I’ve watch the Debt Diet series this summer and Jean was one of the experts.  She helped families create systems to get out of debt and in control of their finances. She even moved into one family’s home to jump start the process.

Welcome to the 87th edition of the Money Hacks Carnival. Today’s blog Carnival has a lot of helpful tips and personal lessons learned for people looking for personal finance information in topics from investing, money management, and being frugal.

Editor’s Choice

I really enjoyed these posts and think that they offer some practical tips for many people.

• Stop Trying to Time the Markets! was a wonderful article submitted by Man Vs. Debt.
• How to Retire Early has some practical tips from Free Money Finance.
• Scary Calculation On Credit Card Debt Elimination was crunched and discussed at Studenomics.
• Quit Worrying About 80% of Your Life was analyzed at Frugally Green.
  

  Like a carnival, we have plenty of great things in store for you!

Banking and Money Management

Planning ahead is a way to have more control over your future.When managing your money, you need a cool head and a strategy.

• How to Get More Out of Your Bank Instead of Them Taking More From You If you’re curious check out the post at Billeater.
• Probate- Why and How to Avoid Probate Fees was a handy posted by Financial Highway.
• Quicken 2010 Review and Quicken WillMaker Free with Purchase of Quicken 2010 was  done at Cash Money Life.
• How Much Life Insurance Do You Need? is answered at Provident Planning.
• Hurricanes and Planning for Financial Disaster has the numbers at Fiscal Fizzle.

Investing

Smart people ask questions and financial geniuses apply the answer. Learn to be proactive and successful with your investing.

• Why You Should Keep Contributing to Your 401k is explained at Good Financial Cents
• Dividend Payout vs. Free Cash Flow Payout was posted at Dividends Value.
• The Scientific Method To Investing In Biotech is looked into by 20s Money.
• Roth 401K vs Regular 401K is compared  at Roth IRA Rules.
• Keep the 3-Month Expense Fund? is discussed by M is for Money.
• 2010 Roth 401k and Roth IRA Limits is covered at My Dollar Plan.
• 5 Ways to Make Your Kids Wealthy takes a long term view over at The Personal Finance Playbook.
• Sexy CD’s: Who Needs ‘Em? was posted at Affine Financial Services.

Getting a Good Deal

Don’t deny the fears, habits,and goals you have with money. Look for ways to get a good deal with what you have.

• Don’t Save for College? is written and discussed at Brain Dead Simple! Financial Organizing.
• Have you check out The Canadian Finance Blog’s post on Maternity Leave And Parental Benefits?
• PT Money shows you 15 Surprising Places You Can Trim Your Budget.
• 4 Real Estate Lessons For Sellers has helpful information at The Happy Rock.
• My Credit Score – Has It Really Jumped 31 Points? has some thoughts from Out of Debt Again.

Credit Cards

• Credit vs Debit Transactions with Your ATM Card is a great comparisionat Money Ning.
• The 8 Most Important Credit Card Terms posted at Learn Credit Cards.
• Credit Card Offers for Pet Lovers posted at Credit Card Offers IQ.
• 0% Balance Transfer Offers–A Big List of 0 APR Balance Transfers posted at The Dough Roller.

Frugality & Saving Money

Keep more of your cash in your pocket by watching where you spend.Spend on what you love and be thrifty on what doesn’t matter.

• Baker wrote a guest post on  9 Ways You Can Knock the Socks off Your Next Landlord at Get Rich Slowly.
• Ten Things I Learned Moving And Tips has handy tips at Free From Broke.
• Eat Out for Less – Off Peak Dinner Deals caught my attention and whetted my appetite at My Wealth Builder.
• How to Find Affordable Engagement Rings was posted at Propose To My Girlfriend.
• 4 Benefits of Business Travel had a good review from  Buck$ome Boomer’s Journey to Retirement.
• Ten Ways That I Save Money By Being Frugal is a solid post from  Own The Dollar.
• A$k and Re¢eive, Revisited is a good read at Funny about Money.

I hope you enjoy the Carnival today. Next week’s host is Amateur Asset Allocator!

Photo Credit: {meagen}

This week’s Financial Guru Review is about J.D. Roth. He’s the personal finance blogger over at Get Rich Slowly. He’s very popular in the persnal finance blog niche and has been around for many years.

His mantra for his personal finance is ” do what works for you”. He doesn’t have hard and fast rules. J.D. Roth shares some guidelines, but wants readers to see for themselves whats best for them.

J.D. Roth on Getting Out of Debt and Credit Cards

J.D. sees debt reduction as a step, not just a goal. He points out that being successful involves making incremental changes:

Rather than quit cold turkey, I think the best way to begin a life of frugality is by taking small steps. Small steps eventually become big strides, but only after you’ve developed your frugal muscles.

Like many financial gurus, J.D believes in having an emergency fund before you start reducing you debt. He recommends the following steps:

• Stop acquiring new debt: Hide your credit cards and create a spending plan or a budget, whatever fits your personality. Reduce your expenses to ’stop the bleeding‘.
• Establish an emergency fund: Look at your expenses and see if you can ake some adjustments to increase the amount you can set aside for your emergency fund.  He has an idea on increasing the barrier to using your emergency fund for frivolus reasons and oening a savings account at a different bank.
• Implement your debt reduction plan: He prefers to let his readers decide which method works for them: either a debt snowball or paying highest interest rate first.

J.D. and Building Wealth

Something fascinating with J.D. is that ,as a reader, you can follow his financial journey step by step through his blog. Now that he is out of debt, J.D. explored what to do with his money. Sharing his personal thoughts, he broke down how he is using his money to build his finances:

Once my consumer debt was repaid, that $1000 a month was available for other uses. The old J.D. would have immediately used it for fun and games. The new J.D. was smarter. I used this money to begin saving and investing, to begin building wealth. Since the end of 2007:

• Increased his emergency fund from $1000 to $12,000
• Opened a Roth IRA and a 401(k) and max the accounts out

Saving money each month is important to J.D. and he shared his views on what to shoot for:

Something that I find fascinating is that J.D.’s blog also explores avenues of personal fulfillment along with personal finances. He talks about home gardening. He has a wonderful series of posts, not just  the frugality of it, but the enjoyment of it. He also has a wonderful post on affordable and great wines by Gary Vaynerchuk.

What J.D. Roth About Buying a Home

J.D. shares his thoughts on how much of a mortgage someone should budget for:

I’m a strong advocate of being conservative here. I believe your housing costs should be less than 28% of your gross income, and your total monthly debt payments should be less than 36%. These numbers provide ample room but prevent borrowers from being trapped by too much debt.

Again, J.D. stress that you should find something you’re comfortable with based on your budget. Being curious, using his thoughts, the price range we’re looking for in a house fits within his guidelines.

My Thoughts On J.D. Roth

I’m a huge fan of J.D. and agree that having a one size fits all approach is not practical. He has a great blog and his site’s forums is a wonderful resource if you have a question.

If you haven’t already, check out J.D’s and Jim’s wonderful radio show Personal Finance Hour. I’m usually in the chat room following the show as it airs. As for bloggers, he’s an extremely nice guy and very helpful to other bloggers.

What are your Thoughts?

Do you listen to financial gurus’ money advice? If so, which one? If not, why? Is there a financial guru you’d like me to review?

Related Blogs

• Related Blogs on Financial Guru Review: J.D. Roth

If you’re looking to get out of debt, organize your finances, and build wealth; you may be tempted to see what the financial gurus are saying on what to do. I do a financial guru review on some topics that are of concern to many of my readers.

Reviewing Ramit is bit different from the others, as I have been reading his blog for years. I received feedback from you to do a financial guru review for him. He’s the author of I Will Teach You to Be Rich (a book I reviewed here and made a video).

Ramit Sethi on Getting Out of Debt and Credit Cards

Ramit follows many other financial gurus who suggest paying off high interest debt before getting into investing.

• Calculate your debt: You have to look at how much debt you’re in with each company, the interest rate you’re paying on each card, and the minimum payments you’re required to make.
• Decide which method works best for you: Ramit weighs the pros and cons of Dave Ramsey’s debt snowball method and the standard highest interest first order. Ramsey’s way has a psychology boost, as you’re eliminating the accounts you quicker, but the interest based payment plan is better from a purely financial standpoint.
• Lower your credit cards’ interest rates: Going beyond just accelerating debt repayment, Ramit gives scripts on how you can speak with the customer service representative. I had called my credit card company a while back and had my interest rate lowered.
• Allocate your income to paying off the debt and get started: Ramit points out that you have to choose an expense cut that is sustainable until you can get the debt paid off. He also wants readers to not debate the meaningless details and just get started.

Ramit Sethi and Building Wealth

If you have to distill Sethi’s method on getting rich, it’s automating a sustainable system.  He is not looking for you to purge everything in your finances and have you live on beans and rice.  He wants you to spend money on what you (not what others say you should) love and “cut costs mercilessly” on things you don’t care about.

Ramit's system automates your transfers.

He outlines in his book and site the process you can take to streamline your finances.

• Find a bank/credit union that will not fee you constantly. Consider online banks to see if they it your needs. Make sure the bank/credit union has free online billpay. Don’t waste time chasing rates or being enticed by teaser specials some banks put out.
• Create a conscious spend planning. He breaks the plan into several categories: fixed costs (50-60%), investments(10%), savings (5-10%), and spending money (20-35%).
• Set goals that be achieved sustainably. For example, Ramit shows how he decreased his eating out budget in half over the course of six months. If you just cut immediately, there is a high chance that you won’t keep that goal.
• Look for ways to increase your income. I agree with Ramit that just cutting costs can only get you so far. He gives you a script in his book on how to prepare for compensation review. Having side income is important and Ramit has tips on where you can start.
• He then has your link your accounts. Ramit has specific plans on how to set up your automatic transfers. His guest post on Four Hour Work Week details his automation plan a bit more.

What Ramit Sethi Says About Buying a Home

First off, Sethi wants you to examine why you want to buy a house. Do you want a place to own or are you looking for an investment? He expects you to run the numbers thoroughly because this is probably the biggest purchase you’ll make. He argues that too many people rush into buying a home with being financially prepared.

For those that argue that owning is better than renting, Ramit gives reason why that is not always the case. He debunks some myths on real estate’s investment potential and offers a rent vs buy calculator. If you do have a mortgage, Ramit offers optimization tips on decreasing the amount of interest you’d pay.

My Thoughts On Ramit Sethi

I find many of Ramit’s thoughts on personal finance to be sound. So many times on personal finance blogs, mine included, little tidbits are debated or discussed. The real decisions, though, are eliminating high interest debt, saving early for retirement, plan ahead for big expenses, and handling your finances in way that works for you.

Free coffee at McDonalds is nice, but you’re not going to make a big improvement to your finances based on small tips. You’ll improve on your finances by making small sustainable changes and looking for big wins. Take care of that and you can have fun comparing interest rates at online banks.

What are your Thoughts?

Do you listen to financial gurus’ money advice? If so, which one? If not, why? Is there a financial guru you’d like me to review?

It took awhile to get this Financial Guru Review done, as I wasn’t too familiar with Ben Stein’s thoughts on personal finance. It was a lot of fun to read some of his columns and interviews.

Ben Stein on Getting Out of Debt and Credit Cards

Mr. Stein does use credit cards out of convenience and pays off the balance each month. Here’s a transcript from Frontline’s special on credit cards:

NARRATOR: Stein says he charges thousands of dollars a month in business expenses on his credit cards.

BEN STEIN: I use all their good services, and they don’t make any money from me. I mean, none to speak of.

NARRATOR: The credit card companies do make a percentage on each transaction, but Stein is not their ideal customer because, like 55 million Americans, he pays his bills off every month and doesn’t pay any interest.

BEN STEIN: The credit card companies hate people like me, who pay off our bills every month. And I know that because I ran into a fellow I went to high school with on the street, and he told me he worked for a credit card company. And I told him about how much I use credit cards and how I pay them off every month, and he said, “Oh, we hate you. We hate you guys. We call you deadbeats.”

Ben Stein and Building Wealth

In an interview with Nickel, Ben Stein commented he saves around 20% of his income for retirement. He also talks about how having specific financial goals can help you avoid ‘indulgences’.

I agree that sometimes you have to make big sacrifices to reap the benefits later. We tend to justify our luxuries. While it’s a common phrase, spending less than you earn is the foundation of fixing your finances. Either cut your expenses or find a way to earn more money. 

Ben Stein on Paying Off Mortgage or Investing

A question some people have is whether to pay off their mortgage faster or invest that money. 

While making no hard and fast rules, Ben Stein offered the following advice:

 Generally speaking, if you have a very low mortgage rate, it is better to invest the money than to pay off your mortgage. It’s an interesting fact – the rate of return on your mortgage is the interest you’re paying on it.

If you have a 6 percent mortgage and you’re paying it off, you’re earning 6 percent. If you can earn more than 6 percent in the stock market, you should probably put it in the stock market.

But, on the other hand, pay it off in an expeditious way. It’s good to have it paid off, or at least mostly paid off, by retirement time.

My Thoughts On Ben Stein

I wasn’t as familiar with his books as I was with the other financial gurus, so I had to dig a round a bit. If you’d like to learn more, here a link to his NY Times columns.

I agree with how he uses credit cards without going into debt. I found some bloggers have wrote some good posts about him. 

•  Ben Stein Is The Best Yahoo! Finance Columnist 
• Ben Stein: Invest or Pay Off Mortgage? 
• An Interview with Ben Stein Part 1
• An Interview with Ben Stein, Part 2

What are Your Thoughts?

With everything, find out if this advice is useful for you. No one is going to care about your finances like you do. Following the guidelines of a financial guru doesn’t get you off the hook for personal responsibility.

Do you listen to financial gurus’ money advice? If so, which one? Is there a financial guru you’d like me to review?

This week’s Financial Guru Review is about Suze Orman. Suze is the author of best selling books such as Women and Money, The Road to Wealth, and Young, Fabulous and Broke.

Suze is a very popular personal finance guru. She’s appeared many times on Oprah as a financial advisor and she has a show on CNBC. She’s also on Twitter and answers many questions sent to her.

Suze Orman on Getting Out of Debt and Credit Cards

Before 2009, Suze Orman’s advice was to use extra money to pay down your debt first. Now Suze is advises paying minimums on your debt until you have a solid emergency fund of 8 months.

Suze explains exactly why she has changed her advice:

With rising unemployment, having a big emergency cash fund is vital, even if it means curtailing your credit card repayment strategy.

The sad reality is that the credit card industry is taking actions to protect themselves with no regard to your needs or how good you have been about paying your bills on time. …

Many of you are even finding that when you do  finally pay off your credit card debt that the  issuing credit card company of that card is closing that card down as fast as they can so you cannot ever charge on it again. You did everything right, and yet still you could have your credit limit reduced, which can have a negative impact on your credit score…

If you do not have a stash of cash in an emergency fund and you have been using all your extra money to pay down your credit card debt and they keep closing your cards down—what are you going to live on if you lose your job?

I think she brings up a valid reason for building up an emergency fund before attacking high interest debt. This revised advice is an acknowledgement of what’s going on today with unemployment and credit card companies.

My only concern is, how long it would take a family to build up their funds while their high interest debt is climbing?

I do agree, though, that you should have a cushion set aside, I’m more inclined towards 3 months aside, and pay down debt with a small amount going towards fattening the emergency fund.

Suze Orman on Building Wealth

Suze is a big believer is building up and maintaining your FICO score. She has created services and products on monitoring and working on your FICO scores.

Why is this important? By having a solid FICO score you can decrease your rates for car loans and mortgages. It’s a huge gain for you and save you thousands of dollars in interest.

She also advises taking advantage of your employer’s 401(k) match while paying down debt.

Her Recession Rescue Plan, as shown on Oprah, includes the following steps:

1. Live on half your income. If you’re a two income family, appreciate your circumstances and see if you can cut your expenses.

2. Put your all your savings into an emergency fund. Any expenses saved goes towards build your 8 month emergency fund.

3. Use the stimulus package to help. If you’re laid off you can receive some assistance with your COBRA premiums. She also mentions the $8,000 tax credit for first-time home buyers. As always, Orman advises people to check their budget to see if this is feasible for them.

4. Make sure your mortgage is affordable. Suze and Oprah provide links and information on The Homeowner Affordability and Stability Plan, which can help you modify your home mortgage with your lender.

5. Focus on what you have. The last step in the plan is to focus on being appreciative on what you do have.

Suze Orman and Buying a House

Suze, like Dave Ramsey, encourages buying a home not based on what a lender tells you can afford, but what your budget can afford.

Unlike Dave Ramsey, Suze advises not paying off your mortage until you’re around 45 and don’t have any plans of moving for a long while. She also point out that a home’s price doesn’t exceed inflation by much. Don’t anticipate your retirement based on it growing as quickly as it did with the last buble.

My Tought on Suze Orman

I found her Young, Broke, and Fabulous book helpful for those looking for a  foundation in finances. My only qualm is I wish she ran more numbers on some of her books. Her strength, though, is motivating people to get started, so that is a huge success right there.

If you want more numbers, you may want to check out Suze’s Road to Wealth. It’s a good resource and it can point you in the right direction fairly quickly.

What are your Thoughts?

With everything, find out if this advice is useful for you. No one is going to care about your finances like you do. Following the guidelines of a financial guru doesn’t get you off the hook for personal responsibility.

Do you listen to financial gurus’ money advice? If so, which one? Is there a financial guru you’d like me to review?

My Life ROI shares his thoughts on Suze Orman and reviews her NY Times Magazine interview.

Other Financial Guru Reviews

• Financial Guru Review: Dave Ramsey
• Financial Guru Review: David Bach

Related Blogs

• Related Blogs on Financial Guru Review: Suze Orman