(L) Marie Joseph

 Tax refunds can be a good thing.

Why? Because the average American don’t save or cannot strategically allocate their tax withholding to pan out to evenly. Some calculations maybe be off and people wound up owing the government money afterwards. Unless you’re a Certified Public Accountant (CPA) or know one, don’t try to guess how many withholding is correct.

Most pundits experts say a tax refund is giving away money to the government interest free … who cares. 

Some people are better off getting a refund than trying to figure out new tax codes. Most people say that’s the only way they can save is by getting a windfall (i.e tax refund)

A nice lump sum of money direct deposited in your account is a pleasant surprise!  and a good way to jump start your savings. To each it’s own. Save money the best way you know how.  Automatic paycheck deductions, tax refunds, gifts or whatever as long as you achieve your goal

Yeah I said it!

Owning nothing beyond property taxes, insurance, and utilities creates incredible freedom

-Laura Vanderkam

 

In a perfect world!

The best way to be debt free is having your debt to income ratio low. Paying more on your debt than required. The more money you pay on debt the more likely you’ll be out of debt sooner. The trade-off is putting off fun, entertainment and nice weekends. The key is to not overextend yourself  to begin with.

So the next time you look for an apartment or home make sure the monthly payments are 25%  of your monthly income.

For example

If your monthly housing payments are $1800, your weekly pay should be $1800 gross.

You should be making 4x the amount of your rent/mortgage payments every month. Why? so you can do other things which your money such as save, invest, pay down debt or take vacations.

The saddest thing to see is someone working just to upkeep a house, no extra cash to do what they enjoy. Of course, the ultimate goal is to have no consumer debt outside of a mortgage. Right now, this is how we operate but soon, I know I maybe needing a newer car within the next 2 years. I probably won’t pay cash, however, I plan to pay it off within 3 years.

For more information on what percentage of your income should be dedicated to life categories, pick up a copy of my book, First Generation White Collar

Money’s easy to make …..But with few exceptions people don’t want money. They want luxury, love, admiration

- John Steinbeck

I do like and have listened to Dave Ramsey. I find him very entertaining. Callers call in to his AM Talk radio show with their money problems. His answer to most questions is to get out of debt and stop dining out. I stopped listening to his show because he was beginning to sound like a broken record. (Same beat different drum)

It’s easy to say get out of debt but once you’re out, it becomes harder to stay out of debt. The problem I find is that you have to make the income to avoid debt. Making $35K a year and being debt free is hard to maintain than making $70K and staying debt free. You must have the income to get your wants and needs or at least save for your wants.  There are people that are debt free and living paycheck to paycheck because their income did not grow. Being debt free and making a low income is miserable. What’s the point?

I rather make an above average income and have manageable debt than  low income and no debt. I think being debt free is beautiful especially when you have a great income to compliment it. I have paid off my car, a loan and other outstanding bills. I was able to do it and do it fast because I was making nearly $70K at the time.  And saving money also was a no brainer as well.

Experts say it’s best to be free of debt. I agree, but make sure your income is satisfactory as well or else you’re another poor person with no debt.

I know a person that drives a luxury car and the payments are 10% of their monthly take home pay which is easy for them to maintain plus they have savings. I also know a person the same age  that has a 11 year old paid for car and no other debt. He is in desperate need for a newer car but can’t afford one because of his low salary. Who do you think is more comfortable? The guy with the unreliable car? It seems like being debt free is not helping him unless he gets a better salary.

Yes, it’s possible to be debt free and broke. Being debt free doesn’t guarantee comfort it’s just means you’re debt free. LOL I was able to be free of debt because of my income, if I made less, I probably still would be making payments or I would have sold the car I love. I rather get what I want and work my butt off to pay it off than to get something sub par with less quality, knowing later I would be unsatisfied.  Sometimes you have to spend more up front than buying cheap because  in the long run you may be spending the same amount.

I’m sure Dave Ramsey and a lot other personal finance experts became debt free when their income rose, not when they was an average Joe. Just my 2 cents

My trigger is boredom. If someone says, I went to Macy’s, they had these things on sale. I say, I’m not sure why you’re telling me this. I push past the idle gossip conversations. I don’t think they’re useful

- Reid Hoffman

Personal-finance website LearnVest.com offers three types.

The entry-level plan (costing $69) you get a customized budget breakdown and a financial to-do list, such as building an emergency fund; one phone consultation; and three months of unlimited email support with a certified financial planner.

The Next plan ($229) provides a five-year financial plan, a phone consult and six months of unlimited email support.

The last plan ($349) adds three phone check-ins and one year of unlimited email support. The phone and email discussions center around the financial plan that is drawn up for you and making sure you’re on track or making alterations if something like a job loss occurs. You don’t get any investing advice with LearnVest, however

I normally offer advice via email for free. However, if you want a more deeper robust advice about your financial future, learnvest.com is a website!

There is a plethora of information about personal finance. Always do your due diligence.

There were long lines for the recent $640 million lottery all over America. This translates to 17,000 tickets sold a minute. Whew, all hoping to hit the jackpot. I’m sure I was the only person that didn’t buy a ticket. If my chances are next to zero, I’m not participating.

Create your own lottery by contributing a fixed amount of money to the bank of YOU. Invest the money you put into the lotto in yourself. Set aside a fixed amount of money every paycheck. Whether it be a savings account, an investment account, business account or idea. Pay yourself first, this is what I do.

I pay myself every Friday. I play my own lotto every Friday. It’s easier for me and I don’t have to wait in line. I have a savings account, investment account and we also give to charity. Our money goes to 3 three places before bills are paid.

The method is very easy to do when you are debt free or if you have manageable debt, which is less than 20% of your income. To calculate your debt to income ratio– add your monthly debt payments and subtract it by your monthly income. I explain this in details in my book. Invest. Create. Grow. Create your own lottery!

Save your money and one day it will save you

- African Proverb

  

I rarely do book reviews. However, this book is worth a mention. No One Ever Told Us That: Money and Life Letters to My Grandchildren by John D. Spooner is a great read!

I guess we all need an older mentor that been through money and life to tell us the real truth. Using his own real – world experiences is like a mini biography of a financial advisor well crafted life lessons that every young person out of college should partake. He talks about searching for a job, investing your money and financial planning for your future. Only if everyone had an uncle or older brother that can teach us how to be independent with money. This book is a page turner. You’re never too old to heed the knowledge of this wise book.

A few excerpts I liked :

Rely on people who are practical, who believe in cutting through bureaucracy and red tape. I trust the advice from these people much more than I trust academic brilliance.

When you’re out in your careers, go to as few meetings as you possibly can. Have co workers give you the highlights in ten minutes or less after the meetings.

Buy a few shares and, preferably in weak stock markets, buy a few more shares. Keep buying perhaps over years, reinvesting dividends (which you can do automatically) in more stock

If you cannot pay off a credit card card in full every month, at least set yourself a debt limit that is realistic in terms of your earnings.

Spend, travel and live. And if money was all taken from me, at least I would have attacked life in some small ways and be able to say, “Yup, I did that. I saw that. Before they took it all away from me.

Everyone should have a industry they love and someone to come home to

You will face many problems after college. These problems will involve careers, business, money, relationships, all phases of your lives. They will keep you awake at night or wake you out of deep sleep. Jump these problems as soon as you can, win or lose, for good or bad. Or they will fester, and in every case make the problem worse for you. Jump on them. Sort them out immediately. And fess up if you screwed up.

 

1) Create and manage your budget with the help of Mint.com, a free online money management site that helps you track and budget your spending.

Start building good credit with CreditKarma.com, which lets you check your credit score for free. Also, enroll in CreditKarma.com’s free credit monitoring to keep tabs on your credit.

Start saving money with an online savings account, such as one at Ally Bank, and start separate funds for different goals such as an emergency fund or a car fund.

2) Polish up your online reputation. If you’re job-hunting or already at your first job, make sure you polish up your online profiles. Employers will google potential employees and peruse their Facebook, Twitter, Tumblr and any other social media profiles for red flags. Screen your social media profiles for anything that may reflect badly to a future employer, such as unsavory pictures or inflammatory posts

3) Set a one year, two year, and five year goals. Only 23% of 20-somethings consider themselves financially independent, according to one report. Setting financial and life goals now can help new grads set smaller, achievable milestones and work towards independence. A one year goal can focus on immediate needs, like moving out of Mom and Dad’s house; a two year goal shoots toward feasible wants such as affording a car; and a five year goal aims to realize your dreams, like moving to New York!

excerpt taken from  Forbes.com article

Remember:

The amount of money one has is actually just a consequence of one’s mindset and actions

-Fitz Villafuerte