Personal Finance Resources

Before I left my job, a co-worker and friend of mine had a valuable story to tell about retirement, and how to wisely enter into retirement. He had worked for nearly 30 years with the same company, and agreed to an early retirement offer from that firm. He had saved and invested well in the stock market over the course of many years; he did everything right. However, the recession of the early 21st century slashed his retirement accounts. Does this story sound familiar?

In this edition of Personal Finance Resources, I would like to offer some ideas on how to allocate and use your saving while in retirement. Many of the larger financial institutions offer a wealth of resources to save for retirement, but not how to spend your money wisely while you are in retirement. So without further ado, let’s get started:

1. The golden rule of retirement spending:
   Spend no more than 5% of your savings per year, and you should expect to maintain your principal balance in your account(s). This concept is very simple as most CDs, money market accounts, bond funds, etc. are very low risk, but still offer a return close to 5%. So if you earn 5% on your principal, and spend 5% per year, than you should end up with roughly the same amount of money, therefore you can effectively live forever (at least from a financial standpoint, ).
2. Transfer your high risk investments to low risk investment alternatives:
   This is part of the issue my friend was faced with when the early 21st century recession hit. He was still invested in moderate to high risk funds, and as the market fell, he got hammered. Now, over a long time line, investing in these types of funds tends to yield much better results; however, if you are needing your money now (like in retirement), then you need to be in lower risk securities such as bond funds, money markets and CDs.
3. Don’t get suckered into ridiculous spending:
   Timeshares, expensive vacations, and other things all sound great, but can really hammer your hard earned savings. Now don’t get me wrong, you need to have some fun in retirement, but don’t let the salesmen talk you into all the extras that spiral the costs up. Get the basic vacation packages, and don’t buy timeshares. Also, don’t buy new cars every year, or participate in car leases. There is a tremendous expense associated with this type of car buying. Get that new car you want, but keep it for a few years.
4. If you get into trouble and need money, consider a reverse mortgage:
   I’m not going to get into the nitty-gritty details of the Reverse Mortgage HECM, but this strategy can be a life saver for those in retirement that are hurting. The short of it is that you can get money now at a very low interest cost, with a wide variety of withdrawal/payment options.

These are some simplified methods to wisely dispersing your savings while in retirement. Please leave any comments you have at the bottom of this page.

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Hey guys, this is Jeffry’s wife, Sarah. I manage a blog about weddings, and Jeffry asked me to write a post for him today. Since I don’t know as much about managing money as I do about weddings, I figured I would stick with what I was good at. Weddings can be a huge and costly endeavor, and if you’re not careful, you could wind up spending a whole lot more than what you had intended. Statistics show that the average American wedding costs around $28 k. Crazy huh? Thats like a brand new (nice) car for the festivities of one day. I remember when we were planning our wedding, Jeffry was astounded at the costs some of our wedding vendors were wanting to charge. Most couples today wanting to get married can’t afford to spend that kind of cash to pay for their wedding. Whatever the case, it is advisable that every couple create their own wedding budget to help manage their spending while doing their wedding planning. Coming up with a wedding budget can be difficult, and here are some pointers to help you get started.

Determine Your Available Funds

Perhaps the first step in determining your wedding budget is to consider how much money you will have to spend on your wedding. This includes any money from parents and other family members, as well as any money you are planning on spending yourself.

Determine the Type of Wedding you Want

This is something that I cover extensively in my blog. If you only want to have a wedding with close friends and family, then you will not be looking at the kinds of costs that you would if you were planning a larger wedding. Also, another great piece of advice is to determine where you want to spend the bulk of money that you have allotted for your wedding. If you want to have a totally elegant and beautiful wedding ceremony, then spend the bulk of money on your church decorations, flowers and dress, and only have a small snack reception, or cake and punch reception.

Determine Your Costs

This step in creating your wedding budget can be a bit tricky, and will require some work. You’ll need to start getting initial pricing from such vendors as your wedding location, your caterer, florist, photographer, the dress you want and more to get an idea of what everything is costing, and adjust your budget accordingly. Don’t be afraid to negotiate, and get your pricing in writing, with how long the pricing will be good for. Talk to as many vendors as you can, and look for ways to cut cost.

Adjust Your Wedding Budget Accordingly

Once you have all of your pricing, you’ll have an idea of what kinds of funds you’ll need to get the kind of wedding that you want. If you find you’ll need extra funds, then you can look for ways to cut costs, or just look for a short term loan at a low interest rate. With the Fed lowering rates, you’re sure to get a great interest rate on a loan.

I can’t tell you how easy it is to go over your wedding budget if you aren’t careful. I remember I had a really difficult time staying within my budget, and even went over my budget a little bit right at the end. There are lots of tips and tricks that you can use to cut costs at your wedding, so take advantage of all the information that you can to help ensure that you have the wedding of your dreams, at a cost you can afford.

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This is a good article on starting off your 2008 finances in the right direction. It gives some tips about budgeting, getting out of debt, and just sound advice about sure footing in personal finance. We all need to do better with our finances in 2008 than we did in 2007, so click the link, read up on it, and then come back here and submit your questions, I’ll be glad to answer them. Check it out guys (and gals).

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For some folks out there, budgeting on a “month cost” method just doesn’t work for them. They have enough money coming in from their job to be able to afford the fast food, movies, and other entertainment that will just kill your budget. They don’t really have the concept of staying on budget, and sticking to what they had planned to spend. There is one such lady in our Church that I talked with a few days ago regarding just such a situation.

In this case, she is a single mother, two kids, and works as a nurse for a local hospital. She makes good money, and is able to afford the little things like going out to eat a lot, getting drinks at the gas station all the time; little things that will just destroy a budget. She wants to do better with her budget, and has tried at one point to chart all of their expenses, and got depressed when she noticed what she was spending.

For her, sticking to a monthly budget would be hard. She identified their main problem though - going out to eat at fast food places too much. This is a problem for a lot of people out there, but with a little discipline, it can be overcome. Since she has trouble maintaining a monthly budget, I offered this solution to her:

Instead of trying to keep a dollar tight budget, how about setting a maximum number of times per week to go out?

Let’s say she limited their number of times to go out to 3 per week. If she is able to stick to that, she would see a dramatic decrease in the total money spent over the month. Try it out sometime, just promise to only spend the additional money at the gas station or the fast food restaurant 2-3 times per week. So when you get the urge to go inside the station and get that coke, you may back off, to keep to the limit you set. I use this method as well, we go out twice a week, often I will grill once a week, and on a rare occasion we will get a Dr. Pepper at one of the local gas stations (it’s something about the way they mix the Dr. Pepper in their fountain drinks, it’s just really good).

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The holidays are over, but that doesn’t mean they aren’t still going to haunt you for another month or two. In fact, those credit card bills are probably going to be showing up very soon in the mail. However, don’t let the post-holiday bills get you down too much because there are a few strategies you can use to get you through the holiday bill season, such as a simple cash advance.

If you’ve been like most people and swiped the credit card through the holiday shopping season, then you’re probably going to have a hefty bill coming soon, if you haven’t received it already. There are a couple of ways you can insure you get that bill paid off and a budget and cash advance can go a long way.

Subtract your expenses from your income and see where you can pay a little more. If you have a positive number when you’ve subtracted your expenses from your bills then you can figure out how much extra you can afford to spend. If you have a zero or a negative number then you need to take a step back and figure out how you can make more money or spend less.

A cash advance is a tool that you can use to help you through those weeks when you need that extra cash to pay your holiday bills off. A cash advance has simple requirements for you to meet and you may even be able to obtain a cash advance that can pay your entire post-holiday bill off. This makes a cash advance ideal if you will have the money to pay it off, but you need to send the bill off now. Either way, a cash advance can make dealing with the post-holiday bills that much easier.

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Want to get taken to cleaners? Then consider buying a used car from a dealer. Even certified dealers will swipe the last dime from your pocket book. I am not trying to be hateful here, but I have a friend that was a car salesman for a year or two, and he told that they go for every last dime they can. They try to sell you on “Intergalactic Personal Car Protection” and a whole mess of other baloney add-ons that just boost their profits, not adding any real value. They will also go for the highest interest rate possible when providing financing for you. I am going to give you a few tips when looking to buy a used car:

1. If at all possible, use cash.
   This is the most beneficial tip I can provide. If you use cash, you will be able to get the best bottom line price, and can more easily turn down all the baloney add-ons. Be sure to get the title in hand when paying cash.
2. If you are going to finance a car, don’t use the dealer’s financing options.
   Again, the dealer is not your friend, they are trying to milk you for the most money possible. Look at the rate and terms they provide, and compare them to quotations you have already obtained from your bank or other lender. Use the power of “NO” when dealing with a salesman. If they tell you they can’t give you the price you want on the car unless you finance with them, just say no. You will almost always be able to work a better financing deal if you go through your own channels outside of the dealer.
3. Get some kind of guarantee or warranty.
   Get the longest, highest grade warranty possible. Cars break down, especially used cars, and even more so used cars that are sold from a dealer or third party. Getting the longest warranty possible will guard you against major repairs that will eat your budget’s lunch.
4. Have a mechanic friend checkout the vehicle before purchase.
   This is immensely important when buying from an individual seller. This kind of person usually has a reason for selling the car, and that reason is almost always because it breaks down a lot, and they want to dump it, and get a better car that won’t have so many problems. This means many times you will be getting a lemon. Almost every time that I have bought a used car from an individual seller, I have been forced to make substantial repairs, almost immediately after buying. Get the advice from someone who knows about cars, I can’t stress that enough.

Bottom line, use common sense. Get estimates on interest rates, maturities and other terms from several different lenders before making your choice. Avoid dealer financing if possible. If it were me and I had to finance a car, I would not finance it for more than 5 years (60 months). The depreciation on the vehicle will outdo the loan before you are finished paying on maturities that are longer than 5 years. And if you ever needed to sell the car, you definitely don’t want to be in a negative equity position.

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I saw this post and thought about my community. This post has input from users around the personal finance internet community and solid steps they took to getting their finances in order, as well as links to other articles that would be of help. Check it out and let me know what your thoughts are.

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To really obtain wealth and/or financial freedom, there must be a change in our mindset. From our youth in America, we are taught to spend, spend, spend and pay for it later. The concept of having it all — right now is what most everyone wants in this country. Unfortunately, unless you have an 80″ vertical and can dunk a basketball, it will take time, patience and careful investing to unmask any substantial wealth. But I am just going to take a moment and give you a few pointers on how you can gear up for improving your financial health:

1. Ignore Advertisements
   TV is one of the worst things you can do to yourself. It is totally commercialized these days and offers nothing wholesome, only product pushing programs. TV is at the heart of our debt-ridden society. If you can bear it, get rid of it. In my house, we don’t even have cable, so if we want to watch something, it is a movie that we have pre-selected on DVD.
2. Track Your Goals
   It may not sound like it will help, but if you have a written budget, and written income goals it will help you to focus for the future. Take a few minutes to write down all of your expenses and come up with some reasonable income goals (challenge yourself, don’t just put down what you are currently making).
3. Seek Out Help from People Who Have Done What You Want to Do
   There’s nothing like having someone near you that has been where you want to go. Start out with blogs like this one, and find professionals that are in a market that you want to participate in. Don’t try to think of something everyone needs but doesn’t have, as you will never get anywhere that way. There is nothing new under the sun. I like real estate, and have had some success in both. If you want to get into those markets, I can help. Sign up for my RSS feed (it’s free) and begin learning about real estate investing and property management.

If you have any questions or comments, please feel free to leave them at the bottom of this page. Stay tuned for more great insight to treating your financial health…

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In this addition, I would like to just give some comments on how I feel about StarTex Power. StarTex Power is a Texas Electrical Retailer (read more on Texas Electricity Rates), and has been growing since deregulation. I am a customer and would like to share just a few comments with my readers today.

1. StarTex Power has been very reliable. Because they do not actually control the electrical generation or power lines, the delivery of electricity to my house has not changed.
2. Their prices are good. I think they have a 1 year contract price that will guarantee a particular kilowatt hour rate, but I am on the month to month plan.
3. I haven’t had any billing issues, all bills have been paid, and the readings appear to be about right.
4. One negative though, during the summer months, they increased the rate on me without notice (they never promised to send notice prior to rate change, however), and it is November now, without a decrease. I have heard of energy companies jacking rates in the summer, but I would think that they would go back down during the winter months. I have been with the company for close to a year, through last summer, and into this winter, expecting a decrease, but it hasn’t happened yet. If you are really concerned, consider their contract plan to secure a particular rate.

I think all in all, StarTex Power is a typical retail energy provider. If I saw another energy company offering a much lower rate for power, I would switch. On another note, the nice thing about going month to month with them, is that you can switch to another provider without a disconnect fee. So if I see another provider with much lower rates, I can easily make the switch! If y’all get a chance, leave some feedback at the bottom of this page, and sign up for my RSS feed for automatic updates.

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Just a quick update and moral support on a Friday night. Focus on tracking all expenses, resist your urge to go to the vending machine to get a soda/snack, and concentrate on saving money. If you can, avoid going out to eat and taking long trips; conserve that gas money and lost dollars on high priced meals. Take advantage of coupons that you see coming in the mail for the grocery store, and also for some of your favorite fast food places.

You don’t have to pay full price for anything! I just bought a laptop online that is a brand new Lenovo (Lenovo bought IBM’s laptop business recently) for $644.99. Expensive you think? Not for a Pentium Core Duo 2.0 GHz, 1 GB DDR RAM, 120 GB hard disk, 15.4″ glossy screen, webcam, fingerprint reader, built-in blue tooth, and wireless LAN. I bought it on eBay completely new with a full one year warranty (I verified it with Lenovo), and it showed up in the mail 3 days later. I own a Dell Inspiron 6400 currently, but now that I have quit my job, I needed another laptop so that my wife and I can push forward on websites, real estate and other en devours simultaneously.

So guys, just to reiterate, keep plugin, focus on your long term goals, and invest, invest, invest!

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