It’s the end of the year…it’s time to get organized! You need to look back at your bills throughout the year, your income and your other expenses…if you haven’t started your budget yet, now is the time! Make it a resolution to get your life under control and to get out of debt! Get mad! Make the decision that this time next year, you will be out of debt (or well on your way to being debt free) and stick to it.
Posts Tagged ‘accountability’
Get organized!
Wednesday, December 30th, 2009You shouldn’t always pick it up!
Monday, December 21st, 2009Today’s Mucho Moolah tip is simple but effective: Look, but don’t touch! All too often, when we go shopping, even if we tell ourselves that we’re only window shopping (a difficult task for most people), we still end up buying things. Why is that? Well, it’s because when we look at things, we want to touch them as well. The retailers know this about us, since they have paid big bucks to do research on how and why consumers spend money, and they not only have figured out that putting a sweater, for example, on a table is inviting, they know that if you pick it up, you’re more likely to buy it! Not only that, but the longer you hold onto the item, or carry it around with you, the more your sense of ownership has increased, making you even more likely to buy it! Whew, have they got us figured out or what?
So, keep our advice in mind, and don’t touch it! If you’re the type of person to go out for “retail therapy” (do NOT get me started on how much I loathe that phrase, and what it implies), then you need to find something to do with your hands. Put them in your pocket, carry a big bag in your hands, text etc. Finding something to do with your hands could save you a lot of money over the course of the month, because every time you see a $200 and don’t buy it, that’s $200 in your pocket for something else, which I hope will be savings!
Gen Y-ers grow up!
Friday, December 18th, 2009Today’s article is from Foxbusiness.com, and is titled Growing Up Financially Is Hard to Do by: Gail Buckner. It’s some interesting commentary on how the Gen Y-ers are responding to the recent economic turmoil!
Generation Y is a term applied to those people currently 22 to 33 years old, of which, I am a member. These people are typically the offspring of Baby Boomers, and according to many in the work force, are nothing like their parents, especially in how they view their jobs. In the past, this (my) generation has been characterized as a bunch of job-hoppers. But now that they and their friends are experiencing layoffs and financial problems, the number of those surveyed that had changed jobs in the last 2 years dropped from 40% to almost half of that, and almost a quarter of them plan to stay with their employer until they retire…now there’s some surprising information!
Another interesting thing of note, however, is that the economy and higher rates of unemployment have changed the optimism and confidence typically displayed by this group of people, and they are becoming more financially conservative…all I have to say is that it’s about time!
Apparently, a new survey shows that 41% of Gen Y-ers have become more fiscally conservative in the last year, and nearly 2/3 say they’re “trying to save more now than a year ago”. I think that is incredible! To know that a lot of people from my generation are waking up and saving is great. And as far as retirement, in the last year the number of Gen Y-ers that are saving for retirement rose from 18% to 53%, but the majority of them are only focused on an emergency fund (which is a good start!). Considering that more than 30% of Gen Y-ers owe more than $5,000 in credit card debt, saving for an emergency and/or retirement is a nice change of pace.
No matter what their motives, the Generation Y group has started to notice the benefits of saving money and job security. I have feared that my fellow Gen Y-ers would never learn this lesson, but I am happily wrong. Maybe it was the economy, maybe it was the fact that it became cool to be a “recessionista”…or maybe it was that we got tired of hearing the word “recessionista”, and started watching our money to get people to quit using that word…either way, it happened, and hopefully it’s here to stay!
Stop enabling your grown children!
Monday, December 14th, 2009It is estimated that Baby-Boomers provide $59,000 in monetary help to their grown children over a typical 5 year period. If you’re a Boomer, you want a money saving tip? Stop enabling your children by supplementing their income and either cut them off completely or cut your “gifts” down by 75%-85%!
This is one of the most ridiculous things going on in our society right now. I cannot believe that Boomers are giving so much to their grown, totally able to work (even if that job is “beneath them”) adult children. I mean, come on…so what if the job doesn’t pay $100,000 a year with nice perks etc. There is value in being able to say you are making it on your own. Let’s break down that number above…$59.000 in 5 years is roughly $12,000 a year, or $1,000 a month! That is a part time job! You want that lifestyle? Don’t get it from your parents, who would like to retire soon!
The bottom line is this: If you’re a Boomer and are looking at your retirement nest-egg, realizing that retirement is going to be tough (if possible at all now or in the future), then you need to evaluate where your money is going. If, that money is going to your children, it is time to cut them off! They can have what’s left when you’re gone (if anything) and do what they want with it at that time. Why would you risk your livelihood on their new car/home improvement etc.? Teach them the hard lesson that sometimes you have to take care of yourself. They will have to learn that lesson when you’re gone anyway, and it will be easier if they have your shoulder to cry on when they learn that lesson.
Are you the child of a Baby-Boomer? Do you “borrow” money from them that you never pay back? Perhaps it’s time for you to realize that you’re draining their retirement money, and that you need to grow up and pay your own way. Nowhere in the “how to be a parent” handbook does it say that your parents are responsible for paying your way from birth to YOUR retirement! Cut them a little slack! If you can’t live without all of those nice things that you’re buying with their money, get a part time job…otherwise, perhaps it’s time you learned to live within your means!
You’ve used it for swimming! The buddy system gets an update!
Wednesday, December 9th, 2009Today I wanted to talk about a great way to help control your spending (or over-spending). A method of checks and balances, so to speak. The buddy system! You remember the buddy system. Perhaps you used it at the swimming pool or when going to a public restroom as a child, or perhaps you used it when in the grocery store with your older siblings…either way, you’ve done it before, and if you’re struggling with spending money (are you a spend-thrift?), you need to do it again!
Okay, so here’s your refresher course, not that most of you need it! When you’re out shopping, and you see something you like, you can approach it 1 of 2 ways. The first way (the one we opt for) is to call your spending buddy and tell them what you’re thinking of buying. If they think it’s frivolous, they can talk you out of the purchase before you buy it. The second option is to call your spending buddy after you’ve made the purchase and try and defend it. The difference is usually how bad you can be made to feel. Think about it…if you call during your shopping, they can stop you from buying it and praise you for putting it up. If, however, you choose to call your spending buddy after the purchase, while defending it you could feel very guilty for the purchase and it could cause problems in the relationship. I think it’s worth the risk to the relationship, however, if it teaches a spend-thrift a hard lesson to learn!
Some other information worth noting…if you choose your significant other as your spending buddy (which is the system your favorite southern couple has in place), you had better be sure you have an absolutely solid relationship that cannot be shaken by a little criticism and guilt. My advice would be to try it on a temporary basis for a week or two before deciding to put it in place as your go-to system. If you find that your feelings are hurt by your significant other, and you can’t get past it, stop the trial before real problems follow and both of you should choose someone else to be your spending buddy. Who makes a good spending buddy? Someone you look up to or respect. A person that can criticize you without losing your friendship or relationship. This could be your mother, sister, brother or best friend. You decide who works best for you, but just get the system in place. The quicker you start the buddy system, the more money you’ll save!
Debit card fees may be the wave of the future…bummer.
Friday, December 4th, 2009Today’s article is Banks’ newest game: Debit card fees, by David Ellis. It centers on the new trend in the banking area to institute loyalty program fees or other debit card fees. Basically, the banks are hesitant to lend money, thanks to all the problems that have resulted from over lending to high risk borrowers (and others), and now with the new credit card legislation that will go into affect soon, this is the avenue that will anger the least amount of people.
These loyalty programs are similar to those of the credit cards, where you earn points toward cash back or other “prizes”. As usual, however, it takes a TON of points to earn anything worthwhile. Luckily, a debit card doesn’t put the consumer further in debt, and these cards give the banks 1%-3% fee per transaction (However, lobbyists for retailers are trying to get that fee capped). UN-luckily, to use these new programs, many banks are charging yearly (or monthly) fees. This means that you have to use your debit card all the time and HOPE to earn the rewards while paying a fee for the PRIVELEGE to be in the program! How fun, right?
Our advice? If you can’t control your spending, and are detached from your debit card, the way you were from your credit card, and it’s not like spending money because it’s plastic…stick to cash. If you can handle using a debit card, use it. We don’t have a problem with them, since the money comes directly out of your checking account…but be aware, overdrawing on your checking account with you debit card is NOT responsible, and if that is you, GO BACK TO CASH! On the subject of loyalty/reward programs? We think you should just skip them. It takes crazy amount of effort to get anything, and costs a yearly fee on top of it! What a waste.
Self esteem and faking success.
Friday, November 27th, 2009Today I’m not using an article, I’m using a blog post from a man I respect very much…Dan Miller. The post is titled Fake Success?, and it centers on a man who went to his high school reunion pretending to be a Naval Officer…bad news for him, because one of his former classmates IS a Naval Officer, and he got reported to the FBI. Sense it’s a crime to impersonate military personnel, he could spend a year in prison. I bet he wishes he’d gone as himself…a bank teller.
We have all seen this in our own lives, if not to the extent of jail time. Somebody tells a little white lie on their resume to make themselves sound better for the job. People update their statuses to make themselves sound more fabulous and exciting than they really are. They embellish the problems they had on their car ride/plane ride etc. to make you feel sorry for them. Whatever the situation, people like to exaggerate when it comes to who they are and what they do. The sad part is, who we are IS enough for most people, and the people it isn’t enough for are not worth your time! Do you really want to spend your life trying to impress other people with lies, or live your life, whatever it is, without the embellishments?
Do you find yourself inventing things when you share your history with other people? Are there things that you’d like to change about yourself, or are you happy with who you are? If you have things you’d change, have you written them down, and set up a plan to change what you’re not happy with? That would be where I would start! Good luck!
More about the recession.
Friday, November 13th, 2009Today’s article is Earth to economists: Recession isn’t over, by Carla Fried. It’s an interesting look at the divide between the people who believe the recession is over, and those that think we’re still in it for a while.
Conflicting information is what the author cites as a problem. An advanced estimate of the annualized 3rd quarter GDP was up 3.5%, but consumer spending fell 0.5% in September. The GDP numbers are a result of government spending, and, as you would expect, unemployment, and the fear of unemployment are the result of the slump in consumer spending. The fact is, a recent poll showed 58% of people (October) still believe the recession is hanging on, up from 52% (September). And while public opinion certainly isn’t the only factor in the economy, it DOES factor into the economy. This is obvious…if people think the economy is down, it affects the way the go about their daily lives, and what they do and don’t spend.
You see, there are a lot of opinions out there on where this country and it’s citizens are headed thanks to this economic mess. Some are saying that we are fine and that everything will go back to “normal” soon, and some conspiracy theorists seem to think we’re going to become third world nation. The truth, thankfully, is probably somewhere in the middle. If you read the original article, you should check out some of the absolutely ignorant and insane comments posted by readers. I’m no economist, but I’m also not going to listen to anyone whose claims sound outlandish at best and pray on the fear and ignorance of other people. My guess is that the economic turmoil will continue for a while…how long? I have no idea. The economy needs to correct itself from the inflated values that we placed on our assets (namely, our houses), and until it corrects itself, I don’t think things can get better. However, I DO think things will get better. Banks will start lending again, companies will start hiring again and people will start spending again. Do I think it will go back to the way things were? No, and I hope it doesn’t. We shouldn’t expect to buy a home and 3 years later move with 50% equity because of the jump in value…that’s not right. Slow and steady wins the race people. When things start to improve, you will have to SAVE your money and PAY DOWN your mortgage for there to be equity in it…and that’s the way it SHOULD be!
The dangerous reverse mortgage.
Friday, October 23rd, 2009There’s a lot of talk these days about reverse mortgages, and whether or not they are a good idea. While I think they are dangerous, I think the real danger is in people not knowing what they are and getting involved with these mortgages anyway. It’s my opinion that you should never sign your name to anything that you do not completely understand (that is how people got into trouble with the sub prime mortgages), and therefore, you shouldn’t take out a mortgage (or other financial product) you don’t understand.
So, what is a reverse mortgage? Well, you can read the full description here, but a simple explanation is that it is a loan for senior citizens, used to release (give back to the owner) the equity of the property as one lump sum or multiple payments over time. The home owner’s obligation to repay the loan is deferred until the owner dies, the home is sold, or the owner leaves (usually going to a long term care facility).
Today’s article (CNN Money Blog post) is titled Reverse mortgages: Sub prime mess déjà vu?, by Carla Fried. It looks at how a lot of retirees are taking out reverse mortgages, since they have insufficient nest eggs to carry them through retirement, and how a lot of people, Comptrollor of the Currency John Dugan included, think these financial products have some of the same characteristics as sub prime mortgages. Considering the mess to which the sub prime mortgages contributed, that should definitely make us be wary of these products.
Some resources to check into, if you want to learn even more about reverse mortgages and their pitfalls, are as follows:
- AARP.org – A section on this website is dedicated educating seniors on reverse mortgage basics, their alternatives and ways that the financial product might be abused. Check out the web page here.
- U.S. Department of Housing and Urban Development – An informative website put on by the government. It’s not as suspicious of the reverse mortgage product as the AARP website, but it still speaks of the dangers of scam artists peddling information that they give away on their website for free!
I know that there are some people who think these products have their place, but I have to disagree. As I have said, I’m fine with 15 yeaar fixed rate mortgages, but products like these, just seem to part people with their money. Make your own choice, but don’t say I didn’t warn you.
Up close and personal…what’s happening in retail as the holiday season starts?
Wednesday, October 21st, 2009This past weekend, since I had a couple of things to pick up, and it was the start of our Christmas shopping, your favorite southern couple went to the mall . While we were out, we decided to do a little economic research that we are now going to share with you. I won’t be sharing any names of stores or people, as I want to respect the privacy of these people, since they were only used for discovering general information.
The first bit of information I wanted to share is definitely exciting, and that is that more people are paying with cash! According to certain retailers (these businesses do not sell luxury goods, just so you don’t think I’m speaking of $1,000 handbags or something), a significant number of their sales so far this year have been in cash, compared with last year, where there were more credit card sales. This is a wonderful bit of information! Now, it’s a small sample, and it’s in my local community, but hopefully it’s at least partially indicative of the way people are shopping this season. I hope that it means more people have saved up for the holidays this year, and aren’t spending more than they make!
Another bit of information we ran across from a national retailer is that the sales are not going to be as good as they were last year (I know, bummed me out too)! According to our source, last year, many of the typical stores you find in your local mall got caught with a ton of extra inventory and slashed prices to be able to move the inventory toward the end of the holiday season. This was great for people, last year, but it also means that they learned their lesson, and this year, retailers won’t (or haven’t) have ordered as much inventory, so the deals that were there last year, won’t be there this year. This is some really unfortunate information, but at least it will keep us focused on finding the best deals this season!
All in all, I still think it is going to be a wonderful holiday season. Just keep in mind that cash is the way to go. Not only will it save you from being credit card poor in January and February (and March?), but it will keep you focused on getting the best possible price! Look out for deals that aren’t deals. Compare prices. Use lay-a-way (making payments on an item that you will not be able to take home until the item is completely paid for) and just be sensible. Remember how your parents and grandparents shopped for the holidays…they saved for it!
