Three New Personal Finance Books for Kids, Teens, and Generation X
In a recent article in the Seattle Post Intelligencer, Eileen Alt Powell covers three new books that can help younger generations get off to a good start with their money.
High School Money Book 
“I want them to start thinking about money — to make conscious decisions for spending, saving and investing — so they can have financial and personal freedom throughout their lives†– Don Silver
The Ultimate Parenting Map to Money Smart Kids
Linda hopes to teach young people the following fundamentals:
“saving 10 percent of what you earn, taking advantage of any kind of retirement plan through your job, working toward owning a house, having enough liquidity to deal with an emergency, and avoiding debt.â€Â
Getting Started: The Financial Guide for a Younger Generation
Brian was inspired to write the book because “he felt many of the books aimed at 20- and 30-year-olds were dated.”
Our 2007 Finances – Moving to a Single Income Family
Family First
The year 2007 may be a financially challenging one for our family. After much thought and discussion we decided to put family before money and have my wife stay at home with our new son. We’ll drop to a one income family halfway through the year which will end our 7 ½ year run of saving around 30% of our annual income.
Financial Strategies
We’ve crunched the numbers and determined that we can get by financially on one paycheck, luckily mine is bigger, but we’ll definitely have to make some adjustments. Unfortunately we’ll have to reduce our savings rate quite a bit but there are three things that will help us keep saving as much as possible:
1) Be More Frugal
Our largest expense is our mortgage payment and short of moving this won’t change. We have no debt other than our house payment so there is a lot of wiggle room in most of our other expenses. Since there are a million ways to save money, being more frugal will be a dominant theme this year. The less we spend, the more we can save.
2) Increase Alternative Income
Ah, the elusive search for other streams of income. Currently eBay sales are the main source of our alternative income. My wife is going to jump into the eBay game as well, I’ll pass on everything I’ve learned to her. In addition, I have several other plans in the works. Not sure if they’ll all pan out but as I’ve learned from Seth Godin, you’ll never know if you don’t try!
3) Increase Salary
A successful year at work led to a terrific performance review, which sets me up for a promotion next year. This isn’t really a pure personal finance strategy but more of a matter of good timing. Luckily my hard work looks like it will pay off. The more I can earn, the more we can save.
How to Buy Low, Sell High, and Reduce Risk by Rebalancing Your Investment Portfolio
How often do you rebalance your investment portfolio?
My trend of rebalancing my 401k in the last days of December ended yesterday. I like to make the changes before the last business day of the year because our 401k administrator only gives us a certain number of free transactions per year. A busy day at work caused me to forget the rebalancing so now I’ll have to wait until the first week of 2007.
Why Rebalance?
Christine Benz from Morningstar explains in this article the benefits of periodically rebalancing your portfolio. One of the benefits is it helps you buy low and sell high:
“When you rebalance, you put money into those securities that have held steady or dropped in value (your losers) while paring back on those investments that have grown more expensive (your winners).”
She suggests the following points to “Tune Up Your Portfolio in Six Easy Steps”:
1) Find Out Where You Are Now
2) Find Out Where You Need to Be
3) Compare Your Target Allocations with Where You Are Now
4) Be on the Lookout for Investment-Style Bets
5) Tinker, Starting with Your Tax-Sheltered Accounts
6) Plan to Make a Habit of It
How to Rebalance
If you’re wondering about the best way to go about rebalancing, John Coumarianos over at Morningstar walks us through an example of doing some maintenance on a sample portfolio. He reminds us of the importance of this necessary task and that it can help reduce our investment risks:
“whether you conduct rebalancing at year-end or less frequently, it’s a great way to reduce your portfolio’s overall risk level and ensure that its current allocations are on track with your targets.”
Rebalance Away!
Use Morningstar’s X-ray tool to look at all your investments, not just your 401k or IRA. Don’t be like me, don’t forget to rebalance!
Why You Shouldn’t Buy a Hummer
“What do you need that thing for”, I ask myself every time I see another Hummer driving through the neighborhood. Out here in suburbia I just don’t understand why in the world people would own such a money pit just to drive around town.
I searched online and found that Jim Walczak over at about.com wrote an article “Should You Buy A Hummer?” that covers the pros and cons of owning a Hummer. He sums it up
“the Hummer is a symbol more than anything. It’s all about image and attitude. It’s purchased more for looks and brawn than practicality and purpose. So, if you’re looking for another way to get noticed…the Hummer could be just what you’ve been waiting for.”
Below are some of the negatives that he lists about owning a Hummer:
- Insurance is higher than most vehicles.
- Gas mileage is poor (roughly 12mpg), especially when used as a daily driver.
- Maintenance costs are high.
- Resale value isn’t very high.
- Expensive to buy, and even more to keep.
In my opinion, owning a Hummer is obviously not a wise move financially. I guess I’ll never understand why people choose to buy one, the only thing I can say is don’t do it!
One thing to note, his article covers the H1 and H2 models, not the newer, smaller H3 that costs less and has better gas mileage. It doesn’t matter to me, H1 or H5, you’re not being smart with your money if you buy a Hummer! I guess if you have no debt, an emergency fund, and fully funded retirement accounts then you can spend your “play money” on a Hummer; but people who have 30K of play money laying around probably aren’t reading this article.
In summary, Just say no to Hummers!
eBay Powerseller Personal Finance Tips – Turn Trash Into Cash
Many of us are feeling the financial pinch the few days after Christmas. The presents have been given and now we have to figure out how to pay for them all! One way to help make the payments is to turn trash into cash!
Thinking Inside the Box
What is one thing most Christmas gifts have in common? Almost all come wrapped in a box! Almost everything I sell on eBay has to be shipped somewhere, which means I’m always in need of boxes.
The first three things I sold on eBay actually lost me money due to the expense of buying boxes, packing peanuts, and bubble wrap. I quickly learned to factor the cost of shipping materials into the total price. Then last Christmas, as I watched nieces and nephews tear through box after box of gifts, I realized that I shouldn’t be spending money on packaging materials, they were all around me for free!
Turning Trash into Cash
Anytime I come across any already used packaging materials I store them on shelves or bins in my garage. I’ve spread the word to family and friends so now they collect their empty boxes, extra packing peanuts, etc. for me as well. Since I don’t have to buy the materials I can charge lower fees and still end up making a few extra bucks on each sale for shipping. I figure over the last year I’ve probably made $800-$1000 just by turning trash into cash!
Personal Finance Tips
There is “trash” all around us that can, with a little effort, be turned into cash. Anyone can do it but most people don’t take the time.
Printer Cartridges
freerecycling.com
Cell phones
TradeMyPhone.com or CellForCash.com
Furniture
Buying new furniture but don’t have a truck to take it to Goodwill? Instead of paying to have it hauled away, sell it locally on craigslist.com.
Donate Items
Donating items such as used computers or clothing won’t put any cash in your pocket right away but the tax deduction at the end of the year can help.
Friends & Family Plan
Use the network effect to help you turn other people’s trash into cash. Let friends, family, and co-workers know you’re always looking for empty printer cartridges, old cell phones, or whatever “trash” you can turn into cash. Over time the word will spread and “trash” will start to trickle in.
eBay Tips
Another way to turn trash into cash is to sell your used items on eBay. If you go that route, make sure you save all the sturdy boxes you opened over Christmas to cut down on your shipping costs!
Avoid Late Fees! Pay Your Personal Property Tax Online.
As usual, I’ve managed to put off paying my personal property taxes for 2006 until the very end. Lucky for me my county now allows procrastinators like me to pay their personal property taxes online up until 12/30!
Keep Your Money
Putting off payment has not been all about procrastination, I’d like to keep my money earning interest as long as possible before giving it to the government. I received my tax bill in November. Waiting until the end of December to pay it probaby earned me an extra $4-5, not a lot but little things can add up!
Making the Payment
The county website has two options, pay with eCheck or with credit card. I ruled out credit card right away because they charge a 13% conveinence fee. In order to pay by eCheck you need your bank account number and bank routing number.
I setup a separate bank account a few years back that I use only for making electronic payments to the government. Any tax bills I pay electronically come out of that account so Uncle Sam won’t ever be able to “accidentally” withdraw money from my main checking account.
Don’t Be Late!
The county charges a late fee of 3.5% if the payment is a day late, then 1.5% late fee per month after that. My total taxes due are about the amount I’ll contribute to my IRA in January. So even if my IRA holdings increase by 8% in January, overlooking my bill and making a late payment would effectively cut that return down to 4.5%! I definitely don’t want to miss the payment, make sure you don’t either!
Festival of Frugality #54
Welcome to one of the most happening festivals around! Internet Explorer users please excuse the mess as the uplanned hosting caught me in the middle of a theme upgrade. I didn’t have time to do each submission justice with a comprehensive review so all I can say is, get ready to meet some frugal people! Without further ado, I give you all the festival!
David presents How a $3.85 drink at Starbucks affects your bottom line. posted at My Two Dollars.
Alison presents Why I Have a Fake Christmas Tree posted at Bargain Quest.
TMT presents I Was Rejected By Lowe’s Home Improvement posted at The Money Tortoise.
Super Saver presents Do It Yourself and Save Money posted at My Wealth Builder.
FMF presents Save Money on Prescription Drugs by Getting Free Samples posted at Free Money Finance.
Steve Faber presents How to Put an Extra $100,000 in Your Bank Account posted at Debt Free.
FIRE Finance presents Frugal Tip – Wink, Flash And Get 50 Free Digital Prints This Christmas! posted at FIREFinance.
Moneywalks presents Problem with people who ?wants? to save posted at Money Walks.
Silicon Valley Blogger presents There’s Treasure In My Trash posted at The Digerati Life.
Joe Caterisano presents Debt solution posted at Penny Pinching.
Nina presents LED Holiday Lights: Eco-Friendly & Reduces Your Electric Bill posted at Queercents.
Sagar Satapathy of BizNicheMedia presents Tips To Reduce Debt & Stay Out Of Bankruptcy posted at Bankruptcy Reader.
Stingy Student presents Dell coupon posted at Stingy Students.
jim presents Always Rent Economy Cars and Avoid Airports posted at Blueprint for Financial Prosperity.
makingourway presents SHOPPING: a neat little gift posted at makingourway.
Lisa Knight presents Dust covers for new fangled sweepers. posted at The Frugal Momma.
Matthew Paulson presents Of Diets and Dollars posted at Getting Green.
Hope you’re feeling more frugal than ever after all those great tips. Have a Happy New Year, now go out and be frugal!
Quick Guide for Last Minute Tax Strategies – It’s Not Too Late!
Back in November I wrote an article A Quick Guide for Last Minute Tax Strategies covering some things you could do to reduce your 2006 taxes, courtesy of H&R Block. If you have a tendency to procrastinate like I do you may not have gotten around to these yet. The good news is it’s not too late! If any of the areas below might apply to you then check out the strategies and act before the end of the year:
- Retirement Contributions
- Charitable Giving
- Energy Efficient Home Purchases
- Education Expenses
- Hybrid Vehicle Purchases
My Money Secrets Revealed!
Bryan Fleming, founder of the Million Dollar Savings Club and the Personal Growth Carnvial recently sought out my thoughts on money in a short interview, which I have included below:
1. What made you decide to write about Personal Finances?
My blessing has been the great role models I’ve had when it comes to handling money. No, not Warren Buffet or Dave Ramsey. My parents and grandparents taught me the value of a dollar and how to use money wisely. I’ve been on the right track financially pretty much my whole life thanks to them.
I see a lot of people that didn’t have the advantage of having good financial mentors growing up. I saw them making poor financial decisions and I wanted give them the help that I’d had and make a difference in their life. Writing about personal finance online seemed the best way to spread the word to a wide audience.
2. What was your biggest Money Managing mistake?
I’m sure I will make more mistakes in the future but to date it was my investment choices during the dot com tech bubble. I was caught up in the tech craze and lost around $5000 investing in B2B companies that are now worth nothing.
On a positive note, I’m actually glad for the error because it taught me a good lesson. I learned the dangers of speculation and the benefits of diversification and valuing a stock appropriately at a young age. Now I just have to make sure that lesson sticks with me throughout my life. (more…)
Personal Finance Reviews and Previews
Check out the following reviews and previews from personal finance sites submitted to a recent group writing project held by Darren at Problogger.net:
Investor Trip reminds us to shop for lower prices and redeem rebates immediately in Stupid Ways to Lose Money.
The Money Tortoise talks about avoiding financial porn, lowering your investment costs, making your planning easier in “Set It & Forget it†For the Future.
Broke-Ass Student encourages us to find courage to take bigger risks in life with
Finding the Courage to Fail – Even as a Broke-Ass Student .
The Simple Dollar offers some insightful trends in blogs and money for the coming year in Blogging and Money: Six Trends For 2007 .
A new site that I’ve never read before, Living the Life as a SAHM talks about being a
Financially Savvy Stay at Home Mom. This looks to be a great resource for single moms that hopefully we can all learn something from.
My contribution How Christmas Letters Can Make You a Happy Millionaire! rounds out the personal finance entries.
Please let me know if I overlooked anyone. Unfortunately, none of us came away with a prize but I am happy to have discovered some new and useful blogs. Check out the other submissions and find some treasures yourself!
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I'm Ben Edwards and I've been addicted to personal finance since I was 12 years old.
That passion for money has paid off for my family - so in 2006 I founded Money Smart Life to help you afford the life that you want. Read My Story...
