Archive for the ‘Finances’ Category

So usually I close out the month with a poem. Well this month I’ve switched it up a bit in an effort to collaborate more with my fellow bloggers. Below is a great treat for all you college graduates in regards to finance and areas of study. This is courtesy of Doogen of Life in the Margins. You can visit her site at www.doogen.wordpress.com to read more of what she has to say. Enjoy!

I’m so excited to be contributing a guest post on A Drop of Jewel today for her finance focused month! Every Monday on my blog (www.doogen.wordpress.com) I focus on a variety of financial issues that come up and this week I wanted to focus on what seems like an unending conversation about the dim and grim situations us twenty-something college grads have found ourselves in. Hope you enjoy it and I’m looking forward to reading and blogging with you!
When I was 18 and first started college, I originally thought I was going to be a doctor. I took science course after science course in conjunction with math classes that I hated. And after a while, I decided that this was not the path I wanted to take. Instead I subscribed to that wonderful part of college that said “Take classes that interest you! Take part in great moral discussions! Learn for the sake of learning!” Which, of course, is fantastic. What wasn’t so fantastic was the fact that I had no balance or guidance to also mention that I should consider double majoring so that I could learn about what I wanted AND get a second degree at the same time. If there was one thing I could tell college freshman–aside from “Beware the student loan monster and apply for internships and network and be true to who you are while simultaneously not being afraid to try out new things” it would be to…
DOUBLE MAJOR.
And here’s where you might be thinking “Duyen, what does this have to do with money?” Well, if you’re going to a four year university as a full-time student the cost of tuition is going to be about the same whether you take the minimum number of credits or 20 credits more than that. So the more classes you take, the more bang for your buck.
If we’re going to have to pay through the nose to get a degree, wouldn’t it make sense to get two if you can? This also would allow you to pursue a degree in something you love, like say English Literature or History or Music Theory, and in something with a more pragmatic function like Mathematics or Communication.
Of course, a degree or two is not a guarantee for job or financial security. As evidence by this recent article in The Atlantic. But it’s a start.
And if you’re out of school, like me, going back to school might seem like a tempting option to avoid the dismal job market. But before breaking out the GRE and LSAT and MCAT book it might be worth looking into getting a Certificate for a particular skill. Schools and post-grads and employers are catching on to the value of such programs as noted in this recent NYT article.
So before enrolling in grad school full time, thus incurring more debt, I would strongly consider taking a course to advance a particularly desirable skill set. Most colleges offer things like this in their continuing education programs and there are plenty of free (or really cheap) courses available online too.
Here are some resources I found:
And ultimately, you have to have a sense of humor about these things. Sarah Shanfield writes about what it means to be 25 today. And one of the takeaways is that “We can’t control the economy or our entry into grad school, but we can laugh with one another and slowly pay off our credit cards.”
Here’s to being a post-grad right?

Budgeting. We all know what it is. We’ve all talked about it, but surprisingly that’s as far as most people go with it. The topic seems to only expose itself when a person finds him or herself overdrawn on their bank account or when they realize they have no spending money left and payday is still two weeks away. “I really need to start setting a budget.” This is what is said but not always done.

Some of us have taken the first step and set a budget but fail to stick to it. This is usually because we under-budget and/or leave things out of the budget. A lot of people only budget for their bills and maybe food forgetting to allot for recreation, shopping, pocket money, laundry, toiletries, and other miscellaneous items. Well guess what? It’s never too late to give budgeting another shot. Stop talking about it and be about it! The following are just a few benefits budgeting provides:

  • An overall snapshot of your financial situation: Having a stack of bills and expenses can be overwhelming. It’s even more overwhelming when you store and file them all in your head. When you sit down and lists these things out, whether manually by writing or electronically with an excel sheet, you gain a clearer picture of where your money is going and if any changes are needed as to where it needs to go. It allows you to identify the “why”, the root cause as to why you’re constantly finding yourself short of money or bouncing checks.
  • A realistic approach to spending within your means: You should have a column with expenses and another column with your income. If your expense total is more than your income total, then there is a problem. You have two choices at this time. You can cut back on some things and since you have everything listed out, it should make it easier to identify where you can cut back. The other option is to find a way to get more income to accommodate your lifestyle according to your budget. Only you can make that decision. Either way, the budget serves as a reality check as to what your spending habits are versus what they should be.
  • A tool to outline an ideal lifestyle for yourself given your current financial status: When working up your budget, that is the time to be completely honest with yourself.  It’s important to include all the things you spend money on monthly, no matter how big or small. If you like to shop, create a monthly shopping allowance and add that to the list. If you go out to eat often, estimate how much you spend doing this and put it on the list. If you enjoy clubbing on the regular, it needs to be included in the budget. Sometimes people forget about the things they use regularly like soap, toothpaste, feminine hygiene products (for the ladies), shampoo, etc. I usually group all of this under one entry titled “miscellaneous”. Whether you group it together or list each thing individually, just remember to add those types of things in! They do start to add up! Don’t be afraid to round up when estimating either. By adding every single detail of how you spend your money and overestimating the costs, you are adding a “cushion” to your budget to ensure you don’t overspend. This allows you to maximize your ideal way of living within your current income.

School districts, wedding planners, your job, and even our government set a budget. It only makes sense that you would set one for your individual life as well.

I think being in debt is something all of us common folk can relate to. I’ve heard so many stories from friends and family who are stuck in debt and feel like they can’t get out. I, myself, am still not 100% debt free but I have managed to get rid of about 85% of my debt over the years. Depending on where you are in your life, until you become totally financially free (or rich), you will probably always have a certain amount of debt. The debt doesn’t have to be huge and you don’t have to carry it on forever. Below are five small things you can do to start lowering your debt:

1.    Don’t Apply for New Credit Cards:

I believe two is the appropriate number of major credit cards an individual should have. If you include department store credit lines, then five should be the maximum. Having more than that is just digging yourself into a financial hole. If you have maxed out most of your credit cards, you have no business applying for new ones. Just because the banks and stores offer them to you doesn’t mean you have to take them. In fact, if you are maxed out and you know you’re a chronic charger you should just cut up those cards that are maxed out. Some people pay down their balance a little, but go right back out and charge more stuff to the card. This does nothing but continue the cycle of debt and you will never finish paying it off. Cutting up the card will take away your ability to just whip out the card at any time and alleviate all urges to charge purchases.

2.    Focus on One Debt at a Time:

If you have multiple outstanding loans and balances, try focusing on one account at a time. You should still make your regular, timely payments on the others but if you can make more frequent payments or can pay more than the minimum, you should do that on one card at a time. This is the strategy I used to help me lower my debt. You can start with the largest or tackle the smallest balance. I started with my smallest balances because I knew I could pay them down faster. This also lessens the feeling of being overwhelmed. Instead of stressing yourself out trying to figure out how you will pay all your balances off at one time, you’re focused on one debt at a time. Once you start paying each balance off one by one, you will start to feel a sense of accomplishment because you have made a dent in the mountain of debt.

3.    Ask for Lower Interest Rates:

This is for your credit cards and/or credit lines you use regularly. Although you definitely shouldn’t be buying anything on credit too often, if you do have a credit line that you use on a regular basis you should do this. Call your creditors, explain to them that you have been a cardholder for “X” amount of time and you make your payments on time. Then ask them to lower the interest rate. Do this every six months. If you have been making your payments in a timely manner, they should do this for you. If they don’t do it, you can attempt to call their bluff and threaten to close your account. Most times they will give in and lower the interest rate. Sometimes it doesn’t work so be prepared for the backfire if they won’t do it J. This will lower your payments making it easier for you to pay the debt down or off faster.

4.    Only Shop with Credit if Necessary:

This is a rule I started using after I bought my first bedroom set. I was paying that bad boy off way longer than I should have been. It seems like you can buy just about anything on credit these days and the promise is always “low, easy monthly payments”. Once again, just because they offer you the credit doesn’t mean you have to take it. My new rule is that I don’t charge anything on my credit cards or take out any loans that I can’t pay off in six months or less. The exception to this rule is only if it is a large purchase (i.e. a car or house). This goes right along with my rule of not buying things I can’t afford. If you can’t pay it off in six months or less, chances are you can’t afford it and therefore shouldn’t be charging it in the first place.

5.    Pay More than the Minimum:

I find it hilarious when people are carrying a balance of thousands of dollars on an account but only make the minimum payment each month of forty bucks. You will never pay that debt off if you do that! If you have a high interest rate, then you definitely won’t! People fail to realize you can’t get ahead of the debt doing that because the interest you’re paying is almost as high as the minimum amount you’re paying. What I did was put any extra money I received towards paying down that credit card. If I got a bonus at work or I did a little overtime or something, it would go straight to the credit card. Tax season was my favorite. Most people look forward to tax season so they can go shopping some more. That’s okay. My suggestion is if you don’t want to contribute your entire tax return to paying off your debt, then do half and half. Set aside half of it to pay down/off a credit card and half to go shopping. I did that a few times as well. Just remember that if you pay more than the minimum on a loan to make the bank aware that you are paying towards your “principle”. Whenever people get a little extra money it burns a hole in their pocket and they can’t wait to spend it. Only you can decide what your priorities are.

“Debt, n.  An ingenious substitute for the chain and whip of the slavedriver.”  ~Ambrose Bierce

“Today, there are three kinds of people:  the have’s, the have-not’s, and the have-not-paid-for-what-they-have’s.”  ~Earl Wilson

“Champagne taste and beer money” is a phrase I’ve heard my mom use over the years. This describes people who have expensive taste but don’t have the funds to back it up and continue to live as though they do. Once again I’ll say there is nothing wrong with having expensive taste. I have expensive taste when it comes to certain things that I like (shoes, jewelry, even snacks).

However you won’t ever see me catching overdraft fees because I just had to have that new pair of Coach shoes. I don’t think it’s necessary for me to make a charge to my credit card for that extra bag of Pepperidge Farm Geneva cookies because I didn’t have enough money on my debit card. This is when it becomes an issue. In simple terms it’s called spending beyond your means.

It kills me to see people spending all their cash and running up their credit cards to buy the latest fashions, newest electronics, flashiest cars, etc. but can’t afford to buy one drink when they hit the club. They have no food at home in their fridge. Then you have the ones who spend all their money on fancy restaurants and takeout food and party time. All the while the rent is past due and bill collectors are blowing up their phones.

What is the point of having the latest cell phone if your cell phone is constantly getting cut off because you didn’t pay the bill? What is the point in buying an Escalade if you can’t afford to keep gas in it? Why are you buying your child the most expensive name brand gear but can’t come up with the money to buy his/her school uniform or tuition? My people, my people, my people! We really need to start prioritizing! Why not start budgeting and sticking to that budget now, pay off your debts, so you can ball out a little later? Spending more than you make so you can keep up with everything that’s “in” is only going to keep you in the same spot. It’s going to make it hard for you to ever get ahead financially.

On the other hand, if all you care about is how you look to other people and being up on what’s “in”, then by all means continue living in your debt-filled life. A few people might notice your pricey Escada blouse or your Louis Vuitton bag (or whatever brands people are keeping in business these days), but I can almost guarantee a hell of a lot more people will notice when you’re hungry or homeless.

“My problem lies in reconciling my gross habits with my net income.” ~Errol Flynn

“There are plenty of ways to get ahead.  The first is so basic I’m almost embarrassed to say it:  spend less than you earn.”  ~Paul Clitheroe

I can’t believe June is here already. Time flies when you’re having fun. This month I decided to switch gears a little and discuss finances. This topic may seem a little dull in comparison to some of my previous topics, but I think it’s necessary.

I have been living on my own for about eight years now. I was nineteen when I left home for good. I was making $12.50/hr. at that time. It hasn’t always been easy, but I have managed to keep my head above water thus far. I have been described by friends and family as being frugal, cheap, thrifty, etc. Mind you, this comes from those with bad credit, no credit, living with parents/roommates/significant others, or in a shitload of debt. I tell them I’m not cheap. I just don’t waste money and I don’t buy things I can’t afford. It’s just that simple.

Some of my peers speculate and assume I make a gang of money. Well I don’t. I have watched them run up credit cards to front, throw money away on fads, gadgets and toys, move out of their parents’ home only to move back, borrow money, have cars repossessed, and dig themselves deeper and deeper into debt.

This month I will be discussing budgeting, avoiding debt, and spending within your means. I understand it’s easy to fall on hard times. God forbid that could very well be me at any point in time as we are all only two paychecks away from poverty. There is nothing wrong with enjoying the finer things in life. It’s another thing to just spend frivolously and carelessly. I am constantly setting financial goals for myself, and so far I have been on track. It’s up to you to decide which is more important, keeping up with the Joneses or keeping up with your own life’s plans.

“He looks the whole world in the face for he owes not any man. ” ~Henry Wadsworth Longfellow

“Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.” – Tyler Durden, Fight Club (via author Chuck Phalanuick)

“The only reason a great many American families don’t own an elephant is that they have never been offered an elephant for a dollar down and easy weekly payments.”  ~Mad Magazine