Okay, first off, let me say that I am sincerely, SINCERELY sorry for the lack of posts!!! I have a number of excuses, but they mostly have to do with my new business, The Mommy Brand, and the blog that I write to go with it. It's pretty much taken over my life for the last little while! Here's my plug: go to my new website for trendy handmade baby gear, and go to the blog to win some great giveaways, get baby shower ideas, baby product reviews, etc. Done.
Now back to the good stuff... I am also now a guest author for a great blog run by BYU students, grads, and faculty called Notes on Parenting. Here's what I posted today...
I just graduated with my bachelor's degree this past spring. Going through high school and college, I always envied the kids whose parents bought them a brand new car, bought expensive clothes, flew them and their spouse to family vacation – you get the idea. Although I was very jealous of the financially dependent kids, looking back, I'm grateful for what I learned from being financially independent. I learned when I first started high school how to save for what I wanted, budget for my expenses, and to live within my means. Another great benefit: now I have more of a long-term vision where I can see the consequences of my financial decisions.
A huge problem among young adults, especially in my generation, is that they start thinking that once they fly the coop they should still be able to live like they did when they lived with their parents; they often expect to have a great car, the latest and greatest electronics, a well-furnished condo, the latest fashions – all the things their parents worked their entire lives to be able to afford.
Next thing they know, they are up to their eyeballs in student loans and credit card debt, turning to their parents for a bail-out. And the most incredible thing that I will never understand is THEY DO IT! Some kids' parents bail them out over and over again! Some long-term effects of these terrible spending habits include: (1) a lifetime of debt, (2) strained – and very often failed – marriages, and (3) bankruptcy. You might think that this is just an extreme example, but you would be surprised at how often this happens.
Don't worry, you can help your kids avoid financial disaster. Here are a few principles to begin teaching at a young age:
1. Teach your kids the value of work. They need to know that money comes from work. Kids these days (my generation included) are living in the Age of Entitlement – they believe that they deserve things. When my mom refused to buy video games for my brother, he always used to say, "Mom, most kids' parents buy them like fifty games."(I'm sure none of you have ever heard that one before!) He felt he deserved what other kids had. Kids need to know that they can work to earn what they want.
2. Teach them to set goals. Goals are essentially the underlying principle of a budget. As you teach your kids to set goals to earn enough money for their wants, help them understand that in order to reach their goal, they will need to give up some of the things they want in order to get what they want most. Help them save a certain percentage of their earnings toward one of their goals.
3. Teach kids financial literacy. When age appropriate, get your child a bank account and teach them how to make deposits when they earn money. Help them understand what a savings account, withdrawal, and deposit are. Teach how compounding interest works – if they keep their money in the bank, it grows. When they get older, get them a checking account (and teach how to balance a checkbook), and eventually a credit card.
16.8.10
27.4.10
Education Loans
Sorry for the long hiatus from posting - I've been working on finals, graduating from BYU, and moving back home to Alaska. But I'm finished with school and ready to put time into some good posts!
Just a thought for today - As I've just finished college, here's a little insight on financing an education.
Education loans are relatively easy to come across, but if at all possible, I encourage students to get by the best they can without them. Live frugally and within your means - college is probably the easiest time in your life to live cheaply.
Remember these two points:
1. When you graduate from college and start making some real money (hopefully!), just think how wonderful it would be to NOT OWE YOUR PAYCHECK to anyone! When money comes in, you get to decide what you do with it!
2. When you're in school, remember that if you live NOW like most people WON'T, later you'll live like most people CAN'T.
Just a thought for today - As I've just finished college, here's a little insight on financing an education.
Education loans are relatively easy to come across, but if at all possible, I encourage students to get by the best they can without them. Live frugally and within your means - college is probably the easiest time in your life to live cheaply.
Remember these two points:
1. When you graduate from college and start making some real money (hopefully!), just think how wonderful it would be to NOT OWE YOUR PAYCHECK to anyone! When money comes in, you get to decide what you do with it!
2. When you're in school, remember that if you live NOW like most people WON'T, later you'll live like most people CAN'T.
12.4.10
Wise Counsel on Budgets
Here are more great words of wisdom on budgeting by Marvin J. Ashton:
Some claim that living within a budget takes the fun out of life and is too restrictive. But those who avoid the inconvenience of a budget must suffer the pains of living outside of it. The Church operates within a budget. Successful business functions within a budget. Families free of crushing debt have a budget. Budgeting guidelines encourage better performance and management. (emphasis added, Marvin J. Ashton, "It's No Fun Being Poor," Ensign, September 1982, 72.)
Some claim that living within a budget takes the fun out of life and is too restrictive. But those who avoid the inconvenience of a budget must suffer the pains of living outside of it. The Church operates within a budget. Successful business functions within a budget. Families free of crushing debt have a budget. Budgeting guidelines encourage better performance and management. (emphasis added, Marvin J. Ashton, "It's No Fun Being Poor," Ensign, September 1982, 72.)
8.4.10
Eliminating Debt: Step 2
So now that you have quit diving further into debt by using a strict cash-only budget, it's time to start paying off the debt. And since it's highly unlikely that you'll be able to pay it all off in the first month, step 2 is to prioritize.
How to Prioritize Debt:
Start by making a list of all your creditors, your balance, and the interest rate they are charging you. Example:
Bank of America Visa: $3750; 22.1%
Ford Credit: $8,400; 8%
Gap Credit Card: $475; 18.9%
Dr. Smith: $800; 10%
Then, rank each creditor by interest rate. Set aside a specific amount each month that will go toward debt reduction. With this amount, starting paying off your debts in order of interest rate (in this example, pay off Bank of America first, then Gap, then Dr. Smith, the Ford). The purpose behind this prioritizing is to get rid of the debt that is most expensive to you first. So, in the case of your Bank of America debt, each dollar in your balance is costing you 22.1 cents per year, whereas Ford is only charging you 8 cents a year on a dollar. Get rid of the credit card debt first! (Note: Keep paying your monthly minimum to ALL your debtors as you go through this process to avoid default) Once you pay off one debt, move to the next.
How to Prioritize Debt:
Start by making a list of all your creditors, your balance, and the interest rate they are charging you. Example:
Bank of America Visa: $3750; 22.1%
Ford Credit: $8,400; 8%
Gap Credit Card: $475; 18.9%
Dr. Smith: $800; 10%
Then, rank each creditor by interest rate. Set aside a specific amount each month that will go toward debt reduction. With this amount, starting paying off your debts in order of interest rate (in this example, pay off Bank of America first, then Gap, then Dr. Smith, the Ford). The purpose behind this prioritizing is to get rid of the debt that is most expensive to you first. So, in the case of your Bank of America debt, each dollar in your balance is costing you 22.1 cents per year, whereas Ford is only charging you 8 cents a year on a dollar. Get rid of the credit card debt first! (Note: Keep paying your monthly minimum to ALL your debtors as you go through this process to avoid default) Once you pay off one debt, move to the next.
5.4.10
An Alarming Statistic
In the pamphlet, "One For The Money', Elder Marvin J. Ashton gave these statistics:
"How important are money management and finances in marriage and family affairs? May I respond, “Tremendously.” The American Bar Association has indicated that 89 percent of all divorces can be traced to quarrels and accusations over money. Others have estimated that 75 percent of all divorces result from clashes over finances. Some professional counselors indicate that four out of five families are strapped with serious money problems."
That was 35 years ago, before credit was in abundant supply in our country. I believe that these stats are probably worse now.
"One For The Money" is great for all families can be ordered free through Church Distribution or downloaded here.
"How important are money management and finances in marriage and family affairs? May I respond, “Tremendously.” The American Bar Association has indicated that 89 percent of all divorces can be traced to quarrels and accusations over money. Others have estimated that 75 percent of all divorces result from clashes over finances. Some professional counselors indicate that four out of five families are strapped with serious money problems."
That was 35 years ago, before credit was in abundant supply in our country. I believe that these stats are probably worse now.
"One For The Money" is great for all families can be ordered free through Church Distribution or downloaded here.
1.4.10
The Worst Financial Advice I've Ever Heard: Part 2
Go back about a year and a half ago, just after the stock market took a nose-dive in October 2008.
If you were like most people, your retirement accounts took a nose-dive as well because they were full of stock investments.
Some bad advice I heard: Get out of the stock market now!
Why is this bad advice? It is contrary to a "sleep well" (as Dr. Sudweeks at BYU calls it) buy-and-hold investment strategy. Unless you were all set to retire that year, you definitely should have stayed in the market. In fact, this would have been a perfect time to buy.
A buy-and-hold investment strategy means (1) diversifying the types of investments, and (2) holding for a long time. The reason is that even though the stock market is cyclical and sometimes takes nose-dives and seems risky, over the course of a number of years, it is generally always a positive investment.
Lesson: If you are young, invest in stocks now, but don't monitor your stocks performance everyday - you'll be tempted to trade if they are having a bad day. Hold them! You'll notice that over your lifetime they will likely always grow. If you are closer to retirement, most of your investing should be in more "fixed" investments, such as bonds, from which you always know the payout. In the long-term, you will usually receive a higher payout with stocks; however, they are much more risky in the short-term, which is what you want to avoid when you are nearing retirement.
Let's say you had a stock that normally had a price around $50 per share during the previous summer. And say it went down to $20 in October. Well, by the time Summer of 2009 rolled around, stocks had been steadily climbing back up. So say your stock had gone back up to $35 by summer. It might not have reached its previous price of $50, but your stock is worth $15 more than if you had sold in October '08.
Now let's say you bought the stock on the day it tanked at $20. By the next summer, your stock is now worth $35 - up $15! That's a 75% gain! And if you understand the stock market, you know that if you hold it for a long time, it will likely go well above and beyond that. When it comes to investing, always remember the old adage: Buy Low, Sell High!
If you were like most people, your retirement accounts took a nose-dive as well because they were full of stock investments.
Some bad advice I heard: Get out of the stock market now!
Why is this bad advice? It is contrary to a "sleep well" (as Dr. Sudweeks at BYU calls it) buy-and-hold investment strategy. Unless you were all set to retire that year, you definitely should have stayed in the market. In fact, this would have been a perfect time to buy.
A buy-and-hold investment strategy means (1) diversifying the types of investments, and (2) holding for a long time. The reason is that even though the stock market is cyclical and sometimes takes nose-dives and seems risky, over the course of a number of years, it is generally always a positive investment.
Lesson: If you are young, invest in stocks now, but don't monitor your stocks performance everyday - you'll be tempted to trade if they are having a bad day. Hold them! You'll notice that over your lifetime they will likely always grow. If you are closer to retirement, most of your investing should be in more "fixed" investments, such as bonds, from which you always know the payout. In the long-term, you will usually receive a higher payout with stocks; however, they are much more risky in the short-term, which is what you want to avoid when you are nearing retirement.
Let's say you had a stock that normally had a price around $50 per share during the previous summer. And say it went down to $20 in October. Well, by the time Summer of 2009 rolled around, stocks had been steadily climbing back up. So say your stock had gone back up to $35 by summer. It might not have reached its previous price of $50, but your stock is worth $15 more than if you had sold in October '08.
Now let's say you bought the stock on the day it tanked at $20. By the next summer, your stock is now worth $35 - up $15! That's a 75% gain! And if you understand the stock market, you know that if you hold it for a long time, it will likely go well above and beyond that. When it comes to investing, always remember the old adage: Buy Low, Sell High!
31.3.10
Grab My Button!
Here's how:
First, copy the HTML code in the box below my button in the sidebar to the right. On Blogger, go to the Layout page on your blog, then under the Page Elements tab, click on Add a Gadget on the sidebar. Choose HTML/JavaScript, then paste the button html code in the Content box (you can leave the Title box blank if you want), click Save and ...voila!
First, copy the HTML code in the box below my button in the sidebar to the right. On Blogger, go to the Layout page on your blog, then under the Page Elements tab, click on Add a Gadget on the sidebar. Choose HTML/JavaScript, then paste the button html code in the Content box (you can leave the Title box blank if you want), click Save and ...voila!
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