Last month was a bit of an adventure with our seven year old cat. He ran away (something he’s never done) and we were worried sick. Once we got him back, we spent some money on keeping him healthy.

In addition to taking him to the vet for a check up, we also got him updated on his rabies shot. I couldn’t have imagined the true costs of being a pet owner when we first adopted him. I thought it would be cheap and easy to take care of an animal, but that’s not always the case.

If you’re thinking of adopting a pet, please read this article. It’s my hope that pets get adopted into ‘forever homes’ and that both parties happy. Unfortunately, many pets are dropped off at shelters because the owners couldn’t handle the financial responsibilities.

How much does it cost to own a pet?

Some people don’t realize the total costs of maintaining their pets. They may only think of food and the occasional visit to the vet. Being a pet owner, I can tell you that unexpected things will happen even if your pet is relatively healthy.

If you’re still interested in getting a pet, you should first check out how much it costs to care for a pet. The ASPCA looked at the first year costs of some common animals people have as pets and shared the numbers:

• Fish: $235
• Bird: $270
• Guinea Pig: $705
• Rabbit: $1,055
• Cat: $1,035
• Medium Sized Dog: $1,580

Speaking of the ASPCA, shelter animals can make wonderful pets for your home. Don’t think that they are the throwaways. My family went to the local shelter years ago and they were able to find a kitten with the particular temperament they were looking for. He was very people friendly and loved to snuggle up to you when you fell asleep.

Have a pet emergency fund

It’s important to plan ahead and save money up for your pet. Look at the numbers the SPCA has and budget for your pet’s care. You may want to set aside a dedicated savings account for your pet, or you could add that amount into your emergency fund and keep it in one big account.

We all want to be responsible pet owners, but you have to realize that while love and attention are the main ways to care, you still have to have money. The last thing I’m sure you want is to be forced into an economic euthanasia.

Tips for saving on vet care

While pets are never free to take care of, there are ways you can make it more affordable. The key to saving money on taking care of your pet(s) is not to be frugal, not cheap.

Find an affordable vet you can trust

I’ve had my cat since I was in college and was on a very tight budget. I managed to care for him on my limited budget by utilizing my local animal shelter’s low cost pet clinic. There are shelters around the country that offer this service.

The catch with these cheap clinics is that often have odd hours (whenever they can get volunteers), are based on your income (my shelter was $42k or less), and offer limited services. The shelter I used in Virginia covered my cat’s needs (shots, annual checkups, and flea control) and was incredibly inexpensive. I paid about $15 for an office visit and $12 for his rabies shot.

If you don’t qualify for a low cost clinic at the SPCA, some pet stores have clinics, like Banfield at PetSmart. They offer more services and have regular office hours. The quality can vary with the clinics, so check around before you choose.

Once I finished school and had a higher income, I went ahead and found a vet with more convenient hours and a good reputation with my pet owner friends. I’m happy with my current veterinarian and my cat is doing well.

Schedule regular check-ups

Don’t skimp on getting your pet’s annual checkup. Preventive care can save you money in the long run, as you can catch ailments earlier. Keep careful records of your pet’s inoculations and other health-care services. If you move somewhere else or switch vets, make sure you can provide this information to avoid duplication and/or mis-diagnosis.

This past spring, my cat started urinating blood. We went to our veterinarian, but it hadn’t improved even after a few visits. I took my cat to get another vet to second opinion based on a friend’s passionate recommendation.

When I arrived, I gave the new office a copy of the records I had and the contact info for my original vet. They were able to diagnosis and treat him without spending a fortune on another complete round of tests.

Try some DIY grooming

Depending on your pet, this may be a great idea or a huge stress. Getting my cat nail caps at the vet was too much money and not enough reward. Instead, I bought a Pedi-Paw (or something like it) and I trim his nails as needed. After he got used to the routine, it hasn’t been too bad.

Bathing your dog can be messy, but it also save you some money. If you’re not really in the mood to give your dog a bath, do what my dad did and offer your kids money to do it. It’ll help teach responsibility and earn them some spending cash. Who knows, maybe they can start a side business and do it for the neighborhood.

The big take away is look if the grooming service is worth it to you and budget accordingly.

Consider pet health insurance or a pet care plan

Just like people, pets can have health insurance. Not all policies are equal, though. Some policies can save you some money, but be sure to double-check the fine print. You have to run the numbers and see if pet insurance is a good deal for you. If you want to get pet insurance, some popular companies include:

• VPI
• ASPCA
• Pets Best

I think a wellness plan might be a better fit if you find pet health insurance to be too expensive. Many offices offer a package, so ask your vet what their wellness plan is. Having a wellness plan for your puppy or kitten can save you some money during that expensive first year.

Your thoughts?

I love being a pet owner, but I can now understand why my mom was so hesitant with getting a pet. She made us wait until our family budget could afford handle it, and I’m glad she did.

If you’re a pet owner, what tips would you give to potential pet owners? What unexpected expenses have you incurred? What unexpected benefits have you received at a pet owner?

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The cover story on this month’s Money Magazine asks “What would you do with $1000?” We’ve talked in the past about what you’d do with a major windfall, but I thought it would be interesting to take a look at your options with a smaller windfall.

Here are Money’s suggestions:

• Build up your emergency fund
• Spend five hours with a financial planner
• Buy a top-notch mutual fund*
• Upgrade your appliances
• Join a gym/hire a personal trainer
• Pay down credit card debt
• Update your estate documents
• Teach your kids about investing
• Invest in your career (training, etc.)

In our case, we’d either sock it away in our taxable investment account (we already max out our retirement accounts) or use it to pay down our mortgage. Other solid options that they didn’t list include charity, opening/funding an IRA, preventative maintenance on your house or car, planting shade trees around your house, and so on. Or maybe… Use it for something fun.

Now it’s your turn…

What would you do if $1000 fell into your lap today?

*Note: Money mentions several funds that have low minimum investments, including the Schwab index funds, whose minimums have been dropped to $100. I also like the Vanguard Star Fund for creating a diversified portfolio with as little as $1000.

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Are you and your significant other a “money match”? My wife and I have very similar money habits, but many other couples apparently don’t. In fact, according to researchers at the University of Pennsylvania:

“Surveys of married adults suggest that opposites attract when it comes to emotional reactions toward spending. That is, ‘tightwads,’ who generally spend less than they would ideally like to spend, and ’spendthrifts,’ who generally spend more than they would ideally like to spend, tend to marry each other…”

The reason for this, they say, is an innate tendency to prefer mates who possess characteristics that are dissimilar from those that we deplore in ourselves. Hmmm, interesting.

Since money is a frequent cause of marital discord, we all know where this is headed, right? According to the authors:

“In spite of this complementary attraction, spendthrift/tightwad differences within a marriage predict conflict over finances, which in turn predict diminished marital well-being.”

So… Back to the original question. Are you and your significant other on the same page when it comes to spending and saving? If not, has it created any friction in your relationship? And how have you dealt with it?

Source: UPenn.edu via MSN/Money

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A few weeks ago, I ran across a nice video that gave a rundown of ways to get out of your cell phone contract without paying an early termination fee (ETF). We actually just went through this process (more below), and I’m sure that many others are in the same boat, so I thought I’d highlight it here.

Avoiding a cell phone ETF – in theory

What follows are six (possible) ways to break your cell phone contract without a penalty. Some are easier than others, but in any case you’ll probably have to work at it to convince your carrier to let you out.

• Cancel within 30 days. Many carriers have a 30 day trial period during which you can cancel without an ETF.
• If you have free roaming, use more than half your monthly minutes while roaming and your carrier might terminate your agreement to save money. Set your preferences to roaming only and make tons of calls using your free night and weekend minutes.
• Keep an eye out for notices of service changes. You typically have the right to cancel if your provider makes a “materially adverse” change to your agreement.
• If you have recurring problems with your service, call in and document the problems whenever they occur. Takes notes on your conversations and get the name and/or ID of the people you speak to. If you can document a pattern of problems, you might be able to get out of your contract.
• If you have a friend that needs cell service, and is willing to take over your agreement, ask if your carrier if you can transfer your line. If you don’t know anyone who needs a new phone, search the internet for cell phone swap programs.
• Move to an area without coverage (seriously?). If you can’t get reliable service at your home address, your carrier might let you out of your contract.

Avoiding a cell phone ETF – in practice

In our case, we had suffered through terrible coverage at home for a few years. We put up with it for so long because we were getting dirt cheap service through a pair of Sprint SERO plans. In the end, however, we decided to move on to greener pastures.

In looking at the Sprint coverage maps, I noticed that our house was outside of their coverage area, so I called to inquire about canceling. I was told by the phone rep that we could get out of our contract without the ETF. He said he’d notate our account and we could simply port our numbers elsewhere.

Fast forward about six weeks and we got hit with a $441 bill — two $200 ETFs plus a little over 10% in taxes. To make a long story short, I spend the better part of two weeks (and countless hours on the phone) getting this removed from our account.

We even had to go so far as providing proof of residence. Apparently the fact that we’ve been receiving (and paying) our bill at our current address for roughly three years wasn’t sufficient “proof” that we actually live here.

Lessons learned

I think the take home message here is that, no matter how strong your case, you need to be prepared to fight with your carrier. Take good notes whenever you call. Record the date and time of your call, the name and ID number of the rep that you speak to, and so on.

As long as you have a legitimate case, you should be alright — eventually. I do have to say that the frustration was totally worth it, though… I’m loving my iPhone, and we’re thrilled to once again be able to use our phones at home.

Source: Spend Less TV via Bargain Babe

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If you’re looking for something fun and cheap to do this weekend, don’t forget that Saturday is National Museum Day. That means you can get free admission to dozens of museums across the country.

Click here for a full list of participating museums. If you find one that you want to visit, simply print out the admission card and take it with you. Each admission card is good for two people, limit one card per household.

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How would you like to win $2500? Well… Lending Club has recently announced that they’re giving away a $2500 cash prize to their 25,000th registered investor.

They’re expecting to reach the 25k mark sometime during the month of September, so all you have to do is sign up for an account (it’s free) for your chance to win.

Here’s the scoop:

• Over the next few weeks one lucky winner will become Lending Club’s 25,000th registered investor and win $2,500 cash!
• To enter the contest simply open a free investing account by completing all three steps of the investor registration process including creating a password, verifying your ID, and linking a bank account.
• No purchase necessary to enter or win. Winner will be announced after October 1st, 2009.

In case you’re not familiar with Lending Club, they’re a peer-to-peer lending network with average annual returns of 9.6%. I’ve written about them extensively over the past few months, and have been gradually increasing my investments with them. So far so good!

To those of you who sign up… Good luck!

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Finance Freaks please step forward…

Are you like me? The Personal Finance FREAK of the house? The one who is always pushing the envelope, always trying to cut costs, boost savings, etc. If that sounds like you, then let me first say… Well done!

If you stay the course by spending less than you earn, reducing expenses, paying off debt, and building your savings, you will eventually reach the sweet land of financial independence.

It might not happen quickly, and it probably will not be easy, but slow and steady adherence to these principles will help guide you to the land of financial peace. Now, for the next question…

What about your loved ones? Are they as “on-fire” as you are? Or are you pushing them too far, too fast? When is the last time you asked them how they feel about all the new (or old) money strategies? To paraphrase Janet Jackson… “What have you done for them lately?”

Don’t suck the life out of your loved ones!

“If your loved ones ain’t happy, ain’t nobody happy!”

-Matt Jabs

A wise man once said, “If momma ain’t happy ain’t nobody happy!” I like to expand on that quote to included all “loved ones” because the truth of the matter is… If any of your loved ones are unhappy, everyone involved will be affected in some way.

Remember… No matter how staunch and/or passionate you are about getting your financial house in order, others in your family might not share your passion. Your significant other might be aware that the changes you’re trying to implement will pay dividends in the long run, but they might still resent having to “suffer” through them.

This is especially true if you implement things too quickly, or without consulting others. So… Bring your family along patiently, and with compassion. Involve others in a way that they can understand, and always keep the doors of communication open. No question is a dumb question, and every concern is legitimate.

Here are five simple ways you can reward your loved ones in an effort to help maintain peace and balance in the home:

1. Consider others before yourself. One of the easiest ways to remain tuned in to what your loved ones are thinking and feeling is to place their needs ahead of your own. Before you make any financial decision or institute a change that will affect more than just you, think carefully about the effect it will have on them, and ask them for their input. Believe me, they will recognize your effort, and will really appreciate the concern. A little consideration goes a long way!
2. Establish traditions. Growing up, my father always kept us under some pretty tight financial constraints, but one thing he did that I’ll always remember was to take us out for pizza every Friday night. It was a pretty cheap date, but it something special that we appreciated and always looked forward to.
3. Do individual date nights. Take the time to spend a full day with each person in your family. Do something that they love to do. If your wife is an enormous fan of the Russian Ballet, then take her to see one. If your son loves baseball, then take him to see his favorite team. One day of special and personal attention can fill their love tank for a long time.
4. Make exceptions for them. If your boyfriend is a die-hard Michigan Wolverines fan (like me), then make sure that he can catch all the games. For example, if you canceled your TV service (also like me), then consider re-ordering it during football season… He will NEVER forget that you did this for him! If you can’t do this, then make sure you set up a place for him to watch the game each and every Saturday. Your thoughtfulness will not be quickly forgotten.
5. Include them. Don’t just impose your decisions upon others. How would you feel if someone did that to you? Your loved ones, will be much more willing to accept whatever changes you propose if you include them in the decision-making process. Including your loved ones in the planning process will provide many benefits to everyone involved.

If this seems a bit overwhelming to you, try focusing on just the first suggestion — considering the needs of others before yourself. Once you have that down, everything else will fall into place naturally.

What about you?

Do you have any suggestions for keeping the financial peace in your household? If I skipped over any strategies that you employ, please leave a comment and let us know what’s been successful in your home… And with your loved ones.

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About a week ago, I received an e-mail from Zecco, an online discount broker, with details about their “Friends Program.” The short version is that you’ll get a $75 bonus or 20 free trades for each and every friend that you refer.

If you already have a Zecco account, here’s what you need to do:

• Visit http://hello.zecco.com/raf/index.html
• Enter your name and e-mail address
• Enter (or upload) the addresses of people you want to invite
• Type in a personal message (if you want)
• Send the invitation(s)

Bonuses are paid within the first 10 days of the month after your friend opens (and funds) their account. If you want to participate, but don’t have an account, you’ll have to sign up first.

Update: Use code “bonus1” when opening your account and get 20 free trades.

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As most of you know, I got an iPhone back in July. Since it arrived, I’ve had a blast digging through the App Store looking for life-changing apps. While I’ve found some real gems, I’m sure that I’ve missed out on some great ones. What follows is a rundown of the eight money-related iPhone apps that I use most heavily.

Money apps for the iPhone

Mobile Banking – A number of banks offer iPhone apps for managing your accounts. The only one I’ve used has been the Bank of America app, simply because that’s where we have accounts. This app replicates all of the critical online functionality in an easy-to-use interface. (free; link)

SplashID – This is my password-keeper of choice going back to my days with a Palm Treo/Centro. There are cheaper solutions out there, but I already had all my data in SplashID, so I just stuck with it. There is also a Mac (or Windows) client, and it supports wireless synchronization. ($9.99; link)

Evernote – This is the iPhone client for the popular note-taking, web-clipping, document-storing Evernote service. This isn’t specifically designed for financial tasks, but I use it for a bunch of money-related stuff — storing receipts, keeping notes on tax-related transactions, etc. (free; link)

JotNot – This is a fantastic little app that essentially turns your iPhone camera into a scanner. Take a picture of a receipt, document, etc. and easily crop it, square it up, and otherwise clean it up into a tidy pdf (or other image file) that you can e-mail from within the app. Yes, it costs $4.99, but it’s been totally worth it. ($4.99; link)

Fuelly – This one isn’t really an app… Rather, it’s a mobile web interface that I’ve bookmarked on my home screen such that it’s accessible from alongside all my other apps. I’ve mentioned Fuelly in the past — it’s a great little site for tracking your mileage. (free; link)

CardStar – Are you sick and tired of carrying around a pocketful of grocery store affinity cards, reward cards, and membership cards? Then you’d better check out CardStar. Simply enter the number from each of your cards and CardStar will provide you with a scannable, on-screen bar code. Very cool. (free; link)

Amazon Mobile – I use this app all the time when I’m out shopping. Amazon is an incredibly handy resource for checking “typical” online prices, reading customer reviews, etc. This app gives you a great front-end to all of that Amazon goodness. (free; link)

SnapTell – This is a fantastic app that runs “visual product searches” on books, CDs, DVDs, and video games. Simply snap a picture of the cover and SnapTell will pull up descriptions, ratings, prices, etc. from Amazon, Google, eBay, and more. This app could completely replace the Amazon app (above) except it only covers specific product types. (free; link)

One big category that I’ve skipped entirely is stock market tickers. While the iPhone comes with a very serviceable “Stocks” app, and there are many more out there, I don’t pay much attention to the daily fluctuations of the stock market. Thus, I haven’t spent much time playing with them.

What did I miss?

The list above is a good start but, as noted above, I’ve almost certainly missed some great apps. After all, there well over 50k iPhone apps out there, including 55 pages of financial apps. Who has time to test them all? Not me.

So… If you have any favorites, please share them in the comments.

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Have you ever paid in advance for a service you had yet to receive, only to get screwed over in the end? Those of us who have been on the short side of this stick know that it’s never a fun experience! Fruh-strey-shun!

As some of you already know, my wife and I have been a one car couple for over 8 months now. After an auto accident, my 2001 Jeep Cherokee was hurtin’ for certain. The initial estimates were that the repairs would cost about $4,000 more than the Jeep was worth.

In other words, my car was totaled. This did not stop me. I found a “friend of a friend” that could do the whole job, parts and labor for $3,500. This body mechanic had done some work for me before, was a little slow, but always came through without any major problems. Then I gave him my Jeep…

Did I pay him in advance?

Yes. Well… partly. I only gave him enough money to buy the necessary parts, which ended up being $2,500. He was able to do the repairs for so much less than the other body shop because he was picking up a majority of the parts from local junk yards, and charging less than half for labor.

Before proceeding further I should mention a few things for the record:

• I was not fully insuring the vehicle against collision damage; at the time of the accident I was carrying only personal liability and comprehensive coverage.
• The cost for repairs at the other body shop was over $9,000 which I was simply not going to pay.
• The body mechanic I ended up using works out of his home in his spare time and does decent work, but has turned out to be incredibly unreliable.

Did I get a receipt?

Yes. I have a written receipt from him stating that I gave him $2,500 for car parts that I have not yet received. I have checked up on the mechanic many, many, many, many times to ensure that he is continuing to make progress and that he has indeed used the money to buy the parts for the Jeep.

I have dropped by his house a few times to see the progress with my own eyes, and have called him at least 25 times over the last 8 months (which is nearly once per week). We’ve both become very frustrated with the whole situation. Me for obvious reasons, and him because I keep pressuring him to get the work done. I believe he’s frustrated by his own lack of work ethic and performance. He winds up giving me a different excuse every time I talk to him.

I am a patient man, but I have no use for this type of behavior — especially when it comes to a business transaction. I’m trying very hard to remain patient and calm through the whole matter and cut the guy more slack. At the end of the day, however, I need to my truck back along with something to show for my money spent.

The other day he blew up at me over the phone – swearing, ranting, and raving. He even told me to come over and “kick his a$$” if I wanted my truck back. He apologized soon after his outburst and said that he was under a lot of pressure and on some new medication.

I told him that I’m sorry if I’m annoying to him, but that I really want my truck back. My hands are tied since I’ve already paid him such a large portion of the repair costs, so I’m at the mercy of his poor work ethic.

So what’s the answer?

I have learned four very solid lessons through this whole ordeal that I will take with me through the rest of my life, and will also gladly pass on to you…

1. Pay for quality. Don’t shop solely based on price. A low price is a good thing, but sometimes the trouble that can come along with it far outweighs the money saved.
2. Don’t rush into business with the unknown. Before you “strike hands” or agree to do business with someone, make sure you’re confident that they’ll uphold their end of the bargain.
3. Always get a receipt. If you are paying for parts or labor in advance, make sure you ALWAYS procure written and signed documentation of the transaction.
4. Prepare yourself emotionally for the worst. There’s always a chance that you’ll end up getting screwed over in the end. Remember that it’s only money, and that it’s not the end of the world. Is it a pain? Most definitely, but you can always overcome.

“Our frustration is greater when we have much and want more than when we have nothing and want some. We are less dissatisfied when we lack many things than when we seem to lack but one thing.” ~ Eric Hoffer

I was supposed to get my Jeep back by the middle of August, but I am still Jeep-less. The mechanic continues to give me excuses while assuring me that he’ll be done soon. At this point, I don’t really care one way or the other. I’ve emotionally separated myself from the situation, so if anything positive happens at this point I will view it as an unexpected blessing.

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Sometimes managing your finances can seem overwhelming. There are a lot of quality resources out there, including websites like this, but the best they can do is to point you in the right direction.

The problem comes when you can’t make a decision or you fail to follow through with a plan because you worried you’re somehow making a mistake. Keep these points in mind if you’re struggling to make a financial decision:

• Don’t focus on being perfect, focus on doing. I’m not saying just throw your money into something, but remember… The perfect is the enemy of the good. Don’t be paralyzed by fear.
• Be willing to make small adjustments. Start with the basics, such as spend less then you earn and build from there. Also keep in mind that you’ll probably have to tweak your plan over time to make it more effective.

Do yourself a favor — take Nike’s advice and “Just do it.” I know, it’s easier said than done. It can be done, though. Here are some situations where you need to quit agonizing and start doing.

• If you have high interest debt, formulate a plan and then start paying it off. Knowing how much you owe will help you determine your the best approach, so don’t guess. And remember, your plan doesn’t have to be perfect. There are multiple approaches. Pick one and start getting out of debt. If you need motivation, go online and read other people’s stories debt reduction stories for inspiration.
• If you’re low on savings, start an emergency fund. Don’t get caught up in trying to get the absolute highest interest rate. Just open a high-yield savings account and get started. Set aside $500 (or whatever you can afford) and then schedule automatic transfers to keep things on track. If you don’t like your choice in a few months, you can always switch banks.
• If you don’t have a retirement fund, then start one today. Some people are afraid to invest their money for retirement because they’re not sure which investment will be the next star. It’s understandable that you want to lose your money, but failing to invest is also costing you money. Target date mutual funds aren’t perfect, but they’re quick and easy. If you have a bit more money and want more control, choose a basket of index funds or ETFs with low expense ratios.
• If you and your spouse aren’t on the same page, start making small changes. I’ve seen how difficult it can be to dig your family out of debt when you and your spouse aren’t on the same financial page. Focus on the things you can improve in the short term, and then work to improve in other areas. Most important of all, be sure to talk about money.

I’m sure you can think of many more instances in which you just need to get started instead of obsessing over the best way forward. The point is that we can be our own worst enemies when it comes to improving our finances.

Your take

What’s the hardest thing you’ve had to deal with when it comes to your finances?

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Do you receive a lot of junk mail? What about annoying calls that interrupt your evening? If you do, you’re not alone. Read on for some tips for reclaiming your solitude.

An ounce of prevention

I used to work at a call center that tried to get people to try out a time share. I once asked my boss where they got the list of people to call, and he said that a lot of them were added through the contests at the mall.

Whenever you register for a contest, send in a warranty registration card, or otherwise hand over your contact information (name, address, phone number, and whatever else you might be asked for), there’s a good chance it will wind up in a computer database.

Often times, businesses sell these contact databases, thereby increasing the amount of junk mail and unwanted phone calls that you receive. Believe it or not, this can happen several times over, such that entering just a single contest can increase your stream of junk mail considerably.

How to get off direct mailing lists

Assuming that your contact info has already gotten out, what should you do? Set aside about an hour and work through the following tips to free up your mailbox.

• Contact the Direct Marketing Association. Many companies are members of the DMA, and will thus stop bothering you if you just ask. Simply send a letter to PO Box 643, Carmel, NY 15012-0643 and ask that you be removed from their lists. You can register online at www.dmachoice.org if you prefer.
• Valpak has an online option for getting off their list.
• Publisher’s Clearinghouse Sweepstakes has a customer service line at 1-800-645-9242 (8:30 AM to 8:30 PM Eastern), or you can just send them an email to pch@ant.net asking them to remove you from their mailing list.

Once you’ve completed these steps, be sure to protect your information so you don’t get added back to any of these lists.

How to get your phone number off telemarketing lists

If you want to reduced the number of telemarketing calls that you receive, sign up for the National Do Not Call Registry. It’s quick and easy, and known to be effective.

Just keep in mind that it might take about a month to notice a difference. This is because telemarketing companies have 31 days to stop calling once you’ve been added to the list.

One last thing…

While you’re at it, you should opt out of pre-approved credit card offers, as well.

What about you? Do you have a problem with junk mail? Or telemarketers? Any tips for dealing with them?

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Just over two weeks ago, I did something decidedly un-frugal. I dropped my Sprint SERO plan in favor of AT&T and an iPhone. That’s right… I willingly ditched a plan that gave me 500 anytime minutes, unlimited text messages, and unlimited data for $30/month. And do you know what? I’m glad that I did.

What was I thinking?

While the Sprint SERO plan is undoubtedly a killer deal, we can’t get a decent Sprint signal at our house. In other words, we’ve been largely unable to use our cell phones at home for the past three years. Aside from being a big inconvenience, the lack of cell service at our house also meant we couldn’t subsidize our long distance service with our cell phones.

Beyond this, my wife and I recently decided to get a cell phone for our oldest son. She also had a SERO plan, and guess what? You can’t add lines to SERO plans. That meant either sticking with our crappy Sprint service and getting him a pay-as-you-go phone, or switching carriers and getting a family plan of some sort. We chose the latter since we’re sick and tired of being unable to use our phones at home.

Why AT&T?

So why did we choose AT&T? There were a few reasons.

For starters, we live in former BellSouth territory. For those that are unaware, BellSouth Wireless morphed into Cingular Wireless, which was ultimately gobbled up by AT&T when they bought BellSouth. As such, AT&T provides by far the best coverage of our area.

Beyond great coverage, we have an AT&T landline. Thus, we’re eligible to sign up for a “Unity” plan. This gives us unlimited calls to and from AT&T landlines anywhere in the country, and it costs nothing more than a “regular” plan with the same number of minutes. Since we’re now in AT&T country, pretty much none of our local calls count against our minutes.

Finally, I’ve been a lifelong Apple devotee, and have been patiently waiting for the right time to get an iPhone. I finally made the decision to go for it this past winter, but was waiting for the next round of handset upgrades before pulling the trigger. This summer, Apple released the 3Gs, and the rest is history.

Loving my iPhone

My last phone was a Palm Centro. While it was certainly a capable little smartphone, it couldn’t hold a candle to my new iPhone 3Gs. This thing doubles as my iPod, has a 3 megapixel camera that take surprisingly good pictures, and has tons of useful apps (another topic for another day). I pretty much have a mini computer in my pocket.

I’ve configured things such that my e-mail, calendar, and contacts sync seamlessly (and wirelessly!) between my laptop, Google, and my iPhone. It’s a thing of beauty. This sort of connectivity is huge for a guy like me who is not only on the go, but also highly dependent on the internet.

I could go on and on about how much I love my new setup, but I won’t. Instead, I’ll just say this: It’s awesome.

The high cost of awesome

Despite all the rah-rah cheerleading above, there most definitely is a downside to owning an iPhone… It’s expensive. Not only did I have to abandon my uber-cheap SERO plan, but I also have to pay the $30/month iPhone data fee. And guess what? Text messaging costs extra.

In the end, we traded our 2 x $30 SERO plans for an AT&T family plan. The base price is $69.99, and we get two lines with 700 minutes. On top of this, we pay a $30 data fee for my iPhone, $9.99 for an additional line for our son, and $30/month for unlimited text messaging for the family. Thus, our bill now stands at an eye-popping $140/month before taxes and discounts.

We get a few discounts to go along with this, including about $10 off our AT&T landline and DSL (combined) as well as a 15% discount through my employer (applies only to the primary line, so about $10/month), but still… It’s pricey.

Do I have any regrets? No. We now have cell phones that work at our house and an extra line for our son. The iPhone is an extravagance, but it’s an extravagance that we can afford, and one that’s worth the price of admission (at least to me).

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Today I thought I’d step outside of the purely financial realm and talk a bit about self-improvement. While many of the following thoughts can improve your finances, they have the potential to have a much broader impact on your life.

Focus on your passions

“Anyone can dabble, but once you’ve made that commitment, your blood has that particular thing in it, and it’s very hard for people to stop you.”

-Bill Cosby

I’ve found my greatest success by simply focusing on just 1, 2, or 3 things about which I’m passionate. Take stock of your commitments and obligations to see if you’re involved in things that you no longer truly interest you. Also, while you may not like telling people “no,” sometimes it needs to be done, and everyone involved is usually better off in the long run.

Don’t know what you’re passionate about? Take some time to figure it out. Here are some ways you stand to benefit from follow your passions:

• Accomplish more. If you’re doing what you love, or at least working toward it, you’ll be amazed at how much you can and will get done.
• Increased joy. You’ll be more of a blessing to all those around you if you enjoy what you do day in and day out.
• Increased self-confidence. If you’re following your passions, you will undoubtedly end up exercising your natural gifts. This will increase your success which will, in turn, increase your confidence.
• Increased self-worth. Few things make you feel more useful than when people benefit from the work you do. If you’re working in your ideal field, the chances of your work being beneficial increase dramatically.

Stop (or at least set limits on) watching TV

“Television won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.”

-Darryl F. Zanuck, President, 20th Century Fox, 1946

Like guns, wine, and many other things in life, television can be a blessing or a curse. It all depends on how you use it. Whether you’re an adult or a child, your TV time should undoubtedly be limited. Simplifying your life by limiting your television time can help you:

• Save money. Cancel your satellite/cable TV service and use a cheap digital antenna to pick up a good number of local broadcast stations.
• Complete lingering projects. How is your “honey do” list looking? Turning off your TV will force you to focus your time elsewhere and can be an excellent way to take a huge bite out of that oft neglected to-do list.
• Free up more time to exercise. Whether you’re doing projects around the house, or simply walking around your community, turning off the “boob tube” will certainly increase your physical activity… Trust me.
• Spend more time with your family. Instead of watching TV, get to know each other better. This will boost creativity and improve family relations.
• Free yourself from excessive commercial advertisements. Watching less advertising almost always leads to increased creative thought since your mind will not be as saturated with “less than perfect” ad rhetoric. You might also save some money!

Make the switch to homemade/homegrown

“Tell me what you eat and I will tell you what you are.”

-Anthelme Brillat-Savarin

What did humans do before the advent of the train, the automobile, and our massive modern shipping and logistics networks? Well, we purchased the majority of our foods, goods, and services from locally, of course!

Here is a list of changes you can make to simplify your life and even a few benefits you stand to realize:

• Use homemade products. Making your own homemade products can save you money and provide many other health and environmental benefits.
• Make homemade gifts. This is another great way to save money, boost creativity, and provide an artsy learning opportunity for kids. Your gifts will also most likely be appreciated on a deeper level.
• Eat homegrown foods. Eating locally-grown foods is a great way to save money, improve your health, and reduce your environmental impact. If you can grow your own garden, great! If not, visit local farms and/or frequent the local farmers market to pick up healthy local foods.
• Lose weight. Tying in with the idea of eating homegrown food, my wife and I have both lost over 15% of our body weight after cutting fast food and heavily processed commercial foods from our diets. We focus 90% of our eating on whole foods such as dry beans, whole wheat, raw fruits and veggies, etc.
• Reduce healthcare costs. Despite “the miracles of modern medicine,” obesity and related diseases are growing increasingly more common with each passing day. Our families and communities deserve better, so why not set a healthy?
• Support local farmers and craftsmen. Tired of spending all your hard earned dollars on products made in China? Stop that craziness and start supporting your community by purchasing local goods and services. Doing so is good for both you and your community.

Adopt a reuse philosophy

“Use it up, wear it out, make it do, or do without.”

-Unknown Proverb

The adoption of sustainable habits and a resourceful mindset gets easier and pays higher dividends with each real-world application. The concept is simple — instead of being so quick to throw things away, consider reusing them for some other task.

• Recycle your waste. This practice motivated me to reduce my trash bill. I had been paying $46 every three months for trash removal, now I pay less than $5!
• Reuse your zip lock baggies. This may be something you saw your parents (or perhaps grandparents) doing, but have never practiced yourself. There’s a lot of wisdom to be found in the practices of depression-era people!
• Reuse commercial containers. My wife and I eat a lot of yogurt, and we use the 32 ounce containers, along with many other reusable grocery containers, to store everything from homemade ice cream to homemade laundry detergent.
• Repurpose scrap materials. Do you have some spare wood, metal, or string lying around the house? Instead of buying products for your next home improvement project, try to make use of your leftovers and make something yourself! This exercises your creativity, creates a learning atmosphere, and can also save you a boatload of money. In fact, hust the other day I used left over downspout piping to hook my rain barrels up to my rain gutters instead of paying nearly $50 for new connectors.

Purge and enjoy the tax breaks

“Have nothing in your houses that you do not know to be useful or believe to be beautiful.”

-William Morris

Every year, my wife and I donate several huge bags of clothes to Goodwill. Each time we do it, we get a receipt detailing what we gave so come tax time we can claim the generous income tax deductions. You might not think this would be very lucrative, but it can be more beneficial than selling your stuff on eBay or Craigslist.

Simplifying your life by purging your excess can help you:

• Declutter your home. Getting rid of clutter can reduce stress by decreasing the number of things that you have to clean, maintain, worry about, etc.
• Receive tax breaks. As I mentioned, every year my wife and I claim tax breaks associated with our donations. Each year, this yields hundreds of dollars worth of deductions, which is nothing to sneeze at!
• Reduce your materialistic tendencies. Like it or not, the hours upon hours of commercials that we’ve been bombarded with are bound to affect our thinking and buying patterns. The more you purge, the more you realize how little how much more we have than we need.

Love your neighbor

“Man is now able to soar into outer space and reach up to the moon; but he is not moral enough to live at peace with his neighbor!”

-Sri Sathya Sai Baba

This may sound like something you’d hear at a religious service, but the concept makes an incredible amount of sense when you think about it. I challenge you to go through one day this week where you try hard to consider the needs of other people before your own. Before you react in any given situation, try to consider where that person is coming from. Instead of reacting with anger or abruptness, give that person something no one else will… A compassionate and patient response! You won’t believe the results.

This oft-neglected behavior can yield the following benefits:

• Reduced your stress. Instead of practicing behavior that elevates your blood pressure, do the opposite. You’ll improve your health and maybe even make some new friends.
• Increased joy. Investing in mutual funds is good, but… So is investing in karma and the general welfare of others.
• Reduce the stress and increase the joy of others. What a blessing you’ll be if you sacrifice your agenda for the benefit of others! You’ll refresh their outlook on life, and will also help spread a positive attitude.

Closing thoughts

For the past six months, I’ve re-dedicated myself to living passionately and powerfully. I’ve narrowed my focus, charted my course, and achieved a much higher level of satisfaction in all areas of my life. Success hasn’t come overnight, and I’ve had to work hard to make it happen, but… I’ve seen a huge improvement in the quality of my life. What about you?

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Unless you’re careful, mixing family and finances can be a recipe for trouble. For example, lending money to family members is a great way to ruin relationships.

Another challenging area is when your parents find themselves in a financial mess, and you feel compelled to step in and offer guidance. How do you help with a nest egg that got hammered over the past year? What can you do if they have a free-spending lifestyle that’s resulted in a huge amount of debt late in life?

The first step is deciding whether or not to intervene. Once you’ve decided to offer your assistance, here are some tips for helping without creating problems.

Arrange a meeting with a Certified Financial Planner

Hiring a financial planner can be a great stress reliever for both you and your parents. Just be sure it’s a fee-only planner so everyone’s interests are aligned. Involving a CGP can be a great option for a couple of reasons.

First, this is a neutral person to whom your parents can explain their situation in detail. It’s natural for parents to hold back important information from their children for fear of embarrassment or judgement.

Second, by doing some research through the National Association of Personal Financial Advisors, you can find someone with the specific experience your parents need to get back on the right track. Just be sure to talk to them first to make sure they’re right for the situation.

One way of bringing it up would be to mention to your parents that you’re thinking of having an expert take a look at your own finances. You can then give them the name and number of a planner.

How to talk with your parents about their finances

If your parents don’t want to go to financial advisor, but still need help with their finances, you may have to work with them yourself. Here are a few tips for handling what might turn out to be an awkward conversation.

Handle with care

Put yourself in your parents shoes before you say anything. How would you like for this conversation to start if the roles were reversed?

Be realistic with your advice

Don’t assume that your parents will change decades worth of bad habits overnight. Instead, I would recommend focusing on one area at a time.

Prioritize helping with their finances

Depending on how willing they are to accept help, identify the areas in which they are most in need of assistance. Here are some ideas:

• Budgeting. This is a great way to simplify your parents’ life. Show them how to automate their finances and set aside money in their savings account for an emergency fund, vacation, etc.
• Eliminating high interest debt. Work with them to create a debt snowball to reduce and eliminate their credit card or other high interest debt.
• Retirement. If they haven’t yet reached retirement age, make sure that they’re at least investing enough in their 401k to get their employer’s match. If their budget will support it, you should also explain to them the benefits of traditional and Roth IRAs.

Don’t forget about estate planning

Ask them if they have a will and power of attorney. Remind them that you want to respect their wishes, and explain that these documents will allow that to happen.

Preserve the relationship

The ultimate goal here is to encourage and guide your parents with their finances, but they have to be willing to make the changes necessary. Simply lending (or giving) them money will only make a bad situation worse, and can jeopardize both your finances and theirs.

Whatever you do, be sure to preserve your parents’ dignity, keep your own finances firm, and maintain your relationship.

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Should married couples combine their finances? Or should they keep them separate? This is a bit of a financial hot potato, with strong supporters on both sides of the aisle. In the end, however, the “right” answer almost certainly depends on the circumstances and the people involved.

With the foregoing in mind, I wanted to talk a bit about how we approach things, and to also give you guys a chance to share what works for you (and why).

Our approach

My wife and I actually combined our finances before we even got married, and we’ve never looked back. To be completely honest, I can’t even remember having had a big money conversation in which we decided to do this. Rather, it just seemed like the right thing to do, so we did it.

Looking back, this was very easy to implement because things were so simple. We didn’t have much money, and neither of us had any debt. In the end, we just had to open a joint bank account and put each other on our credit cards.

Since that time, our finances have grown increasingly more complex, but we’ve maintained a joint approach across the board. With the exception of our retirement accounts, where we’re not allowed to have joint ownership, my wife and I are joint owners of all of our banking and investment accounts.

As far as credit cards go, we have two main cards. My wife is the primary account holder on one, and I’m the primary account holder on the other. We’re both authorized users on each other’s accounts, and we use them interchangeably to maximize our rewards.

Overall, this has been a fantastic arrangement for us. My wife and I are two of the most financially-compatible people you’ll ever meet, and we’re also very open with each other. While we’ve had our fair share of disagreements about various things over the years, I can’t recall a single argument about money.

Another wrinkle for us is that my wife now stays at home with the kids. Since she doesn’t currently have an income of her own, maintaining separate finances would be the rough equivalent of putting her on an allowance. Given that she works at least as hard as I do, that just doesn’t sit well with me.

What about you?

Okay, now it’s your turn… Are you a fan of joint or separate finances? Or perhaps you’re partial to a combination of the two approaches? Whatever your preference, what concerns you about the alternate approach?

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Hosting a dinner party is a great way to spend time with family and friends. It gives you a chance to relax over a good meal and catch up with everyone, and doesn’t have to cost an arm and a leg. With that in mind, I’ve asked friends to help me out as I try and put together a guide to dinner parties that can help reduce stress.

Decide what kind of dinner party you want to host

Before you invite people over, you should decide the size and tone of the dinner party. Ask yourself these questions:

• How big to you want the party to be? I think that six to eight people is good number to start with and test the waters. That way you’ll have a chance to speak with everyone for at least a bit.
• Who do you want to spend time with? Try to mix people with different interests and personalities to encourage conversations. You might even consider inviting a combination of neighbors and co-workers.
• What kinds of food should you serve? You can keep things informal by choosing finger foods for appetizers. As far as the main course goes, Italian dishes can be relatively easy to prepare and great to serve a large group.
• Should you ask others to bring food? Having others bring a dish can be a wonderful way to lighten your load, and also adds to the diversity of the meal.

Menu ideas for your dinner party

Once you’ve decided who to invite, you need to decide on the menu. I often use Food Network for meal ideas and recipes. If you’ve never used it, you should try it out.. You can search by ingredients, ease of making, and user reviews.

Here are some ideas for dinner party food ready that can prepared in 30 minutes or less, I found these easy recipes:

Appetizers

• Lemon Basil Chicken Salad
• Coconut Soup
• Leboo’s Buffalo Poppers
• Pesto Chicken Quesadillas

Main dishes

• Deep-Fried Lasagna
• Flank Steak with Red Wine Vinegar and Greens
• Delmonico Steaks with Balsamic Onions and Steak Sauce
• Spanish Spice Rubbed Chicken Breasts with Parsley-Mint Sauce
• Chili Suizas Bake

Desserts

• Chocolate Angel Food Cake and Raspberry Parfait
• Banana Split Cake
• Molten Lava Cakes

Dinner party etiquette

Curious as to the guidelines you should follow what rules you should follow about the guidelines for dinner parties, here are some tips below. Just keep in mind that it’s your party, so feel free to play change things up.

• When should you serve the food? Debrett’s suggests that food should be served within an hour of the guests’ arrival. Have most of the food ready before they arrive so you’ll have time to mingle a bit before dinner.
• How much alcohol should you serve? Keep it simple and serve a glass or two of wine before the meal. Have non-alcoholic alternatives for those who choose not drink. Decide for yourself how much alcohol you want to have at your party, and keep an eye out during the dinner party in case you need to cut someone off.
• What kind of music should you play? I personally think that music should reflect the vibe and the season of the party. I would also recommend creating a playlist ahead of time to reduce the number of distractions when your friends arrive. Be sure to keep the volume low enough that you can follow a conversation.
• How should you handle the seating arrangements? The key is to mix up the usual groups and introduce people. Have a quieter person sit next to a socializer, and so on.

Dinner parties and people

I’ve written previously about genuine conversations and networking with others at dinner parties. What follows are some tips that I’ve picked up in the past.

• Introduce people by sharing a story. A great way to introduce people is to share a complimentary story about one (or both) of the people that you’re introducing. Genuine compliments are always appreciated, and telling a story helps to break the ice.
• Listen carefully to others. You probably like it when people you’re talking with are engaged and listening intently. Your guests are no different.
• Ask follow-up questions. You don’t have to be an expert in order to hold up your end of the conversation. Ask questions… What do they mean? How did they come up with the idea? Ask them to break things down for you. Not only you boost their ego, you’ll also learn quite a bit.
• Be loyal. If a guest says something negative about one of your friends (whether or not they’re at the party), kindly stand up for your friend. People respect loyalty. Conversely, avoid gossiping as it can ruin your reputation and others.

Parting Thoughts

The people are what really makes a dinner party sucessful. The food, music, and atmosphere are simply there to help to foster conversation. Even if the details of your dinner party aren’t perfect, it’s still likely to be a fun and memorable experience for everyone.

Do you have any tips for hosting a dinner party? What works and what doesn’t?

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While attending a recent Homeowners Association meeting, my wife and I were overwhelmed by the attitude of a majority of our neighbors. With few exceptions, they wanted everything done for them and thought all they had to do was sit around and complain loudly enough to make it happen.

After about 15 minutes of complaints and finger pointing, I chimed in on a specific issue with, “What if each of us just committed to doing our part to help make things better for everyone?” The crowd fell silent for a good five seconds (which felt like an eternity in a room full of 50 people) before everyone astoundingly agreed.

I don’t think that my neighbors were incapable of thinking up such a simple solution on their own. Rather, I think this is an illustration of the depth of our cultural dependence and reliance on others for seemingly everything in life.

“The willingness to accept responsibility for one’s own life is the source from which self-respect springs.”

-Joan Didion

Let’s consider the notion of personal responsibility as a whole, with a heavy focus on financial accountability at the individual level. After all, by developing an understanding of things that are going on at a personal level, we’re sure to gain insight into what’s happening at higher levels.

The root of the problem

“No alibi will save you from accepting the responsibility.”

-Napolean Hill

Unless you’ve been lost at sea for the better part of seven years, you’re likely aware of the economic problems that have pushed us “against the financial ropes,” both individually and as a nation. As ridiculous as it sounds, these problems stem from Ricki Lake and Richard Simmons as much as they stem from Osama Bin Laden and George W. Bush.

No, we’re not in this predicament because we haven’t been “Sweatin’ to the Oldies.” Nor are we here solely due to 9/11, Republicans, Democrats, or other bureaucrats. We’re here because, on a whole, we’ve become a nation that rebels against virtue and character, and chooses instead to value the emptiness of fame and fortune.

Unfortunately, relying on fame and/or fortune for happiness is grounds for disaster — just ask anyone who has ever been rich or famous!

Who can we blame?

“Man must cease attributing his problems to his environment, and learn again to exercise his will – his personal responsibility.”

-Albert Schweitzer

In our culture, we seem to have an unquenchable need to blame someone for everything, and therein lies the problem… Personal responsibility is the polar opposite of pointing the finger of blame. Who is responsible for the fact that you have a negative net worth? The credit card companies? No. While I believe their practices to be a crime, you are the one who signed up for the offer to get a free t-shirt and a license to spend money you didn’t have!

Granted, in this day and age of rampant corporate bailouts, our leadership continues to set a terrible example of fiscal responsibility for its citizens. Their utter non-chalance when it comes to their use of presumptuous money to fund their wayward behavior. While this is glaringly obvious, I propose that we need to consider things at a more granular level.

What if our individual track records over the course of the last year were made public for all to see? How would we fare? Most of us would have a few skeletons that would quickly quiet our brash criticism toward others. The point here is simple: before we can expect others to act in a certain way, we need to be sure that we’re behaving appropriately ourselves.

Don’t like how the government is spending money they don’t have? When is the last time you made a credit card purchase with money you didn’t have? Angry with how your employer is failing to budget enough money for personal raises? How would your family budget hold up under similar scrutiny? Moreover, if you weren’t living paycheck to paycheck, you wouldn’t be so dependent on your employer, and might be more thankful that you still have a job.

Obviously, I’m painting with broad brushstrokes here. Not everyone in our society lives beyond their means, or mismanages their money. On the whole, however, these things ring true.

So what’s the answer?

“Accept responsibility for your life. Know that it is you who will get you where you want to go, no one else.”

-Les Brown

Yes, our political leaders have shown an immense amount of irresponsibility have fallen victim to fashionable corruption. This does not, however, give us the right to follow their lead, complain about their inadequacy, or wait for them to fix our situation. What it does give us is an ever-increasing need to take responsibility for our actions!

Here’s a list of suggestions to help us regain personal financial responsibility:

• Accept that you cannot blame others for your position in life. Pointing fingers might feel like the easy way out, but it doesn’t do anyone any good. Instead, take a good look at your own financial state, accept full responsibility for it, and work out your own plan to change it for the better.
• Don’t expect anyone to change anything for you. Don’t wait for handouts. Instead, pick yourself up, dust yourself off, and work harder than ever to fulfill your own goals.
• Decide that your past will no longer dictate your future. Commit to putting your old financial habits behind you. Wipe the slate clean and give yourself a fresh start.
• Consider your own actions before you attack the actions of others. Make sure you have your own financial house in order before you start tearing down others who have an obvious problem. On the contrary, if you see they need help, find out if there is anything you can do the assist!
• Don’t file bankruptcy. This may seem impossible, and I’ll probably catch a lot of flak for writing this, but bankruptcy goes against everything I have mentioned previously. It is the ultimate cop out — the complete opposite of personal responsibility.

Concluding thoughts

“No one will improve your lot if you do not yourself.”

-Bertolt Brecht

All of the above may sound simple and obvious to you. If it does, that’s great — I’m obviously not talking to you. In the end, I thought these ideas deserved mentioning, and that they might be just the sort of thing that some — like my neighbors in the condo association meeting — needed to hear.

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This is just a friendly reminder that stamp prices are increasing on Monday, May 11th. As long as you get your stuff postmarked by tomorrow (May 9th), you should be fine. But… Don’t drop stuff in the box after the last Saturday pickup and expect it to go out as expected on Monday.

In case you missed it the first time, postage on first class letters will be increasing from $0.42 to $0.44, and prices for other services will also be adjusted upward. Of course, if you have forever stamps, you don’t really have to worry (at least not for regular letters). If not, you’ll need to pick up some $0.02 stamps.

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This is just a quick note to say that Intuit has extended their discounts on Quicken 2009. They’re offering $20-$50 off (varies by product), and the discounts were set to expire this week. But guess what? They’ve extended them through May 31st, 2009.

Here are the details:

• Quicken Deluxe 2009 ($59.99 $39.99)
• Quicken Premier 2009 ($89.99 $59.99)
• Quicken Home & Business 2009 ($99.99 $69.99)
• Quicken Rental Property Manager ($149.99 $99.99)
• Quicken Online (Free, as always)

Previously: More Discounts on Quicken 2009

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Related Articles at fivecentnickel.com:

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» TurboTax and Quicken Giveaway Winners

What would you do with a major windfall? For the sake of argument, let’s say that someone dropped a million bucks in your lap. Would you pay down debt? Buy something nice? Save or invest it?

About a week ago, I posed this question to my “Tweeps” (people that follow me on Twitter). The primary limitation on their responses is that Twitter requires that all messages be 140 characters or less.

I never answered this myself, so I’ll do so now:

@fcn: “First, I’d pay a bunch of taxes. Then I’d take a nice vacation, maybe renovate our attic, and save/invest the rest.”

As for everyone else, I got 24 responses:

• @SuburbanDollar: “I would pay off my mortgage and student loan, buy a new boat, and invest the rest. 8% return on the remaining 750 is like 60k…”
• @The_Weakonomist: “I’d upgrade my honeymoon, buy a house, save $50k and invest the rest.”
• @TheHappyRock: “$400k is enough to pay pay off current house and buy a new one with cash. Total debt freedom!”
• @ElBueno: “Buy a modest house. Invest some. Give some to sister and brother-in-law for their business. Take a few years off from job to build mine.”
• @ManVsDebt: “Conservately invest it all, live only off interest, and devote life to form nonprofit to educate inner city teens on personal finance.”
• @centsiblelife: “Pay off all debts, spend $100K updating our house/yard, put away $ for 4 college educations, save the rest and live off the interest.”
• @jeffrosecfp: “Treat my family to a few nice things, donate some and invest the rest and live off dividends and interest for years to come.”
• @enochko: “Approx. 10% in inflation-protected securities (emergency cash for 2-3 years), rest in index funds (currency hedged for int’l funds).”
• @freefrombroke: “With $1M? Buy a house, go back to school full time, and put away the rest.”
• @zenshinji: “Something like save 100K for my kids’ college, invest 400K, save 400k, and pay myself with the remainder.”
• @FiscalFizzle: “With $1M and rates a bit higher, I’d buy a house and car for cash, invest the rest in something relatively safe and live off the interest.”
• @Flexo: “Buy a house, invest, give to charity. Unfortunately $1M isn’t enough to start a foundation unless I forgo the house and investing.”
• @jayarezee: “Pay off our mortgage and invest the rest!”
• @MyLifeROI: “Pay off my parents mortgage so they can finally relax, MBA, max ret. accts, start a 529 for (way in the future) kids, Vanguard funds.”
• @beatingbroke: “Pay everything off. Set up investments for college and retirement. Long vacation. Donate, donate, donate.”
• @closedblueyes: “Pay off $73k in student loans, buy a house ($300k or so), pay off my mom’s mortgage ($80k), and save/invest the rest.”
• @stephonee: “I don’t think I would even pay off my student loans. I would invest the whole sum carefully, but aggressively. All stock index funds.”
• @Azuaron: “Student loans? Gone. Move out of campus housing to an apartment. Setup emergency, car, computer, and moving funds. Invest the rest.”
• @RevancheGS: “Buy house, keep cash for spending/maint/prop taxes, set up housing for parents, revise the will, get a Master’s, save/invest rest.”
• @countmypennies: “Pay off my house (or buy a house), make a few charitable donations, and start saving for my hypothetical children’s college ed.”
• @nbnw: “A million bucks? Pay off my debt and take the job I wanted, not the one that I can afford.”
• @Shondratasha: “Pay off all debt incl. mortgage, invest in real estate I can buy and hold, research for @ least 1 angel investment.”
• @katekashman: “$1M? Give 10%, Save 10%, Spend 10%, put aside 10% for kid’s colleges, and invest the rest. Real fun is planning to spend the 10%.”
• @bargainr: “I’d put half in savings (for a rainy day!), the rest into some income bearing investments to supplement my income.”

It looks like debt reduction, saving, and investing are all high on most everyone’s list. Honestly, I was a bit surprised that more people didn’t mention treating themselves to something nice with at least a fraction of the money. I wonder how closely reality would mirror the above responses. Perhaps the majority of respondents are just more responsible than me.

What about you?

What would you do if fate presented you with major windfall? Again, let’s assume that we’re talking about a million dollars. Would you be 100% responsible? Or would you go a little crazy?

And now for some shameless self-promotion… If you’re not currently following me (@fcn) on Twitter, you are cordially invited to do so. Oh, and you can also get new article notification on Twitter by following @fcnfeed.

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In case you missed it the first time around, the good folks at Lending Club have offered to provide FCN readers with a $25 signup bonus* just for opening a Lending Club account.

Here’s how it works…

1. Visit Lending Club using a link in this post
2. Open and activate a lender account
3. The $25 will be automatically deposited in your account shortly thereafter

That’s it. Note that there are some eligibility requirements for opening a Lending Club account (must be 18, certain states excluded, etc.), but those should quickly become apparent when you click through.

*Note: The signup page won’t say anything about the bonus, but they’ll be able to track and credit you using the special link in this post.

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Related Articles at fivecentnickel.com:

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Talking to your spouse about money can be difficult, but such conversations are vital to a healthy relationship. In fact, money problems are a common source of marital strife, so it’s important to maintain an open line of communication.

What follows are some general guidelines for talking with your spouse about your family’s finances:

• Pick the right time and neutral ground for your conversation(s). Trying to have a financial conversation on the spot can make your spouse feel like they’re being ambushed. Instead, pick a mutually agreeable time in the near future when you can sit down and talk.
• Choose your words carefully, show respect, and be specific. Don’t let the discussion to turn into a heated argument, and don’t point fingers. Instead, try to present your concerns as a team issue. Rather than making blanket statements about how your spending is out of control, ask things like “How do you think we can decrease our spending?” or “What do you think about reducing our spending in category X by Y dollars?”
• After you come to an agreement, write down your goals. This is an important point. While you don’t want to hold anything over your spouse’s head, having a concrete list of goals/steps can be an excellent motivational tool.
• Be willing to meet on an ongoing basis. Not all problems can be solved through a single conversation. Moreover, even if you’re able to quickly agree on the proper course of action, continuing to talk about things can help keep you both on track.
• Celebrate your success. Finally, don’t be afraid to celebrate your successes. It’s a team effort, and you both deserve a pat on the back whenever you score a victory.

What about you?

Do you have any tips for handling money conversations with your spouse? What works? What doesn’t? And what types of problems have you faced?

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This is a guest post by Philip of Weakonomics. If you like what you see here, please consider subscribing to his RSS feed.

Last week, I took my car in for some scheduled service. The dealership is near my office but far from home, so it made sense for me to take the shuttle offered by the dealership. Upon boarding the shuttle, I was greeted by the driver and three other gentlemen. The conversations wavered for a few minutes until everyone learned that I work for a local bank. At that point, the conversation shifted to the economy. And once I told them I was also a finance blogger, they let me take the lead.

The first thing that I asked was what they all did for a living. While I realize that this will sound like the beginning of a bad joke, I was seated alongside a lawyer, a doctor, and pastor — as well as the driver, who was a retired teacher. And then there was me, a banker.

The conversation moved from auto bailouts to social security before we settled into my sweet spot: personal finance. Everyone was willing to talk about their situation because they all had something to brag about. But the ultimate shocker was when we learned what kind of money each person had.

Want to guess who had the most money? I’ll give you a hint… It wouldn’t be a very interesting post if it was one of the high income earners. Still wondering? Well, our driver had more money than the rest of us. Considering his inexpensive clothes and the fact that he probably earns $10 an hour, this took us all by surprise. Even more so given that he had worked as a teacher his entire life.

Profiles in finance

No matter how many times I read it, I always lose sight of the fact that high income does not necessarily translate into high net worth. Our driver was very financially savvy and had a healthy nest egg. In fact, he said that he takes all of the money he earns driving the shuttle and parks it in 529 accounts for his grandchildren. He only works because, as he said, his wife can’t stand him being around the house for more than a few hours every day.

Next in line was the pastor. The spiritual leader of our short journey learned his personal finance lessons early in life when he was working at a small church. He was the treasurer, accountant, and head usher. Money was tight for the church, and he sometimes used his personal credit cards to help the churchgoers pay bills. Sure, he meant well, but it almost wiped him out. After balancing a church budget for a decade, he figured he should get his own house in order. He moved cross country after getting married, and he also started working at a larger church. He took the lessons from his younger days and adopted a debt-free lifestyle. Ultimately, he paid cash for the car that he bought from the dealer.

Next in line after the pastor was me, the banker. You don’t need to know too much about my finances. Just know that I’m a debt-free twenty-something who hasn’t worked long enough to amass a large net worth.

And now we’re left with the two who should have been at the top… The doctor was in better shape than the lawyer, but he was also older. It took him 14 years to pay off med-school, and now he’s in his late 40s and has only paid off about 10% of his mortgage. He leases a minivan, and carries a balance on five credit cards. He says that every doctor in the hospital lives like this. He also told us that doctors that work in small offices generally make less, but they don’t have the same pressures for social ranking, and are thus in better financial shape.

Finally, the attorney. He’s been out of law school for five years, and still owes over $100,000 in student loans. On top of that, he’s upside-down on a mortgage and has no investments. Though he’s married, she isn’t working because she is taking care of their new baby. He’s dressed nicely, but he can’t afford new suits, and was proud of the coupon he’d found online for his oil change. This poor (literally) guy was very open about his problems, and admitted to feeling lost in a world of debt. The pastor gave him Dave Ramsey’s name. Hopefully he’ll see the light.

Lessons learned

While I’ve read stories like this in the past, the truth never really sunk in until I shared a ride with these guys. There was a time in my life when I was jealous of doctors and lawyers. They wear nice clothes, drive fancy cars, and send their kids to private schools. However, so many of them spend money like it’s going out of style, choosing to live above their impressive means in an attempt to keep up with the Joneses. My jealousy has now died; all that is left is pity.

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This is a guest post by Jim of Bargaineering. Jim is also co-host of the Personal Finance Hour, a weekly personal finance radio show.

Before I make any financial decisions, I always try to talk to someone about it. Whether it’s buying something from Amazon or investing in a stock, I always talk to at least one person about the decision before I make it. There are a lot of benefits to sharing your decisions with others, here are just a few of them.

Fraud protection

Most of us are pretty good at spotting fraud. We don’t know all the security features in the twenty dollar bill, but most of us can spot a fake from a mile away. Every so often, however, you run into a Madoff investment “opportunity” or an intricate multi-level marketing scheme that manages to slip past the fraud detector…

That’s when running the idea past a friend can be crucial. Even the simple act of talking through and explaining the opportunity could clue you in to the fact that it’s a fraud.

Achieve a better understanding

On the internet, there is always someone who knows more about something than you do. Whether it’s a hot new investment or a new bank account, chances are someone has done a lot more research about it and can give you more information to help you make a good decision.

One of the reasons why I started the Bargaineering Forums was because I realized that I don’t know everything about everything. I’ve been fortunate enough to have readers who do, so I invited them to join the forums to share their wisdom. It’s a small community but we have all manner of experts and always welcome new perspectives.

Cooling off period

You just walked into a store and you saw the latest and greatest shiny gadget or gizmo (if electronics aren’t your thing, substitute something you really like). You want it. You don’t need it, but you want it. Why not ask your friend about it?

By introducing this small barrier, you give yourself time to cool off and think more rationally about the purchase. Maybe you wait a month to get it, perhaps you wait for a coupon or a sale, or maybe you go back to the store and buy it; regardless of the outcome, you let yourself cool off and think more rationally about the decision.

Possible gotchas

This tactic isn’t without downsides. It’s important that you find people who know more than you do about the subject, so you get constructive feedback and aren’t stuck in “teaching” mode. You want to talk to someone who can critique the decision, not simply understand it and agree because they’re deferring to your knowledge.

It’s also important to just use your friend’s input as an additional data point. Weigh their viewpoint along with everything else rather than treating their opinion as the be all and end all. Just because they agree doesn’t mean it’s a good decision!

Do you use any of these techniques whenever you make money decisions? Which have you found to be most/least effective?

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Budgeting can be a daunting task. It takes time and effort, and it’s not necessarily fun. The keys to having a successful budget are to make it: (1) realistic, and (2) easy to maintain. Some people mistakenly assume that having a budget means cutting their expenses to the bone and hoarding their money for the future, but that’s simply not the case. Likewise, maintaining a budget doesn’t have to be an onerous task. The ideal budget helps you to stretch your dollars further without taking up a huge amount of your time.

Build a Realistic Plan for Your Budget

Cutting everything fun out of your budget does you no good. People who drastically deprive themselves almost always revert to their old habits. It’s just a matter of time before you lose your resolve. Instead, try these tips.

Track what you spent last month. Review your bank statements either online or on paper. See where your money went. If you want to make it easier to track your expenses, try a money management program.

I use Mint (it’s free!) to provide online snapshots of our accounts. It can show the data with a list of transactions and categories or, if you’re more visually inclined, there’s a tab that lets you examine the data in a pie chart.

Look closer at one or two expenses that you want to change. For us, our weakness was eating out for dinner. We looked at six months of data and noticed that we were eating out way more than we thought. To rectify this situation, we set a goal to cut back, but not eliminate, going out for dinner.

We also don’t try to tackle multiple goals at once. By focusing our efforts, we’ve been able to cut back on expenses and still enjoy a romantic night out.

Review your budget regularly. It’ll take time as well as some adjustments to develop a budget that works for your family. Once you find your rhythm, you can check it less often.

Automation Can Help You Stick to Your Budget

Automating your finances can help you “lock in” certain aspects of your budget and decrease the likelihood that you’ll go astray. Here are a few tips.

Have a portion of your paycheck transferred to a high interest savings account. Start small, on the order of 5-10%, and use automatic transfers to move that money into your saving account. You probably won’t even miss such a small amount.

I use ING Direct for my savings. The main reason for this is that I can easily create sub-accounts. This allows me to not just save, but to save for very specific goals.

For example, I have one account where I’m saving to eventually replace my car. I just started this account, so it’s small. Over time, however, the automatic transfers will build it up. These sorts of transfers work well with a budget, because I can set aside a defined amount on a regular basis rather than getting hit by a huge expense all at once. Anticipating your financial needs can save you lots of headaches.

Here are some possible saving account goals:

• Vacation fund
• New television/electronics
• Semi-annual expenses like renter’s insurance

Set up free online billpay with your bank. Most banks and credit unions offer free online billpay with your checking account. If you’re willing to set aside an hour or two to get your all bills entered, you can reduce your time spent paying bills to 15-20 minutes month. On top of this, you’ll save on postage.

It took me an hour to get our bills entered online. I just sat down with a stack of our bills and entered the accounts, address, and dates into bill pay. For “fixed” bills that are the same every month, I set them to be automatically paid one week before their due date. For bills that change form month to month, like the electric bill, I just login and type in the amount – it takes less than two minutes.

Take advantage of your company’s 401k program. It may be off in the distance, but eventually you’ll be retiring, so… Investing now makes good sense. If you’re just getting started, then try to invest at least a small amount on a regular basis — just like with your automated savings (above). You can always increase your contributions in the future. How much should you save? Try to set aside at least enough to receive your company’s full match — that’s free money, so don’t turn your back on it.

What About You?

Do you budget? How do you handle your bills? Have you automated your saving/investing? If you have any tips or tricks, please share them in the comments.

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The good folks at Lending Club have offered to provide FCN readers with a $25 signup bonus* just for opening a Lending Club account. As you might recall, I recently gave away $100 to one lucky Lending Club account holder. This time around, there’s something for everyone!

Here’s how it works…

1. Visit Lending Club using a link in this post
2. Open and activate a lender account
3. The $25 will be automatically deposited in your account shortly

That’s it. You can then lend the money out and start earning interest. Note that there are some eligibility requirements for opening a Lending Club account (must be 18, certain states excluded, etc.), but those should quickly become apparent when you click through.

*Note: The signup page won’t say anything about the bonus, but they’ll be able to track and credit you using the special link in this post.

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» Lending Club: Invest in Your Friends

Lending money to family and friends is a bit like walking a tightrope, and it’s very easy for things to go wrong. With the ongoing recession affecting so many people, you might be tempted to lend money to a loved one in hopes of helping them out. While this might sound like a good idea in principle, doing so can be problematic.

The first step in deciding how best to proceed is to find out why your friend or family member is having a difficult time. If they have a history of being responsible with money and are just experiencing a temporary setback, you might consider helping them out. If, on the other hand, they consistently have trouble with money, you should think twice — you could do more harm than good. How?

As hard as it is to admit, some people just aren’t good at handling their finances. They constantly live paycheck-to-paycheck and don’t seem interested in (or able to) change their habits. If you lend them money, you’re jeopardizing your relationship, and you might also wind up enabling their bad spending and non-savings habits.

Thoughts on Lending Money to Family or Friends

1. Do not co-sign for a loan! If you do, you’ll be legally responsible for paying off the debt if they do not or cannot pay. How would you feel if you got stuck with your someone else’s debt? This sort of thing can cause tension and resentment, and might even destroy the relationship.
2. If you don’t have money to lose, then don’t loan them money! We all have responsibilities of our own, so don’t loan out money that you can’t afford to lose. Make sure you have ample emergency fund in case your family has an emergency of its own.
3. Think about giving a small financial gift. If you have the means to give some money, but feel uncomfortable with a loan, then try simply giving a smaller amount. You’ll feel good about having provided some assistance, and you won’t stress about getting your money back.
4. Consider giving something other than money to help. If times are a bit rough, grab some groceries. If you’re afraid of enabling them, offer to help organize a yard sale or something.
5. Offer to help them with budgeting. This can be a tricky one, as most people aren’t willing to share their finances. Even so, you can show them how you budget, and maybe share some helpful tips.
6. If you end up making a loan, put everything in writing. Decide ahead of time when and how the loan will be paid back (e.g., lump sum or monthly payments), and have both parties sign the agreement. Make a copy and keep the original.

What if You Can’t (or Won’t) Lend Them Money?

If you end up having to say ‘no’ to a friend or a family member, keep it brief. Explain to them you just can’t loan them the money, but you can offer your support (or a small gift if you can). Just remember, it’s up to you to weigh the options and come up with the right answer for you.

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Over the weekend, I asked my “Tweeps” (i.e., people that follow me on Twitter) for their single best piece of financial advice. The primary limitation was that Twitter requires that their messages be 140 characters or less. Thus, the advice had to be short and to the point. I got things started with this:

“Don’t spend money that you don’t have.” (@fcn)

Which prompted the following responses:

• @katekashman: “Automatic savings – it really works. Even if you screw up everything else, it might just be enough to get you through.”
• @bargainr: “Like the tortoise and the hare, slow and steady wins the race. It’s about being smart with money, not clever with get rich quick schemes.”
• @zenshinji: “Do the math. Compare like items at the store, super fantastic premium cable vs. basic + NetFlix + online, etc.”
• @JeremyVoh: “For 9 out of 10 people, it takes hard work to make money. The other one is lucky. So, make your own luck and work hard.”
• @countmypennies: “You don’t need that. You can make do. It won’t kill you.”
• @scottneumeyer: “Read Dave Ramsey to get educated on money.”
• @QuickenPRChels: “Don’t use credit cards. When I heard it way back when, I didn’t listen. Should have.”
• @CashMoneyLife: “Spend less than you earn; earn more than you spend. Two different ways at looking at the same thing.”
• @Green_Panda: “Don’t just cut expenses; look to increase your income, too.”
• @glblguy: “Budget your money.”
• @LazyManAndMoney: “Make saving automatic, by siphoning money to an account (like a mutual fund) that you never look at.”
• @Night_runner: “Spend less, earn more.”
• @RevancheGS: “Take care of your money first before you use it to help others, lest you find yourself in trouble as well.”
• @ramit: “Don’t think of personal finance as a game of more willpower (”If I REALLY try to save, I will…”). Automate savings/investments.”
• @FMFblog: “Spend less than you earn.”
• @ericabiz: “Follow the one-in, one-out rule. For every item you buy, one of equal value or purpose must go.”
• @jeffrosecfp: “Don’t invest just because you can. Take your time, research, reevaluate before you make your 1st investment.”
• @ncn: “Understand credit, how it works, and how interest can work for or against you.”
• @moolanomy: “Keep your mind open to learn new things and find creative ways to solve your problems.”
• @mbhunter: “Buy used whenever it makes sense.”
• @FourPillars: “Education – whether you learn about investing or bank accounts or how much debt you have – it all helps.”

There’s a bit of overlap in the responses, but I decided to go ahead and include them all. If nothing else, you can view overlapping responses as additional “votes” for a particular suggestion.

As a side note, my bit of advice prompted @StephTheBlogger to send me a link to the SNL video that I posted on Sunday.

Oh, and in case you weren’t aware, you can get new article notifications via Twitter by following @fcnfeed.

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Over the weekend, we returned from a very enjoyable vacation. We spent the week aboard the Disney Magic* and we had a great time touring the Western Caribbean. While this is undoubtedly a rather extravagant vacation, a big part of our enjoyment came from the fact that we planned for this expenditure, and paid for it completely out-of-pocket. Unfortunately, that’s not the case for everyone…

One evening early on in the cruise, my wife and I sat down at the bar to have a drink and unwind. Shortly thereafter, a fellow passenger sat down beside us and struck up a conversation. As it turns out, he and his wife and daughter are regular cruisers. So regular, in fact, that the bartender seemed to know him quite well.

During the course of our conversation, he talked at length about things like the high-end staterooms that they always stay in, how much he had spent at the Disney art auction on their last cruise, and the “great deal” he had gotten on his watch while shopping in one of the ports – he paid “just” $1,600, which was apparently about $600 off retail.

He went on like this for a few minutes before he eventually trailed off. At that point, the bartender ribbed him a bit about his spending habits, which prompted him to say something that spoke volumes about their lifestyle:

“Man, it took forever to pay off that last cruise.”

He went on to joke that he better not drink too much before the art auction, or it might be even worse this time around. While he tried to laugh it off with a devil-may-care attitude, it was actually kind of sad. How relaxing can it be to go on a vacation knowing full well that you’re spending money that you don’t have, and that you’ll return to the “real world” even deeper in debt?

I’ve argued previously that it’s okay to spend money — and not just on needs, but on wants, as well. That’s the whole point of having your finances in order, isn’t it? But… No good can come of spending money that you don’t have.

*Note: This was actually our second time onboard the Disney Magic. In case you’re curious, I wrote up a Disney cruise review following our first trip.

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This is a guest post by Adam Goodman, author of “Following The Goods.” If you like what you see here, please check out his weblog and subscribe to his RSS feed.

It’s unfortunate, but my story isn’t original. I’m 29, educated, and up until four years ago, I never saw the need to understand how to manage my finances. For some reason, I always assumed that my finances would magically manage themselves. That’s how I ended up owing the bank a huge student loan, having no savings, and living in my mom’s basement, wishing I had done things differently when I was younger.

The Problem

Many young people aren’t interested in financial management, and who can blame them? The name alone must scare people away. It sounds intimidating, but it’s an important topic that needs to be taught at an early age. And therein lies the problem… It needs to be taught, but it often gets left at the sidelines until it’s much too late.

Few parents talk about finances at the dinner table, and even fewer K-12 education systems mandate learning how to manage your finances. This is somewhat ironic, because people use financial management every day, whether they know it or not (remember, bad financial management is still financial management – it’s just ineffective). I should note that there are some great programs out there to help teach young people about finances.

Without a burning platform, people aren’t motivated to learn. If your parents are always helping you out financially, you’ll never know why compound interest is important. If your spouse is always paying the bills, you’ll never know why you need to pay off high interest debt first. If you’re always living paycheck-to-paycheck, you’ll never know why a budget is important. If you don’t understand how budgeting works, you’ll never know why you need to start saving for retirement as soon as possible.

Where to Start

It’s never too late to learn and change your habits, but imagine if you could start following sound financial management advice when you were 15, as opposed to 30. That’s 15 extra years of doing things right, and no matter how much money you make, the earlier you start budgeting and saving, the better off you’ll be. As a side note, if you don’t know what compound interest is, now would be an excellent time to look it up.

So what does a person need to do? Well, there is a lot of great information out there, but you have to look for it. Not only that, but you have to want to learn about it. I’m sure many of you are convinced of the importance of doing this, but don’t know where to start. At a minimum, you need to understand the basics of financial management, including (in no particular order):

1. Understanding what the equation Income – Expenses = Savings means
2. Knowing where you spend your money (what is an expense?)
3. The difference between things you want and things you need, and knowing how to prioritize them
4. The future cost of living – how much will that 4 bedroom house really cost you?
5. Setting financial goals and making budgets to meet them
6. How compound interest works (both for and against you)
7. When is credit good, and when is it bad?
8. The basics of investing
9. Why you need to start saving for retirement today
10. How to maintain your education (and share what you learn with others)

Remember, personal financial management might sound scary and complex, but it’s really not that hard. In fact, it’s nowhere near as scary as scary as meeting your in-laws for the first time. Financial management is not something that you’ll learn overnight. It takes time to master your finance, but the payoff is well worth the trouble. Take ownership of your finances and start your education today.

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If you missed the last round of discounts on Quicken 2009, today’s your lucky day… Intuit is offering discounts of up to $50 on various Quicken products through April 26th May 31st, 2009 (EXTENDED!).

Here are the details:

• Quicken Deluxe 2009 ($59.99 $39.99)
• Quicken Premier 2009 ($89.99 $59.99)
• Quicken Home & Business 2009 ($99.99 $69.99)
• Quicken Rental Property Manager ($149.99 $99.99)
• Quicken Online (Free, as always)

Oh, and if you missed out on the previous deals, don’t feel bad. This pricing is actually better than the discounts they’ve offered in the past.

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In what has become something of an annual ritual, stamp prices will be increasing once again on May 11th. First class letters will be increasing from $0.42 to $0.44 and prices for other services will likewise be adjust upwards. The good news is that the availability of forever stamps means that you won’t have to scramble to find $0.02 stamps after the increase.

In addition to this price increase, the US Postal Service has recently considered dropping Saturday delivery. What do you think about this? Honestly, I really wouldn’t miss an extra day of service. In fact, it might make my weekends just a bit more relaxing.

Oh, and in case you’re curious, I put together a historical graph of stamp prices around this time last year. It’s not inflation adjusted, but it still gives you a sense for how much things have changed over the years.

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While it’s a bit premature to proclaim an end to cash-based society, I was recently reminded of just how plastic-dependent we’ve become. While on a short flight on Southwest Airlines the other day, the flight attendants came through the cabin offering a variety of energy drinks, beer, wine, and cocktails for sale. While airborne beverage sales are commonplace, I was a bit surprised to learn that they wouldn’t accept cash as payment.

“As we come through the cabin, please keep in mind that we only accept credit cards* or Southwest Airlines drink coupons as payment,” came the voice over the loudspeaker.

I’m not sure how long they’ve had this policy, but it struck me as odd that they wouldn’t accept cash. Instead, they’ve chosen to arm their flight attendants with handheld credit card readers and subject themselves to the fees that come along with credit card usage. Perhaps they’re concerned about theft, or maybe it’s simply an efficiency thing. I’m really not sure.

Anyway, before anyone asks, yes, it’s perfectly legal to refuse cash payments. True, the Coinage Act of 1965 states that:

“United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues.”

This means that cash money (as defined above) is a valid form of payments for debts when tendered to a creditor. What it does not say is that private businesses, individuals, or organizations have to accept currency or coins as payment for goods and/or services. Private businesses are free to establish their own policies on the acceptability of cash unless there is a state law that says otherwise.

And now that we’ve had our civics lesson for the day…

Have you run across businesses that favor credit over cash?

*I’m assuming that they’d also accept debit cards.

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If you’re a Quicken user and are looking to upgrade, then I have good news for you… Intuit is currently offering a $20-$50 discount on some of their most popular products. Here’s the deal:

• Quicken Deluxe 2009 ($59.99 $39.99)
• Quicken Premier 2009 ($89.99 $59.99)
• Quicken Home & Business 2009 ($99.99 $69.99)
• Quicken Rental Property Manager ($149.99 $99.99)
• Quicken Online (Free, as always)

Note that these discounts replace the percent-off discounts that Intuit previously offered. In most cases, however, the new pricing is at least as good as the previous promotional pricing. These discounts are good through May 31st, 2009 at which time all products will return to their regular price.

Previously: Quicken 2009 Discounts

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A year ago I wrote up a list of financial goals for 2008. Today, I thought I’d take a look back at them and see how we did.

Retirement Savings

As expected, this one was a no-brainer. We maxed out our retirement savings across the board, though we were unable to make Roth IRA contributions as we were beyond the contribution limits. If you’re looking forward to the coming year, here’s a rundown of the IRA contributions limits for 2009.

Non-Retirement Savings

We continued saving aggressively outside of our retirement accounts. We also came up with a overall allocation plan that maximizes tax efficiency while achieving our desired overall balance of stocks and bonds. While the need for this was driven by our non-retirement savings, we implemented it across our full portfolio. Here are a few related posts describing the changes that we made:

• Reconsidering Our Asset Allocation
• How to Manage Your Asset Allocation With Multiple Accounts
• Our Investment Portfolio: Asset Allocation and Location
• Market Turmoil, Portfolio Drift, and Asset Allocation: Time to Rebalance?

Simplifying Our Finances

This one mostly successful, in that we dropped down to two main credit cards (Amex Blue Cash and Chase Freedom) while still keeping an old Citi MasterCard around for use at Sam’s Club. I ended up leaving our other Citi MasterCard since it reduces our apparent credit utilization, and thus has a positive impact on our credit scores.

As far as account consolidation goes, we still have a number online savings accounts that we don’t really use. These are partly a byproduct of my habit of opening accounts so I can write a review “from the inside.” Unfortunately, I’ve been lax when it comes to closing these accounts, so they’ve proliferated.

Finally, I’ve largely completed the task of automating our bill paying and investments. We’re automatically paying pretty much everything that we can, and I’ve set up e-mail and/or text reminders for the rare things that can’t be automated.

Protecting Our Future

This one is a big, fat FAIL. Once again, while we’ve gone to great lengths to protect our assets, we still haven’t closed the deal on a long term disability (LTD) policy for me. I have coverage through work, but we’re in the market for a private policy to provide supplemental coverage. It looks like this item will (once again) roll over to next year’s goals.

Creating a User Manual for Our Financial Life

Once again, FAIL. I’ve given quite a bit of thought to how this one will be implemented, and what to include, I haven’t taken the time to actually put it together. As I said before, “I’m envisioning a three-ring binder containing everything that she [my wife] needs — account numbers, insurance policy numbers, contact information, usernames, passwords, etc.” In truth, the usernames and passwords will likely reside in an encrypted computer file for added safety.

Kids and Money

This is one is a partial FAIL. In truth, I made a conscious decision to delay this one until the market settled down a bit. While we’ve stayed the course (and actually injected a bit more during dips) when it comes to our personal portfolio, I didn’t want to introduce the kids to investing during an uncharacteristically volatile market. That being said, I’m still not 100% sure how to implement this one once I decide it’s time, as we have four kids and I don’t really relish the idea of keeping track of four more investment accounts.

Taxes

This one was mostly successful, in that I’ve aggregated most tax-related documents in a couple of places around the house (plus a few tax-related receipts in the car). Not quite as organized as I had hoped, but better than usual.

What About You?

How did you fare relative to your goals/resolutions for 2008?

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Whew… I’m barely getting this one in under the wire, as it’s only New Year’s Day around here for another five minutes or so. Anyway, I just wanted to wish everyone a Happy and Prosperous New Year. After a relatively* uneventful day of travel, I’m exhausted and looking forward to a long weekend of hanging out with my wife and kids before getting back to grind. How about you?

*Note: I said ‘relatively’ because, as I noted over on Twitter, we shared a plane ride home with Rob Van Winkle. Oh, and we also had the privilege of waiting just under an hour for our luggage. With four exhausted kids. Fun.

Photo Credit: plrang

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If you’re looking for some last minute gifts ideas, a reader recently tipped me off to the results of this year’s Axiom Book Awards. If you’re not familiar with them, the Axiom Awards are “designed to bring increased recognition to the year’s very best business books and their creators.” There are actually 25 different categories, though I’m only listing the winners for five of them (some are pretty esoteric).

Note that I haven’t actually read any of these, so I can’t vouch for them. However, there are some interesting titles here that I will likely check out. Oh, and I’ve also listed Amazon’s current star rating alongside each title.

Personal finance

• The Lies About Money (3.1 stars)
• Life is Short, Art is Long (3.5 stars)
• The Quiet Millionaire (4.8 stars)

Economics

• The Emerging Markets Century (4 stars)
• Wikinomics (3.9 stars)
• The Economics of Happiness (3.7 stars)

Success and motivation

• The Dip (3.8 stars)
• The Age of Speed (3.8 stars)
• Lasting Contribution (4.6 stars)
• Women & Money (4.6 stars)

Communication skills and networking

• Perform at Your Best (5 stars)
• Talk to Me (5 stars)
• Trust and Betrayal in the Workplace (4.8 stars)

If these titles aren’t enough to satisfy your inner bibliophile, then be sure to check out these earlier posts:

» Best Personal Finance Books
» Eleven Great Books About Money
» More Great Books About Money

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I originally posted this on Twitter, but decided that it’s worthy of a mention here, as well. According to a story in the NY Times, a temporary Wal-Mart employee was trampled to death by crazed bargain hunters…

Tension grew as the 5 a.m. opening neared… By 4:55, with no police officers in sight, the crowd of more than 2,000 had become a rabble, and could be held back no longer. Fists banged and shoulders pressed on the sliding-glass double doors, which bowed in with the weight of the assault. Six to 10 workers inside tried to push back, but it was hopeless.

Suddenly, witnesses and the police said, the doors shattered, and the shrieking mob surged through in a blind rush for holiday bargains. One worker, Jdimytai Damour, 34, was thrown back onto the black linoleum tiles and trampled in the stampede that streamed over and around him. Others who had stood alongside Mr. Damour trying to hold the doors were also hurled back and run over, witnesses said.

Unbelievable. Anything for a $2 DVD or cheap flat panel TV, right? Oh, and guess what? Some members of the mob reportedly became enraged when they were told that the store was closing due to the death. They wanted to keep shopping. What a bunch of callous morons.

There was also a cellphone video of the aftermath posted on YouTube which captured people laughing about what had just transpired and making snide comments about mouth-to-mouth resuscitation. The video has since been removed.

Source: NY Times

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This is just a quick note to let you know that voters can get a free coffee at Starbucks, a free donut at Krispy Kreme, a free scoop of ice cream at Ben & Jerry’s, and possibly a free chicken sandwich at Chick-fil-A (though it could be too late for this – lunchtime only?).

Sadly, the state of Georgia has outlawed such tomfoolery:

“Any person who gives or receives, or offers to give or receive, or participates in the giving or receiving of money or gifts for the purpose of registering as a voter, voting, or voting for a particular candidate in any primary or election shall be guilty of a felony.”

In light of such laws, Starbucks has extended the offer to all customers. I’ve heard that you still have to wear your “I Voted” sticker for the others, though, so you might actually be guilty of felonious donut eating in some locations if you take part. Yikes.

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While perusing The Wisdom Journal, I ran across an article predicting the return of layaway. For those of you that aren’t familiar with the concept of layaway, it refers to the service where customers are allowed to ‘reserve’ a product at a store by making a deposit, paying off the purchase price over time, and then picking up the item when the balance hits zero. It’s a bit like a highly targeted savings account.

While layaway used to be a big deal, it seems to have fallen into disfavor in recent years. In fact, Wal-Mart ended their layaway program two years ago. But now that credit is hard to come by and the economy is stumbling into oblivion, layaway is apparently back in vogue. In fact, retailers including K-Mart, TJ Maxx, Burlington Coat Factory, and Sears are pushing layaway as an alternative to credit cards.

It’ll be interesting to see if this catches on. As far as I’m concerned, anything that encourages people to actually pay for things before taking possession of them is a good idea.

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A week or so ago, I shared some tips from Warren Buffett about how to become a millionaire. Today, I wanted to share some tips from our eight year old.

This weekend, I had an interesting financial conversation with our eight year old. This is the same kid that has an impressive knack for saving. To set the scene, we were tooling around town when the subject of cars came up…

As we pulled up to a stoplight, a particularly sweet ride rolled by. As soon as they spotted it, our kids started marveling at how nice it was, and how much it must have cost. The undertone of the conversation was that the owner must be über-rich. Never one to miss out on a teachable moment, I mentioned that stuff like that isn’t necessarily an indicator of wealth.

Taking a page from “The Millionaire Next Door,” I explained that some of the wealthiest people that they’ll ever meet are the ones that don’t flaunt it. In fact, most people probably wouldn’t even realize that these people are rich — rather, they’ll seem just like “regular” people leading a “normal” life.

This prompted our eight year old to say:

“Why doesn’t everyone just buy normal stuff? That way they could get rich. And if millionaires just bought normal stuff, then they could stay rich.”

While this is a bit of an oversimplification, I think our society could use a healthy dose of eight year old logic. In fact, if more people thought like him, we wouldn’t be talking about negative savings rates and multi-billion dollar bailouts.

Intrigued, I asked him if he wanted to be a millionaire. His response?

“Maybe someday, but not right now. If I was a millionaire, I’d probably just worry about my money all the time.”

From the mouths of babes…

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Would you like to become a millionaire? Silly question, I know. Who wouldn’t? With that in mind, I thought I’d share some tips on getting rich from none other than Warren Buffett, the world’s richest man.

Buffett got his start selling sticks of Juicy Fruit gum as a kid in the mid-1930s, and ultimately became the world’s greatest investor. What follows is a list of things that he’s learned along the way…

1. Reinvest your profits. When you make money, reinvest your profits instead of spending them. Even a small sum can ultimately be turned into great wealth.
2. Be willing to be different. Don’t base your decisions on what everyone else is saying or doing. Think for yourself if you want to be above average.
3. Never suck your thumb. Do your homework, and be prepared to quickly make up your mind and act on it. Avoid unnecessary sitting and thinking.
4. Spell out the deal before you start. Your leverage is always greatest before you begin a job. Always work out the specifics of a deal before you start, even if you’re dealing with friends or family.
5. Watch small expenses. Be vigilant about minimizing your expenses, both in business and in your personal life. By doing so, you’ll ensure that you profits or paycheck go further than ever before.
6. Limit what you borrow. You can’t borrow your way to wealth, so be careful with loans and credit cards. And if you get in over your head, negotiate with your lenders to pay what you can. Once you’re debt free, save money and start investing.
7. Be persistent. With tenacity and ingenuity, you can win against a more established competitor.
8. Know when to quit. Know when to walk away from a losing proposition. There’s no sense in repeating the same old mistakes trying to dig yourself out of a hole.
9. Assess the risks. When faced with a decision, imagine the best- and worst-case scenarios. If the benefits don’t outweigh the risks, then think twice before proceeding.
10. Know what success really means. There’s more to life than money. According to Buffett, “When you get to my age, you’ll measure your success in life by how many of the people you want to have love you actually do love you. That’s the ultimate test of how you’ve lived your life.”

It’s pretty simple, really. Spend less than you earn, invest regularly, don’t go into debt, don’t take unnecessary risks, and stick to it. There are no magic bullets.

Source: Parade

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Hmmmm… This is interesting (and a bit scary)…

Apparently a botched news story sparked a selloff of shares of United Airlines (UAL) yesterday. It seems that, on Sunday afternoon, the South Florida Sun-Sentinel accidentally re-ran a six year old Chicago Tribune article about United filing bankruptcy. Unfortunately, there was no date associated with the story, and Bloomberg picked it up and reported it as new information shortly before 11AM yesterday.

Not surprisingly, this blunder resulted in massive selling, driving shares of UAL down 75% from a bit over $12/share to $3/share. Here’s a screenshot of the stock chart showing the precipitous drop.

The story was pulled, and United is reportedly investigating what happened. As of right now, the stock is trading at just shy of $11/share. It’s kind of scary what an errant click of the mouse can do, isn’t it?

Source: Forbes via The Consumerist

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My wife and I have recently (finally!) started using a babysitter somewhat regularly such that we can get some time to ourselves. With that as a backdrop, I thought it would be interesting to hear how much you guys are paying your babysitters (or how much you’re getting paid if you earn extra money as a babysitter).

I’ll go first…

We have four kids between the ages of 3-10 and we’ve been paying $10/hour. Our babysitter is a friend of the family, very responsible, and just short of high school. From what I can tell, we’re paying somewhat more than the going rate in our area, but we also have more kids than most, so I think it balances out.

What about you? How how much do you pay your babysitter?

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In case you’re a Quicken user like me, I thought I’d point out that Quicken 2009 is just around the corner. It’s supposed to start shipping on September 3rd, and they’re currently offering discounts ranging from 20%-36% on their various products.

Update: They’re now offering $20-$50 discounts on their most popular products, as follows:

• Quicken Deluxe 2009 ($59.99 $39.99)
• Quicken Premier 2009 ($89.99 $59.99)
• Quicken Home & Business 2009 ($99.99 $69.99)
• Quicken Rental Property Manager ($149.99 $99.99)
• Quicken Online (Free, as always)

I’m just bummed that they still haven’t updated the Mac version beyond Quicken 2007. While it still does exactly what I need it to do, it’s not a Universal Binary application, so it doesn’t run natively on an Intel processor. An update of some sort has been rumored for quite awhile now, but it hasn’t happened yet.

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This is a guest post from Dylan Ross, a Certified Financial Planner and owner of Swan Financial Planning, LLC, a registered investment adviser in New Jersey.

The term “financial planner” is often applied to a variety of finance-related occupations, and its use is largely unregulated. Just about anyone can call himself or herself a “financial planner” without obtaining any licenses, certifications, or any specific credentials. Because there is such a mix of activities and circumstances that, when combined, constitute what is generally accepted as financial planning, the need for certain licenses, certifications, and registrations will depend more on what they actually do in practice than what they call it.

Who’s in charge?

There is no single regulatory authority that governs the conduct of financial planners in the United States. Most financial planners provide investment advice and insurance advice, two independently regulated activities, in addition to the overall financial planning process

The U.S. Securities and Exchange Commission (SEC) or state securities authorities regulate investment advice that involves securities. State insurance departments regulate insurance advice. There is no required regulation for the financial planning process; however, some financial planners are regulated by the Certified Financial Planner Board of Standards, Inc. (CFP Board) by becoming CERTIFIED FINANCIAL PLANNER™ (CFP®) practitioners.

Various governmental and non-governmental groups enforce the rules, laws, and regulations that apply to financial planning. Financial planners and financial planning practices register with or receive licensing and certifications from these various entities. These registrations, licenses, and certifications may also be granted to individuals or business that are not practicing financial planning.

Registrations

Any person or business providing advice relating to securities for compensation must register as an investment adviser with either the U.S. Securities and Exchange Commission (SEC) or their state’s securities authority. There are a few specific exemptions to the registration requirement; however, those exemptions to securities advice do not apply if it is part of financial planning services. This means any person or business that provides financial planning with advice related to securities must register.

Financial planners and financial planning practices usually register at the state level unless they also manage assets. If they manage assets, the amount of assets that they manage will determine whether they register with the state or the SEC.

Typically, business entities register as Registered Investment Advisers (RIAs), and each person that provides advice on behalf of the RIA is registered as an Investment Adviser Representative (IAR). Registration usually requires an application, an examination, and a filing fee. There are no experience or educational requirements.

Financial planners that also choose to sell securities and collect commissions must also become a Registered Representative of a securities broker/dealer firm. The Financial Industry Regulatory Authority (FINRA) and securities exchanges primarily regulate the activity of security sales. Additional exams such as the Series 6 and Series 7 are only required to sell securities and do not authorize or qualify someone to be a financial planner, nor are they necessary to practice financial planning.

Licenses

In many states, financial planners and their businesses are required to have appropriate insurance licenses in order to advise on the need, use, and purchase of insurance, even if the planner does not actually sell any insurance. Licensing requirements vary from state to state, but typically involve a pre-licensing education requirement, application, examination, licensing fees, and an ongoing continuing education requirement.

Certification

There are no certifications required in order to offer financial planning services, and the only organization that specifically regulates the actual practice of financial planning is the Certified Financial Planner Board of Standards, Inc. (CFP Board). However, the CFP Board only has authority over CFP® certificants. The CFP Board also enforces practice standards and a code of conduct, and they have the authority to suspend or revoke the certification.

Requirements to become a CFP® professional include the successful completion of approved educational courses in financial planning, a Board administered examination, a bachelor’s degree, three years of financial planning experience, agreement to ethical standards, meet candidate fitness standards, payment of certification fees, and ongoing continuing education.

There are several additional certifications available to financial planners geared toward specialized activities such as college planning or divorce planning. Many of these are granted by membership organizations, and include some type of educational or examination requirement, dues or fees, and possibly continuing education.

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This is just a quick note to let you know that I wrote a guest post over at Get Rich Slowly on using an allowance to teach kids about money. Be sure to stop by and check it out.

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As I alluded to in my post about things every teen should know about money, the state of financial education in this country is pretty abysmal. In fact, according to a recent survey by the Jump$tart Coalition, high school seniors were able to correctly answer an average of just 48% of questions about basic financial concepts. While college seniors did a bit better, their 65% average score still equates to a “D”.

Curious about what today’s student do and don’t know? Here’s a sample of the findings from the 31 question survey:

• Only 48% of respondents knew that a credit card holder who only pays the minimum amount on monthly card balances will pay more in annual finance charges than a card holder who pays their balance in full.
• Just 40% were aware that they could lose their health insurance if their parents become unemployed.
• A measly 17% knew that stocks are likely to yield higher returns than savings bonds and checking/savings accounts over the next 18 years even though there has never been an 18-year period where this wasn’t true.

Clearly, we have a long way to go when it comes to educating the next generation about financial issues! I’d be curious to know how my contemporaries would’ve done when we were in high school (or college). Perhaps we weren’t any better off…

On the bright side, 88% knew that a savings account was a good place for money that you’d need to spend on tuition within the next year and 82% knew that certificates of deposit (CDs) aren’t typically associated with spending (yes, that’s from an actual question).

Interestingly, there were also some apparent demographic trends in the data. For example, caucasian students correctly answered 53% of the questions, while Hispanic and African American students correctly answered 45% and 41% of the questions, resectively. Amongst college students, the numbers were 63% vs. 60% vs. 55%.

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I recently ran across an article on Bankrate that talked about raising a money-savvy teen. In it, they covered ten money management lessons. They also provided some depressing statistics on the state of personal finance education in the United States.

For example, when asked about basic financial concepts, high school seniors were only able to correctly answer 48% of the questions that they were asked, and college students didn’t fare much better. In fact, college seniors correctly answered just 65% of the questions that they were asked.

So, what does Bankrate think that teens need to know? Here’s their list:

1. Balance a checkbook
2. Budget money
3. Finance college
4. Establish credit
5. Identify wants vs. needs
6. Deal with debt
7. Pay taxes
8. Consider all costs
9. Save for the future
10. Stretch a dollar

I was surprised to see that there really wasn’t anything on this list about managing credit cards. I guess that some of this stuff could technically fall under establishing credit and dealing with debt. However, I think there’s a big gap between securing credit and dealing with debt — namely, managing your available credit wisely.

I also think that it would be valuable to teach kids about the loan process in general. While they talked a bit about student loans, kids leaving high school should (in my opinion) have at least a cursory knowledge of how things like car loans and even home mortgages work.

Finally, I find it hard to believe that they didn’t include anything about investing on this list. It’s really never too early to start educating kids about investing basics, and teens are certainly old enough for a basic education on investing and financial markets — e.g., stocks vs. bonds, the power of compounding, etc.

Of course, regardless of what’s on this list, it’s clear pretty clear from the statistics presented above that they’re not getting this info at school. Thus, it’s extra important to ensure that they get this stuff at home.

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