3 Good Moves For Your Financial Self Defense

When you have self-awareness as a martial artist you can overcome personal weaknesses and harness your mental and physical strengths. For instance, it is said that a ninja warrior can win a battle without ever drawing his sword. Through mental and physical power he can evade, confuse and “cloud the mind” of his opponent. In certain martial arts disciplines, you can learn certain self-defense moves that will redirect the strength of an opponent and turn it against him, even if he is twice your size.

With spending habits and money attitudes, recognize your own weaknesses and devise ways to circumvent them. For example, if you’re an impulsive shopper with credit cards, know you need to carry cash when going to the store. Before buying something, research prices in advance, decide how much you can spend and only bring that dollar amount with you. Or, if you have a habit of spending all of your paycheck and can’t seem to save money, take the time to go over your budget, understand what you really need to cover your bills each month then calculate the balance. Pick a portion of that balance, have it automatically deducted from each paycheck and deposited into savings. If you can’t see it in your checking account, you won’t spend it.

The dictionary defines “strategy” as “an elaborate and systematic plan of action”. In martial arts, a plan of action is a way of anticipating enemy moves and defending yourself against various types of attacks. A strategic plan can take minutes, weeks or months to execute. Sparring an opponent in the dojo perfects your ability to act and react to a variety of punches and kicks, recognize behavior patterns and ultimately devise a plan that will effectively overpower your opponent, all within the span of a few minutes.

A financial plan of action is a longer-term strategy that begins with identifying your goals. What do you really want to have or achieve in your life? Do you want to have a comfortable retirement, live in a big house or take a cruise around the world? What will it take to achieve these goals? A good financial strategy. If you realize early on that executing this strategy using sound personal finance tactics will save you from adversity and give you what you really want, it won’t seem like such a chore.

In all martial arts, drills and forms are practiced thousands of times a year for many years. A new student is given a white belt, symbolizing a clean slate. After years of practice, once you can perform certain skills and forms proficiently, you are permitted to move up in rank. Ultimately, with perseverance, you may be awarded a black belt. (The black shows that you’ve been practicing for so long your belt has turned dark from dirt and sweat.) At this level your reactions are swift, accurate and based on muscle memory; they come naturally.

Building good money management skills takes time and lots of practice. Effective money management tactics get you in the habit of tracking your income, controlling your spending and building up your savings until this behavior becomes automatic. When you’re in good financial shape and have prepared for the worst, meaning you’re aware of potential dangers and have set aside emergency savings, (not perfected your spinning side-kick) you will survive intact and move closer to your goals.

Focusing your mind and body, building strength and awareness, and creating solid defenses will overcome adversity and lead to success whether it be in finance or on the mat.

“To hell with circumstances, I create opportunities”, Bruce Lee

 Written by Hollis Colquhoun

Learn more about Hollis Colquhoun

PRACTICE:

HAVE A STRATEGY:

8 Ways to Make College Cheaper

8 Ways to Make College Cheaper, by Hollis Colquhoun

It's about time for school to start again and because of the horrible job market, many young adults who couldn’t get jobs are going back to college with fewer financial resources. Tuitions for public and private schools currently range from $15,000 to $50,000+ per year. If your child is going to college soon or thinking about college next year, here are a eight ways to cut costs.

1. Complete the Federal Application for Student Aid. All colleges and universities use this to determine grant and need-based aid eligibility. The FAFSA is also necessary if you are applying for federal student loans. Even if you have decent household income, fill out the FAFSA to get an Expected Family Contribution (what you should be able to afford) which may indicate your student would be eligible for some college assistance. Go to FAFSA.ed.gov to fill out the application. To get an estimated EFC before the official results come back go to FinAid.org.

2. Do your homework. There are college search sites where a student can plug in various school characteristics, academic requirements, sports, student body size, location and narrow down the field. There is a huge variety of colleges across the country with wide variations including tuition. If possible you and your child should pay a visit to colleges that are relatively close by, just to get a feel for what your student likes and doesn't like. Some of the best college search sites are: College Navigator, College Board College Search, and Princeton Review.

3. Compare Costs and Financial Aid Packages. On a college's website there is a Financial Aid page that shows the amount of financial aid given per student per year and outlines the types of grants, scholarships, work-study and financial assistance programs that are available. You can also go to the federal College Navigator site to compare college financial aid statistics. A good resource for finding out what merit-based grants and scholarships colleges offer is MeritAid.com.

4.Understand Graduation Requirements and Graduation Rates. Depending on the student's capabilities, and if he/she will be working while attending school, evaluate the curriculum requirements and try to determine if it's realistic for the student to graduate in 4 years. Check out the college's graduation rate as an indicator of how many years it might take. Many students are taking 5 to 6 years to graduate, which will certainly affect the total tuition outlay. To get a broad evaluation of graduation rates go to College Results Online.

5. Check Out Community Colleges. Many community colleges offer good two-year programs and have an affiliation with a four-year college or university. If the student successfully completes the Associates program, he or she has automatic acceptance into the partner college. Semester tuition at community colleges are generally significantly cheaper than at 4-year schools.

6. Research Local Scholarships. Many community organizations and local foundations have scholarships that are awarded based on academic merit, community service or a particular field of interest. As early as possible, check with your high school guidance department for a complete listing of all available state and local community organization and private foundation grants and scholarships. That way if the student must do volunteer work or take a specific course in a particular area to qualify he or she will have enough time to complete the requirement.

7. Rent your textbooks. Textbooks can cost $1000 or more per semester if you buy them. You can rent books and save quite a bit. Just do some comparison shopping and watch out for fees and shipping costs. Some good sites are Chegg.com, CampusBookRental.com and Bookrenter.com. if you do want to buy your own books go to Amazon.com and Half.com for used book offerings.

8. Compare living costs. According to CampusGrotto.com the average cost of room and board for 2008-9 was approximately $7700 at public colleges and $9000 at private schools. If there are living options at the college, do research and comparison shop to make the best rooming choice . There are schools that require a freshman to live in a dorm on campus but many larger universities have approved housing for freshmen that is off campus in a apartment or house, which may be cheaper than a dorm room. For students who are upperclassmen moving into apartments or houses, discuss setting up a food budget and how they can cut meal costs by creating a weekly dinner plan, grocery shopping once per week and making big batches of pasta, stew or roasts that can be used for leftovers or lunches, (just like you do at home).

College is a huge expense, but if you tackle it just like you would buying a new house or car, there are definitely ways to save money. Research, plan and comparison shop, and do it with your student. Not only will you and your child be more in sync with his or her academic choices and college expectations, your child will be more financially aware and understand what a college education really costs.

A quick lesson on holiday scams

An Instant Tax Refund Will Cost you

(This article first appeared on Technorati's FEST Feature)

Beware - Dealer Financed Auto Loans Can Be Costly

Beware - Dealer Financed Auto Loans Can Be Costly

Consumer Reports just posted an article written by Anthony Giorgianni on how to avoid making costly errors when purchasing a car using dealer financing.

Before going to a car dealership, it pays to shop around at banks, credit unions and online sources such as Bankrate.com and E-Loan and get pre-approved for a car loan at the lowest interest rate. (Going to multiple lending sources will only count as one hard inquiry on your credit report if it involves a major purchase and is done within a 30 day period.) Having the pre-approval when you walk into the dealership will put you in a position of strength when negotiating a deal. If you do find that the dealership rate is the most favorable, Giorgianni’s article emphasizes the need to be aware of some not-so-favorable practices that can occur with dealer financing:

1. Scam: The dealership quotes an interest rate for the loan, you agree and complete the paperwork. Several days later the dealer calls to say that you didn't qualify for the lower interest rate. You are then faced with three choices: accept a higher rate, make a larger down payment or return the car.

Don’t take immediate delivery of the car and read all of the fine print of the loan agreement Make sure the agreement states the approved loan amount and interest rate before you sign it. 

Reprinted from Technorati. Written by Hollis Colquhoun

Solution:

2. Scam: The dealer fiddles with your credit application, maybe increases your income without your knowledge to enable you to qualify for a larger loan.

Review the credit application before signing it and get a copy of the completed application. Check the loan amount and monthly payment to make sure it’s what you anticipated and can afford.

3. Scam: The dealer offers “gap” insurance in case of damage, accident, theft of the car and your loan balance is more than the car is worth, and to cover loan payments in case you lose your job or become disabled.

Solution:

Check with outside insurance providers to understand the coverage you need and compare policy costs to better evaluate the dealer’s insurance once your loan has been approved.

4. Scam: You want to do a trade-in when purchasing a new car but the old car value is less than the value of the outstanding loan. The dealer offers to pay off the old loan as part of the deal. In effect the dealer is adding the old loan balance to the new loan without you realizing it.

Solution:

When buying a new car, understand that the car value will decrease by 20-25% within the first year of ownership. You should be able to make a down payment of approximately 20% when you buy the new car, that way you won’t be “upside down” on the loan within months of owning the car. You shouldn’t buy a new car until you’ve paid off the loan on the old car but if you are shopping for a new car and want to do a trade-in, first go online to get real car values at Edmunds.com and TrueCar.com. If you decide to go with dealer financing, read over every line of the financing and dealer agreement before signing. You don’t want to be paying off two car loans.

5. Scam: The dealer is offering a cash incentive to be used as a down payment on a new car purchase but the dealer rolls the incentive amount into the loan without you knowing it. The dealer may also inflate the amount of the loan by telling the lender the car has more extras than you’re really getting.

Solution:

Again, be an informed consumer. Read all of the dealer and lender documents to know what you’re buying, what it should cost and what your loan amount and payments should be.

Buying a car is a big financial commitment whether you’re paying for it outright or taking out a loan. It is very important to do your homework and not be pressured by the car salesperson. Focus on the price of the car and the loan amounts and not the monthly payments, (although you must be able to handle the loan payments within your budget). A car loan is a secured loan. Once you sign the contracts you are the car owner, but if you don’t make the payments on time the dealer has the right to take back the car.

Contact the Federal Trade Commission and the Better Business Bureau if you have complaints regarding any fraudulent financing practices of a car dealer

Solution:

Buying vs Renting a Home

It is very ingrained in our psyche that homeownership is an American symbol of success. But in today’s economic environment, owning a home might not make much financial sense, at least for the next year or two.

It’s true that a home is an asset but it is usually accompanied by a mortgage, which is a liability. If you are going to put money into a home then your home value needs to grow at a higher rate than its costs, and the net value increase has to beat the return you could get in a savings account. Otherwise your home-as-an-investment isn’t going to produce the highest return and isn‘t the best use of your money.

Traditionally, at least over the last 20 years, home values have generally moved up. However, it has become apparent in the last 3 years that home values can also go down, and yet, people still are reluctant to rent versus buy. Your rental expense isn’t any different than your utility expense or even your grocery expense; these are basic costs of living. You and your family need a roof over your heads, warmth and food. If living costs and investments can be boiled down to math and risk, your feelings about home ownership might change.

Below are some realistic numbers based on current market offerings in the same town, comparing the cost of buying versus renting. Assume the utility costs would be approximately the same whether you buy or rent, but maintenance, lawn care and repairs would be taken care of by the landlord in the rental house. There may be an additional cost for renter’s insurance but unless you collect antique furniture or valuable artwork, the annual cost is very reasonable ($100-200 per year).

1. BUYING:

Cherry Hill, NJ House $250,000 3BR/2Bath

Deposit (20%) 50,000

Mortgage 200,000

30 yr fixed interest @ 4.25%=

$984/mo.

R/E taxes 2010 $7,649/yr=

$640/mo.

Home Insurance $780/yr (Chubb)=

$65/mo

TOTAL COST $1689/mo (mortgage, home ins., real estate taxes)

Additional Costs: not included (approximately $2000-3000/yr)

Repairs, Lawn care, Home Maintenance (unknown)

Pros: You own an asset who’s value may increase.

Cons: Cash must be used for the $50m deposit and then the liabilities: mortgage, insurance and taxes have to be paid along with regular maintenance and repair costs of the home.

2. RENTING:

Cherry Hill Brick Colonial 3 BR/3Bath

$1800/mo

Pros: You can keep your $50,000 in a CD or conservative mutual fund earning 3-5% annually which is $1500-2500 (or in bonds or stocks which can be even a higher rate of return albeit with more risk). You also don’t have any other costs besides rent and utilities-the landlord is responsible for maintenance and repairs.

Cons: The house isn’t yours and if the value increases substantially then you won’t be able to monetize it. However, if the value stays the same or decreases, you have no liability and may be able to rent the same house more cheaply in the future or buy a house in a few years at a lower price.

Owning a home, particularly outright (with no debt attached), is a wonderful thing, but using the above examples, let’s look at the pros and cons of owning versus renting per month without having a mortgage payment:

Own $250,000 Cherry Hill Home:

No mortgage

R/e taxes & ins. $705/mo.

Maintenance & repairs ?

Sell Home for $250,000 & Rent:

$250,000 @ 4% annual return=

$10,000 or $833/mo.

Rent = $1800/mo

Net monthly cost = $1000 (approximately)

The net cost difference between keeping your house or selling it and renting would be approximately $300 per month, ($1000-$705=$295) not including the cost of maintenance and repairs involved in owning the home. Plus, if you sold your house, you would have $250,000 in the bank growing on a compounded basis. After 20 years of compounding at a 4% annual rate (not considering inflation), you would amass about $550,000.

Having a home of your own is good and bad; having half a million dollars in the bank is great.

Written by Hollis Colquhoun

 Learn more about Hollis Colquhoun

(This article first appeared on Technorati)

Comparison Shopping!

Comparison Shopping

Saving money is a high priority. Comparison shopping is a given when food shopping or buying a TV, but it can also be applied to a few other areas which can have a big impact on your monthly budget.

Phone, internet and cable:

Phone and cable companies have combination packages but they can end up costing alot. Consider removing your landline and only using a cell phone, review your minutes usage and perhaps get a plan that is shared with extended family members. Change to a basic cable plan and rent movies monthly through a company like Netflix or check movies out at the library. Once you know what you need for these services, call the providers in your area and ask them for their best deals. For internet service you can contact NetZero for free or low-cost plans or share wireless service with a neighbor.

Insurance:

Monthly car insurance can be a big expense. If you have a decent driving record, raising your deductible (the amount that you pay out-of-pocket before the insurance coverage kicks in) can lower your monthly payment. Say you currently have a $250 deductible, you could raise it to $500 and significantly lower your monthly premiums- just don't have an accident!

Then call several insurance companies to compare the policy costs.

Prescriptions:

Believe it or not, there are big price differences in prescription drug prices between various drugstores chains and warehouse stores. First consult with your doctor annually to review your prescriptions and get generic drugs where possible. New medications come out every year. Then compare the prices of each drug at the chain drug and warehouse stores. Also, if you by a 90-day supply online, there is usually a big saving. Drugstore.com is a good site to use for price comparisons. Some prescriptions have small price changes between different dosages, say the difference between 100mg and 200mg pill is slight. You could get the larger dosage pill and split it, but only do this with the approval of your doctor.

Written by Hollis Colquhoun

Learn more about Hollis Colquhoun

Couples Need to Talk Money

Credit Reports And You

There are many websites and services, like FreeCreditReport.com, that heavily advertise a "free" credit report and score but in fact these free products are usually tied to a credit monitoring service trial, often for only seven days. If the customer doesn't call to cancel the service before the seventh day it is activated with a fee of $15 to $35 per month.

As a result many consumers have been angered by the misleading advertising and confused about where to get a free credit report. In fact consumers have the legal right to get their credit report for free once per year and to dispute errors on their report. Through the CARD Act of 2009, the Federal Trade Commission has amended the rules of the Free Credit Report Rule to require companies who are issuing "free" credit report ads to fully disclose that these are not the free federally mandated reports. AnnualCreditReport.com is the only site that provides the free annual credit report from each of the three main credit bureaus: Experian, Equifax and TransUnion.

As of April 2, 2010 the following rules also go into effect:

*The three credit bureaus can't advertise for other products and services through AnnualCreditReport.com until after a consumer has received his or her free credit report.

*As of July 1, 2010, companies that report information to the three major credit bureaus must improve the accuracy of their information. Consumers have the right to dispute errors on their report directly with the companies that are supplying the information to the bureaus. (Dispute forms are available at the FTC website: FTC.gov. Conduct all disputes in writing, not over the phone.)

*As of January, 2011, creditors must notify consumers if their credit report status has caused a negative change in interest rate terms relative to other customers. Or if the creditors don't want to issue updates of negative credit report information to specific customers they can elect to provide a free credit score and information regarding the score to ALL of their customers.

Credit reports influence a person's employment eligibility, rental lease qualification, utility deposit requirement, mortgage, car loan and insurance rates, and unsecured loan interest rates (like credit cards and personal loans). In short, credit reports and scores have a huge impact on the lives and living costs of consumers. It is important that consumers understand their rights to access their reports and to maintain the accuracy of their credit report information. It is also imperative that consumers actually do what they are legally entitled to do- get their credit report every year and make sure the information on it is correct.

Written by Hollis Colquhoun

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Cutting College Expenses The Easy Way

Cutting College Expense the Easy Way

Upromise is a SallieMae college savings program that everyone paying or saving for college should know about and utilize. In partnership with over 700 online retailers, 8,000 restaurants and 22,000 grocery and drugstores nationwide, a percentage of the amount that you purchase from any of these companies will be rebated into your Upromise account. For online purchases through the Upromise shopping portal each participating retailer will give you back a percentage of your spending from 1-25%. When you register a credit card with Upromise for eligible gasoline, drugstore or food purchases at participating companies a percentage of that spending will also be funneled into your account.

With your Upromise savings you can accumulate money to pay for college-related expenses by opening a high-yield savings account and opening a 529 account where the interest will grow tax-free. You can also use the money to pay off existing student loans, or request a check to pay off a particular college expense.

A really cool feature is the ability to invite family members and friends to  sign up with Upromise to contribute to your account, thereby harnessing the  purchasing power of many people. In signing up with Upromise part of their gasoline, grocery, restaurant dining, travel and online spending would flow into your account and every day there are online coupon deals, discount coupon codes and super saver promotions by various retailers.

According to Upromise President David Rochon, only 5% of the population is able to pay for all anticipated college costs. Recent studies have shown that students graduating from a 4-year undergraduate program are carrying approximately $25,000 in government student loan obligations which have to be paid back-they cannot be discharged in a bankruptcy.

Now over 10 million people are members of Upromise. Parents can become members when their child is very young and start saving for college early and easily. The cost is FREE so getting everyone you know to participate is a no-brainer.

Written by Hollis Colquhoun

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Debt Overload, Settlements and Bankruptcy

Debt Overload, Settlements and Bankruptcy

According to the National Bankruptcy Research Center, Chapter 7 bankruptcies, which allow for the legal removal or forgiveness of most unsecured debt obligations (except government-backed student loans, fines, alimony, delinquent taxes and child support), rose 42% in November 2009 relative to 2008.

In 2005, the government made the bankruptcy laws more stringent which included adding an income means test, forcing people with higher incomes to file a Chapter 13 bankruptcy which involves a debt repayment plan. Consequently there was a spike in the volume of Chapter 7 bankruptcy filings at the end of that year. The change in the filing requirements, however, did not put a damper on the number of filings this past year.

Because of the housing crash and the unemployment explosion, many couples and individuals from a variety of educational and professional backgrounds have been seeking bankruptcy protection as the only means to deal with their debt. This past year, people haven't been trying to find an easy way out of a massive spending spree where they bought designer shoes and European sports cars. Instead the debt has predominantly come from credit cards that were used by the down-sized or unemployed as a means of survival when their income disappeared, from college students who couldn't find loans or part-time jobs so they relied on credit cards to pay basic living expenses, from small business owners who had to pay suppliers while there revenue dried up, and from people with no emergency savings faced with unexpected medical bills.  On top of all this, the housing market shed billions in value as demand came to a screeching halt, so  homeowners have been squeezed from all sides.

Bankruptcy doesn't have the negative stigma that it used to, but it still has the ability to trash your credit report. However, the law was created for a reason - to give you a solution where there isn't another one. It gives you the opportunity to start fresh, at least where part of your unsecured debt is concerned. In fact, studies have shown that most bankruptcies are the result of very high medical debt. Yes, filing for bankruptcy can damage a credit report but if you have been struggling to pay or are unable to pay your debts over an extended period, your credit report will be suffering anyway.

There are lots of commercials on television and radio offering a way to legally eliminate your debt without filing for bankruptcy. In fact, what those companies are doing is getting the lenders to agree to a settlent for pennies on the dollar after your debt has gone into collection, which can take a period of many months. The amount of the settlement isn't guaranteed and all the while your credit score is falling dramatically. And, what the commercials fail to mention, is the fact that when a debt is settled and a large portion is forgiven, the IRS considers the forgiven amount (over $600) as additional income so you have to owe income taxes on it.

A Chapter 7 bankruptcy does stay on your credit report for ten years but if you get out from under a mountain of debt and show financially responsible behavior, paying bills on time and  managing your debt, that negative notation will have less effect over time. Plus, there will be no tax liability after the debt has been legally eliminated.

Written by Hollis Colquhoun 

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Defaulting On Your Mortgage, It's Not All Business

Defaulting On Your Mortgage, It's Not All Business

Lately, there have been many news articles and interviews debating the moral obligation of paying your mortgage versus the economic consideration and investment choice of voluntarily walking away from your mortgage and giving up your house.

The morality of not honoring a contract can spark a heated debate. But the negative economic consequences for a homeowner reneging on a mortgage can be  substantial, regardless of how a business or investment manager would behave regarding their financial contractual commitments.

According to the First American Loan Performance Index, U.S. home prices doubled on average between 2000 and 2006, and have since fallen about 30%. Zillow.com reports that approximately 20% of homeowners with mortgages are now "under water," meaning the home is worth less than the mortgage balance. But the decision to "walk away" from the mortgage and give up the home cannot be made based on a pure business calculation.

Paying on debt that is higher than a home's value might not make business sense, but a business doesn't have to worry about the same consequences that people do. If a homeowner decides to "strategically default" meaning not pay even if he or she can pay, there are serious ramifications which could be greater than the cost of continuing to pay a higher mortgage on a devalued house.

The following are three very negative personal financial consequences to walking away from your mortgage:

1. Foreclosure or "deed in lieu" where you allow the lender to take possession of your home, has a severe impact on your credit score. You aren't paying back what you owe. In an article by Elizabeth Weintraub, About.com Guide 2009, she interviewed David Steep, manager at Vitek Mortgage in California, who stated that if a homeowner is having difficulty paying on a mortgage and elects to "walk away," the drop in that person's FICO score could be 200-300 points. The average FICO score these days is mid to high 600's, so that is a devastating drop.

2. Each state has different laws concerning deficiency balances if a homeowner stops paying their mortgage and gives back a home to the lender . When the lender sells the home in an auction or to another party and the amount received is lower than the mortgage owed, the difference is called a deficiency balance. In some states the bank or lender can go back to the homeowner/mortgage holder and demand payment of the difference. Some states have anti-deficiency laws that protect the mortgage holder from having to pay that difference, but it may only cover the "purchase money" mortgage or the mortgage that was taken out when the residential home was first bought - the first mortgage. However, if a person bought a house with a "piggy-back mortgage", meaning 80% of the purchase was paid with a first mortgage and the remaining 20% was funded with a second mortgage or home equity loan, then the homeowner could be liable for the money owed on the "hard money" second mortgage or home loan. Even worse, in some states the lender can get a judgement and place a lien on a person's other assets if the deficiency balance isn't paid.

3. When you give back your home to the lender, that notation stays on your credit report for up to seven years. It will be extremely difficult to buy another home within two years of foreclosing and sometimes the waiting period can be up to six years, depending upon your credit status prior to foreclosing. This will also affect your ability to rent an apartment, get a job, qualify for another loan, obtain low-cost insurance and utility rates. After a year or two you may be able to get a loan but your interest rates will be higher because of your poor credit history. These days your life is closely tied to your credit report and score.

So, it is imperative that you contact a real estate attorney and understand the laws of your state, before making the decision to walk away from your house and mortgage. You  can visit LawHelp.org for general information on mortgages and to locate an attorney, and ForeclosureLawFirms.com for state anti-deficiency law information. The financial merits  of staying in your residence and paying your mortgage versus giving it up cannot be viewed through the same eyes as a portfolio manager.  Besides, you have to live somewhere.  Good financial health is important in many aspects of daily living, and market values aren't static, they go down and up. As an alternative, you may want to consider doing a short sale or loan modification. Go to FannieMae.com to find out the current guidelines,  consult with a reputable realtor, and if you need help locating a nonprofit housing counseling agency to act as a medicator visit the National Foundation for Credit Counseling website.

Written by Hollis Colquhoun

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Finances: The Status of Women, Work, and Wages

The Status of Women, Work and Wages,

Another report on the status of women in the U.S. workforce has come out with good news and bad news (mostly bad). A March report released by the U.S. Bureau of Labor Statistics titled “Women at Work” begins with the fact that in 2010 women’s wages have improved from 78 cents to 81 cents for every dollar earned by men.

Another piece of good news is that in 1970, 22% of women in the civilian labor force had attended college and in 2010 that figure increased to 67% But. in today’s economy, jobs are still hard to come by and most openings are either in the healthcare or education field.

So don’t start celebrating yet.

Men still out-earn women in almost every category and if you look at the people in America’s boardrooms, only 3% of the leadership positions at the 1000 largest U.S. corporations are held by women.

There’s more bad news. From 2008 to 2018, the women’s civilian labor force is projected to increase by 9%. This increase is primarily due to two changes - the number of women in the workforce aged 65 to 74 is expected to increase by 90% and the number of working women aged 75 and older is projected to increase by 61%. Meanwhile the number of women in the workforce who are 16-19 years old, as well as those aged 35 to 54, is expected to decrease over that time period.

Some of this shift has to do with changing demographics. But it is also due to the fact that 75% of our country’s impoverished are elderly women. Because they have shorter careers, longer life-spans and lower benefits, older women need to find additional income to supplement their meager Social Security income.

Right now, nurses and elementary and middle-school teachers make up the biggest employment areas for women. They have slightly higher wages than men, probably because they’ve been working in these positions longer and have achieved more seniority. However, the average salary in each of these fields is not great.

The most popular and highest-paying healthcare position is a registered nurse with an average salary of approximately $52,000. The second most popular and highest paying career for a woman is an elementary or middle school teacher with an average annual salary of $47,000 and the third most popular occupation is a nursing and home health care aide who makes an average of $22,000 per year.

Forbes had an article last week that highlighted the jobs where women earn slightly more than men: bakers (approximately $25,000/yr.), construction supervisors ($52,000/yr.), waiters and bartenders, makeup artists and skincare specialists, interviewers, pre-school and kindergarten teachers ($32,000/yr.) and teachers’ assistants ($25,000/yr.). Except for the construction supervisors, of which only 3% are women, most of these jobs are relatively low-paying.

On the brighter side, AOL Jobs had an article last month that listed the highest-paying entry level jobs for men or women. Most require a college degree.

The best paying entry-level jobs:

*Investment Banking Analyst- (requires graduate work) $73,000/yr.

*Assistant Actuarial analyst- (requires a bachelor’s degree,

strong computer skills) $54,000/yr.,

*Junior Tax Associate- (requires a degree in accounting) $53,000/yr.

*Pharmaceutical Sales Rep.- (requires college degree) $51,000/yr.

*Auditor- (requires 4-year degree in accounting) $49,000/yr.

*Wind Turbine Technician- (requires associates degree) $47,000/yr.

*HealthCare Resource Analyst (requires bachelor’s degree

and training) $47,000/yr.

*SEO Analyst- (requires 4-year degree, marketing experience,

strong analytical skills) $44,000/yr.

Forensic DNA Analyst- (requires 2-4-year degree) $41,000/yr.

Law Research Associate-(requires associates degree) $40,000/yr.

With more women graduating college and the continued weakness in the job market, the best course of action is to enter college with a career plan. First, students should research the fields where there’s demand with higher pay, and check out available scholarships and financial aid. Then they can graduate with a minimal amount of debt and have a good job waiting for them.

(This article originally appeared on Technorati's Women Channel) Written by Hollis Colquhoun Learn more about Hollis Colquhoun

 (This article originally appeared on Technorati's Women Channel)

Written by Hollis Colquhoun

Learn more about Hollis Colquhoun

From Holiday Reverie to New Year's Resolution

Except for the massive piles of snow glistening in the sun throughout the eastern U.S., this holiday's sparkle is beginning to fade away.

Like buyers remorse after closing on a house, many of us are getting a sinking feeling that we've spent too much money over the past two months. We're afraid to open our credit card statements or review our budget.

2010 was a good year for most of our stock portfolios and retirement accounts if we had them, but we're still not back to 2007 levels. U.S. companies are reporting higher profits, but many of us are still unemployed or struggling to make all of our financial ends meet. So how can we resolve our budgets and goals in 2011?

It's not going to be easy.

An article in Yahoo Finance by Pallavi Gogoi, "Where are the Jobs?" points out that because the economy is more global than ever, a larger portion of international companies are focused on where the demand is - overseas. Growing markets in China, Brazil and India with increasing appetites for goods and services are motivating U.S.-based companies to build or invest in new plants within those countries.

For example, in the last few months Caterpillar has made major investments in three new plants in China. Likewise, DuPont, who used to sell most of its products in the U.S., now sells more than two-thirds overseas and has recently built a plant in India.

That's good news if you're invested in the stock of these companies but not so good if you're looking for a job. The U.S. labor force is falling behind in creating an educated workforce that can compete with graduates from other countries. As the demand grows in areas such as the Asia-Pacific region, not only are companies increasing their local involvements, they are building plants overseas and hiring a bigger percentage of employees from the host countries even in the more sophisticated industries.

To help make your budgeting efforts on the expense side more successful this year, an article on CNN.com by Christine Romans titled "3 Easy Resolutions to Make Your Money Work Better",suggests:

Drink more water, less soda and expensive drinks

Take advantage of the payroll tax savings

Put more money in your 401k (even a small amount)

Of course finding ways to save is one approach but that needs to be combined with adding more income. If you are unemployed and have no prospects in the near future, one source of flex-type employment can be found at FlexJobs.com You subscribe to the service for $15 per month or $50 per year. There are fifty career categories for telecommuting, part-time and freelance jobs and trained staff members weed out the scams and ads. Employers can post their flex-type jobs for free.

The New Year celebration always carries the promise of new opportunities, but it won't bring quick solutions. Now that the holidays are a memory and we're back to the reality of January, stay focused on balancing your budget and chipping away at your debt.

Happy New Year to all!

 Written by Hollis Colquhoun

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From Payday to Mayday

Federal Trade Commission Release: “Payday Loans Equal Very Costly Cash” at FTC.gov

Credit Unions: Peer Group Comparison-Short-term Credit Products by Chris Tissue, 3/29/10 at Creditunions.com

Written by Hollis Colquhoun

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From Payday to Mayday

Fast Cash, EZ Money, a payday loan may be tempting but don't get sucked in.

A typical payday loan is for 1-2 weeks and is appealing to people who don’t have other ways to borrow in an emergency. For example, let's say you need $250 today to cover your electric bill which is overdue and about to be shut off. You decide to go to the “Fast Cash” payday lender where you post date a check for $300 that corresponds to your pay check ( 9 days away). The lender will give you $255 after taking out a fee and interest charge of $45. On pay day the lender deposits the check to the bank. So far so good, the electric bill gets paid. However, come pay day, other bills are demanding your attention and you don't have enough money in the bank to cover all of them.

Back you go to the money store for another loan. Either you pay back the first loan and ask for another, or you “rollover” your loan for another two weeks, both options will incur a second $45 charge. If your payday loan check “bounces” when the lender deposits it, you will also be charged a “bounced check” fee which is usually around $30, not to mention the overdraft fee of $30 that your bank will charge. Stopping payment on the check or closing your checking account before the check is deposited can cause serious legal consequences depending on your state.

According to a 2009 report by the Center for Responsible Lending, "75% of payday loan volume comes from people who have paid back their initial payday loan but must re-borrow before their next pay period." The report also states that the payday loan industry "churns" or turns over 59 million loans per year which costs borrowers $3.5 billion in fees.

Conveniently, there are also online payday loan companies that allow you to electronically sign a contract giving them access to your checking account to fund the loan. But be forewarned, the internet lenders may be hard to identify (they may be based off-shore) and these loans may be renewed automatically, with fees charged at each renewal. Because internet-based payday loans require personal and bank information you are at a higher risk of fraud and identity theft.

What is really unnerving is that large banks such as Wells Fargo and Bank of America are spending hundreds of millions of dollars to support payday lenders at a time when conventional loan sources have dried up. The big banks are looking for ways to get higher returns. The small borrower is left between a rock and a hard place.

It is a difficult environment to have insufficient income and few borrowing options. Obviously it would be best to keep on top of monthly expenses with a budget and only borrow what you can pay back. However, if you are in a bind, there are credit unions offering short-term loans at an annual percentage rate that is cheaper than a payday lender (although still high). In addition, nonprofit credit counseling agencies can help with budgeting and debt management solutions if you‘re struggling to make payments on personal loans or credit card debt.

Below are some sources of information on payday loans:

Consumer Federation of America, September 2009 Report at Consumerfed.org

GAO Covert Operation Nabs For-Profit Debt Settlement Companies

GAO Covert Operation Nabs For-Profit Debt Settlement Companies

For the last several years, consumers have been struggling with high levels of debt and shrinking incomes. Looking for help and lured by radio and TV advertising, many people have turned to debt settlement companies as a way to eliminate some of their unsecured debts. These settlement companies tout their ability to reduce debt by 40 - 60%, however, most of time, the companies charge excessive fees, do not live up to their promises, and leave consumers in worse shape than they were originally.

There have been a huge number of consumer complaints about the fraudulent, deceptive and abusive practices of debt settlement companies. In response, the U.S. Government Accountability Office agents mounted a covert operation to determine the extent of these illegal practices. They called twenty companies posing as fictitious consumers, made surprise visits to several of the companies that were called and interviewed industry insiders.

The GAO recently released a report of its findings. The following are highlights of this report:

*17 of 20 companies said they collected fees before settling the consumer’s debts, which the FTC says is harmful to consumers. (The FTC is proposing to ban this practice.)

*Nearly every company advised the GAO callers to stop paying their creditors even if they were up-to-date with their payments.

*Many companies made fraudulent or inaccurate assertions about their success rate in settling debts, (some said they had a 100 percent success rate, but FTC investigations have found the success rate to be closer to 10 percent).

*Some claimed to be operating under a government debt relief program, (which doesn’t exist).

*Some claimed to pay consumers $100 if they don’t settle their debts within 24 hours. (This is impossible, and companies don’t pay outright after consumers sign up.)

It was determined from this covert operation that the complaints filed by hundreds of thousands of consumers across the country were valid and widespread. The report highlights several cases where a debt settlement company caused more financial harm than good. One case involved an Arizona debt settlement company that claimed to have helped a New York couple reduce their debt. In fact, after calculating the fees paid and the settlement amount, the total paid to the settlement company was more than 140% of what the couple originally owed.

State and federal agencies are increasing their efforts to bring legal action against debt settlement companies that have engaged in illegal practices. Consumers who are deeply in debt should consult with accredited nonprofit credit counseling agencies before approaching for-profit debt settlement companies. To locate a nonprofit credit counseling agency go to the NFCC or AICCCA.websites.

Written by Hollis Colquhoun

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Get Unbranded

This article first appeared on Technorati "Get Un-Branded and Skip the High-Priced Labels".

Holiday Shopping

Holiday Shopping When Every Day is Black Friday, by Hollis Colquhoun

As the holidays approach, money will be tight for many families. Many retailers have moved up the start of the holiday shopping season to November 1^st with enticing deals and discounts. The December issue of Consumer Reports talks about how to avoid retailer traps that can cost you instead of save you money. The article discusses five areas where consumers can be lured in with expensive consequences:

1.Just because a store advertises a super sale doesn’t necessarily mean it offers

merchandise at the lowest price available. Before buying any item for yourself or

as a holiday gift, do some online research to check the prices at retail and discount

stores. Don’t forget to include shipping and handling in the product’s cost.

2.There have been recent changes in the laws regarding gift cards that limit fees and extend expiration dates. You do have to pay to buy a gift card, but there’s no assurance that if something happens to the retailer, like bankruptcy, the gift cards will still be honored. In addition, my people either don’t use their gift cards, don’t use all of the credit on the card or buy an item that is more expensive than the card value. So if you’re unsure of what to buy a relative or friend, sending a check makes more sense.

3.A gift that is an electronic or special order item needs to be in its factory sealed box or packaging to be returned for a refund or there may be a restocking fee. So don’t open the gift if you don’t want it. You can return an item with no fee if it’s broken or defective.

4.Extended warranties on electronics and appliances are often pushed by salespeople because the retailer makes a lot of money on the warranty. Most products carry a standard warranty and if there is a problem it generally shows up during the standard warranty period. Plus if the product needs a repair after the standard warranty expires the repair is usually the same cost or cheaper than the cost of the extended warranty. Check with your credit card issuer to find out if they automatically cover the item after the standard warranty expires.

5.Before buying an item, understand the retailer’s return policy for store-bought, online and mail order merchandise. Always hold on to the receipt, return label and if it was mailed, keep the bag or box. Give the gift receiver the gift receipt if there is one and explain the merchant’s return policy.

This holiday season consumers need to do their homework and plan ahead when it comes to gift-giving. If the budget is tight, think of ways to do or make something that will be special to the recipient but low cost to the giver. Retailers are trying harder than ever to reel you in with “deals” and “rock-bottom prices.” Don’t get caught unaware.

Read this: Divorce Don'ts

DIVORCE DON'TS

Shopping for a new mortgage?

If You’re Shopping for a New Mortgage, Be Smart and Don't Make These Mistakes

A house is probably one of the biggest investments you’ll make in your life, and mortgage payments will generally be the biggest monthly expense in your budget. If you’ve decided you want to shop for a house, it’s important to do your homework and evaluate all the options.

Try to answer the following questions: What is the quality of the neighborhood (location, location, location)? How is the offering price relative to comparable homes nearby? What are recent sale prices? What is the condition of the home? (Think black mold and radon.) And, what can I (we) really afford?

If you think you’ve found the house of your dreams, make sure to understand what the purchase, loan and maintenance costs will be. Analyzing the costs of homeownership ahead of time may seem easy, but if it’s your first real estate purchase there are many things you should consider and a few things you shouldn’t do before you sign on the dotted line.

A recent article on Yahoo News by Colin Robertson, lists ten major mortgage mistakes you should avoid making.

1. Not Knowing Your Credit Report Status or Your Score. If your credit score is bad then the interest rate you’ll get for any type of loan, including a mortgage, will be higher than the base rate. For any type of big-ticket purchase like a house or a car, you should check your credit report and score at least 6 months in advance. (A recent study showed that over 80% of credit reports have some sort of error on them.) That way you will have time to correct any mistakes or make positive changes in your borrowing behavior. Get your report for free at AnnualCreditReport.com. To get your score will have to pay about $10.

2. Applying for Other Credit at the Same Time as the Mortgage. Your credit score is affected by how much debt you have and what you’re applying for, so it makes sense to hold off on applying for a new credit card or any type of loan until after you’ve been approved for the mortgage.

3. Not looking at the entire cost of the mortgage and monthly payments. Depending upon your down-payment and your credit worthiness, you may have to pay additional insurance along with the principal, interest and taxes each month. Know what your “all-in” monthly cost will be.

4. Trying to Quickly Fix Your Balance Sheet. The mortgage lender wants to know what assets you already own and what debts you owe. You can’t just temporarily put someone else’s savings into your account to make your balance sheet look better; the lender wants to the see the assets you've owned for a period of time - "seasoned" assets.

5. Job-Hopping Obviously the level and stability of your income will be important factors in evaluating your ability to pay back the mortgage. If you get a better offer at another firm and you’re in the same industry, then that probably won’t be viewed as a negative event.

6. Not Being Pre-Approved You may be “pre-qualified” for a loan but it’s better be armed with a mortgage “pre-approval” from a lender. Not only will you know where you stand in terms of the mortgage costs but you will also be a more attractive buyer in the eyes of the realtor and seller.

7. Not shopping among mortgage lenders. You can comparison shop for mortgages, too, and there are mortgage brokers who can do the job for you. Make sure you are aware of all of the total cost of the mortgage, including closing costs.

8. Getting Lured in By “Cheap” Mortgages. With the last housing boom came a slew of wacky mortgage products, like negative-amortization loans, that were created to entice a borrower. Follow the guidance of the saying, if it sounds too good to be true, it probably is. With this economic environment and low interest rates, chances are rates will be moving up in the future, so a variable rate mortgage probably won’t move in your favor. It would be a better idea to stick to conventional fixed-rate mortgages.

9. Not Locking in Your Mortgage Interest Rate. This goes with mistake #8. Since interest rates are near their lows it makes sense, if you have approval for a variable rate mortgage, to lock in a low rate as soon as you can.

10. Not Reading the Mortgage Documents. Mortgage documents can be lengthy and confusing, but it’s important for you to read all of the fine print before you sign. You want to be aware of any conditions that might trigger a change in your terms or additional costs.

When you have a very good idea of what your dream house will cost, including taxes, insurance and a certain amount for emergencies, remodeling and repairs, you can also realistically weigh the option of buying versus renting a home. It still might make more sense to rent.
 

Originally appeared on Technorati/Business/Finance/FEST
 

The Opportunity Cost of Spending

The Opportunity Cost of Spending

Everyone knows the cost of buying something. First you want an item. Then you shop around, find the best price, buy it, and add sales tax if necessary. Then it is yours, with the numbers on a receipt to prove it. However, whenever money is spent on something the total cost of this expenditure involves much more than just what‘s on the receipt; it’s called the “opportunity cost“.

According to the Economist, the definition of "opportunity cost" is "the true cost of what you have to give up to get it". In other words, if you decide to buy a dress or suit for $250, obviously you will have to shell out the $250 (or charge it on your credit card), but in addition you will be giving up the ability to use that $250 in another way, a way that may be more valuable or beneficial.

For example, you could have used that $250 to add to your retirement savings. What would the money have done for you if was channeled that way? Let’s assume you’re 30 years old and the rate of return on investments is approximately 5%. If this money was invested and compounded annually over 35 years, $250 would turn into $1,433 at age 65. So what would be a better choice for you? Do you really need the dress or suit? Do you have adequate retirement savings?

Another option for the $250 would be to pay down debt. Perhaps you have a credit card balance or student loan. If you’re paying a high interest rate on those loan balances, not only would the $250 pay down some of the outstanding loan amount, it would also decrease the amount of interest you would pay with the lower balance.

Even small spending decisions involve an opportunity cost. Deciding whether to buy a $3 cup of coffee by itself may not require deep thought or analysis but if you buy that coffee every day of the week, the expense will add up to almost $100 a month or $1200 a year and that amount is definitely worth analyzing. Maybe $1200 could pay for an educational course that would give you additional certification allowing you to earn $10,000 more in annual salary?

Every spending decision you make should be viewed in terms of the whole cost -the purchase price plus opportunity cost. Evaluate your choices based on your financial needs, wants and goals and then use your money in a way that will benefit you the most.

This article, “The Opportunity Cost of Spending,” first appeared on Technorati.

 Written by Hollis Colquhoun

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The Rewards of Spring Cleaning

The Rewards of Spring Cleaning  

Spring has just sprung and so the time is right to think about spring cleaning. Before bringing out the dust rags, buckets and industrial strength soap, take stock of the things you have-clothing, furniture, equipment, knick knacks, etc.. What items have gone unused in the last year? What clothing hasn't been worn in ages?

This exercise gives you the chance to simplify your life, clear out the clutter and get cash for the things you don't need or use. If the idea of having a garage sale sends shivers down your spine, here are a few tips to make the process easier:

Get all family members to participate, including the kids: From the attic to the basement, have everyone do a survey of his or her belongings and make a list (or pile) of the things they have outgrown, haven't worn or used since last spring.

Get neighbors and friends to do the same thing: Misery loves company. If several families get involved then you can have a combined garage sale which will add to the supply of offerings and helpers. Your town may designate a specific  Saturday or Sunday during the spring and summer months as "Garage Sale Day" when neighborhoods can have sales going on at the same time, luring more shoppers. If it doesn't exist where you live, start the tradition.

Review items before the garage sale: Swap unused or slightly worn children’s clothes with neighbors who have children of various ages to get a new wardrobe for your child for free. On the day before  sale day, price and coordinate items with neighbors and friends to organize sale categories and displays. Use different colored price stickers for each family’s things to make it easier to divvy up the sale proceeds at the end.

Be an organized team on sale day: Have people sign up for shifts during the day and one designated cashier with a cash box. (Get extra change from the bank.) Allow children to sell lemonade or refreshments on the side so that they can participate and earn money. 

Make the most of leftovers: Items that didn’t sell can be donated to Freecycle (look on their site FreeCycle.org for a group in your area) or to another local nonprofit organization. Get a receipt for your donation indicating the estimated dollar value of your contribution, for tax deduction purposes.

Once the sale is over, clutter has been conquered, clothing swapped, items sold and donated, your spring cleaning will be easier and wallet will be fatter!

Written by Hollis Colquhoun

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The Social Network-Don't Get Caught in its Web

(Originally posted on Technorati)

Written by Hollis Colquhoun

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The Super Power of The Purse

The Super Power of the Purse, by Hollis Colquhoun

Your purse has power squared for your personal & financial self-defense.

First, your purse holds the resources to make you financially powerful, even if you‘re not the major income earner in your relationship. Studies have shown that women and their wallets control over 80% of consumer spending. In general, women buy most of the household and family items, including major appliances, food, clothing, vacations and automobiles, so they carry a hefty financial weight in the operation of the economy.

Of course the best plan of action for maximizing the spending power of your purse, particularly for larger ticket items, is to take your time and not make impulsive decisions. Comparison shop, gather information, work within your budget and after a lot of deliberation and number crunching, make a wise purchase.

Secondly, your purse is an effective weapon if you’re alone, on the street or in a parking lot, and the victim of an attack by a thief or mugger. Most women have large shoulder bags that hold a multitude of essential items: wallet, journal, cell phone, cosmetic bag, keys, snacks, water bottle, etc. consequently, it wields a decent amount of real weight.

Contrary to some opinions, the best defense against an attacker is not a can of mace or keys in-between your fingers. Both of these defenses take time to set up and bad guys won't wait while you dig in your purse for the can or stick the keys through your fingers.

Rather, the best way to use the defensive power of your purse is to move with speed and the element of surprise. Swing your purse like a chain with an iron ball attached at the end and aim for the attacker’s head. Wing it, let go, then run in the opposite direction.

The power of the purse is amazing - don’t forget it!

Tips for getting ahead in this tough economy

How to Get Ahead in This Tough Economy

 Written by Hollis Colquhoun

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Understanding Your Marital Worth

UNDERSTANDING YOUR MARITAL WORTH

YOUR EARNING POWER:

How do you determine your earning power?

Earning power in a marriage consists of:

1. Income earned through employment, Social Security benefits

2. Savings achieved through cutting costs, freeing up income

3. Potential future earnings and retirement income

This article will take a look at evaluating the earning power of value #2.

ADDING TO SAVINGS, FREEING UP INCOME:

You and your husband have built an economic partnership and in many cases have raised a family together. Even if you don't have a paying job, understand that you still have part ownership of the household income. If your husband is the sole money maker, that money is not strictly his to control. He wouldn't be able to work full-time, take care of the children and manage the household all on his own without creating more expenses, so you make an economic contribution to the marriage by performing tasks that don't cost the household anything. You create income, not only by performing tasks he'd have to pay for, but by freeing up money to pay for other expenses or to put into savings. The total household income, even if you don't have a job for pay, is an important part of your personal income calculation and worth. To illustrate this value, make a list of the tasks you perform regularly that result in monthly cost savings for the household:

JOB AVERAGE OUTSIDE COST (Monthly)

Example Yours

Transportation 100

Housekeeping 200

Cooking 400

Laundry 200

Tutoring 100

Elder Parent Care 200

Other

TOTAL(After-tax dollars) $2000

Using these sample figures, in order to have the $2,000 per month to pay someone to do these tasks, you would have to earn approximately $2,500 per month before taxes. In this case your efforts would result in cost savings equivalent to earning $30,000 per year. You can insert your own tasks and calculate your monthly cost savings contribution. Even if you don't have a paying full-time job, you provide real economic value to the household by lowering expenses, and therefore have real personal economic worth in the relationship. You need to recognize and embrace this value.

Be advised that any individual who earns income can establish an individual retirement account (IRA) and contribute up to $5,000 annually, and that any husband (or wife) who is eligible to set up an IRA can also create a spousal IRA for a non wage-earning spouse up to the same amount. If you are over 50 years old, you can contribute up to an additional $1,000 per year. So, if your husband is the primary wage earner, speak to him about setting up an IRA for you, if he hasn't already.

Written by Hollis Colquhoun

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Why Do We Overspend?

 Why Do We Overspend?

There was a very good article the other day in the “Financially Fit” section of Yahoo Finance written by Jodi Helmer, that described the top 8 reasons why we overspend. Here is a synopsis:

1. You spend more when paying with plastic. (I think most of us know this.) This is due to the fact that we stop focusing on the price and more on the item we want to buy; we’re willing to pay more with a credit card than if we had to pay cash.
2. When music is playing you’re inclined to spend more. Studies have shown that music makes you exercise better and also increases your motivation to spend.
3. Buying in bulk can cause you to spend more. If you buy a bunch of something (like 50 rolls of toilet paper) it throws your monthly budgeting out of whack and you’re likely to use up the product more quickly knowing there’s lots more available.
4. Dieting can cause you to spend more on other things. If you’re deprived in one area you’re more likely to impulse spend in another.
5. Tracking exact costs. Your eyes might be tracking purchases to the penny but research shows that you might lose sight of the total amount you’re spending. (The old “forest for the trees” problem.)
6. Buying clearance items. They look really cheap but you probably don’t need them; you buy “just in case” and overspend.
7. Shoppiing without a list is one of the most mentioned “no-no”s. The reason is obvious, I think.
8. Falling for price tactics. Everything is relative. If you go to a restaurant where the menu has a $100 burger and a $50 steak, you will think the burger price is crazy but the steak price almost seems reasonable.

Written by Hollis Colquhoun

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Why Pay When You Can Get It For FREE

Your Financial Life at Age 90

I just read an article on CBS MoneyWatch discussing the average life spans of women and men. For women who are now in their 50's (like me) studies show the expected average age is 87. Keep in mind this is the average age; what if we live to be 90 or 95?

The big question is, can our savings and retirement money support us until then? In the article, Steve Vernon mentions a website:  Livingto100 which uses current medical and scientific data to build a life expectancy calculator. Based on the answers you give to 40 questions regarding your health and family history, the calculator will determine your life expectancy. The site will then provide personalized feedback and a “to-do list.“ Once you answer the questions and see what the future holds, it’s time to review your retirement plan.

How much do you have saved for retirement? What if you lived to be 90? Using the retirement calculator on Bankrate there are sample scenarios below that illustrate what your financial future would look like if you retired at age 65 and had to survive on your monthly taxable retirement plan income, (for example from a qualified IRA or 401k where the money is taxed when it’s withdrawn). This does not include any Social Security payments, nor does it take inflation into account:

Starting Age Contribution/Yr Retirement Yrs Rate of Return Tax% After-Tax Income
  25             $2000                  30                    6.00%             15%        $1644
  25               2000                  35                    6.00%             15%          1560
  30               2000                  35                    6.00%             15%          1124
  25               2400                  35                    6.00%             15%          1873
  30               2400                  35                    6.00%             15%          1348
  25               3000                  35                    6.00%             15%          2341
  40               3000                  35                    6.00%             15%            830

It’s wonderful to find out that the odds are you’ll live to age 85 or 90, but if you want to survive financially until then, or even better,live comfortably, the planning must start as early as possible with the maximum amount contributed per month. Obviously the assumptions made above use a fairly conservative rate of return on your investments (6%). But as we all have experienced, the market can go way up and way back down.

It is so important to have a retirement savings strategy and plan, particularly for women who may have fewer income earning years and fewer benefits. You can fool around with the Bankrate calculator and input various assumptions to come up with your own financial action plan.

Many employers now offer a 401k plan, and several news articles have stated that a good percentage of these companies are going to start or reinstate matching contributions up to a certain portion of your pay. Do whatever you can to take advantage of this opportunity, since having a match is like having free money. There’s a good chance you will need it way down the road.

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Written by Hollis Colquhoun