SavvySugar

Would You Enroll in a Financial Planning Bootcamp?

SavvySugar — Mon, 16 Nov 2009 14:45:03 -0800

I’ve always been kind of intrigued by Stanford grad Ramit Sethi’s New York Times bestseller I Will Teach You to Be Rich. I dismissed the book at first because the gimmicky title brought to mind images of the question-mark guy on late-night infomercials, but the more I heard, the more interested I became. To hear why I changed my tune, read more.

Sethi recommends setting up free checking and savings accounts at dependable banks, and automating all your bill payments and transfers to savings. He thinks scrimping on things like lattes to save a couple bucks is useless financial advice, and says you should start to invest while you’re still young. Sounds pretty practical, huh?

So when I heard Sethi was holding a six-week online financial boot camp, I was actually pretty excited. It wasn’t until I was looking at the registration page, credit card in hand, that I backed out. It’s not that I didn’t think the boot camp would be helpful, but I decided spending a couple hundred bucks to find out how to save money wasn’t a wise choice for me.

I’m sure plenty of others felt differently, though, and you might, too. So tell me, have you ever paid for a workshop, class, or boot camp to whip your finances in shape? Or would you ever consider it?

Source: Flickr User Kyle T. Ramirez

The Best Work and Money Advice From 5 Prominent People

SavvySugar — Wed, 10 Jun 2009 08:30:03 -0700

There's nothing better than getting advice from those who have been there, done that, and exceeded expectations. From Food Network host Paula Deen to best-selling author Robert Kiyosaki, here's the best financial and career advice ever received by five prominent people, along with their advice for new college graduates.

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Have You Ever Been to a Financial Advisor?

SavvySugar — Sat, 11 Oct 2008 11:00:43 -0700

The sinking Dow Jones Industrial Average has everyone in a fluster, which means more and more investors are looking for guidance from their financial advisers.

Have you ever been to a financial adviser to help you manage your portfolio or make sense of your financial goals and plans?

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Six Steps to Worrying Less About Your Money: Part VI

SavvySugar — Mon, 25 Feb 2008 14:02:37 -0800

There are some parts of our financial lives that require more attention than others - saving for college or buying a home are two areas that can be a bit overwhelming to think about, not to mention begin tackling these goals. A financial plan can help you overcome this anxiety and Real Simple names needing one as the sixth worry in its March issue feature. To read their recommendations for developing a financial plan just read more.

Write down the names of three people you know and admire who are diligent about money: Ask them how they plan their finances and collect their practical advice. Apply the tips that make sense for your situation to your unique plan.
Do some reading: Between books and blogs, there's a wealth of information out there. The magazine names Beth Kobliner's as a good resource for people in their 20s and 30s.
Find a planner: Ask friends and family for any references and find a fee-only financial planner. You could also use the National Association of Personal Financial Advisers website or the site run by the Garret Planning Network - look for the letters CFP (certified financial planner) following the adviser's name.

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6 Ways to Save on Your Everyday Purchases and Afford Something You Really Want

SavvySugar — Wed, 11 Nov 2009 08:30:45 -0800

In this economy, little treats, like my weekly gossip mag and a latte are my no-fail pick-me-ups, even when I can't afford the new handbag I really want. Still, living on a budget doesn't mean splurges have to be totally out-of-the-question. In fact, even finance experts, Ori Schnaps, co-founder and manager of Thrive, and Aaron Patzer, founder of Mint.com, wouldn't recommend not shopping at all.

They advise that going cold turkey can have a negative affect on your finances, and vowing not to splurge can lead to overspending later on in the month. Instead, both financial experts have real-life advice and small spending tips that will help you to spend more wisely day-to-day. Who knows - that splurge-worthy item might just be affordable after all. Read on to get all of their great tips and find out how you can save.

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7 Guidelines For First-Time Home Buyers

SavvySugar — Tue, 15 Sep 2009 04:30:22 -0700

Just about a year ago, our financial system as we knew it was collapsing - Wall Street was in shambles. Things kept getting worse in pretty much every corner of the economy, and we're still trying to figure out whether or not the country has reached a state of recovery. The housing market has been particularly tumultuous, but many new buyers are taking advantage of lower home prices and finding themselves in escrow for the first time.

Home-buying is a different game than it used to be, so The New York Times' Ron Lieber gathered a list of seven suggestions for navigating the new housing economy.

Start with the basics. Lieber lays the foundation for conservatively getting into the market and says, "Put 20 percent down, so you have less of a chance of owing more than your home is worth if prices fall again. Get a fixed-rate mortgage, so the biggest part of your monthly housing bill remains stable." On top of that, he recommends spending no more than about 35 percent of your pretax income on mortgage, property tax and home insurance payments.
Consider your income. Income overconfidence may have had something to do with the mortgage mess, but Princeton economics professor Harvey S. Rosen thinks “People can, on average, make reasonably good predictions of their future incomes and act on them in sensible ways by buying bigger houses."
Bow to unknowns. Financial planner Bobbie D. Munroe encourages her clients, especially the younger ones, to model their budget in three ways: with both spouses working full time, one working part time, and one staying at home for a few years (and maybe even practicing living on one income).

See the four more guidelines when you read more.

Map out expenses. Financial planner Dennis G. Stearns "estimates that owners of a newer home that do some work for themselves but contract major work out to others will pay 3.6 percent of the original purchase price annually for maintenance and 4.5 percent if it’s an older home."
Buy best (or cheapest). Financial planner Michael Kalscheur "suggests buying the dream house you covet (if you can afford it) or an inexpensive starter house but not anything in the middle." He reasons that buying the entry-level home instead of the second place home will allow you to save enough money to buy what you really want down the road.
Stretch the house. Stretching out your tenure in a home by making periodic upgrades might be more sensible than ever moving from that first home.
The eight-hour rule. Lieber advises, "If an impending loan has you stretching for the Ambien, it’s a pretty good sign that the loan is a bit of a stretch as well." In other words, sleep on it before making any decisions.

Couples' Financial Conversation Starters

SavvySugar — Mon, 13 Jul 2009 08:30:56 -0700

Whether they've been battle royales or stern disagreements, arguing about money with your significant other is something most of you have been through. Frustration between couples built on financial issues is particularly common during the recession, when many folks are unemployed and bills need to be paid.

The editors of Money magazine want to help you find peace with your money, and one of the topics they address is how spouses can avoid arguing about money these days. They advise once-a-week meetings dedicated to talking about money, focusing on common goals instead of differences and playing the blame game.

To kick-start the meetings, Money created a list of conversation starters and the editors encourage you to separately write down responses and discuss them at your first meeting. To see their talking points, read more.

"What is my biggest money worry nowadays?"
"What are my top three savings priorities, in order of importance?"
"What am I pleased with about our financial life?"
"Is there anything I want to understand better about our finances or wish that we could investigate together?"
"If we had to cut back on spending, what three areas would I choose? What three would I avoid cutting?"
"Are there any important money tasks I think we have been procrastinating on?"

Would you use these conversation starters with your significant other, or have you already covered these bases?

Married For 80 Years, Couple Shares Keys to Happy Marriage

SavvySugar — Thu, 04 Jun 2009 04:30:19 -0700

Talk about devotion. Bill and Marie DeCaro (ages 100 and 99) have been married for eight decades, making them the world's second longest-married couple. They were married in 1929 and endured the hardship of The Great Depression when Bill lost all of his money because of a shuttered bank.

When Action News asked Bill about the downfall for most marriages, he replied, "Where do couples go wrong? They spend too much money. Don't know how to hold on to more money." While the couple believes the lack of financial responsibility is the number one way to rock the marriage boat, Marie says the rest of it is pretty simple. She advises, "Remember to talk a lot, love a lot, laugh a lot, exercise a little and have a little fun."

To see a video of the endlessly in love Bill and Marie who still cuddle after 80 years, just read more.

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Will You Hit These Money Milestones by the Time You're 30?

SavvySugar — Fri, 10 Oct 2008 12:30:52 -0700

Turning 30 can be a dreadful birthday for some reluctant 20-somethings, but no matter how full of dread you may be there's a way to gracefully enter the next decade in regard to money management. In order to set you up for smooth sailing, MSN Money created a list of six money milestones to reach by the time you're 30. Do you think these milestones are appropriate for most people in their twenties? Is there anything you'd add or remove?

Scale back the credit cards. If you aren't able to live on your earnings and are still taking on credit card debt when you're 30, it's going to be difficult for you to save enough for retirement.
Own a home, or have a plan. One expert says that homeownership should be a priority, and to start saving for a down payment.
Have skills. Develop a set of marketable skills by the time you are 30 and try to bring something new to the table.
Give money away. Financial advisor Scott Hanson says, "I think it's financially healthy to give."
Know thyself. Decide what's important to you. Hanson explains, "Start to know yourself and build parameters so your life and money line up with those parameters."
Know smart people. When you need advice, turning someone who's good at their job can save you money in the long run, whether it's a tax preparer, financial adviser, attorney, or insurance agent.

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Ask Savvy: Should I Invest in a Roth IRA or CD?

SavvySugar — Tue, 06 May 2008 06:48:57 -0700

Dear Savvy,

I'm a college freshman and I took Economics about 2 years ago and I vaguely remember my teacher advising we should invest some money into a Roth IRA or CD. I don't have a job right now, but this summer I'm definitely looking to work for as long as I can. How would this affect my financial aid eligibility in school? What is the difference between the two and the pros and cons? Lastly, What should I do?

To see my answer just read more

Before I get answering, pat yourself on the back for thinking about investing at such an early age. A lot of young adults (some of my friends included) talk about investing but don't actually do anything because it becomes confusing and therefore frustrating. So, in order to keep your investor momentum going I'll answer your question regarding which investment is best for you. As for the summer job affecting your financial aid, that's one question I cannot answer and it's best to discuss any concerns with your school's financial aid office.

Roth IRAs and CDs are two very different investment / saving vehicles and choosing which is best for you depends on your goals. Roth IRAs are generally used for retirement savings, and the funds in a Roth can be withdrawn tax-free and without penalty if they're used toward purchasing your first home. A Roth IRA is an account composed of other investments, while a CD is an investment in itself.

CD, which stands for Certificate of Deposit, is a generally low-risk investment that is guaranteed by the bank. Think of it as a savings account that forces you to leave the money where it is for a certain period of time (unless you want to pay an early-withdrawal penalty) and earns a set interest rate for the term of the investment.

You'll be eligible to invest in a Roth IRA once you start earning a paycheck, but some banks require minimum initial investments or minimum contributions. There are typically minimum investments for CDs and the interest rates vary according to the term of your investment - generally the longer the term, the higher the interest rate.

In your situation, if you don't already have an emergency fund worth about three months living expenses, I'd open a high-yield savings account and build some readily available savings first. And if you have any credit card debt you should try and pay off those bills with your summer income before you even think about investing. Once you have those things squared away, a Roth IRA is probably the smartest place for you to start investing but you need to weigh your options carefully and consider your individual financial needs and goals.

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