Okay, so we are all thinking about New Year’s resolutions, whether we believe in them or not. Chances are, not. At the same time, there is something about a New Year and a fresh start.
As Warren Buffet said, “The chains of habit are too light to be felt until they are too heavy to be broken.”
Use this to your advantage and start making a few small changes in the way you handle money:
Keep the change, it may feel like pennies, but they might just call it change because it has to power to do just that.
Pay yourself first and last, everyone knows about putting away first, but remember to tuck away any extra you have before your next pay check and you’ll be amazed how much faster it adds up.
Switch to tall, latte that is. This will save both your pocket book and your hips.
Track your spending and your saving. This makes all the difference for me.
Watch the fees, they add up, often faster than the interest.
Simplify your life, you’ll be amazed how much you save with less.
In preparing for the New Year it is always good to look back at the current year to assess your accomplishments as well as ups and downs. Here are the financial highlights and lowlights of our financial year:
Established DINKS.com to discuss our financial insights and inquiries
Reached wedding savings goal four months early
Property tax tripled from one bill to the next
Miel received $10k as a gift from her grandfather’s death and paid off half of her student loans
Miel began graduate school and started taking on more student loans
James quit his job and became a full time academic and Ph.D. student
DINKs selected Hansens as a winner of a stock and walked away with $30k in earnings
James played too much in stocks and lost around $5k
Miel received promotion and raise of 10%
Enjoyed wedding and spent $20k on one fabulous day
Enjoyed honeymoon in Thailand for two weeks on about $5k
Mielreceived $500 for Tickton Fellowship for proposal writing
Refinanced to get out of an ARM and negotiated for good rates
Mielreceived $750 bonus Innovations Award for work in Macedonia
Miel received end of year raise of 8% for excellent work
Networth declined 8% over the year, due to student loans and wedding
Enjoy our year in review while we consider the year ahead!
We DINKs know that you have better things to do then sit around and cruise the net for personal finance article, so we wanted to let you know about an interesting piece on payday loans and the fringe economy from Alternet.
The basic point of the article is that payday loan making organizations like check-cashers, rent-to-own business and pawnshops constitute a whole separate “fringe” sector separate from the mainstream economy. A basic characteristic of this fringe economy is it’s catering to poor or financially disadvantaged persons with the use of high interest products such as payday loans. It’s an interesting article and outlines how payday loans have a detrimental impact on poor peoples budgets.
A couple of days ago, we received an email from ZivYirmiyahu, the publisher of CreditCardClient.com, asking that we check out his site. Since the site looked interesting we wanted to comment briefly about it today.
How CreditCardClient.com works is that you enter your current amount of credit card debt, as well as some other information like your card’s interest rate and the amount you spend every month into the site. After some automated calculations, the page makes a recommendation for an additional card that you might consider transferring your balance too.
Some people, including some very good friends of the DINKS, have a good deal of credit card debt. For people who want to be smart about eliminating their cards, this site could be a useful tool.
In terms of costs and hidden fees, Ziv told us that he receives a commission if users from his site apply for additional credit card offers. So, users of the site should be aware that its purpose is to direct its users to card offers that may be cheaper for the consumer.
The good news is that when we entered our info for the one card Miel has, it showed that we couldn’t do any better since we hold no balance on the card. This is obviously the best way to use credit cards. For those of you in the boat that don’t have credit card debt, and can carefully manage use of cards, this site could also offer resources to find out the best deals to get in terms of points and such. For instance Miel uses the Chase Cash rewards card. This was selected as the best card for no interest for the first year, which allowed Miel to pay off the card in less than a year without accruing further debt from interest. Now Miel was psyched this week when she got $100 back from use of her credit card. Considering that her card is mostly used for business purposes and travel for work, this isn’t bad. Plus, she hasn’t paid a penny in interest or fees! Note that Miel is thinking of moving over to a United card, since she now has elite status because of work travel and could get even more free flights!
As a final note, other than locating more competitive offers, there are some other things one could do to manage their credit cards. For more details on this, please feel free to check out our earlier postings on credit cards and how to eliminate them.
Start out the new year right by managing your money well!
Just saw this skit from the Dave Chapelle show. The video makes fun of the differences between hip hop and mainstream financial cultures. Its only a one minute and a half or so, and its its good for a chuckle so feel free to check it out.
Warning: There is some profanity, so its Not Safe For Work.
Also, thanks much to the HustlerMoneyBlog.com, for bringing the video to our attention!
One thing about Americans is that we don’t negotiate often. That is to say, most of the time when we want to buy something, we usually don’t attempt to negotiate the price. This is a shame because very often negotiations can result in pretty substantial discounts for the consumer.
For example, Miel and I recently bought a necklace at a jewelry store for her. Because we haggled about the price we were able to get 10 percent off (a savings of $60…we were buying bling). Maybe $60 isn’t a lot, but we also negotiated on other things like, phone bills and our joint goals.
Just to help inform you about negotiation and how to negotiate, we’re including a handy google video you might want to check out:
For those who haven’t read it, the book is basically a tutorial on starting and running a business on the internet. It focuses on how to work with major sites like ebay, amazon and yahoo. Some of the advice on working with these sites is relatively straight forward, but whats really interesting is the “success stories” at the end of each chapter. For example, Joyner details how one company called Fleegolf grew from $20,000 worth of merchandise to several hundred thousand dollars annually in profits. They did this mostly by being smart about on-line marketing and inventory control.
Another good part of The Online Millionaire is the general advice suggested on building a webpage. Joyner offers some solid advice on building a successful web presence. For example, she first advises that quality content is required, then the website should be optimized for search engines and finally sites should develop a professional and appealing feel. While this advice is a “no-brainer”, Joyner’s easy writing style gives what she has to say an appealing folksy bent.
All in all, The Online Millionaire would be a great resources for anyone who wants to get started selling products or services on-line. That said, the books advice is targeted for a general audience and would probably not be suited for experienced on-line sellers.
Hope this Helps!
Best,
James
p.s. we don’t get paid for doing book reviews for Wiley, we do it because some days we just need something to blog about!
As some of you may remember, my wife and I nailed down a plan to deal with our current budget problems. Well, as part of our plan, we decided to purchase shares in high yielding stocks to supplement our monthly incomes.
Now that things have settled down after the holidays, we sat down and selected three stocks:
1) Frontline Ltd. (FRO). Frontline is a tanker company owned by a Norwegian millionaire. The company’s share price has been flat over the past couple of years, but its dividend payments have been consistently been great. We took a position (about 180 shares) and intend to hold until James’ graduation from the U of Maryland.
2) BPPrudhoe Bay Royalty Trust (BPT). Prudhoe Bay Royalty Trust is company that provides royalties from oil pumped out of Alaska’s Prudhoe Bay field to its shareholders. Its share price has done well over the past few years, and more importantly it has an almost 9 percent yield. Our holding period is approximately the same as for FRO.
3) Advantage Energy Fund (AAV). AAV is a gem. The company is organized as an unincorporated mutual fund trust in Canada. While there have been some tax issues with Canroys, and the dividend in this fund has been cut, the dividend payout ratio is still 18%. We took a larger position in this issue, buying approximately 1750 fund units. We’ll see how it works out, but the siren call of monthly dividends seems, at least for AAV, currently hard to resist.
Hope you enjoyed reading! As always, we welcome comments or feedback!
One of the age-old tips for holiday savings is to share gifts that don’t necessarily cost much. Our dear friend Suz does a great job of doing this. She clipped a financial tips section from a magazine (sorry, don’t know which one). We thought we’d share this with you. Some of the tips aren’t really geared towards DINKS, but it’s worth checking out:
Developing a structured approach to your finances can help you stay on track fro long-term success. This working calendar offers suggestions for steps you can take throughout the year . Keep in mind that what’s listed is not necessarily time sensitive, nor does it have to be accomplished exclusively in the month indicated. By establishing a schedule to work through these important details, you increase the likelihood of meeting your goals.
January: Review your Finances
Gather all your financial statements.
Draw up a workable budget.
February: Plan For Taxes & Retirement
Begin pulling together everything you need for filling your taxes.
Review year-end retirement statements.
March: Stay Current
Update all beneficiary designations.
Establish instructions about what should happen if you become incapacitated.
April: Review Your Financial Plan
Review your budget.
Make contributions to your IRA.
May: Plan to Play Down Debt
Review all your debt.
Prioritize all your debt payments.
June: Invest In Your Family’s Future
Determine how much you need to save for college expenses.
Educate your children about money.
July: Check your Credit
Request free copies of your credit report.
Review your budget.
August: Protect Yourself With Insurance
Review your life, health and disability insurance.
Assess your property and car insurance.
September: Put Your Affairs in Order
Update your estate plan.
Donate items to charity.
October: Determine Year-End Strategy
Estimate your ’07 taxes and consider your tax strategies.
