Beyond Paycheck to Paycheck

at May 18, 2009 in Carnivals, Cash Flow, Debt management, Investing, Media, Ranting, Retirement, Saving Strategies, Tax and Uncategorized. 3 Comments

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.

"financial education"

What are your favorite financial web sites?

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at May 11, 2009 in Ranting. 3 Comments

Besides this blog, where else do you go for financial information? If you visit other financial blogs, which ones? For non-blog sites, where do you go? Do you stick with those that have been around for many years, like Yahoo! and MSN Money? Do you choose those that you knew first from their off-line existence, like Money and WSJ? What about the “newer” sites, like Mint, Quicken? Which financial web sites do you like the best and why?

Thanks in advance - this will help me as I develop new blog content and recommendations - I want to know where you already visit and enjoy!

"financial education"

Politics and personal finance: Do they mix?

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at May 6, 2009 in Carnivals and Ranting. 2 Comments

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.

# # #

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.

"financial education"

Upromise underdelivers

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at April 17, 2009 in Ranting and Saving Strategies. 4 Comments

I don’t like to talk disparaging about other people or other companies.

You: So I’ve noticed.

Life is too short and the world is too small.

You: But you’re going to bad-mouth Upromise anyway?

No, I don’t really have an issue with Upromise itself. However, I am concerned about some of the people who have Upromise accounts.

You: Why?

Two reasons. First, because I’ve been asked various times at different speaking venues about my thoughts on Upromise as a key savings vehicle for college.

You: And the second reason?

Because I just received an email from Upromise on April 3 that began:

Dear Upromise member:

Congratulations — you’ve earned over $25 in your Upromise account.

You: Okay, so far so good. What’s the problem?

Here’s the thing: My former employer Toys “R” Us was, I believe, among the very first big merchants to join forces with Upromise (it was also one of the first big ones to discontinue its affiliation). As a result of my Toys “R” Us employee status and my financial bent, I decided to join Upromise and opened an account way back in May 2002.

You: That’s almost 7 years ago.

Indeed. My first daughter wasn’t born until nearly three years after I started participating with Upromise.

You: That is an early start for college saving.

It was an early start to think about saving for college. But participating in Upromise is NOT saving for college. Let’s be clear: Upromise participation is nothing like the miracle of compounding interest. There’s not much miraculous about Upromise. The premise is pretty simple: if you spend some of your everyday money with certain merchants (like Bed Bath and Beyond) and/or on certain products (Keebler), you’ll receive a small increase to your Upromise account.

You: How small?

Microscopic. And therein lies the problem. After seven years of Upromise participation,

You: You have over $25!

Yes.

You: How much over $25 do you have?

I have just under $50 in my account at this moment. At this rate, when my oldest reaches college, I should have enough to buy her about three-quarters of one textbook.

You: So does Upromise suck? Should I quit Upromise?

No and no. There’s nothing wrong with accepting free money and this is fifty bucks I can use in 15 years that I did nothing to earn. For that I am grateful.

Still, some people do get excited about UPromise. When they do so in my presence, I politley tell them to calm down and explain to them how little it will matter in the end. More important, I explain, is look at and begin saving within a 529 plan. (Upromise says they can help with that too.) Not surprisingly, most of your kid’s education isn’t going to be paid with fruit crackers, it will be paid with the fruits of your labor.

At the end of the day, buying one text book used instead of new will do more to ease your college financing dilemma than Upromise will.

Have you checked your Upromise account balance lately?

"financial education"

Friday Frenzy: Twitter, saving money on a phone bill, girl scout cookies, and the credit markets

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at March 27, 2009 in Cash Flow, Ranting and Saving Strategies. 0 Comments

After a bunch of requests, I finally got my act together and I’m now on Twitter. So, as the saying goes, feel free to follow me on twitter. I have many ideas for using this (relatively) new medium (to me) some of which I think are going to be fun, so hop on over there.

My brother, ever the negotiator, forwarded me a how-to guide to saving money on your cell phone bill.

Like I’ve said before, the dread of such tasks can easily exceed the reality of the undertaking. For the woman in this example, her efforts were worth over $500/hour. Better yet, her total time invested: 12 minutes. Most of us will dwell making the call for far longer than the actual call will take. But even if you do, you have no chance to save money until you pick up that phone. Your hourly earnings are zero dollars per hour. So: no more dwelling! Start doing and you’ll begin saving month after month on those recurring minor expenses, key current users of your precious cash-flow.

On a completely unrelated note and as I posted on twitter yesterday,

If the girl scouts can sell cookies to every American during a recession, why don’t we see if they can get the credit markets moving?

I welcome your thoughts on all of these topics. Have a great weekend.

"financial education"

I’ll keep the change, thank you

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at March 23, 2009 in Carnivals and Ranting. 0 Comments

Change is good.

It was finally warm enough to go on a hike yesterday. (Well warm enough for a short hike wearing a hat and gloves anyway).
There’s less than a month to go until April 15 (Yes, I do taxes and my clients are thrilled.).
Michigan won a NCAA tournament basketball game for the first time since 1998!
With the time change, daylight lasts not only past 4:30, but to nearly 7 PM.
I’ll be in Maryland and Chicago next month. (Be sure to let me know if you or your organization is nearby!)

All good things in my life to be sure and none too affected by AIG bonuses or Cramer vs. Stewart. Too many people focusing on “non-controllables,” if you ask me.

Lately, I’ve been spending more time on the blog, especially answering questions at what might be the world’s biggest first time homebuyer credit Q & A forum and finishing up delighted client’s tax returns. I hope to see and meet many of you online or in-person in the near future.

I just read through this week’s carnival of personal finance, hosted by Four Pillars. Good stuff there too.

Any good change in your life?

"financial education"

What are your thoughts on the government’s actions? Here are mine

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at March 18, 2009 in Ranting. 0 Comments

Periodically, but with increasing frequency, someone leaves a comment on the Beyond Paycheck to Paycheck blog where it’s obvious the writer is ticked off at his or her inability to receive maximum benefit from some new government incentive:

Just yesterday someone wrote of his frustration caused by an inability to receive the full recovery rebate credit due to a sizable severance payment. (There is some irony there.)

Someone else was upset he didn’t qualify for the 2009 $8,000 first time home buyer credit - the one you don’t have to pay back - because he bought their first home in late 2008.

Of course, those who purchased their first homes before April 2008 are upset they don’t qualify for the 2008 $7,500 first time home buyer tax credit (interest-free loan) that those who bought in late 2008 can benefit from. (Incidentally, those who purchased their homes from 2006 through early 2008 are far more likely to be further under water than those who will benefit from the credit. So, I suppose, they have a gripe.)

Whether it be the first first time home buyer credit, the 2008 economic stimulus payment, the 2009 recovery rebate credit, the second first time home buyer credit, the new 2009 economic stimulus payment (WOO HOO! thirteen bucks), there’s plenty of money being thrown at Main Street.

Yet even those who do benefit on Main Street are complaining that their take is a pittance compared to the amount of money being thrown at Wall Street. Even small businesses are upset, and, as a result, there’s going to be a whole bunch of new money thrown at small businesses in the form of loan guarantees.

Whenever a government arbitrarily picks winners and losers according to theoretically completely objective criteria, people who barely fall on the other side of the line are bound to be upset. Those who benefit are, of course, happy (until they realize that the money they receive is really that of their yet unborn great-great-grand children who will be stuck with the bill). I can’t imagine any government receiving wide-ranging support for so many extremely expensive initiatives. Furthermore, their actions could get in the way of equilibrium. Within the housing market, for example, many non-government experts believe that the only way buyers will rush, and they surely will, is if home prices drop far enough.

Well, those are my thoughts. What are yours? Which government initiative seems particularly promising? Totally unfair? Both? Don’t hold back, now. (You haven’t so far.)

"financial education"

Spring was here, saving still is - which will hang around

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at March 9, 2009 in Ranting. 1 Comment

It was in the fifties here in New Hampshire yesterday. In early March, that counts as a great day. It seemed like everyone was outside. Indeed, it was fun reconnecting with our neighbors over something besides a snow shovel. Having always lived in cold weather climates (New York, Michigan, Massachusetts, Illinois, New Jersey, and New Hampshire) I’ve wondered if people in warm places (southern California and Florida for example), could possibly appreciate a 50 degree day as much as we Yankees. (Yankee in this case meaning New Englander, not one who plays for the team from the Bronx.)

As a rough segue into personal finance, it’s as though I am asking if those with a bunch of money might have a tough time appreciating a sudden cash inflow of ten bucks like someone recently laid off.

Given our economy, it seems like people (both those with and without money) have begun to appreciate it a bit more. Our national savings rate has finally gone positive (although it remains paltry).

Will it last when the economy invariably turns around or is this a just while times seem bad phenomenon? After all, nothing lasts forever. It’s snowing right now, and the forecast is for three to six more inches.

"financial education"

Economic Stimulus - What’s in it for me?

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at February 23, 2009 in Ranting and Tax. 5 Comments

You: This economic stimulus - what’s in it for me?

There’s something for everyone (almost) in the economic stimulus package. But it probably isn’t much.

You: Well, what is it?

Starting in several weeks, you’ll get about 13 extra bucks in your weekly paycheck (probably.)

You: Just thirteen bucks? Didn’t the stimulus cost nearly a trillion dollars?

Yes and yes.

You: Okay then. Thirteen bucks. For how long?

For the rest of the year.

You: Then what happens?

Your stimulus gets reduced to nine dollars a week.

You: Is this a joke?

Define “joke.”

You: Something meant to evoke laughter through humor.

Intentionally evoke laughter or unintentionally cause laughter?

You: Intentionally evoke.

Then no.

You: Jeez. What else will I get from the stimulus?

That depends.

You: On what? On how I spend my $13?

No. It depends on whether you’re unemployed, needing health insurance as a result, looking to buy a home, or other specific conditions. Here are the highlights of what you may receive.

You: In addition to my thirteen bucks.

Right.

Unemployment Benefits

The first $2,400 of unemployment benefits you receive during 2009 will not be taxable.

You: What if I’m not unemployed?

Then this is not relevant to you.

Health Insurance

If you lose your job between Sept 1, 2008 and December 31, 2009 and want to keep your health insurance, you can select COBRA and the government will chip in 65% of the cost. You pay the remaining 35%.

You: What if my insurance is really expensive and I don’t lose my job?

Then this doesn’t apply to you.

You: What if I hate my job and quit?

No dice.

You: What it I currently have to pay more than 35% of the premium as an employee?

Then try to appreciate the irony.

People on Social Security or Who are Disabled

Many of those collecting Social Security or who are disabled will receive a one-time $250 check.

You: I suppose if I’m not disabled or on Social Security,

Correct. Nothing.

Car Buyer Tax Deduction

If you buy a new car before the end of this year, you can deduct the sales taxes you pay on the new car purchase even if you take the standard deduction.

You: What if I’m more practical and buy a slightly used car?

No tax-break.

You: What if my state has no sales tax?

No tax-break.

You: What if I buy a bicycle instead?

You’ll get better exercise but still no tax break.

First Time Home Buyer Tax Credit

The existing first time home buyer tax credit has been overhauled. The 2009 version of the first time home buyer tax credit was the subject of a recent post.

You: What if I already own my home?

Tell a friend.

You: That I bought a house too soon to qualify for the credit?

No. That your friend could still take advantage of the creidt.

You: Why would I want to do that?

Because you’re trying to be a nice person.

Miscellaneous

There are also some education-related spending and tax breaks for transit accounts.

You: I graduated school a fair bit ago. What’s the deal with the transit accounts?

You can spend up to $230 a month pre-tax for public transportation you take to work.

You: But I drive to work and my spouse works from home.

Then you get nothing.

You: Except the $13.

True.

You: Michael, you know, this conversation wasn’t very, how should I say . .. .

Stimulating?

You: That’s the word.

"financial education"

Blogging for the heck of it

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at February 17, 2009 in Ranting. 0 Comments

Blogging is one of the strangest and potentially loneliest activities. When I began blogging, I felt like I was writing in the middle of the forest.

You: Because it was dark?

No.

You: Cold?

No!

You: Were there bears nearby?

No. It felt like a forest because I wondered if anyone was reading what I was writing.

You: How is that like a forest?

If a tree falls. . . if a bear $hit$ . . . that kind of thing.

You: Gotcha.

Then, after a while I started to notice traffic picking up. Suddenly, one day, someone comments. A week goes by. Another comment. Then another. I start to think: “Okay, I’m making a difference.” Then –

You: Yes?

Nothing. Silence returns. Traffic stays but it is grows eerily quiet once more.

You: Like a forest. I get it. Kind of a bummer.

No doubt. Fortunately, I was able to fight through those early months. Now the Beyond Paycheck to Paycheck blog is growing quickly. It’s syndicated in a bunch of placed including at the Quicken’s Community. Recently, traffic is exploding and comments are too.

You: Really? It doesn’t look like comments are way up.

I know! It’s kind of a bummer (and also one of the reasons for this post). You see, there’s now a post about the home buyer credit with 36 comments on it and another post about the economic stimulus with a dozen. Each post is now approaching 2,000 views! But they’re not new posts, so many people don’t realize how our community is growing. So here’s the thing: “It’s okay to comment!”

You:I know, but there’s comfort in numbers.

That is so true, especially in blogs. There’s hardly a post, I’m finding, with exactly one comment. It’s either no one commenting or at least three or four folks. It’s just like at a seminar. No one wants to ask that first question, then someone does and next thing: I’ve got 20 questions headed at me and a line backing up from the autograph table!

So, go ahead and comment. One of the best opportunities was yesterday’s post asking what do you want from the blog. That’s an easy one to comment on. Check it out and let me know what you think. Or you can tell me to take a flying leap below (but it’ll cost you a comment.)