My Stolen MacBook

So it happened....the unthinkable! I had my new MacBook stolen while traveling to Pittsburgh over the weekend. After the initial shock of realizing it's gone, this morning I've started to do all the paperwork: the police report, starting the renter's insurance case, changing all of my passwords, etc. etc. The hardest part is the feeling of violation that comes with having your personal property stolen, but as the saying goes, "if it's a problem that can be fixed with money, it's not a problem". So all in all, I've learned several great lessons on keeping a close on your property at all times (my laptop was taken at church); the importance of having a renters (or homeowner's) insurance policy that adequately covers your personal belongings; and keeping it in perspective. I will be closely monitoring my personal financial information because even worse than my laptop being stolen is the personal information that can be taken. Thanks to John Sileo and the other FTC resources, I feel adequately prepared to know what to do when things like this happen. To learn more about identity theft, go to www.sileo.com or www.ftc.gov (click on identity theft).

Ten Facts about the First-Time Homebuyer Credit

From the IRS:

Many taxpayers who purchase a home this year will qualify for an $8,000 federal tax credit. The refundable first-time homebuyer credit is a major tax provision in the American Recovery and Reinvestment Act of 2009. But time is running out to qualify for this credit.
Here are ten things the IRS wants you to know about the first-time homebuyer credit:
1. To be considered a first-time homebuyer, you – and your spouse if you are married – must not have jointly or separately owned another principal residence during the three years prior to the date of purchase.
2. You cannot claim the credit before there is a completed sale and purchase of the residence. The sale and purchase are generally completed at the time of closing on the purchase.
3. To qualify for the credit, the completed purchase must occur before December 1, 2009.
4. The home must be located in the United States.
5. The credit is either 10 percent of the purchase price of the home or $8,000, whichever is less.
6. The amount of the credit begins to phase out for taxpayers whose modified adjusted gross income is more than $75,000 or $150,000 for joint filers.
7. The credit is fully refundable. A homebuyer with no taxable income, who qualifies for the credit, may file for the sole purpose of claiming the credit and receive a refund. The credit will be paid out to eligible taxpayers, even if they owe no tax or the credit is more than the tax owed.
8. The credit is claimed on IRS Form 5405, First-Time Homebuyers Credit.
9. Taxpayers can claim the credit for a qualified 2009 purchase on either their 2008 or 2009 tax return. For those who have filed a 2008 return, a Form 1040X, Amended U.S. Individual Income Tax Return can be filed in order to get a refund in 2009.
10. The credit for qualified 2009 purchases does not have to be repaid, as long as the home remains your main home for 36 months after the purchase date.
Qualified taxpayers who have been considering a main home purchase may find extra incentive from this tax credit to buy now so they can complete the purchase before the December 1 deadline.
For more information on this and other key tax provisions of the Recovery Act visit the official IRS Website at IRS.gov/Recovery.
Links:
* First-Time Homebuyer Credit
* YouTube Video - First-Time Homebuyer: English Spanish ASL
* Audio File for Podcast - First-Time Homebuyer Credit 2009: English Spanish
* The American Recovery and Reinvestment Act of 2009: Information Center
* Form 5405, First-Time Homebuyer Credit (PDF)
* Form 1040X, Amended U.S. Individual Income Tax Return (PDF)

Bernanke was a victim of identity theft by a nationwide crime ring. - ABC News

Bernanke was a victim of identity theft by a nationwide crime ring. - ABC News

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Protect Yourself! FTC's Identity Theft Program

So recently, I had an inquiry of how to protect yourself against identity theft. Many of us don't take the necessary precautions and innately trust others with very sensitive and private information, which can cause years of heartache, money and time. Often, we do innocent things such as set our purse or laptop down while we speak to someone or get something. I had an embarrassing moment recently at a Financial Readiness Event in Texas. I was helping with registration and set my purse close by on a table. I kept glancing over my shoulder to keep an eye on it while I spoke with John Sileo, the Identity Theft expert. At one point in our conversation, several soldiers penetrated the table to where I couldn't see my purse anymore. I quickly excused myself to retrieve it and then it hit me....I HAD JUST LEFT MY PURSE AND WALKED AWAY WHILE TALKING WITH A NATIONALLY RENOWNED IDENTITY THEFT SPEAKER! Brilliant, I know!

Innocent acts such as this, even for a split second, can create years of heartache. Most people don't know this, but the #1 perpetrator of identity theft are family members or close friends (i.e. roommates or business partners). You never know what is happening in another person's life and what desperate measures they may take to steal your identity and everything you own....without you evening knowing!!

So, my recommendations....Check out the FTC's identity theft website! It's chalk full of great information. You need to know the basics of how to protect yourself! Also, John Sileo has a some great stories and ideas of how to take preventative measures against this threat. One tip he gives as an example is, do you know the #1 place that laptops are taken? Hotel conferences. So lock it up on your room right? Well that's the #2 spot!

Be aware! You can never be too careful, especially since the largest identity theft ring was just taken down last week!

Stop Calling Me!! FTC's Do Not Call List

So last week, I was inundated with telemarketing calls. It was extremely frustrating and you always know when they are calling because you hear the *pause* and then, "Is Miss Bell there?" Immediately, my defenses turn on. After 3 or 4 calls in 2 days, I decided it's time to register all of my phone #s on the Do Not Call registry that FTC runs. It is an easy, two-step (and now I don't mean country dancing ;)) registration process. It takes just a few minutes, but within 30 days, these #s should not be receiving any more telemarketing calls.

Another piece of advise: Currently, there are not any government backed Do Not Email or Do Not Send Mail lists. I found a few private ones for the mail side, but most of the Do Not Email lists are primarily spammers, which will flood your email box with even more unwanted emails. A Do Not Email list has been proposed to Congress, but so far no action has been taken.

Engaging Generation Y

I just read a though provoking article called Engaging Generation Y. How do you develop Generation Y employees to be leaders? I'm working on a presentation series called Money Talks: Communicating about Money Amongst Generations. Facinating topic...and I'll continue to share interesting articles as I find them.

House of Cards - CNBC.com

This production by CNBC about how the housing crisis came to be is a facinating study and incredible reporting. One of the best shows I've seen in years. It simply gives the facts and uncovers the mass of confusion that reigned. When Alan Greenspan says even he didn't understand, then how in the world did Wall Street think they could grapple it and win. My favorite line is from the woman who grew up in Compton: "I am being held accountable for making bad choices, but who in that industry is being held accountable?....I am stupid, but you are guilty, litterally guilty."

House of Cards - CNBC.com

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Financial Tip of the Week

Avoid overdraft fees by keeping a set minimum balance in your checking account at all times. If you choose to use overdraft protection (usually a line of credit or savings account connected to your checking account), know the fees. Although there are fees associated with overdraft protection, the fees are much less than if you are charged the higher non-sufficient funds fees.

“If I Had Only Known”: Learning to Take Charge of Your Finances as a Single Adult

“If I had only known….” is a phrase that has been repeated multiple times in the recent months from Wall Street to main street America. The wide-spread credit and housing crises continue to unfold market fluctuations, housing downturns, and in some cases, bankruptcies and foreclosures impacting Americans and global economies. Many are disheartened with a feeling of fear that permeates the atmosphere. Greed has reared its ugly head, and now, we are facing a crisis that is epic in proportion. According to Alan Greenspan, the U.S. is suffering a "once-in-a century" type of financial crisis.

Now is the time to act. The last thing you want to think is “If I had only known…” after it’s too late. As a single adult, one of the benefits of learning now is to the same secret to successful saving and investing…START EARLY! Don’t wait until you’re married, have a job that pays more, or any other “significant start” in life to get your finances in order – the time to start is now, regardless of where you are on your life’s journey. The way we manage our financial household can even have a larger impact on the global economy.

The single years provide a unique time in life for further education and personal development. Personal finance should be a part of that foundation you are laying for your future and it will have lasting effects. The following are three basic financial principles to start working on today:

Be Debt Free

There are many benefits and freedoms we enjoy from being debt free. Many people don’t realize that your credit score can not only affect the ability to get loans and the interest rates you will pay, but it could also be the deciding factor for future employment. Many employers today pull credit reports during the hiring process because they see credit reports as an indicator of your integrity and trustworthiness. Keep in mind that some professions which require a security clearance require a good credit score. A poor credit history can put your future career in jeopardy.

Realize there are long-lasting consequences of poor credit. For example, bankruptcy stays on your credit report for the next 10 years. Even missing just one payment on a credit card will show on your credit report for years and will have a negative impact on your score. Also, when the time does come for marriage, be aware that you are not only taking your spouse’s name but also their credit history. Once joint accounts are opened and a joint credit history is established, your credit becomes one as well. Chose wisely!

Now is the time to take charge of your finances and become debt free regardless of your marital status. Make a list of all your debts; write down the balance owed and the interest rate, then decide which debt you will pay off first. You can either choose to pay the debt with the highest balance or the highest interest rate first. Either way, if you learn to pay more than the minimum monthly payment, you’ll be surprised how quickly you can reduce the debt. Know that regardless of your marital status, being debt free offers many freedoms and prevents many communication problems in future relationships. Start today!

Spend Wisely

We’ve all heard “spend less than you earn”, but we find that in today’s fast paced world where mixed messages and targeted marketing is the norm, it is hard to focus on the difference between our needs and desires. It often seems that everything becomes a need: the newest, the fastest, the best. In a time when credit is instant to obtain and where every shopping venue accepts plastic, we can purchase anything we want with the touch of a button and the swipe of a card. However, this doesn’t mean we can afford it.

Several years ago, I was teaching a financial counseling class where a handful of the students were from Spain. During a discussion about some required reading, one of the Spanish students raised her hand and said, “We cannot relate to your American spending habits. If we want something in our country, we save for it or go without”. I quickly realized we see the world through our own experience; it is important to realize that regardless of the marketing techniques or sales schemes, our spending habits are learned behaviors. Recognize the principle of sacrifice in your spending habits especially as a single adult. As an old country song states "We've been so busy keepin' up with the Joneses, four car garage and we're still building on, maybe it's time we got back to the basics of love"^[1]. If you want something, save for it.

First, make a list of your goals. Where do you want to be next year? In 5 years? In 10 years? In 20 years? Record your goals then recognize the financial obligations you will need in order to achieve them. Some will be short-term while others will take longer to obtain. When you have written down your goals, you will be better able to distinguish between your needs and your wants. This will help you stay motivated as you begin to make changes financially. You will also want to include a savings for unexpected and/or unplanned events. We know that regardless of our continual effort to plan the future, we can’t always anticipate what the future will hold and therefore, we need to save for the unexpected, both good and bad.

Next, there are three things to do to get a handle on your finances:

1. Record everything you spend for three months.
2. Look at the data you have gathered and decide where you can cut costs and save.
3. Create a spending plan and follow through to realign your spending habits to meet your goals.

Regardless of where you are in your education or professional pursuits, you can save and need to begin today. If you can learn to manage a $500 budget, you will be able to manage a $5 million budget.

Save for the Future

Saving today for something tomorrow might seem too far off and difficult, but the benefit is great. An advantage to youth is time. Money makes money; the principle of the time value of money rewards those who save now for the future. For example, if you were to start at the age of 25 saving $150/month invested at 8%, you would have over half a million dollars by the age of 65! If you decide to wait until 45 to start saving, assuming everything stays the same, you will only have $88,000 in the same account. The secret to saving and investing is to start young and save often!

To stay motivated and encourage saving, keep your list of goals where you can see them. These goals should be specific plans for saving, such as a car, down payment on a house, education, or a wedding. Categorize your goals according to the proper time horizon: short-term (1 to 2 years), mid-term (3 to 5 years), and long-term (more than 5 years). Each time category should be invested in the proper investment vehicle. Speak to a financial planner or a trusted and knowledgeable friend or family member about your appropriate investment mix. It is also wise to get two or three opinions to make sure you are comfortable with the investment mix and appropriate advice.

There are also specific saving vehicles to utilize during various stages of life. For example, a Roth IRA is a great tax saving vehicle for those who have a long-term time horizon and are currently in a low tax bracket. The money in a Roth IRA goes in after-tax and comes out with tax-free earnings. Another benefit is that you can use the principle at any time without incurring a penalty.

For shorter-term goals, separating money into various savings accounts helps you stay focused on the specific goal and encourages saving. Automatic monthly or bi-monthly deductions can be a fool proof way to help you remember to pay yourself first. No matter how you save or what vehicles you use to save – Do it!

Conclusion

The single years can provide a unique time to practice the principles of sound financial management. Remember the time to start is now and it’s never too early to start taking responsibility for your finances by getting out of debt, spending wisely, and saving for your future.

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[1] Country singer Waylon Jennings's 1977 song "Luckenbach, Texas (Back to the Basics of Love)"

Money Talks!

My 3 favorite things to talk about are 1) Money 2) Politics 3) Religion. I've quickly come to the realization that I'm a lone ranger, hence the reason for the lack of dinner invitations! ;) But I also realize that money is something that we can't ignore and not discuss. It's not going to go away, even if we do decide to stick our heads in the sand and pretend everything will be okay.

So how do you start talking about money? First, realize that it's not a taboo. Just like Sex in the City has made talking about sex acceptable, it's about time we start talking about money. One of my favorite places to start a discussion about money online is at Geezeo. Check out the confession booth, question and answer area and jump into talking about money.

Protect your identity: Be aware of social networking scams

Recently, there has been a series of deployed military families that have been victimized by compromised personal data given through social networking sites. Be careful with sharing significant personal data when connecting through these social sites.

The most recent scam involves identity thieves and imposters using social networking sites to contact relatives of deployed U.S. military personnel, most specifically grandparents. The impostor advises the grandparents that he is returning home on leave from Iraq and asks the grandparents to keep his presence secret so he can surprise his parents. A short time later, the grandparents are again contacted and the impostor advises them that he and a friend are stranded with a broken down car. The imposter then asks the grandparents to wire a significant amount of money to cover the cost of the repairs.

Always be cautious of the personal information you chose to share on these social networking to ensure that no exploitable information is available. Always verify the identity of anyone who contacts you to share personal information, pin numbers, social security numbers, or fund transfers. Do not act on your impulse, check with your financial institution to ensure unauthorized individuals do not have access to your accounts. Always know who is on the other end of the line.

Financial Tip of the Week: Overdraft Protection

Avoid overdraft fees by keeping a set minimum balance in your checking account at all times. If you choose to use overdraft protection (usually a line of credit or savings account connected to your checking account), know the fees. Although there are fees associated with overdraft protection, the fees are much less than if you are charged the higher non-sufficient funds fees.

Military Tips while Deployed

So my day job is teaching financial education to the military. I have the privilege and honor of serving an incredible audience. This post is specifically for service members who are preparing or in deployed locations.

The first is the Savings Deposit program (SDP). SDP is a one of a kind, which can only be utilized by deployed service members while in theater. This program allows service members to deposit up to $10,000 in a savings account that earns 10 percent annually (compounded quarterly). To be eligible, the service member must meet the criteria and start the program with the finance office in the deployed location. For more info, go to: http://www.dfas.mil/militarypay/woundedwarriorpay/savingsdepositprogramsdp.html

Secondly, if you are young and deployed and have extra cash, consider putting the funds into a tax-free Roth account. If you used deployed (tax-free) money in a Roth, then you will never be paying taxes on that money (assuming you use it for the specified purpose). Roth IRA earnings are also tax free for education and for a first time home purchase. Remember that for 2009, you can only put $5,000 into a Roth with a $1,000 catch up contribution for those over 50. (Here’s a good break down of the differences between a Roth and an IRA http://www.fool.com/money/allaboutiras/allaboutiras03.htm).

Finally, once you’ve maxed SDP, the Roth IRA, I would also suggest you max your Thrift Savings Plan (TSP). TSP is the federal government’s 401(K)-style plan. You can place pre-tax contributions up to $16,500 in 2009 into your TSP account, unless you are in a combat zone. The combat zone tax exclusion for 2009 is up to $49,000 including bonuses & combat pay!! That’s a great way to get jump start on your retirement. Oh and note, tax-exempt contributions will not be taxable even after withdrawals!! You can’t beat this deal for a retirement tax advantage. TSP offers a choice of six low cost funds, including 2 bond funds (G&F), 3 stock funds (C,S,&I), and lifecycle funds (L). For more info on the combat zone tax exclusion go to: http://www.tsp.gov/forms/tspbk08.pdf (see page 9) or see www.tsp.gov

And as always, get a second opinion for your specific financial situation. Military members can call Military OneSource (www.militaryonesource.com) 24/7, 365 days a year at no charge. They have financial counselors and planners to help you with your specific situation. Best wishes and thank you for giving all of us back at home the privilege of freedom.

Quick Tips: Ideas to Walk Away & Save

Here are some quick tips, which may help put purchasing decisions into perspective:

* If you find something you want to buy and can’t live without, walk away from the purchase. If you still desperately want it 24 hours, have thought through whether you can afford it, if it’s for a good price, etc – then go back and purchase it. But if you’ve already forgotten about it, then you have your answer. This goes for a $2 checkout register purchase or a $300 clothing purchase.
* Freeze your credit card in a bucket of water. If by the time the credit card is completely and naturally thawed out (no cheating here), then you can get it. This is your “cool-down” period.
* Bring a fiscally conservative family member to help you shop. They will tell you the honest truth: whether that outfit really looks good on you – or if it’s a waste of money.
* Stick to a shopping list, and don’t waste time browsing! And, as my boss currently reminded me, use coupons!
* Limit your exposure to advertising. Scientific studies have shown that the more we’re exposed to advertising – whether it be on TV, in magazines, etc – the more likely we are to buy.
* Start an internet wish list by saving the URLs of the items that you would love to buy. If you use the book-marked pages, then you won’t forget the items you desperately want even if it takes you two or four weeks to save up the money for the purchase. (And quite honestly, if you do forget about the purchase, then I think you’ve already answered your own question about whether you really wanted it…)
* Collect your spare change or start an electronic savings account that pulls a small amount from your checking every week. Use that money as a “fun” account. Anything goes, but once the money is gone, you have to start saving again to make that next purchase

With this in mind, you can stick to your spending plan. I used to tell my college students, “If you can learn to manage a $500, you can manage $5 million”. It worked for Warren Buffet and it can work for you. Learn to manage what you have now and as more is given to you, you will have the knowledge and skills to manage the larger income.

The habits you create now, whether you are a struggling college student or a newly minted graduate, will be the habits that remain with you throughout your life As one of my favorite mentors says, “It’s not how much money you make, it’s how much money you keep.”

Credit Cards: More or Less?

People often ask me questions that I feel might be helpful for others to see as well. Here's one I received recently.

"In terms of our credit rating, would you say we are better off having more credit cards with zero balance and lots of capacity or having fewer cards?"

Credit reports....gotta love the mystery! Here's the answer.....It depends! It depends on how long you've had the cards, how much of a credit balance you carry (or if you carry a balance), the credit usage (the amount you card vs. your limit...ie how close you get to your limit) and how many cards you have! That really helps huh! ;)

Typically if you've had a credit card for a LONG time, it's best not to close it because this will actually drop your score. But if you have 30 cards even with zero ....that's not the best for credit ratings either! You typically want to have a few cards and keep low balances on your cards and not get near the maxed out amount (which also has a negative impact on your credit score).

For a great credit report learning tool, go to Brightscore.com. It's worth the money to learn about how credit reports work and the best way to improve your credit.

Tip of the Day: Check Your Credit Report

Today's tip of the day is check your credit report from all three credit agencies.  The ONLY website I recommend for doing this is annualcreditreport.com.  This website is free (unless you decide to purchase your credit score) and is the website where all three credit agencies (Equifax, Transunion and Experian) were required by Congress to offer consumers a free credit report once a year.  Remember that you will get three credit reports from all three agencies and you need to verify all the information is correct.  For a great web-based credit training tool to help you read and understand your credit report, I recommend Brightscore.  There is a fee but it's a great educational tool to help you understand how your credit report works.  Good luck and go pull those reports! 

Investing in a Down Market

The most frequent question I get is where do I invest my money, and lately, the most common question is what do I do with my invested money. Well, let's start with those who already have invests: be it in a 401(k), IRA, Roth IRA, brokerage account, etc.

Rule #1: Leave it alone!! Now is not the time to become a day trader or realize that you really wanted that mutual fund. For the most part, I would suggest you consider not touching the money and let the markets rebound. Remember your long-term time horizon on this (and ESPECIALLY since you are young!)
Story: I had a question a few months back from a woman who's brother had a Roth IRA. She said her brother had opened his Roth and had invested approx $16,000. Since then, he had lost almost half of it in the current poor financial market. He cashed out his remaining Roth money, and now what should he do with it?
My advice: Leave it alone! Even Donald Trump, Warren Buffet and Bill Gates are losing money in this economy. The S&P 500 (a general stock market index) was down over 38% in 2008. This is the greatest one year loss since 1931. Therefore, if you are fully invested in an S&P 500 index fund then yes, you will too will have a loss of 38% for last year. There's no secret magic pill to get around this. It's just where the market is at this point. Therefore, my advice was to open up another Roth IRA, redeposit the funds (within 6 months) to avoid tax penalties and realize that the market is on sale.
Word of caution: One thing we have learned with this market is the importance of diversification. If you own a single stock or just a few concentrated shares (i.e. profit sharing plans with company stock shares) and you are wondering what to do with it, I recommend you speak with a financial planner about your situation (future post on this coming soon!).

Rule #2: The Market is On Sale! It's like shopping: You wait for the best pair of jeans to go on sale so you don't buy it at full price! The same applies to the stock market....everything is on sale! Why pay full price (buy high sell low) when you could get a deep discount (buy low sell high)? Therefore, if you have EXTRA cash laying around and want to use it for a long-term (at least 10 years or more) goal, then invest it. If you plan on using the money in the short-term (5 years or less), then the stock market (as we are currently seeing for retirees) is not the best place to be heavily invested. You should look into more liquid investments, such as savings accounts, money market accounts, certificates of deposit, etc etc. It's vitally important to know your purpose/goal for the money and what time horizon you have. This should be the first step before you ever put money into an investment account.
Now, get out there and start looking for your bargain mix of a diversified portfolio which invests in broad varieties and types of businesses. To help you get started, here are a few recommended resources:

• Saveandinvest.org
• Securities and exchange commission
• North American Securities Administrator Association
• SIFMA's Foundation for Investor Education
• Investor Protection Trust

Happy Long-term Investing!

Sileo, John Sileo....ID Theft Expert

So lately I've been traveling like crazy heading to Financial Roadshows at Military Installations. At these events, we have a number of keynote speakers as well as presentations. One of my favorites is John Sileo; he's an Identity Theft expert....mostly due to the fact that his identity has been stolen twice! He is lively, fun and entertaining, but most importantly, he's got some great tips on protecting yourself from Identity Theft. For a taste of what he suggests, I provide the following. For more great information, go to his website or read his blog. The following tips come from his article "The First 8 Steps to Bulletproof Your Identity" on his blog.

Summary

1. Opt out of financial junk mail by registering at http://www.optoutprescreen.com/.


2. Shred any paper documents that would go in the trash with a durable and safe confetti shredder.


3. Track your credit report 3 times per year for FREE at http://www.annualcreditreport.com/.


4. Monitor your identity with the right online identity surveillance service.


5. Lock your identity documents in a bolted-down, fire-resistant document safe.


6. Freeze your credit with Experian, Equifax, and TransUnion.


7. Protect your computer with security software, a firewall, encryption and strong passwords.


8. For further details, consult your copy of Stolen Lives:Identity Theft Prevention Made Simple.

Debt Relief & Financial Counseling

We are in a struggling economy that seems to have touched everyone from Wallstreet to Main Street. People are feeling the effects and are seeking help and a way to turn this around. So let me offer a few of my own suggestions.



1) So let me commend you for making it this far! You've done the hardest part: Admitted that you want to get out of the stress and worry attached to your debt situation. GREAT!!! We can now start with a plan of attack! My first suggestion is what a doctor would suggest you do to get back into shape after not working out for several years: Go in for a physical and assess where you stand.



MUST READ: The Federal Trade Commission's "Knee Deep in Debt" info helps you know you various options for seeking credit counseling help. You need to know where you are and what your options are before beginning any program.



2) Now that you have an idea of your options the next step is to access your individual situation. (Click here for a debt repayment worksheet).

How much debt do you have and is it feasible for you to create your own debt consolidation plan? We hear so many marketing ploys to sign up for debt relief and free yourself up. What does this mean? A company (which will take a cut of the payment for their own profit) will roll together all of your debt (i.e. credit card debt, car loan, personal loans, etc) into one. The benefit: instead of having half a dozen payments every month, you'll only have one sum payment. The company then pays each individual creditor, and of course, taking a piece for themselves to provide the service.



So my suggestion: Find a reputable financial counselor to help you facilitate this AND help you break your debt habits to make a long-term change. This financial counselor, just like a personal trainer, will guide you through the proper channels to pay off the debt, but even more importantly, they'll help you break debt habits that you've created over the years which got you here in the first place. They serve as a coach that will get you back into shape while training for a long-term plan that will include healthy spending habits.



A few words of warning: Be VERY careful about who you choose as your financial counselor. There are many swindlers out there ready and willing to take your money and run! MUST READ: From the FTC - Choose a Financial Counselor



The FTC can't suggest financial counselors, but I'll let you know the companies that I've worked with and feel comfortable with their structure and work. Make sure you do your own homework and that you feel comfortable with whomever you choose!!



Mary's suggestions:

• InCharge Institute


• National Foundation for Credit Counseling - To find an NFCC counselor click here


• Consumer Credit Counseling Services - To start credit counseling online click here

TYPES of DEBT SERVICES

The primary 2 types of debt repayment services are:

1. Debt Management Plans = These are plans where the company works to help you negotiate lower interest rates but repay the debt over a feasible time frame that works for you. The purpose of these plans is negotiate a feasible payment to pay the debt that you incurred.

Warning: Be careful about the company you choose to help you with these plans. Many are not regulated at a federal level and some have very low lying restrictions at a state level. So before you proceed read the Federal Trade Commission's "Must Do List" for debt management plans



2. Debt Settlement Plans = NEVER recommended. Let me repeat, NEVER recommended. Debt settlement companies have a very aggressive marketing campaign and continue to grow (many mortgage brokers who went bust in the housing fallout have now found a "new" career in the debt settlement arena).



How it works: A debt settlement company sounds fabulous because they promise to pay pennies on the dollar for the debt you have incurred. What they do is have you pay them instead of your creditors. They keep the money, minus their generous cut, in a bank account in your name (which is why it is "guaranteed"). After a year of two of not paying the creditors, which means your credit is wrecked, the debt settlement company "negotiates" with the creditor and tells them they will pay pennies on the dollar for the debt that is owed. Sometimes the creditors accept and the debt is repaid at a fraction of the cost. But when the creditor will not accept the terms, you are still liable and can end up in bankruptcy court. Oh and by the way, telling the judge that you hired a debt settlement company to take care of the debts doesn't stand up in court. The debt settlement company has taken their cut of the money and fled the scene. You are left in a worse situation than before: You still owe the debt, you've lost the money that the company took, and your credit is even more wrecked than before.



To read a more about debt settlement companies, here are a few more websites:

• Federal Trade Commission definitions of all debt consolidation companies
• For another take on debt settlement companies, go here.
• Wall Street Journal article (Oct. 14, 2008) on complaints about debt relief companies

After attending an FTC workshop on the debt management and debt settlement plans, I cannot recommend any debt settlement company due to their primary repayment structure and harsh marketing techniques.

Most importantly, congratulations for deciding to make a change and looking for the best solution! Good luck in your new fiscal fitness plan!

Tips from the President's Council

So, I’ve been a slacker on adding new articles and after looking at my page counter, I’ve realized 2 things: 1)  You must add new things to keep up interest 2) Short and sweet is the best way to go! Therefore, I’ve decided to reconcile.  To fix #1, I’ll add a tool, idea, technique, etc. at least 3 times a week, and for #2……..it will be short and sweet! 

Since I work in the financial planning/education world everyday, I feel like I have to share the tidbits of information that I receive constantly.  So here it is….all yours and it’s free.  I hope that it helps and you pick up some nugget of information that might help you with your personal finances. 

In 2007, President Bush started “The President’s Advisory Council on Financial Literacy”.  This group is headed by Charles Schwab (yes, as in “Ask Chuck”….The Charles Schwab).  It runs across 2 administrations and unless renewed, expires this year.  They give some great advice.  Here’s just a few: 

 Tips to Managing Your Money in Challenging Times

1. Understand how your bank or credit union account is insured. The Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA) insures all deposits at insured banks and credit unions up to at least $250,000. To check whether your financial institution is insured visit go to FDIC or The National Credit Union Association.

2. Understand how your investments are protected. Brokerage firms are required to be members of the Securities Investor Protection Corporation (SIPC), which insures customer securities accounts up to $500,000, including $100,000 in cash claims, when a brokerage firm fails. To learn more about these protections, visit the Securities and Exchange Commission.

3. Always keep lines of communication open with your mortgage lender. As soon as you know you may have difficulty meeting your mortgage or home equity loan payments, contact a counselor to work out a payment plan at HOPE NOW or by calling 888-995-HOPE (4673).

4. Protect your credit score. Only put on your credit cards what you can afford to pay back. For other hints on improving your credit score, visit the Treasury's interactive website. Also, to protect against identity theft, get a free copy of your credit report at annualcreditreport.com.

5. Make sure you have a rainy day fund. Keep an emergency fund worth three to six months of your monthly expenses in an insured account. If you don’t have an emergency fund, try to start one. Visit the budget calculators on the Treasury's website.

6. Don’t try to cut costs by canceling your insurance. Keep up with your insurance payments, and you’ll keep in place your protection against medical costs or major loss of personal property, like your home or car. Learn more in the Life Events section on MyMoney.gov. 

7. If it sounds too good to be true, it probably is. Watch out for scams trying to take advantage of all of the recent changes in our nation’s financial markets. Educate yourself at FTC.gov.

To learn more about your money, visit MyMoney.gov. For more information on the President’s Advisory Council on Financial Literacy, visit the U.S. Treasury Department’s Office of Financial Education web site at Treas.gov/ofe. 

Labor Statistics from Nov 2008 to Feb 2009

Today I received an email with the total number of layoffs since Nov. 1, 2008, at America's 500 largest public
companies....It totals over 380,000 people.  There is no need to state the stark reality that we are all currently living in.  But I like Zig Ziglar, I too believe there is a silver lining to every cloud.  Sometimes it's just a little harder to see than at other times! 

"Fortunately, problems are an everyday part of our life. Consider this: If
there were no problems, most of us would be unemployed. Realistically, the
more problems we have and the larger they are, the greater our value to our
employer." - Zig Ziglar

From the start of the recession in December 2007 through December 2008, the
total number of mass layoff events (seasonally adjusted) was 23,485, and the
number of initial claims (seasonally adjusted) was 2,394,434. Source: Bureau
of Labor Statistics

Number of layoffs since Nov. 1, 2008, at America's 500 largest public
companies*: 382,691

Date/ Company /Total Laid Off /Industry 
2/6/2009 Weyerhaeuser 300 Materials 
2/5/2009 Estee Lauder 2,000 Personal Products 
2/5/2009 Fortune Brands  136 Consumer Durables 
2/5/2009 News Corp. 25 Media 
2/5/2009 Allergan 460 Pharmaceuticals 
2/4/2009 Time Warner 2,750 Media 
2/4/2009 Cisco Systems  2,000 Technology 
2/3/2009 Bancshares 500 Banking 
2/3/2009 Electronic Arts 1,100 Software 
2/3/2009 PNC Financial Services 5,800 Banking 
2/3/2009 Comcast 50 Media 
2/2/2009 Goodrich 35 Aerospace 
2/2/2009 Macy's 7,000 Retailing 
1/30/2009 Sears Holdings 300 Retailing 
1/30/2009 Caterpillar 22,924 Capital Goods 
1/29/2009 Broadcom 200 Semiconductors 
1/29/2009 International Gaming Technology  200 Leisure 
1/29/2009 Textron 4,665 Conglomerates 
1/29/2009 Ford 3,800 Durables 
1/29/2009 Eastman Kodak 4,500 Household 
1/29/2009 Black and Decker 1,200 Household 
1/29/2009 Walt Disney  1,200 Media 
1/28/2009 Starbucks  6,700 Restaurants 
1/28/2009 Boeing 10,000 Aerospace 
1/27/2009 Target  1,000 Retailing 
1/27/2009 Masco  600 Construction 
1/26/2009 IBM  2,800 Software 
1/26/2009 Texas Instruments 3,400 Semiconductors 
1/26/2009 Lincoln National 540 Insurance 
1/26/2009 General Motors 9,758 Durables 
1/26/2009 Home Depot  7,000 Retailing 
1/26/2009 Pfizer  19,800 Pharmaceuticals 
1/26/2009 Sprint Nextel 8,000 Telecommunications 
1/23/2009 Abercrombie & Fitch 50 Retailing 
1/23/2009 Deere & Company 662 Capital Goods 
1/23/2009 Harley-Davidson 1,100 Consumer Durables 
1/22/2009 Microsoft  5,000 Software 
1/22/2009 Huntsman  1,665 Chemicals 
1/21/2009 Burlington Santa Fe  2,500 Transportation 
1/21/2009 UAL  1,000 Transportation 
1/21/2009 SPX  400 Conglomerates 
1/21/2009 Intel  5,000 Semiconductors 
1/21/2009 Walt Disney 600 Media 
1/21/2009 Wynn Resorts 53 Leisure 
1/21/2009 Eaton 5,609 Capital Goods 
1/20/2009 Clear Channel 1,850 Media 
1/20/2009 Deere & Co.  160 Capital Goods 
1/16/2009 ConocoPhillips 1,300 Oil & Gas 
1/16/2009 Hertz Global Holdings 4,000 Business Services 
1/16/2009 WellPoint 600 Health Care 
1/16/2009 Advanced Micro Devices 1,700 Semiconductors 
1/15/2009 Xerox 275 Business Services 
1/15/2009 MeadWestvaco 2,000 Materials 
1/15/2009 Autodesk  750 Software 
1/15/2009 Marshall & Ilsley 830 Banking 
1/15/2009 General Electric 1,000 Conglomerates 
1/14/2009 Ecolab 1,000 Chemicals 
1/14/2009 Delta Air Lines 2,000 Transportation 
1/14/2009 Motorola  4,000 Technology 
1/14/2009 Google 100 Software 
1/13/2009 KeyCorp 200 Banking 
1/13/2009 Newell Rubbermaid 75 Household 
1/13/2009  Cummins 1,300 Capital Goods 
1/12/2009  Mosaic  1,000  Chemicals  
1/12/2009  Best Buy  500  Retailing  
1/12/2009  Precision Castparts  40  Defense  
1/9/2009 Oracle 500 Software 
1/9/2009 Smithfield Foods 75 Food 
1/9/2009 Freeport-McMoRan Copper & Gold 2,750 Materials 
1/8/2009 Union Pacific  230 Transportation 
1/8/2009 General Dynamics  179 Defense 
1/7/2009 Walgreen 1,000 Retailing 
1/7/2009 EMC 2,400 Technology 
1/6/2009 Alcoa 13,500 Materials 
1/5/2009  Cigna  1,100  Health Care  
1/5/2009  United States Steel 4,225 Materials  
12/31/2008 Mohawk Industries 160 Consumer Durables 
12/31/2008 Tyson Foods  120 Food 
12/31/2008 Target 132 Retailing 
12/30/2008 Allegheny Technologies 323 Materials 
12/30/2008 Motorola  400 Technology 
12/23/2008 ULA (Boeing, Lockheed Martin) 172 Joint Venture 
12/23/2008 Johnson Controls 125 Consumer Durables 
12/23/2008 Las Vegas Sands 11,500 Leisure 
12/22/2008 Parker-Hannifin 405 Capital Goods 
12/19/2008 Genworth Financial 1,000 Insurance 
12/19/2008 Sovereign Bancorp  1,000 Banking 
12/18/2008 Omnicom Group 3,145 Media 
12/17/2008 Ryder System  3,100 Services 
12/17/2008 Western Digital 2,500 Technology 
12/17/2008 Aetna  1,000 Health Care 
12/17/2008 Parker-Hannifin 46 Capital Goods 
12/17/2008 Bristol-Myers Squibb 3,700 Pharmaceuticals 
12/16/2008 CBS  30 Media 
12/15/2008 Merrill Lynch  400 Financials 
12/15/2008  Charles Schwab  100  Financials  
12/13/2008  Berkshire Hathaway  345  Finance  
12/12/2008  International Paper  2,050  Materials  
12/11/2008 Bank of America  35,000 Banking 
12/11/2008 Whirlpool 250 Durables 
12/10/2008 Mohawk Industries 105 Durables 
12/10/2008 Procter & Gamble 320 Household 
12/09/2008 Praxair 1,600 Chemicals 
12/08/2008 Anheuser-Busch Co. 1,400 Food 
12/08/2008 3M  2,300 Conglomerates 
12/08/2008 Wyndham Worldwide 4,000 Leisure 
12/08/2008 Dow Chemical  5,000 Chemicals 
12/05/2008 Legg Mason  200 Financials 
12/05/2008 Cablevision  100 Media 
12/05/2008 Staples  140 Retailing 
12/04/2008 Steel Dynamics  65 Materials 
12/04/2008 Windstream  170 Telecommunications 
12/04/2008 General Electric 500 Conglomerates 
12/04/2008 E.I. du Pont de Nemours 2,500 Chemicals 
12/04/2008 AT&T 12,000 Telecommunications 
12/03/2008 United Technologies 350 Conglomerates 
12/03/2008 Gannett 2,000 Media 
12/03/2008 Adobe Systems 600 Software 
12/03/2008 Jefferies Group 300 Financials 
12/03/2008 Viacom 850 Media 
12/01/2008 JPMorgan Chase  9,200 Banking 
12/01/2008 PepsiCo 87 Food 
11/25/2008 Dana Holding 50 Durables 
11/24/2008 BlackRock 10 Financials 
11/21/2008 Western Union 200 Business Services 
11/20/2008 Bank of New York Mellon 1,800 Banking 
11/20/2008 Boeing 800 Aerospace 
11/17/2008 Citigroup 52,000 Banking 
11/14/2008 Sun Microsystems 6,000 Technology 
11/12/2008 Applied Materials 1,800 Technology 
11/12/2008 Morgan Stanley 2,000 Finance 
11/12/2008 Liberty Media 910 Retailing 
11/11/2008 AK Steel Holding 800 Materials 
11/6/2008 Mattel 1,000 Household 
11/6/2008 MGM Mirage 400 Leisure 
11/4/2008 Hartford Financial Services Group 500 Finance 

*Total announced layoffs at America's 500 largest public companies as
measured by a composite ranking of sales, profits, assets and market value
since Nov. 1 2008. Includes layoffs at subsidiaries, joint ventures, and
majority owned companies. - Compiled by Klaus Kneale, 02.06.09

Identity Theft: Think Like A Spy

Today, at the Fort Belvior Financial Readiness Challenge Event, I heard one of the best financial speakers I've ever heard.  John Sileo.  He is an identity theft expert, and the way he became such, is because his identity was stolen....TWICE! For an excellent read, check out his blog.  More on this topic from me in the near future.... 

SNL Skit: Don't Buy Stuff You Can't Afford

The Circle of Life: Deciphering Between Needs vs. Wants

If you want to save money, an easy way to do it is to not spend money.  The richest man in the world, Warren Buffet, has practiced this principle his whole life.  He has saved 50% of everything he earned since he started throwing newspapers as a young boy.  (Now a lot of intelligence and some luck also played a vital role, but the basis is You Can’t Spend More Than You Have!  (Web Note: For a detailed history of Buffet’s life, go to http://beginnersinvest.about.com/cs/warrenbuffett/a/aawarrentimeln.htm)

But wait…how exactly does one define a want versus need? Sure, we all need food, shelter, clothing – but what about a cell phone? A car? A good argument can be made that needs vary depending on a person’s lifestyle choices. 

For example, I live in Washington DC – land of one-way highway exits and road signs labeled by city, rather than direction. I spent a lot of time stuck on one-way roads, digging through an atlas while getting honked at and trying not to sob. Right around Christmas, I conveniently mentioned to my parents that GPS is a need, not a want, in D.C. If you know me and my inability to navigate, you would agree. I don’t exactly think that even my rationale of “wants vs. needs” were spot on in this case, but I know everyone sees some wants as a “need”!

It’s amazing how not only do needs and wants vary by person, but there are also strong cultural influences on our perceptions of need. I recently taught a financial counseling class at a university. I had all the students read the book, “Your Money or Your Life”, by Vicki Robin and Joe Dominguez. The book talks about how to get out of debt, develop savings, and live well for less. The class was discussing the book, but I noticed the nine foreign exchange students from Spain were silent. Towards the end of the discussion, I asked them what they thought. One courageous girl in the back raised her hand.

"Miss Bell, we do not understand your American way of spending,” she said. “We save for everything or we do without.  We have one car for our entire family. We save for vacations, gifts, and any other unneeded or unnecessary expenses.  In fact, usually the only debt someone will go into is for a house.” 

Wow. What a different philosophy!

Needs versus wants is all a matter of perspective. Stephen Covey states that we all view the world through our own “spectacles”, in his book, “The 7 Habits of Highly Effective People”. This means that what we as Americans may view as a basic need, the rest of the world may not see it in the same light. I remember a student in another one of my classes who was amazed to discover not everyone had a TV in their bedroom. He was even more shocked to later find out some people have never even seen a TV – talk about a candidate for study abroad! The point is, go back and reevaluate your needs versus wants.

Here are some quick tips, which may start to put things in perspective:

• If you find something you want to buy and can’t live without, walk away from the purchase. If you still desperately want it 24 hours, and have thought through if you can afford it, if it’s for a good price, etc – then go back and purchase it. But if you’ve already forgotten about it, then you have your answer. This goes for a $2 checkout register purchase, and a $300 clothing purchase.
• Freeze your credit card in a bucket of water. If by the time the credit card is completely and naturally thawed out (no cheating here), then you can get it. This is your “cool-down” period.
• Bring a fiscally conservative family member to help shop. They can tell you the honest truth if that outfit really looks good on you – or if it’s a waste of money.
• Stick to a shopping list, and don’t waste time browsing! And, as my boss currently reminded me, use coupons!
• Limit your exposure to advertising. Scientific studies have shown that the more we’re exposed to advertising – whether it be TV, magazines, etc – the more likely we are to buy.
• Start an internet wish list by saving the URLs of the items that you would love to buy.    If you use the book-marked pages, then you won’t forget the items you desperately want even if it takes you two or four weeks to save up the money for the purchase.  (And quite honestly, if you do forget about the purchase, then I think you’ve already answered your own question on whether you really wanted it…) 
• Collect your spare change or start an electronic savings account that pulls a small amount from your checking every week. Use that money as a “fun” account.  Anything goes, but once the money is gone, you have to start saving again to make that next purchase

With all of this in mind, you can stick to your spending plan. I used to tell me college students, “If you can learn to manage a $500, you can manage $5 million”.   It worked for Warren Buffet and the principle is still true.  Learn to manage what you have now and as more is given to you, you will be have the knowledge and responsibility to manage the larger income. 

(Book Recommendation: Read the Richest Man in Babylon by George S. Clayson) 

The habits you create now, whether you are a struggling college student or a newly minted graduate, will be the habits that remain with you throughout your life    As one of my favorite mentors says, “ “It’s not how much money you make, it’s much money you keep.”

 

 

The New Year’s Resolution that You Will Actually Keep

Every year we all make resolutions. Resolutions are good, noble, and serve to make us better….but if you’re anything like me, your resolutions end in a guilt-ridden Saturday night ice cream binge on the kitchen floor with a pint of Ben and Jerry’s. So, no judgments.

Once we slip up on our resolution, whether it is a diet or a budget, it is hard to regain that idealistic glow and keep going forward. The rationale is always the same – well, guess that was short lived; might as well forget it.

That line of thought may work for a wardrobe with lots of elastic waistbands (no judgments, ok?), but not so much when we’re talking about financial security. Budgets are like diets. Everyone KNOWS they should have one, but no one really wants to do it. Once the budget is blown with, say a retail therapy shopping spree, it is hard get back on track. But a spending plan, well, that’s different from a budget. A spending plan is a way of life. When you’re serious about dieting, you change your eating habits. Same thing applies for a spending plan. The only way to change your spending habits is to have a plan. Now that the word budget is out of your vocabulary, let’s get started.

Here’s what you do. For one week, starting right now, track everything you spend. I mean everything. Pennies in the couch cushions, quarters in the cup holder, credit card charges – everything. Make this easy -  track your purchases on your blackberry or your iPhone. If you’re the pen and paper type, carry a small notebook in your wallet. An index card in your wallet, right next to your cash and credit cards works great! Write down every expenditure and save your receipts. At the end of the day, transfer the information to an excel spreadsheet. It should only take five minutes. Figure out whatever tracking method works for you. Anything goes – just as long as you do it!  Hey, if you want to take personal ownership and know where your money is going, you have to know your spending habits.

Once you’re tracking your money, we can start to develop a spending plan. Spending plans are composed of four basic components:

1. Identifying your income
2. Listing your expenses (this is why you’re tracking what you spend for the week)
3. Comparing income and expenses
4. Setting priorities and making changes

 Doesn’t sound so hard, eh? It really is that easy.

 (Web Note:  The above points came from the spending plan found on http://www.smartaboutmoney.org/nefe/pages/content.asp?page=1309. Another good example of spending plans, especially for college students, is at http://www.orgs.ttu.edu/r2b/money_management.php.)

After the first week, you can start using financial software to help track and monitor your money. The financial software is fantastic, but I really want to emphasize the importance of you taking control of your spending.  The software, bank, credit card company or anyone else is not responsible for your money….you are!  By simply tracking your spending for a week, you will be better able to know where and how you spend your money. 

Once you have tracked your money for at least a week, and have begun to take ownership of your money, it’s time to start the financial plan and get the overview of where your money is going.  I highly recommend using the free, web-based financial software called MINT.COM.  The website allows you to track all of your accounts in one place. It is a secure website that instantly downloads all of your information in a secure webpage.  And yes, that is my favorite part, it’s web-based so you can do it literally anywhere – well, anywhere you have internet reception!  The software uses great visual effects including dashboards, charts and graphs that are easily compared to average Americans.  All expenditures pop up instantly on your transactions page, in a way that’s easy to read (for example - $45.60 at Target). You are able to categorize the spending with a label that works for you.  If you go over your spending plan, the website can send you an email or text message. Also, the website identifies your APR (annual percentage rate) as well as any hidden fees charged by credit card companies.  And if you enter your retirement plans or investment accounts, the website will instantly compare your portfolio against benchmarks so you can see just how much you have lost this year (that is you and Bill Gates, Warren Buffet and the entire market ;) . . . more to come on this topic later).  It literally takes the pain and agony out of the day to day monotony of tracking the pennies.  It syncs your data and gives you the overview of where your money stands on an up to date basis with just the click of a button.…can you tell I’ve fallen in love with this website?

Seriously though, financial software is vital to your long-term financial health. Intelligently tracking your money allows you to make the most of it. Consider the combination of the stand-alone spending plan and the software as a temporary tool to help you track where and what you are spending your money on. Eventually, you will know your financial habits. But until then, use a plan and your financial software to understand where your money is going. Once you know your past, you can plan your future.

…Speaking of plans, I plan on hiring a large body guard, named Sven, for my refrigerator. If I try to get near it, he will tackle me. Then maybe finally I can make good on that diet resolution.

Your Financial Roadmap: Where Do I Begin?

Taking control of your money and financial future can be completely overwhelming. Some would rather clean the bathroom before looking at their finances.  But the important thing is to start somewhere! Take action – even if it’s just entering your information into financial software that does most of the hard “scrubbing” for you.

The key is to start small and start early. Smart financial planning, early on, yields huge dividends later. For example, if instead of buying the latest iPod this year, you invested the $250 into the stock market, with a rate of return of 8-percent, by the time you retire in 30 years, you could have over $370,000! Now, how important is that new yearly iPod to you?

Ok, so we know we have to take control. But where to start?

Well, what makes you happy?

What do you think is going to make you happy in five, ten, and twenty years? Money doesn’t buy happiness, but it is one of the factors that will help you get to where you want to be. When setting a financial plan, you need to figure out the basics – what you are saving for, and why.

To better identify your goals, break down where you envision yourself in the following categories:

• Physical –  Where do you want to be living? What are your physical fitness goals?  What are some luxuries or extra things that would have great meaning for you? 
• Emotional – What will your family life be like? What are your hobbies? What will your social life (friends) look like?
• Spiritual – How important of a role will your spiritual well-being play in your life?  What things have deep meaning for you in life? 
• Mind – What are your career goals?  What do you want to do during retirement?   Is life-long learning important to you? 

You need to know your goals and have them clearly defined in order to progress with your plans.  The more specific you are with your goals, the more you can break them into achievable mini-goals.

(Side Note:  I have always wondered why people set goals to become a millionaire by age X (insert an age).  If you haven’t identified why you are saving, or what makes you happy,  then this one goal is futile.  What is the purpose of becoming a millionaire by that age?  If you know it, then work like crazy for it.  But if you are simply working for the substance of money alone, I’d have to say that 1) it will be hard to stay motivated or 2) you’ll end up like Ebenezer Scrooge.)

I had an accounting professor who earned his millions by his mid-thirties, but after a few years of playing golf everyday, he was bored stiff.  He ended up going back to his alma matter to teach accounting classes and donated his check back to the university.  Point of the story:  Know what the bigger picture is and purpose behind the money..

Once you’ve identified your goals, it’s that much easier to identify what kind of financial decisions you need to make to get you there.

Ok. Now that we have a general idea of your future goals, we can use this as the outline for your financial plan. Don’t panic! Financial plans are not as scary as they sound. It can be as simple as “bring lunch to work to avoid paying takeout prices”. Your financial goals will obviously change as you move throughout your life, so while you should be specific, allow yourself plenty of room in your planning process for change and development.

So, now let’s make a financial plan.