MyMoneyMinute.com

Home Buyer Tax Credit To Expire

The deadline to qualify for the Federal Housing Tax Credit is this Friday, April 30th.  Many housing markets are in a midst of a flurry of activity as the deadline looms.  This government program provides an $8,000 tax rebate for anyone buying their first home, and up to $6,500 to home buyers who have resided in their previous home at least five years.  To qualify, you must be under contract by this Friday, and close on your purchase by June 30, 2010.

Market Manipulation

While the actual stimulus program can (and should) be debated, it is no accident that this will be a busy week in residential real estate.  Some agents are even trying to capitalize on the momentum by privately extending their own “tax credit” of up to 3% of the purchase price after the government credit expires.  Very creative if you ask me!

I have a personal stake in the matter since my house is on the market.  I know it will help us get showings this week, but I’m not sure if it’s the best use of taxpayer money.

What About You?

Are you trying to purchase a house and beat the deadline?  Was this Federal Housing Tax Credit a good idea?  Should it be extended?  Tell me your thoughts or experiences with the Federal Housing Tax Credit.

.

Follow me on Twitter

.

photo by coffeego

Personal Finance buyer, credit, government, home, real estate agent, realtor, stimulus, tax

The most expensive "free" soda you'll ever purchase.

Credit Cards In The News

Credit cards have been hitting the news lately.  Over the past year, almost everyone I’ve run into has had their credit limits reduced for one reason or another.  Then, in late February, the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (CARD, for short) went into effect.  For specific information on how these laws impact our lives, read this article from Free From Broke.

Have Our Habits Changed?

The most recent credit card news is a bit disappointing.  According to a report by CardHub.com, Americans have cut $93 billion in credit card debt from 2008-2009.  Great news, right?  Unfortunately, an estimated 90% of the reduction is due to borrower bankruptcy & credit card company charge-offs on accounts over 180 days due, while only $10 billion was due to consumer payoffs. In other words, we haven’t drastically turned as frugal as we thought.

Of course, there are plenty of conclusions you can draw from this study.  Perhaps we aren’t as frugal, or maybe in the midst of the Great Recession, people have chosen to prioritize other bills over the credit cards, like their mortgage, electricity, or car payments.  Also, I suspect a drastic increase in “fix my credit” cases out there, where they encourage card holders to stop paying on their accounts for months, then come back and attempt to settle the debt for pennies on the dollar.

Frugal Out Of Necessity

The good news is that credit card use has hit a plateau.  The true test of whether we’ve collectively changed our habits will be on the other end of the Recession.  Will credit card use increase again, or will people continue living within their means with debit cards?  In America and much of the West, will we turn from a negative-savings rate, to setting aside money for emergencies?  Are we just being frugal now because we HAVE to?  It seems any answer right now creates more questions!  Ever since my early 20’s when I applied for a credit card to get a free Padres T-shirt, my credit use increased!  I jumped the pay-back curve by a few years when we paid off our credit cards a bit over two years ago.

.

Follow MyMoneyMinute on Twitter

.

Personal Finance

When nothing seems to help, I go and look at a stonecutter hammering away at his rock perhaps a hundred times without as much as a crack showing in it. Yet at the hundred and first blow it will split in two, and I know it was not that blow that did it, but all that had gone before.

We Are The Champions

Congratulations to the New Orleans Saints on their victory in Super Bowl XLIV! The Crescent City and the State of Louisiana will be partying from now through Mardi Gras, celebrating their team’s victory over the Colts.

The celebration got me thinking about the successes in life. They often feel few and far between. Afterall, every year a Super Bowl celebration on one city means 31 other cities are left with some level of disappointment. So how should we view success and deal with the inevitable failure in life?

The Struggle

Before success comes the failures. How many times did you see video clips of Saints fans from 20 years ago, with paper bags over their heads proclaiming their consistently horrible team the “Aints” instead of the “Saints”? Thomas Edison failed thousands of times before hitting successfully on inventions that altered the history of the world. How many losing seasons have the Cubs endured; yet how satisfying will it be when they finally win the World Series? Just ask Red Sox fans.

What I learn from this, is that the greater amount of failure and hard work you put in, the more meaningful & satisfying the success.

The hard part is shifting your thinking to where you understand that failure is just part of the road on your way to success, not an end in itself. The best article I remember about embracing failure comes from my blogging buddy, Financial Samurai, in his post titled “You’re Rejected!”. When I’m struggling with setbacks, personally or professionally, it helps to read articles like this to keep proper perspective!

Share Success With Others

Funny commercials come and go. Millions of dollars were spent on promoting South Florida and the Super Bowl itself. But what is the lasting memory for me? Super Bowl MVP Drew Brees, nearly in tears, holding his infant son and reflecting on his journey that finally ended with a championship.

Success just isn’t the same unless you share it with others. Having a spouse, team, city, or even state behind you — walking with you through the pitfalls, laughing and crying with you through the journey, or working into the night with you to accomplish a goal — without such support the accomplishments are at best miniscule.

That reminds me — swing over to PT Money and congratulate PT, a Louisiana-native, on the Saints Super Bowl win.  It’s fun to share in others’ success, isn’t it?

Conclusion

So when you run up against one of life’s failures, remember it is a prerequisite to success. Like the quote above indicates, just keep pounding the rock. When the rock finally splits, you’ll have such a greater appreciation for your success when you recognize the previous blows that came before it.

Follow Me On Twitter

Personal Finance

Face it — we’ve all made goals

Lose 10lbs (or 20.. or a lil’ more, LOL), get that degree, read a book, or even get through a Bible study series.  To achieve your goal, it is a great idea to break that goal up into incremental steps & check up on your progress frequently.  I was listening to a Zig Ziglar tape last night, and he was telling the story of how he decided to lose 37lbs. in 10 months.  So he broke it down — 3.7lbs. per month; less than a pound/week; in fact he even broke it down to 1.9 ounces/day!  While 37lbs. seems insurmountable, 1.9 ounces each day certainly seemed attainable.  He also would check back periodically to see how his progress was coming along.

If you want to finish that degree, break it up — semester by semester, class by class, hour by hour of class & study time if need be.  If you want to read a book by a certain date, do a chapter break-down and allocate time accordingly.

Likewise, your finances are no different.  Perhaps I should’ve come across Ziglar’s advice earlier this year, and I could’ve broken down goals into monthly morsels.  But, what I can do, is take a look back and review our progress from our New Year’s Financial Resolutions.  We are now 3/4 of the way through 2009, so it’s a good time to venture back and see how we’ve been doing with our goals, and if/how they’ve changed.

Original 2009 Financial Resolutions

1.  Pay off H’s Car Loan

YES! The car was paid off early this year, as detailed in my post, “Don’t Laugh, It’s Paid For!” We’re relieved the consumer debt is gone, hopefully for good.  Now we can put all our effort and focus into the student loans.

2.  Pay off My Bar Study Loan

Balance-wise, it is a very small educational loan.  But we want to just pay it off to use the extra $50/month to add to our snowball!  Plan is to have done by February as well.

YES! We were also able to do this early on this year.  Like I said in my original New Year’s Resolutions post, it was a smaller balance, and we were able to take the minimum payment of $50/month or so and “snowball” (apply) it to our next student loan balance.

3.  Establish a “tweener” Emergency Fund

If you are extremely focused and intent on paying off your debt in an 18-24 month period, Dave Ramsey recommends a “baby” Emergency Fund of $1,000 to protect you from falling off the wagon back into credit card debt.  Once this is paid off, you then fully fund your Emergency Fund with 3 to 6 months expenses.

Since our student loans are a little more long-term than the consumer debt we have paid off, we want to establish a “tweener” Emergency Fund of $10,000 by July.  This would give us a little more cushion so we can begin to attack & pay down our student loans.

4.  Pay off H’s Parent Plus Loan from College

A moderately-sized loan in our world, we took this loan back over from H’s parents after getting jobs.  We just thought it was the right thing to do.  We believe it is attainable to knock this out in the 2nd half of the year, and have it paid off by December.

5.  Begin saving for future car

YES! NO! uh.. SORT-OF! Here’s the deal.  After paying off Resolution #2, we continued to snowball our monthly payments, but stopped adding any surplus money to our debts at the end of each month.  Rather, we attempted to pile up money for any number of life possibilities that we expect could happen:

• Emergencies — We wanted to have money available as our “Tweener Emergency Fund” in case life happened.
  
• Gaps in employment — Because I do project-based work, we wanted to bank up money in the event I was unemployed for a lengthy amount of time.  Good thing we did.  I spent 7 weeks off this summer between projects!  It really helped to have a little money set aside — it saved our budget and our sanity.
  
• Buying a new car — I have nearly 193,000 miles on my 2000 Nissan Maxima.  I hope the thing runs for quite a while, but we want to bank away some money in case the inevitable happens — the car blows up on me and we need to buy another car.
  
• Having children — This is a reality for most young marrieds, and one that’s probably closer to reality than not at this point.  We wanted to bank money away in case my wife had medical complications, or needs to take extended time off work.

So as you see, we were able to reach the goal of a “Tweener” fund, but the slow economy caught up to me and my project work, which in-turn slowed down the money pile.

There’s still hope of achieving all these goals, although paying off H’s Parent Plus loan will probably be shifted ahead until sometime next year.

Do you have financial, health, or other goals that you’ve made? What’s your progress looking like??

MyMoneyMinute on Twitter

photo by frli

Personal Finance goals, new year, new years resolutions, resolutions

In a recent interview with Parade magazine, Jay Leno talks about his transition from hosting The Tonight Show to his new prime time slot.  It was a very personable interview.  While most celebrities appear self-absorbed, Jay Leno comes across as a hard-working regular guy who hit the big time.  But success didn’t exactly fall into his lap.  Here are a few financial lessons to be learned from Jay Leno:

#1 — Finding a Job:  Do Whatever It Takes

If you really want a job, do whatever it takes to make a good impression. Years ago I lived in Boston, and when I saw a Mercedes/Rolls-Royce dealer, I thought, “I’d like to work there.” I asked about a job, but the boss said, “We’re not hiring now.” Monday morning, I returned. I went to the car-wash bay, said “I’m the new guy,” and started washing cars. After three or four days, the boss saw me and asked, “What’s he doing here?” The car-wash guy goes, “He’s a hard worker.” I said, “I figured I’d work here until you hired me.” And I got the job. That attitude has always worked for me. – Parade Magazine

I first read this in disbelief.  Jay’s persistence enabled him to find a job working around cars.  Even if he was only washing them, he still found a way to be around something he loved.  In my career path, most of the time I’ve waited for the door to be opened wide for me.  If Jay Leno wasn’t kicking the front door down, he was at least sneaking in the back door.

#2 — Hard Work Pays Off

After 20 years of hard work, Jay Leno was an overnight success   In 1973, Jay opened a comedy club, and worked the improv circuit for many years.  In the late 80’s, Leno began to fill-in as host for Johnny Carson on the Tonight Show, before finally replacing Carson in 1992.  On top of his television show, Leno continues to do stand-up approximately 160 nights each year! 

It is easy to get discouraged in your career, and there are many ups & downs.  But if you love what you do, have passion for it, work hard towards your goals, you will live a fulfilled life — regardless of how many millions come your way   I love justice and the rule of law.  I studied hard in school.  Jay reminds me that I need to keep working hard to find my niche.

#3 — Live Well Within Your Means

I know what you’re thinking: “Sure, if I had a ten-figure salary, I’d be able to live within MY means too!”  But for Jay Leno, this habit began early in life.

Leno may have millions, but his approach to wealth dates to his early days turning a wrench.

“I had two jobs as a kid, one at a fast-food restaurant and one at a Ford dealership. And I’d put the money from one job in one pocket and spend it. And the other paycheck I’d save,” he says. “I do that now. I have always banked my Tonight Show money and lived off the stand-up. I have one credit card, no mortgage, and I don’t lease.” — USA Today, 7/16/2008

His frugal ways began early.  He saw the benefits of training himself to save money.  For teens out there, could you not do the same thing?  For young singles, make the switch before you are exposed to the leveraged lifestyle of credit cards and car payments.  For married couples, what can you do to begin to live off of one spouse’s income?  If this seems impossible, start slow — live off of 95% of your income, then 90%, etc.  Work your way into setting aside money.

#4 — Give

In 2001, Jay’s wife Mavis was on the board of Feminist Majority, and the couple donated $100,000 to their cause of educating the public on the plight of women in Afghanistan under Taliban rule.  Jay has also donated for auction Harley Davidson motorcycles signed by celebrity guests who appeared on The Tonight Show.  Proceeds from these auctions have raised nearly $3 million for victims of 9/11, 2004 Indian Ocean Tsunami, and Hurricane Katrina.

While this exposure and charity may financially be a drop in the bucket for Leno, my gut feeling is there is plenty set up for charities that we just are not privy to in the outside world:

Any plans for his Tonight Show windfall? Leno leans over a stack of papers, pretending they’re bank statements. “I suppose I’ll just look at the number one day and go, “Oooh, that’s pretty neat,’ ” he says. He says he has set up foundations that donate to a range of charities but then closes the book on the topic. – USA Today, 7/16/2008

What I learn here is that life is more fulfilling when you are contributing toward a cause bigger than yourself.  We do that by donating time, money, and in Jay Leno’s case — his celebrity status.  Sometimes these gifts are public, but many times they are private, putting priority on the cause rather than the giver.  We should do what we can, and usually we can do more than we think.

#5 — Substance Over Style

His swift gait carries him past dozens of motorcycles, another longtime passion. In the mix is a new Ducati Desmosedici: The first one off the Italian factory floor went to Tom Cruise. Leno praises the bike but hastily adds he’s just borrowing this one. “I don’t really need an $85,000 motorcycle,” he says.

“These machines are really my only indulgence,” he says. “Other than that, well, I’m still the kind of guy who goes to McDonald’s with clipped-out coupons. My wife, Mavis, will take me out to a nice restaurant, but the whole time I’m going, ‘Food costs this much?’ ” – USA Today, 7/16/2008

Leno obviously has an enormous amount of income and wealth, but still has not lost that ‘regular-guy’ charm.  He never let style outgrow the basic substance of a fruitful life — hard work, saving, ignoring fear.  His lifestyle leaks into his television career.  While other late-night hosts Arsenio Hall and David Letterman got many of the headlines and accolades from supposed hardcore fans, Jay Leno, in a workmanlike fashion, outlasted Arsenio and repeatedly obliterated Letterman in television ratings.

While I may not win any ratings battles, I took away some sound investment advice from this: 

Every few months, there’s a new investment fad or get-rich-quick strategy that pops up (flip a house!  buy gold!) — but ultimately, the best strategy is to diversify your investments, and go forward in a workmanlike manner.  You may not always be as exciting as the fads (Arsenio), but ultimately, your returns (TV ratings) will be higher while others get caught in the crashing wave.

photo by johngulliver

Follow MyMoneyMinute on Twitter

Personal Finance Jay Leno, The Tonight Show

Are You Choosing To Participate In This Recession?

Let’s face it – the bad economic times are real.  We are in a deep recession.  Unemployment is high, construction is at a stand-still, and the stock market is in major correction.

But have we deepened our misery with an attitude of “doom & gloom”?  Are we in a self-fulfilling prophecy, where it has in fact become a more harmful economic environment because we are living in fear of how bad it can get?  While some of us may not have much say in a lay-off or a salary freeze, we do control our attitudes and whether we live our lives out of a spirit of fear, or from a spirit of empowerment and hope.

Town Hall For Hope

Dave Ramsey, a best-selling author and nationally-syndicated radio host, is a personal finance guru and America’s chief proponent of a debt-free lifestyle.  Dave will be hosting a Town Hall For Hope on April 23, 2009, at 8pm EST.  Over 5,000 churches and other organizations have signed up to host the event, which will be broadcast via a live private feed to each location, as well as through select radio markets and on the Fox Business Network, where Dave also hosts a daily television show.

In the 90 minute broadcast, Dave will spend 30 minutes speaking directly to our current economic climate, where true “hope” comes from (hint: it doesn’t come from Washington, DC!), and what real “change” must happen to put you & your family on the road to financial fitness.

The remaining 60 minutes will be split into two 30-minute Q&A sessions.  Questions will be taken not only from the live audience in Oklahoma City, but Dave is also going “Web 2.0″ by integrating and taking questions from these social networking sites:

• Facebook
• YouTube
• Twitter (@TownHallForHope #THFH)

Find A Host In Your Area

I’m hoping to find Dave’s message and this Town Hall For Hope both encouraging and inspiring.  You too should consider attending this event!  Click here or on the picture at the top of the page to locate a church or other organization that is hosting in your area.

Have you been reacting out of fear in this down economy?  Where do you place YOUR hope?  Tell me what would you ask Dave in this upcoming Town Hall For Hope.

Personal Finance, Uncategorized dave ramsey, Town Hall for Hope

Record Drop In Credit Card Usage

The Federal Reserve reported Tuesday that credit card usage & consumer borrowing (non-mortgage debt) has dropped at record levels.  Credit card spending fell at an annual rate of $7.8 billion, or 9.7%.  People are charging less and saving more.  That’s good news, right?

Lesson Learned?

In a vaccuum, decreased credit consumption is a victory in the battle against the bondage of debt.  Does that mean the Dave Ramsey’s and Suze Orman’s of the world have gotten through to the consumptive masses, and people are rejecting debt?  Hopefully, but studies show household debt decreases during times of recession and then, as creditors begin to make more credit lines available, consumers increase their credit card borrowing levels at the first sign that the economy is breaking out of a recession.

In fact, the reason the credit crunch is so huge during this recession, is because during the last recession (dot-com bust, 2001-2002), household debt actually grew because of low-interest rates and the break-out of credit card “teaser rates”.  So instead of a natural ebb & flow to credit availability, creditors have slashed credit card limits and increased minimum payments.  Basically, we’re now forced to double-correct our credit usage because our households kept on borrowing through our last recession!

Don’t Let History Repeat Itself

Use this double-correction recession to your advantage, and resist the urge to increase credit card spending when our economy begins to break out of this.  Practice delayed gratification by saving up to pay for things.  It is character-developing.  Use blog post and financial personalities to motivate yourself to get out of debt.  If you think you’re in too big a hole, consult some professionals about options prior to filing bankruptcy!  The point being, you need to eliminate past mistakes and work hard to put yourself into a position where financial mistakes won’t happen again.

Proverbs 22:7 (The Message) says “The poor are always ruled over by the rich, so don’t borrow and put yourself under their power.” Other versions say the borrower is servant, or slave to the lender.

With a deep recession and slashed credit limits, you have been forced to change your habits… for now.  What habits you default to when times are good again economically?

Are you subjected to the power of the rich?  Are you a servant?  Who owns you?

photo by Andres Rueda

Personal Finance consumer debt, credit card, dave ramsey, debt, suze orman

As I recently chronicled, we recently paid off my wife’s car.  The bank mailed the title to us the other day, and reminded us we have a few details left to take care of now that we’re official car owners.  I’m passing along their reminders with a few of my own suggestions & comments mixed in.  For other inspiration, see a similar article written by PT Money when he paid off his car in January.

What To Do After You Pay Off Your Car Loan

The Title

Check your title to make sure a bank representative signed & dated your release of lien. They should have upon mailing it to you, but hey, mistakes happen.  A signed & dated release of lien is satisfactory to transfer a clean title down the road, but if you want the lien completely removed from your title, go to your local county tax office, pay the applicable fees, and order a new title with the lien removed.

Store your title in a safe place. Title can be stolen and forged, so I recommend you don’t keep the title in your car.  Leave it in a protected place, such as your home safe, a locked file cabinet, or a safe deposit box at your local bank.

Insurance Policy

Change the “loss payee” on your insurance policy. When your vehicle’s financed, the lender requires you list them as “loss payee”, which means that if you total your car, any insurance payment for a total loss goes to cover the remaining loan balance first.  When you become the outright owner, you should change this to avoid any miscommunication and hassle with the bank and insurance adjuster should you total your car.  We use Esurance for our auto insurance, so this was easy for us.  I just logged onto my online account, and edited the car information.  In fact, I had forgotten to do this for our other car, so I changed them both on the spot.

While you’re at it, review the rest of your insurance policy. I considered raising my deductible, but decided against it for now.  But I did decide to add roadside assistance to our policy should our cars breakdown.  Both our vehicles are getting along in miles and we have an 80 mile round-trip commute each day.  I figured an extra $10 every six months wasn’t too bad for roadside assistance coverage.

Personal Finance

Snowball your car payment. If you just paid off a typical car loan, odds are your payment was about $400/month.  What will you do with all this extra money each month?  Don’t waste it on frivolous spending.  Be focused & intentional with that extra dough.  Add it to your debt snowball, or continue paying yourself a car payment each month, so you can buy your next car with cash, rather than a cash advance.

Take a minute to celebrate! That’s one less chain in the bondage of debt.  One more link broken on your way to freedom.  Congratulations are in order!  Pat yourself on the back, enjoy a celebratory dinner — whatever works to keep you motivated to continue on the path to financial awareness.

photo by rick

Personal Finance car insurance, car loan, Cars, dave ramsey, debt snowball, loan, snowball, title

moneyStrands is the latest in the explosion of personal finance programs to hit the web.  Recently, I had a chance to have a virtual sit-down with Ryan Williams & Atakan Cetinsoy from the moneyStrands team to find out a little more about their newest product and the Strands business line.

Tell me a little bit about moneyStrands and how you came up with the concept?

There are many budget & financial tracking websites popping up these days, such as Mint or Wesabe.  Do you see these sites as your competition, or does moneyStrands cater to its own niche market?

I’ve signed up for moneyStrands and honestly, I have been very impressed at its clean look, functionality, and usability by regular guys like me.  What do you like about your site that you feel is an improvement over other financial management websites?  What do you anticipate improving on the moneyStrands website?

moneyStrands is only one aspect of the Strands brand.  Tell me about the other branches of the Strands brand.

What is the overall vision for the Strands brand?  Do you hope to merge or enter ventures with other online companies that would compliment your company’s vision?

Finally, I am always impressed with those that have a vision and go out into the real world and execute it.  Tell me a little bit about yourselves.

Thanks to Ryan & Atakan for the interview. I’ll have a review of their website soon!

Personal Finance interview, moneyStrands, personal finance management

7.9 Earthquake Near Tonga Sparks Eruption

Last week, a volcanic eruption close to the South Pacific nation of Tonga has destroyed rich birdlife and vegetation, leaving a wasteland of black ash and tree stumps, witnesses said Friday.  The volcano, on the small, uninhabited islet of Hunga Ha’apai 63 kilometres (39 miles) northwest of the Tongan capital Nuku’alofa, began erupting Monday.  It continued to spew Friday even as a major earthquake with a magnitude of 7.9 rocked Tonga’s main island of Tongatapu.

Tonga’s chief geologist Kelepi Mafi, who inspected the area Thursday, said the volcano has two vents, one on Hunga Ha’apai and another around 100 metres offshore.

The volume of the rock and ash coming from the vents has completely filled the gap between the offshore vent and Hunga Ha’apai, increasing the island’s land mass by hundreds of square metres.

What Are Your Financial Underwater Volcanoes?

When life brings a little trembling, there are many financial issues that lie just beneath the surface that can erupt at a moment’s notice.  There is no doubt that life comes at us fast, and it seems as if we’re always playing catch-up in some regard.  If tragedy or just plain life happens unexpectedly, what areas of your financial life would you not be prepared?

Today I offer a pretty simple challenge.  Identify those Financial Underwater Volcanoes in your life today.

For me, I’d have to say first & foremost is estate planning (a will).  This seems to get pushed to the backburner — and I’m an attorney who can write up my own will for free!  Perhaps it is because I know I can write a decent will that I’m waiting for the time to construct a will that is taylor-made for my family.  When in reality, I should get a basic will in place and fine-tune the details later.

Another area of potential Underwater Financial Volcano eruption would be our emergency fund.  But we are working on this one — we just paid off our car and are now building up our baby emergency fund to at least 3 months’ expenses.

As you can see, I’m not perfect either.  But once we can identify these “hot-spots” (yes, pun intended), we can go about rectifying the situation.  I’d hate to see your island be destroyed when you could have minimized the damage.

What are YOUR Financial “Underwater Volcanoes”??

photo by The Sunday Times

MyMoneyMinute — Identify Your Financial Underwater Volcanoes

Personal Finance baby emergency fund, earthquake, emergency fund, estate planning, life insurance, Tonga, underwater, volcano, will