As you know, I love Ramit of I Will Teach You To Be Rich and used to do everything he said, but then I got lazy… and went grad school broke.  At any rate, after a month of completely reckless spending, I’ve decided it’s time to get my finances back in order and to finally get around to doing something Ramit always says to do: automate my spending.

Instead of spending time each month locating and paying your bills, take some time today and set up your bank account to automatically pay your bills each month.  This way you won’t have to worry about missing a payment because it will be set.  If you’re back in school, like me, you’ll need to alter this plan a bit as you’re not making as much as you used to and probably aren’t contributing to your 401K anymore, but this is still helpful.  In his book, he really breaks down this process, but his video (below) explains this with enough detail that you can get going.

Honestly, do this.  One less thing to worry about.  Instead of having to make a list of all your bills and taking the time to write a check (eek!) or go through each website to pay online, save yourself the hassle, take an hour today and do it.

peace,
e.

So last night the House passed the health care reform bill AND  the Student Aid and Fiscal Responsibility Act of 2009 (a.k.a. student loan bill).  Thank God.

I know everyone is hyped about universal health (and I am too) but I am really hyped about this student loan bill.  So what’s in it:

• kicking the banks out the mix, which will save you money when it’s time to repay your loans
• more money for Pell Grants
• loan forgiveness for people serving in the military
• starting in 2014, reducing the cap on how you repay each you (from 15% of your income currently down to down to 10%)
• more funding for community colleges and HBCUs
• early education funding is out, but I’m sure it will get money in the revamped No Child Left Behind

The health care bill has loan forgiveness for doctors, dentists and nurses – lord knows they need it.

You can read the full thing here (yes, it’s at the end of the health care reform bill).

peace,
e.

Oh man, I just got my taxes done and I was not happy about the results.  Of course after I got them done I ran across this article about a ton of overlooked tax deductions.  Looking forward to saving some money on taxes next year.

Among my favs were:

• Hearing aids, eyeglasses, contact lenses
• Education expenses to maintain or improve job skills
• Job-related professional journals and newspapers
• Employment agency fees or commissions
• Home office expenses (if you work from home)
• Moving expenses
• Donated clothing or other goods; note the estimated value (see “Valuation Guide” at goodwillpromo.org) on the receipt
• Student loan interest
• Accounting or legal fees involved with taxes (oh word?)
• Jury duty pay reimbursed to employer

Check out the entire article here.

Hey, if you haven’t done your taxes yet and want some face time at an IRS Taxpayer Assistance Center and get answers to any last minute questions, today (March 21st) is your lucky day.  Click here to find out where your nearest IRS Taxpayer Assistance Center is  and get some help with your taxes.

peace,
e.

Source: Real Simple

The economy, recession, and Wall Street are all words that you’re probably sick of hearing, I know I am! If you are employed, you might be worried about losing your job, and if you’re unemployed you are trying to figure out how to make extra money while in between jobs. This current economic state is enough to stress everyone out as we all figure out how to get by. When I was younger my mother always taught me to never just depend on one source of income, I didn’t get it then, but boy do I get it now. Below are a few ways to get your hustle on in the recession.

1. Clean the Clutter! Yes, I know the online consumer run sites like EBay and Craigslist can be time consuming, however don’t count them out.  If you pick just two hours out of the week to clean your house/apt./room there is almost a guarantee that you will find something valuable that is no longer of use to you.  Electronics and furniture are big ticket sellers, and will certainly put extra cash in your pocket.
2. Be creative! If you were the shining star in Ms. Johnsons fourth grade art class (ok maybe that was me) or if you’re just extremely creative in general, sell your crafts! Websites like Handmade, Etsy, Fusion, and iCraft allow you to upload and sell your creations online.
3. Babysitting! With so much new free time on your hands (if you’re unemployed)  what better way to make easy money than babysitting for your loved ones, neighbors, or friends for a couple hours during the week? The best thing about babysitting is that you can give the kids back.   Most parents pay $20-$150 for babysitters to watch their kids for 2-5 hours.
4. Blog for Cash! New Media has been taking over corporate America for the last 10 years.  Many companies are hiring recent graduates to set up official blogs, facebook, and twitter sites to help market their products.  Make sure to include your technology savvy on your resume!  If you see a company without a blog who could really use one, call them up and offer your services (no really!).
5. Online Surveys! Ok, I admit surveys are absolutely no fun at all. However, filling out surveys for research corporations is one of the easiest ways to make money. While completing these surveys for cash will not exactly make you a millionaire, it will put a little extra money in your pocket.

Most importantly, put yourself and your talents out there, no time to be shy, it is the recession after all!

Mia

for a limited time only.  Oh yes.  Suze Orman and Oprah have to come together again to offer us Orman’s latest book, 2009 Action Plan: Keeping your Money Safe and Sound.  Well I like the sound of that.  From now until January 15, you can download the book on Oprah’s website.

Go and download the book, we’ll discuss it next weeek.

peace,
e.

“It’s the most wonderful time of the year…” or at least it used to be, but it’s hard to tell with a flat economy and unemployment on the rise. Christmas shopping for most will certainly not be what it’s been during previous years. Consumers have to be cautious of their budgets and focus on getting needs and not wants in these hard times. However, it’s important to not let the Scrooge (economy) steal you’re Christmas spirit. Below are five helpful tips to shopping during the recession:

1. Have a “Shopping Account”: One of the biggest mistakes most people make every year is overspending. Instead of taking all your credit cards and having a large amount of money in your debit accounts; limit yourself. Take only the credit card(s) that you will not be able to max out. If you walk in with a limited budget you can’t go deeper into debt.
2. Shop Online: This is a great way to save money! Retailers offer their internet customers free shopping and handling charges during the holiday season. Many retailers also have special coupons and sales that last throughout the holidays. You’ll also be saving on gas, money, and most importantly time!
3. Go Alone: I have always made it my priority to never do Christmas shopping with friends/family. Studies show that shopping in groups persuades many to spend more than they usually would. Go shopping alone, with a set purpose, and you’ll come out with a smile.
4. Making a List…: Another mistake that most consumers make is going holiday shopping without a Christmas list. Instead of just wondering around the store/mall, decide before hand what you’ll be purchasing for your loved ones. Without a list, it’s too easy to buy things you don’t really need or spend more than you intended. Make a list, check it twice, and stick to it like white on rice!
5. Shop Smart: The most important thing to remember during times like these is to shop smart. Instead of purchasing gifts just because, buy things that your friends and family members can really use. Shop around for the best deals, negotiate with the retailers, and think before you swipe.

Good luck out there!

~Mia

Ramit Sethi is running a Save $1000 in 30 days Challenge over at I Will Teach You To Be Rich.  Some of the options are no brainers (Pack lunches for the rest of the week), while some are pretty innovative (Use gas prices to become your own hedge fund).

So far there are 25 tips (listed under the cut).  Some are geared towards people with cars and houses but for the most part, I think we can use most of them them.  It may be too late to start the challenge with him on his site but I def recommend trying some of these tips for yourself.  Check Ramit’s site often for more tips.

peace,
e.

All 25 Tips

1. Pack lunches for the rest of the week
2. Turn your thermostat down 3 degrees
3. Sell something on eBay today
4. Involve your friends in your savings challenge
5. Optimize your cellphone bill
6. Use gas prices to become your own hedge fund
7. Create a “No Spending” day once a week
8. Implement the A La Carte Method
9. Only buy new things when replacing something old
10. Use the free rewards from your credit card, car insurance, and workplace
11. Never pay full retail price for clothes or eyeglasses again
12. How I’m saving $2,000+ on eating out in 2009
13. How to negotiate your car insurance
14. Use self-persuasion to share how much you’ve saved so far
15. Forget going to a bar — ask people over for dinner
16. Cancel any large purchase this month
17. Buy generic for the stuff you don’t care about
18. No Christmas gifts this year
19. Save Money, Eat Well and Look Hot in Less Than an Hour
20. Change the date of Christmas
21. Save thousands by pre-paying your debt
22. Analyze your progress in the 30 Day Challenge
23. Go cash only for 15 to 30 days
24. Cut your commute expenses by 40%
25. Earn more money using your God-given skills

As for me, I’m trying1, 6, 7, 9, 11, 21 and 23.  Wish me luck.

Are you going to try any of these?

Although we’re not officially in a “recession” it sure does feel like it. Gas prices are going up and down, the costs of groceries are higher than ever, and most people are too scared to check their 401k. Fortune 500 companies like Yahoo!, Google, and Lehman Brothers are laying their employees off left and right. Pundits on cable news shows warn us everyday of the failing economy and how it’s only going to get worse. In the meantime what exactly are we (the middle class) supposed to do to keep our head above water until things get better again? How do we prepare ourselves and our finances for the hard times ahead?

1. First and most important, is Job Security!  There is always a huge possibility that you can lose your job. Companies often times choose to cut back on operations when profit and sales lag, and employees are the first to go. It’s always good to be prepared, if you’re not 100% sure, put your resume out there. A great new site, Uboast.com allows you to market yourself through video resumes and personal profiles. Invest in yourself, you’d rather be safe than sorry!

2. Restructure your budget. Pulling back on your daily and monthly spending is a necessity. Cut out any unnecessary spending and start concentrating on your emergency fund. If anything were to happen, it’s nice to have a fund that you can count on to get you through at least 3-6 months of unemployment. If you don’t have an emergency fund, start one immediately!

3. Clean up your balance sheet.  Do not charge bills and shift payments during a recession, if you do, you’re heading for financial turmoil. The worse off the economy is doing, the higher your minimum payment will be on your credit card. If the interest on your credit card is high, consider shopping for a low interest rate that will allow you to switch your balance over.

4. Shop Smarter.  Although you should always shop smart, during a recession never spend more than you have to. Instead of throwing your neighborhood circulars away look through them carefully. Concentrate on finding good deals in your local grocery stores, dry cleaners, and surrounding businesses.

5. Consider All of Your Skills. Many of us get so caught up in our 9-5 jobs that we sometimes forget how much we have to offer in other fields. If you have other passions like writing, teaching, art, and music, explore them! There’s nothing like getting paid a little extra money for doing something you love.

Lastly, don’t be scared! Remember, history always repeats itself.  In recent times, the U.S. went through a recession in 1973, 1980, and 1991. Yes recessions do happen they’re painful, unfortunate, and tend to make people lose faith; however when they’re over, strong periods of growth and expansion arise. Keep the Faith!

~Mia

Our economy lives and dies on debt, and before I get into this financial crisis and the absurd hypocrisy of this bailout plan, let’s get back to basics.

Previously , I referred to Debt as Savings’ evil step child.  The relationship comes from the fact that the money that banks lend out in the form of credit cards, car loans, and mortgages is in fact the money you have saved in the bank.  Americans love this.  It means we can buy crap that we can’t afford in the short term, and pay for it over time.  The evil part comes from the risks involved in being heavily indebted, and this crisis has been a painful demonstration of that risk.

It has been estimated that the average American adult carries about $4,200 in credit card debt alone.  But what’s so bad about that?  I mean, we’ve got all this time to pay it back.  The fundamental problem, though, is that we do not save.  So when something bad happens – say an unexpected hospital visit or the loss of a job – we do not have the cash cushion to weather the storm.  If Americans have an average of $700 in the bank at any given moment (I made that number up), it doesn’t take an investment banker to figure out how little time it will take to burn through that cash making your credit card payments.  From there, bankruptcy is right around the corner.

But what does this have to do with the bailout?

More fingers are being pointed than you can count, but it is this simple idea that really underlies the whole crisis.  Banks, it turns out, carry debt too.  They borrow from each other to make investments and cover operations (to me, this is like transferring balances from one credit card to another).  But they carry a hella lot of debt.  Whereas on an individual level, Americans may carry $18 in debt for every $3 they have in the bank, some of these banks were carrying as much as $100 in debt for every $3 in the bank.  I am sorry, but that is plain friggin’ dumb!  So when their income streams unexpectedly slowed – when people started missing mortgage payments, for example – and their creditors kept knocking on their doors, you can see how a bank can vanish in an instant.  Lesson: when you have debt, you gotta have savings.

It’s obviously deeper than that, but this was the fundamental root of the problem.  People try to pin it on other things, and some of it makes me angry.  One scapegoat has been the Community Reinvestment Act, which merely stopped banks from discriminating against people of color–a practice they got so comfortable with that they actually had maps outlining minority neighborhoods where they refused to lend.  People claim it forced lending to people that couldn’t pay, but CRA was enacted over 30 years ago and can only be tied to 20% of the crappy mortgages.  Fannie Mae and Freddie Mac are even older.  Yet no banks were collapsing until a rules change in 2004 let them take on too much debt relative to their cash on hand.

What pisses me off the most though is that only a year after this rules change, Congress changed the bankruptcy code to make it harder for individuals that get in trouble by taking on too much debt to declare bankruptcy.  Yet when banks took the same risk, but to an obscenely higher degree, Congress hauled ass to bail them out.  This basically lets them declare bankruptcy, wipe out their bad debts, and immediately get back to borrowing.  Individuals, on the other hand, get their credit handsomely screwed for at least 10 years.  That’s just not right.

-MannyFresh

Lifehacker put me onto this a really dope post on when (and how) to get rid of your credit cards.  We’re in a recession and we need to get (keep) our money right.  The full article is on Get Rich Slowly.

Why you should cancel your credit card:

• Reduces the risk of identity theft.
• Reduces your bookkeeping.
• Prevents you from abusing them.
• Puts you in control of your finances. (Don’t underestimate the power of this.)

How you can cancel your credit card:

1. Call to cancel the account. Check with customer service to be sure your balance is zero before you start the process. After you ask to cancel your card, the sales rep may try to talk you out of it. Be prepared to stand your ground. And take notes!
2. Send written confirmation. Using your notes, write a letter and send it to the card issuer. You can find a sample credit card cancellation letter at The Dolans.
3. Check your credit report. After you receive confirmation that the card has been cancelled, it may take several weeks for the change to be reflected in your credit report. It is your responsibility to verify that your report is accurate, so keep tabs on it.

peace,
e.