Category: Personal Finance

Is Going Back to School Worth the Cost?

people-woman-coffee-meeting.jpgWhether or not to continue one’s education is one of the top questions in personal finance. Even for financial experts, it is not an easy decision. However, there are some great ideas and some great information out there that can help you make the best choice for you. It may be easier than you think. Continue reading “Is Going Back to School Worth the Cost?”

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The Net Worth Mindset

I didn’t get into studying finance until I was in my 30s, but when I did I studied hard and tried to make myself an expert in it. I had to, because I had to teach it. One of the things I latched onto early was the balance sheet. It fascinated me and continues to command my attention. Predictably, when I learned to look at my own personal balance sheet, my personal financial life literally started to come into balance. Continue reading “The Net Worth Mindset”

My Year with a Cash Back Credit Card

Like many consumers, my wife and I have long been suspicious of credit card companies. We are generally cautious about debt, not wanting to add to our massive student loan obligations. Credit cards, of course, are among the worst kinds of debt: with high interest rates compounding at a rapid rate.

Up until the end of 2016, the only credit cards we ever had were from making a large retail purchase on credit. For example, I purchased my Macbook Pro with Apple Credit, which is really just a Barclay credit card. The first year has no interest, so I paid off the account in one year and paid no interest. I wanted to keep that line of credit open to build my credit rating, so I set up automatic bill-pay on a bill that is $15/month. I pay off the balance every month, and I don’t use that card for anything else. It has been great for building my credit at no cost. Otherwise, it not very useful and adds to my stress sometimes when I worry about forgetting to pay it.

blue-cash-everydayWhile teaching my high school personal finance class about credit cards and credit ratings, I decided to do an experiment and try using a cash back card. I compared some cards and decided to apply for the American Express Blue Cash Everyday rewards card. Credit Karma informed me that with my credit history, my application would have a good chance of being accepted, and it was. Continue reading “My Year with a Cash Back Credit Card”

Robinhood to the Rescue

An app that let’s you quickly and easily trade stocks with no transaction fees? It sounds too good to be true. There has to be a catch, right?

robinhood iconThis was my reaction when I heard about Robinhood, the app you can download for free and use to start trading stocks with no transaction fees. At the time, most of my retirement savings was in a 403(b) and a state pension. These accounts have limited options, mostly made up of index funds. I am not crazy about index fund investing for several reasons, which I will elaborate on at another time. I had finally opened a Roth IRA with an online broker to invest in individual stocks, but I was frustrated with the fee situation. I investigated Robinhood as an alternative, and here is what happened. Continue reading “Robinhood to the Rescue”

Book Review: All About Asset Allocation

All About Asset AllocationAll About Asset Allocation is worth a read by every investor, even if you don’t buy into efficient-markets theory (EMT) or modern portfolio theory (MPT) and focus your investing on alternative strategies.

Richard A. Ferri uses tons of charts to help demonstrate the effectiveness of various kinds of diversification of the portfolio. He identifies the roles of various kinds of securities in the modern portfolio. He makes excellent cases for the importance of real estate exposure and international equities. He points out the weakness in the simplistic approach that many financial advisors take to investing in bonds.

Ferri demonstrates various strategies for hedging against inflation, interest rates, and other risks. He creates suggested allocation plans for investors at 4 different age levels and 3 different risk profiles. While I do not agree with all of Ferri’s theories and strategies, everything he advocates is research-based. His approach is appropriate for investors at any level, young or old, advanced or beginner. This is a great resource for anyone committed to meticulous portfolio management.

Bringing Spending Down to a Low Boil

I spend a lot of time talking about the importance of paying off debt and investing for long-term goals. I preach it to my high school personal finance class every day. However, the real struggle for most Americans is making room in their monthly budget to pay for it. The “pay yourself first” strategy is helpful, but still involves making room for saving or paying off debt in your budget. In the end, it always seems to come back to earning more money and spending less of it.

Both are easier said than done. Asking for a raise is a joke in many industries, and there are only so many hours in a week that you can spend laboring. When it comes to spending, almost everyone could read off a list of things he or she would like to have or even need to have but sacrifice to keep the budget in line.

For me, I don’t pay for television. I mooch off a family member’s account for one subscription service, and I buy an occasional DVD. That’s it. I have never paid for live or on-demand video entertainment of any kind. I watch an occasional sporting event or PBS series, and the rest of the time I spend reading. This is one of many things I do to keep excess expenses down.

sisyphus (titian painting)Despite that and many other efforts I make to save money, I still feel like Sisyphus pushing student loan payments up the hill, only to have the next statement roll down over me, showing that at age 32 I’m nowhere near done paying for the college degree I finished at age 22. And I still feel like I need to save more for retirement and for a downpayment on a house.

If you feel that way too, here are 2 easy tips that have helped me recently:

  1. If you can’t make a huge increase in debt repayment, at least round up what you pay on your higher-interest debt payments. Within a few months, you will notice improvement in your statements and even see the minimum statement payments decrease. It gets quick results, and that feels good.
  2. Track your spending by recording it, using your bank’s expense-tracker for your debit card, or using an app like Mint, Personal Capital, Tiller, or Wally.

Consumer sector corporations are brilliant at getting you to develop bad spending habits: café coffee, gas station soda and candy, eating out too much, not sticking to your grocery list, or impulse-buying at discount stores, department stores, or online. You can probably relate to more than one of those. I certainly can.

For my wife and I, the biggest spending problem right now is food. We are both teachers, and we both have some health problems that rob us of energy. At the end of the school day, we often feel too tired to cook, and are tempted to eat an easy processed meal, grab a pizza, or stop at a quick service restaurant, all of which are usually more expensive than a home-cooked meal, and not great for your health either. To make matters worse, I have a gluten allergy. Those easy processed meals like mac-n-cheese, TV dinners, or frozen pizza cost about 3 times as much when you have to get them gluten free. Putting together 5 gluten-free sack lunches per week is not cheap or easy for me either.

This summer, we came up with a plan to solve our food spending issues, and we were able to get most of it done in one weekend. Continue reading “Bringing Spending Down to a Low Boil”

10 Things I Learned From Teaching a Personal Finance Class

2016-2017 has been one of the craziest years in my teaching career. My principal texted me last July to ask me to teach Personal Financial Responsibility, a course encouraged, but not required, for high school students by the state of Indiana. I accepted the challenge and immediately delved into learning as much as I could to help my students. Nearly a year later, after teaching two sections of the course, I have learned a great deal about finance and about myself. In this article, I would like to share with you what I have learned this year.
Continue reading “10 Things I Learned From Teaching a Personal Finance Class”