No, this is not a reference to The Hitchhiker's Guide to the Galaxy. Much like the the simple washer savings baby step, I loved this idea because it only takes a second and it isn't something that I would have thought about on my own.
I live in a community where I can't line dry my clothes outside and I haven't reached the level where I am comfortable with wet clothes lying all over my house to dry. That means that I use my dryer and according to dryer tips there is an easy way to reduce the cost of each dryer load by 10%.
After throwing in all the wet clothes that have come out of the washing machine, take a big, fluffy, dry towel and throw it into the dryer with all the wet clothes. As this fluffy towel tumbles in the dryer with all the wet clothes, it helps to absorb the moisture in the wet clothes which allows them to dry more quickly. In the end, you get your clothes dry in less time and save a bit of money in the process.
I started doing this about a week ago and it seems to work just as claimed. it's one of the easiest 10% savings I have found in a long time.
Tuesday, October 25, 2011
Friday, October 21, 2011
Throwing on Cold Water
I love finding little baby steps to improve my finances which take very little time or effort to accomplish. This baby step does both in a matter of seconds and can save about $100 a year according to washer tips.
All you need to do is take a stroll over to your washing machine and turn the wash cycle switch so that it's pointing to a "cold – cold" wash. I have been doing this for a few weeks and I can't tell a difference in the cleanliness of my clothes at all. Unless your clothes are terribly dirty, I highly doubt that you will see a difference either.
It is the cost of heating the water that is the most expensive part of washing clothes. When the washing machine is set to "cold - cold" there is no cost to heat the water, and this is where the money savings comes from. A small and easy baby step that I took to help improve my finances.
All you need to do is take a stroll over to your washing machine and turn the wash cycle switch so that it's pointing to a "cold – cold" wash. I have been doing this for a few weeks and I can't tell a difference in the cleanliness of my clothes at all. Unless your clothes are terribly dirty, I highly doubt that you will see a difference either.
It is the cost of heating the water that is the most expensive part of washing clothes. When the washing machine is set to "cold - cold" there is no cost to heat the water, and this is where the money savings comes from. A small and easy baby step that I took to help improve my finances.
Tuesday, October 04, 2011
Dave Ramsey Baby Step 3
Once you finished Baby Step 1 and Baby Step 2, you are ready for Baby Step 3 which is to put aside 3 to 6 months worth of expenses into your savings account. This will be your full emergency fund. Take the time to look at your monthly expenses and figure out how much money you would need to live for 3 to 6 months if you lost your job. Whatever amount you come up with is how much you should have in your full emergency fund.
The important thing to remember is that this money is for emergencies only such as any unexpected incident which would have a major impact on you and your family. This emergency savings should be kept in a money market account so that it can easily be accessed in an emergency. The key to remember is that this money is not investment money, but insurance money for you to use when the unexpected things in life happen.
The important thing to remember is that this money is for emergencies only such as any unexpected incident which would have a major impact on you and your family. This emergency savings should be kept in a money market account so that it can easily be accessed in an emergency. The key to remember is that this money is not investment money, but insurance money for you to use when the unexpected things in life happen.
Friday, September 30, 2011
Dave Ramsey Baby Step 2
Once you finish Baby Step 1, the next step according to Dave Ramsey is to make a list of all your debts, excluding only the house. This debt list should be ordered from smallest to largest and the smallest debt balance becomes the number one priority. According to Dave, you shouldn't worry about interest rates and focus only on the debt amount. If two debts happen to be the same amount, then you should list the debt with the higher interest rate first.
Dave calls paying off the debts this way a "debt snowball" and he likes this order because it allows you to have pay off some of your debts quickly which should give you motivation about getting out of debt. Dave understands that paying the higher interest rate debts will save more money, but feels that paying off debt is not always about math. A lot of it is emotional and about motivation. He believes that personal finance is 20% knowledge you know in your head while the other 80% behavior. With this in mind, he believes that once you are able to get rid of the lower debts, you will see the results you are producing and stay motivated to get rid of all your other debt as well.
Dave calls paying off the debts this way a "debt snowball" and he likes this order because it allows you to have pay off some of your debts quickly which should give you motivation about getting out of debt. Dave understands that paying the higher interest rate debts will save more money, but feels that paying off debt is not always about math. A lot of it is emotional and about motivation. He believes that personal finance is 20% knowledge you know in your head while the other 80% behavior. With this in mind, he believes that once you are able to get rid of the lower debts, you will see the results you are producing and stay motivated to get rid of all your other debt as well.
Tuesday, September 27, 2011
Dave Ramsey Baby Step 1
When it comes to finances and baby steps, many people often think about Dave Ramsey's 7 baby steps. Over the next few weeks I will be going over each of them and you can decide whether they are a good approach for you. The first Baby Step in Dave Ramsey's program is to save up a $1000 emergency fund.
Everyone really should have an emergency fund for the unexpected events that happen in life to all of us. The amount of the emergency fund probably varies from person to person depending on their situation and lifestyle. $1000 is definitely much better than having nothing at all and creating an emergency fund is a good place to begin financial baby steps.
Saturday, January 12, 2008
Saving Money For Your Child's Future: A Different View
A few days ago, I had lunch with a person in the local community whose opinion I respect quite a bit. He has two adult children, only one of which attended college straight out of high school, and both of which run their own business.
What I wanted to know from him was how exactly he raised his children to be such independent, self-motivated, entrepreneurial people. What he told me really surprised me, and it made me think a bit about whether I should be contributing to my children’s 529 plans or doing something different for their future.
When the children were young (under 12), he paid an allowance for household chores. There was a minimum that had to be done to even qualify for the system each week - so they had to do a certain number of tasks just as a baseline. Beyond that, though, they could earn money by doing more chores: dishes, lawn care, and so on.
Meanwhile, he was investing in a mutual fund for each of the children. Each week, he put a small amount into their fund, intending to use it later to help them out.
On each child’s twelfth birthday, he sat down with them and helped them develop a business of their own that they could manage. One of them chose lawn care and snow removal, while the other one chose math tutoring because he was exceptional at math (and had already completed all of the math courses offered in the school district). He provided them both an equal amount of “seed money” out of their fund to get things started - one of them used it to buy a used lawnmower and a snow shovel, while the other bought a printer cartridge and paper to make flyers. He then guided them on their business, acting basically as a free business consultant to them. The only requirement that he placed on the business is that half of the money either had to be reinvested in the business or invested in something else - they could spend the other half.
In both cases, the businesses thrived. The math tutoring child wound up with significantly more in his fund than his brother, but the lawn care/snow removal brother wound up with a lot of equipment. Both learned quite a lot about how to operate a business.
On their eighteenth birthday, they were gifted their funds. After that, the parents provided no more financial support. The person with the lawn care business took that money, bought a lot of ads and some new equipment, and expanded the business. The son with the tutoring business finished his senior year, then went to school to get degrees in both business and civil engineering on a nearly full scholarship, then worked at an engineering firm for six years while that fund still grew, then used it to put out his own shingle. He now runs an engineering firm.
To me, there is a lot of appeal in this plan. It relies heavily in constant fostering of self-reliance and entrepreneurship in your children, but it also gives them the opportunity to choose education if they so wish.
This doesn’t change my desire to save money for my child’s future, it just makes me reconsider putting the money into a 529. That money has tax benefits if used for education, but an extra tax penalty on earnings (10% more than long term capital gains) if used for non-educational purposes. If you assume they’re going to go to college, a 529 is the right way to go, but if they wind up starting their own business right out of high school - which an entrepreneur might - a 529 is a hindrance as compared to a normal fund.
Post courtesy of Trent Hamm
What I wanted to know from him was how exactly he raised his children to be such independent, self-motivated, entrepreneurial people. What he told me really surprised me, and it made me think a bit about whether I should be contributing to my children’s 529 plans or doing something different for their future.
When the children were young (under 12), he paid an allowance for household chores. There was a minimum that had to be done to even qualify for the system each week - so they had to do a certain number of tasks just as a baseline. Beyond that, though, they could earn money by doing more chores: dishes, lawn care, and so on.
Meanwhile, he was investing in a mutual fund for each of the children. Each week, he put a small amount into their fund, intending to use it later to help them out.
On each child’s twelfth birthday, he sat down with them and helped them develop a business of their own that they could manage. One of them chose lawn care and snow removal, while the other one chose math tutoring because he was exceptional at math (and had already completed all of the math courses offered in the school district). He provided them both an equal amount of “seed money” out of their fund to get things started - one of them used it to buy a used lawnmower and a snow shovel, while the other bought a printer cartridge and paper to make flyers. He then guided them on their business, acting basically as a free business consultant to them. The only requirement that he placed on the business is that half of the money either had to be reinvested in the business or invested in something else - they could spend the other half.
In both cases, the businesses thrived. The math tutoring child wound up with significantly more in his fund than his brother, but the lawn care/snow removal brother wound up with a lot of equipment. Both learned quite a lot about how to operate a business.
On their eighteenth birthday, they were gifted their funds. After that, the parents provided no more financial support. The person with the lawn care business took that money, bought a lot of ads and some new equipment, and expanded the business. The son with the tutoring business finished his senior year, then went to school to get degrees in both business and civil engineering on a nearly full scholarship, then worked at an engineering firm for six years while that fund still grew, then used it to put out his own shingle. He now runs an engineering firm.
To me, there is a lot of appeal in this plan. It relies heavily in constant fostering of self-reliance and entrepreneurship in your children, but it also gives them the opportunity to choose education if they so wish.
This doesn’t change my desire to save money for my child’s future, it just makes me reconsider putting the money into a 529. That money has tax benefits if used for education, but an extra tax penalty on earnings (10% more than long term capital gains) if used for non-educational purposes. If you assume they’re going to go to college, a 529 is the right way to go, but if they wind up starting their own business right out of high school - which an entrepreneur might - a 529 is a hindrance as compared to a normal fund.
Post courtesy of Trent Hamm
Wednesday, June 06, 2007
Money Poem From 6th Grader
A money poem written by a 6th grader for a contest:
from Cape Cod Online
M — Millions and millions would be nice.
O — Or maybe you can double that twice!
N — Now that you know you can save in an account.
E — Even if you don't have a grand amount,
Y — You can start a savings account, this way you will never run out!
from Cape Cod Online
Thursday, April 12, 2007
College Students Learn Personal Finance From Their Parents
The majority of college students say they learn the most about personal finance from their parents, but less than half of students say their parents make a consistent conscientious effort to teach them, according to a new survey of over 2,000 students and parents conducted by The Hartford Financial Services Group, Inc. (NYSE: HIG).
Parents of college students have a somewhat different view. Nearly two-thirds (63 percent) of the parents surveyed say they definitely see personal finance education as their responsibility and consistently make the effort to teach their children about it, compared to the only 41 percent of students who say their parents did. About 70 percent of college students cite parents as their primary source of information.
The need for better personal finance instruction for young adults is one issue on which both groups see eye-to-eye: Students and parents agree that college students are not well prepared to deal with the financial challenges that lie ahead. Less than one-quarter of students (24 percent) and only 20 percent of parents say students are very well prepared to deal with the financial challenges that await them after graduation. Moreover, more than three-quarters of students (76 percent) wish they had more help preparing for their financial future, The Hartford survey found.
“These findings highlight the fact that many parents are stepping up to the task of teaching financial basics at home,” said Dr. Susan Coleman, Ansley Professor of Finance at the University of Hartford and advisor to The Hartford’s Playbook for Life financial education program. “At the same time, however, students don’t always get the message the first or even second time around. These concepts, which are new to most young people, require frequent reinforcement at home and elsewhere.”
Dr. Coleman emphasizes that acquiring personal financial expertise is a continuous learning activity that should begin at an early age. Parents can initiate and lead the learning process in any number of ways, but, she adds, “It’s important to invest time and effort on an ongoing basis to reinforce those lessons.” She offers parents the following suggestions for raising financially-savvy young adults:
Model good personal finance behaviors. Be a good role model by setting goals, creating a budget, using credit responsibly, and making saving and investing a regular practice. In other words, live your financial values.
Give children responsibility for their finances. Help your children accept personal responsibility for their financial situation at levels appropriate for their age. Require them to earn an allowance by doing chores and helping out, rather than just giving them money. Don’t buy them everything; instead, teach them to set goals and save for things they want. And don’t be so quick to bail them out – allow them to suffer the consequences of poor financial decisions.
Help students budget in college. For each year of college, help them determine the anticipated expenses – such as tuition, books, food, transportation, clothes and entertainment – for which they will be responsible. Then, determine how they will pay for those expenses – a part-time job, summer work – and make sure anticipated expenses and income match.
Be candid about credit. Have a frank discussion about responsible use of credit cards before your college student gets bombarded with offers at school, and before he or she gets into trouble. Explain that credit should be used for emergencies – not every small purchase. Also, make it clear whether you plan to subsidize that credit card usage, or whether he is on his own.
Discuss career options. Point out that there are different rewards – monetary and non-monetary – associated with different types of careers. It’s not obvious to young people that different career paths bring various economic outcomes and lifestyles.
Seize teachable moments. College breaks and summer vacations provide opportunities for renewed dialogue about personal finance. Recognize and praise responsible financial behavior whenever it’s exhibited.
“Parents play a crucial role in financial literacy because students get the majority of personal finance information from them,” says Dr. Coleman, “Young people value their parents’ experience and look to parents for this kind of information and guidance. But it’s important to recognize that financial expertise is a life-long goal. Many young people are overwhelmed; they think they are supposed to know everything and are bewildered that they don’t. We must keep in mind that financial skills are acquired bit by bit over the course of a lifetime.”
Few students head off to college with any formal instruction in personal finance. According to a study by the National Council on Economic Education, only seven states required personal finance classes in high school in 2004. Moreover, the study found that students entering college get a failing grade on personal finance knowledge, scoring 53 percent (F) on a basic 24-question quiz on economics and personal finance.
Parents of college students have a somewhat different view. Nearly two-thirds (63 percent) of the parents surveyed say they definitely see personal finance education as their responsibility and consistently make the effort to teach their children about it, compared to the only 41 percent of students who say their parents did. About 70 percent of college students cite parents as their primary source of information.
The need for better personal finance instruction for young adults is one issue on which both groups see eye-to-eye: Students and parents agree that college students are not well prepared to deal with the financial challenges that lie ahead. Less than one-quarter of students (24 percent) and only 20 percent of parents say students are very well prepared to deal with the financial challenges that await them after graduation. Moreover, more than three-quarters of students (76 percent) wish they had more help preparing for their financial future, The Hartford survey found.
“These findings highlight the fact that many parents are stepping up to the task of teaching financial basics at home,” said Dr. Susan Coleman, Ansley Professor of Finance at the University of Hartford and advisor to The Hartford’s Playbook for Life financial education program. “At the same time, however, students don’t always get the message the first or even second time around. These concepts, which are new to most young people, require frequent reinforcement at home and elsewhere.”
Dr. Coleman emphasizes that acquiring personal financial expertise is a continuous learning activity that should begin at an early age. Parents can initiate and lead the learning process in any number of ways, but, she adds, “It’s important to invest time and effort on an ongoing basis to reinforce those lessons.” She offers parents the following suggestions for raising financially-savvy young adults:
“Parents play a crucial role in financial literacy because students get the majority of personal finance information from them,” says Dr. Coleman, “Young people value their parents’ experience and look to parents for this kind of information and guidance. But it’s important to recognize that financial expertise is a life-long goal. Many young people are overwhelmed; they think they are supposed to know everything and are bewildered that they don’t. We must keep in mind that financial skills are acquired bit by bit over the course of a lifetime.”
Few students head off to college with any formal instruction in personal finance. According to a study by the National Council on Economic Education, only seven states required personal finance classes in high school in 2004. Moreover, the study found that students entering college get a failing grade on personal finance knowledge, scoring 53 percent (F) on a basic 24-question quiz on economics and personal finance.
Saturday, March 31, 2007
Frustration With Aid Applications
One of the issues with applying for student loans that is often overlooked is the time and frustration that goes along with it. Even at my age, I don't like to become frustrated (and throw a tantrum when I do). The Chicago Tribune has an article on how College aid forms tests families' pain threshold:
The good news? There's a bill called "College Aid Made EZ Act" that is intended to make it easier to apply for financial aid by simplifying the Free Application for Federal Student Aid form working its way through Congress. The best option is not having to apply for these loans by saving early, but for those that do, making the process as simple as possible is always a good goal.
If you have just finished applying for financial aid for a college student you might have a few gray hairs.
Filling out a FAFSA—the form required for obtaining low-interest federal loans and college grants and scholarships—is a grueling process. It's so confusing and time-consuming that parents often start to think of their tax return as a walk in the park by comparison.
The good news? There's a bill called "College Aid Made EZ Act" that is intended to make it easier to apply for financial aid by simplifying the Free Application for Federal Student Aid form working its way through Congress. The best option is not having to apply for these loans by saving early, but for those that do, making the process as simple as possible is always a good goal.
Thursday, March 29, 2007
14 Ways To Find Financial Aid
While this is not something that I am going to have to worry about since I'm starting my college savings early, that is not the case for everyone out there. Here are 14 proven ways to get financial aid from NextStudent
Of course, the best strategy is to start saving early so you don't have to worry about any of this when it's time to go to college ;)
1. Search Far and Wide
2. Apply, Apply and Apply
3. Remember Cutoff Dates
4. Go Local
5. Be Careful Where You Put Your Money
6. Network
7. Look into Fellowships and Grants
8. Match up Your Interests
9. Serve Your Country
10. Look to Your Roots
11. Go Rural
12. There’s Always Begging
13. Try Again, Ask Your Parents for Help
14. Don’t Fall Behind
Of course, the best strategy is to start saving early so you don't have to worry about any of this when it's time to go to college ;)
Wednesday, March 28, 2007
Should Personal Finance Be A General Education Class?
Even at my young age, I can see the benefits of making personal finance a required course in both high school and college. This was the subject of an piece at the Daily Trojan college newspaper:
I'm all for basic financial education for all and I hope that this isn't even a topic of discussion when I reach college age.
While a student can't earn a bachelor's degree from our fair university without taking courses in writing, global cultures and scientific inquiry, the essential subject of personal finance is totally absent from the curriculum. With all due respect to the academy, understanding how to manage money will be far more important to most upon graduation than understanding the sexual rituals of vanishing tribes in Papua New Guinea...
Some may argue that a school nicknamed the "University of Spoiled Children" wouldn't need to educate its students about money because they already have it; however, the problem with many spoiled children is that they've never known how to make it. With expenses reliably placed on parents' credit cards and the word "budget" absent from their vocabularies, students used to relying on an expense account while in school may face a rude awakening when they become independent.
I'm all for basic financial education for all and I hope that this isn't even a topic of discussion when I reach college age.
Monday, March 12, 2007
Personal Finance Courses Popular In College
Business week has written an article on personal finance courses in college:
Let's hope by the time I get there, it is a required class for graduation...
Personal-finance classes—for business and non-business majors alike—are in demand among undergrads, who are looking to get a head start on their financial future. Olin's personal-finance course, which is about 10 years old, has grown from 80 students per semester at its start to 200 today.
Let's hope by the time I get there, it is a required class for graduation...
Wednesday, March 07, 2007
College Personal Finance Classes
I hope that by the time I get to college that personal finance courses will be a requirement as in this article:
It doesn't surprise me even at this early age that real life classes would have a huge impact for those going out into the world on their own for the first time (^_^)
Recent college graduate Erica Brooks wasn't exactly overcome with excitement when she decided to take a course in personal financial planning during her final semester at the University of Missouri-Columbia.
"I thought, 'That's really boring,'" she recalled. "That's what parents are for."
Nearly three years later, Brooks considers those lessons in debt management, retirement planning and prudent spending some of her most valuable college experiences.
It doesn't surprise me even at this early age that real life classes would have a huge impact for those going out into the world on their own for the first time (^_^)
Wednesday, January 17, 2007
100 Best Values in Public Colleges
Kiplinger's Financial Magazine has put together the 100 best values in public colleges which is worth taking a look at. Part of learning about finances is getting a good value for the money you spend. While many people don't think much about this when it comes to college, it can mean the difference between leaving college with no debt or a lot of debt.
Sunday, December 03, 2006
New Animation Series Teaches Kids About Money
I'm always happy when I hear about projects to help kids learn to save:
The video and two others featuring the popular cartoon characters will debut this week nationally on the Black Family Channel during the children's morning programming.
The animated series, titled "Big Time Saver," extols the virtues of prudent money management, including saving for the future - "Don't spend it all ... on sneakers and bling" - establishing a healthy credit record - "Payin' my debt, it's my rep" - and creating a college fund - "All kids of every nation, make a cash donation to your sure foundation, your college education."
The video and two others featuring the popular cartoon characters will debut this week nationally on the Black Family Channel during the children's morning programming.
Friday, December 01, 2006
Post College Personal Finance Crash Course
While I'm getting ahead of the game and getting my college savings in order, not all are that prepared. For those who didn't prepare and end up with debt coming out of college, here are a few tips to help you that are sound money advice post graduation:
Participate In The Company 401k Plan
Consolidate Your Loans
Be Selective About Which Debt You Pay Off First
Pay Bills On Time
Establish A Health Care Plan
Identify Your Goals
Develop Good Spending Habits
Saturday, November 18, 2006
Pay Students To Take College Classes
Here is an interesting idea: Pay high school students to take college level classes. That is the proposal of the Minnesota Private College Council which is proposing the state spend $100 million over two years to give high school students incentives to take college prep courses. Student would be able to earn up to $5,000 in scholarship money under the proposed program.
I'm all for any program that can help people afford the cost of college. I"m interested to see if this will help students better prepare for college and I'd like to see what type of results a program like this might bring.
I'm all for any program that can help people afford the cost of college. I"m interested to see if this will help students better prepare for college and I'd like to see what type of results a program like this might bring.
Tuesday, November 14, 2006
41 Tips To Help A Student Get "A" Grades
While getting my finances in order so that I can pay for college is important, getting good grades and enjoying my studies will also be on the top of my list. I came across this good list of 41 Tips To Help A Student Get "A" Grades. Here are a few of them that I liked:
5. A useful measure to recall the material you have read is to get another person to ask you questions or alternatively ask yourself questions about the material you have read. i.e. What is the main assessment criteria?
14. Try to develop the skills of listening for the important word cues that illustrate or reveal the teacher/speaker’s emphasis. These include words like most important, on the other hand, in addition to etc.
36. It is advisable to try to schedule work or study that demands high levels of concentration, such as taking notes on a specific text in 50 minute time periods. Then have a short break.
5. A useful measure to recall the material you have read is to get another person to ask you questions or alternatively ask yourself questions about the material you have read. i.e. What is the main assessment criteria?
14. Try to develop the skills of listening for the important word cues that illustrate or reveal the teacher/speaker’s emphasis. These include words like most important, on the other hand, in addition to etc.
36. It is advisable to try to schedule work or study that demands high levels of concentration, such as taking notes on a specific text in 50 minute time periods. Then have a short break.
Friday, October 27, 2006
State Versus Private: Which Is The Better Buy
The decision on whether to go to a state or private college is still quite a ways off for me, but the finances involved make for a big decision. Since I'm planning to have all my college funding saved by the time I turn 18, if I choose to go to a college that is less expensive, I will have money left over to begin my life once out of college. I will have to seriously weight the benefits of both options to see what is best.
I started thinking about this from an article in the Philadelphia Inquirer:
I started thinking about this from an article in the Philadelphia Inquirer:
Sending a child to a prestigious school is a real accomplishment. But lots of happy and successful people have come out of the state schools. At less than one-third the cost, maybe they're a better buy.
Free Teens and Money Kit
Talking with my uncle (okay, it really isn't talking yet, but I am blurting out words now and then), I realized that not all kids are lucky enough to have banks in their area or museums to help them learn money skills. If that is the case, you can get some help from the government. The Federal Citizen Information Center offers a free "Teens and Money" package to help teens learn about important money information:
Order Your Free Package Here
The older your children get, the more they have to deal with real-world challenges like saving money, getting car insurance, and managing credit cards. Help them get ready for adult life with the Teens and Money package.
Order Your Free Package Here
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