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Monthly Archives: September 2011

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Friday Roundup: Breaking The Financial Rules

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Smart has the brains

Hello Everyone and Happy Friday.  I hope you all had a nice week.  Here on DINKS Finance we usually like to give our readers tips and tricks on how to save money, live on a budget, and accumulate wealth while still enjoying our lives.  However, today is going to be a little bit different. Today we are going outise of our DINKS box.  Today we are taking everything that we have learned about finance, and doing the opposite.  We have searched the web to bring you some new tips and tricks on personal finance.  We are breaking myths, going against the odds, and setting the record straight today here on DINKS Finance.

Check out these great posts from around the web about Breaking all of the Finance Rules:

The Money Pincher  discusses one of the most controversial subjects in budget planning, and one of the biggest expenses in my own personal budget in the post “When Eating Out Saves Money”.  Many people think that eating out is a waste of money but I don’t think so because everyone has to eat.  So what if you could save $5 by cooking at home, what about the 30 minutes it takes to cook the meal and the 15 minutes it takes to do the dishes afterwards.  I would rather spend an extra $5 and save 45 minutes of my time.  I don’t drink alcohol or smoke anything so I don’t see the harm in eating out every once in a while.  However, when eating out becomes a habit it can definitely harm more than it can help our budget.

The Simple Dollar  says that Frugality is not for everyone in the post “Is This Frugal Idea Worth It for Me and My Family?”  I like this post because “Frugal” is such a dirty word.  I feel that I should be wearing Berkinstock sandals and laying on a patch of fresh cut grass when I hear the word Frugal.  Everyone wants to save money, but why? Just because we are told to do so?!  We don’t have to be Frugal and save every dollar we earn, we just have to be financially smart with our money.

Get Rich Slowly  says that playing the lottery is not a waste of money in the post “Reader Story: Winning the Lottery”.  This is a great post about how going against the odds paid off (big time) for one couple. Their lives changed forever because of one single lottery ticket.  So many people think that playing the lottery is a waste of money, well I am sure that this couple would disagree.

Investor Junkie  warns us about financial terminology in the post “There’s No Such Thing as a “Risk Free” Investment”.  Many people want to invest in Term Deposits and Bonds because they feel the market is too volatile and they don’t want to take any risk . Investor Junkie tells us that even Term Deposits and Bonds have some risk, the average investor just might not know about it.

(Photo by angela7dreams)

4 Reasons Why Getting Married Makes Financial Sense

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financial sense, marriage perks, financial advice

(Guest Post by Ryan Sandberg)

Marriage and divorce rates are a fluctuating thing that are very often affected by the state of the current economy. By many estimates, divorce rates saw a drop during the recession because people simply weren’t able to get divorced. This was due to lack of income and couples being tied to a mortgage. There are many other reasons that people stayed in marriages during such difficult economic times, but many people are seeing the benefits of getting married.

In times such as these, people who have been putting off taking that leap into wedded bliss have done so because of hesitancy or lack of time. Besides the fact that you want to share your life with your loved one, getting married has the added benefit of making the best financial sense:

Splitting The Bills

Perhaps the most obvious, and best reason, that people get married are the huge cost benefits of splitting the bills. When you have two incomes, you’re able to get a lot more done and increase your buying power very quickly.

Improved Credit Scores

When two people get married, usually one has a much lower credit score than the other. It can take years of diligent efforts to improve your credit score. This is a big annoyance when you’re getting married and planning to buy a car or home. When you get married, you can take out a home or auto loans under the name of the spouse with the better credit score. This will ultimately save both of you a lot of money because you’ll be able to get better terms for you loan and improve your buying power.

Bigger Tax Return

This has long been one of the best financial benefits of being married. When you’re filing as a married on your taxes, you save a lot of money and get more back on your return.

Long-Term Savings

Basically put, when you have two incomes, you’re able to put far more towards your future than if you were saving as a single person. Often times one person’s income is put solely toward the bills while a large portion of the other spouse’s income is put towards saving for retirement and other investments.

There are a lot of financial benefits to being a married couple, regardless of the current state of the market. In no way does this mean that you should get married only because of the monetary benefits, but it is a huge plus. If you’ve wanted to get married, but simply haven’t had the time to do so, it might be the best decision when establishing a good financial base for both your futures.

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Guest Post by Ryan Sandberg – a freelance writer with a passion for entrepreneurship, efficiency and ice hockey. He enjoys researching and sharing his opinions/findings on finance, marketing, entrepreneurship and current tech trends.

What is a Financial Plan & Why Do You Need One?

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financial plan, financial advice, financial tips

Good Morning DINKS.  If you deal with a Certified Financial Planner at your Financial Institution then you may have been solicited for a Personal Financial Plan.  This is a service which is usually offered to clients who are planning to achieve specific financial goals such as the purchase of their+ new home, or who are planning for their retirement.

Some independent brokers also offer Personal Financial Plans to their clients but there is a cost involved. Wealth Management Firms also offer Personal Financial Plans to their clients which may or may not be included in their quarterly or annual fees.

A Financial Institution aka Your Bank is the only place that offers Free Financial Plans to their clients.  The reason is because banks earn revenue on a variety of products such as bank accounts and credit products; they also earn their yearly revenue as a national institution.  Unfortunately Brokers and Private Wealth Management Firms do not have this luxury.  They are micro managed and their revenues are based solely on their fees charged to clients.

If you have never had a Personal Financial Plan prepared for you, I suggest that you visit your local bank and ask your Financial Planner to prepare a Personal Financial Plan.  There are benefits for both clients and banks when presenting a Personal Financial Plan.  The client gets to see if they are on the right track towards achieving their short term and long term financial goals, and the bank gets to present a professional image to their clients.

Banks usually offer Personal Financial Plans as a deal closer to clients who are considering investing with their financial institution.  A professional and knowledgeable Financial Planner can be the deciding factor when clients are choosing to invest with one financial institution over another.

There is approximately 5-8 hours of work involved in the preparing a Financial Plan which includes meeting the clients and gaining their trust, gathering the clients information, inputting the information into the software, making the necessary financial calculations, finding presentable solutions, as well as presenting the final Financial Plan to clients.  Therefore Personal Financial Plans are only offered to a specific clientele.

The Features and Benefits of a Financial Plan

  • It shows clients their current personal financial situation compared to where they want to be
  • A Financial Plan clearly defines personal financial goals and the steps needed to take in order to achieve them
  • The Financial Plan can be updated yearly to make sure that we (as clients) stay on track
  • We can change, add, and delete goals as needed
  • Certified Financial Planners can give us advice on all of our products including insurance, savings, retirement accounts, mutual fund accounts, and estate planning, real estate investments, and our own business for entrepreneurs
  • A Financial Plan determines if our goals are achievable or if we have to make adjustments to our dates, timelines, and objectives
  • Financial Plans determine the most tax efficient sources of income during retirement.  They show us where our income will come from during retirement

Savings Bonds RIP

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savings bonds, cash bonds, savings

(Guest post from James, original founder of DINKS Finance :))

As many of you long time readers of personal finance blogs will know, the U.S. Treasury department recently issued a press release saying they were eliminating paper sales of savings bonds, effective January 1st, 2012.

This move comes as little surprise as some personal finance pundits noted it could be happening as early as 2008.  It is still possible to purchase bonds electronically, but as of the end of the year, you won’t be able to get paper versions any more.   This move is just the latest in a series of rulings by the Treasury department liming public sales of this investment.

In terms of what it means for your personal finances, the answer is probably very little.  The Treasury department has already limited the amount of bonds one can purchase, so the tax-deferred benefits of owning large amounts of these kinds of securities is already limited.   Savings bonds also don’t pay the best rates.  For example, while Series I bonds currently pay 2.6%, it is possible to get a better deal with 30 year treasury notes at 3.7%.

Since savings bonds have widespread ownership among the American population, one has to wonder why the Treasury is doing away with the program.   Part of the reason may be that annual bond sales are somewhere in the range of 200 million USD.  Given the huge financing needs of the Federal government, it’s likely that selling savings bonds is just no longer an important source of government funding.  It’s also the case that Washington is under huge pressure to cut back on spending, and it is possible that there isn’t a strong savings bond constituency to defend the cost of printing and mailing the paper securities.

So, the bottom line is that savings bonds are a dying investment class, however it may not matter for your pocketbook.

Happy  Investing.

James

Credit Card Balance Transfers Are Bad!

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credit card balance transfers, credit card tips, balance transfers advice

credit cardAs someone who has made her share of financial mistakes regarding debt I am not a big fan of Balance Transfers.  However, as a financial services employee I am a big fan of Balance Transfers. Banks make a lot of profit from clients carrying balances and paying interest on their credit cards.

When I was an older teenage and a young adult I lived on credit.  Now as a professional soon to be 31 year old, my best Credit Card advice is that we shouldn’t spend more money on our Credit Cards than we can afford to pay off.  I now only use my credit card for purchases to build and maintain my good credit history.  I pay off the balance at the end of each month to make sure that I don`t fall back into bad habits, and to avoid paying interest.

The subject of Credit Card Balance Transfers is coming up because I had a client come to my office on August 31 who was desperate to apply for a new Credit Card.  He explained to me that today was the last day of the low interest promotion on his current Credit Card, and he wanted to apply for a new Credit Card with a new Balance Transfer promotion.

Due to the high balance on his previous credit card and the amount of credit he currently has compared to his income, we were unable to approve him for a new credit card in the branch.  I was obligated to send his Credit Card application to our Credit Adjudication department and it could take up to 3 days to receive an answer.  The client was less than pleased that we couldn’t approve his new Credit Card instantly and that he may have to pay 3 days of interest on his Credit Card.  It is a big misconception amongst people that having existing credit automatically guarantees them to obtain more credit.  This statement couldn’t be more false.

Instead of paying off our Credit Card balances by obtaining more credit in the form of a Balance Transfer, we should just pay off our Credit Card Balance.  No good can come out of transferring our balances between Credit Cards every three, six, or twelve months.  Credit Card Balance Transfers are a Band Aid solution because the Credit Card Balance is not being paid off; it is just being moved around. Every time we apply for a new Credit Card to transfer our existing balance we get a hit on our Credit Bureau, and this lowers our Credit Score. There may also be various fees associated with Balance Transfers.

In Case I haven’t convinced you that Balance Transfers Are Bad, here are some Banks that are currently offering Balance Transfer Promotions:

Bank of America is currently offering 0% APR on Balance Transfers made within 60 days of the account opening.  BOA Balance Transfers are subject to a 4% transaction fee.

Wells Fargo clients can directly request a Credit Card Balance Transfer through Online Banking. Wells Fargo Balance Transfers are subject to a 5% transaction fee.

Capital One offers clients different Balance Transfer options depending on the Credit Card they choose. Some Capital One Credit Cards offer a $0 transfer fee with a 24.9% interest rate, or a 10.9%-18.9% interest rate with a 3% Balance Transfer Fee.

Photo by Robert Scoble

Weekly Roundup: Home Renovations and DIY Projects

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Happy Friday Everyone.  Today we are discussing home renovations.  We recently explored the world of real estate investing and flipping home in a DINKS Reality post called “Flip This House”

Are any of our DINKS readers House Flippers?

Whether you are flipping houses for a profit or you are just trying to spruce up your own home with some minor renovations and home deco DINKS are here to help.  We have searched the web to bring you the best posts about DIY Projects and Home Renovations.

Enjoy!

Krystal @ Give Me Back My Five Bucks discusses her home renovation progress as well as her To Do List.  Krystal is slowing but surely making her townhouse her home.  Check out her progress in the post “Saving up for renovations.”

Brad @ Enemy of Debt  gives us helpful budget tips during home renovations.  Brad discusses the dirty details of having to replace his roof in the post “A Top Priority: What to Consider When Budgeting for Roof Maintenance.”

Cat @ Budget Blonde shows some love to Ashley from A Blonde’s DIY Life.   Cat and Ashley discuss home decorating projects with a theme in the post “Blondes Have More Fun”.  She is currently trying to incorporate Greek Key Patterns.  If you need inspiration during your home renovation or decorating projects then check out this post because these two lovely ladies have found a solution with a new sharing outlet called Pinterest.  It allows people to post or “pin up” different snap shots on your page of interest.  As an example if you want inspiration for a tropical theme or a red theme you can post it on your page and other DIY readers will post pics of your theme to help inspire you.

Mark Weisleder @ Moneyville  talks about putting our house on the market and selling our home.  His post “Will an open house help sell your home?” discusses the pros and cons of whether our real estate agent should have an open house.

Have a Great Weekend Everyone.

 

Love Drop is helping Melanie in Boston

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This month Love Drop is collecting money and goods for Melanie who is a wonderful mother of four great kids.  Melanie’s life was recently turned upside down when she was hit by a car while walking near her home. Thankfully Melanie survived the car accident and now she is on the long road to recovery.  Melanie tries to keep a positive attitude because even though she now has limited mobility, at least she is still able to spend every day with her four kids.

Melanie’s life and the lives of her four children have now been changed forever; Love Drop wants to help make the transition to her new life with limited mobility a little bit easier. Three things that Melanie and her family could really use right now are a front-loading washer and dryer, as well as a new stove with front controls.  Melanie loves to cook and she would love to continue doing so for her family.

As a coupon blogger, Melanie is no stranger to budgeting, personal finance, and saving money.  She often uses her money-saving abilities to help out others in the community. It may be ten months to a year until Melanie’s life is close to how it was before the car accident. This month Love Drop really wants to bring together people in the personal finance community as well as in Melanie’s community who want to help get her house ready for the upcoming stretch of rehab and recovery.

You Can Help Melanie and Her Family in Four Different Ways:

  1. Donate Appliances that Melanie can access from her wheelchair.
  2. Give $1.00 or two – even the smallest gifts can go a long way.
  3. Share this site with others and help spread the word about Love Drop.
  4. Offer a Gift or Service. Gift Cards are always helpful for families.

How to Survive Unemployment

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(Guest post by Jessica Wagner)

When you or your significant other becomes unemployed, you may no longer be considered a DINK, but you can guarantee that will be here to still give you some financial advice. Getting by with two incomes in a relationship is definitely worth strategically planning for, but also figuring out a game plan for yourself if one of you were to become unemployed is beneficial too.

The reason why a majority of relationships fail is because of financial struggles. Lacking funds or poor money management often lead to damaging fights that can be difficult to recover from if not properly dealt with. To avoid having strong arguments in an already stressful time, consider planning for unemployment in the chance that one of you were to become so.

Even if you aren’t planning on becoming a single income couple, things happen, especially in the current job market and economy, and it will benefit you to have a plan in action. Don’t make combined purchases that you couldn’t afford if one of your were to become unemployed, and create prospective budgets should either you or your significant other lost their income. Doing this will allow both of you to know that you can survive should one or the other lose their job.

If you or your significant other becomes unemployed, you need to immediately reconsider your spending. While you should already have budgets created, you need to re-evaluate those budgets and make sure that you haven’t acquired any additional expenses since those budgets were created. If you notice that you have been eating out more, plan on cutting down again and trying to stick to cheaper home cooked meals. Also note that regular expenses, such as gas, will decline because one of you is at home.

While watching your spending is obviously something needed during unemployment, keeping a solid routine is often overlooked. If you or your spouse becomes unemployed, you will be home all day and this loneliness can lead you to become slightly starved for attention. While you were once able to let yourself and your significant other enjoy some alone time after work, you will now be desperate for conversation – which can often drive the working partner insane. Try to maintain other forms of socialization to combat the loneliness.

You also need to maintain a routine should you become unemployed. Whether you are looking for mechanical engineering jobs or electrical engineering jobs it doesn’t matter. You simply need to treat job hunting like a job. Activities that you should always continue doing even during unemployment include:

  • Waking up at a regular time
  • Showering and dressing in normal office attire
  • Exercising
  • Regularly socializing

Unemployment doesn’t have to be the end of the world, and it doesn’t need to destroy your relationship. Sure, it will put a bit of strain on you and your significant other should one of you lose your job, but with proper planning, you can avoid having unemployment become the bane of your relationship.

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Jessica Wagner is a freelance writer from lovely, almost-always sunny, San Diego, CA.

What Motivates Your Finances?

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financial tips, financial advice, personal finance

financial tips, financial advice, personal finance

We all work to have money, but why do we want money? Is it because we want to be able to afford the finer things in life, or is it because we let our money define us?  The motivation behind our finances determines how we behave financially and how responsible we are with our money.  Some people are motivated by the option to buy nice things or take nice vacations; some people are motivated by the option to have more than others.  What motivates your personal finances?

My personal financial goals motivate my personal finances.  I save for my retirement because I have a retirement goal, and I save in my emergency fund in case I lose my job or have an unexpected emergency.  I also save in my Employee Stock Share Plan because my employer contributes on my behalf and it is free money for me.  I don’t save just to build up my net worth because I would rather spend that money on personal experiences.

I don’t care how much money I have in the bank because if we don’t use our money then it is worthless.  In order to have value money has to be spent.  Do you like to brag about your money?  Some people are defined by their net worth and they save every single penny in order to increase their net worth, buy why? If you don’t have goals then why are you saving? Maybe you were advised by your parents or grandparents who lived through the great depression to save money in case of another tragic economic event.  Has anyone experienced a  recent tragic economic event?

Does your class status motivate your finances? Maybe the status of Middle Class, Upper Middle Class or Upper Class is important to you.   Maybe the neighbourhood you live in, or the type of car that you drive are important to you.  The amount of income that I declare each year on my personal tax return may define my money class, but it does not motivate me.  As long as I have enough money each year to achieve my financial goals, fill my hungry belly, and have a warm (clean) place to sleep every night I am happy.

My class status is irrelevant to me, and frankly I feel that classes do more harm than good to a society. We are all people and we shouldn’t judge each other based on how much money we make.  My current personal financial goals include saving for retirement and taking a trip to Europe each year.  Next year I am going to Naples Italy.

Why do you pay off your debt every month? Maybe it’s because you don’t like to pay interest, or maybe it’s because debt burdens you.  For some people the idea of debt is unsettling.  Maybe the need to not owe money to anyone motivates your finances. I try to pay off my VISA balance every month because it helps build and maintain a good credit score.

Even though I have no intention of applying for additional credit in the near future, I feel that my credit score is a very important part of my financial life.  Unlike my net worth, the number of my individual credit score is important to me; this is because it directly affects me as an individual.  Net worth and Class Status are comparisons between us and other people, and that does not interest me.  Finances are personal, it is not a competition.

What motivates your finances? In other words why do you get up in the morning and go to work?

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Photo by LuluLemon

Friday Roundup: Fitness and Finances

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rock wall climbingHappy Friday DINKS.  Today we are discussing the connection between our Personal Fitness and our Personal Finances.  When our finances are in order everything else in our lives is usually also in order.  Keeping control of and actively managing our personal finances is a personality trait that usually applies to all other aspects in our lives.

If we like to learn about different things this usually applies to everything else in our life from personal finance to personal fitness. This is why many Personal Finance bloggers often write posts about their Personal Fitness goals and routine or about losing weight. It is a common goal for people to want to save money and lose weight.

Here are some great posts from around the web about Personal Finance and Personal Fitness:

Young and Thrifty talks about the link between her money and her health in the post “What Yoga Taught Me About Personal Finance”

Money Pincher  discusses her decision making process and the benefits of exercise in her post “Fitness Dilemma: Yoga versus the Treadmill”

Amber at Blonde and Balanced  is known for trying to find a balance in her life between everything she loves from her new husband and her family to her money and her personal fitness.  She talks about setting fitness goals and tracking her progress in the post “Workin on My Fitness Weekly”

Krystal at Give Me Back My Five Bucks is an avid runner.  She lives in on the West where their winters are not as harsh as the ones over here on the East Coast. A milder climate allows Krystal to get outside and be active.  She sets personal monthly fitness and finance goals in her post “August 2011 Goals”

The Girl With The Red Balloon  is a self proclaimed Gym Rat. She discusses her obsessive compulsive personality, her dedication, and her need to find balanced in the post “Change in Focus”

Have a great weekend everyone!!!

Photo by Noodles and Beef

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