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Posted by Erin E.,
under Debt, Erin E, Student Loans |
08/24/2010
Last night, my grad classes started up again. Actually, I should say, my grad class, since I’m only taking one this semester. Quite unfortunately, tuition has gone up unexpectedly. Which was a brilliant move, considering nobody can afford anything these days, least of all students.
I waxed nostalgic yesterday, remembering the time when school was the most important thing in my life, because that’s all I did. I was a full-time student. Now, the start of school sneaks up on me. I remember, “Oh, I should probably make sure I have a notebook and pen,” while I’m folding Buzz and Woody underpants or refilling a juice cup for the 900th time that day.
One of the major things that’s been different this time is the money aspect. I took three years off between undergrad and grad school, which meant I had three years of paying on student loans, loans that were a vague and distant idea when I was an undergraduate. This time, I’m paying as I go (because I can, because it’s less expensive), but that makes life harder in some ways. Now I have to consider the fact that we need a new refrigerator when I’m choosing how many classes to take. Appliances weren’t a concern when I was 18.
In other words, I can really identify with this Best of Craigslist posting (warning: foul language!).
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Posted by ET,
under Auto Loans, Debt, ET, The Economy |
08/18/2010
The Federal Reserve released its quarterly report on household debt and credit, and I was surprised to see some good news that I wanted to share.
The Good News: Auto loans are up 25%, payments on a bigger % of debt are current, and the total amount of credit account inquiries has gone up for the first time in 3 years. These are all signs of an increase in demand. Credit Card accounts are being closed faster than they are being opened, and this can be seen as a good thing (consumers are getting smarter) or a bad thing if you believe this will impact credit levels.
Why is all of this happening? I believe that people are past the pain point of holding cash in fear of losing their jobs and the need for a few new things such as a car, work clothes, school items, updating appliances, etc. Yet, they are not opening new cards in an effort to get a one time price break or deal at a retailer. Hopefully these purchases fall within your financial plan, and are budgeted for. If they are, congrats on sticking to your plan and stimulating the economy at the same time.
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No Comments | Tags: Consumers are getting smarter, Economic Recovery, Federal Reserve, Increase in demand
Posted by KEJONES,
under Auto Loans, Debt, Family, Financial goals, General, Mortgage |
05/17/2010
Recently I read that if you really want to get ahead financially, you shouldn’t sweat the little things- like that indulgent, over priced coffee that you can conveniently swing by and pick up on the morning commute. Apparently that isn’t making as much of an impact on finances as that indulgent, over priced VEHICLE that some of us choose to drive. Or that ridiculous, keeping-up-with-the-Joneses house that that vehicle is being parked at. And I say AT and not IN because, be honest, the car isn’t kept in the garage because the garage is full of other stuff! Apparently we are spending too much on our cars, houses and food.
That made me think back to my recent post about cutting back on eating out: For my family, it’s true, an easy place for us to cut back. For my parents it’s not as realistic because they rarely eat out, so maybe that won’t work for them. So I thought more about the other things mentioned…the house and cars.
The house? Size-wise we absolutely could downsize, however we couldn’t scale back the mortgage payment, so that’s not really as realistic of an option. We were lucky enough to have land to build on given to us (from my uber-generous father in law!), contracting services and my husband and father in law (as well as other generous family members and friends) did a huge majority of the work. In return, we have a lot of equity in the house and a very low mortgage payment. It’s ironic because we were SO eager to get into our dreamhome and have space for everyone to spread out. I quickly learned that the more space you have, the more “stuff” you accumulate and the more space you have to clean! Thinking back to the days when we lived in a two bedroom apartment I realize I was happier. Yes, it was tight…and our family was one child smaller, but I think there is a happy medium to be had. Plus in this market, I can’t imagine listing a house and waiting for it to sell. Definitely NOT the time for us to downsize.
The cars? We have three kids…one car seat and two booster seats. Therefore, we are limited to vehicle options at this point. One is paid off, so that’s about as smart as it gets. It is on it’s second transmission and we are beginning to think it might be time for a third soon, although hopefully not. The other is not paid off, we bought it used and it works for us. I’m not sure we could replace it with anything more economical. We could lower the monthly payments by extending the terms of the loan, but that’s not smart for us, I’d rather pay it off sooner. We have recently checked into refinancing the car at a lower rate, we found some great rates through a local credit union, without extending the terms. If anything, I think we need to work on bulking up our 50 pound 8 year old, so he’ll grow and meet the height and weight requirements to get him OUT of the booster-then we can focus on our 6 year old. I’ll cut the baby some slack…for a few years anyway.
The food? We are working on it. We have adjusted to eating out less. I’m interested to see how we do by the end of the month. I’m not sure we will make our goal of 50% less, but I’m sure we are going to do better than we have been. And little by little, we’ll get there…
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No Comments | Tags: Auto Loans, budget, car payments, house, Mortgage, think big to save big
Posted by KEJONES,
under Debt, Financial goals, Special Events, Student Loans |
05/10/2010
Congratulations! You made it; you walked; you’re officially an alum…NOW WHAT? It seems like we spend so much time and energy in college trying to graduate, once we fin ourselves “graduated” we are left to think to ourselves, “Oh crap, now what?” It wasn’t that long ago that graduates walked across the stage, got their diplomas, then shed the cap, gown and diploma and traded them for a suit and briefcase on Monday morning. That is no longer the case. With the current economy, new grads are finding themselves alongside job candidates that have more advanced degrees, more experience, more everything. Suddenly, their ambitions come into question and some may begin to think “Maybe that’s not what I really want to do.” The path that you had laid out for yourself, might not be the one you find yourself on.
No matter your course, there are a few things one needs to decide upon.
Job or Graduate School?
For many people grad school is a requirement in their chosen field. For others, grad school delays entering a shallow job market and enhances their resume for when they are the future. This is the time to decide what you want for your future: do you need more school, or is it time to enter the workforce? The decision is purely personal and can only be made by YOU!
Where To Live?
As long as Mom and Dad haven’t turned your bedroom into a home theatre, chances are you would be welcomed back with open arms. And a list of chores. More and more college grads are returning to the nest in order to save money. As with any situation, there are pros and cons to both. At home, you have little-to-no rent, utilities and other associated costs. You are also living with your family…and it’s not easy to bring a date home. If you rent, you have the freedom to do what you want, when you want to do it. You also have rent, utilities and roommates.
Make Your Move
Now is the chance to decide where you want to live, geographically. You might be comfortable where you are and settle in your college town. Maybe you prefer your hometown…or maybe you want to get away to somewhere completely different. Think about it, if you could live anywhere in the world, where would you live? Ok, now go!
Welcome to the World of Budgeting
As inviting at it may be to celebrate that new job with a new car…consider the fact that you are generally going to be bringing home less than you think you will and your living expenses will be higher. As much as it will pain you to drive past that dealership everyday, sit on the idea of spending for a while, at least until you’ve had some time to adjust to the new costs associated with “living in the real world.”
Save or Spend?
Point blank: Start saving NOW. Seriously… today. The earlier you start planning and saving for retirement, the sooner you can retire, or the more money you will have to spend during retirement. And it’s not just retirement anymore: marriage, kids, cars and homes all come with a price tag.
Insurance
Health, auto, and life…it seems like the options and offers are endless. Insurance can be overwhelming to some people, but it doesn’t have to be. There are advantages to all the different options, just make sure you are paying for only the coverage you need.
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1 Comment | Tags: college, graduate, graduate school, graduation, insurance, job, post grad, real world
Posted by KEJONES,
under Debt, Family, Financial goals, Savings |
05/3/2010
Recently I began to think about the budget we had in my household, or better, the lack thereof. Every month we had money coming in and going out, but it seemed like we were constantly living paycheck to paycheck, never knowing where our money was going. It basically felt like we were just constantly paying more and more money out, with no end in sight and never being able to get ahead. Like many people these days we are constantly on the go with the kids: t ball, PTA, work, preschool, homework and other various activities, as well as everyday household duties: laundry, groceries, cooking and cleaning. At the end of the day we are exhausted and definitely NOT slightly interested in sitting down to create a budget. However, I was tired of constantly wondering where our money was going. It was like a slow hemorrhage from our account. We are working hard for our money, and I feel making more than enough to have more in savings and less in debt, yet it seems like we are in a constant state of “getting by” without “getting ahead”.
One day I sat down with my laptop at the kitchen table and pulled our online banking information for the previous 30 days. I downloaded it to a spreadsheet and sorted it into categories: groceries, dining out, entertainment, clothing, school / preschool related expenses, kid’s sports, healthcare, car payments, gas, auto and life insurance, utilities, mortgage, etc. I was nauseated to find that we spent $600 eating out the previous month! This was in addition to the $600 on groceries we spent. I fully anticipated spending $600-800 on groceries, as we do have a family of five, but I never would’ve guessed $600 on eating out. This was an area that I knew we could immediately make a change in with relative ease. We’ve set a budget for one family meal out per week, and then my husband and I each get one lunch per week, or any variation thereof, but no more than $75 per week. This will immediately free up $300 per month that can be used to pay down our credit card debt, which will then allow us to start saving more every month.
Have you taken the time to set up a budget yet? Where do you think you could cut back in order to better your financial outlook?
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No Comments | Tags: budget, dining out, eating out, family budget, kids, paycheck, reducing debt, restaurants
Posted by ET,
under Debt, ET, Financial goals, In The Media, Special Events |
04/16/2010
Most of us have heard the song “I have a feeling” by the Black Eyed Peas (lyrics = http://bit.ly/OfbuT). The band is great, and this particularly upbeat song is about going out and partying because “Woohoo, tonights gonna be a good, good night”! Today is a Friday (April 16), so should I just throw caution to the wind and blow my disposable income on a good time tonight? If I am a Pea, then yes, I will blow it all- “Tonight’s the night, let’s live it up, I got my money, let’s spend it up, Go out and smash it”.
Ok, this might not come as a surprise, but this is a really stupid idea unless you have a financial plan and monthly budget (find out more here: http://bit.ly/aIXghY). Spring fever causes many of us, me included, to lose our minds at times, but please don’t lose track of your financial goals – this will only give your bank account a black eye. Warms walks, baseball games, gardening, bike rides, golf, and dinning out are all especially fun at this time of year. Set a budget before you head out tonight and then stay within it, this will help eliminate any financial (or other) hangover that you could otherwise experience Saturday morning.
If you are looking for additional ideas this weekend, or want to plan an amazing Staycation with your family or closest friend, then check out some of these great ideas http://www.gosimplifi.com/MyVacation.aspx. Have a great weekend!
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No Comments | Tags: Black Eyed Peas, Financial Hangover, Financial Plan, Monthly Budget, Staycation
Posted by ET,
under Debt, ET, General |
02/7/2010
The short answer is yes, you can pay for the toy hamsters with your credit card. Cepia, the maker of Zhu Zhu Pets claims that over 7,000 US households now own these robotic rats, and I doubt they all paid cash. As a result, children and hamsters everywhere have been united in a sort of primal bliss that only fans of the critically acclaimed movie G-Force can understand.
Why do I care if you pay for a Zhu Zhu pet with credit when a single rodent retails for just $10? After all, this is a great price point for most parents. I care for two reasons, first – these toys are annoying to adults (yes, I am a victim) and typically lead to demand of the accessories that go with the pets, which then costs you more. (These accessories retail for much more $18 and up at Toys R Us http://bit.ly/75kIH5). But I mainly care for a second reason. Most Americans have credit card debt, and if you are one of them please reconsider. Small ticket items add up quickly, are difficult to keep track of, and will end up costing you a lot more in the long run. I am not trying to pick on Zhu Zhu pets, but rather want us to consider all of our little purchases before making them (coffee drinks, new iphone app, and/or any item sold in a retail check out line).
Lets pay off our credit card debt before making our next small purchase, and if you do need to buy something little – consider using cash. Losing sleep over the purchase of “Scoodles” the Zhu Zhu pet is understandable on many levels, but hopefully it will not be a result of rising credit card debt.
Popularity: unranked [?]
1 Comment | Tags: Credit Card Debt, Small Purchases, Zhu Zhu Pets
Posted by Sophie,
under Debt, General |
01/18/2010
We received this question yesterday from Donna T.:
If I have about $24,000 in credit card debt, is it wise to work with “credit reduction” companies claiming to work with the National Debt Reduction Program?
First of all, there is no “national debt reduction program.” There are companies that use the words “national” and “debt reduction” in their names, but there is no government sponsored program for debt reduction. In essence, it’s the Wild West out there when it comes to debt repayment companies, and you are pretty much on your own when it comes to considering whether you should use one of these companies.
Second, if you’re like Donna and you have a lot of consumer debt, take a moment to evaluate your current mindset about your situation. If you have a five-digit credit card debt load, you are most likely WAY over your head in terms of servicing and paying down this amount. Which means you’re probably stressing about it big-time, so the idea of debt reduction sounds really, really good.
Unfortunately, if something sounds too good to be true, it probably is. According the Consumer Federation of America, debt reduction programs are notorious for shoddy marketing and making promises to consumers that they can’t deliver.
In Donna’s case (and probably yours, too), the likelihood of a company being able to dramatically reduce the principal owed on a pile of credit card debt is small–unless she’s willing to declare bankruptcy and start over, which she wants to avoid if at all possible. A better bet is to get help with putting an aggressive payment plan in place. And this is where a number of reputable organizations can help. American Consumer Credit Counseling is a good place to start, or if you are a member of a credit union, ask if they use BALANCE. Or if you want to go hardcore, check out Dave Ramsey’s do-it-yourself approach to getting out of debt.
If your consumer debt problem is acute, it can make it really difficult to think about your overall financial situation, but I encourage you to consider creating a financial plan as a crucial part of getting out of debt. Defining your goals and understanding what it will take to achieve them is a great way to motivate yourself to deal with a major credit card hangover. To create a free financial plan for yourself, pop over to our planning service and get started. Good luck!
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