So my wife and I are starting to shop for a home. We’ve never owned a home before. We almost did twice before, in two different states and in what seems like two different lifetimes ago. For a variety of reasons, it didn’t happen either time, but I’m pretty sure it will this time.
You: What makes you so sure?
As I said to a friend at a party recently: “If we don’t buy a house soon, you won’t hear about a divorce, you’ll read about a murder.”
You: Your wife really wants a house, eh?
Yes, quite perceptive of you.
You: You?
I’m ready, especially now that the bubble has become self-evident. Still, I’ve always been cautious about owning a home and remain so. Not that it’s going to stop me (remember, I like life), but an article featured in this week’s carnival of personal finance called The Other Costs of Home Ownership serves as an excellent reminder that owning a home has far greater costs than simply the monthly mortgage. Tough Money Love gives quite a list including:
- Property taxes
- Homeowner’s insurance
- Lawn care
- Internal maintenance
- Keeping up with neighbors
So my question to you homeowners: What’s surprised you, financially speaking, about buying and owning a home?
To everyone, regardless of homeownership/renter status: are you interested in hearing about our progress towards home buying including the ups and downs, the negotiations, selecting and working with a realtor, the pro’s and con’s of various properties, and so forth? Which parts of the home buying process would you find to be the most interesting or educational?
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Of all the articles in this week’s Carnival of Personal Finance, I most enjoyed Moneymonk’s Why American’s Don’t Save. Perhaps because it reminded me of a post I wrote long ago, Top 10 Excuses For Not Saving, but also because it was an excellent reminder of being realistic about the future.
Fact 1: It won’t be easier to save in the future.
Fact 2: Tomorrow is promised to no one.
The solution is, and has always been, living in balance.
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I’ve found that my various ever-increasing subscription lists have minimal overlap. It’s exciting to see the numbers grow, of course, but I haven’t done a great job in informing everyone what’s available from me elsewhere. Here’s where you can get financial education from Total Candor and I - choose your favorite format(s). Cancel
- The Total Candor free monthly newsletter has some of the blog’s best articles of the month, links to additional media, and deals/discounts on Total Candor products. You can sign-up for the newsletter here.
- You might not know: I wrote a book called Beyond Paycheck to Paycheck. It’s the number one customer-rated book on Amazon.com’s Money Management for Young People list. You can buy it from Amazon, or buy it directly from Total Candor (and have it autographed). It’s great resource for all ages and makes a terrific graduation gift (Northwestern University apparently agreed; they provided a copy to every member of the Class of 2009).
- I am also an expert for LifeTuner.org, a new site geared to young people and brought to you by the non-profit AARP.
Anywhere I’m missing that I should be (or I forgot to put on this list?)
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You: It’s not lighthouses.
Probably not.
You: Or millions of acres of corn fields.
Not likely.
You: What is it?
Very high average student loan balances.
You: How and why would you know this?
Late at night, after we get the kids down, one of the things I like to do to relax is study student loan patterns by county.
You: For real?
Heck no! I was just reading the carnival of personal finance, hosted by Living Almost Large and noted an article by Broke Grad Student called Average Student Loan Debt By State. Inside the artcile is a map of average student loan debt by state. (I will admit to being a bit of a map geek).
The states with the two highest student loan burdens are Iowa and New Hampshire. Broke Grad Student and several commenters weighed in with their theories as to why. Not surprisingly, factors include the cost of the schools in the state, the extent of state support to the public schools, cost of living, and cultural factors.
Check out the carnival, article, and map. How does your state fare. Are you surprised at all by the results?
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I’m always eager to share articles written elsewhere that are useful to Beyond Paycheck to Paycheck readers. That’s one reason I read the Carnival of Personal Finance every week. This week’s version, hosted by fellow New Englander David from Money Under 30, includes my post Should I Repair My Car or Buy Another One?
Of the more than 100 articles at the carnival, one immediately caught my eye: The Digerati’s Balance Transfer Credit Card Tips, Facts and Traps. While much has been written on this topic, few writers have tackled the balance transfer “opportunity” as succinctly. More importantly, Silicon Valley Blogger includes a little table summarizing where the current opportunities. Alongside, the accompanying text highlights your key personal considerations. Like most other personal finance considerations during a downturn, opportunities abound - just not in the same place nor in the same way as a few years ago.
For anyone with existing credit card debt, his article should be considered required reading. Note: your individual conclusion may be to do absolutely nothing. And that’s okay too.
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Although my wife and I are going to celebrate our 10th anniversary in a few weeks, it was as though we were married only yesterday as I read The Weakonmist’s post How I Saved 15% On My Wedding Ring In 15 Seconds & 45% Overall, which I found while reviewing this week’s Carnival of Personal Finance, hosted by Funny About Money.
Truth be told, my wife’s wedding ring and my wedding ring are both remarkably inexpensive. We went for the traditional plain gold matching bands. However, when I had previously purchased my wife’s engagement ring, I did almost everything wrong.
You: Tiffany’s?
I said “almost everything.” I did go to the diamond district in Boston and sought out a wholesaler/retailer.
You: But?
But I totally failed to negotiate.
You: Why?
Quite honestly, I didn’t know you could, so I blew it (From a financial perspective only; it’s a beautiful ring and, as I said, my wife is still tolerating my nonsense 10 years later). Nonetheless, I have long since learned that virtually everything in every jewelry store is negotiable. About the only difference between a jewelry store and car dealership is the lack of a negotiation about the value of the “trade-in.”
The Weakonomist gives a great quick summary of how easy negotiating jewelry can be. My experience echoes his findings. Simply asking for a discount will often garner one and the greater your “ask,” the greater the follow-up discount. Margins in jewelry (unlike cars) can be very high, so jewelers have great incentive to move merchandise, even at lower than sticker price, rather than stick to their guns and lose a potential sale to a competitor.
Have you haggled over jewelry? What strategies worked for you?
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My wife and I took a “staycation” this weekend. I’ll admit we didn’t plan it that way. We had a busy Saturday planned but aside from a brief visit by family Sunday, little else scheduled for the weekend.
But sometimes you really can enjoy the place you live.
The weather in New Hampshire was stunning all weekend and so we were outside for most of it. We ate most of our meals outside (ranging from in town by the harbor to at a picnic by a lighthouse to our own backyard). We also spent a lot of time at the beach and took many walks with the kiddos to different neighborhood playgrounds. Each night, everyone (including me) fell asleep with a smile on their face and slept soundly. This weekend proved, once again, that some of the best things cost very little (or nothing at all).
Now, it’s back to the work week. Having just read this week’s carnival of personal finance, hosted by Greener Pastures and featuring my post Yet another reason why you shouldn’t even try to time the market, I’d like to point out an enjoyable - if not somewhat disturbing - post by Jeremy at Taking Charge called Am I a lab rat in the credit card industry’s psychology experiment?
Jeremy reminds us of an interesting and not well-known feature of credit card usage: tracking. A bank can learn a lot about the likelihood you’ll repay your debts based on the types of purchases you make - not just how much you charge and your recent repayment history. With the recent legislation capping fees and rate changes credit card companies can collect and modify, you can bet that the use of models like those Jeremy discusses will only increase as financial services companies quickly move to find ways to minimize their losses.
So, what do you think about being a lab rat?
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One of the best parts of the weekly personal finance carnivals, including this week’s carnival hosted by WiseBread, it the wide variety of personal finance topics covered. In addition, I always take the time to enjoy an article or two that I’ve been meaning to write myself but just haven’t gotten to. This week was no exception, even if my post about The New Frugality made the cut. Here are my three favorites of the week:
J. Money from Budgets Are Sexy presents Paying extra towards your loans now, goes a long way later! This is so true it hurts. How much pain? As J. Money says, “It’s like kickin’ compound interest in its head and getting away with it :)” How could you not enjoy?
Another favorite: Save Money By Buying the “Good” Toilet Paper by That One Caveman. Two very important lessons from this title. First, you can never go wrong putting “toilet paper” in a blog posting title, something I learned a while back when I wrote Toilet Paper As an Economic Indicator last fall - still is a bizarre way to look at the world. Second, sometimes paying for quality is actually cheaper than paying for quantity. (Amazingly, this was also the theme of the toast my brother gave for my wife and I at our wedding, but that’s another story for another day.)
Money Lessons from Monopoly is another wonderful article. Free Money Finance reminds us that Monopoly is a great teacher not only of the importance of cash-flow (how much fun is it to mortgage our properties?) but also of luck (the frustration of your opponent consistently missing your hotels as he marches around the board).
Quick FYI: The Total Candor web site was featured in the Philadelphia Inquirer over the weekend for savings help. Did you see it? If not, see it now.
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You: Uh-oh.
What?
You: You’re not going “there,” are you?
No. I have consistently tried my best to suppress any political leaning from my blog postings, books (I say books, not book, because I am working on book number two right now), and seminars.
You: But you must care, right? You do vote, don’t you?
Yes and yes. However, my attitude has been that providing an unbiased education was far more important than an occasional rant about politics. Given the unbelievable political split in this country, why even go there and risk someone not really hearing the message because an off-topic comment got him so angry/pleased? Maybe someday I’ll weigh in on certain political issue, but I see no point in doing so now.
It seems that most personal finance bloggers take a similar approach. Nonetheless, one blogger recently reported on Dave Ramsey’s recent venting on what the government has done in the last few months including his line: Bush and Paulson decided to bailout stupidity and the new administration decided to stimulate stupidity.”
You: What do you think?
I think it’s great to see someone who knows about personal finance candidly sharing his opinion on what the government is doing. Furthermore, I’m always in favor of responsibility at any level, including government.
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What about you?
If you enjoyed Rocket Finance’s post, you’re sure to enjoy several others from this week’s Carnival of Personal Finance, including my Red Sox personal finance moment, Expect the Unexpected: The Jacoby Elllsbury Edition.
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You: Did she irritate you?
Actually, she really irritated MoneyMonk, as she writes about in her recent post Can I afford it: Suze Orman, I’m mad at you!, which, like my review of Upromise (Upromise Underdelivers) is featured in this week’s Carnival of Personal Finance.
As you may already be aware, one of the most popular segments of the Suze Orman Show is when she answers people’s questions about whether they can afford to buy things or make certain financial decisions they are considering. According to MoneyMonk, a man asked Suze Orman her opinion on his proposed purchase of a $30,000 round-the-world trip for his 40th anniversary. He has a net worth of nearly $300,000, is retired and is debt-free.
You: What did Suze say?
She denied him.
You: And this irritated the blogger?
Yes, and nearly everyone who commented, including me. Read the article for the reasons why. It’s a good reminder for the importance of balance and understanding both life’s and one’s financial “big picture”. (A difficult task to be sure for anyone to accomplish in a few minutes on a TV or radio talk show.)
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You: No, they don’t.
But they do influence your spending.
You: Sometimes, I guess. I hadn’t really given it much thought.
I haven’t written about it in a while. But entertainment spending irrefutably is tremendously impacted by those you go out with. For others, the amount they spend is also influenced by who they are with for other expense categories, such as clothing and other mall-type retail stores.
In reviewing this week’s Carnival of Personal Finance, which featured my article Friday Q & A: First Time Home Buyer Tax Credit, I noted Broke Grad Student’s How Friends Influence Your Spending Habits.
As the weather begins to warm up around the country, (not so much really here, but soon enough) it’s a good reminder to spend on and when it matters to you, not just because some of your peers are. While you never genuinely know what another person can actually afford, you should take the time to self-reflect; to truly understand when and how you wish to spend your finite resources.
What would you discover about yourself if you took the time to do so?
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