips and a strong work-ethic, it is possible to perhaps branch off into other related fields, or at the very least become proficient in these skills. 3 Reasons it matters: 1. Learning more skills may change your ways of thinking. Often, problem...

I figured since I've been doing this blog for a few months, it would be worth taking a look at what we've accomplished: 1. First credit card completely paid off (over 1500 balance) 2. Second credit card almost paid off (only 435 dollars left after this month's payments) 3. Working more side jobs to generate additional income 4. Opened up a few accounts to start investing and building assets. 5. Opened up an ING Savings account and have already earned close to 50 dollars in interest. In the next six months I would like to 1. Get financial paperwork organized and ready to execute (will/trust? and power of attorney etc) 2. Finish paying off credit cards 3. Rebuild savings accounts to have at least 4000 dollars in savings + money for goals. 4. Save enough to go on vacation without putting anything on a credit card or any kind of pay-over-time. 5. Pay for christmas on a 500 dollar budget and pay cash for everything.

Home is where the heart is, but not necessarily your money. "The value of my home has more than tripled over the past five years, so I'm considering selling it and renting a house or condo to lock in the profit. Then I'd invest most of the proceeds in dividend-paying stocks. I just feel the housing market is going to keep weakening in the near term, and I don't want to lose these gains. My plan for early retirement would be shot if the price of my home fell significantly. What do you think?" This was a quote from a letter that was in a financial article I was reading recently. And upon reading that, I realized that this was something that I had often considered myself. Currently, the equity of the condo where I live is nearly 1.5x the current value of my 401k. This is amazing, but at the same time a little absurd. If I was strictly concerned about keeping my assets diversified, I'd have to come up with a few thousand to put in my 401k (assuming a 50/50 split) ...

Its not that amazing really, but this morning when I went to get my morning coffee at Dunkin' Donuts™, the clerk sold it to me for .51 cents. I was amazed and I wanted to throw it out there to anyone else in the Boston/Dowtown Crossing Area. It was the Dunkin' Donuts next to the Capital Crossing Bank. The guy actually rang it in to the register, so he might have miskeyed, or they might have mispriced it for .51 instead of say 1.51. Either way, it was good stuff.

Not long ago, I read this article about personal finance bloggers. One item that I have been noticing lately is that there are more and more financial bloggers. The fact that there was this article is an indication that I was not imagining this phenomena. I think that this is quite exciting because it indicates that there has actually become a very useful function of the internet and blogging. That is, to provide information about money in a person-to-person manner so that people can become more educated and handle some of these more complicated financial issues themselves. This got me thinking though. What does all of this mean though? What are some of the ideas that might come out as a result? Here's what I think could happen I think that we will begin, probably by Generation Z, to start seeing most kids graduate from high school and college with a thorough understanding of their own finances. This implies that they will understand how to save money, why they should, how to plan...

Here's a neat idea. If you are a bit low on cash for Christmas shopping, something that some family members might really enjoy is a mix cd of music. Here's the idea - if these friends and family are really into music, then it is likely that this will be something that they would enjoy. Up until now, most music had to be purchased in the store on a CD or downloaded using a napster-like subscription-based service or a pay-per-song method like the ITunes website. SpiralFrog is changing all of that. It appears that all of the Universal Music catalog will be available for free, advertising-supported, download via their site starting in December of this year. This would provide a great way to try-before-you-buy and perhaps even use the music to create gift CDs for friends and family in time for christmas. What a nice way to give something personal, but without spending money. And it is all done without stealing music through some shady website or peer-to-peer file trading system or ...

Over the past several weeks I have been separating out my expenses into two categories: escapable v.s. inescapable. The concept that I had in my brain in the beginning was rather abstract. But after reading the book "Rich Dad, Poor Dad", the concept became much clearer. My thinking is simple: in life there are expenses. There is no way around it. You have to eat. You need to have someplace to live. These are two examples of expenses that you will be incurring no matter what your lifestyle is. And you will be paying for some things until you die. Taxes are another expense like this. It never occurred to me how often people overlook this one. But, like the adage advises us, there's no escaping death or taxes. So this train of thought brings me to the question. If I have to eat, live somewhere, and pay taxes, What are the other kinds of expenses? The escapable ones! So, after a bit of thought, I was able to make a list of escapable expenses: Credit Card Student Loans Car Loa...

If you follow my blog, you will know that I was expecting that there would be some kind of settlement in my father's divorce whereby I might become the custodian of some money to be set aside for my now four-year-old brother when he gets older. It has been interesting so far in trying to determine what the next step is going to be if that money comes in. However, the point might be moot since it is unlikely that there is going to be any money that actually comes out of the divorce settlement for him anyways. But, in my world, better safe than sorry when it comes to stuff like this so I went on the net and found out a couple of interesting things. One of the key items when it comes to managing money for a minor is the age of majority. This is different in every state, but in this case, in massachusetts, it seems to be eighteen from what I've read. Assuming that this is the case, whatever I do with the money, whether it be invested or placed in another kind of account, it would b...

If you follow financial news, you are noticing that there is tremendous focus lately on inflation and the potential impact on our economy. The fact is, with gas prices increasing and other items' prices increasing, real inflation is higher now than it has been in recent years. And (almost) everyone is starting to feel the pinch. What many people are not considering with regard to inflation is the fact that the rich are not getting hurt by it nearly as much as the average person. Most of us have under 500K in total assets. People with fewer assets are accumulating less wealth than the people who have more substantial sums. In simple terms, rich people can afford the inflation. If inflation increases from 3% to 4%, the power of the assets that are accumulated by everyone does decreases. However, the rich don't worry about it. If they have 1 million dollars, each year, if it were invested in the stock market, these people have approximately 100k in income. This 1% increase means...

Almost everyone wishes at one point or another that they could get more done, or feels that there is not enough time in the day. Perhaps this is more of a sentiment in the Northeast part of the US or closer to major cities, but I think that it is still a topic worthy of consideration. Write It Down One of the major items that I have started doing over the past year is not procrastinating about developing my ideas. In some ways, I often find that my brain is somewhat of a wanderer. That is, when I am trying to work on a particular project, my brain will often consider other ideas. It is this "creative" energy and thought that is often the inspiration for most of my great work. The problem, for me at least, is that my left brain wants to stay on task. So, instead of taking that energy and capturing it and the ideas with it, I often lost it by staying focused on the task at hand. Focus on What's Interesting Since my mind was clearly more interested in the creative idea I was...

Minimum wages were recently increased in Massachusetts. The increase was passed by a democratic majority legislature. And yet again, in my opinion, this will decrease the amounts of money available for the middle class but not actually help the poor. Read the article from the Boston Globe about it here Often times, people think that more money is the solution. In fact, there is even a federal movement linking a reduction in Estate Tax to minimum wage increases. Linda Basch writes an interesting opinion article on this topic for those interested. But since this is my blog, I am worried about myself first. And what I can see is the following: As those with a lower wage get a hike of anywhere from 15-20% over the next two years, I will likely only get a total of about 6%. Granted, my salary is not close to minimum wage, but the strict size of the increase isn't all that worries me. It is the impact on prices. Prices are already in sky-high. Some say this is due to oil prices. And som...

You might love the debt you have on your student loans. Financial Planners generally like it too. It's for a good cause. It's cheap. And it's usually tax deductible. Now here's the kicker: many students don't actually get to deduct their student loan interest. Now you are probably screaming at the computer! What am I talking about? When many people file taxes, they are not actually taking advantage of the student loan interest deduction. What do I mean? Well in many cases, people pay their student loans on-time frequently and are not able to deduct them as part of their taxes. This is because when deductions are calculated for tax purposes, many people (especially young, recent graduates) do not itemize their deductions. And this is smart; here's why: In general, each year there is a generic amount of money as a standard set by the government in order to make life easier on taxpayers. So, instead of tracking deductible expenses throughout the year, most people s...

It seems pretty basic, but I'm surprised at how few people really think about it. In fact when I was in college, these ideas were not real to me at all. My grandfather tried to teach me the concept, but I never really grasped it. He said, "life is about managing risks." But I don't think that quite captures it. (Sorry, Papa.) Rather it isn't really just risk, its choices. Choices and wealth are directly and constantly related. Some fake examples relating choices to wealth 1. Parents choose to spend large amounts of money on their kid's education. As a result, the kid, Jeff, takes better classes and lands a better job and makes more money than would have been made otherwise. [Good Choice = more wealth] 2. While the Jeff is at college, he decided to skip out of some key activities and therefore had less exposure to important ideas from his classes. This lost knowledge kept him behind a co-worker (Jane) and he did not get a promotion and raise as fast as his co-w...

Not too long ago, I realized that the strategy was fairly simple for getting a handle on saving and cashflow. While earning extra income is not always easy, I realized that lowering my debt was the easier of the two to do. So, the key is to lower my standard of living and become accustomed to it. I've changed the following and it has made a big difference: - I eat at home more frequently. - I use my TiVo to record as much T.V. as I want to watch. - I bring lunch to work more. (Lean Cuisines at 3-3.50 each is about 1/2 the price of a take-out lunch at most places.) - I drive less and take public transit more. This has really cut down on gas costs. - I spend less on throwaway entertainment (trips to amusement parks, movies) and opt for permanent, reusable entertainment options (computer games, dvds, an Ipod, a TiVo (subscription paid up-front)) and healthy activities (like tennis or walking outside). - I buy a morning coffee far less, opting to make coffee at work. Instant coffee is ...

Even though we hear over and over in the media, we, as Americans are still charging up a storm. According to a recent Federal Reserve survey, the median balance on Credit Cards in 2004 was 2400 dollars. This does not bode well. This means that many people are losing 240 dollars or more annually, just on credit card interest payments. There are some bright sides to the survey though. Only 3% of all debt is Credit Card debt. This means that what is often termed good debt: mortgages and college, are much larger amounts. This is important because mortgages are debts that have an a tangible asset associated with them: real estate. In the event that these debts cannot be repaid, at least there is an asset that is available. Although the increase is somewhat concerning, it is not quite so large when you consider inflation and the fact that over 20% of credit card users pay off their bill each month. This means that many people are using their cards responsibly. The key to keeping our national...

Recently, I've discovered that there are even more high-yield savings accounts than I had imagined. However, for me, more important than the exact high-yield account that is used, I feel like these need to be my goals and guidelines with regard to my mid-to-long-term savings: Use it instead of Credit Cards for unexpected expenses but only when necessary. Covering 6 months of expenses is unrealistic for most people including myself. I will try 2-3 months as part of a contingency plan in the event of an accident, health problem, or unexpected Job loss. I know people don't think it will happen to them, but I worked with someone who had been laid off. So you should consider what you would do if you lost your job, if your roof caved in, if your car got wrecked. These are not crazy situations and it is important to be realistic about your plans if something like this happened. I think that cash or some other non-volatile holding is a good protection for at least some of their wealth ...

Paying off my debt is the first step though. I work hard. I think that most people would say the same thing about themselves. However, in this hustle and bustle of 403Bs, Roth IRAs, defunct pension funds and Medicare worries, we often lose sight of what retirement is all about and why these financial issues are so important. Recently, I had a nice, long vacation. Eleven days to be exact. And during that time I did some relaxing, some chores, and overall just enjoyed myself. This was what I would expect out of my retirement and what I am saving for. But I realized that many people are not in that position in their retirement. They are having to choose between their heart medicine and a decent dinner. This is not meant to scare anyone. However, the simple fact is that in our retirement we will likely be earning less than we do now. The worst shock of retirement for many people is realizing that the day they retire they will only have about 1/3 or 1/2 of the monthly income that they used ...

Most people follow the standard advice of financial planners and other advisors when deciding what debt to tackle first. This advice is usually fairly basic: pay off the highest interest debt first (usually credit cards) and continue to take that same monthly payment and apply to the next debt etc down the line until all the debt is paid off. But recently I considered this I am getting ready to start paying down principal on my student loans and last credit card. I discovered that this advice is not true for everyone, especially not in the case of a windfall. The reason that this is not true is because of the doom that compounding interest can bring. Here's a simple example to show you why time, not just your interest rate, should be a big factor in deciding your lump-sum payoff targets. Scenario There are two loans: one at 17.5% (a credit card with a 2000 balance) and a personal loan at 7% that has a 10000 balance. Each debt has a normal payment - the credit card is 125/month and ...

There is no avoiding it, the debt-income equation is the key to everyone's financial future. It is a key factor for everyone's fico score. If your monthly debt exceeds your monthly income, you are in trouble. It is that simple. And many people are in the same boat. The average credit card debt in the United States However, if you are in debt, how can you hope to repay it? Often times, interest rates for credit cards are the culprit. If you have a good credit score (check it at freecreditreport.com ), you may be able to do a balance transfer or negotiate with your current lender to reduce your rate. But what do you do when there is no way to get the rate reduced? Here are some options: 1. If you have an emergency fund , consider using that savings (either some or all) to pay off your credit card debt. It is likely that in this case you can mitigate your risk by paying it off in chunks over time to save money in interest and make sure you can handle any new expenses with existin...

Recently there was an article on InvestorGeeks about whether or not you should buy or rent. I am a proponent (for the most part for many people) that renting is the way to go. If you a renter and you have decided to embark on that quest to buy a home or condo, there are a few things that I would advise you to do and consider during the process that might save you tons of time and sanity (and that I wish I knew before I started!). Before the Purchase: 1. Consider the type of Real Estate broker you are getting. If it is someone you know and trust, that is great. However, be aware that there are two types of brokers - a buyer's broker and a seller's broker. Even if you walk into a real estate office and get an agent on your own, they might not be acting completely on just your behalf. It is possible to have two 'sellers' agents that is - each one advocates for the seller, even though one works with you to close the deal. Consider this before you commit to an agent. 2. Take...

One of the first things that I learned about personal finance from my grandfather is to have an emergency fund of six months worth of expenses. This still seems absurd to me in this day and age and given my income to debt ratio. Even though I think an emergency fund cannot be underestimated, according to a Federal Reserve survey, 8% less people even have savings accounts since 2001. The savings mentality is drifting away. Instead large percentages of people's net worth is in retirement accounts. This is a key mistake for most people. They confuse 401k loans and home equity lines of credit with emergency funds. In my opinion, neither 401ks or home equity should be touched until you are approaching retirement. Instead, a separate account (either savings or money market) should be set up and used for emergencies. That is the perfect self-insurance plan. It is for just what it sounds like - emergencies. Working at my first job out of college was great, but there were lay offs. Luckily ...

Double Your Money Fast When I was in middle school and high school, I would talk to my grandfather about investing. He would talk to me and teach me neat tricks like the Rule of 72 . Being interested in math and money, I was quickly interested. However, I found that the most difficult issue for me was that investing was so expensive. Even through college I was never able to get enough cash together for the minimum that was required for an initial investment in a mutual fund. My grandfather would simply say that the solution would be to save the money in a savings account until I had enough. This was difficult and it was not until I was able to start working at a job after college and had a 401k that I was able to do this, mostly because the money was gone before I even noticed it. This brings me to the main idea here. Although many of the nicer funds that I would like to get into today have high initial minimum investments like Vanguard , I don't feel pressured or upset by that any...