Money Making Sense

You want to raise a responsible teenager.  You understand that one day they'll move out on their own.  Managing your child's work habits is a tricky endeavor.  As a parent you have to decide the proper parameters for work in your teen's life. In addition to the value of work you hope that they graduate into adulthood with an appreciation for the value of money.  This is a worthwhile project for parents to undertake.  Below are some things to consider when addressing your teen and work.

• Responsible grades.  What do you consider responsible grades?  Do you require a minimum GPA in order for them to maintain employment?  What consequences will low grades have for their ability to earn money?
• Having their own checking account.  How will they manage their money? Will you guide them in opening an account and learning to make deposits and withdrawals?  This is a great skill for a child to have BEFORE graduating high school.  How closely will you monitor their spending and checkbook?  The more freedom they have the more growth they will experience.  You need to really think this through before taking this step.
• Requiring them to save.  Will saving be required in their finances?  Will it be a set amount or percentage?  Where will he/she put the saved money?  How much 'choice' do you give them in the savings equation?
• Meet me halfway in reaching purchasing goals.  If they work for half the amount of the item, you will pay for the other half.  If you and your teen identify a specific item of interest, this could provide the spark to get them earning and appreciating money.  Some examples of prized items:  car, pet, game system, computer, or any other higher priced item.
• Work during the summer.  This is a great time for your teen to get a job.  School is out and they have lots of time to do something. 
• Point them toward interest areas. If your child likes horses, check with a local breeder about job possibilities.  If she is artsy and creative, check into jobs at hair or nail salons.  Choosing a career field that interests your child can help them get valuable knowledge about a career field early in their working years.  Experiences like this may confirm to them that this career field is one they wish to have long term.

What do you think about teens and work?  What conditions do you think are necessary for a teen to work for money?  Please share a comment to add to the conversation.

I thought I would share some of the wealth shared in various blogs I read this week. Kudos to the following great reads:

Kick Debt Off shares an awesome financial fitness test to assess your financial situation.

Money Smart Life shares about 9 mistakes people make with their IRA.

Neal at Wealth Pilgrim shares tips whether your struggle is weight loss or managing money.

My Super Charged Life shares a great post about 5 habits that can greatly change your life.

Personal Finance Notebook shares 7 reasons why we pay high interest rates.

Money Help for Christians shares a gem on the attitudes necessary to get out of debt.

Cash Only Living shares 100 ways to reduce expenses.

Personal Finance by the Book shares great ways to use your income tax refund.

There are bunches of college graduates returning to their parents home after graduation.  The shaky job market coupled with large amounts of student loan debt make striking out on their own unrealistic. According to Monster's 2009 Annual Entry-Level job outlook, about 40% of 2008 grads still live with their parents.  Parents in this predicament need options in how to get their boomerang college grad out of the house and on the road to independence.  Below are some options I believe are worthy of consideration as a parent seeks to get their child out of the house.

• Job 1: Have an income.  Within the first few days of moving in your child is to get a job of some sort.  Being picky is not an option.  Their first job is to ccreate an income.
• Charge them rent.  While this may seem cruel it's very important that your child learn that things in life aren't free.  Of course this doesn't happen until they have some form of income.  You can charge as little as $75 a month.  Here's the kicker: You save their rent in an account to help them get a stash to get their first apartment.
• Chores are required.  Being an adult comes with responsibilities.  It's perfectly acceptable that you work out appropriate household duties for adult child.
• Treat them as an adult.  The days of curfew and tight reins are in the past.  While your child is back at home, he is not the misguided adolescent from his high school days. 
• Give them privacy.  Living in same home can be challenging when the parties have been independent for quite some time. Work together as much as possible to allow privacy.
• Set time limit on their stay.  I recommend a year or less. If your college grad hits it hard there is very little reason for them to be gone in this time frame.
• Match their savings (to a certain limit).  Maybe you decide that you will match what they save up to a certain amount each month.  This encourages them to save and moves them closer to getting out on their own.
• Discuss finding a roommate.  Your adult college grad can better adjust to independent life by splitting the costs with a friend.  This can be a good bridge to ultimate independence.

There you have my short list of suggestions.  Which one makes the most sense to you?  What strategy have I left out?  Please comment and add to the conversation.

In the January 2010 issue of Money Magazine the author recommends "adding a credential" as a tool to survive in today's fragile job market.  The recession has caused millions of workers to rethink what job security means.  As I write the unemployment rate is still hovering around 10%.  It makes sense to have more than one skill set in order to naviagate through the unknowns of these ever changing times.  Here are some suggestions on framing a new plan to stay afloat in today's job market.

• 1 year certificate at a community/technical college.  There are some great career programs that can be achieved through your local community college.  Many of the class offerings are available at day times and evenings.  This is great given the time constraints of some individuals.
• 2 year degree from community college.  This has the same benefits as those mentioned above but the amount of training is more involved.
• Make a hobby into a part-time business.  Think about what you love to do in your spare time.  Are you good with technologies?  Are you musically gifted (music lessons)? Are you a rock solid cook? How about part-time catering?  Many folks have things they love but haven't gone the extra step to think about how those skills can be marketed as a business.
• Take a part-time job in an area of your interest.  Go find someone who owns a business in an area of your interest and inquire about part time employment.  Business owners are always on the look out for 'reliable workers.'  Letting them know of your passion for their business can open the door for you.  This also adds to your network of potential employers.
• Start a blog.  While it can take some perseverance to make money at this practice, it is still an option.  This can be especially beneficial if you have a knack for writing and/or website design.
• Freelance.  You can do your own thing through a part time business.  While you may have to beat the bushes at the start up level, once you get established this can bring extra income.  Personal Finance Ninja shares how he makes $1000 a month freelancing.  This is a great read.
• Consulting. If you have a lot of knowledge about a particular career field you can be of value to business owners trying to add value to their business.  Having extensive years of experience in a given field can open doors for you.  I have personal friends who do this in education and medical fields.
• Think about previous employers.  Maybe you have long forgotten about jobs you had 5 or 10 years ago.  It can never hurt to touch base with a previous workplace and feel out any job opportunities there.  Having previous experience in that career might increase your value to the organization.  Your prior experience may save them on training costs. 
• Do an internship.  Internships are on the job trainings with no training costs for the employer.  Ask the boss if you can spend 5 hours a week experiencing what happens at the workplace (for free).  While this may or may not be well received, you never know until you ask.  If the employer agrees, you've just added another resource to your network.

I hope that a few of these options provide some direction to someone looking to expand their skills in a fragile job market.  Which one appeals the most to you?  Please share one that I may have left out?

A new year present opportunities for better money management.  It also holds the opportunity to repeat your past mistakes.  If you wish to have more success financially, please read the rest of this post.

1) DEVOTE TO A BUDGET

While the term "budget" may leave a bad taste in your mouth, it is a must to succeed financially.  Every dollar spent must have a destination.  Money that doesn't have a destination ends up being spent frivolously.  Having a budget "in your head" is not enough.  It must be in writing before the first dollar is spent.  There are good budget programs available in software like Microsoft Money and Quicken.  Each expenditure can be listed with the monthly amount entered in each listing.  If the idea of a budget seems restrictive, go ahead and budget a "fun money" line item for you and your spouse.  This amount needs to be agreed upon by each spouse.

2) DECIDE WHAT MATTERS

What you spend money on reflects your priorities.  Spending $1,500 on a comfy cruise without an emergency fund says something about your priorities.  What percentage of your budget is spent on needs vs. wants?  The payments you're making on that flat screen TV…they would come under "want."  Your house payment would be a "need."  If your budget is devoted more to needs than wants you can say that you're on the right track.  As mentioned earlier,  having some fun spending in the mix is tolerable as long as it's within reason.  After all, all work no play makes Jack an incontent boy.

3) DELAY GRATIFICATION

You can't always get what you want.  I'm sure there's a song with such lyrics out there.  The artist's name evades me right now.  The quicker you realize this principle, the further progress you will make to financial success.  This simply means saving for future expenses.  Yes that other dreaded word in this post, SAVE.  It's well known that American families are saving less and less these days.  Are you willing to wait to enjoy reaching a goal?  Do you have to have it now?  What is your preference?  Saving monthly to enjoy that great vacation a year from now?  or whipping out the plastic for a Visa Vacation?  Your answer will tell how well you're willing to wait.  Have a great and disciplined new year!

Financial peace means different things to different people.  For sure, most everyone wants to achieve it.  Being at peace with your money situation is a great place to be.  Are you there right now?  Are you missing a few pieces your financial peace puzzle?  If financial peace is what you want, you have to define it.  Below are things I consider essential to my financial peace.

• Being current on all my bills.  Being behind on a bill is no fun place to be.  I like to have all my bills paid on time.  I can say this is true 95% of the time.  We have a few moments in our busy lives where we are late by a few days.
• Having an emergency fund of $1000.  Life happens to us all whether we are ready or not.  Insurance deductibles, car repairs, car tires and other unexpecteds happen to my budget.  Without an emergency fund these events can take me further into debt.
• Good insurance.  Life comes full of risks.  Insurance provides protection from those risks.  Health, car, life and disability are essential types of insurance for families.  Without insurance you are at risk of severe losses financially.
• Good communication with my spouse about money.  Being able to discuss money issues in a civil manner is priceless in a relationship.  Money talks can be among the most emotional conversations in a marriage.  I don't have a magic prescription for this one.  My wife and I do good to have 50% of our talks fall under the 'civil' category.
• A stable job.  In today's economy this is a true blessing.  I'm fortunate as a public school educator to have a job that is pretty stable.  My heart goes out to dear friends who have fallen on hard times and unemployment.
• Contributing to my retirement.  As a public educator I am among those who have a pension available for retirement.  Having 5% automatically deducted from my paycheck makes retirement a 'hands free" experience for me.  Not having a choice in the plan keeps me honest.

There you have my definition of financial peace. Does your definition differ from mine?  Please comment on what it means to you.

It's no secret that the costs of college rise every year.  As your child nears college age it's important to look at what you can offer your child in the way of assistance.  My premise is that the college experience should be a partnership between parent and child.  While nobody will argue that fun should be a part of their experience, it's not unfair to ask your child to fund some of their own fun.  It's important that they be a part of this decision.  Below are some possible solutions to funding your child's "fun."

Matching Funds. For every dollar he/she raises you will match it dollar for dollar.  You could also use a ratio (3:1, 2:1).  This matched money goes into an account set aside solely for college fun expenses.  You might consider setting a time limit on this.  Example: Every dollar you give me for the next 3 months I will match it.  You're not only helping them fund a college expense but instilling responsibility as well.

Match up to a specific dollar amount.  Your budget may not permit you to do a match for every dollar earned.  You may need to set a cap on the amount that you match.  Once your child meets that cap, the rest of the money raised is unmatched.

Summer College Stimulus.  This is an example of the time frame listed above.  Your current/future college student can receive matching funds for any money given to you for the summer.

Set Parameters on What You Supply.  Let your college student know how much fun money you will supply.  You must remain firm on this issue. Remaining firm will teach your young adult child discipline and responsibility.  You will also need to tell him that you're willing to discuss 'emergency' events to determine if additional help is needed.

The decision to fund your child's college fun is an important one.  How much help you provide should be based on your specific financial situation.  You need to understand that your child's involvement in the solution can promote responsibility.  Involving your child in raising some of these funds just might teach them lessons they won't get from a book.

We've heard the term stimulus a lot in the last 3 months.  Our President, congressmen, and senators have thrown billions of dollars at the economy trying to jolt it into a recovery.  Whether the funds will accomplish the intended results remains to be seen.  My intent is for you to worry about what you can control.  While the stimulus is putting billions of dollars into this economy, the actual help it provides to your bottom line is probably minimal.  I think you your time is better spent creating your own stimulus plan.  Below are some clear cut measures you can take to create your own stimulus plan. 

1) Have A Written Budget.  Unlike the earmarks and fat of the stimulus, have an exact destination for your money.  Have categories for expenses such as mortgage, groceries, utilities, insurance and the like.  You can't captain a good ship without knowing the conditions of all the parts.  You need a written plan for your money before the first dollar is spent.

2) Fund and Emergency Fund.  You must prepare for the unexpecteds of your financial life.  Murphy will come visit you.  You need a buffer between you and life.  This is your emergency fund.  Having a mimimum of $1000 will keep you from having to take the bailout money (credit cards).

3) Turn a Hobby Into Part-Time Income.  When you have a shortage of funds, seek out other types of income.  If you have a strong interest or aptitude for woodworking, start a part-time business.  If you're a computer whiz, folks will pay you for repairs or consulting work.

4) Slash Your Expenses.  There are cheaper ways to finance your life.  Must you have premium cable with all the extras?  Must you have a brand new gadget when the one you have works just fine?  Must you pay full price for groceries?  Couponing can make a difference.  Good deals can be had at garage sales, consignment sales, and flea markets.  Imagine how much better our government would be if they only spent what was in the account.

The only money you have control over is your own.  Don't wait on Washington to solve your problems.  Get your own plan together and create your own stimulus

Do you want more income? Do you mistakenly think that making more money will bring you immediate results? Will it help you reach your financial goals more quickly? My opinion is making more is only half of the equation.  To truly succeed with more you need to do the second half: direct your money.  Yes, you need to give every dollar marching orders. Below are some ways that making more can truly be effective:

• Fund your emergency fund.  I recommend 1 months expenses as a good start.  The unexpecteds will happen to your budget.  You need a place separate for this money.  I recommend www.ingdirect.com. The set up time is minimal and you can link the account to your checking account for easy transfers.  Not having an emergency fund ensures that you will continue to accrue debt when 'life' happens.  This site also allows you to create more than one account. If you don't have savings accounts for vacations or Christmas, this is a great place to do so.
•  Pay extra on any minimum payments.  If you have credit card debt, a great place to put 'more money' is paying the debt down quicker.  It's amazing what an extra $25 a month can do to help you pay it off sooner. (link here)
• Pay off other loans.  Installment loans or automobile loans are a couple of examples.These are great places to spend 'more' money.  Don't just accept the terms you signed up for.  Use any extra monthly income to pay this debt down quicker. Check with the lender before your first payment to make sure there are no prepayment penalties on the loan.
• Pay down second mortgage (home equity loan).  As I suggested above, be sure to check with your lender about any prepayment penalties before making any extra payment.
• Pay extra on your mortgage.  If you have extra income after completing the above  suggestions, go after the mortgage.

Making more money is a great way to reach your financial goals.  The key issue is to HAVE A PLAN for where the money goes.  If money does not have a designated place to go, it runs away from you.  Did I leave any suggestions out? Please comment below.

My family is spending a week at Disney World in Orlando, FL.  My in-laws are paying for the lodging and tickets.  Can you say blessed?  We are responsible for the costs of meals and souvenirs and ant other 'entertainment' type expsenses for the week.  My wife and I set a budget for the week of roughly $1100.00.  Today is Day 2.  We spent yesterday travelling down here (11 hours).  I am excited about the fun things we will get to do as a family this week.  No doubt some memories will be made.  I'm really interested in us keeping 'in budget.'  While I tried to account for everything, all of us personal finance writers know that the 'unexpected' can happen.  My hope is that any of the 'unexpecteds' will be minimal.

What about you?  When was the last time you went on vacation?  Did you make a budget?  More importantly, did you keep it?  What advice do you have for me or anyone else who is making vacation plans?  If you have any  personal advice for "managing Disney World, I'm "all ears."

As mentioned in my previous post, we are enjoying a 7 day Disney vacation compliments of my in-laws (Christmas gift).  We are responsible for extra events we attend as well as our food costs.  We learned early on that Disney allows families to bring food and drinks into the park.  What a blessing!  We are under budget thus far.  Rule #1: Call ahead and find out if the park you're attending allows food items and coolers to be brought in. Below are some tips I hope you find useful if you're considering an amusement park experience for your next vacation.

1) Eat breakfast in your room.  We brought pop tarts, cereal and fruit.  Eating these items takes care of breakfast expenses.

2) Use cash only.  I've heard it said that we spend 10-15% more with plastic than we do with the greenbacks.  Don't venture into the plastic for vacation unless you can pay it off completely when that bill arrives.

3) Plan your vacation.  Those that fail to plan, plan to fail.  The most costly vacations are those 'spur of the moment' trips that happen at a moment's notice.  Things like cheap hotel fares, and discount deals often get overlooked because you did it suddenly.  Your vacation needs a budget as well.  You need to have marching orders for every dollar.  Example: X amount for food, X amount for souvenirs, X amount for gas, etc.

4) Take a stroller.  This especially applies if you can bring food and drink into the park.  This  Many of them have storage space below.  You can also hang bags off the handles as well.  Kids can be transported on these as well.  If you have a preschooloer (as I do), this item is a MUST.

I hope you found a few tips that can benefit you.  Vacations are great when they come in under budget.  I hope your next one does.  What about you?  What tips can you add to my list to make a vacation affordable.  Please feel free to add to the conversation.

As my family and I approach the last half of our Disney vacation, I thought I would choose a Disney-related title.  Have you ever been out of touch?  clueless?  Have you or someone you know ever been benched by the coach?  If you've made financial mistakes, you're not alone.  Managing money is a game.  There are rules to follow.  A good game plan involves good offense and defense.  Below are some effective strategies to improve your financial game. 

1) Know Your Goal.  You must know the object of the game.  Do you want to reduce debt? increase income?  start investing for retirement?  Knowing and writing down your goal increases your chances for success.

2) Have a solid offense.  Offense means putting points on the board.  If your goal is to have a comfortable retirement, you need to designate a place to invest your money.  Some common choices you have are a IRA, Roth IRA, 401K, and a pension.  Take offensive action and educate yourself starting today about your retirement options. 

• Create a written budget.  You need to be proactive to win with your money.  Having a written budget means having a destination for your money before your first bill is paid.

3) Have a solid defense.   You need to protect what you earn.  If you're married and/or have children, you need adequate insurance as soon as possible,  Some examples of good defense are the following types of insurance: home, life, auto, health, and disabiliity.  Life has risks and you need to be prepared. 

• Have an emergency fund.  You need to have 3 months of expenses saved for unexpected financial events.  I recommend an online savings account such as http://www.ingdirect.com  You can have money transferred out of your checking account through an easy registration process.

4)  Hire a personal trainer (certified financial planner).  If you want to improve your game performance, you often have to go to an outside expert.  For a more in depth review of all your finances, consulting a fee only planner is a great idea. You can go to: http://www.nafpa.org  Click on "Find An Advisor" for a financial advisor in your area.

My hope is that that you have a better financial game this next year.  I hope that these suggestions are helpful to you.  Please add any improvements that I may have left out.

While most experts agree the worst of the recession is behind us, the unemployment rate is still hovering around 10.0%.  What this means is there are still millions of folks in the U.S. without jobs.  Some of those individuals may have found a job but be making significantly less than the job they lost.  Some of those folks are hoping that they'll find something before unemployment benefits run out.  Below are some suggestions for anyone who desires to maintain an income in this job market.

• Work part time somewhere and make a difference.  Be an invaluable team member.  Do your job with great fervor and ask the boss what you can do to help the organization's bottom line.  Part time can become full time if you work at it.
• Do any job you can find.  You have an income to find.  This is not the time to be picky. Establish some income first.  Work on the right job after you have an income coming in.
• Ask yourself some important questions.  What skills can I offer an organization?  What hobbies or interests do I have? Are they marketable in the current job market? 
• Ask your friends what unique skills or talents they think you have (only ask 'real' friends).
• Work from home.  Are you or your spouse gifted in the area of cooking? Catering can be done from a home kitchen.  Are either of you interested in internet? You can conduct all kinds of business from your home computer.
• Blogging.  Are you passionate about a given subject? Cooking? Gardening? Technology?  While income from this takes time, if you're truly interested, it could eventually bring an income. 
• Be a freelance writer.  You can write for another blogger or service and get paid.
• Babysit.  Some folks have the patience and interest to care for children.  My wife began this service in our home 3 months ago and it has added several hundred dollars to our monthly income.
• Rent out a room.  If you have the comfort of extra space in your home, why not use it to produce income? 
• Barter.  You may have a skills that someone else could use.  They in turn can provide you a service you could use.  I have a friend who works in the medical field.  He has assisted friends with basic medical issues in exchange for some carpentry work in his home. 
• Mow grass.  A lot of local grass cutting outfits look for extra help to serve all their customers.
• Deliver something.  Whether it's pizza or papers it doesn't matter.  These are ways to create extra income.
• Throw boxes.  This time of year UPS or FedEx sees a rise in business.  Give them a call.

My hope is that a couple of these may prove helpful to someone looking to improve their income situation.  Having adequate income to support your needs is important.  Maybe there is a few I left out.  Please add to the list by commenting.

In her Kiplinger.com article, " 6 Money Mistakes of Newlyweds,"  Erin Burt shares mistake #3: That one partner shouldn't give the other financial reins.  This is so true.  Managing money in marriage is a shared undertaking.  Both partners have a vested interest in the final decisions.  When two partners marry, they become one.  Marriage partners both need input into money decisions.  If one partner is better with details, it's OK if they create and maintain the budget.  The critical practice is that both partners have the freedom to discuss how money is spent.  It all comes down to communication.  What money advice do you have for newlyweds?  Do you think there are times it's O.K. to make money decisions independently?

It's a fact of life we are all gettiing older.  It's also a fact that one day we will have a retirement of some kind.  There a lots of product 'types' in the marketplace.  My thought is what retirement 'type' do you prefer?  Below are some types to think about as you envision your retirement.

1. Seamless Retirement.  This person simply loves what they do and would prefer to do nothing else.  They report to work each morning and do the job because they love it.
2. Supplemental Income.  The income from social security alone does not cover the needs for this retiree.  They work either part time or full time to get the extra income to cover their monthly expenses. 
3. Part-Time Work/Part-Time volunteer.  This person only needs part time work to cover expenses.  They spend their other time volunteering for causes that they love.  They involve themselves in community groups that benefit others as well.
4. Gotta work to pay for healthcare.  These folks have large amounts of medical debt that leaves them no choice but to work to make a decent dent in the debt.  These folks will work a job just for the healthcare insurance.
5. Working to pay for my fun.  While this person can afford to pay monthly bills, they need extra income to finance their fun.  Examples of fun can be golfing, travel, cruises, and other interests. 
6. Working for free (volunteer).  Staying active staves off illness.  The more active you are, the more the healthy you are.  This retiree exerts energy helping others who are less fortunate. 
7. Finding a New Calling.  Retirement creates an opportunity to set a new course and fulfill a dream.  This could be the first time someone can really "pursue their passion."  Most folks will spend 15-20 years in retirement.  Why not spend it learning new things and making a real difference in the world.

Envisioning what retirement will be is especially difficult for younger folks.  It doesn't hurt to think about what you want to be doing when you get there.  What type of retirement above appeals to you?  Please comment on your preference.  Also feel free to add a type I may have left out.

As the new year inches ever so closer, it's a good time to take an overall look at your financial situation.  A good way to know this is to establish your net worth. You need to know the sum total of what you owe and what you own.  Many folks just aren't aware of where they are financially.  To assess your total net worth you add upp all that you own (assets) and subtract what you owe (Liabilities).  Below are examples of each.

Assets: current value of car(s), current value of home, furniture, savings account balances, checking account balance, life insurance policies, investment account balances, 401K balance, etc.  You just find the value of everything that you own and record it.  Once all is on a list, you add them all together and you have the total value of all your assets.  You can do this on a spreadsheet if you wish. 

Liabilities: Amount owed on: car(s), home, furniture, credit cards, installment loans, second mortgage, medical debt, etc.  Just like your assets, you add the list of all your debts togther and get your total amount owed (liabilities).

Doing the Math

Total Assets – Total Liabilities = Net Worth

Go ahead and get started.  You might just learn something.  You might decide that you are proud of what you've accomplished financially.  On the flip side, you might get motivated to make some financial changes.  A new year is coming and now is a good time to see your overall picture.

We all have the need for fun.  Getting out and spending time with family and friends ia a worthwhile investment.  What we have to guard against is buying too much fun and spending the next year paying for it.  It is possible to have fun without significant expense.  Below are some ways to experience frugal fun.

• Save for your fun (make it automatic).  Set up a separate savings account and make regular deposits to reach the amount needed for your experience.  I suggest http://www.ingdirect.com  You simply go to the site and set up the account, how much you want deposited every month and you are on your way. 
• Make it local.  Almost every community has parks, museums, and local attractions.  Admission to these are usually free or minimal in cost.  You and your family can learn about local culture and history. 
• Make it a 'family' event.  Declare a 'game night' at your house.  Get out your board games and do nothing but play games.  Tip:  Each family member gets to pick their own. 
• Partner up.  Maybe you and another family desire the same experience.  Put your heads together and split the costs. 
• Camp out.  Camping out is a great time for your family.  This allows qulaity time for you together at a minimal cost.  The last time I took my son the cost of the site for 1 night was $11.00.  I'll take this over a motel room expense.  The food expenses were split by the rest of our group and kept to a small amount of money.
• House sit.  Maybe you have a relative or good friend that lives near a place you want to go.  Find out when they are going on vacation and ask if you can house sit for them.  Tell them you'll take their mail each day and feed their pets while they're gone.  Also remember to keep the place clean.  My buddies and I did this one summer and got free lodging for a week (in Florida).
• Visit websites.  Go to the websites of places you want to go.  You can find coupons or discount rates.
• Carpool.  This can reduce travel expenses especially on a long trip.

What have you found in the way of low cost fun for your family?  What tip would you add to my list?

I am a HUGE Kentucky basketball fan.  While last year was a humbling season, this new team under new Coach Calipari is turning some heads.  As a personal finance blogger I couldn't help come up with some ways that basketball and finances are similar.  Here goes.

• Value every possession.  What you do with every penny you earn matters.  Are you on top of where it's going? Are you earning a top interest rate on your savings and invesments?  Once your money is lost, there is little you can do to retrieve it.  Make sure you value what you have.  If you respect your money, it will respect you back.  The opposite is also true.
• Have good support.  Kentucky has fantastic fan support.  Who are your fans?  Who is in your corner when it comes to managing your money? Are you on your own?  Act quickly.  Include your spouse and good friends in your money decisions.  We need support to continue to succeed.  We all need someone to be accountable to about our money.  Do you have someone to bounce financial issues off of?
• Learn from mistakes.  Every player makes mistakes.  The best choice once a mistake is made is to learn from it.  Don't allow bad money habits to continue. Confront the mistake and devise a plan to not allow it to happen again. 
• You've never arrived.  As a team or an individual, you never stop learning or improving.  To be effective you must always be learning and growing in your knowledge about money and investments. 
• Fundamentals are required.  You can't succeed with money unless you have the basics of a written budget.  A budget tells the dollars you earn where to go.  You also need a savings account for emergencies.  Without these 2 fundamentals you can expect your financial game to go nowhere.
• Recruit a high level of talent.  You need solid team members handling your money.  Having teammates that are great at their position will enhance your performance.  Have a great accountant.  Insist on a financial planner who has a strong record with clients.  Surround yourself with a "dream team."
• Have high expectations.  You will never succeed with money unless you expect a lot from it.  You need to give your best everyday.  You don't succeed in life without continuing to set high standards for yourself.  How hard is your money working for you?
• Don't deviate from your game plan.  Even though you may be taking some tough knocks, stick with what makes you successful.  The recession caused a lot of investors to cash out and run.  Have a long term perspective on your finances.  Don't allow emotions to govern your financial decisions.
• Listen to the coach.  In the financial world, a coach is a financial planner.  If you invest the money to get a professional's advice, by all means take good notes.  This person's job is to give you a financial plan that helps you reach your financial goals.

I know there must be a few more basketball fans out there.  What parallel did I leave out?  Please add to my list.

Why do some folks get ahead financially while others struggle? Why does one person go on to achieve their financial goals, while another flounders from one mistake to another?  I contend that it's adherence to the little things that can make the difference between success and failure with money.  What are the little things?  Below is a list of the little things that one cannot ignore if you want to make progress financially. 

• Have an emergency fund of 3 months expenses.  Not having an emergency fund will always prevent you from climbing out of your financial troubles.  Unexpected expenses are going to happen.  Not being prepared for the unexpected will result in you going further into debt.  An emergency fund acts as a buffer between you and the unplanned expenses that come your way.
• Have a written budget.  A written budget is a drill instructor for your dollars.  You need to know where your money is going.  You can craft a budget using Quicken, MS Money, or a simple spreadsheet will work.  You designate categories for your money.  Some sample categories are: Housing, Groceries, Insurance, Medical, Gas, Credit Cards, and Transportation.  The 'writing' part of this is important.  You must have it visual and able to be revised monthly.
• Communicate regularly with your spouse about finances.  Whether you manage money in accounts separately or not. you must still communicate.  Who pays what bills each month? What financial goals do you have?  How will you measure progress towards goals? How will you pay for and be prepared for financial emergencies?  Communication is critical for couples to progress financially.  The number one reason for divorce is money fights.  Don't let money differences ruin a lifelong commitment.
• Practice caution when it comes to debt.  Opportunities to go in debt are all around us.  You need to understand that debt is bondage.  As much as possible, save and pay cash for large purchases.  If you can't pay cash, don't buy it.
• Distinguish needs from wants.  You can upgrade anything these days.  Cars, appliances, cell phones, and cable packages are just a few examples.  The questions is whether these upgrades qualify as a need.  If the model you have isn't broke, why upgrade?  The 'gotta have more' mentality can bust a budget quickly.
• Balance your checkbook every month.  Balancing your checkbook is a litmus test for your finances.  Balancing your checkbook reveals areas for improvement in your financial record keeping.  I am constantly amazed at what I forget to record.  My ATM withdrawals often never get recorded in the check book.  Giving the check book a once over keeps things honest and allows me to catch errors before they catch me.

There's my list of little things that can make a BIG difference in your financial picture.  It's easy to agree that these small things are important.  The difficult part is the 'doing' of them.  How many of these do you practice?  Are there any that I left out?

As 2010 begins I have a few folks I think can get you off on the right track.  Below are five posts that I enjoyed reading this week.  Go by and give them a visit.

I would highly recommend Bible Money Matter's post on setting up a blog. 

Kudos go out to Christian PF on the ingredients of a healthy financial plan.

Not Made of Money has 5 great financial goals for 2010.

Young people need to take right approach to money found at My Dollar Plan.

Neal over at Wealth Pilgrim offers a neat post on handling  conflicts about money and marriage.

A new year means new beginnings. A fresh start. A clean slate.  It's a great time to go over your financial situation and make sure you've got everything covered.  You know the feeling when you get an hour down the road and you realize you forgot something.  Not fun.  Below is a checklist of financial things that you need in place as you move forward into 2010.

• Written Budget.  You need to have a visual budget (paper or computer).  You need to have categories for things such as groceries, insurance, entertainment, housing, gasoline, savings,etc.  You need to have a destination for each dollar before your first one is spent.  Not having a budget is like not having a target at the shooting range.  Aim for nothing and you'll hit it every time.  Money that is not accounted for often gets blown on things that aren't important.  Go ahead and get that budget in writing.  You can preview sites such as www.mint.com  or www.youneedabudget.com.  You can also read other blog reviews of these programs as well.
• Emergency Fund.  You need to have 3 months of expenses in a separate account to handle life's unexpected costs.  I recommend www.ingdirect.com.  The set up is quite easy and you can link to your checking account so transfers can be made efficiently.
• Will.  I heard it said that over 50% of people have no will.  Not having a will can make things very stressful on your family.  You need to make your last wishes known in a legally written will.  You can shop around and do this for a minimal cost.  A little out of your pocket can make an already emotional event much more manageable for your loved ones.
• Adequate Insurance.  Life has risks.  You need to be prepared for them.  To naviagate through life successfully you must have auto, life, health insurance.  Being uninsured for unexpected health concerns and other events can devastate your finances in a hurry.
•  Retirement Plan.  You need to plan for retirement.  Start off with any plan that may be offered by your employer.  If your employer offers a 401K you need to sign up as soon as possible.  If you're stretched for cash, don't worry. You can often begin with just having $25 deducted from each paycheck.  Don't pass on funding your retirement.  Educate yourself and begin today.
• Debt Repayment Plan.  If you have debt, you need a plan to eliminate it. Dave Ramsey recommends that 'snowball' method where you pay off your debts smallest to largest.  You can also pay high interest debt first if you desire.  The important thing is that you pay down debt as soon as possible.  Debt robs you.  You need it out of your life.  I recommend you go through Financial Peace University.  You can sign up for a class near you at www.daveramsey.com.

Well, there you have it.  Where do you stand? Do you have all these in place?  If so, you're off to a good start.  If not, you just got your New Years To Do List.  What have I left out?  Please comment if you have something to add.  Good luck to you as you seek to have a better financial life in 2010!

We will hang it up one day.  We will quit our day job.  If you're lucky you'll leave on your terms. We want a retirement that is good.  We want to enjoy the fruits of our labors.  Below are some suggestions for anyone wanting their retirement days to be their best days.

• Make good health a priority.  You need to be mobile to enjoy life.  The longer you stay mobile the more freedom you will have to get out and see the world.  Exercise and good nutrition are great choices.  A steady amount of each can ensure fun in retirement.
• Good Healthcare Coverage.  Healthcare costs have been outpacing inflation for years.  You need solid health insurance to protect you from high healthcare costs. 
• Emergency fund of 1 year's expenses.  You need access to cash for expected and unexpected expenses.  Having a good amount of cash that's easy to access is important.
• Pursue your passions.  Maybe you have some hobbies that you were never able to make into a business.  Retirement can be a time to fully focus on your interests.  Investing in your passion might provide a part-time income for you if you find a ready market.  Pursuing your passions can be used to benefit others.  If you are handy with wood crafts, you might sell your wares to benefit a favorite local charity.
• Invest in your community.  Find a community service group that aligns with your values and give your support. 
• Spend time with family.  If your lucky enough to be near family, this is a great use of your time.  Spending time with your children and grandchildren can bring great joy to your life.
• Work for free (volunteer).  Local schools and community service organizations are great places to spend time.
• Start a blog.  A blog is an opportunity for you to share your passion and knowledge on the internet.  You can use expertise in an area and meet a need for many people.  The set up is inexpensive.  Having a blog is a great outlet for someone with a lot of time.  It can be especially rewarding for someone with physical limitations that might restrict their mobility.  All you need is a computer and internet access and you're on your way.

There's my list of activities that can make retirement days your best days.  Which one stands out for you?  What have I left out? Please comment.

The recession impacted the portfolios of millions of people in the United States.  It's safe to say that many consumers experienced losses that they hope to never experience again.  Some writers say the recession was a 'cleansing' that was needed for an overextended economy.  I'm not sure myself.  I do know that I learned some things from this event.

• Conventional is no longer conventional.  Some financial gurus recommended a 75/25 Stock/Bond allocation for retirement funds.  Folks who carried this ratio got slammed by the market drop over the course of 2008.  We need to rethink what the best allocation is for our finances.
• A "right age" to retire has changed.  Many investors who were less than 5 years from retirement have realized they need a 'new' plan.  I think the radical drop in the market means you need to be willing to work longer than you may have anticipated. 
• Having a 3 month emergency fund is a must.  The job losses of the recession left many families with no resources to fall back on.  Having a 3 month cushion can 'buffer' the blow of a job loss and give someone some time as they seek other employment.
• Home equity can vanish.  The value of your home can change. Many homeowners went to tap equity to learn that it simply wasn't there.  Those that had it, could not tap it due to banks tightening up lending practices. 
• Definition of 'reliable job' changed. The unemployment associated with this recession has been staggering. Many employees have had to 'retool' to get a new job. Still others weren't able to find anything at all. The new normal for employment is 'do what pays the bills' and find a better job in the meantime (if such a thing exists).

There you have it.  These are the lessons I've learned from the recession.  Are there any you wish to add?

Best Links of the Week

Enemy of Debt   shares about the importance of taking 'actionable' steps toward your goal.

Out Of Your Rut shares 7 ways to improve your business.

Money Help For Christians shares '55 Reasons To Get Out of Debt."  These are great!

Discussing money. It's a necessary evil in marriage.  The number one reason for divorce is money fights.  Spouses don't agree on issues surrounding money.  Opinions vary on the issues of saving, spending, and debt.  It's safe to say we've all had arguments about money.  What if you knew the ingredients of a 'healthy' money talk.  Would you want to know what they are?  More importantly, would you seek to put them in action?  Below are my ingredients for healthy money talk.

• Calm Setting.  Fruitful money talks don't work in busy settings.  You need a place where you can hear each other and be free from distractions.  If you have children, this may not be achievable until you get them all to bed.  You both need a calm place to talk about money issues.
• Freedom to talk about money.  Nobody likes walking on egg shells.  Both partners need to give the other freedom to have money talks.  Issues can't be addressed unless they are discussed.
• Proper timing.  You need to be sensitive to your spouse's desire to discuss money.  There are times when it's better to 'cease talks' until a later time.  If you pick a wrong time to discuss money, it's OK to ask, "When's a better time for us to talk about this?" 
• Tone matters.  I've heard it said that in marriage it's not what is said but "how" it's said that makes the difference.  This is so true.  The wrong tone can send a conversation south in a hurry.  Raising your voice or using a condescending tone will stop a money talk on a dime.  Be careful to use the right tone. 
• Discuss goals not specifics.  You and your spouse might disagree on how much to pay toward a credit card.  However, you might both agree on 'having less debt.'  Discuss your goals.  Put them on paper.  Discuss how you're going to achieve them.  If you're clear on your goals, you can make headway with money decisions.
• Agree to disagree.  You and your spouse will not see eye to eye on all money matters.  Some topics take time and continued conversation. 
• Be responsible.  We've all made mistakes with money.  Be mature enough to admit that you blew it.  Admit your shortcoming and move on.  Better yet, make a plan to not make the mistake again. 
• Be willing to forgive. Whether you say the words "I forgive you" or not doesn't matter.  You need to extend grace to your partner when they make a money mistake.  Didn't I just say we've "all" made mistakes with money. 

What do you think of my suggestions? Do you see one that is more important than another?  Did I leave one out?  Please share a comment to add to the discussion.

There's a reason it's called 'personal' finance.  How you spend your money is personal. You choose what you buy.  You choose what is too expensive and what is not.  When a couple joins their hearts together in marriage they bring their money issues into the marriage as well.  Sometimes the 'personal' issues of money are not addressed until much later in the relationship.  This can create tremendous stress on a marriage.  While we all have made money mistakes, some issues (debt) are just better left alone, right? NO.

The time to address the money issues you brought into the marriage is now.  Money fights are the number one reason for divorce in this country.  You may wonder if your partner will remain with you after telling the truth.  I can't answer that.  I do know that honesty is a very foundational value in marriage.  Being truthful establishes trust.  Trust must be present for a marriage to survive.  Maybe you've incurred a lot of debt after you got married.  Are you and your spouse fully aware of the debt load you have created?  If you've been untruthful about your finances with your partner, you're travelling a dangerous road.  Below are 3 benefits of being completey honest about your debt.

1) Complete Awareness.  It was years into my marriage before I sat down and looked at all that we owed.  It was a wake up call for me.  Knowing how much I owed brought home the fact that there was a need for change.  While disclosing large amounts of debt can be frightening, it can be a new starting point in your relationship.

2) The Urgency for Change.  Once you know what the full scope of the problem, you can then begin to see the need for change.  You may acknowledge for the first time your financial train is headed for disaster.  You may first begin to see that it's time to chart another course.  It's time to read and heed those warning signs.

3) Confront Denial.  It is so easy to spend money and not know where it goes.  You swipe the card and go on home with your purchases.  You are like a kid in a candy store.  You will not be deprived of what you want.  Behaving like there is no tomorrow does have its consequences.  The purpose of this post is for you to address your denial now.  Assess the damage and make a new plan for the future.

4 Questions to Answer TOGETHER.

1) What do we owe?  This may take a few days and several conversation.  Get out paper and pencil and write out every debt you owe. List it by name, current balance, interest rate, monthly payment.  This is a list of every loan and credit card balance that you have.

2) Are we happy with it? When you look at what you owe are you comfortable?  Is the plan you have for eliminating debt working?  Do you lose sleep thinking about your debt?  These questions can help you determine if you need to stick to your current plan or devise a new one.

3) Do we see the need for change?  Does knowing all that you owe make you angry? resentful? regretful?  If  you're having strong emotions it's probably time to make some changes.

4) What change can we start now?  This  a critical question.  Maybe you need to chop the fat from your budget.  Do you "have to" eat out so much? Do you "have to" have Starbucks three times a week?  Do you "have to" eat out for lunch everyday?  Saying no to a few things can free up money to be directed toward your debt. 

Complete honesty is critical when it comes to marriage and money. I hope the words I shared today will help you and your partner to have a higher trust level.  More trust in marriage results in more stability. Good luck!

It's been a good week in the personal finance blogosphere.  Below are some of the best for the week:

MyLiferoi shares some great advice on insider secrets of car financing.

LiveRealNow shares how to flog your inner impulse spender.

OutOfYourRut gives great advice about better use of your time than watching T.V.

FiveCentNickel writes an excellent piece about the right time to start investing.

If you've got a teen who desires to work Fiscal Fizzle shares great advice about the pros and cons of a working teenager.

My Super Charged Life gives 7 steps to achieving a simple life.

Get Rich Slowly gets a gem of a post on Women and Retirement from a Motley Fool writer Robert Brokamp.

These post were a true delight and I hope you take time to check them out.  Have a great weekend.