Lessons On Financial Independence From Our Founding Fathers

Posted on July 3, 2012 by Blog Team

Is your financial life fireworks and bombs bursting in air? Or is it more of a steady drumbeat toward victory? The campaign to become financially independent can be a lot like staging a revolution: it takes sacrifice, determination and courage before you achieve success and freedom.

The campaign to become financially independent takes sacrifice, determination and courage.

Here are four of our favorite founding fathers and the lessons their lives can teach us about how to become financially independent:

 George Washington

Who doesn’t know the legend of a young George ‘fessing up to chopping down a cherry tree’ Washington. General Washington is still revered today as much for his honesty as for his role in winning the revolution. It takes that kind of courageous truthfulness to help liberate yourself from the oppressive rule of debt. To pay down debt, you need to be honest with yourself about the mistakes you made that got you into too much debt in the first place.

 Ben Franklin

He’s on the $100 bill and maybe that’s because when it came to money, Ben was one sharp dude. Some of our best-loved axioms about money come from Mr. Franklin, including “a penny saved is a penny earned,” and “rather go to bed without dinner than to rise in debt.” An inventor, businessman and statesman, Franklin was always thinking things through. It takes that kind of advanced planning, introspection and consistent analysis to know what steps you need to take in order to achieve financial independence.

Thomas Jefferson

Best known as the founding father who actually wrote the Declaration of Independence and much of the Constitution, Jefferson was a very verbal critic of overuse of credit and too much debt. He was also a strong proponent of the concepts of individual responsibility, education and action. “Never put off for tomorrow what you can do today” is one of his most famous quotes. To manage your money, you need to accept responsibility for your decisions, educate yourself to make the best possible decision and then take action.

Alexander Hamilton

Our nation’s first Secretary of the Treasury, Hamilton authored much of the economic policies that launched our nation’s financial life. He was instrumental in the creation of a national bank. The takeaway from Hamilton’s life is the importance of establishing savings. Ben’s quote about saving may be more famous, but Hamilton’s guiding hand helped create the system that allows us to save for our dreams as well as for our necessities.

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How to Apply for a Job

Posted on June 29, 2012 by Blog Team

The national unemployment rate held at 8.2 percent in May, according to the Bureau of Labor Statistics. With so many people looking for work, you may be wondering how to apply for a job and have the best chance of landing it.

No matter what type of job you are applying for, professionalism is always appropriate.

 Personal experience — and the combined advice of a number of job-search resources — tells us any successful job application requires four things:

 Honesty – In such a competitive job market, it can be tempting to fudge facts a bit if you think it will give you an edge. Yet honesty consistently makes the list of top qualities employers want most in a job candidate. More than one high-profile professional has very publically been ousted from a job when fabrications on their resumes were discovered. Honesty should also include being candid about your credit, if a potential employer asks because some employers are able to check candidates credit reports.

 Preparation – Do your homework when you’re applying for a job. Research the company and its products or services online so you’ll not only know what the company does, you’ll have a better idea of whether you’re a good fit for the job. Take pertinent materials to the interview, like a copy of your resume (even if you’ve already emailed, faxed or snail mailed a dozen copies) and work samples, if appropriate. Also, don’t forget a pen! Changing jobs requires plenty of planning and preparation. Be diligent in your search and something will come through.

Professionalism – No matter what job you’re applying for – short order cook or director of operations – professionalism is always appropriate throughout every step of the application process. From sending a polished, well-written resume with your initial application to showing up for the interview in appropriate workplace attire, be professional and courteous throughout your interactions.

 Tactful persistence – In today’s job market, it’s not enough to simply land an interview, because chances are the company is interviewing multiple candidates. You’ll need to be persistent to get the answer you want, but be sure to do so tactfully. Follow up the interview with a handwritten thank you note to everyone you spoke to – or an email if you have their addresses. A week after the interview, a polite call should be OK, unless the interviewer specifically told you not to call, or shared a hiring timeline with you that would mean no decision had yet been made.

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The Summer Blockbusters You Don’t Want a Ticket For

Posted on June 27, 2012 by Blog Team

Summer blockbuster season can make or break the year for a movie studio. Just as those big-budget productions have a huge impact on a studio’s financial health, some blockbuster life events can affect your credit for the rest of the year – and beyond.

Woman playing with her daughter

Take the right steps to protect your identity and manage your use of credit.

 Here is our version of some summer blockbusters you wouldn’t want a ticket for:

 “The Spy Who Scammed Me” – Spy films are often filled with exotic cars, scenery and locales, but there’s nothing glamorous about getting scammed by online spies. Spyware that steals your personal or financial information is a favorite tool of identity thieves. To protect yourself from identity theft scams, monitor your credit report and make sure your computer’s anti-virus and anti-malware software stays up to date.

 “House of Credit Cards” – Used wisely, credit cards can be like the perfect bucket of popcorn that makes the movie more enjoyable. But if your financial “house” is built on credit cards, and you use plastic to pay for everything from your morning coffee to a flat-screen TV, you’ll be setting the stage for unwelcome drama.

 “The Budget Terminator” – The special effects needed for a successful summer sci-fi flick can be budget busting. If a studio loses money on one flick, chances are it can make up the cash with a different movie. Bust your own personal budget and it can be a lot harder to get back on track.

 “The Bad Debt Grudge” – The Federal Reserve says total consumer credit outstanding—“debt” to the rest of us—topped $2.5 trillion in March 2012. Carrying too much debt can be like living in a horror movie. Bad debt can haunt your credit for years, making it difficult to achieve your financial happily ever after.

 Taking steps to protect your identity and manage your use of credit can help ensure you don’t end up with a ticket to the kind of show you’d rather miss.

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Five Trips for Sensible Spenders

Posted on June 22, 2012 by Blog Team

Summer is here and you’ve saved sensibly to fund your summer vacation. Now where can you go to get the most bang for your travel buck?

Two chairs on a sandy beach.

If you crave fun in the sun and you live on the eastern seaboard, the Caribbean is a sensible choice.

We’re betting that someone who’s creative and money savvy enough to have a respectable summer vacation budget is looking for the most value possible.

Here are five money-saving travel tips for sensible spenders looking for a summer escape:

1. The closest national park – America’s National Park System is like no other in the world. Chances are you live within a decent day’s drive of one of its 397 sites, which include national parks, historical sites, monuments, battlefields, nature preserves, recreation areas, seashores, lakeshores and parkways. A national park vacation can be one of the cheapest, most educational and entertaining trips to be had for your travel dollars. Log on to www.nps.gov for ideas and to find the national park site nearest you.

2. For East Coasters, the Caribbean – If you crave fun in the sun and you live on the eastern seaboard, the Caribbean is a sensible choice. It’s easy to find plenty of summer travel deals—both by air and by cruise ship—to this tropical playground. Whether you’re traveling alone, with a group or your family, the region has plenty to offer everyone.

3. For West Coasters, Central America – The countries that make up the Central American isthmus offer a variety of experiences for travelers, from the cosmopolitan, in cities like Panama City, to the natural wonders such as the cloud forest of Costa Rica. The U.S. dollar stacks up well against the local currencies in many of these countries, meaning you can get more for your money.

4. Europe for everyone – The European debt crisis has impacted the travel industry, and you may find some great deals to dream locales. Greece may be struggling with debt, but it’s still a beautiful country that offers one-of-a-kind sights like the Acropolis.

5. The neighboring state – Every state in the union has something unique to offer, whether it’s an unusual natural landscape, like the Grand Canyon in Arizona, a world-class city such as Illinois’ Chicago, or a rich historical heritage such as Savannah in Georgia. Yet you may never have thought about what the state next door has to offer travelers. Check it out! Chances are you’ll waste less time getting to your destination, spend less on lodging, and learn something new, interesting and fun about your neighboring state.

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Barking Up the Right Tree: The True Costs of Owning a Pet

Posted on June 20, 2012 by Blog Team

Owning a pet can be one of life’s greatest pleasures. Pets selflessly give love and companionship, and they can even improve your health; in some cases they can lower your blood pressure and reduce stress. Yet while they ask little in return beyond food, shelter and your heart, pets come with costs.

Mother sitting with her two children and a puppy.

Before you buy a pet, consider the cost of the pet itself, as well as its maintenance.

If you’ve decided to take on a pet, you’re probably already aware of basic costs like food, vaccinations and annual health checkups. But do you know just how much those expenses will add up to every year? Every month? Not knowing could lead to some unpleasant financial surprises.

For example, if you’ve budgeted $15 a month for dog food, it may be enough if you have a small pooch that doesn’t require any kind of special diet. However, if you have a large dog that eats more or a dog with health concerns that mean she has to eat a special type or brand of food, your monthly pet food expenses can soar.

Perhaps you’ve set aside $1,000 a year to pay for medical care. As long as your pet remains in good health, that sum may be sufficient. Just like human health care costs though, animal medical care can get expensive and just one hospitalization can eat through a modest budget.

You can find a great breakdown of pet care costs at www.aspca.org, the website of the American Society for the Prevention of Cruelty to Animals. According to the ASPCA, owners of a small dog may shell out more than $1,300 for everything from food and medical care to a carrier, collar and leash in the first year of ownership. First-year costs for a large dog can approach $2,000. Even a fish comes with maintenance costs – more than $200 a year, the ASPCA estimates.

In some ways, taking on a pet is like any financial investment you make; you need to thoroughly research associated costs before you make the investment and budget accordingly to meet those costs.

Finally, before you buy a pet, consider the cost of the animal itself. Some people pay thousands of dollars—and go into debt—to buy the latest “designer dog.” However, for much less money, a mutt from the shelter will be just as much an expert at giving love and companionship as any other dog. Before you spend a bundle on the must-have breed of the moment, ask yourself if your new best friend would really want you to go into debt for him.

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Using Social Media to Find Money Saving Deals

Posted on June 18, 2012 by Blog Team

If you’re a frequent blog reader (and we hope you are, since you’re reading this one), you already know the value of social media in keeping you connected with friends, family and professional peers. But did you know that social media can also save you money?

Groupon sends daily emails with deals for restaurants and merchants in your area.

Sure, spending money is fun, but saving it can be even more fun! Whether it’s a coupon code posted on a company’s Facebook page or a freebie revealed when you check in on foursquare, you can find plenty of ways to save money with social media. Here are a few of our favorites:

foursquare – Start by downloading the foursquare app on your smartphone, then “check in” to the network wherever you are. When you check in with your location, foursquare can give you access to money saving deals and bargains from businesses near your current location.

Groupon – Another site that provides free membership, when you join, you get daily emails with exclusive deals for restaurants and merchants in your area. You take advantage of these deals by purchasing through Groupon.

All4freebies.com – This website is updated every 24 hours with information and links to companies that are offering free stuff. Usually, these are promotional items but you can sometimes score some really interesting things like perfume samples or nutritional supplements. The site shows you a listing of current freebies and allows you to link directly to the web pages of the companies making the offers.

AnnualCreditReport.com – Hopefully, you keep an eye on your credit all the time, but that doesn’t mean you should pass up your annual opportunity to view your credit report for free. Once a year, you can access your report from all three of the major credit bureaus by logging into AnnualCreditReport.com. As you know, when it comes to the power of making money saving deals, a clean credit report and a good credit score go a long way!

Freeshipping.org – Another site that consolidates offers from other sites, this one clues you in to online merchants who are offering free shipping on the day you visit the site. If you’re already planning to make an online purchase, it pays to see if what you want is available from a merchant who’s offering a free shipping promotion.

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Should You Use Credit Cards While You’re Rebuilding Working on Your Credit

Posted on June 15, 2012 by Blog Team

If you’re not happy with your credit score, you may decide it’s time to take a look at your finances, pay down your credit card debt and work your credit. You’ll have a lot to think about as you plan your course of action. One of your toughest questions may be whether or not you should continue using credit cards while you’re working to improve your credit.

Credit Card Advantages

Wise use of credit cards can be good for your credit score.

Many people with poor credit also have high credit card debt. In fact, maxed-out credit cards or carrying a lot of credit card debt can significantly influence your credit score. Credit bureaus consider your ratio of credit available to credit used, total debt and types of debt when calculating your credit score.

So if you’re working on your credit, you may feel that credit cards got you into your poor credit situation, and that you should swear them off altogether. However, that’s not necessarily the best course of action.

Wise use of credit cards can be good for your credit score. Paying your bills on time and having more credit available than you use all reflect positively on your credit report. If you can commit to setting aside bad habits – like carrying a balance or using credit cards for transient purchases like groceries or movie tickets – you might find credit cards to be a useful tool for improving your credit standing.

If you decide to continue using credit cards while working on your credit, keep these rules in mind:

  • Focus first on reducing the debt you already have and promise yourself that you won’t create any new debt while you’re working on regaining control of your finances.
  • Cultivate new, better habits for credit card use. Pull out the plastic only for purchases that you know you’ll be able to pay off right away. If you’ll have to carry a balance in order to buy something, don’t buy it. Instead, save toward the purchase. It’s better to wait a few months to buy something than to increase your debt and pay the interest associated with your credit card rate.
  • If you’re having trouble getting someone to give you a traditional credit card, consider getting a secured card. A secured card requires you to put up a certain amount of money in order to use the card, helping ensure you don’t go over your limit, and that the debt is essentially pre-paid. It will look the same on your credit report as a traditional card.
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How to Find a Summer Job

Posted on June 13, 2012 by Blog Team

College kids, high-school students, teachers and people looking to supplement their income – a long list of people will soon be looking for summer work. Whether you’re a working adult who needs additional income or a college student who wants to gain some experience in your chosen field, finding summer work can be challenging.

people in new city on vacation

Higher unemployment rates mean tougher competition for summer jobs.

Higher unemployment means more competition for fewer jobs. If you want to earn extra income this summer, you need to begin your job search right away. Here are a few tips that can help you find a summer job:

Network – If you’re already working one job, chances are you know a lot of people who could help you find summer work. Your professional network may include people who are hiring seasonal employees or who know someone who is. Work your LinkedIn and Facebook contacts, send out email feelers and ask friends and family to keep their eyes open for opportunities for you.

Don’t forget the old standbys – You probably won’t find a seasonal job advertised on one of the big employment websites, but cracking open the want ads of your local paper might yield a wealth of opportunities. Check local print media and city-specific websites, and peruse those community bulletin boards at the post office, grocery store and your community clubhouse. If you’re looking for a local job, it makes sense to look where local employers most often advertise.

Capitalize on your skill set – According to a recent New York Times report, just one in four teenagers is expected to find a job this summer. Increased competition with adults also looking for part-time work is probably a contributing factor to that statistic. As a working adult, you have experience and skills that can make you more appealing in the job market.

Seize the low-hanging fruit – If you’re having trouble finding a summer job that fits your skill set, there’s no shame in going after work that’s below your usual pay-grade. If your objective is to supplement your income, less intellectually challenging jobs can fit your needs just fine. So don’t be afraid to pick up a few hours at that fast food joint down the street or sign on for weekend work with the local landscaping company.

Start your own business – Can’t find just the right job for you? Starting your own seasonal business may be the solution. You’ll be able to decide your own hours, fit the second job into your schedule and use the skills you already have.

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Money Advice for Married Couples Who Still Can’t Talk Credit

Posted on June 11, 2012 by Blog Team

Most of us are willing to overlook certain things for a spouse.

Maybe she doesn’t comment on his penchant for splashing water all over the vanity when he brushes his teeth. Perhaps he holds his tongue about how her homemade chicken soup is never quite as good as what his mom used to make. When you’re married, it’s natural to want to avoid making waves over minor issues.

If you and your mate have a tendency to avoid talking about money, the time is now.

When it comes to money matters, and especially credit, however, avoidance can turn toxic. Marriage counselors and your great Aunt Susie who’s been married for 45 years would probably tell you the same thing – communication is key to any successful marriage. Communicating about money is doubly important.

Perhaps you haven’t yet clashed over finances, or perhaps money has been a source of strife for some time, but if you and your mate have a tendency to avoid talking about money, the time to remedy that situation is now. Conflict over money is a leading cause of divorce.

Take these four steps:

Step 1 – Clear the air.

Acknowledge whatever money issues you’ve been trying to overlook, and do your best to sit down together and discuss these matters calmly. Pretending problems don’t exist won’t make them go away. Talking them through can help move you toward a solution – together.

Step 2 – Reassess.

Pull out your bank statements, credit reports, credit scores, and other financial papers. Then, go over everything together. If you don’t already have a household budget, start one. If your budget has been stagnant for awhile, take another look at it. You’ll need to work together to get a clear picture of your current financial situation.

Step 3 – Clarify your goals.

What actions does your financial situation call for? Do you need to pay down debt? Increase retirement or education savings? Boost your emergency fund? Discuss what you need to do and how you’ll both work toward achieving your shared financial goals.

Step 4 – Renew your vows.

Managing money together is an important aspect of any marriage, but it’s not the most important one by any stretch. Renew your promises to each other to be open and honest, and to work together to build your life together. After all, money is only a tool you can both use to help make your marriage more secure and strong, but it’s not the source of your love for each other.

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Money Advice for Newlyweds: How to Initiate the Talk

Posted on June 8, 2012 by Blog Team

Most people would probably agree that talking about money can be a romance killer. However, trying to build a life together while avoiding talk of financial matters is like trying to speak the language of love without the use of nouns and verbs. It may seem silly and fun at first, but eventually it will cause a breakdown in communication.

couple lying on beach, enjoying each other's company.

It’s important for couples to be open with each other about financial matters.

It’s important for couples to be open with each other about financial matters like savings, spending, managing debt and credit use. After all, money problems are often cited as one of the leading causes of divorce, and poor communication can make any problem even worse.

May and June are wedding season, so it seems like a good time to offer some money advice for newlyweds on how to get started communicating about finances.

Step 1 – Air your laundry, no matter how dirty.

It may be true that honesty is always the best policy, but it’s not always the easiest to follow. If you’re less than proud of your financial history – whether it’s because you’ve got a lot of debt or even had a bankruptcy– you may be tempted to keep your indiscretions from your future spouse. You’ll both retain separate credit scores after you’re married, your financial health and history will become linked on joint accounts. Your spouse will appreciate your honesty and be better equipped to co-manage your financial future together if he or she knows up front about any challenges you may face together.

Step 2 – Practice full disclosure.

Open a bottle of wine, make a nice dinner, sit down together in front of a romantic fire and review your financial statements, tax returns and credit reports together. Being married means sharing every aspect of who you are with each other, including how much money you make and how much you like to spend.

Step 3 – Set financial goals together.

Discuss what each of you wants long term for your financial future. Do you have debt that you would like to pay off? Do you want to save money for a down payment on a house? Save toward an early retirement? It’s important for married couples to align their financial goals so that they’re working together toward achieving those objectives. You may find you have individual goals as well as common ones, so it’s important to be on the same page about your priorities and how you’ll achieve them.

Going forward, newlyweds should always keep in mind why they work, save and budget – so that they can make their money work for them. While money is essential for survival, it’s still just a tool. Successful couples learn how to cooperate to use that tool to make their lives together even more fulfilling.

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