четверг, 31 декабря 2015 г.

Parents’ spending habits influence kids

Whether you’re financially smart or dumb, part of what you do with your money, you’ve learned from them. Good thing, though, is that you don’t necessarily grow up to be like your parents. But they sure can influence you.
In my case, my mother was pretty shitty with money. Never really believed in long term financial planning, saving, and spent pretty much on her whim. She died with nary a cent for me to inherit. And whenever the parent leaves the kid with the funeral bill, that’s always a shitty deal.
Good thing is that I learned from her mistakes and have become much better when it comes to finances. My mother’s experience taught me to value money, save, and spend carefully. Part of my motivation is that I want to retire wealthy and to leave a nice inheritance for my kids.
Be aware that parents often put up fronts either for to appear to be keeping up with the Joneses or perhaps to help kids feel secure about the family’s financial stability. Try to take a look back at your childhood and compare and contrast your parent’s lifestyle.
Spending habits like incurring debt and not budgeting are tell-tale signs of financial stupidity. If your parents live frugally and are now happily retired, then they’ve done great. Learn from their successes. If not, then try to learn from their mistakes and avoid digging for yourself your parents have dug for them.
The best way to know these things is to communicate. Be open. Talk to your parents and know their biggest mistakes. Talk to your spouse and feel free to discuss money matters in an honest and proactive light. Talk to your kids so that they also have a clear picture of your finances so that they can grow up financially smarter than you.

четверг, 24 декабря 2015 г.

Financial tips for college fresh grads

If you’re graduating in a few months, you got to prepare yourself soon. You’ll be pressured to have a job and, of course, earn money on your own. Here are some finance tips for the fresh college grads:
If your student loan confuses you, now is the time to figure it out.
It’s time to not only familiarize yourself with the details, but also to understand every bit of information regarding your loan. This might help you pay it off as soon as possible.
Start saving for the short term.
If you have plans on living independently, you must have the means to support yourself – to pay for an apartment, to buy food, to have money while looking for employment.
Start saving for the long term.
Invest in your future. It pays to have something reserved for the rainy days. And if you’re lucky enough to keep a large amount of your saving, at least you’ll have head start on your retirement fund.
Decide whether you really need a car.
If you have plans on moving to a place like Los Angeles, you’ll definitely need a car to move around. But remember that car payments and gas can really be expensive for fresh grads. Instead, you can consider cities and other places with good public transportation systems.
Ask about benefits.
Once you land a job, ask about health insurance, dental insurance, vision insurance, employer-matched retirement plans and other subsidies. These things are as important as your paycheck.
Figure out a budget.
There’s nothing wrong with dreaming – just know how to temper your expectations. It might help to take the time to research and compute the cost of living in different areas where you want to live and the expenses needed to keep a particular lifestyle.
Life after college is tough. It’s full of uncertainties. The last thing that you want to do is to cry and run home to mommy for the financial failures that you should’ve preempted.

четверг, 17 декабря 2015 г.

How financial institutions encourage bad habits

In an ideal world, all banks, financial advisors, credit card companies, and other financial institutions would have your best interest in mind. But, that’s not the case.  Most of the time, these are the same institutions that would encourage you to breed bad habits.
Student loan debt
We were all made to think that student loan debt is responsible debt. A good education leads to jobs, right? Well, think again. This might be true, but you still have to evaluate your college spending plans. When going to college, be conscious of the debts that you’re taking. Remember that most fresh grads are still struggling with employment and that it may take years before you land into a career that can liberate you from the burdens of student loan.
Overdraft protection
If you’re the kind who shows tendencies of overdrawing your bank account, then banks are scouting for you. Banks would first allow you to spend more money than what you actually have in your account and then would cover your excess expenses for $35/advance. What’s wrong is that that $35/advance rate snowballs into a large burden, together with the amount of money advanced. Nowadays, laws are now in place to prevent banks from enrolling you to their overdraft protection program automatically.
High interest rate mortgages
Some mortgage brokers are out there to trick you. Their goal is to tempt you to get high rate mortgages through incentives. This kind of payment is referred to as yield spread premium. In the end, you have to remember two things: first, it’s in the broker’s interest that you pay more. When you pay more, your broker gets more as well. And second, do your homework: research and be an informed customer.

четверг, 10 декабря 2015 г.

How to talk about money

People rarely talk about money. That’s why when some veer towards that topic, others have no choice but feel uncomfortable. Avoiding any talk of money is almost impossible. So, when caught in that situation, here are some tips on how you can handle them.
Your salary
It’s never advisable to divulge your salary to everyone. You shouldn’t also brag about bonuses, commissions, and compensation packages. But if someone asks how much you earn, the safe response would be “I make enough to get by.”
Real estate
This one is tricky. Because even if you answer vaguely, transactions go to public records. If a neighbor is really eager to know how much you spend for your four bedroom Colonial, he can always go to the local county clerk’s office or search the Internet for it. Despite this, it doesn’t mean you’ll answer all questions right off the bat. You can just say that you got your home either below or above the asking price.
A flashy car will not be left unnoticed. If asked about the car you drive around, simply name the car and drop the topic. You don’t want people to be overwhelmed by your arrogance by talking more about its price tag.
Public vs. private school
It’s no secret that private schools are pricier than public schools. Sending a kid to a private school is regarded as a status symbol. In this sense, it’s just rude to name drop your child’s prep school at random people just to impress. Try to be polite by naming the school and explaining vaguely what you like best about their curriculum.
Your investment portfolio
Your investment portfolio should be treated as your salary – you shouldn’t divulge its exact value. Deflect questions by answering with estimations, with percentages rather than the value in dollars.
Bragging about one’s money is offensive. Know more about your friends and acquaintances by asking about themselves and not by their wealth (or lack thereof).

четверг, 3 декабря 2015 г.

5 ways to save more money

Sometimes, you need not do something drastic or overwhelming for you to save money. You may start thinking about your day-to-day routine and see what things you can actually trim to save a few more dollars a month. Here are small things that could save you a bit more.
Dropping vices. You might not realize it but that pack of cigarette or two that you smoke on a daily basis actually amounts to something substantial in a month. Try to look at your other daily guilty pleasures at well. Could be that daily Chinese take out or that extra can of soda.
Buy in bulk. Buying in bulk definitely is cheaper. However, keep in mind to focus only on items that do not have a shelf life, for example, paper towels. Some items containing chemicals have active ingredients that might stale.
Unplug all unused appliances and turn off lights. Often overlooked but appliances when plugged even if not in use, still leeches off a few a bit of juice. Light, even if you’re using energy saving fluorescent ones still consume watts of electricity. Turning them off prevents waste.
Drop unnecessary subscriptions. How many of your existing subscriptions do you actually get to maximize. How about your phone? Your cable TV? Your magazines? Your newspaper? How many of them do you actually use or read half the time in a month. You might just be able to drop one or even all of them.
Avoid flooring your car’s throttle. Some driver drive as if there’s no tomorrow. Heavy right-foot driving actually just wastes gas. You don’t need to tap your car’s ponies when driving. Besides, even if you build up speed and only brake shortly afterwards, you’re just converting all the force into heat. Get more mileage by tempering how you speed up.