Don’t Know What You’ve Got Till It’s Gone

I feel like an ungrateful person.  I have a lot of blessings in the form of health, family, friends, a home, food to eat, insurance, a job, the list goes on….

Yet, there are days when I get worked up over things that in the big picture are pretty unimportant.  It’s easy for me to get caught up in the cycle of making money and paying bills and forget about all the things that are going right for our family.

Making a Gratitude List
I’ve decided to build a gratitude list that details all the things that are going well in our life.  My method is simple. Twice a day I’m going to write down:

• What I enjoyed about my life the last several hours
• What I’m looking forward to in the next few hours

Whatever comes to mind will probably be things that I’m lucky to have but typically take for granted.  I don’t know how long I’ll try this for, I guess until I run out of things to add to the list.

Using the List
I think my gratitude list will actually be the most useful on days when things just aren’t going my way.  When something bad happens to you, it can ruin your whole day, week, or month.  I know that I can obsess over bad news and dwell on the negatives for far too long.

My hope is that when something unpleasant happens to me and I’m wallowing in self pity that I can bring out the gratitude list and remind myself that whatever it is, I still have all these other things going for me.  That’s what I try and do now but it’s hard to think positive thoughts when you’re down in the dumps. Hopefully the gratitude list will be there to remind me of the pleasant things and help me get my mind back on track!

What do you think?  Do you have a gratitude list?  How do you get yourself through a bad day?

 

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Auto Insurance for College Graduates

Auto insurance quotes for college graduates searching for car insurance will probably make them wish they were back on their parent’s insurance policy. While some college graduates will have been paying their own auto insurance throughout college, the ones that have been covered by their parent’s insurance are in for a rude awakening.  Getting cheap auto insurance that still gives you enough coverage depends on finding the right agent, doing your research, and knowing how to lower your rates.

Find A Quality Agent

A good auto insurance agent will get you the best rate possible with the adequate amount of insurance coverage. Anyone can find you cheap insurance, but it’s probably the bare minimum coverage that exposes you to hundreds of thousands of dollars in liability.

Personally, I choose independent insurance agents, because they have access to dozens of insurance companies and their products. They will shop around for you and present you with the best coverage at the most affordable price. That’s not to say that State Farm, All State, and other exclusive agents are no good, but they are only bound to what their principle company allows them to offer.

Car insurance is extremely competitive, and that’s why I believe going to an agent who can shop around for you is the best way to approach finding a quality agent.

Do Your Research

The Insurance Information Institute has some good information to educate you more about car insurance. It would take an entire series of posts to get into all of the intricacies about car insurance, and that is why it is so important for you to do your own research. There are four major things you need to know about car insurance before signing on the dotted line:

1. Car Insurance Liability Limits
2. Exclusions from Coverage
3. Car Insurance Endorsements
4. Difference between Comprehensive and Collision Coverage

The internet makes it easier than ever to research rates, you can get auto insurance quotes from multiple sites on the web.  Make sure you search the rates on multiple sites to get an idea of what the average rate is. Here are a few places you can get insurance quotes online so you can compare their rates right away:

What You Can Do To Lower Your Rates

As a young person, especially for guys, your insurance rates will be in the highest tier simply because of your age. There are statistics to back up the fact that younger, more inexperienced drivers get in more accidents than middle aged people. There’s nothing you can do about your age, but there are a few things you can do to lower your car insurance quotes.

• Choose a $higher deductible for Collision and Comprehensive coverage if you choose to carry them.
• If you are still in college, ask about a good student discount. State Farm offers a discount for students with a certain grade point average.
• If you have renter’s insurance or homeowner’s insurance, ask for a multi-line discount.
• If you plan on buying a new car after college, consider a car with high safety ratings. I know, you’re still young and a Toyota Camry doesn’t sound that appealing, but sports cars and SUV’s that are prone to flipping over carry higher insurance rates.
• Do not let agents tack on policy endorsements that are not necessary. The only ones I pay for are emergency roadside assistance and collision coverage for rental cars.

The importance of being a well-informed consumer is invaluable, and insurance policies are often overlooked by consumers of all ages. It is one of the products we buy that we know so little about, yet don’t bother to educate ourselves about. Be informed and do your homework. You’ll save a lot of money on car insurance and on other big purchases you make in your lifetime.

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Roth 401(k) – Frequently Asked Questions

Roth 401k’s are a relatively new option for retirement investors.  I was researching the Roth 401k to see if it was right for our family and here are some frequently asked questions I came across.

How are Roth 401(k) contributions different from regular 401(k) contributions?

Regular 401(k) contributions are made before taxes, reducing your current taxable income, and you don’t pay any taxes until you withdraw money from your account.

If you make a Roth 401(k) contribution you pay taxes up front. Contributions are made on an after-tax basis, and both the contributions and earnings are tax-free upon distribution (subject to certain requirements).

Bottom line: Regular 401(k) contributions give you an immediate tax break; Roth 401(k) contributions give it to you down the road.

Who could benefit from Roth Contributions?

You may find a Roth 401(k) appealing if you:

• Anticipate your federal taxes will increase in the future
• Are younger and have a long time to retirement
• Are lower-paid with low marginal tax rates
• Have not been able to make Roth IRA contributions due to income limits
• Want to minimize taxable income during retirement
• Are looking for greater estate planning opportunities

How is Roth 401(k) different from a Roth IRA?

Roth 401(k) has no income limitations; therefore Roth 401(k) may be appealing to higher-paid workers who haven’t been able to contribute to a Roth IRA. Unlike Roth IRAs, a Roth 401(k) requires a minimum distribution beginning at age 70½.

Can I contribute to a Roth IRA and a Roth 401(k)?

You can contribute the maximum allowable to a Roth IRA in addition to making Roth 401(k) contributions.

Am I eligible to make Roth 401(k) contributions regardless of my income?

Yes. Any eligible worker can contribute to a Roth 401(k) account. Unlike Roth IRAs, there are no income limitations.

Can I make both regular and Roth 401(k) contributions?

Yes. You can make all pre-tax contributions, all Roth 401(k) contributions or a combination of both. The IRS places limits on the amount of contributions you may make to a 401(k) plan. The sum of your regular 401(k) contributions and Roth 401(k) contributions cannot exceed the annual federal limit. The limit is $15,500 for 2008 and $16,500 for 2009. The over 50 catch-up limit is $5,000 in 2008 and $5,500 in 2009.

Can I switch my Roth 401(k) contributions to regular 401(k) contributions (or vice versa)?

No. Money cannot be switched after it is contributed.

Are there any special conditions to withdrawing my contributions tax-free from a Roth 401(k) account?

Yes; two conditions must be met. Your contributions and earnings are tax-free upon withdrawal provided:

• The withdrawal is made at least five years after the year the first Roth contribution was made.
• The money is distributed after you reach age 59½ or on account of death or disability.

What happens to my Roth 401(k) contributions if I leave my job?

Your Roth 401(k) balance can be:

• distributed directly to you
• rolled over into a Roth IRA
• rolled over to another qualified retirement plan that allows for Roth 401(k) contributions

Can a Roth IRA be rolled into the Roth 401(k)?

No. Roth IRA’s cannot be rolled into Roth 401(k)s.

Will employers match my Roth 401(k) contributions?

It depends on the employer. Keep in mind that although Roth 401(k) contributions may be matched just like regular 401(k) contributions, match contributions are not available for Roth treatment. In other words, match contributions made will be subject to tax upon distribution.

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Credit Card Fees & Interest Rate Reform

The Credit Card Accountability, Responsibility, and Disclosure Act or “Credit CARD Act” passed the Senate yesterday. The bill will now go through the legislative process of merging with the Credit Cardholders’ Bill of Rights, passed by the House earlier in 2009, before a final bill can be given to the President. Here is a look at some of the details that Senators Dodd and Shelby had proposed for the bill.

Credit Card Billing Cycles

A couple of the major provisions in the bill pertain the billing cycle, a part of the credit card industry that has come under substantial scrutiny in recent years. The proposal would require credit card companies to send out bills at least 21 days before payment is due. Further, no payment can be considered late unless the bill was mailed at least 21 days prior to payment being due.

For those who are frustrated by the 30-day billing cycles, which means the bill is due on a different day many months out of the year, the proposal looks for bills to be due on the same day every month.

Credit Card Interest Rates

Further, for those who are going to be getting a new card soon, there is no need to worry about interest rates for the next year. During the first year, the rate must remain the same. For those who may have large balances, there is more good news. It’s proposed that any rate change will not apply to existing balances, those are immune from interest rate changes. Also, along these lines, any payments made must first be applied to the higher rates, which should help some consumers pay down that debt quicker.

Student Credit Cards

Credit card companies that market specifically to college students will find some changes as well. Any account holder under 21 will have to have a cosigner over the age of 21, or will have to prove they have the independent means to pay back any debt incurred through the use of credit cards. Marketing credit cards to students and the trouble that often ensues has also received a significant amount of attention over the past several years.

Implications of Credit Card Bill

There is some debate on what impact these credit card reforms will have on credit card companies. Because the riskier borrowers are the ones who will receive the most protection from these changes, some say this will limit credit to those individuals. The thinking is that if those people are not seen as lucrative as they once were, credit card companies will have less interest in pursuing those accounts.

That could change significantly the mode of operation for some companies. Many credit card companies pursue those with poor credit histories who may be trying to rebuild their credit. In order to manage the risk of lending to those with bad credit, the credit card companies may tighten lending rules; making unsecured credit for those considered higher risk much more difficult to come by.  Of course, some would argue that this group of people shouldn’t have been granted credit in the first place.

Fees and interest rates being reduced to help consumers will likely eat into the profitability of credit card companies. To help make up for the shortfall in revenue, some features of credit cards, such as those extremely favorable terms for more responsible credit card holders, may be a thing of the past.

Many of the changes will not go into effect for nine months to give credit card companies time to adjust to the new policies.  Some consumer groups are concerned that companies will actually raise interest rates and fees until then.

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Snacking on Personal Finance

Who doesn’t like to snack?  When I snack it’s usually because I don’t have time to make a meal or just have a craving for a small taste of something.  Our new baby hasn’t left us with much spare time this last month so I’ve been doing a lot of snacking in the kitchen. 

I’ve also been snacking on personal finance articles, squeezing one in here and there between tasks during the workday or a crying baby in the evenings.  Here are some of the tasty money snacks I’ve run across recently:

Saving Money

– Lazy Man and Money –  Save Money By Turning Off Your Television

– Moolanomy – 1001 Ways to Save Money

– Cash Money Life – Baby Coupons & Deals

Retirement

– Brip Blap – Early Retirement or Meaningful Work?

– Million Dollar Journey – How Much Do You Need to Save for Early Retirement?

Insurance

– The Sun’s Financial Diary – Save Money on Life Insurance

– Free Money Finance – What It Means to Be Self-Insured

Clutter 

– Frugal Dad – 10 Secrets To Curbing Your Appetite For Stuff

– Five Cent Nickel – Preventing Impulse Buys & Combatting Clutter

– Mighty Bargain Hunter – Declutter Your Life

– The Simple Dollar – Minimize Junk Mail

Money Etc…

• Consumerism Commentary – 5 Jobs for People Who Like Money
• The Digerati Life – How To Buy A Foreclosure
• Get Rich Slowly – Starting a Business After Losing a Job
• Generation X Finance – IRS Audits
• My Dollar Plan –  Job Search Tips for New Grads
• Bargaineering – Comparing Fixed Annuities and Certificates of Deposit
• No Credit Needed – 10 Things to do Before Creating Your Budget 

Carnivals

• Festival of Frugality
• Wisebread – Personal Finance
• Mighty Bargain Hunter – Debt Reduction
• MyLifeROI – Money Hacks
• Money Highway – Debt Reduction
• Pickup Pennies – Money Hacks
• Tax Carnival
• Man vs Debt – Debt Reduction
• FIRE Finance – Personal Finance

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Stock Prices – Why They Go Up & Down

The price of a stock is determined by what people are willing to pay for it. At whatever point the demand of buyers meets the supply of sellers, the price of the stock is created. There may be someone out there trying to sell their AIG stock for $50 a share, but there are no buyers, or no demand at that price. The more important question is what pushes the stock up and down? The way I see it, the major factors fall into four categories:

• Fundamental Factors
• Technical Factors
• Market Sentiment 
• News

Stock Price Fundamental Factors

If the stock market were in a vacuum, this would be the only topic to discuss. With the absence of outside forces, a stock’s price would come down to its value and potential for earnings. When looking at these two factors, analysts use a stock’s P/E Ratio and Earnings Per Share (EPS) among others to determine the proper price of a stock. Other factors used are Cash Flow & Dividends.

Stock Price Technical Factors

Technical factors are a combination of external pressures that can change the supply and demand of a stock. These can force a stock in a particular direction regardless of the fundamentals.

Inflation is a very large factor in the stock market. Generally, low the inflation means higher valuations of the stock. The opposite can be said of high inflation.

Market & Industry Strength both play roles on a stocks price as well. If a particular stock is seen as outperforming or underperforming, the entire sector can be pulled in the same direction. Consider it guilt, or reward, by association.

Liquidity can also effect the movement of a stock. In terms of the size of a company, larger stocks generally have more liquidity than smaller stock. They respond better to news and have much higher trade volumes.

Stock Prices & Market Sentiment

The movements of the stock market over the last 18 months are a perfect example of how market sentiment can drive prices. What we saw for a large period of time was irrational fear taking over causing massive selloffs. It has driven some stocks down to small fractions of what they once were and others have disappeared altogether. As I said in my investing mistakes post, the two biggest enemies of the market are fear and greed. Both can and have caused major swings in both individual stocks and the market as a whole.

Stock Prices & News

Some may consider this a part of the previous category, but I see this as something that drives market sentiment and not necessarily something that is part of it. Imagine what would happen to the price of a stock if it were announced that the company had found a cure for cancer. What if another company found massive oil reserves inside the US borders? Using that same logic, if it was found that a food company had been distributing food with toxic ingredients…you get the point.

While this is not a complete list of driving forces, most items would fall into one of these four categories. When you’re looking at investing in a company, be sure to examine all these criteria before buying the stock.

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Personal Finance Newsletters

Personal finance newsletters are a good way for bloggers to build relationships with their most passionate readers.  I had several readers ask me what the point of a newsletter was since I already publish new posts everyday.  What else could possibly be covered in a newsletter?

Giving You What You Want

The thing about blogging is that although hundreds or thousands of people may visit your site everyday, unless they leave a comment you have no idea who is reading the posts.  The great thing about a newsletter is that it helps build a relationship between the regular readers and the owner of the site.  It also lets bloggers figure out what regular readers really want to know more about and allows them to deliver extra content on those topics to subscribers.

Personal Finance Newsletters

I’ve subscribed to several personal finance newsletters that have recently started up and can recommend that you try them out as well.  They’re free to join and have been delivering interesting and useful information, you can follow the links below to sign up:

• Bargaineering
• Consumerism Commentary
• Generation X Finance

Everyone that signed up for the Money Smart Life newsletter a few months ago got access to the Investor’s Tax Guide, which hopefully helped out during tax season and will help with some tax planning for this year.

Video Case Studies

One of the pieces of feedback that I’ve received is that subscribers are looking for ways to make extra money so I’m putting together some case study videos on how friends of mine make extra money with side businesses.

One of my friends pays his mortgage payment each month with the money he makes!  I’ll send out some more information on those case studies in the newsletter, if that’s something you’d be interested in you can sign up for free below:

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Free Credit Report & Credit Monitoring Trials

Free credit reports are available annually and you can get a free trial of credit monitoring services online from various companies so there’s really no reason you shouldn’t be able to check your credit report and keep tabs on your credit score.

Credit history and credit scores play the leading role for individuals and couples trying to qualify for a mortgage or finance the purchase of an automobile. So how do you know what your credit history looks like or if you have a high or low credit score? Below are a few resources you can use to check your credit report and find out your credit score.

There are three credit agencies: Experian, TransUnion and Equifax. Since each agency keeps its own records, it’s wise to order a copy of your credit report from each of the three agencies. The credit agencies and other services listed here also allow you to order all three reports at once. If you’re married you’ll have to order a credit report for you and your spouse to obtain each credit history and score.

Annual Credit Report

AnnualCreditReport.com is a central source where you can order your free credit report and scores from Equifax, TransUnion and Experian. In a few simple steps online, you can place your order and be on your way to reviewing your credit history and scores. This service allows you to order one free credit report from each of the credit agencies per year.

MyFICO

Your FICO score is one of the many credit scores computed from your credit history. It is the score used by 90 percent of the banks and lenders in the United States, when they are determining whether or not you qualify for the mortgage or loan you are applying for. Since it is one of the most important scores, you should monitor it closely.

MyFICO is an Equifax service that allows you to order a free trial of two Equifax credit reports and obtain your FICO score. It also provides a service to alert you when there are changes to your credit report or FICO score. This is a paid service, but they do offer a free trial period to test it out. – MyFICO Credit Report

Experian

Experian allows you to order your credit report and score from their website when you sign up for a free trial of their service. There is also an option to pay a small fee to receive your credit report and score from all three credit agencies at once.

Again, what shows up on your Experian report may differ from what is reported on your other two credit reports, so you can order a copy from each agency individually or use one service to order all three. – Experian Credit Report

TransUnion

You can order your individual report from the second of the three credit agencies, TransUnion. The TrueCredit program offered by TransUnion also provides a service where you can order all three of your credit reports and credit scores at once. Here is a TrueCredit review. – Transunion Credit Report

Equifax

The third of the credit agencies, Equifax, provides a similar service. You can order your Equifax credit report and credit score or purchase all three credit reports and scores at once. Unlike the other services, Equifax doesn’t offer a free trial. You can get started with ordering your individual or set of credit reports and scores with Equifax online. – Equifax Credit Report

Your credit history and credit scores play a major role in qualifying for a mortgage or financing any major purchases. It’s simple and easy to do and you have several options so it’s a good idea to check your credit report and scores at least once a year.

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Credit Scores & Interest Rates: Why Credit Matters to Newlyweds

Credit scores make the world go round–at least in the lending and loan world. As newlyweds you’re embarking on a new life together. This new married life usually requires the merging of existing property and the purchasing of new items. Whether you’re applying for a new credit card, buying a car or home, or buying car insurance, your credit scores and credit histories dictate whether you’ll qualify, the interest rate you pay, and the repayment terms. Poor credit history and low credit scores of your husband or wife can make building your married life together an uphill financial battle–a battle that can lead to divorce.

Qualifying for Credit

Every time you and your spouse apply for credit, your credit score, and sometimes your full credit report, are pulled. The lender uses your credit histories and credit scores as the foundation on which they build their decision. First, they assess how much of a risk you are to them and whether or not they want to extend credit to you. The higher your credit scores and the better your credit histories, the more likely you are to be approved. Your credit scores and histories also directly affect the interest rate you’re charged and the repayment terms established by the lender.

Don’t be fooled into thinking your good credit supersedes your spouse’s bad credit either. If you apply for loans together, both of your credit histories and scores are evaluated. Depending on what you’re applying for, you may not have the option to apply separately. For example, when you apply for car insurance, the insurance agency asks you to list everyone living in your residence that is of driving age. Even if your spouse never drives your car, their credit may affect the insurance premiums you pay.

Interest rates

It is a well known fact that good credit borrowers are charged lower interest rates than those with poor credit. Higher interest rates also cause your monthly payments to be higher. Especially when you’re first starting out in married life, finances may be tight. If you’re trying to buy a car or home or obtain a credit card, higher payments may prohibit you from being able to afford the purchase. Plus, nobody wants to pay more than they have to for an item. Higher interest rates mean you’re paying more for the item in the long run.

Favorable Lending Terms

It’s not only the interest rates that are affected by credit scores and histories. It’s also the terms of the loans or credit extended. It’s not a secret that good credit borrowers receive better repayment terms. For example, the longest financing period for a car is typically five years. Good credit borrowers are a lower risk to financing companies, so they can usually qualify for the longest financing terms. Bad credit borrowers not only pay a higher interest rate, but they have to repay the loan in a shorter period. For a car it may be two to three years. Higher interest rates and shorter terms equal higher monthly payments and a higher overall cost of the purchase.

Credit Scores Matter

The overall effect is that higher interest rates coupled with shorter financing terms make your payments much higher than good credit borrowers who receive lower interest rates and longer repayment terms. This can push you into a situation where you can’t afford to make the payments, which can cause your credit score to spiral down even further. Establishing good credit histories and maintaining high credit scores is imperative to painting the best financial picture for your married life–whether it’s buying a house or obtaining a credit card for emergencies.

This post on credit scores and interest rates is part of a series on credit and debt in marriage.  You can also read about debt and marriage, free credit reports, and improving your credit score

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Cheap Summer Activities

One of the best things about being a college student is getting your summers off!  Of course most college students don’t have lots of money so they have all this free time in the summer but no funds to do anything exciting. The author of Studenomics, a personal finance blog that offers common sense advice for college students and recent graduates, put together the list below of cheap summer activities in honor of George Costanza and the summer of George.

Want to have fun this summer but you really don’t have much money thanks to last semester’s tuition and textbook fees? Don’t worry this article will provide you some low cost options for having fun without going broke this summer.

1. Spend the day relaxing at the beach. Plain and simple, no more to add.

2. Go hiking. For those of you that like a little more adventure than beach lounging you can try out going for a hike.  Even if you’re in the city there’s usually a big park where you can get out and tromp around.  Not only is it free, it’s good exercise.

3. Sporting events. I’m not talking about ridiculously overpriced professional sports. I’m referring to those competitive games that are played at a local park that you could watch for free. I personally have the honor of watching my younger brother play soccer in a highly competitive league. It may not be a Manchester United game but the spectators still get a bit wild and out of control with enthusiasm.

4. Free concerts. I doubt you will catch any big name artists but there are always free concerts of small local bands going on during summer nights. Plus you never know the band may end up being the next Rolling Stones and you were there to see them at the beginning. Well that probably won’t happen but you will still have an enjoyable evening.

5. The college campus scene. There is always something happening around the college campus even when classes are not on for you. Around my college campus I have seen free movie screenings, barbeques, dances, and just random hanging out.

6. CitySearch. If you’re really itching to get out on the town but have to make your dollars go a long way, visit CitySearch to find free events in your city.

Studenomics covers a good range of topics for young people looking for advice on how to survive this current recession, grow their careers, manage their finances, go on cheap dates, and still be able to enjoy the weekends.  Here are some other posts he’s published today around the blogosphere as resources for college students during the summer.

• Learn a New Language @ TotalCandor.com
• Take Up a Sport and Become Good At It @ FreeFromBroke.com
• Help Your Local Church @ GatherLittleByLittle.com
• Take Some College Courses This Summer @ PoorerThanYou.com
• Summer Jobs With Little Startup Funding Required- Part 1 @ MoneyNing.com
• Summer Jobs With Little Startup Funding Required- Part 2 @ PTMoney.com
• Take Control Of Your Financial Situation @ Bargaineering.com
• College Work Study Abroad @ CashMoneyLife.com

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