Archive for December, 2010

How-to Graduate From College Debt Free

By: MD | Date posted: December 09, 2010 (6:00 am)

Do you want to graduate from college debt free? Is it even possible to graduate from college debt free?

The answer is yes. Today I’m going to show you guys how you can graduate from college debt free. I also want you to know that this isn’t some hypothetical post or a “what if?” situation. This is my story of how I managed to graduate from college without any debt. As of two days ago I paid off the last $326.41 that I owed my school. I will write my final exam this Saturday morning. I will officially graduate from college debt free.

This isn’t ground breaking advice. The following will be common sense tips that anyone can apply. If a dude with spiked hair can do it, so can you.

Always hold a job.

You need to have money coming in. It doesn’t matter how much money you earn per hour or how much you make a week, what counts is that you have some sort of income coming in. I personally feel that so many college students fall behind financially because they don’t have an income coming in. With no money coming in this means that you’re going to have to rely on debt (student loans or your credit card) to pay for everyday expenses.

You can’t find a job? Consider one of the following options:

  1. Find work around campus. There are many jobs that pay well around the college campus. I made some decent money by working as an Exam Invigilator (watch people write exams) for the school.
  2. Start a side business. Whether you want start a personal finance blog (me) or become a textbook broker, college can be the best time for you to start a sidebusiness. Plus you really have nothing to lose.
  3. Find a job in service industry. You won’t always find the job that you want. You’re going to have to get your hands dirty. There’s nothing wrong with this. Working in the service industry can be a great college experience.

Save your money!

You need to save your money. I’m not talking about thousands of dollars. Even if you save $20 a week, you’ll have $1,000 in your bank account at the end of the year. That thousand bucks is much better than nothing, or an account in the negatives. A few of the ways I saved some major coin in college are:

  • Living at home. I know that this sucks but it’s manageable. Thankfully, my parents gave me the basement so that I could still have friends over. Living at home can save you thousands of dollars a year on rent, utilities, and food.
  • Ask for discounts. My friends from school always think I’m joking around when I ask for the “student discount” whenever we go out. It actually works. Most places do offer a student discount. I was able to save 15% off dinner the other day just because I asked for the discount.
  • Save money on textbooks. There are many ways you could save money on textbooks. I would either share my books or buy them used. I rarely purchased new textbooks unless I absolutely had to.

Manage your time.

We all have the same 24 hours in any given day, you need to get the most out of yours. I’m by far no time management expert nor can I claim to posses the multi-tasking abilities of Tim Ferriss. I have just been able to use some of my time wisely. Not all of it but some. My favorite time management tips are:

  1. Work now, relax later. The reverse never works. Get your work done first. Actually do the work you hate the most first. Once you’re done your work you can relax.
  2. Focus on what’s important. Don’t stress about that 5% assignment or updating your Facebook feed. Do your important work.
  3. Shut out distractions. Distractions are fun. Being up all night because you were distracted in the evening is NOT fun. Turn your distractions off until your work gets done.

Ignore the BS.

There are many distractions out there. I’ve been affected by all of them. From drinking into the early hours of the morning, to gym addictions, all the way to staying on Facebook instead of finishing your term assignment. These distractions will get to you. The trick is to not let either ruin your situation. Ignore all of the negativity out there and just enjoy life.

Party on the cheap.

You obviously need to party in college. I’m tired of personal finance blogs telling you not to party. I would’ve lost my mind a long time ago if I never went out. Going out is a staple of college life. Unfortunately, partying in college can cause lots of problems for some people. When I mention partying in college I stress that you SHOULD NOT use your time in college as an excuse to binge drink or engage in drug use. Partying in college is fun when you go out with your close friends for drinks on the weekend. Don’t let having a good time with your friends ruin your finances or academic life.

Random thoughts.

My last piece of advice is to apply for every form of free money out there. Apply for all scholarships, grants, and bursaries. You never know when you’ll get a few hundred bucks for free.

I wish all of you guys nothing but the best! I’m curious to hear how have you guys managed to save money in college?

[Quick note: We'll resume with the obtaining a mortgage series once again next week. Stay tuned!]

(photo credit: billaday)

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Car Maintenance Schedules

By: Green Panda | Date posted: December 08, 2010 (5:00 am)

I will admit it – I’m not a car person. I check my fluids and my tire pressure to make sure everything is alright, but I need reminders to get my car done. I finally decide I needed to be a bit more proactive with car care so I decided to get some useful information. If you’re not a car expert or you’re so busy that time flies, this handy guide will help you schedule your car’s major maintenance easily. Just plug it into your calender and and set alerts to give you a heads up on upcoming expenses.

Don’t wait until your annual inspections to find out you have a huge car repair bill coming your way. Plan ahead and even out your car expenses on your monthly cash flow. I’ll share some of the big ones to help you get started.

Oil Changes and Tune-Ups

Oil changes are one of the easiest things you can do to help extend the life of your car. Without having them regularly done, you can do damage to your engine.  While conventional wisdom said you should get an oil change every 3,000 miles, manufacturers have suggested you can do it at least every 5,000 miles. So while engines have improved over the years, that doesn’t give you an excuse to skip out on your oil change. If you have the time, you can do it yourself, or if you prefer, you can get a shop to do it for you.

What exactly are tune-ups? It’s preventative care for your fuel and electrical system. You should look at getting tune-ups every 2 years or 30,000 miles- whichever comes first. Here a re few things that are listed for tune-ups:

  • Change the air filter
  • Replace spark plugs
  • Checking the belts
  • Replace the PCV

When looking at the schedule for tune-ups everyone recommended looking at your owner’s manual. Some mechanics are treating newer cars like older ones and that could cost you more money.

With tune-ups and oil changes, please also factor in how often you use your car. IF you do a lot of travel and put a ton of wear and tear on your car, you’ll have to check on your car more frequently.

Tires and Batteries

I just had 2 of my tires replaced this week. While it wasn’t cheap, getting new tires is better than having one blow out when you’re driving on the highway. You really don’t want to take chances with your tires. Use the penny test to see if your tires need replacing. Place a penny into the groove of your tire. If you see the stop of Lincoln’s head, go ahead and get that replaced as soon as possible.

Again, it can vary based on your driving style and environmental conditions, but tires can last around 50,000 miles. If you’re not sure how many miles you’ve driven with the tires, at the very least you should replace your tires every 6 years.

If you’ve had to get a jump for your car, you know how annoying it is to have a problem with your battery. Try to get track of when you get your battery. The normal life of a car battery is around 3-4 years, depending on a variety of factors. Whenever you get a tune-up, make sure they check the condition of the battery. They may have to clean the terminals.

Thoughts on Car Maintenance

If you’re still unsure of when you should take care of your car’s maintenance, Edmunds has a tool that will break some of them down based on the car model you have. It also include average prices in your area for these services.

I’d love to hear your thoughts on it. How you keep your car regularly maintained? Do you use a calender to keep track of car repairs or do you just wait until something breaks down?

Where Does Our Money Go?

By: Kristina | Date posted: December 07, 2010 (9:00 am)

Budgets are a part of personal financial planning and therefore, they are a personal decision.  Of course there are standardized rules to budget planning, but if our income doesn’t support our budget then what are we working towards?

A personal budget depends on our personal income.  We need to live within our means, and spend less than we earn.  If we have more coming in, than we have going out we will always be saving.  It is a standard rule in the financial world that we should save 10% of our annual income; and we should have three months of savings in our rainy day account for emergency purposes. However, our income may not support a standardized savings habit.

We need to adjust our spending to our income. Do you spend the standardized (suggested) 35% of your income on your housing and 15% on transportation? If you live in a large metropolis city, I imagine that your housing costs may be higher than someone who lives in a rural area. Therefore once again the standardized budget will not fit with our personal income.

Personal budgets should not be about standardized percentages, they should be about our income. We should pay our bills on time, enjoy our money, and save the rest.  If only it were that simple!

Think about your spending last month. How much did you spend on housing, transportation, and food? Now think about the month before last month.  Did you spend the same amount on housing, transportation, and food? There are some essential monthly expenses that need to be fixed and constant every month.  If our income is fixed then our expenses should also be fixed.

In my opinion housing, transportation, and food are my most important monthly expense; because if I don’t have somewhere to sleep, if I can’t get to work, and if I don’t have food in my belly, then nothing else really matters. 

Photo By The US Army

I Do…But First, Let’s Talk Finances.

By: Kristina | Date posted: December 06, 2010 (2:34 am)

This past week Yahoo published an article from Flare Magazine called “10 things to know about your partner before getting engaged.”  I was surprised to learn that personal finances and money management were not even in the top three criteria on the list.  I personally believe that similar interests and philosophies regarding personal finances and money should be at the top of the list. 

If we share similar interests, philosophies, and goals regarding money with our spouse then we will also share other similar interests.  If our spending habits are similar to our spouses spending habits, we must also share similar life interests and other common thoughts.

Sharing complementary interests was on the top of the list at number one.  We spend our money on our interests and therefore, the relationship will be a lot easier if we share common interests with our spouse.  It would be hard to have one person in a couple who always likes to stay at home, while the other person always likes to be out on the town.

Having similar personal goals was number 3 on the list.  I agree that it is very important to share future goals because we should always be working towards something.  Personal goals should include financial goals such as buying a home and planning for retirement.  My boyfriend and I couldn’t be more opposite in this category.  I always like to be working towards a goal such as saving to buy a new condo, or planning our next vacation.  My boyfriend is very happy paying one monthly bill as we rent our apartment.

Financial views finally made the list at number 4.  I personally think that this should have come in at number 2 on the list instead of family baggage.  Similar spending habits can make or break a relationship.  I had a client come into my office this past week and remove her husband from all of their joint savings, checking, and investment accounts because he was excessively spending money.  In my opinion, financial trust is just as important as fidelity and commitment.

Is your spouse supporting kids from a previous relationship? Was the question asked at number 5. Child support and alimony payments can account for a large portion of a person’s monthly income.  We may be resentful if our spouse is spending money on his previous family, instead of saving for his future with his current family.

Sex, Ethics, and Addictions were also all factors that we should consider about our spouse before we get engaged.  Can anyone guess what question came in at number 10? We should inquire if our future spouse has a past criminal record.  This would definitely be on the top of the list for me. When I saw this I asked myself, when does sexual behaviour take precedence over having a criminal record? I would personally like to know about my boyfriend’s criminal past, (especially if it included anything such as identity theft fraud or money laundering) before I would like to know about his likes and dislikes in the bedroom.

Do you and your spouse have similar financial interests, goals, and money management habits?

 

Photo By Somma

What’s Cool Around The Web

By: MD | Date posted: December 03, 2010 (6:00 am)

We are back once again to highlight some of the top articles from around the web!

1. Body Parts You Can Sell @ Consumerism Commentary.

2. Snowboarding on a Budget @ Canadian Finance Blog.

3. Tip # 478: Unload your $1 bills every night! @ Budgets Are Sexy.

4. Make Yourself a Gift For Christmas @ Do Not Wait.

5. How to make your own Christmas Crackers @ Squawk Fox.

6. The Basics of a Credit Report @ Money Help For Christians.

7. How-to Financially Survive The Holiday Shopping Season @ Studenomics.

8. CFA studying: Where to study @ Smart Financial Analyst.

9. 5 Life Lessons That You Need To Learn @ Financially Poor.

10. 5 Tips to prevent eating out from eating a hole in your wallet @ Young and Thrifty.

11. Emergency Funds — A CFP (R) Tells You What You Need @ Wealth Pilgrim.

12. 5 Ways Personal Finance and Fitness Connect @ The Financial Blogger.

13. Lesson from the Wikileaks debacle @ Intelligent Speculator.

14. Carnival of Money Stories 2 @ BITFS.

15. Carnival of Personal Finance @ Realm of Prosperity.

Important Fees That Come With a Mortgage… Are You Ready?

By: MD | Date posted: December 02, 2010 (6:00 am)

We took a little break from the Mortgage Series last week. However, do not fear because were are back again with another edition! I already asked you guys if you were ready to purchase a home and we talked about getting our documents together. What’s next? Paying for the mortgage and all of the fees involed with a mortgage.

Since we brought up certain fees that will come along with a mortgage already, it’s time that we went into a little detail on the important areas. I wanted to address the three main direct and indirect fees that come along with a mortgage:

Direct fees with a mortgage.

There are fees directly tied into obtaining a mortgage and making your first home purchase. If you don’t account for these expenses then your first home purchase could end up a disaster. If you do calculate these fees then you’ll have a better understanding as to if right now is the ideal time for that home purchase.

Mortgage payments.

This includes mortgage payments plus interest. If you don’t compare your salary to your other expenses along with your mortgage, your home purchase could be a financial mess. I personally opted to make bi-weekly payments on my mortgage. I also get paid bi-weekly at my current job. This means that I need to consider my mortgage payment before I decide to make any other purchases (like a Spring Break trip next year).

Property fees.

This ranges from property taxes to maintenance fees. I was watching a real estate show on the HGTV channel in Canada a few months ago. The couple was looking to purchase a town home. At the end of the episode they finally found a town home that met their needs. The location was perfect and the couple fell in love with the actual property. There was just one issue. This property came with maitnenance fees. The maintenance fees were a crippling $400 a month. Yes, an extra 400 hundred bucks on top of your mortgage. Heaven forbid you plan on eating or going out at all. Please consider all property fees when planning to apply for a mortgage. Maintenance fees in most condos can be very expensive and crippling.

Lawyer costs.

Lawyers don’t work for free. When you first apply for a mortgage you’ll find that the lawyer working with you is extremely helpful. This is because they plan on charging you for everything. I remember being billed for every phone call/fax. You should at least save $1,000 for a lawyer when working on closing a mortgage.

These are the three main direct fees that come along with a mortgage that I wanted to address today. Of course you’ll also need to consider the involvement of a real estate agent in this mix.

Indirect mortgage-related fees.

Now that we looked over the direct mortgage fees, how about those indirect fees that I mentioned? The next issue that you’re going to have to cover is figuring out if you can pay the indirect fees that will come your way now. The three most common indirect fees here are:

Increased consumption.

Now that you have your own place you’re going to want to spend some money on the items in your property. You’re going to want a new flat screen tv. You’ll be tempted to design every room in the place to look the way that you want it to. Simply put, your consumption will increase. You’ll be spending more money than when you were renting.

Repair related work.

Even when you purchase a brand new piece of property from the developer, you’re still going to have to do some construction related work. From changing up the look of the backyard to setting up a bar in the basement. Every home owner feels motivated to perform some sort of repair work around their new property. These are all additional fees that will come along with holding a mortgage.

Maintenance.

You’re going to have to take care of your new property, especially if you want it to increase in value for a future sale. Then there’s maintenance like shoveling the snow or cutting the grass. This won’t directly cost you too much money, but it will certainly eat up a lot of your time. Do you have the time to spend? Will you outsource these activities?

Rarely do potential home owners look over all of the fees that go along with acquiring a new mortgage. Are you ready to cover the many fees that go along with a mortgage? Where do you stand right now?

Check out the rest of the Obtaining a Mortgage Series:

Part 1: Are you ready to purchase a home?
Part 2: Get your documents together.

(photo credit: dyntr)

Should You Go on Vacation When You’re in Debt?

By: Green Panda | Date posted: December 01, 2010 (5:00 am)

There are many people who are gazelle intense with their debt reduction plan. They consider it outrageous to even consider taking a vacation during the process. Others, however, think that having a vacation is rejuvenating and it will help them to stay on the course for eliminating their debt.

Is it possible to have a fun vacation if you’re in debt and very little spare cash? Can you plan a staycation that rocks and helps you stay on course? Is there a best choice for you to take? I’ll look at both sides of the coins to find out.

Why Are You in Debt?

I think the first thing you should  ask yourself is what got you into this predicament. Have you considered that you’re in debt because of the lifestyle, you’ve led (including vacations)? If you were to look at your bills would you notice that you’re still in debt because a past vacation? How much was it?

First off, you should examine your end goal and the plan of attack that you currently have. Some families choose to go it alone and craft a strategy on eliminating debt; others subscribe to a program to give them some guidelines. If you’re on the Dave Ramsey baby steps, for example, you should already have a baby emergency fund in place while you’re tackling the debt.

Staycations Are Your New Best Friend

If you’re stumped for ideas on what to do, check out the web. There are a ton of sites that can offer some great ideas for your next staycation.

It’s fun to see your city or town through the eyes of a tourist. You’ll get to discover some interesting places that you’ve overlooked all these years.

Vacations- Necessary Whether In Debt or Not

Some people need to take a break, even when they are intensely focused on getting out of debt. They’ve been doing the rice and beans rountine for a awhile and have seen some great progress. What if you saved a bit of your debt reduction money each money and used that to fund your entire vacation? Would that make you feel better?

There are ways to prepare and save when you’re taking a vacation. You don’t always have to rely on a credit card to take care of it.

  1. Save up for the trip. If you’ve already have a small emergency fund, continue the deposits, but save it for the vacation now. Debt free vacations are a lot less stressful.
  2. Go for a road trip. Unless you can get a great deal on flights (sometimes you can), save some money and do a road trip.
  3. Split a trip. Maybe you can split costs with your roommate, a friends, or family member that you get along with. It’ll make the vacation more enjoyable and reduce the costs.
  4. Don’t overbook yourself. A vacation is about relaxing and enjoying yourself. Plan a few things to do – you won’t be living by a clock and you’ll appreciate the activities you will be doing.

Thoughts on Finding Balance While Reducing Debt

In the end, only you can decide what’s right for you personally and financially. What are your thoughts in it? Do you think there’s a good reason to be gazelle intense? Do you think debt reduction can have some spending in it?

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