Frugal Fun and Financial Fitness

Underground Economies

2012-02-19T07:29:00.000-06:00

On a recent trip to visit our son in the Army stationed in Italy, I started to think about the "underground economy," Greece and their debt problems, and taxes. As we were purchasing items, most if not all places prefers cash (Euros) then take a credit card. Some places even charged you 10% more if you used your credit card. Now I'm sure some of this is to offset the credit card fee but I wonder how many sales do not get reported for tax purposes.

Greece is, in part, in trouble because of an underground economy that deals in cash and where income is not reported to the government. As they implement their austerity measures and cutbacks, have they increased their tax collections and increased reported income? Would they need to cut back as much if everyone, and I mean everyone, reported their income? This may be against their culture and custom, but the Greek government needs every Euro it can get to provide services and pay down its debt.

The same is true in the United States, we all need to pay our taxes so the government can pay for services we use every day. We may think that we "won" by not reporting all of our income, or by claiming more in deductions then we actually earned, but when you do that, we as a country lose. We lose support of our streets, our education system, our libraries, and our national defense.

As April 16th approaches (tax day) lets not lose as a country. Take every legal tax deduction you can, but be honest and report all of your income and don't exaggerate your deductions. It takes us all to do our fair share to keep this country great.

Brown Bag Valentine

2012-02-09T21:10:00.001-06:00

It is Valentine’s frugal fun time. In keeping healthy hearts, label one of these healthy snack items and sneak it into your sweetheart’s lunch box. The following are a few sweet (as in thoughtful) sample valentines lunch box label treats for you to consider:

1. Apple: “You are the apple of my eye”
2. Cheese Slices: “Our love is so cheesy!”
3. Cupcake: “You are my little cupcake”
4. Cherries: “I cherish the memories”
5. Almonds: “I am nuts about you”
6. Pepper Packets: “You spice up my life”
7. Turkey Roll Up: “Don’t’ be a turkey, go out with me”
8. Ham Roll Up: “I am a real ham when it comes to dating you”
9. Peanut Butter and Jelly: “We go together like peanut butter and jelly”
10. Sushi: “You are the wasabi of my sushi”
11. Lettuce Salad: “Lettuce enjoy our time together”
12. Relish Salad: “I relish our time together”
13. Tickets to Lunch: “Let’s ketchup”
14. Jar of Mustard: “I mustard enough courage to ask you out”
15. Olives: “Olive you”
16. Pickle: “If I am ever in a pickle, I want it to be with you”
17. Bouquet of 14 Carrot Sticks: “14-carrots for you”
18. Corn Chowder: “It may be corny, but I love you”
19. Tabasco Sauce: “You warm my up with your spice.”
20. Ice Cream Sandwich: “Ice cream with delight when I think of you”
21. Miniature Box of Lucky Charms: “You are my lucky charm”
22. Miniature Box of Corn Flakes: “Just like corn flakes, you are great!
23. Miniature Box of Raison Bran: “You are my Raison Bran, you keep me regular”
24. Jimmie Bean Sausage Muffin: “You are my Jimmie Bean Sausage Muffin, a little ray of sunshine”
25. Mentos and Diet Coke: “Our love is like Mentos and Diet Coke”
26. Maple Syrop: “ I’m stuck on you like syrup”
27. Grilled Cheese and Tomato Soup: “We go together like grilled cheese and tomato soup”
28. Pears: “We make the perfect pear”
29. Sweet Potato: “ You are like a sweet potato and I want to butter you up”
30. Plums: “Plum love into you”

Time to Sell or Buy a House?

2012-02-09T07:00:00.000-06:00

Spring is the time for love, the groundhog to see or not see his shadow and time to buy or sell a house. This year we are selling our house. We want to move to the country and have chickens, a goat, maybe a llama, fruit trees, and a big garden. As empty nesters, we don’t need to be close to the schools, and our current home is in the perfect neighborhood to raise a family.

As this is my first time selling a home, I am learning a lot about trying to maximize your selling potential. Here are a few lessons learned:

It takes time, energy and effort to get a house ready to show. We have spent the last few weeks cleaning, repairing, editing, and donating things we no longer need. Good Will and Habitat Restore are great places to take your good-slightly used items that you no longer need. To clean, organize and minimize can be revitalizing.

Make repairs when things break. We had to replace two bedroom doors. It wasn’t a big deal to replace them. To think, we lived with our “slighted bruised” doors for years! Though not that noticeable, we should have taken care of it at the time of injury. Keeping everything in good repair will encourage everyone in the house to maintain that level of polish and care.

If you don’t use it in a year, donate it. After living in one location for the past 18 years, we have many things we rarely use. When I first moved to Iowa, I moved once a year for three years. If I didn’t use it in that year, I donated it. I was able to pack light and did not have a lot of things cluttering my life. It feels really good to get to be purged of all clutter.

Take the time to clean daily – really clean. It is nice to be living in a house that is ready to show perspective buyers at any time. We are making a conscience effort to make sure we never leave a room messy. We are doing what we were taught as little kids – put your toys away after you play with them. The little things make such a big difference.

We might have listed our house at the right time. Interest rates are low and the economy seems to be tracking optimistically, at least in our community. So far we have had three showings in the first four days. We will keep you posted on ups and downs of selling a home. And if you are interested in buying our house….you know what to do! (contact us).

New Beginnings and Heartfelt Thank Yous

2012-02-06T21:35:00.000-06:00

HelloWorld-

Tonight,the man in brown delivered to our door steps two copies of ‘PersonalFinance: Building Your Future’ Walker & Walker 1e. After threeyears, hard work and much support and encouragement from the McGraw Hilleditors, the 480 page book dropped on our door step and for the techie side ofme, complete with QR codes that really work with the blog, which is too cool onso many dimensions.

The bookarrival is not an end point. It is a kick-off to a whole new adventure. We lookforward to classroom adoptions and interactions with the blog and how socialmedia can influence student learning and help keep current events interwovenwith discussion items in the class room.

We wantto reach out just one more time to our friends at McGraw Hill. Hugs andcartwheels to Michele Janicek, Jennifer Lohn, MelissaCaughlin, Diane Nowaczyk, Jennifer Jelinkski, Ann Torbert, Bradley Woodrum,Johnna Barto, Elizabeth Hughes and all of the other editors, production staff,and marketing staff who have teamed up with us on this journey. Howeverwonderful and beautiful the hard copy of this book, it is just the start.

And to those who gave us feedback prior to publication, thank youfor helping us frame the book so that it is a fair and balanced perspective topersonal finance. In this day and age, do you think we can find you on facebook to say thank you directly? Zuckerberg would support that approach. In fact, he might throwstock at it.

So finally, in case we can’t facebook friend you, a sincere thankyou toAngel Alexander~Brenda Anthony~Michael Araujo~Sean Basford~Pam Bennett~Ross Blankenship~KarinBonding~Walter Boyle~Craig Bythewood~Ron Camp~Peter Chen~Margaret (Meg)Clark~Fernando Conde~Barbara Connolly~Nirmalendu Debnath~Beth Deinert~SusanFeinberg~Chuck Finnell~Elizabeth Fletcher~Roy Fletcher~Paula Freston~DavidFricke~Wayne Gawlik~Terri Gonzales~Judith Griffin~Jana Hosmer~SandraHuston~Seonah Kendall~Jim Keys~Lee Kitchen~Juannae Landry~Jeff Livingston~ThomasLynch~Bala Maniam~John Marcis~Mario Mastrandrea~Diane Masuo~RobertMcCalla~Jamshid Mehran~Jim Meir~Tammi Metz~Dianne Morrison~PattabiramanNeelakantan~Thomas O’Keefe~Dan Oglevee~Diana Parker~Martina Peng~LoriRadulovich~Andreas Rauterkus~Greg Richey~Andrew Salcido~LawrenceSchuffman~Patricia Shaw-Crabb~Michael Slates~Martin Spechler~EdithStrickland~Sven Thommesen~Steve Tolbert~Lilian Nnenna Ukadike~ShafiUllah~Randall Valentine~Dick Verrone~Rubina Vohra~Andy Whitman~WaltWoerheide~Bruce Xiao

College Debt or a New Car?

2012-02-06T19:41:00.000-06:00

I was talking with a colleague the other day about student loan debt. She shared back "Perhaps we are thinking about student loan debt in the wrong way. We will go into debt $20,000 - $40,000 or more for a new car and not think twice. But we start to panic when a student graduates with $20,000 - $40,000 in debt. The car will last 6-10 years, but your education will last a lifetime."

Now I don’t want you to go into debt to finance your college education if you don’t have to, but I want you to think of your college debt as an investment that will last a lifetime. In Chris Farrell’s article “College Degree Still Worth the Cost Despite the Risk”, he quotes a study at the Booking's Institute that shows the return on investment for a college degree has been about 15% a year for the past 60 years. Not a bad return if I do say so myself, given the stock market has only shown a 6.8% return on investment over the same time period.

However with college, like any investment, there is risk involved. If you are looking at college as just a way to get a higher paycheck, there is a risk that a job may not be waiting for you when you graduate. In fact, your financial return may differ based on your major. So the question is “How much should I borrow to finance my education?”

Think about it this way…what kind of car do you want to drive, and be able to afford 10 year after you graduate? Look at others in your future profession to see what they drive. If they are driving Mercedes, BMW, Audi and Lexus, then they have a relatively high income and therefore they can go into greater student debt based on their future earnings potential. However, if you see professionals in your chosen field driving used cars that just get them from point A to point B, your profession may have a lower earnings potential and you may not be able to repay high students loans easily.

My suggestion is not to borrow any more money than 1-2 times the cost of the car driven by the professionals in your field 10 years after they graduated from college. Yes, I know, many who are 10 years out of college are driving a mini-van, SUV or crossover to haul the kids around, but is it a new loaded car or used-vehicle? This rule of thumb will help you keep your student loans to a reasonable amount based on your future earning potential.

There are many different calculators you can use to see what your earning potential will be, the likelihood of employment, what your take-home pay will be, cost of living, etc., but I like looking at cars. Let me know what you think this 'calculator' to estimate a reasonable amount of student loan debt.

‘Like'-ing IPOs

2012-02-03T22:06:00.001-06:00

So you want to buy shares of Facebook with their Initial Public Offering (IPO)? Good luck. An IPO is where a private company or closely held company, like Facebook, offers shares to the general public for the first time and that stock is then traded on a stock exchange. Friday’s ‘All Things Considered’ on National Public Radio did a great job of explaining how IPOs work and why companies go public in their article “Facebook’s IPO and the Average Investor.”

When a company goes public, it works with an investment bank to price shares of its soon-to-be issued stock and to decide how many shares to issue. The initial price is a combination of science and art. The science is calculating the value of the company including potential future income (part art), and the real art is forecasting what investors will pay for the stock.

Investment banks will sell large blocks of stock from the IPO to its best customers. These are usually large institutional investors and their high dollar customers. The average person can only purchase shares when intuitional investors and high dollar customers start trading their shares in a stock exchange. This means we have to wait until after the IPO to purchase shares.

Most companies go public with an IPO to raise money for expansion and growth. The company could also go public to cash in on the company’s value and distribute it to the shareholders. It is estimated that that the valuation of Facebook will be in the neighborhood of $100 billion and according to the Washington Post, expects to raise as much as $5 billion in the IPO. This means that Mark Zuckerberg, founder and CEO of Facebook could hold as much as $28.4 billion of Facebook stock after the IPO.

Facebook is almost forced to go public because of Security and Exchange (SEC) rules on how many stokeholds (500 shareholders of record) a company can have before it has to issue disclosures as a public company. Facebook is at that point where it has to issue these reports and since they have to issue reports, they may as well go public.

What will Facebook do with the $5 billion it raises? Only time will tell- $5 billion is an incredible amount of seed money. We also wonder if Zuckerberg will change his Facebook status from 'Private' to 'Public' at the time of the IPO.

Prenuptials for All?

2012-02-01T22:39:00.000-06:00

‘Kobe Bryant's Wife to Get All Three Houses, Worth $18.8 Million’, ‘Mel Gibson Loses Half of His $850 Million Fortune to Ex-Wife in Divorce’. As these headlines spam the news, it gives us pause to consider, should prenuptial agreements be made a requirement prior to granting a marriage license? No one goes into a marriage thinking this has a 50-50 shot. Hurt is the last thing you want bring onto this special someone—but unfortunately, 50% of the marriages end is divorce – so many suffer significant financial distress in dissolution. It is especially difficult to stay civil during this time which is unfortunate to each other as well as impacted children, family members and friends.

Sweetheart day is just around the corner. Looking for the perfect Valentine’s gift? Just as every business partnership goes into a contract agreement with a dissolution (sell out, buy-out) clause, should every marriage engage in a prenuptial agreement? Do you state up front in an agreement the steps you will take to keep your partnership strong; but if all else fails, maybe the greatest gift you can give the one you love is a commitment to an elegant, fiscally responsible exit so you can remain friends (at least civil) after dissolution of the marriage. So much emotional and fiscal hardship takes place during a divorce. How much of that pain would be spared if in the bliss of every-lasting love, both parties contractually agreed to a fair dissolution option?

Your partner is your friend. Making a pledge to keep your partnership fiscally fit through thick and thin, could be considered a loving, caring Valentines gift --along with a small token in a Tiffany blue gift box. Something to consider.

Keeping Resolutions

2012-01-25T23:26:00.002-06:00

How are you doing on your New Year’s resolutions? Did you decide to make a budget? Having a hard time sticking to it? Hereis a short video that we hope will help.

Fiscally Physically Fit

2012-01-18T22:44:00.001-06:00

Money is a resource and so is your health. If you loseall your money, you can find a way to earn it back. You cannot always get yourhealth back. The state of Iowa champions an annual 100 days, live healthy campaign,with the goal to bring together friends, families, businesses and communitiesin team-based wellness challenges. Thispromotion for positive lifestyle change is part of Live Healthy Americaand kicks off January 23, 2012.

The goal of Live Healthy America is to provide the tools, resources, andtechnology to assist individuals, organizations, and corporations in creating aculture of wellness. It has grown to a wellness solution that motivates,educates and empowers organizations to make positive and lasting lifestylechanges to achieve optimal health. All this helps to drive downlifestyle-related health care costs, which benefits you, your family and youremployer.

Shaving calories and increasing your activity will helpyou lose weight, save money, reduce medical expenses and can help you live alonger, healthier life. Go online and check out your options today. Pull together ateam. Challenge your friends andneighbors to join the Live Healthy Campaign. Staying physically fit is one of the best things you can do to helpyou stay financially fit.

The Budget Challenge

2012-01-13T15:43:00.001-06:00

Okay, so you have been tracking your expenses and you are getting ready to set your budget based on your values. Now I want you to consider incorporating some values into your budget, such as 100% or 90/10 or 80/10/10.

Goal of a budget is to spend less than you have coming in. The old rule of thumb is to save 10% of your income and live on 90%. This is great advice given our economic time and job uncertainty. You should be putting at least 10% of your income into retirement savings, and then you need to have an emergency fund as well. The key to savings is to PAY YOURSELF FIRST! Treat your savings like a bill that you would never miss. With each pay check, transfer money into your savings account. Even if you have other bills to pay, I feel it is important that you save on a regular basis. This gets you in the habit of saving, even if not at 10%.

Now the challenge is to reflect your values. The 80/10/10 rule is where you live on 80% of your income, save 10% and give away 10%. Personally, we value our community and we feel that it is important to give back to our community. When we were in college without any income, we would give back in our time and talents by volunteering.

If you are currently on the 100% plan or the 100+% plan, sit down and see if you can work towards either a 90/10 or the 80/10/10. The good news is that it is up to you on where you give back, and how much you give. I would encourage you to start with 98/1/1 where you live on 98% and give and save 1% each. Try that for the first year and then see if you can go to 96/2/2 until you get to where you want to be.

Money is just a resource and it should be used as a reflection of your values. Your budget is to help you use your money as an expression of your values. Share with us how it goes and ways you give back. The paradox is “the more you give, the more you get.” Good luck and happy budgeting!

Reboot Your Budget

2012-01-11T17:34:00.002-06:00

2012 and the New Year’s Resolutions are two weeks old. So how are you doing? Did you make a commitment to finally make and follow a budget? If you did, you are not alone. Budgets seem to be easy to make, but really hard to follow. If this sounds familiar, here are a few pointers that may help you stick to your budget.

When you think of budgeting and making a budget, first take a moment to reflect on your values. Money is just a resource and using this resource should be a reflection of what you value. I’ve always thought that if you want to see what people value, look at how and where they spend their money. A budget should allow you to express what you value and help you from running out of money by planning out your known expenses.

Do you know where your money is going? To make a realistic budget, first track where you spend every penny, --yes every penny, for two months. At the end of the first month, review where you spent your money. Keep going for another month to catch all of your expenses and income. There are software packages like Quicken or www.mint.com to help you track your expenses. It doesn’t take a smart phone or expensive software. You can track your spending with a little notebook that you keep with you 24/7. If you want control over your weight, write down everything you eat. If you want control over your money, write down where you spend every penny!

Now that you have two months of spending, categorize your spending and estimate your expenses, spending, savings and investing for the rest of the year. Don’t forget the non-routine expenses, such as vacation, birthdays, anniversaries, holidays, etc. Make sure your budget reflects your values.

To help you stick to your budget, go with one of the oldest budgeting techniques. Use cash and envelopes. Write the category on the outside of an envelope and when you get paid, put cash into the envelope. When you go grocery shopping, take your “grocery” envelop. When you go out to eat, take your “dining out” envelop. Yes, using cash is old fashion, but it works.

If you share expenses with someone else, get that person involved in your budget. Create the budget together and have weekly budget meetings. Make sure you agree that your budget reflects your values and that you both agree to the budget. Keep the conversation focused on the budget and not on past spending. Keep the conversation positive and keep working on a common goal.

This is a real quick overview on budgeting. Let me know if it works, what questions you have and ideas for blogs that will help you succeed in your personal financial goals.

Tax Time – Withholdings on Target?

2012-01-06T23:39:00.000-06:00

From Guest Contributor Ila Zimmerman

For the last 10 years I have prepared tax returns on weekends for a couple hundred clients. No matter how much income individuals make, they always welcome a tax refund and scorn paying more taxes. The tax refund is like a gift from the government even though it is your money.

If you want to make every frugal penny count, calculate what your tax liability is going to be and make sure you are withholding just enough each paycheck to cover your tax liability. The government provides the W-4 form and instructions to help you project your withholdings for the year. Withholding more than your liability is simply letting the government use your money for free instead of you earning interest on it. When I don’t see the money in my paycheck, it’s much easier not to spend it. To get a chunk of money all at once seems to have lots of possibilities. With your tax refund, you might be able to invest in an IRA and save yourself a little more. Or maybe you can pay off debt, pay cash for a trip or an electronic gadget instead of putting it on a credit card.

On the other hand, it can be very stressful if you do not have enough taxes withheld and have to pay the government more money when you file, especially if you do not have the money and/or if you have to pay a penalty. Generally, if you have at least 90% of what you owe in taxes withheld or 100% of what you paid last year (110% for higher incomes) then you will not be assessed a penalty. The penalty is an interest charge on the portion of taxes you did not have withheld throughout the year and is based on your federal tax rate. If you don’t pay the money you owe by the return due date or if you don’t file a return and owe money, then the interest charge can climb to 25% or greater. Bottom-line: Pay your taxes on time.

Finally, if you have a refund and do not file your return for three years, you will not get the refund. But if you owe, the balance due will not go away. Specific questions about taxes? Go to ilazimmerman.com. I would be happy to help you determine a comfortable withholding amount, help reduce your tax stress and help make your tax time a pleasure.

Frugal Festive Opportunities

2011-12-30T20:13:00.000-06:00

Have you planned your New Year’s celebration yet? A little shorton cash? Consider giving a last minute shout out to friends and acquaintances --Themore random the better. Those that accept, have them pair up to provide acourse of the meal. Each take turns serving, with one pair volunteering to dodishes. What you have is a gourmet evening with good company for the cost of making one dish at home. The entree to our last impromptu gathering this week wasa hit (Chef Daniel Boulud's Pork Shoulder with Guinness, Dried Cherries, and Sweet Potatoes).

All in all, it makes for a very frugal –very fun evening out. Hopeyou are gearing up to enjoy wrapping up 2011.

From the Heart

2011-12-26T14:49:00.000-06:00

During thegifting season, it is sometimes difficult to find the ‘perfect’ present. Someof the best are those from the heart. Like the garden stone with our grandchildren’s’foot prints, framed photos of special moments from the past year, lovely scarvesfrom faraway places we have traveled. Sometimes the best gift can be the offerto undertake a dreaded task, like cleaning out and reorganizing a storage room oroffering your services as dishwasher for your parent’s dinner party.

The very bestgift is the present of presence, being there for one another, either in personor in heart. And to think – it doesn't cost a penny. How grand.

Christmas Traditions

2011-12-24T05:26:00.001-06:00

Every year, in place ofbuying gifts for one another, we take a family vacation for Christmas. Thisyear was an exception. The year got away from us. With no extra funds set asidefor travel, we decided to spend time together at home. To compensatefor not traveling, we exchanged gifts with one another. We made manyof the gifts, but we still felt like we needed to buy everybody something. Thiswas way more work than we remembered. Spending money in such a short window of timefor so many people, and not knowing if it is something they would like, need orwant --is stressful.

It was joyful being togetherand has been a very laid-back week. But we all agreed that from now on: 1) each Christmas, we willstart planning for the next year's trip. When everyone is together, it iseasier to negotiate the dates and destination selection. 2) We will budget asavings plan for the trip that stretches over a 12-month period. The ultimate gift you cangive yourself is to pay for a trip out of savings vs. on credit. 3) We will goback to drawing names for a Secret Santa, with a dollar amount cap on spending.

We all agreed that in thefuture, if we feel tight on time or funds, we will find a way to at least takean overnight trip as a family. We didn't appreciate how much we enjoyedour Christmas vacations until deciding to not do it this year. What a great wayto help us all gauge the value we find in the investment.

Hope all is joyful where youare at this holiday.

4 Days ‘til Christmas; 10 Days ‘til End of Year

2011-12-21T13:51:00.000-06:00

As we rush around getting last minute gifts, we should also be mindful of the end of the year for tax reasons. Here are a few items to check off your list before 2012 rolls around.

- Last Minute Charitable Contributions: Time to get in the last minute charitable contributions for the 2011 tax year. Is it time to clean out your closet and make a donation to Good Will? Can you afford to give a little extra to a charitable cause? It has been a rough few years for a lot of people and your donation may be just what your favorite charity needs to help those in need.

- Unreimbursed Medical and Dependent Care Accounts: These are your "use it or lose it" accounts. You have to use the money by the end of the year or you forfeit your balance. If you have money in these accounts, maybe it is time to get your eyes checked or a new pair of glasses. Make sure you have paid all of your dependent care expense and that your balance is zero.

- 529 or Educational Savings Deposits: In some states, your contribution into an educational savings account or 529 plan is a deduction on your state taxes. Do you need to add a little more for next semester's U-bill? Consider adding a little more to receiving the deduction?

- Taxes: Do you have any tax bills due in December or January? These bills might be deductible on your taxes. You might consider paying your January taxes in December to take advantage of the deduction.

- Medical and Dental Expenses: Did you have a lot of medical expenses this year or are you going to have medical procedures next year? You may be able to deduct medical expenses on your taxes if the amount is greater than 7.5% of your adjusted gross income (AGI) and you itemize your taxes. A little tax planning can save you a lot of money.

- IRA Contributions and Future Tax Planning: You have until April 15, 2012 to maximize your IRA contributions. However, an IRA or 529 contribution to someone else might be a great last minute Christmas gift.

We wish you and your family a great and ~~save~~ safe holiday season. As always, check with your tax professional to see what strategies work best for your individual situation.

Upcycle Twinkle Time

2011-12-14T23:05:00.000-06:00

It is the holidays and in the spiritof gifting and the joy of creating, make useful and fun things for family and friends this time a year. Tis the art of Upcycle: To make new fromitems that have lost their usefulness or value.

A few flavors of the day:

Paper bagstockings, perfect for gifts of movie passes, lottery tickets or gift certificates:

Covering an old canvas so to gift a new painting:

Piecing together old jeans into a cozy blanket:

Everyone has a little elf insidethem. Get out the glue and glitter and release your inner elf. Very fun. Veryfrugal.

OWS, Student Debt, Tuition Increases and Tuition Free Colleges

2011-12-09T20:30:00.001-06:00

Higher tuition, more studentloans, and greater access to higher education…what do we do? The Occupy WallStreeters (OWS) say they are not going to repay student loans and aredemonstrating on college and university campuses. In today’s InsideHigher Ed daily updates, there is an article about how their energy mightbe misplaced. This article argues thatcollege and university administrator’s hands are tied because states arecutting funding to higher education and students are demanding quality studentservices and education. They are feelingthat their only or best choice is to raise tuition and fees, which ultimatelyincreases the debt burden for college graduates.

According to DiplomaGuide.comthere are 10colleges and university with $0 tuition. Yes that is right, $0.00 in tuition. Perhaps we should look at these institutions to see if we can apply somebest practices to reduce the cost of higher education. Many require students to work on campus. College of theOzarks nicknamed “Hardwork U” requires 15 hours/week of work from thestudent to graduate tuition-free. Berea College offers every student a full-tuitionscholarship and a laptop computer while attending Berea and work-study tooffset food, room and board.

Higher education is notfree. It is expensive to pay forbuildings, professors, administrators, support staff, research and everythingthat makes college “the best years of your life.” So the question is “how do we lower the cost of higher education without additional taxesand reduced quality of education and services?”

My answer is YOU! Didyou graduate from college? Did youbenefit from college? If so, it is timeto give back. You can give back to aspecific scholarship, start a scholarship, name a building or give to thegeneral fund. You can ask anyone who asksfor donation, the amount is not important, but it is important that you get inthe habit of giving. We are all atdifferent places in our financial lives, so whether you give $1 or $100million, just give. This holiday season, think about giving your college oruniversity a gift. Contact your alumniassociation or foundation to see how you can help reduce the cost of highereducation and designate your money to the area where you believe it would dothe most good.

If you value higher education,and if our society values higher education, we need to put our money where ourmouth is and give back. College and universityadministrators, faculty and staff — You have a huge responsibility to do asyour donors wish and be good stewards of the resources you are charged withmanaging. That not only includes thefiscal responsibility, but the education you provide in the classroom and thesupport services in housing, recreational services and every service to thestudents. You are charged with providing the highest quality education andexperience at a reasonable price.

I hope you have a happy holidayand take time to reflect on your personal values and where your moneygoes. I’ve always said, “If you want tosee what people really value, look at their checkbook and see where they spendtheir money.” I hope your values andyour checkbook are in agreement.

Frugal Fun and the Holidays

2011-12-07T20:13:00.001-06:00

“Frugal Fun”', “Holidays”: The two topics go hand-in-hand. So much of the joy of the holidays is the timespent with love ones and surprising them with something special. The somethingspecial does not have to cost a mint. Gifts from the heart can be theleast expensive and the most treasured.

Frugal-festive examples from our homesteadthis year include packets of homemade monogrammed stationary:

Stockings made from a fabric stash and old costume jewelry:

And grandparents teaming up with the grandchildren to make extra special surprises for the parents. These activities make the holiday glow --from the joy of the planning, the making and the giving.

From our household to yours, we hope your holiday prep this year isjoyful, frugal and fun. :)

So Many Priorities, Never Enough Money

2011-12-04T22:36:00.001-06:00

80-10-10: That is the budget we strive to achieve in our household.Live on 80%, save 10%, give 10% of our time, talents and treasure. We are not thereyet but every year we get closer. Coming to the end of this year and headinginto the next, we find that we have had, and will continue to have, morepriority family fun than we originally budgeted for. How do we balance our prioritiesand our income?

Wantto pay for it in cash and continue to keep our credit card balance at zero eachmonth? -Yes
Wantto take out of our savings or reduce our savings rate? -No
Considerbacking down on our giving? -No.

Ideally, we should bring our life style within the limits ofthat 80%. Selling off an asset, such as an extra automobile, is one option wediscussed. We have three vehicles (car, truck, van) between two drivers. For the most part, thetruck and the van sit in the garage as we typically car pool. Why is it hard topart with assets we seldom use even though they cost us money? Even if avehicle is paid for, it still costs you in maintenance, license, insuranceand depreciation.

It’s hard. Yes, a van is handy at times and we love ‘Chitty’, with her ‘Truly Scrumptious’ navigation voice and leather, heated seats, back-upcamera and warning sounds when her bumper gets close to another object – which makesparking in tight spots such a breeze. We named her ‘Chitty-Chitty-Bang-Bang’ because with her laser speed control, wefelt she practically drove herself.

To balance our budget, do we:

Take from savings? Take from giving?Carry a credit card balance? Sell Chitty? Change spending habits elsewhere?

Whether you are striving to live on 90% of your income andsave 10%, or aiming for the 80-10-10 split --how do you keep an every changing lifestyle balanced and in budget? What recommendations do you have? Thank you forsharing.

Look Who’s Trying to Collect from Beyond the Grave

2011-12-03T19:04:00.001-06:00

What happened to your debts when you die? As seniorsincrease their debt during retirement, you should know what happens to debtswhen you die. According to FoxBuisness.com“Nearly 40% of all seniors say they have accumulated debt in their retirementyears with no plans to pay it off in their lifetime. Are the heirs and next of kin responsible?

There is not an easy answer and it all depends on thesituation. The first thing to do in allcases is to notify all creditors of the death. Normally, the estate and theexecutor who handles the estate will liquidate the assets, pay creditors anddistribute the proceeds according to your last will and testament or it will bedistributed according to state laws.

If there is not enough money to pay all creditors, thegeneral order of who gets their money is:

1. Funeral expenses,taxes and administrative fees

2. Secured creditorssuch as mortgage loans, car loans, etc. These creditors have the rights to the assets securing the loan.

3. Unsecured creditors…if there is any money left. If there is no money left, the creditor willcontact the co-signer and the co-signer is legally responsible for thedebt. If the debt was just in thedeceased name, most credit card companies will write off the debt.

However, more and more credit card companies are outsourcingtheir collections and contacting the next-of-kin trying to collect based on “moralobligation.” Saturday’sWall Street Journal has an article describing how collection firms aretargeting survivors to try to collect at least some of the debt. According to this article, “Collectors arestarting to realize just how much money you can get from someone when they are attheir most vulnerable.” Many survivors pay some or all of the debts just tostop the collectors from calling and bringing on recent memories of thedeceased, even though they are not legally obligated to pay.

Here are some of the facts you should know:

The Credit Card Accountability, Responsibility andDisclosure (CARD) Act of 2009 prohibits creditors from charging late fees orannual fees during estate settlement.
Not all monies are available to creditors. Retirement accounts such as 401(k)s and IRAsdon’t pass through the estate, but go directly to the beneficiary.
Under the FairDebt Collection Practices Act , collectors cannot dothe following:
Call before 8:00 a.m. or after 9:00 p.m.
Call at work if you ask them not to
Harass you, use obscene or profane language orthreaten the use of violence or other criminal means to harm you, yourreputation, or your property
Conceal his or her identity on the phone
Lie or falsely imply that you have committed acrime
Disregard a written request from you to ceasefurther contact
Falsely represent the amount, character or legalstatus of debt
Continue to contact you if you ask them inwriting to stop

Ifyou feel you are being harassed, contact your state’s Attorney General’s officeand the Federal Trade Commission with thedetails of the phone call or harassing activity. You may not be liable for the debt and youhave rights to keep you from being harassed.

OWS: Repay Student Loans?

2011-11-22T19:39:00.001-06:00

OccupyWall Street (OWS) protesters have decided not to pay back students loans as a way toprotest the high cost of higher education. Is this a good idea? Check outwhat Prof Bob has to say.

Credit, Deficit Super Committee, and You

2011-11-20T22:49:00.001-06:00

Do youknow what would have happen if we followed a federal balanced budgetamendment? We would all be speakingGerman. Deficit spending allowed thefederal government to finance World War II by selling “war bonds.” Our nation’s monetary policy allows thegovernment to borrow (by selling bonds)to finance necessities and to smooth out the ups and downs of natural businesscycles.

The deficitSuper Committee deadline is Monday, November 21^st, 2011. As thecommittee meets, I hope they are listening to some of those in the 1% who saythey would not mind paying their fair share in taxes. I hope they listen to the99% who want to see fairness in the tax system. I hope they listen to themajority of economist who say we should be borrowing and investing ininfrastructure.

Let’sthink about it for a minute. We borrow money to fix our roads, bridges,schools, and dare I say, Internet, so all would have access to the World WideWeb via high speed connection. We bridgethe digital divide and make a path for easier access to education for everyone.We put people to work. It’s a simpleequation; the more people who are employed, the more tax revenue the governmentreceives and the less that is spent in social programs. The more people unemployed, the more thegovernment spends on social programs and the less tax revenue it has coming in.

Interestrates are at an all-time low, which makes borrowing for the government (and for you) very inexpensive. It is okay, and maybe even a good idea toborrow money if it is for an investment that will have lasting returns. Borrowing for a college education, a home,and even for the government to put people to work and get our economy going aregood ideas. It is important to look at thelong-term vision and payback when considering taking on credit. Does the Super Committee have the vision andthe guts to make the right decisions? Forthe health of our country, I hope so.

Credit, Debit or Cash - Holiday Shopping

2011-11-19T20:47:00.001-06:00

Black Friday is less than a week away and there is no placeI would rather NOT be than shopping at4:00 a.m. when the stores open. I willbe in my bed sleeping off a good Thanksgiving meal of smoked turkey and hamwith all the fixings. But as we getinto the season of spending, shopping and giving; here are some ideas to keepin mind.

When shopping for gifts make a list and check it twice. Find out where you can get the best deal andmake a budget for your gift giving. This may be a tougher holiday season financiallyso it is even more important than ever to keep both hands on your purse stringsas you walk into stores playing holiday music and seeing displays that say “buyme!” Using cash and the envelope systemof budgeting keeps you within your budget.

Using credit cards provide some protection, however you maybe tempted to spend beyond your budget. Credit cards are governed by the FairCredit Billing Act which provides you specific rights to dispute your creditcard charges when your purchases are not delivered as agreed. You can also build rewards for using yourcredit card, whether airlines miles, cash back or points to use how you wouldlike. The major downside of using acredit card is that if you keep a balance, you could make the holidays last allyear long or longer, trying to pay off what you purchased.

Cash and debit cards can keep you from having the credit cardholiday hangover. You will not receivemonthly bills of unpaid balances. This alsohelps you stay within your budget. Ifyou don’t have the cash, don’t buy it. Debit cards do not offer the same as credit cards. Debit cards areregulated by the Electronic Funds Transfer Act (a federal law), and you only have a specified time to disputecharges. If you wait too long, you may loseall of your money.

If you use cash, be sure you hang on to your receipts andkeep track of what and where you spend money. Sometimes my wallet is like a black hole. I put money in and I don’t know where itwent. Receipts can also help you in returning items.

You can also make holiday gifts if you have the time and talent, butthat is a blog for another day. We hope you all have a great holiday season, spend yourmoney, time and talents wisely and -- get a quiet moment to reflect on yourblessings. Happy Thanksgiving!

The Stock Market Thriller

2011-11-09T17:33:00.004-06:00

“Make sure your seatbelt is securely fastened and keep your hands and feet inside the vehicle at all times.”

This is what you hear as you get on an amusement park roller coaster. Maybe your stock broker or financial advisor should also say this when you begin to invest in the stock market. In the spirit of full disclosure, should we formally address the stock market by its thrill ride name?

There is Disney’s The Twilight Zone Tower of Terror, Kings Island’s The Beast, Six Flags Great Adventure’s Kingda Ka, the Stratosphere Hotel and Casino in Las Vegas has Insanity, and the king of amusement park roller-coasters, Cedar Point in Sandusky, Ohio has Disaster Transport, Iron Dragon, Maverick, Mean Streak, Millennium Force, Raptor, Top Thrill Dragster and Wicked Twister. Any one of these names fit the gyrations, the ups and downs of the stock market.

Even with your seat belt securely fastened, it is a good time to reassess your risk tolerance and which investment options best fit your personal goals and ‘ride’ tolerance. Monday’s Wall Street Journal (11.7.11) has an entire section titled Investing In Funds which examines mutual fund investing and different opportunities. How to Rest Easy in a Crazy Market provides seven tips to help you “enjoy” the ride and make sure your portfolio stays on the tracks. Here are the seven points:

1. Get real about your tolerance for pain. We have all heard “the higher the risk, the higher the potential return” but we don’t hear “the higher the potential for loss.” Risk involves the ups and downs, and if we are in risky investments, we better be prepared for the downs and possible total loss of our investments.

2. Favor funds that cast a wider net. Spread your risk out by being diversified in your holdings or in funds that are more diversified. In other words, don’t put all your eggs in one basket, but diversify in different baskets composed of different eggs.

3. Hire a pilot who charts a smoother ride. All of the funds are going to have their ups and downs, but look at funds managers who reduce volatility to smooth out the ups and downs. Unless you like the ups and downs, make sure you have on your shoulder belts and HANS devise.

4. Don’t try to wager on where stocks are headed. Face it, you can’t time the market for peaks and valleys. Be a continuous investor, putting money in the market monthly where you don’t have to worry about the highs and lows and trying to time the market. Also rebalance your portfolio periodically to make sure you stay on track.

5. Fine-tune your cash stash to your family’s needs. With any investment, you need to think about when you will need to convert it to cash. Would you need to cash in your investments if you were to lose a job, buy a car, down payment for a house or pay for college? Everyone’s circumstances are different, but money that you will need with a short time horizon should not be in volatile investments.

6. Don’t assume that a stock-free portfolio is risk-free. Bonds, precious metals, commodities, houses, pork bellies as investments all carry risk. Know the risk of the investment and your investment objective before investing, not after the investment has declined in value and it is too late.

7. Don’t be ashamed to seek help. Investments are complicated and if you need help, there are personal finance classes offered at your local colleges and universities as well as financial advisers and planners that can help you determine and reach your financial goals. This is not to say that you don’t need to be concerned with your investments. No one is going to be more concerned about your investments and wellbeing than you. Be financially knowledgeable, financially literate, and monitor your progress towards achieving your goal.

You have the decision whether you are on one of the top 10 thrill masters or want to go for an easy ride in the park. Be knowledgeable, make wise decisions, go for your goals and enjoy the ride.

What is your favorite roller coaster name to best describe the stock market? We invite you to post your response in the comments.

The Rising Cost of Auto Insurance

2011-11-06T21:13:00.000-06:00

It seems like every time I turn on the television, I am bombarded with insurance commercials. I see Flow offering discounts for Progressive, a gecko advertising for Geico, Mayhem causing trouble -advertising for All State Insurance and countless others. Most of the insurance companies are advertising their low rates; others make their distinction on service.

Rates seem to continue to increase and it may not be my imagination. In the November 2011 issue if Smart Money, they state that auto insurance has increased 10% from 2008-2010, siting increases are due to the increased costs to repair a vehicle, soaring medical bills, increased probability of being in an accident, and increased number of uninsured motorist (now estimated at 16%).

So what is a person to do, to make sure they are covered with the correct amount of coverage and still keep their costs low? Here are some suggestions:

• Keep an eye on your credit score. Most insurance companies use your credit score to help estimate your risk and therefore your rate. By keeping your credit score high, you can keep your insurance rates low.

• Have the correct amount of coverage. Your state has a minimum coverage you must have. If you don't have enough insurance you could be putting other assets at risk if you get sued. By having too much insurance, you could be wasting your money.

• Shop around for different rates. It takes a little time, but may pay big dividends in savings to switch companies.

• Look at the deductible on your insurance. The higher your deductible, the more money you will have to pay out if you are in an accident, and the less the insurance company has to pay out.

• You could also give up some of your privacy and have your driving habits monitored. Progressive Insurance has "Snapshot" which monitors your driving habits. Your premium will be set on how you drive.

We all need to have insurance and the correct amount of insurance. Shop around on-line and/or talk to your insurance agent to make sure you are covered.

Is Student Loan Forgiveness the Answer?

2011-10-27T22:11:00.001-05:00

President Obama announced changes to the “Pay As You Earn” plan on Wednesday, October 26, 2011 that would/could ease the repayment of student loans. According to the College Board, the average public in-state tuition rates are increasing 8.3 percent for the 2011-12 year.

President Obama pointed out that the average college graduate owes $24,000 in student loans and that the 2011 graduates have an average debt load of $27,300. USA Today reported that outstanding student loans will reach $1 trillion ($1,000,000,000,000) before the end of the year. Currently, student loan debt in America has surpassed credit card debt. Is this our next financial crisis?

The highlights of the “Pay As You Earn” plans or income-based repayment plans are to:

· Start this option is 2012 (vs. 2014)

· Cap student loan payments to 10% of discretionary income (vs. 15% )

· Forgive any remaining balance after 20 years (vs. 25 years)

· Support consolidation of direct government student loans with government-backed private loans helping an estimated 5.8 million people. This would essentially allow refinance the private loans at lower government rates.

According to a White House fact sheet, a teacher $25,000 in debt and earning $30,000 a year will see their payments reduced to about $114 a month.

Student loans do not go away in bankruptcy unless under extreme circumstances and it looks like this could be one alternative to help people who have a lot of student loan debt. Current repayment plans include the options of 1) Standard Repayment plan of 10 years with a minimum payment of $50.00; 2) Extended Repayment plan if you have more than $30,000 in Direct Loan debt -repayment over 25 years; 3) Graduated Repayment letting you start out with low payments and increase your payment amount every two years; 4) ‘income contingent’ and 5) ‘income-based’ repayment plan.

As you take on student loan debt, you have to decide if and how you will be able to repay your loan. These new changes may not be right for everyone, especially if you do not have a lot of student loan debt and you get a high paying job after graduation.

Borrow wisely, study hard, have fun and pick the right repayment plan for you.

Making Sense of Occupy Wall Street

2011-10-10T20:43:00.004-05:00

As a business professor I am torn about the Occupy Wall Street protest (OWS). On one hand, the capitalism and free market economy enable people to “pull themselves up from their bootstraps” and become wealthy by inventing, creating, developing and delivering new and creative products and services that meet a need. Doing this at a price consumers will pay while making money is an art and science. For those who have this talent and gift, should they not be compensated for taking risks? Isn’t that what makes American business great? This is the land of opportunity….right? Just look at what the late Steve Jobs did to help make your life better. We didn’t have to buy an overpriced MP3 player, but Jobs had the gift to make the i-anything what we as Americans wanted to buy.

On the other hand, I read about executive compensation in the millions while the business is laying off workers or not giving them a raise and I wonder how many line jobs those millions of dollars to one person could pay for. I wonder what is “fair” compensation for CEOs who run corporations. Is anyone worth $1 million a year, $5 million a year, $30 million a year or even $4 billion a year? Does greed cause us to “bend” the rules, influence decision that our more about us and not so much for the greater good? Is it the corporation that should be concerned with the greater good? I can argue with myself all night long about these issues and not come to a clear conclusion.

Maybe that is what I am struggling with the OWS protest, I don’t know exactly what they want and when they will be satisfied enough to unoccupy Wall Street. I don’t know if they have clearly stated what they want to see changed.

From my desk, here are my suggestions for clarity of goals:

1. Deal with executive compensation and fair pay. Limit executive compensation to a times average salary. Whole Food touts CEO John Mackey’s salary and cash bonus to no more than 14 time the average worker’s salary. This should also include stock options and differed compensation. If the people on top want a raise, everyone should get a raise. This may develop a sense of teamwork, community and doing good for everyone.

2. Limit the amount of contributions to political campaigns, politicians, and political organization. Isn’t America to be governed for the people, by the people? Take the all corporations out of politics and limit individual contributions so no one can buy influence.

3. Make the tax code fair. When Warren Buffett is saying it is not fair that he pays less in taxes as a percentage of income than his secretary, things need to be changes. We need to simplify the tax code by getting rid of loop holes to where anyone can do their own income tax.

I know that these three things take time to work through and have to be done through corporate boards and acts of congress. Maybe the Occupy Wall Street protest will grab the attention of the civil unrest in this nation and steps can be taken to save our democracy and do good for the greater good.

National Document Shredding Day?

2011-10-09T19:38:00.003-05:00

There is not an official ‘National Document Shredding Day’ yet … And maybe that’s ok, because it is a good habit to take on daily. If you do not own a shredder, watch for local ‘shredding’ days that may be sponsored by a local bank or your city. On September 30, 2011, the whole state of Tennessee sponsored a document shedding day to promote identify theft awareness.

What should you be shredding? Anything that may contain personal identifying information such as Social Security numbers, your address, date of birth or passwords, cancelled checks, check registers, bank statements or receipts, loan documents, mortgage documents, brokerage statements, school records, credit card, mortgage and finance solicitations, credit card statements, contracts, personal business papers, and credit applications.

Not only are you protecting yourself from identity theft or fraud, often the shredded material will be recycled into items such as commercial grade paper towels, toilet paper and other paper products.

Free Checking a Thing of the Past?

2011-10-04T19:22:00.001-05:00

The day has come. We are beginning to see the ramifications of the Durbin Amendment - Dodd-Frank Act, which became effective October 1, 2011. The amendment imposes limits on the fees that banks can charge merchants for each customer debit card purchase. To compensate, some banks are looking to make up for the lost revenue via other means, such as charging you a fee for the use of your debit card and/or checking account. You have options as to where you do your banking. It is important to select an institute where the service and products best match your needs.

ABC News has compiled a list of the 10 largest banks and how much each is charging for basic checking accounts and the debit cards. Additionally, you can learn about your local bank and credit union options online.

It only takes a few minutes to do a side-by-side comparison as to your options but can save you significantly over the long run.

To Convert or Not Convert the IRA

2011-10-02T22:39:00.003-05:00

This was the year long debate in our household. In 2010, the federal government dropped the income limit for moving savings from a traditional to a Roth IRA. Additionally, you had a one-time option to pay taxes on the current value of the converted funds over a two-year period. The converted asset then grows tax-free.

To get this tax break off any future earnings of the converted funds, you have to pay income tax on the value of the funds moved.

From Kelly Greene's Wall Street Journal article on 9.30.2011, "The federal government allows the tax-law equivalent of a do-over, says Maria Bruno, an investment analyst at fund giant Vanguard Group, whose customers converted more than 230,000 traditional IRAs to Roths last year, and which has processed 3,900 do-overs this year, as of Monday."

We are one of the 3,900 who converted back. This was a highly contested move in our household. Bob is sure with the current level of the national debt, that by the time we withdraw the retirement savings, we will be under the burden of a significantly higher tax rate. Kristy is pretty convinced we most likely will never retire so it will be a tax that our kids can cover when inheriting the asset. In the final hours.... Kristy won.

Investors who transferred traditional IRA holdings to a Roth in 2010 can move the funds back to a traditional IRA and avoid the tax up to October 17th. If you filed your 2010 tax returns already, you can amend them. We amended our tax returns last month. The weight of such an extra-large tax payment, even spread across a two-year time line seemed insurmountable to Kristy, given our number of other more short-term, family goals.

There were multiple steps to "reconvert", a waiting period, and then the "recharacterize" of the account as a traditional IRA. Calls to our tax advisor, calls to the IRA custodian...

The downside? We lose the one-time option for 2010 conversions of getting to spread the income involved across two tax returns. We lose out on the possible tax-free earnings of the converted fund. Up-side? Significant less tax to pay over the next two years.

Who was right? We will let you know in 30 years.

Renters Insurance Is Assurance for Students

2011-09-25T21:47:00.002-05:00

This morning, firefighters from cities across Johnson County, Iowa battled a large fire affecting multiple buildings in downtown Iowa City. There were apartments on their upper floors of the impacted buildings. In the TV interview, one of the displaced student tenants said ‘Thank God for renter’s insurance’. Hopefully, all the tenants were as wise as the student being interviewed.

College students renting an off-campus apartment or house should consider purchasing renters insurance to protect their personal property (i.e., computer, television, bicycle, furniture, clothing) in the event that it is damaged, destroyed or stolen.

Even if a student is a dependent under the parent’s insurance, the student’s personal property, in many cases, is not covered if the student lives off campus. Your landlord’s insurance doesn’t cover your personal property in the event that your propriety is stolen or damaged as a result of a fire, theft or other unexpected circumstance.

Premiums for renters insurance average between $15 and $30 per month depending on the location and size of the rental unit and the policyholder’s possessions. For the price of a few lattes, you could have thousands of dollars of insurance. Unusually expensive items, such as fine jewelry or an art collection, may require the renter to purchase additional coverage, called a “rider” or “floater”. Your insurance agent can help you determine if additional coverage is necessary.

Another important factor to look for when shopping for renters insurance is “actual cash value” vs. “replacement cost” coverage. Actual cash-value coverage will reimburse you for the value of the personal property (it's garage-sale price) at the time of your claim. Replacement cost coverage, on the other hand, will reimburse the full value of the new item, after you purchase the new items and submit your receipts. While the up-front cost is greater, you are more likely to receive accurate compensation for your possessions.

Bankruptcy and Student Loans

2011-09-25T20:08:00.002-05:00

If you're having serious trouble paying back your student loan debt, bankruptcy is not a likely alternative for you. Student loans are usually not eligible for discharge from bankruptcy.

If you're having trouble making any of your payments, the first step is always to contact your lender, be honest and try to work toward a realistic payment plan. The lender would much rather be paid over a longer period of time then for you to default on repayment of your debt.

If your student loans are the largest part of your debt, you are better off to contact your student loan lenders and see if you can arrange an easier repayment plan or deferment of payments, over bankruptcy.

Bankruptcy filings stay on your credit report for 10 years and will likely limit your ability to get a mortgage, borrow money, or get a job.

Student Loan Default Rate Increases

2011-09-24T15:13:00.022-05:00

Is the education worth the debt? Is it worth going an extra year so you can work while going to college and not take on debt? First, a college education is worth the cost, but you have to look at the potential ROI (Return on Investment). Different careers pay varying wages. With higher earnings, you are able to pay back a larger student loan debt with fewer sacrifices.

The U.S. Bureau of Labor Statistics (BLS) publishes an OccupationalOutlook that lists occupations, the education required, and the potential salary range. According to the BLS, the high your education, the more money you will make and the less chance you will be unemployed. Choose your education, career and debt load carefully.

The cost of an extra year of college could be more costly than taking out a loan and finishing on time. To calculate this cost, add together the cost of tuition and books for one additional year of college plus your potential future salary, and then subtract your current salary. If tuition and books cost $30,000 and your future salary is $35,000 upon graduating, and you are making $15,000 now, that extra year cost you $50,000 ($30,000 + $35,000 - $15,000). Can you better afford the fifth year of $50,000 or take out a loan to get done in four years?

Choose your institution carefully. You may think that private 4-year colleges and universities are the most expensive but if you calculate the true cost (tuition, room and board minus any grants and scholarships) it might be close to the cost of a state school. If adding in the cost of getting done in four years compared to five or six, and placement rates for their graduates, it may be less expensive to attend a private college or university.

You can also receive credits from your local community college and usually transfer the credit to a 4-year college or university. If considering this option, talk to the college or university you are planning to transfer to make sure all of your community college credits count towards graduation.

Using the Federal data for the 2009 cohort, the highest default rate for colleges and universities offering baccalaureate or above degrees is for for-profit schools with a 15.4% default rate, followed by public colleges or universities at 5.2% and then private colleges and universities at 4.5%. Student loan defaults do not go away on your credit report.

Being a federal loan, the government has more power to garnish wages (up to 25% of your wages), keep your federal and state income tax refunds, take your future lottery winnings, and garnish part of your social security. Student loans are rarely discharged in bankruptcy. So once you borrow the money, you will have to pay it back!

If you are having trouble making your student loan payments, check out www.studentloans.gov for information on deferment of payments. You can also check out a Wall Street Journal video for more information on student loan defaults.

Goals and Lotteries

2011-09-12T21:39:00.011-05:00

We know it is better to save our money than to buy a lottery ticket. The odds of winning the Powerball are 1:195,249,054. Yet, when the payout climbs above a $100 million, we start to dream of what we would do with a winning jackpot.

Lotteries give us an excuse to dream of what we would do if we had an abundance of funds at our finger tips. What would you do? What would you buy? Where would you travel? These dreams provide motivation to set goals and to work to achieve these goals. It also helps you to get in touch with your values and to ask the question of what your really want out of life.

We know that we probably will not win the Lottery jackpot, but we have big dreams and goals to achieve. An entrepreneurship professor once said "if you are going to dream, dream big." and "be careful of what you dream for, it just might come true." So go ahead and dream of winning the lottery and what you would do with all the winnings. Then set goals based on your values and work to achieve your dreams.

Freezing Sweet Corn is Sweet Work!

2011-08-21T13:24:00.007-05:00

This week a wind storm blew down three rows of our neighbor’s sweet corn. Luckily, the corn was ready to be picked. Now to be perfectly honest, picking sweet corn is hot work, especially in Iowa when the temps are in the 90’s and the humidity is in the 70’s. But here is what we have found to make the harvest enjoyable:

 Do it with friends: Many hands make light work – as well as good conversation while doing the work.

 Share a meal: We picked the corn at the farm, and then had a nice meal with FRESH (picked off the stalk less than an hour before eating) corn, with a home raised chicken, warm bread, great cheese and wine. And oh yes, a good desert before we started the shucking, cleaning, blanching, cooling, cutting and bagging of the corn.

 Divide and conquer: It is just the way it works, but while the guys are shucking, the girls are cleaning, blanching and cooling the corn. By the time the guys get done shucking, it is time to start cutting the corn off the cob. When is it all cut, we bag it up for the freezer, teaming together, getting it done.

 Share the profits: Now we didn’t make money by freezing corn, but we all saved money by having corn in our freezer to eat later. We shared what we harvested with those that helped and with our family and friend.

 Make it festive: Making an evening event around the activity, such as sharing a meal and drink, adds to the camaraderie. Productive activity with others makes the “work” fun and leaves you feeling well and good.

Where to Invest in Turbulent Times

2011-08-12T14:49:00.004-05:00

The Dow Jones industrials dropped 634 points Monday. Gold is at a record high. Farm land prices are high. There is uncertainty in the housing markets, stock markets, bond markets, international government debt, and the world-wide economy. The big question--where to invest? When the markets are so volatile, let it ride out and instead turn to make investments in what you can control: your time.

Now is the time to invest in yourself and time with your family and friends. It is time to reassess your skills, abilities, and how you spend your time. It is time to become more self-sufficient. Some ideas of self-investing in turbulent times:

• Grow a garden or visit farmer markets; can or freeze fresh vegetables for the winter months. Nothing tastes better than corn chowder or lasagna on a winter day made with fresh frozen sweet corn or tomatoes that you grew.

• Cut firewood. If you have a wood burning fireplace or wood stove, cut and stock up on wood for the winter. This can be a family event and as they say, the wood will heat you when you cut it, split it, stack it, and finally burn it! This can also cut down on your winter heating bills and provide hours of family time watching the fire burn.

• Take a class to improve your skills or learn a trade. The more you know the further you will go. Maybe you want to learn about auto repairs, plumbing or other trade. This can help you save money by doing your own repairs. Perhaps you need to improve your computer skills, cooking skills, or writing skills, take a class at your local college or community center. This can make you more marketable and you may unleash one of your passions.

• Invest in your family and relationships. Nothing has a higher return and lasting benefit than great relationships. Invite family or friends to join you on the above adventures. Turn off the television, computer, and phones and have a night of playing cards or board games. Join or start a book club. Engage in conversation, really get to know other people, and build lasting relationships.

The markets will go up and down. Money will come and go. Your true happiness will be determined by the friends and relationship you have and the difference you make in the lives of those around you. So in these turbulent times, invest in you, your community, and in family and friends.

A Berry Good Day

2011-07-22T20:49:00.005-05:00

There is nothing better than picking fresh berries for breakfast or clipping fresh spinach and lettuce in the evening for dinner. They are plump full of vitamins and you burn calories in harvesting your bounty. Growing fruits and vegetables in your yard, on your patio or on a window ledge is good for the environment, good for your health and good for your pocket book. Challenge yourself to eat local and in season. Try adding one fruit or vegetable to every flowerbed. A cucumber trellis is great fun for the patio. Love sweet potatoes vines climbing on the fence. Each hill can stay stored in the ground into the fall - harvesting it when you are ready to indulge. It’s not too late to plan the summer’s second season plantings or purchase the fruit trees on sale for next year’s harvest

A great blog to check out is Eden Makers Blog. Likewise, a nice book on edible estates is Edible Estates: Attack on the Front Lawn.

For your video viewing pleasure:

Bon Appetite!

Saving $$$ on Gas

2011-07-03T12:15:00.007-05:00

Summer is officially here and you feel the itch to hit the road and explore. What a relief to see gas prices take a dip at the height of summer vacation time! Other effective ways to save at the pump:

Check online sites like gaspricewatch.com, gasprices.mapquest.com or gasbuddy.com for the most competitive prices.
Watch your tire pressure. Underinflated tires of just 3 PSI (pounds per square inch) can degrade your miles per gallon by 1%.
Keep your car engine will maintained. A properly maintained vehicle will run more efficiently and give you better mileage, which saves you money in gas.
Get rid of unnecessary weight in your car. The heavier the vehicle, the more energy it takes to move it on the road.
Park in the shade. Gasoline evaporates out of your tank and it does so faster when parked directly in the sun - winter or summer.
Drive conservatively and at a steady speed. The greater your speed, the less miles per gallon you will average. Better yet, bike it. :)

Alphabet Soup of Financial Planners

2011-05-01T14:02:00.006-05:00

Our assumptions are that no one cares more about your financial future than you. So if you need and/or want help in making wise financial decisions, who can you trust with your money and your financial welfare? Most of us pick a financial advisor by asking a friend or relative. We might also stop in our bank, talk to our insurance agent, or hear about financial advisors that advertise in print, radio, television, or social networks. Many financial advisors will have letters behind their name to signify a specialty or that they have passed specific test and accreditation. Here is just a sample of the most common certifications you will see associated with financial advisors:

AEP - Accredited Estate Planner

CDFA - Certified Divorce Financial Analyst

CFA - Chartered Financial Analyst

CFP - Certified Financial Planner

ChFC - Chartered Financial Consultant

CLU - Chartered Life Underwriter

CMFC - Certified Mutual Fund Counselor

CPA - Certified Public Accountant

CRC - Certified Retirement Counselor

CRPS - Chartered Retirement Plans Specialist

NAPFA – National Association of Personal Financial Advisor

PFS - Personal Financial Specialist

RIA - Registered Investment Advisor

Just because a financial advisor has letters behind their name does not make them an honest person. The April 29th edition of the USA Today stated that in 2010 there were 87,222 Securities and Exchange (SEC) complaints/questions and 1,310 Financial Industry Regulatory Authority (FIRA) new disciplinary actions filed. To help you find a financial advisor that you can trust, research their certifications and accreditations and check out BrightScope Advisor Pages. BrightScope post information on advisors such as their employment history, qualifications, amount of assets under management and complaints filed. Do your homework when selecting a financial advisor. You do not want to trust your financial well-being to the next Bernie Madoff.

The Harvest of the Incredible Front Yard Edibles

2010-10-25T23:06:00.005-05:00

Call it editable estates, urban agriculture, reducing your carbon footprint, or a throwback to the American ‘Victory Garden’ of World War II -- Last year, we decided to plant at least one surprise edible in every garden plot in our back and front yard. Among the many fruits and vegetables, we had peppers beside are day lilies, strawberry plants as ground cover lining are front walk under the yews, and sweet potatoes climbing the fence as a back drop to the zinnias.

Not only have we been rewarded with the playful fun of edibles interwoven across the landscape, we have relished (no pun intended) in the harvest. We have feasted on fresh vegetables and fruits all summer and have been canning and freezing to carry us well past Thanksgiving with home goodies. Who knew that three cucumber plants would give us enough to can dozens of quarts of dill pickle spears and bread and butter pickles? This fall, our pepper jelly has been a huge hit at gatherings. We found a very simple, step-by-step recipe at pickyourown.org. With very little effort, we have been able to reap the bounty of the harvest.

As we pulled in the last of our harvest this past weekend, we are already thinking about growing our production next year. We challenge all of you to tempt the fun of it next spring, even if it is just a few small strawberry plants as ground cover or a blue berry bush next to your garage doors. Before you know it, you also will be indulging in the joy of fresh picked berries with your morning coffee and swapping zucchini muffin recipes with co-workers.

Nothing warms up a cold, grey, winter day like browsing through a seed catalog such as that from seedsaver.org and imagining your own little garden, full of ripe tomatoes and chilies and cucumbers and zucchini and carrots and ... :). -Happy planning.

The Flywheel of Finance

2010-10-10T15:59:00.008-05:00

You have probably heard it said before, “the first million dollars is the hardest to save.” As I continued teaching from Jim Collin’s book 'Good to Great', he speaks to how disciplined thought and disciplined action brings about disciplined results. It is like a flywheel -- like starting a lawn mower, where it is hard to get started and then through continual little pushes (disciplined action) the flywheel begins spinning faster and faster until you reach breakthrough (the engine's running).

As I am reading this, I keep thinking about how hard it is to make your first million dollars (I’m a long way from my first million) and how the flywheel provides a great analogy to saving your first million. It takes disciplined thought and disciplined action to start saving on a regular basis. If you start out saving $25 a month, you are starting your million dollar flywheel moving. Every time you get a raise, receive a bonus or a cash gift, you can add more to your monthly savings and you are pushing the flywheel faster. The more money you have in savings, the faster the flywheel turns because of compound interest. If you have $100,000 saved and you get a 5% annual return, you have just added $5,000 a year ($416.67 a month) to your savings. If you have a million dollars in savings with a 5% return, you are adding $50,000 a year to your savings or $4,166.67 a month.

When you look at your retirement flywheel, what ever your magic number for retirement, it is a big, heavy flywheel. It takes disciplined thought and disciplined action to get disciplined results. The best way to get your retirement flywheel moving is through monthly automatic transfers to your retirement savings; 401k, Roth IRA, traditional IRA or other retirement investments. Whether you start off with $5, $25 or $250 a month, you are starting your flywheel moving. The more you contribute the faster your flywheel moves and the quicker you will reach your goal.

The goal should be to have your flywheel move on its own without you adding money to it with enough to cover your expenses. At that point, you are independently wealthy and reach your point of financial independence. Your passive income is making enough to cover all of your expenses. Jim Collins would refer to this as “breakthrough.” What is your breakthrough number --$1,000,000 in savings returning 5% so you get $50,000 a year? $2 million in savings returning 5% so you get $100,000 a year? What ever your number, you can’t get there unless you start making contributions to your retirement savings.

Start Pushing Your Flywheel…..TODAY!

Leadership and Personal Finance

2010-10-03T22:49:00.008-05:00

In my Senior Seminar class at Mount Mercy University we are reading "Good to Great" by Jim Collins. Chapter 2 is on Level 5 Leadership. As I read this chapter, I couldn’t help but to think how each one of us can be a leader in personal finance and how we can take some of the principles from Jim Collins and apply them to our daily lives. Collins describes a Level 5 Leader as someone who “builds enduring greatness through a paradoxical blend of personal humility and professional will.” We all want our families to be successful and I want my kids to be more successful than me (building enduring greatness).

A central theme of this chapter is setting up the company for future success and not worrying about individual success. Our last blog entry was on how much money it will take to retire so I naturally put the two together. I want my kids to be able to retire and live successful lives, so I want to set them up for future success. The questions are how do I do that and am I doing the right things.

What we decided to do is a Roth IRA "parent match"; matching up to a certain dollar amount each year, dollar for dollar, that the kids put into a Roth. For the kids, they are doubling their money. For us (the parents) we are giving them their inheritance early and hopefully instilling in them the importance to save for retirement. At age 17, Clay has a Roth IRA which will be tax free income when he retires. Fifty years of compounding will really cause his Roth IRA to grow.

We have also helped the parents of our grandchildren to set up 529 college savings. I know it doesn’t sound exciting, but at Christmas and birthdays, we contribute to their 529 accounts. We like to look at it as long-term love. Over 15-18 years, 3-year-old Jordan’s and 5-month-old Emmy's money will grow and ease some of the cost of a college education.

So I guess what I’m trying to say and do is that it is not so much about us anymore as it is about the future of our family. We all try to do the right things, share our love, and now share our knowledge and finances. We make a comfortable living and it would be nice to have more, but I would rather cut back a little so we can help the kids and grandkids with their future expenses and saving goals; in personal finance and leadership, taking our family from "Good to Great".

What is it Going to Take to Retire?

2010-09-26T11:12:00.009-05:00

In reading the Sunday, September 26th Cedar Rapids Gazette, there was an article “From Boom to Bust” by Susan Tompor that got me thinking what it would take for me to retire. Susan also wrote the article “How to Prepare for Retirement” to help you plan. One of the things she stated in her “How to Prepare” article is “that you want to spend 4 percent or less each year from your retirement saving.” So….how much is it going to take? Other experts say that you will need 80-100 percent of your pre-retirement income in retirement.

If we put together all of this, and for ease of numbers, say you make $100,000 before you retire, you want 100 percent of your pre-retirement income, and you are only going to spend 4 percent of your retirement per year, you would need $2.5 million in retirement savings.

Now this does not include your Social Security income. Right now, you can start collecting Social Security at ages 62, but if you want to receive your full Social Security benefit, you must wait until you are 67. It might be earlier deepening on your ages. You can check what you will receive from Social Security at http://www.ssa.gov/.

All I can say is that I’m really glad that I have a job that I love and that it is a secure job. I don’t know when I will actually retire or if I will just slow down and travel more. It’s good to know your retirement numbers; no matter how scary they look so you can plan. A favorite quote of mine as it relates to retirement savings is “The best time to plant an oak tree is 20 years ago. The next best time is today.”

Perspectives

2010-05-13T21:29:00.008-05:00

On Monday, our oldest son returned back to Colorado Springs from Afghanistan after being deployed for 13 months. We were able to meet him at the Denver International Airport after his 72 hours of travel from Kuwait. It was so good to get the hugs and see him face to face. We helped him get settled into his apartment, pick up his new Jeep and took him out for non-army food, complete with non-disposable tableware and actual glass goblets.

As we sat eating dinner at the Blue Star Restaurant in Colorado Springs, Nate said something that really stuck with me. “Everyone should be required to spend a few days in Afghanistan. They would really appreciate what we have here in the United States a lot more.”

Our army captain has been deployed 25 of the last 30 months, first to Iraq and then he volunteered for Afghanistan. He enjoys the little things a lot more; like a shower that he doesn’t have to walk 200 meters to, a bed that fits his 6’5” frame, with more than a 2” mattress, no sand or dirt in his coffee. I can only imagine what life was like on his deployments.

Some families have been up against some financial hardships and it calls for tough budgeting to pull through these times, to really draw a hard line between needs and wants. I would like to challenge everyone reading our blog is to mentally go to Afghanistan or Iraq for a moment and think about what your life would be like. When you return from your mental trip, I hope you feel as I did; the appreciation of everything you have, what the United States has to offer, and for the men and women deployed away from friends and family.

Thanks to all the men and women serving in our armed forces; And may every son and daughter serving, return home safely.

Fitness and Financials

2010-05-09T20:22:00.003-05:00

Four weeks to my bucket-list triathlon sprint. It is the last hour panic of must get healthy, must get fit activity. I had forgotten how good you feel when the endorphins kick in after a run. What’s so great is that you can do it all so cheaply.

You don’t need to spend money on a gym or buy equipment to get fit. Running outside beats the tread mill for cost and keeping you fresh and inspired. Public Television broadcasts workout programs you can record and follow. The internet has a great yoga videos you can follow along for free. Staying healthy- staying fit helps keep your healthcare cost low and keeps you feeling great.

If you are paying a gym membership, now might be the time to suspend it and spend your time outside running or riding a bike. Grab friends to join you on the run or bike ride and make a day of it. Not only will you be saving the cost of your gym membership but you are building a tighter community of friends; all getting healthy together.

Tax Time – The Psychology of Taxes

2010-04-12T22:44:00.004-05:00

Okay, so I have my MBA in finance and I know that we should have our tax withholdings set from each paycheck so that come April 15, we still owe $1,000 or more on taxes. My propblem is that I really like getting a tax refund. Financially I know that if we get a tax refund, we have just given the government an interest-free loan. We could have invested the money or paid off debt instead of having a “forced savings of 0%” by overpaying taxes.

If we owe money come tax time, I REALLY dread doing my taxes, put it off until the last minute, get moody and am generally no fun to be around. I feel that the government is taking way too much of my salary for taxes and look for every possible deduction that I can find.

When I know that I’m getting money back on my taxes, I look forward to getting them done to see how much I get back. I’m in a much better mood and feel good that I’ve done my civic duty of paying taxes. I then put the money towards debt reduction, investing, savings or vacation. It is “guilt free” money that I feel good about spending.

Are a few dollars in interest (or more) worth the reduced stress come tax time? Financially and psychologically, I have two different answers. In this case, my mental soundness wins over my financials.

Hope you are, as well, on your way to a pain-free April 15th tax day.

A Jewel in the Rough

2010-03-13T07:31:00.007-06:00

We found another mini-vacation site only 35 miles from where we live. It is the Ladora Bank Bistro, in no other place than Ladora, Iowa, population 286. Proprietors, Brad Erickson and Colleen Klainert purchased the 1920-built “jewel box” style bank and turned it into a bistro of fine wine, phenomenal food and an atmosphere that an old banker loves.

The structure maintains its marble teller windows and the iron teller cages, original wood floors and the two original vaults, now being used as a wine cellar and a kitchen storage closet. Engraved in the wall, next to the 24 foot high ceilings are four pillar statements that warm my heart:

“Frugality is the the Parent of Fortune”

“Integrity in the Companion of Success”

“Wealth is the Achievement of Thrift”

“Diligence is the Mother of Virtue”

On the outside of the bank, above the entrance etched in stone reads “The wealth of this community embodies the richness of her soil, the integrity, frugality and diligence of her people.” On the first visit, Kristy bought me their t-shirt with the sayings.

Colleen and Brad have a great menu of small plated appetizers meant to be shared. Our favorites are the Prosciutto, Maytag Blue Cheese, Stromboli and mini mushroom tart coupled with the California blend Snap Dragon. Colleen is a wine expert and pairs the wine with your taste and food to make the culinary experience extraordinary. We end on either the chocolate covered cherries or the Turtle Minis, both wonderful.

Chocolate, Red wine, a Fortress of old money….is this heaven?

If passing through Iowa or a nearby resident, we invite you can take an afternoon or evening mini vacation and experience the comfort and fun of the Ladora Bank Bistro. Check out the website for the story on the bank, Brad and Colleen, pictures, the menu and hours. Let us know what you think.

Save Energy -Save $$$

2010-03-06T22:57:00.004-06:00

If you have a primary residence in Iowa and are served by MidAmerican Energy, then you are most likely eligible for a free energy inspection audit. We had our EnergyAdvantage® HomeCheck this past week. Not only was it FREE, but they made energy-saving improvements to our home during the audit. Outcome of the visit:

A FREE report of the condition of our home's insulation, heating and cooling efficiency, water heating equipment and windows
Replaced bulbs with FREE energy-efficient light bulbs
Swapped out two FREE shower heads with energy-saving, massaging shower heads
Installed a FREE energy-saving faucet aerator on the guest bathroom sink
Provided us with a 70% rebate for additional insulation in the attic (value of $750!)

There were a number of other things that they would have done, had our home needed it (such as water pipe insulation, water heater insulation blankets and programmable thermostats).

Check with your energy provider to see if they are offering the same service. Not only were the upgrades free, but they will help us save money on our future energy bills, the updates conserve energy and reduce the demand on natural resources needed to produce energy, reducing our carbon footprint.

Rebalancing

2010-02-28T13:00:00.009-06:00

It’s the end of the month and time to assess how we are tracking fiscally into the new year. As we continue to reassess our spending habits and values, we still crave for a more simplified lifestyle. Not so much about spending less time at work, we both love our careers. But we both feel the need to spend more time with our family, our extended family and our friends. We love meals at home, movie night with homemade pizza and popcorn, playing dominos, cards or watching the boys take on marathon nights in the game of Risk, soccer games and story-time with our grandchild. Those times are starting to seem more few and far between.

It is difficult to keep a healthy balance between work and time for family and friends. There is always one more report to write, another meeting to prepare for and another e-mail to answer. We have to consciously make family and friends a priority. We know that balance is important in reducing stress and maintaining our health. How convenient that doing the simple things at home with family and friends is also better on the budget and living within your means.

Triathlon

2010-02-24T21:00:00.006-06:00

Staying healthy and fit is one of the best things you can do for your bottom line and your waist line. You get to that point where a little voice in your head starts to think that if you don’t get going, you’ll be too far gone to ever be fit again. How to get there? Aim high. Isn’t a triathlon on everyone’s bucket list? Are you in the Midwest? Check out the June 6th Pigman Sprint Triathlon in Palo Iowa. Not in the Midwest? Find a USA Triathlon sanctioned event near your hometown.

Yes, we are recruiting first-time participants, preferably over the age of 50. We like good company and would be thrilled to have some still with us at the finish line. This year, it’s all about finishing and all the endorphins between now and June in prepping for the big event.

A Phenomenal Alfredo

2010-02-20T21:00:00.004-06:00

Yes, Bob did it again. You must try this! Friday night we had Chicken Alfredo for 4 for $12. (Cost of paired wine excluded).

We followed the Alfredo recipe from RecipeZaar with the addition of ½ cup of shredded Asiago cheese. This sauce went over a bed of thin egg noodles from Kalona and was topped with chicken (cubed) browned in olive oil and 1 cloves of garlic. For a wine, we paired it with Mayo 2008 Sauvignon Blanc. If you are a die-hard red fan, then a pinot noir will work very well. Mighty fine dining at a mighty fine value!

Linen Liners

2010-02-15T18:30:00.004-06:00

Have you ever received a gift where the wrapping paper is so beautiful, you can’t bear to toss it? I love to upcycle beautiful gift wrapping as linen linings in my dresser drawers. A special treat is to sprinkle them with lavender oil. Even if the paper only stretches for one drawer, I love the mix and match of each drawer having it’s own characteristics. Seeing the lovely paper when I root to the bottom of the drawer reminds of the event's special celebration day.

Valentine's Day Panic

2010-02-12T18:55:00.006-06:00

It is almost Valentine’s Day and with all the other chaos, you have yet to prepare for how you will let your loved ones know how much they mean to you. Short on time or money, the following action plan will save you:

1) Relatives and parents for whom you have not yet mailed a valentine: Take a picture of yourself/family blowing a kiss from your phone; and then send off to their cell phone their ‘Happy Valentine’ picture-card.

2) Write tons of little notes to your kids/husband/wife and hide them everywhere they will pass that day. Example places with sample messages:

a. For your kiddos: coat pockets “Pocket full of love for you”, toothbrush “Your smile lights up the room”, math book “1-2-3, my love for you will always be”, I-pod “Your voice is like music to my heart”, steering wheel of car “Even when you drive me crazy, I still love you”.

b. For your hubby or wife: in their shoe “You are my soul-mate” , bathroom mirror “ lip-stick kisses”, remote control “You turn me on”, light switch “You are the light of life”. You get the picture - the sillier, the better.

3) Plan a dinner where everyone participates. A favorite of ours is homemade heart-shaped miniature pizzas.

Hope you all have fun-filled day with your loved ones.

Snowy Sundays

2010-02-10T21:49:00.008-06:00

It’s Sunday afternoon, there's a lot of snow on the ground, it’s cold and we have no energy to do all the things we need to do. Solution: Escape on a mini 4-hour vacation. Last Sunday, we went out with another couple to chase away the winter day and take a time-out from our overwhelming list of 'not-done's.

We landed at Fireside Winery, located in Marengo, Iowa about 30 minutes from our home. We had great fun browsing through their gift store and sampling their wines. Who knew Iowa could produce such lovely reds? Levi, our host, shared warm brie and bread with everyone in the tasting room.

Our favorites? The Frontenac and Hearthstone, which pared well with the artichoke spinach dip, our meat and cheese plate, the good conversation and wonderful company. The scenery of the snow covered field was peaceful and relaxing. You don’t always need an expensive vacation to escape. There are discoveries to be made in your own backyard.

Ties that Bind Us

2010-02-02T05:30:00.049-06:00

Our office moved into a new location. With cutbacks this year, there was no budget for art. Our solution was to create our own artwork. To start, most everyone contributed at least one old necktie from their household.

This past Sunday, volunteers pulled together and created the tapestry for our reception area, titled ‘Ties that Bind Us’. The backing, stuffing and neckties were all repurposed from previously discarded items. Our work of art is a great example of “Upcycling”, where you repurpose discarded items to give them a new life. Turning trash into useful items goes a long way in saving you money and the environment.

Not only do we have a lovely work of art; the pride, joy and teaming together to create the work of art is priceless. Wearing the remaining portion of the clipped neckties will add to the fun during our open house next month. :)

Less-Stress Investing

2010-01-30T12:30:00.007-06:00

“New Bank Rules Sink Stocks”, “Turn at the Capitol Rocks the Market”, “Stocks Set to Bounce” -The stock market and individual stocks are susceptible to headliners, rumors and speculation. Daily monitoring of the ups and downs can be disheartening or exhilarating. Remind yourself that stock market fluctuations are relatively short-run and investment in stocks should be for the long haul. Historically, prices recover over time. If volatile stock investments are too stressful for you, consider growing your investment portfolio through low-cost index funds (i.e. check out Vanguard 500 Index at Vanguard.com). Index funds reduce the effects of individual stock fluctuation by diversifying your portfolio and have performed comparably well.

In order for your savings to outpace inflation; you will need to take on a certain amount of risk with your investments. Low-cost index funds are an option for the road-weary.

Never Shop Hungry

2010-01-29T05:30:00.011-06:00

Yesterday I stopped at the store on my way home from work to pick up a few items on a list. Being close to dinner time, I was hungry. I ended up filling my cart with junk food. My intent was to pick up a battery, laundry detergent and milk. While I did get the items on my list, such items as Tostitos, Velveeta cheese, salsa, crackers and Oreos also populated my cart. Bad move to grab a cart vs. a basket which further enabled caving into my hunger cravings. The kids at home were happy to see the junk food but it was not what we needed. I ended up spending over $50 on what should have been a $20 trip.

Lessons learned:

• Don’t go grocery shopping when you are hungry. Food and low prices (I’m always looking for a deal) were just too hard to pass up.

• Stick to the list. Even though I had a list, all the end caps, large stacks of food and low prices were too good to pass up. Even though I got a great deal on all the extra munchies, it cost me twice as much as I should have spent.

• Use a basket not a cart. I had plenty of room in the grocery cart and it didn’t weigh me down when I added the additional items not on my list. If I would have used a basket, I know I wouldn’t have been as tempted to purchase items not on my list.

The 28-Day Challenge

2010-01-27T20:51:00.004-06:00

Feeling cash strapped? Trying to dig out of debt from December? February is the shortest month of the year and is a good time to challenge yourself to simplify. Experiment with cutting out non-necessary expenses for 28 days to see the impact on your cash flow and your happiness. What would happen if you made most your meals at home with your family and friends; If you invited your friends over to make a meal together instead of going out on the town; If you didn’t watch the cable add-ons for the 28 days; If you packed your lunches and not buy anything from a vending machine?

Only you can decide what your wants are, what makes you happy and what is worth the cost. Try the 28-day experiment. See how much money you can churn toward reducing your debt, build up your emergency fund or give to a cause like Haiti. The challenge is on… go for it!

Home Maintenance

2010-01-21T05:30:00.007-06:00

Last week, a broken kitchen faucet led to an accidental remodel of our first floor bathroom. We love home improvement and a trip to Lowell’s is like a visit to the candy shop. The bathroom remodel was part joy and part good ongoing upkeep.

Home repairs play an important part in protecting your investment. Doing it yourself can be a fun challenge and a source of pride. In taking on the task, it is important to do your homework. Taking advantage of the free classes at your local home improvement store is a great way to build skill and befriend an expert. We believe we cut our remodeling costs by more than half in doing it ourselves and are very happy with the outcome.

‘Labor of love’ or just plain ‘labor’, doing it yourself is a great way to keep your maintenance cost low and your home value up.

Dieting and Dollars

2010-01-19T05:30:00.012-06:00

Has January always been plagued as diet month? Ads plaster the newspapers, commercials are everywhere and we hear of the excessive holiday weight complaints throughout the day-from ourselves as well as others. Our excess weight is a sign of how we spend our money. Over 10% of American's disposable income is spent on food. This is twice what the typical family spent in 1929.

We know we don’t need to join a club or start a fad diet to lose weight. We could cut two-thirds of our fat, shave 700 calories and save at least $7 a day (> $2,500/person this year), simply by selecting healthy food options compared to eating processed fast junk food. If we eat healthy, we will lose weight, save money and live a longer, healthier life.

Diet and dollars – may both our weight and budget reflect healthy losses and gains in this coming year :)

The Gift of Service

2010-01-18T20:39:00.004-06:00

We were visiting with a new graduate and his fiancé Friday evening. He had an interview earlier that day and felt it had gone well but didn’t seem excited about the opportunity. They were taking about their honeymoon plans and how they love to travel. We suggested that they give thought to a year or two of volunteerism. With a tight job market, it is a good way to get experience and growth. It is also something you have the freedom to do before you take on the responsibilities of a home mortgage, a car payment and children.

The travel and experiences will enrich your life in so many ways. Leading a productive life is rewarding. Giving of yourself to help others is incredibly fulfilling. There are a number of options; Doctors without Borders, Peace Corps, Financial Service Corps, USAID, KIVA, teaching English abroad in underdeveloped communities and a whole host of missionaries just to name a few. For new graduates, it something to consider as you weigh your options against a tight job market.

Live-Save-Give

2010-01-08T07:40:00.004-06:00

As the New Year begins, it is time to reevaluate budgets, investments and giving. On Saturday, January 2nd we were driving and listening to one of our favorite money broadcast: Marketplace Money. They had an article about the Fifty Percent League that made us rethink our giving. As Marketplace Money states: “The Fifty Percent League is made up of people who believe it’s their moral obligation to give away as much of their money as they can.”

We believe in the 80-10-10 rule where you live on 80% of your income, save 10% of your income and give away 10% of your income. This Saturday was the first time we heard about the Fifty Percent League and it made us question if we were giving enough to the causes we believe in.

The article interviews Pilar Gonzales, who only makes about $35,000 but gives away at least twenty-five percent of her income. Even though she does not make a lot of money, she has placed her priorities in helping others and is living out her values.

No matter how much or little you make, you can make a huge difference in other people’s lives by giving of your time, talents and financial resources. As you make your New Years Resolutions, are you living out your values with your time, talents and money? We invite you to listen to their story.

Fresh New Year

2010-01-02T21:20:00.004-06:00

New Year, New Resolutions, New Expectations. New Years is time to de-clutter. Clutter is physically and mentally exhausting. Following all the commotion that comes from the end of the year frenzy, I long for quiet, peaceful, at rest January. It is a time to de-junk my house, my office, my closets and my life. Doing so brings about clarity and energy. Steps of this process:

1. Assess priorities and establish a plan on how you will give focus to your priorities.

2. Choose the objects, obligations and activities that align with your priorities. Say no to the things that don’t matter. Saying yes to things that are not a priority will drain you.

3. Eliminate the non-essential. This frees you from having to tend to things that aren’t important to you and reduces clutter both physically and mentally.

4. Make sure every physical item has a place. Being disorganized is a waste of your time as you look for lost items as well as an irritant. By being organized, you gain control over your space and time.

5. Create a schedule where every priority is allocated it’s time. Dedicating time to your priorities assures you are working toward achieving and maintain your goals and will keep you in control and on top of your world.

6. Review and update your budget for the new calendar year. Make sure it reflects your priorities and that you are living within your means.

7. In setting up a budget, follow the 80-10-10 rule of living off 80%, saving 10% and gifting to others 10%.

Following these steps kicks off the year with focus, clarity and new energy.

Tax Savings at Home

2009-12-23T10:06:00.004-06:00

The holidays are here and it’s a time of gathering family and friends. Do you feel that itch for a bigger homestead? Tax incentives make the jump even more enticing. On 11/6/2009, the homebuyer credit was expanded. Under the new law, you may be eligible for up to an $8,000 credit if you purchase a home in 2009 or enter into a binding contract to buy a principal residence before May 1 of 2010 and close by June 30, 2010. For qualifying purchases in 2010, you have the option of claiming the credit on either your 2009 or 2010 tax return.

The new law opened up the credit to long-time homeowners buying a replacement principal residence as well as raised the income limitations. The full tax credit is available to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000, or $225,000 for joint filers. Those with MAGI between $125,000 and $145,000, or $225,000 and $245,000 for joint filers, are eligible for a reduced credit.

For more detail on eligibility and how to take advantage of this tax credit, click on the title of this entry to link to the IRS description of this credit.

Vehicle Tax Savings

2009-12-21T20:28:00.003-06:00

Do holiday trips and gas prices get you thinking about a new ride? There are a few tax advantages you may want to consider under the American Recovery and Reinvestment Act of 2009 when looking at your new vehicle options:

1. Plug-in Electric Drive Vehicle. Purchasing a plug-in, 4 or more wheeled electric drive vehicle after 12/31/2009 can earn a tax credit between $2,500 and $7,500, depending on the battery capacity of the vehicle.

2. Low Speed Plug-Ins. Certain low-speed electric vehicles and two- or three-wheeled vehicles can earn a credit of 10% of the cost of the vehicle (up to $2,500) for purchases made between 2/18/2009-12/31/2011.

3. Conversion Kits. You can earn a tax credit of 10% of the conversion cost (up to $4,000) for converting a vehicle to a qualified plug-in electric drive motor vehicle between 2/18/2009-12/31/2011. A taxpayer may claim this credit even if the taxpayer claimed a hybrid vehicle credit for the same vehicle in an earlier year.

4. Lowering Alternative Minimum Tax (AMT). Starting in 2009 the Alternative Motor Vehicle Credit (including the tax credit for purchasing hybrid vehicles) can be applied against the Alternative Minimum Tax.

5. New Vehicle Sales Tax Deduction. Taxpayers who buy new vehicles in 2009 can deduct the state and local sales taxes they paid or other taxes and fees they paid in states with no sales tax.

Tis the Season

2009-12-20T11:30:00.005-06:00

It is the holiday season. Are you worried about it being a budget breaker? Do you hate fighting the crowds at the shopping malls? Consider going away on a family retreat in place of exchanging gifts. All the stress about the right size, color or spending money on something they won’t like goes away.

At our household, we go away as a family each Christmas. It is such a gift to focus on time and having fun with one another. We do a few trinkets in a stocking and sometimes draw names at Thanksgiving for a Secret Santa to carry out over the days on the trip, but the days of gifting have to total less than $25. Spending the holiday on a vacation with family, whether at a pricy ski resort, tent camping on a beach or a long weekend at an indoor water park, you are creating memories, relaxation and fun as well as staying in the spirit of the season.

Fun Friday Nights

2009-12-18T17:46:00.009-06:00

In the past, we use to kick off the weekend with dinner out with friends. Once we all started having kids, the logistics of getting a sitter and leaving the kiddos, on top of the cost of eating out made for more stress than fun. We soon learned that it was more enjoyable and economical to collect at one of our homes, kids in tow and experiment with new recipes.

Last Friday, we fixed Anaheim Shrimp Scampi. Costs of our evening with friends amounted to $20 for 2 lbs of shrimp, spaghetti squash, an avocado and assiago cheese. Adding in the bottle of wine for $8, we fed four adults for $7 each. Our recipe was from George Stella's "Livin' Low Carb" cookbook which was both scrumptious and easy to make. This meal at a restaurant would have easily been $20 a person, a savings of greater than $80 long before you add in the wine and a tip. Culinary nights at home with friends are laid back, fun and frugal and make for a good way to start your weekend.

Welcome

2009-12-18T16:03:00.004-06:00

Imagine your life 10, 20 or 30 years from now. Imagine you never have to worry about money. There are no arguments about money. Imagine being in control of your money, not your money in control of you. Imagine that you are working where you want because you find meaning in the work, not working for the paycheck. Imagine how you are living your life the way you want, in sync with your values. You are able to do what you want, when you want. You are able to give back to your community through giving of your time, talent and financial resources. Imagine your life full of purpose.

This blog invites you to look at your personal finances and think about different ways to achieve your goals. What is your definition of financial success? Financial success is unique for each individual. It may be living in a big house, driving fancy cars or traveling the world. It may be working in developing nations to help feed the hungry, inoculate people against preventable disease; or it may be living comfortably with your family, giving back to the community, and having a purposeful life.

Researchers have long strived to find the secret to happiness. Money does not provide happiness. One of the key contributors to happiness is to have a meaningful and purposeful life. Money is a tool, a resource, to be used wisely in accordance with your values, vision and mission. You can use money as a resource to help you achieve your goals or you can work you whole life trying to acquire more of this resource. How you use this resource and view this resource has a great impact on your happiness and life fulfillment.

Throughout this blog, we hope to share financial fitness tid-bits to help all of us find ways to save money. Take advantage of the frugal fun and financial fitness suggestions that fit you and start applying them to your daily life. You will be amazed at how little changes can make a big difference in achieving your personal financial goals.

Bob and Kristy