Do You Have What It Takes To Be Debt Free And Financially Successful?

Posted March 28th, 2012 in Financial Freedom by Jeremy Waller

No. You probably don’t.

You see there’s a reason that the majority of people are in debt. There’s a reason why the average amount of credit card debt per household is $15,956.

There’s a reason why the average American consumer has a total of 13 credit obligations on record at a credit bureau. These include credit cards (such as department store charge cards, gas cards, and bank cards) and installment loans (auto loans, mortgage loans, student loans, etc.).

Debt is a way of life that most people are accustomed to. It’s driven by a materialistic mindset that has no concept of delayed gratification.

Most people don’t think about how much something costs. They just think about if they can afford the monthly payment.

Delayed gratification is a concept that is lost on most people. Would you be willing to live on nothing for the next two years so that you can live free of financial pressure for the next 30? Well, most people wouldn’t.

The median household income in the U.S. in 2011 was $49,445. That means there are a lot of people living on less than $50k per year.

If your household income is $75k per year, could you find an extra $2,000 per month in your budget? You can’t? Then how does half of the U.S. live on $50k or less per year?

If you could, do you know how drastically different your finances would look 2 years from today?

For the average American, that would pay off all your consumer debt and give you a fully stocked emergency fund.

If you’re already debt free, investing an extra $2,000 per month could go a long way towards building wealth or generating passive income.

If you invested $25,000 per year in a vehicle with a 10% yield – which isn’t terribly difficult to achieve with high yield dividend stocks or real estate investments – and then re-invested the proceeds for 10 years – you would have nearly $400k that throws off $40k per year in passive income. And that’s not even counting any capital gains.

Oh well 10 years is a long time. Is it? Unless you’re in your mid 50s I can almost guarantee you that you’ll be working longer than 10 years.

Someone in their mid-20s, like myself, could retire before they were 50.

All this goes back to delayed gratification.

If you don’t have the discipline to live below your means and delay some of that pleasure, then you can look forward to a life of debt and late retirement (or possibly no retirement.)

It seems completely asinine to spend like there’s no tomorrow when you can achieve financial freedom from just one or two years of sacrifice.

Could you imagine not having to worry if you lost your job? Could you imagine being able to pay for your kids’ college without taking out loans? Could you image being able to travel to all of those places you always wanted to visit? Could you imagine being able to generously give to someone in need?

Many people give all of that up because they aren’t willing to sacrifice in the short term.

Giving up things may not feel good today, but isn’t it worth it for a better tomorrow?

What’s your view on all of this?

Top Personal Finance Posts Of The Week – Rising Gas Prices Edition

Posted March 25th, 2012 in Blog Carnival by Jeremy Waller

With gas prices there seems to be this magical barrier. $3.75 per gallon? No big deal. $4.00 per gallon? Double dip recession! End of the world!

In the summer of 2008, gas prices in the U.S. hit their highest point ever – a national average of $4.11 per gallon. Once gas passed $4 per gallon, many people started trading in their trucks and SUVs for more fuel efficient cars and many businesses started looking into redesigning their fleets.

Gas is once again nearing the magic freak out point. As of today, the national average for regular unleaded is $3.90.

Time to get a hybrid?

Top Posts of the Week

MMD @ MyMoneyDesign writes Would Dollar Cost Averaging Have Saved You From “The Lost Decade”? – The S&P 500 decreased by 23% during “The Lost Decade”. Would the strategy of dollar cost averaging have saved your investment portfolio from being reduced by this much? Let’s crunch the numbers and find out for ourselves.

Kyle @ The Penny Hoarder writes How to Get Paid $200 a Month Testing Websites – Website testers are paid $10 to record their opinions of a website’s appearance and ease of use. It’s a pretty easy job and there a number of firms currently hiring…

Jon the Saver @ Free Money Wisdom writes Buy Disability Insurance or Go Broke! – Disability insurance is a topic that most people don’t know much about. It can protect your income in times of crisis during your life!

A Blinkin @ Funancials writes Friends Don’t Let Friends Ignore Inflation – Lets say you have two friends. One of your friends keeps stealing money from the other. Wouldn’t you feel an obligation to warn your one friend about the other? Of course you would! It’s the same obligation I feel when I think about your money and inflation.

Corey @ 20s Finances writes My College Mistakes Everyone Should Avoid – My college experience was a blast and I learned a lot of financial lessons the hard way. I believe college students grow and mature faster as college students then most other times in their life. Students arrive on campus pumped up for all the good times to come, so oblivious to their responsibilities.

John @ Married (with Debt) writes Stress at Work? Take an Office Vacation – Experiencing stress at work? Find out how to reclaim part of your day and take a vacation in your office. It’s not hard.

Amanda L Grossman @ Frugal Confessions writes Keeping All Your Eggs in One Basket is Risky – My sister and I used to gather eggs from our henhouse for breakfast.

Kevin @ Thousandaire writes How To Turn Your House into Income – If you want to make some money off your house, consider renting out a room. That way you keep your place to live and make some money of it at the same time.

YFS @ Your Finances Simplified writes How Friends Can Ruin Your Finances – Have you ever had the kind of roommate that eats everything in the fridge even though he didn’t buy the groceries, or come up short on rent and ask you to cover for him?

Shaun @ Smart Family Finance writes Should Families Buy a House or Rent an Apartment: The Risks of Homeownership Compared to Renting – Understanding the risks of homeownership can also help you implement strategies to reduce those risks.

The Top Personal Finance Post of The Week

And my pick of the week is……

The post by Ken Faulkenberry @ AAAMP BlogI Lost 100% of My Investment and I’m Happy I Did!

Ken learned three huge mistakes many investors make.

  • I was greedy.
  • I was lazy.
  • I followed the crowd.

It cost him $1,000 to learn, but has likely saved him much more than that over the years.

Infographic: How Much Do People Spend On Coffee, Lunch and Gas for Work?

Posted March 20th, 2012 in Frugal Living by Jeremy Waller

I’m sure you’ve heard before how quickly things like coffee and lunch can add up if you’re buying them every day. Anecdotally, I’ve talked to a number of people who are making coffee at home and are bringing leftovers for lunch to save money.

However, according to this year’s Accounting Principal’s Workonomix Survey, there are still plenty of people that are spending bucket loads of cash buying coffee and lunch every day.

Half of the American work force chooses to buy coffee every day and over 50% of people who buy coffee are spending more than $20 per week – over $1,000 per year.

Nearly a quarter of the people surveyed prefer to dine out for lunch, spending $37 per week on average – or almost $2,000 per year.

Here’s a neat infographic that lays out some of the findings (click for full size image):

Top Personal Finance Posts Of The Week – $98 Billion Question Edition

Posted March 18th, 2012 in Blog Carnival by Jeremy Waller

Tomorrow morning Apple is holding a conference call to discuss the result of a series of internal conversations regarding its $98 billion war chest.

It was no secret that Steve Jobs was adamant on keeping a rainy day fund – most likely as an overcompensation for the company nearly going bankrupt in the 90s. However, the new man in charge Tim Cook has said, “it’s more than we need to run the company.”

There has been an increasing demand to return cash to the shareholders. This could take place directly in the form of a dividend or indirectly via a stock repurchase program.

Needless to say, the outcome of the call will be plastered across the news tomorrow.

Top Posts of the Week

Scott @ Mortgage 1A posted FHA Loan Requirements and Underwriting Guidelines – The Federal Housing Administration, commonly known as “FHA,” is part of the U.S. Department of Housing and Urban Development (HUD.) The program was created for low income individuals, or families that might need a little help in the homeownership process.

Aloysa @ My Broken Coin posted Some Jobs Pay More Than You Think – The other day I overheard a conversation in the park while waiting for my pug to sniff a dry bush on the curb. Two girls were power walking, passing by me, discussing something animatedly.

Dividend Ninja @ The Dividend Ninja posted Building My Portfolio for Retirement, with Dividends and Bonds – In my mid to late 40’s, my focus of late has been more on planning for retirement and how I will generate a consistent monthly income to fund my retirement. I find myself in between the need to increase my portfolio through capital appreciation, but also for the need to generate monthly income in retirement.

Christopher @ This That and The MBA posted Side Hustle: The Real Mobile Hot Spot – Would you do this for a side hustle?

Shaun @ Smart Family Finance posted When Should You Rent and Not Buy? – Renting can save you money if you follow the rules and understand when you should rent instead of buy.

Christopher @ This That and The MBA posted What to do Wednesday in Personal Finance? Is the Adjustable Rate Mortgage becoming extinct? – What do you think about the future of the ARM? Come take a look at my thoughts.

Erika @ Newlyweds on a Budget posted How to make money as a mystery shopper – Mystery Shopping has a lot of perks. It may not be a lot of pay, but you can get free groceries, oil changes, restaurant meals and more!

Early Retirement Investments posted Is It Better to Bank With a Credit Union? – Read my viewpoints on why credit union may be the better of the two

Dr. Dean @ The Millionaire Nurse Blog posted Killer Jobs: Do You Have One? – Is your job killing you, one keystroke at the time? What can you do when your job requires you to sit for long hours?

AverageJoe @ Average Joe’s Money Blog posted The Passive Income Lie – Everyone’s excited about passive income. Heck, so am I. But is the promise of “work hard now so you can play later” a goal you should pursue?

Steve @ The Loonie Bin posted Investing In Your Health – If it’s important for an investor to make quality investment decisions to efficiently expand their wealth, is it not just as important to make healthy decisions to expand the lifespan of the investor?

Ashley @ Money Talks Coaching posted How Has Your Childhood Affected Your Money Habits? – Think back on your childhood and choose one word to describe the feelings you had about money as a child.

Steve @ Money Infant posted How to Quickly Pay Off Your Credit Cards – Do you want a simple formula for paying off your credit cards as quickly as possible? This is what I did to get rid of $60k worth of debt in just 33 months.

Wayne @ Young Family Finance posted What to Invest in? – Are you wondering what to invest in? Where to invest your money? Find out what you should not be doing.

Credit Cards Are Dangerous: The Psychology Of Paying With Cash

Posted March 15th, 2012 in Credit Cards by Jeremy Waller

Over the years I’ve discovered that knowing how to manage your money is only 20% of the picture. The biggest part, by far, is the mental battle.

If I could sit down with you for 1 hour, I could teach you everything you need to know to budget your money, pay off debt, invest and save for retirement. It’s not conceptually difficult.

What is difficult is living out that plan over the next year and the next 5 years and the next 20 years. Continue Reading »

Let’s Talk About Debt

Posted March 9th, 2012 in Debt by Jeremy Waller

The following is a guest post from Suzanne Coblentz. Thanks Suzanne!

No, I am not joking, I really want to talk openly about debt.  For many American’s living with economic challenges has become quite normal. Of course, most of us don’t really view the stress of mounting credit card debt as a ‘challenge’, but more of an inconvenience to be dealt with eventually…like retirement.

Paying off or consolidating debt is one of those things on our to-do lists, something we resolve to work on with the New Year etc.  But, it’s not something we actually deal with, not until we have to.

It is the lack of familiarity with their options that holds most people back from finding debt help.  It can be confusing to understand the difference between debt consolidation, debt management, debt settlement, bill consolidation, loans and more. The only well-known way to get rid of debt is bankruptcy and that is not really a solution as much as a last resort.

So let’s make this a reality.  Take a few minutes, get online and do some research.  There is a wealth of information available on; blogs, providers of debt relief services websites, and reviews sites, all talking about debt solutions or debt relief service providers.

This information is free for the taking.  Once you understand the debt lingo, you can then determine if you can do things on your own to expedite paying off your debt, if you could benefit from a debt management plan or if you are in need of more serious services like settlement or bankruptcy.  Don’t hesitate to contact these providers directly and ask questions, lots of questions, but do not feel obligated to do anything until you feel ready and until you fully understand how the plans work.

Whatever you do, just be sure to do something.  Don’t push off tackling your debt head on and giving yourself a second chance financially.  If you are ready to have a conversation about your debt, here is a provider checklist to help you evaluate different debt relief service providers.

Suzanne Coblentz

Suzanne is a CareOne Debt Relief Services community moderator and works in the Social Media department. If you have questions about CareOne Debt Relief Services please visit www.CareOneCredit.com or call and speak with one of our certified credit counselors, 1-888-888-CARE.

Carpooling Etiquette: 10 Ground Rules To Keep Your Sanity

Posted March 6th, 2012 in Cars, Frugal Living by Jeremy Waller

The following is a guest post from Alex Kelly. Thanks Alex!

Whether it’s rising gas prices, the cost of parking or just the frustration that can come with the daily commute, there are many reasons why you may be considering forming a carpool. Carpooling, or sharing a ride with others headed to the same destination, can help you save money and wear on your vehicle.

There are two primary types of carpools: those for work and those for parents whose children participate in extracurricular activities. You can also find ride-sharing options for long-distance trips and errands such as doctor appointments and grocery shopping.

Regardless of the type, any carpool requires certain logistics and ground rules in order to work effectively. Use these 10 carpooling tips to get started.

  1. Dividing the cost. If all passengers take turns driving, then each can assume the full cost when he or she is the driver. If the carpool has people who are only riding and never driving, then you might consider equally splitting the cost of gas, vehicle wear and tear, parking and tolls. Consult AAA’s driving cost assessment to help with the math.
  2. Finalizing the carpool participants. Decide who will be carpooling and how you’ll split the driving.
  3. Coordinating pick-up and drop-off. You have several options: meeting at a central location, meeting at the driver’s house or having the driver stop at each residence.
  4. Dealing with tardiness. Establish how long the driver will wait for latecomers. A window of five minutes is generally acceptable.
  5. Deciding how often to carpool. Carpooling even a few times a week can help lessen the cost of driving and reduce stress. For passengers who have occasional obligations before or after work, a daily commitment just isn’t feasible.
  6. Etiquette in the car. One of the best carpooling tips is to discuss what is acceptable in terms of music, cell phones, food, smoking and scents like air fresheners, perfumes or cologne. This can prevent a lot of tension.
  7. Emergency arrangements. Come up with a plan to follow when the driver is suddenly unavailable. Advance notice would be best, but if it’s a family emergency or the car won’t start, you don’t always know ahead of time. Be sure to exchange contact information so everyone can be notified.
  8. Vehicle requirements. While you can’t control the cars that others drive, your carpool group may want to insist on certain standards, such as the number of seats, full coverage car insurance, cleanliness or safety features. Passengers whose cars don’t meet the requirements must be riders only.
  9. Discussing driving records. Have an honest discussion about accidents, speeding tickets and more serious offenses before you start carpooling. If any participant’s driving record is less than desirable, don’t be shy about asking that person not to drive.
  10. Agreeing on a policy for extra stops. Talk about whether you will allow time for stops on the way. It can be a great inconvenience for others in the carpool if you insist that the vehicle make unplanned stops at the pharmacy or dry cleaner.

Finally, be sure to check your vehicle insurance policy to see if it mentions carpooling. You want to be sure you have enough coverage to protect against the unexpected. If you’re not satisfied with your current insurance, consider shopping around for a better package.

Top Personal Finance Posts Of The Week – Cutest Kids Ever Edition

Posted March 4th, 2012 in Blog Carnival by Jeremy Waller

This weekend we did 6 month pictures with the boys. I may be biased, but these are the cutest freakin’ babies I have ever seen!

The pictures totally capture each one’s personality. Ian, who’s personality is perfectly captured on the top right, is high strung and lets you know exactly how he is feeling. He wasn’t very happy that we were forcing him to sit still for pictures and he was letting us know with his incessant arm waving and angry babbling.

Noah, with the toothy grin on the bottom right, is our laid back boy who smiles at almost every occasion. He’s always happy and super easy going.

Like the picture above says – we truly are twice blessed.

Top Posts of the Week

My Wealth Builder posted Roth IRA Contributions for Higher Income Individuals – “In 2010, Congress removed the income limitation to do a conversion to a Roth IRA. This created a loophole for high income people unable to make Roth IRA contributions due to income limitations.”

Dr. Dean – The Millionaire Nurse posted Eight Reasons Why Single Women Buying A Home Is Nuts! – “Twenty percent of single women own homes, compared to just 10% of single men. Most experts think single women are drawn to the comfort/security that comes from living in your own place. Financially, is buying a home a good idea?”

Simple Debt Free Finance posted Save Money on Insurance – Skip These Insurance Policies You Don’t Need! – “Some insurance policies are a waste of money, and some are essential. The trick is knowing which is which. Here’s a quick guide to some of the most unnecessary insurance policies available.”

All About Living With Life posted 10 Wise Quotes About Money

Nerd Wallet posted NerdWallet’s Top 10 Personal Finance Apps – “We’ve chosen a few of our favorite finance apps that make money management a little more convenient.”

Modest Money posted My Decision To Live In An Expensive City – “As I prepare for my move at the end of the month, I’ve been thinking more and more about my decision to stay close to Vancouver. It is a very expensive city to live in, but I feel at home here. Am I a fool for staying here when I can’t really afford it? Maybe, but I just can’t see myself living anywhere else at this point in my life.”

The Busy Executive posted Why I’m NOT paying off my mortgage early – “Keep in mind that just because you don’t pay off your mortgage early doesn’t mean you are incapable. I soon expect to have enough cash liquidity in reserve to retire my mortgage instantly if I should change my mind. I’m holding off because I believe that I will have better investment options down the road.”

The Top Personal Finance Post of The Week

And my pick of the week is……

Control Your Cash’s post DOW hits 7634! What now?

You win because you hit one of my biggest pet peevs:

CBS News has a video clip with the wonderfully objective title: “Dow 13,000: Time to Invest?”, which itself summarizes why financial illiteracy is pandemic. Yes, first let’s overpublicize a rise, however modest, in the Dow level. Then, let’s imply that people should buy stocks. Because that’s when you want to buy, when prices are rising.

I’ve wanted to punch my monitor more than a few times this week because of stories like this. I am in 100% agreement with your wonderfully sarcastic post.

Blog Carnivals and Other Mentions This Week

Carnival of Money Pros at Money Pros
Yakezie Carnival at Not Made of Money
Carnival of Financial Camaraderie at My University Money
Totally Money at Afford Anything
Canadian Finance Carnival at Canadian Finance Blog
Carnival of Wealth at Control Your Cash
Carnival of Retirement at Money Reasons
Financial Carnival for Young Adults at 20’s Finances

Is Laser Hair Removal Worth It? Warning: Highly Technical Analysis

Posted March 1st, 2012 in Frugal Living by Jeremy Waller

Ok. I admit this post is a little strange for me. Laser hair removal isn’t something that crosses my mind often (ever?)

But, I saw a Groupon the other day and I really did wonder if you could save money in the long run. I can’t remember the details offhand, but it was something like $400 for six sessions on an “exta-large” area. (Do they charge more if you’re really overweight?) I’m assuming that your legs or your back fall under the extra-large category. Continue Reading »