A great way to find free events in your area is to find a great local blog in your area. Do you have one that you use? Post the link and the city in the comments.
Miami - Miami FL On The Cheap
Thursday, June 30, 2011
Wednesday, June 29, 2011
Before Taking out Student Loans
Before you take out student loans, do a cost basis analysis. Will you spend more or less than you are expecting to make in returns?
Let's say that you want to get an MSW and become a social worker and it will cost you 80K in grad loans. You currently make 30K and think that you can get 40K if you had an MSW. That does not seem like a good return. If you do a loan analysis on a 15 year, 80K loan at 6.8% interest, you will pay $710/month in loans for 15 years. The 10K increase (which is not guaranteed) would bring you an extra $625/month if you cut 25% out in taxes. Therefore, you will be loosing money the first 15 years.
However, if you are currently earning 25K and think that you can earn 40K with an MSW after spending $40K on a degree, then it's worth it. The loan ()using the same terms) would end up being $355/month and the potential increase would be $937/month after taxes. It looks like you would be profiting around $582/month. That seems like a sound investment.
Let's say that you want to get an MSW and become a social worker and it will cost you 80K in grad loans. You currently make 30K and think that you can get 40K if you had an MSW. That does not seem like a good return. If you do a loan analysis on a 15 year, 80K loan at 6.8% interest, you will pay $710/month in loans for 15 years. The 10K increase (which is not guaranteed) would bring you an extra $625/month if you cut 25% out in taxes. Therefore, you will be loosing money the first 15 years.
However, if you are currently earning 25K and think that you can earn 40K with an MSW after spending $40K on a degree, then it's worth it. The loan ()using the same terms) would end up being $355/month and the potential increase would be $937/month after taxes. It looks like you would be profiting around $582/month. That seems like a sound investment.
Tuesday, June 28, 2011
Gifts for Close Family Members
I like giving gifts that will give back. I've given my sister the gift of a Roth IRA for Christmas one year. She now puts money in it on a regular basis and she's on her way to savings for retirement. Of course, you can only do this for a person you know well like your sibling or your child.
For my nephew that is coming soon, I was thinking of buying a small amount in an Educational Savings Account to kick start his college fund. Again, you must know the parents closely to make sure they won't already max out their child's ESA.
If you are the parent of a child, you can request for college fund contributions instead of gifts. Below is a link to a letter that you can use as a template. Stick the letter in the invitation and people can choose to contribute or bring a traditional gift. I think this works great if your child is small. If you hold a birthday party for a little one, you will receive more gifts than you will know what to do with, therefore, the gift of contributions is a great idea.
Child College Fund Contribution Request Letter
There are also savings bonds and traditional stock certificates that you can gift to a parent for them to place into a college fund. Can you think of another way to gift a college fund contribution to a child that you are not close to?
For my nephew that is coming soon, I was thinking of buying a small amount in an Educational Savings Account to kick start his college fund. Again, you must know the parents closely to make sure they won't already max out their child's ESA.
If you are the parent of a child, you can request for college fund contributions instead of gifts. Below is a link to a letter that you can use as a template. Stick the letter in the invitation and people can choose to contribute or bring a traditional gift. I think this works great if your child is small. If you hold a birthday party for a little one, you will receive more gifts than you will know what to do with, therefore, the gift of contributions is a great idea.
Child College Fund Contribution Request Letter
There are also savings bonds and traditional stock certificates that you can gift to a parent for them to place into a college fund. Can you think of another way to gift a college fund contribution to a child that you are not close to?
Monday, June 27, 2011
New App - Entertainment Book
The Entertainment Book has now come out with an app, the Entertainment Book Companion. The app will tell you what discounts from the book are available near by!
Thursday, June 23, 2011
Plans with Exceptions
If you have a financial plan, you know where you are going and why you are doing what you are doing, therefore, it makes it easier to save and spend less. However, even Dave Ramsey has made exceptions.
Step one of the baby steps for Dave Ramsey is save $1,000 for emergencies while you are paying off debt. However, he does specify that if you earn less than $20K per year, your baby step one should be save $500 for emergencies.
Be flexible and mend everything to your on situation.
Step one of the baby steps for Dave Ramsey is save $1,000 for emergencies while you are paying off debt. However, he does specify that if you earn less than $20K per year, your baby step one should be save $500 for emergencies.
Be flexible and mend everything to your on situation.
Wednesday, June 22, 2011
Necessities vs. Luxuries
The only way to manage your expenses is to realize what are necessities and what are luxuries. For necessities, all you need is shelter, food, clothes, and some bathroom products.
Shelter means a roof over your head in a safe neighborhood, not a nice condo in a nice area next to your work. Food can be as minimal as rice, beans, some fruits and veggies, and the occasional meat. Clothes means a couple of outfits for work and something to keep you decent in other times. And, bathroom products are your basic shampoo, soap, toothpaste, etc.
If you are spending money on anything else, you are spending money on a luxury. I'm not saying that you should never buy clothes again or eat rice everyday. What I am saying is that if you are in credit card debt, cannot understand how you could possibly squeeze any money from your budget for retirement, or are living paycheck-to-paycheck and are spending money on luxuries, then you have no excuses as you are able to make a change and be able to save up an emergency fund, funds for retirement, and finally money for something fun.
Everyone gives excuses as to why they are buying 'luxuries' and why they are 'necessities.' I've said that the reason why I pay for a downtown apartment is because having a car would be more expensive. However, I've lived in the suburbs before and have taken a bus. I just don't want to get back on the bus even though I would save hundreds of dollars a months.
I've heard people say that they use coupons and, therefore, the ready made food is cheaper. However, unless you are like the people on Extreme Couponing, you are probably still paying more. The way to know is to see what is the average price per pound for veggies, rice, meat, etc. I've found that using $1/lbs of food is pretty accurate if you stay to the meat on sale, whole chickens, and chicken drumsticks. Therefore, if a 16oz package of a ready made meal costs $2, I know I'm paying double for the convenience.
For clothes, people use the excuse of their work to shop. However, after you have a few work outfits, you really don't need many more. See if you can remember when your coworkers wore the same thing as they are wearing today. Most likely, you will not be able to answer that question or guess if they own 5 shirts or 20. If you can't remember their wardrobe, most likely they can't remember yours either.
Bathroom products can be expensive, however, if they are bought on sale, they can cost next to nothing. The trick is not to be brand specific, which is a downfall of many. Try out the shampoo on sale and you will most likely not notice the difference.
Just remember to ask yourself next time you shop if you are buying a luxury or a necessity.
Shelter means a roof over your head in a safe neighborhood, not a nice condo in a nice area next to your work. Food can be as minimal as rice, beans, some fruits and veggies, and the occasional meat. Clothes means a couple of outfits for work and something to keep you decent in other times. And, bathroom products are your basic shampoo, soap, toothpaste, etc.
If you are spending money on anything else, you are spending money on a luxury. I'm not saying that you should never buy clothes again or eat rice everyday. What I am saying is that if you are in credit card debt, cannot understand how you could possibly squeeze any money from your budget for retirement, or are living paycheck-to-paycheck and are spending money on luxuries, then you have no excuses as you are able to make a change and be able to save up an emergency fund, funds for retirement, and finally money for something fun.
Everyone gives excuses as to why they are buying 'luxuries' and why they are 'necessities.' I've said that the reason why I pay for a downtown apartment is because having a car would be more expensive. However, I've lived in the suburbs before and have taken a bus. I just don't want to get back on the bus even though I would save hundreds of dollars a months.
I've heard people say that they use coupons and, therefore, the ready made food is cheaper. However, unless you are like the people on Extreme Couponing, you are probably still paying more. The way to know is to see what is the average price per pound for veggies, rice, meat, etc. I've found that using $1/lbs of food is pretty accurate if you stay to the meat on sale, whole chickens, and chicken drumsticks. Therefore, if a 16oz package of a ready made meal costs $2, I know I'm paying double for the convenience.
For clothes, people use the excuse of their work to shop. However, after you have a few work outfits, you really don't need many more. See if you can remember when your coworkers wore the same thing as they are wearing today. Most likely, you will not be able to answer that question or guess if they own 5 shirts or 20. If you can't remember their wardrobe, most likely they can't remember yours either.
Bathroom products can be expensive, however, if they are bought on sale, they can cost next to nothing. The trick is not to be brand specific, which is a downfall of many. Try out the shampoo on sale and you will most likely not notice the difference.
Just remember to ask yourself next time you shop if you are buying a luxury or a necessity.
Tuesday, June 21, 2011
Nontraditional Earnings
If you are a teacher, a student with higher summer earnings, an employee that depends on the tourism industry, a tipped employee, an employee that must rely on commissions, etc., then you know that a monthly budget is not easy to do.
However, you might be ahead of the curve as research shows that setting a yearly budget is more accurate as people tend to overestimate slightly and, therefore, have money left over in savings. A yearly budget is a good idea for the nontraditional earners as you can take the average of your yearly income, or the income from last year and base a budget on that for the entire year. Then, split the budget by 12 to get your monthly budget. This means that some months you will have to dip into your savings and some months you can put money away into your savings.
The tricky part of an nontraditional income is not the budget, it's the savings. You must separate your emergency fund from your 'slush fund.' Your slush fund should be used for the drier months, during the summer by the teacher, on colder months for an hourly CA resort worker, etc. If you stick to your new monthly budget, you should earn extra on some months to leave in this fund and use the extra on the slower months.
However, you might be ahead of the curve as research shows that setting a yearly budget is more accurate as people tend to overestimate slightly and, therefore, have money left over in savings. A yearly budget is a good idea for the nontraditional earners as you can take the average of your yearly income, or the income from last year and base a budget on that for the entire year. Then, split the budget by 12 to get your monthly budget. This means that some months you will have to dip into your savings and some months you can put money away into your savings.
The tricky part of an nontraditional income is not the budget, it's the savings. You must separate your emergency fund from your 'slush fund.' Your slush fund should be used for the drier months, during the summer by the teacher, on colder months for an hourly CA resort worker, etc. If you stick to your new monthly budget, you should earn extra on some months to leave in this fund and use the extra on the slower months.
Monday, June 20, 2011
Windshields
If you are one of the unlucky people to have had your windshield broken, you know how unpleasant that can be because it is usually not the driver's fault. Because, it is likely not be your fault, you shouldn't have to pay for the replacement.
In fact, did you know that if your windshield is cracked or damaged by a rock falling from a truck, you can call up the truck company if you can get the name off the side or the back of the vehicle and some identifying information like the license plate. You can tell the company what happened, and often, the company will pay for the replacement of the windshield for you.
Also, if you woke up with a broken windshield or something hit you on the roadway, you may contact your state's Department of Transportation and explain the situation. The DoT should have a budget for this. I recently called the DoT for this issue and although, they had no specific person I could talk to, I spoke to the person who makes the budget and he asked that I submit all information to him directly for review.
Also, in many states such as Florida, if you have comprehensive insurance, they will cover the windshield replacement for any purpose.
In fact, did you know that if your windshield is cracked or damaged by a rock falling from a truck, you can call up the truck company if you can get the name off the side or the back of the vehicle and some identifying information like the license plate. You can tell the company what happened, and often, the company will pay for the replacement of the windshield for you.
Also, if you woke up with a broken windshield or something hit you on the roadway, you may contact your state's Department of Transportation and explain the situation. The DoT should have a budget for this. I recently called the DoT for this issue and although, they had no specific person I could talk to, I spoke to the person who makes the budget and he asked that I submit all information to him directly for review.
Also, in many states such as Florida, if you have comprehensive insurance, they will cover the windshield replacement for any purpose.
Friday, June 17, 2011
Don't Skimp on Things that Matter
I'm looking for a new used car and yesterday I needed to run a CarFax report, however, CarFax no longer has an unlimited option. Therefore, I decided it would be best to run another report for $3.75 from CheckThatVin. However, that report only let me know that the title was issued 4 times and the title is clean. CarFax usually gives service information, the amount of owners, accident details, etc.
Therefore, I ran another report for $6.99 because it was supposed to be comparable to CarFax, however, that had similar information. I did find out that the car was never in a collision, but I knew I could get more information.
I wanted to see the service records and ended up going with CarFax nonetheless. Therefore, the first two checks were a waste of time and money since I ended up with the company I knew was good in the first place. I wanted to know as much as I could before I spent a large amount of cash on a used car.
Moral of the story: don't skimp on the things that matter like used cars.
Therefore, I ran another report for $6.99 because it was supposed to be comparable to CarFax, however, that had similar information. I did find out that the car was never in a collision, but I knew I could get more information.
I wanted to see the service records and ended up going with CarFax nonetheless. Therefore, the first two checks were a waste of time and money since I ended up with the company I knew was good in the first place. I wanted to know as much as I could before I spent a large amount of cash on a used car.
Moral of the story: don't skimp on the things that matter like used cars.
Thursday, June 16, 2011
Investments and Holding On
A lot of people hold on to bad investments that they know they want to sell simply because people want to recover any losses that might have happened.
I've been skimming through Suze Orman's Young Fabulous and Broke and bumped into some common sense knowledge that not everyone follows. You must learn how to let go of investments that are no longer working. Once in awhile review your stocks and mutual funds and see if you would still buy them today. If you wouldn't buy them today, why are you holding on to them now when you can be making a profit somewhere else? It might be difficult to loose money in the stock market, however, the missed opportunity cost and the potential for further losses is too great so get out of the investments that are no longer working for you today!
I've been skimming through Suze Orman's Young Fabulous and Broke and bumped into some common sense knowledge that not everyone follows. You must learn how to let go of investments that are no longer working. Once in awhile review your stocks and mutual funds and see if you would still buy them today. If you wouldn't buy them today, why are you holding on to them now when you can be making a profit somewhere else? It might be difficult to loose money in the stock market, however, the missed opportunity cost and the potential for further losses is too great so get out of the investments that are no longer working for you today!
Wednesday, June 15, 2011
Library Benefits
I recently joined the local library because it's now a 5 minutes walk from my new apartment. The obvious benefits of joining a library and using it is to borrow books for free. However, I did not realize that libraries provide much more for their communities.
I'm guessing every library is different, but mine has started a new program where you can 'check out' a museum pass for ten popular museums in the city. The museum admission fee is waived with this pass.
Also, this week I picked a flyer that advertised free admission to a history museum that is across the street on the opening day of a new exhibit. On that day, if you RSVP, you may also attend a happy hour sponsored by local restaurants. The happy hour is free and will have beer, wine, and appetizers.
Joining the library has been paying off greatly so far.
I'm guessing every library is different, but mine has started a new program where you can 'check out' a museum pass for ten popular museums in the city. The museum admission fee is waived with this pass.
Also, this week I picked a flyer that advertised free admission to a history museum that is across the street on the opening day of a new exhibit. On that day, if you RSVP, you may also attend a happy hour sponsored by local restaurants. The happy hour is free and will have beer, wine, and appetizers.
Joining the library has been paying off greatly so far.
Tuesday, June 14, 2011
50-30-20 Budget Calculator
In my earlier post, I talk about the Liz Weston Budget. Now, MSN Money has put up a calculator on their website see how your budget breaks up in percentages and if you are on track if you follow this budgeting method. Please click below for this budget calculator:
50-30-20 Budget: A simple spending breakdown.
There are so many ways to budget out there, however, you know hat you are on track if you fit the definition of a strong budget for each personal finance expert such as Liz Weston, Suze Orman, or Gail Vaz-Oxlade.
50-30-20 Budget: A simple spending breakdown.
There are so many ways to budget out there, however, you know hat you are on track if you fit the definition of a strong budget for each personal finance expert such as Liz Weston, Suze Orman, or Gail Vaz-Oxlade.
Monday, June 13, 2011
How much house can you afford?
MSN money has a useful tool to see how much house you can afford. Before, going to get pre-approved, have an idea of how much you really want to and can take out in a mortgage. Use this tool to find out:
How much house can I afford?
How much house can I afford?
Friday, June 10, 2011
Mutual Funds Trading
Unlike stocks, mutual funds do not trade in the middle of the day. The stock market is open 9-4 eastern time and you can only buy and sell mutual funds at the end of the day. Therefore, even if you place an order during the day, it will not be executed until the end of the day. Also, if you want to see the value of your mutual fund, you must wait until the end of the day.
Mutual funds consist of a variety of stocks and it would be too difficult to compute the value of all stocks in a given mutual fund at a specific time as stock prices can change every second.
Mutual funds consist of a variety of stocks and it would be too difficult to compute the value of all stocks in a given mutual fund at a specific time as stock prices can change every second.
Thursday, June 9, 2011
Flexibility
Setting financial goals is the best way to achieve what you want in your financial life, however, you must also be flexible.
Recently, I had to raid my emergency fund for a non-emergency purpose: advanced rent of 6 months. However, because I was willing to raid my emergency fund, I believe I received a better deal from my landlord.
Also recently, I made the mathematical calculation to see if it was better to pay off my private loan aggressively or to take it slow now because I am still paying capitalized interest which counts principal and interest as interest payments for tax deduction purposes. My goal was to pay the loan down aggressively, however, after doing the math, it did not make sense until the capitalized interest was paid off.
Therefore, it is always best to be flexible if it benefits you in the long run.
My financial goals are now the following:
Recently, I had to raid my emergency fund for a non-emergency purpose: advanced rent of 6 months. However, because I was willing to raid my emergency fund, I believe I received a better deal from my landlord.
Also recently, I made the mathematical calculation to see if it was better to pay off my private loan aggressively or to take it slow now because I am still paying capitalized interest which counts principal and interest as interest payments for tax deduction purposes. My goal was to pay the loan down aggressively, however, after doing the math, it did not make sense until the capitalized interest was paid off.
Therefore, it is always best to be flexible if it benefits you in the long run.
My financial goals are now the following:
- Continue to contribute up to the match to my 401(k) (4% of gross salary)
- Make my emergency fund what it was before
- Contribute 11% of my gross salary to my Roth IRA
- Then think about saving extra for increased student loan payments in the future
Wednesday, June 8, 2011
Debt and Savings
If you have debt, you are probably aggressively paying it off, or should be. If you follow the Dave Ramsey Plan (or a version thereof as I still believe in high interest loans should be paid first), you will try to pay everything off before you save money for an emergency fund or in your retirement fund.
If you have student loan debt that will be dismissed after a certain amount of years because you work for a non-profit, for example, you might not want to pay off the loans quicker than you should.
In my case, it mathematically works out better if I pay the minimum on the loan that has capitalized interest because the principal and the interest is currently tax deductible. Therefore, I'm not in a rush to pay that off until the capitalized interest is paid off.
For me and the people whose loans will get dismissed, a savings account valued at the same amount as the student loan is necessary to feel the debt freedom that everyone should want to experience. This way, if something happens - you quit working for the non-profit, decide to move, etc., you have the freedom to pay off the loan in full and be debt-free.
If you have student loan debt that will be dismissed after a certain amount of years because you work for a non-profit, for example, you might not want to pay off the loans quicker than you should.
In my case, it mathematically works out better if I pay the minimum on the loan that has capitalized interest because the principal and the interest is currently tax deductible. Therefore, I'm not in a rush to pay that off until the capitalized interest is paid off.
For me and the people whose loans will get dismissed, a savings account valued at the same amount as the student loan is necessary to feel the debt freedom that everyone should want to experience. This way, if something happens - you quit working for the non-profit, decide to move, etc., you have the freedom to pay off the loan in full and be debt-free.
Tuesday, June 7, 2011
Netflix
If you find yourself renting movies at the store on pay-per-view, you should consider investing in the cheapest plan of Netflix. Now that you can watch hundreds of movies by streaming online, it seems like the way to go. You can also get the usual current movies from your queue. What's not to love about it?
Monday, June 6, 2011
Comparison Shopping
If you are looking to buy something, even if it's small like light bulbs, you can do a comparison search on Google Shopping. There of course are many other sites like Price Grabber and Nextag, however, I feel that the Google Shopping website is advanced enough now to service basic needs.
For example, I've been looking at mirrors for a long time. I found some for $10 at Ikea. However, after doing a Google Shopping search for wall mirrors, I found a mirror from Linen's and Things for $5, used 20% off coupon and received free shipping. Mirrors by the same company and of the same size went for over $50 on other websites. Not every deal is this good, but if you know what you want, you can walk away with great savings.
For example, I've been looking at mirrors for a long time. I found some for $10 at Ikea. However, after doing a Google Shopping search for wall mirrors, I found a mirror from Linen's and Things for $5, used 20% off coupon and received free shipping. Mirrors by the same company and of the same size went for over $50 on other websites. Not every deal is this good, but if you know what you want, you can walk away with great savings.
Friday, June 3, 2011
Micro Lending or Peer to Peer Lending Websites
If you are looking for a personal loan, great places to look are the micro lending or peer to peer lending websites. You apply for a loan and investors contribute a portion of that loan so that you have several people lending to you at one time. The interest rate is determined by what you want to pay, by what the investors want to pay, and your credit rating. Here are a couple of the more famous websites:
Prosper
Lending Club
The best use I can think of for this type of loan is for start-up money for a business. Don't consolidate your student loan debt using these websites as they won't come with perks such as IBR repayment or deferment options.
You could also be an investor to a person seeking a loan. The websites advertise high returns, however, be ware, as some of the high risk loan seekers do not repay and you, as an investor, will have to file for collections of your loan and you might loose the money you lent out. What I like about these types of websites is that you can lend $50 to 50 different people. This feature allows you to diversify yourself.
Prosper
Lending Club
The best use I can think of for this type of loan is for start-up money for a business. Don't consolidate your student loan debt using these websites as they won't come with perks such as IBR repayment or deferment options.
You could also be an investor to a person seeking a loan. The websites advertise high returns, however, be ware, as some of the high risk loan seekers do not repay and you, as an investor, will have to file for collections of your loan and you might loose the money you lent out. What I like about these types of websites is that you can lend $50 to 50 different people. This feature allows you to diversify yourself.
Thursday, June 2, 2011
Tax Brackets Explained
There are several tax brackets in the US tax system. If you earn more money, you pay a higher percentage on some of your earnings. Here is how the tax brackets break down:
To see how this would break down for other statuses, visit the Money Chimp Website.
The key to understanding the tax bracket system is that if you currently earn $34,000 and you are filing as a single tax payer, you are in the 15% tax bracket. If tomorrow, you will receive a tiny raise and your salary will be $35,000, only $500 of that will be taxed at 25% and the remaining $34,500 will keep being taxed at the 15% rate.
The key to understanding the tax bracket system is that if you currently earn $34,000 and you are filing as a single tax payer, you are in the 15% tax bracket. If tomorrow, you will receive a tiny raise and your salary will be $35,000, only $500 of that will be taxed at 25% and the remaining $34,500 will keep being taxed at the 15% rate.
Wednesday, June 1, 2011
Shipping - FedEx
If you are shipping something via FedEx, the cheapest way would be on a business account. You can easily create an account yourself at FedEx Open an Account Website. Not only are you saving money by creating an account, you are also saving your address and credit card information in the system, which allows you to use FedEx easily next time.
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